×

Warning

JUser: :_load: Unable to load user with ID: 58

The United State (U.S) product imports from the Organisation of the Petroleum Exporting Countries (OPEC) member countries dropped by 23 thousand barrels per day (tbpd) compared to a month before to stand at 301 tbpd.
Besides, OPEC has raised world oil demand by 1.65 million barrels per day (mbpd) in 2018 in its July monthly market report, unchanged from the previous month’s report, with expectations for total world consumption at 98.85 mbpd.
 
According to OPEC in its July oil market report, this represents a 14 per cent share of total US product imports.
 
In terms of the product supplier share, Canada and Russia maintained their position as first and second supplier to the US with shares of 25 per cent and 10 per cent, respectively.
 
However, imports from both countries were lower than the previous month by 121 tbpd and 86 tbpd, respectively.
 
India was the third largest product supplier to the US, up by 65 tbpd from the previous month.
 
Canada remained the top supplier to the US in April, accounting for 45 per cent of total U.S. crude imports.
 
Canada’s crude exports to the U.S. were up by 6 per cent, or 199 tbpd, compared to the previous month.
 
Saudi Arabia was the second largest supplier to the US with an 11 per cent share of total crude imports, closely followed by Iraq at 10 per cent.
 
Imports from Saudi Arabia were 138 tbpd higher m-o-m, while imports from Iraq were up by 122 tbpd.
 
Crude imports from OPEC Member Countries rose in April by 712 tbpd, or 28 per cent, compared to the previous month.
 
Imports from OPEC Member Countries accounted for 39 per cent of total US crude imports.
 
On crude oil demand projection, OPEC said the initial projection for 2019 indicates a global increase of around 1.45 mbpd, with annual average global consumption anticipated to surpass the 100 mbpd threshold.
 
Based on the first forecast for demand and non-OPEC supply for the year 2019, the demand for OPEC-15 crude next year is projected to decline by 0.8 mbpd to average 32.2 mbpd.
 
The Organisation for Economic Co-operation and Development (OECD) is once again expected to remain in positive territory, registering a rise of 0.27 mbpd with the bulk of gains originating in OECD America.
 
It noted that the non-OECD region is anticipated to lead oil demand growth in 2019 with initial projections indicating an increase of around 1.18 mbpd, most of which is attributed to China and India.
 
Additionally, a steady acceleration in oil demand growth is projected in Latin America and the Middle East.
 
According to secondary sources, OPEC crude production averaged 32.4 mbpd in first quarter of 2018, which is 0.1 mbpd higher than the demand for OPEC crude.
 
The report stated that in the second quarter, OPEC crude production stood at 32.2 mbpd, which is 0.3 mbpd lower than the demand for OPEC crude.
 
Source: The Business Insider
The Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has said that Nigeria will rely on Nigerian Gas Processing and Transportation Company (NGPTC), a subsidiary of the NNPC, to deliver a 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.
 
The project, expected to be executed with about $3 billion, includes other key projects that will see the country expending over $38.5 billion on oil, petroleum products and natural gas pipelines between 2018 and 2022, according to data company, GlobalData.
 
Speaking on the sidelines of the 2017 Annual General Meeting (AGM) of the company, Baru, who also functioned as the chairman of the AGM, said the corporation was relying on the NGPTC’s competence to deliver the 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.
 
He said apart from the AKK gas project, the company was also busy putting together new pipelines like the OB3 projected to come into operation later in the year alongside other significant gas pipeline projects across the length and breadth of the country designed as an integral part of the bigger trans-Nigerian gas pipeline system.
 
The NNPC boss commended the management and members of staff of the company for recording a profit after tax of N6.11 billion in its first year of operation under the new structure.
 
He said the NNPC management was looking forward to a bright future for NGTPC as it continued to show great promise and positive performance despite operating in an environment laden with incessant pipeline vandalism and condensate evacuation challenges.
 
Chief Operating Officer, Gas and Power and Chairman of the NGPTC Board, Saidu Mohammed, said the NGPTC was focused on consolidating on its strength and grow to bigger levels, noting that by 2019, the company would have leapfrogged into the big league with most of its ongoing gas infrastructure projects coming on stream.
 
Also, Managing Director of the company, Babatunde Bakare, said the 2017 AGM result showcases the corporation’s resolve to align with the prime objective of the Federal Government to harness the nation’s gas resources for the overall benefit of the Nigerian economy.
 
In another development, the Minna Depot of the Nigerian National Petroleum Corporation (NNPC) in Pogo, near Minna in Niger State, was gutted by fire yesterday.
 
The fire, which started exactly at 11.00 a.m., created panic along the ever-busy Minna-Paiko road, leaving commuters stranded.
 
A resident of the area, Malam Ibrahim Paiko, who spoke with The Guardian in Minna, said the leakage started since Saturday but the scooping by the boys started around 2.00 a.m. yesterday.
 
According to him: “When the leakage started early this morning, it ran through the gutters which made black marketers scoop from it.
 
Besides, the Public Relations Officer (PRO) of the NSCDC, Malam Ibrahim Yahaya, who spoke with The Guardian, said: “For now, we have not been able to ascertain whether there is any casualty.”
 
Also, the Director-General, Niger State Emergency Management Agency (NSEMA), Ahmed Ibrahim Inga, who confirmed the incident, said: “We thank God everything has returned to normalcy. Evacuation measures have been put in place and thank God the situation is now calm.
 
Source: The Guardian
MT Sahara Gas, the newly built vessel acquired by the West Africa Gas Limited (WAGL), has delivered 7,000 metric tonnes (MT) of Liquefied Petroleum Gas (LPG), in its historic maiden voyage to Nigeria, to boost availability and safe access to the commodity widely referred to as cooking gas.
 
WAGL is a Joint Venture (JV) between Nigerian National Petroleum Corporation (NNPC), and leading energy conglomerate, Sahara Group. The JV is run by two companies, NNPC LNG Ltd., a wholly-owned subsidiary of NNPC, and Sahara Energy’s oil and gas trading arm, Ocean Bed Trading Ltd. (BVI).
 
WAGL in January 2017, acquired two new vessels, MT Africa Gas, and MT Sahara Gas, in its bid to reduce transportation bottlenecks, add value to the Nigeria economy through exporting the commodity, deepen the LPG market in West Africa as well as enhance access to clean and safe energy.
 
The acquisitions were also a strategic response to the lingering challenges of supply, affordability and fraudulent activities motivated by scarcity of LPG also known as cooking gas.
NNPC’s Group Managing Director, Dr. Maikanti Baru, said in keeping with the Federal Government’s economic growth plan, WAGL remained committed to stabilising the market and ensuring sustainability of the commodity through strategic deliveries within the sub-region.
 
“This is a historic achievement for the NNPC and Sahara Group that showcases a truly successful partnership by all global standards.
 
The quest is to achieve uninterrupted supply of the commodity and address infrastructural limitations as we continue to implement our zero tolerance policy against adulterated products and their promoters across the nation.”
 
Baru said the NNPC/Sahara Group partnership remained a model for successful JVs, adding that both parties were considering various strategies to optimise the delivery of the product across West Africa.
 
Speaking aboard the vessel, the Managing Director, Petroleum Products Marketing Company (PPMC), Umar Isa Ajiya, said it was a significant and important milestone not only for Nigeria, but also for Africa and the entire shipping and maritime industry.
 
“We have a brand new LPG vessel, built by 100% fully owned Nigerian entities and it has picked up LPG from Bonny and brought it to Lagos.
 
This is the first time we are having a wholly owned shipping vessel bringing product to our shores.
 
This is an opportunity to grow and deepen the LPG market in Nigeria such that the use of firewood will come to an end sooner than later.
 
 
Source: The Guardian
The Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC) Maikanti Baru, has said a Final Investment Decision (FID) on the additional eight Million Tonnes Per Annum Nigeria LNG Train 7 Plant will be reached before the end of this year.
This is not the first time NNPC is making this claim, as indeed, attempts to make a final decision on the additional plant has been stalled for many years, dating back to the former President Olusegun Obasanjo’s regime.
 
However, speaking at the ongoing Nigerian Oil and Gas (NOG) conference & Exhibition in Abuja, Tuesday, Baru said the country is keen on driving investment in its oil and gas sector without disclosing further details as to when exactly the decision will be made.
 
He said: “On the expansion of our existing 22 metric tonnes per annum (MTPA) NLNG plant, we are on the verge of taking Final Investment Decision (FID) this year for additional eight MTPA NLNG Train 7 Plant.”
 
With six trains currently operational, NLNG’s plant on the Bonny Island in Rivers State, is capable of producing 22MTPA of LNG, and 5 MTPA of NGLs (LPG and Condensate) from 3.5 billion (standard) cubic feet per day (Bcf/d) of natural gas intake. If the seventh train is completed, total production capacity would be lifted to 30MTPA.
 
To him, with NNPC’s upstream subsidiary – The Nigerian Petroleum Development Company (NPDC), the group would grow production to 500,000 bopd of oil, and 1.5bscfd of gas by 2020.
 
“Furthermore, in terms of frontier exploration, we are optimistic that in the Benue trough, we will drill an appraisal well in Q3 2018 to test the extent of the Kolmani Structure in the Benue Trough. Recall that Kolmani River-1 exploration well drilled by Shell in 1998 encountered 238ft net hydrocarbon interval.
 
“In NNPC, we believe that the downstream sector holds the future. The plan to become a net exporter of refined products by year-end 2019 is on course. Based on this timeline, the revamping of our four refineries are our topmost priorities in NNPC for the midstream segment. Alongside this, we are also progressing with the revamping and rehabilitation of all our pumping stations, pipelines, and depots across the country,” the GMD said.
 
The Secretary General, Organisation of the Petroleum Exporting Countries (OPEC), Mohammad Barkindo, reiterated the need for more investment in the global oil and gas sector.
 
He noted that the lack of investment in the sector poses serious repercussions for future consumers, especially given the increase in world oil demand, which is expected in the long term.
 
According to him,  from 2014 to 2016, during the last industry downturn, world oil supply growth outpaced demand, with supply growing by 5.8 million barrels per day, while demand increased by 4.3 million barrels per day.
 
He therefore argued that extreme volatility in the crude oil market has very negative consequences for such consumers and producers.
 
“Low oil prices are bad for producers today and create situations that are bad for consumers tomorrow. And high oil prices are bad for consumers today and lead to situations that are bad for producers tomorrow,” he said.
 
The OPEC scribe said nearly $1trillion in investments were frozen or discontinued, while thousands of high quality jobs were lost, adding that volatility remained a key challenge for investment into the sector.
 
He revealed that a record number of companies in the petroleum industry had filed for bankruptcy because of the level of shortfall in the price of the product.
 
He said: “According to OPEC’s World Oil Outlook, long-term oil demand is expected to increase by 15 mb/d, rising from 94.5 mb/d in 2016 to 111.1 mb/d in 2040. To meet the projected increase in global oil demand, investments worth an estimated $10.5trillion will be required.
 
“Investment is also necessary to offset the impact of natural decline rates, which can be as high as five per cent per year. To maintain current production levels, the industry might need to add upwards of four million barrels per day each year.”
 
Source: The Guardian
     
 

The Federal Government of Nigeria received N3.211 trillion as Petroleum Profits Tax (PPT) and Royalties from the third quarter of 2015 to third quarter of 2017, according to the Economic Report of the Central Bank of Nigeria (CBN).

Breakdown of the revenue to the government showed that the country received N495.39 billion as PPT/royalties in third quarter of 2015; N388.66 billion, in fourth quarter of 2015; and N314.04 billion during first quarter of 2016.The revenue from PPT/royalties declined in second quarter of 2016 to N212.78 billion; later increased to N392.38 billion in third quarter of 2016; and decreased to N273.13 billion in fourth quarters of 2016.

There was a rebound of revenue to N325.38 billion in first quarter of 2017; N320.49 billion in second quarter and N489.41 billion during the third quarter of 2017. The CBN report for the third quarter of 2017 released recently, revealed that N103.46 billion was allocated to the 13 per cent Derivation Fund for distribution among the oil producing states. 

analysing the report, CBN disclosed that oil receipt at N1.27 trillion during the quarter under review was lower than the proportionate quarterly budget estimate by 6.2 per cent, but was above the receipts in the preceding quarter by 59.7 per cent. According to the CBN, the decline in oil revenue relative to the proportionate quarterly budget estimate was due to the shortfall in receipts from crude oil/gas exports, owing to the decline in crude oil production, arising from leakages and shut-ins/shut-downs at some NNPC terminals.

It disclosed that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.83 million barrels per day (mbd) or 168.36 million barrels (mb) in the review quarter.This, it noted, represented an increase of 0.17 mbd or 10.2 per cent, compared with 1.66 mbd or 151.06 mb recorded in the preceding quarter. The development was due to sustained peace in the oil production region.CBN said that crude oil export stood at 1.38 mbd or 126.96 mb, representing 14.0 per cent increase over 1.21 mbd or 110.11 mb in the preceding quarter.

The development, it hinted, was due, mainly, to reduced activities of vandals in the Niger Delta region.Allocation of crude oil for domestic consumption was maintained at 0.45 mbd or 41.40 million barrels in the review quarter.

Nigerian National Petroleum Corporation (NNPC) Chief Operating Officer, Upstream, Malam Bello Rabiu, proposed some key amendments to the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act to enable the Federal Government optimize the collection of royalties and other revenue in deep water oil production activities.He noted that it was imperative to effect increment in royalties across all categories to increase government take.

“It is our opinion that the proposal to increase the royalty rate for terrains beyond 1000 metres, from zero per cent to three per cent, is commendable but it is necessary to also make corresponding adjustments in other categories,’’ he said.He argued that in the alternative, the graduated royalty scale as provided in the Act should be removed while the Minister of Petroleum Resources should be empowered to intermittently set royalties payable for acreages located in deep offshore and inland basin production sharing contracts through regulations based on established economic parameters.

“It is our opinion that these incentives have outlived their usefulness and are now impediments to the Federal Government’s revenue collection efforts. The use of such incentives can be terminated by an amendment of section 4 of the Act,’’ the Corporation noted.He called on the National Assembly to seek relevant input from the Federal Inland Revenue Service, to resolve the divergent opinions regarding the methodology for the computation of the taxes which would arise as a result of the proposed royalty regime.

Source: The Guardian

Analysts predict further losses on bargain hunting
At the end of yesterday’s transactions on the equity sector of the Nigerian Stock Exchange, the NSE All-share index and market capitalization depreciated by 2.74 per cent to close the week at 37,862.53 and N13.716 trillion respectively.
  
Similarly, all other indices finished lower with the exception of the NSE Insurance Index that appreciated by 3.55 per cent, while the NSE ASeM Index closed flat.Meanwhile, a total turnover of 1.097 billion shares worth N15.471 billion were recorded  in 16,288 deals by investors on the floor of the Exchange in contrast to a total of 1.738 billion shares valued at N18.462 billion that was exchanged hands in 14,790 deals during the preceding week.
  
The drop in tutnover may, however be attributed to the one day holiday declared on Monday June 18th,  2018 to commemorate the Eid-al-Fitr celebrations.Specifically, the financial services industry (measured by volume) led the activity chart with 816.547 million shares valued at N9.425 billion traded in 9,263 deals; thus contributing 74.44% to the total equity turnover volume .
  
The consumer goods industry followed with 76.361 million shares worth N2.992 billion in 2,545 deals. The third place was occupied by the oil and gas industry with a turnover of 51.600 million shares worth N594.590 million in 1,744 deals.Trading in the top three equities namely – United Bank for Africa Plc, Zenith International Bank Plc and FBN Holdings Plc (measured by volume) accounted for 325.580 million shares worth N4.854 billion in 3,381 deals, contributing 29.68% to the total equity turnover volume.
  
Analysts at vetiva Reseatch said: “Sentiment this week was largely bearish, characterized by huge losses in select large caps. Though there is still some room for further losses, we foresee bargain hunting at week open as investors take position on depressed stocks.”
  
Further breakdown of last weeks trading showed that  a total of 61 units of Exchange Traded Products (ETPs) valued at N899.80 executed in seven deals last week, compared with a total of 62,392 units valued at N1.004 million that was transacted last week in 13 deals.
  
A total of 370 units of Federal Government valued at N371,261.96 were traded this week in 3 deals, compared with a total of 9,850 units valued at N9.999 million transacted last week in 10 deals.
  
25 equities appreciated in price during the week, lower than 40 in the previous week. 44 equities depreciated in price, higher than 28 equities of the previous week, while 100 equities remained unchanged lower than 101  equities recorded in the preceding week.
 
Credit: Sunday Times
Investors looking for a haven amid the rout in emerging markets over the past two months would have found one in Nigeria’s domestic debt.
 
Naira bonds issued by the government have returned 8.4 percent in dollar terms this year, the most in the Bloomberg Barclays Global EM Local Currency Index, which includes 25 countries from Argentina to Turkey. And it’s the only local-currency debt not to have made losses this quarter.
 
Nigeria's local bonds have outperformed peers since March
 
Note: Average total return for government local debt in dollar terms
 
Franklin Templeton Investments and BlackRock Inc. are among global money managers that are bullish on Nigerian securities, enticed by average yields of 13.4 percent, which, while down from almost 17 percent in August, are still among the highest in the world.
 
They’re also confident the OPEC member will be able to keep the naira stable, thanks in part to oil prices having climbed around 60 percent in the past year. The naira’s barely budged since a devaluation last year, and held its own as other emerging currencies began to tumble in April. The Abuja-based central bank is keen to keep it that way, at least until February’s elections.
 
South: Bloomberg News
The United States’ Energy Information Administration (EIA) forecasts that Brent crude oil prices will average $71 per barrel in 2018 and $68 a barrel in 2019. Meanwhile, Nigeria’s Bonny Light crude oil has maintain an international price of $73.44 per barrel, higher than the Organisation of the Petroleum Exporting Countries (OPEC) basket price of $73.35 per barrel.
The price of Nigeria’s Bonny Light is higher than the Nigeria’s $51 per barrel benchmark for 2018 budget.EIA in its Monthly Oil Market report for May, expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.The updated 2019 forecast price is $2 a barrel is higher than in the May forecast, which sold for an average price of $77 a barrel, an increase of $5 per barrel from April and the highest monthly average price since November 2014.
 
Even though the 2019 oil price forecast is higher than it was in the May monthly report, EIA expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.According to EIA, expected inventory growth results from forecast oil supply growth outpacing forecast oil demand growth in 2019.
 
EIA currently forecasts global petroleum and other liquids inventories will increase by 210,000 barrels per day (b/d) next year, a factor that, all else being equal, typically puts downward pressure on oil prices.Most of the growth in global oil production in the coming months is expected to come from the United States.
 
EIA projects that U.S. crude oil production will average 10.8 million barrels per day for full-year 2018, up from 9.4 million barrels per day (bpd) in 2017, and will average 11.8 million bpd in 2019.
 
The agency noted that if the 2018 and 2019 forecast annual averages materialize, they would be the highest levels of production on record, surpassing the previous record set in 1970.EIA expects that OPEC crude oil production will average 32.0 million b/d in 2018, a decrease of about 0.4 million bpd from the 2017 level.
 
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, expressed optimism that the price of crude oil would rise to a level that is neither too high nor too low.The Minister said though crude oil appears to have fallen into bad times because of prevailing low price and the campaign against the use of fossil fuels for environmental reasons, the product would soon rise up to take its place as the prime global energy source.
 
Waxing poetic message on the current crude oil prices recently, Kachikwu stated: “My name is oil, those who are kind to me call me black gold. Those who hate me call me crude.“I worry for my future; everyone now talks down on me. Even farmers who trembled at the sight of my name are now strategizing against me.“And all my beneficiaries, me have they abandoned, all because producers have lost their tracks. But I will rise again, and when I do, I will take no prisoners.
 
“I will new technologies control; I will my supremacy confirm; I will my respect regain.“And my pricing, not too low, not too high; but I will not allow prices to humiliate me. All of you in OPEC, APPA, GCEF and all such bodies who have shown me no respect recently, soon, you’ll eat your words.”
 
Source: The Guardian

Nigeria is seeking to amend a law on deep offshore oil exploration and drilling, aiming to increase government revenue from crude sales when prices exceed $20 a barrel, the country’s oil minister said lastweek.

Nigeria’s government relies on oil for around two-thirds of its revenue and Africa’s largest economy is still largely dependent on crude production despite the current administration’s attempts to diversify away from the industry. Those efforts have yielded few results, economic data shows.

Under the deep offshore act, there was a provision in 1993 that allowed for the government to charge oil companies a premium for the administration’s share of sales once the price of crude exceeded $20 a barrel.

The Nigerian government has not enforced that provision but could now look to amend the law to enable it to do so, Emmanuel Ibe Kachikwu, the oil minister, told reporters after a cabinet meeting in the capital of Abuja.

“The net effect for us is close to $2 billion extra revenue for the federation,” Kachikwu said, adding that the petroleum ministry was working with the attorney general to look at the legislation. “From 1993 to now, cumulatively, we have lost a total of $21 billion just because government did not act. We did not exercise it,” he said of the law, without explaining what amendment was needed.

The oil minister noted it would be difficult to recoup past losses, given oil companies that were not paying the government a premium for sales over $20 a barrel were not breaking the law.

However, the administration will explore whether there is an opportunity to get back some of the money, Kachikwu added. The government is also pushing to have Nigeria’s three main oil refineries up and running at full capacity by 2019, the oil minister said.

Despite producing vast quantities of crude oil, Nigeria exports almost all of its crude for refining overseas before paying to have the final fuel products imported, a drain on foreign currency reserves. The administration hopes to raise $2 billion for the refurbishment of the refineries from the private sector, and have them producing around 425,000 barrels of oil per day by the end of 2019, said Kachikwu.

Nigeria’s reliance on oil sales led to it falling into recession last year largely due to low crude prices and attacks by militants on energy facilities in the southern Niger Delta production heartland.

The OPEC member emerged from the recession - its first in 25 years - in the second quarter of 2017 as a result of higher oil receipts.

 

(Reuters)

EVEN as legislators commenced preliminary debates on fundamental of 2018 budget appropriation bill, trouble appears looming from external quarters with OPEC insisting on cutting Nigeria’s oil production to 1.8 million barrels per day.

The bill is predicated on daily oil production of 2.3 million barrels per day at $45 per barrel. While prices continue to float above $60 per barrel in the last few months, authorities say production remains just above 2 million barrels per day.

OPEC oil ministers and other producers are due to meet today in Vienna to discuss extending a deal that has so far reduced crude oil production by 1.8 million barrels per day (bpd) and helped boost oil prices by 40 percent since the middle of the year. The deal between most OPEC members and other major exporters including Russia is scheduled to expire in March 2018.

Sources familiar with OPEC talks said the group may debate capping Nigerian and Libyan output at 1.8 million bpd and 1 million bpd respectively, having exempted the two countries so far due to unrest and lower-than-normal production volumes. Russia has signaled it wants to understand better how producers will exit from the cuts as it needs to provide guidance to its private and state energy companies. Luaibi said there had been a little discussion so far on any exit strategy.

Some Russian producers including Rosneft, run by an ally of President Vladimir Putin, Igor Sechin, have questioned the rationale of prolonging the cuts, saying it will lead to a loss of market share to U.S. firms, which are not reducing output.

OPEC, which comprises 14 countries, has traditionally been much less worried about exit strategies as its members have been known for reducing compliance and cheating on their quotas towards the expiry of such deals. “OPEC and Russia will both realize they are losing market share and they will be better off going back to a more competitive environment,” the head of commodity research at Citi, Ed Morse, told Reuters.

Citi’s rival Goldman Sachs said in a note on Tuesday: “We continue to expect a gradual ramp-up in OPEC and Russian production from April onward.”

OPEC and Russia look set to prolong oil supply cuts until the end of 2018 this week while signaling that they may review the deal when they meet again in June if the market overheats. With oil prices rallying above $60 per barrel, Russia has questioned the wisdom of extending existing cuts of 1.8 million barrels per day (bpd) until the end of next year as such a move could prompt a spike in U.S. production.

Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude. Six ministers from OPEC and non-OPEC oil producers including Saudi Arabia and Russia will gather in Vienna on Wednesday – one day ahead of a full OPEC meeting – to review recommendations by their delegates.

On Tuesday, a joint OPEC/non-OPEC committee recommended extending cuts until the end of 2018 with an option of reviewing the arrangement at the next OPEC meeting in June, three sources from the Organization of the Petroleum Exporting Countries said. However, oil prices slipped on Wednesday as doubts set in about Russia’s willingness to substantially extend a deal among some of the world’s biggest exporters to curb output to help tackle global oversupply and support prices.

Brent crude futures were down 22 cents on the day at $63.39 a barrel by 1147 GMT, while U.S. light crude fell 25 cents to $57.74 a barrel. Moscow fears that a strong price rally off the back of such a move could give an unsustainable boost to the rouble, one that harms Russian exports.

It could also trigger an increase in U.S. production, which has already been rising significantly and offsetting the OPEC-led cuts to some extent. 

A report from the American Petroleum Institute (API) on Tuesday showed a weekly rise in U.S. crude inventories of 1.8 million barrels, confounding expectations for a 2.3 million barrel drop. “The market had been looking forward to a supportive number due to the pipeline disruption from Canada,” said Ole Hansen, senior manager at Saxo Bank. “But nevertheless the overall level of inventory still managed to climb.”

A price rise generated by the shutdown of the Keystone pipeline, which supplies Canadian crude to the United States, turned out to be short-lived, with an announcement on Tuesday of a gradual restart to operations.

  1. Opinions and Analysis

Calender

« July 2018 »
Mon Tue Wed Thu Fri Sat Sun
            1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31