Most oil producers want extension of output cuts: Iran minister

Apr 19, 2017, 01:42
Most oil producers want extension of output cuts: Iran minister

OPEC agreed to slash the output by 1.2 million barrels per day from January 1, with top exporter Saudi Arabia cutting as much as 486,000 bpd. Consequently, the country lost its status as Africa's top oil producer to Angola, according to latest data from the Organisation of Petroleum Exporting Countries (OPEC).

"The key to understanding the shifting trade flows is to be found in the arbitrage spreads", said Eugene Lindell, senior oil market analyst at JBC Energy consultants in Vienna.

The Organization of the Petroleum Exporting Countries will meet on May 25 to consider extending output cuts beyond June to reduce a glut that has depressed prices.

USA crude fell about 0.7 percent to $52.27 a barrel by mid-day Tuesday.

The drop in oil prices during March led declines across commodities, according to Citigroup. Goldman Sachs shares sank 3.1 per cent in early trading after the bank reported a lower-than-expected quarterly profit due to weak trading revenue.

Chan said he expected Brent to test $54 and WTI $51.70. This would vastly outweigh the 1.8m b/d that was agreed upon past year in an arranged output restriction.

The International Energy Agency (IEA) reported in November of past year that they believe peak demand will occur sometime after 2040, with most of the increased demand during the period coming from China and India. Saudi Arabia was said to have produced 9.9 million bpd in March, more than 100,000 bpd below its monthly quota under the production cut deal. "On balance, market sentiment will continue to be swayed by the weekly USA stocks data", she said. "We have an interesting second half to come", the agency underlined in its Monthly Oil Report.

"Even after taking into account production-cut pledges from the eleven non-OPEC countries, unplanned outages in Canada as well as in the North Sea, we expect production will grow again on a year-on-year basis by May", it said.

China announced its first quarter GDP on Monday, which rallied 1.3%, compared to the same period prior year for an annual pace of 6.9%, topping expectations for the year-over-year comparison.

Before the holidays, energy services provider Baker Hughes reported that the number of USA rigs drilling for oil rose by 11 to 683 in the latest week. Also, the prospect for demand was boosted by a hopeful note from the International Monetary Fund. New data shows weaker-than-expected growth in a number of countries including Russia, India, several Middle Eastern countries, Korea and the United States, where demand has stalled in recent months. Consequent to that, the IEA had to cut its 2017 forecast growth to 1.3 million bpd rather than the 1.4 million bpd as forecasted previously. By July 2014, the world was virtually awash in oil - storage tanks were full and supertankers were languishing in ports with no market for their cargos.

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