OPEC postponses technical meetings to evaluate Omicron impact: sources

LONDON - OPEC and its allies have postponed technical meetings to later this week, giving themselves more time to assess the impact of the new Omicron coronavirus variant on oil demand and prices, according to OPEC+ sources and documents.

Oil prices crashed together with other financial markets on Friday by more than 10 percent, their largest one-day drop since April 2020, as the new variant spooked investors and added to concerns that a supply surplus could swell in the first quarter.

Friday's fall was exacerbated by low liquidity due to a US public holiday.

Before Friday, OPEC had already predicted the surplus would grow steeply after the United States and other major consumers decided to released oil stocks to help cool down prices.

OPEC and allies known as OPEC+ have move their joint technical committee to Wednesday from Monday, according to the documents. OPEC would hold a meeting the same day.

A joint ministerial monitoring committee will meet on Thursday instead of Tuesday, the documents showed, OPEC+ will also meet the same day, when a policy decision will likely be announced.

"We need more time to understand what this new variant is and if we need to overreact or not," one OPEC+ source said.

OPEC+ has been releasing 400,000 barrels per day of oil per month while winding down its record cuts from last year, when it cut production by as much as 10 million bpd to address lower demand caused by the virus lockdowns.

OPEC+ has some 3.8 million bpd of cuts still in place and some analysts have suggested the group could pause with the increases after the release of stocks and possible repercussions for demand from new lockdowns to contain the new variant.

-reuters- 

OPEC, Russia meet again to approve biggest ever oil cut

BAKU/DUBAI/LONDON - OPEC, Russia and other oil producing nations were meeting on Sunday in a bid to clinch a deal on the biggest oil cut ever, amounting to 10 percent of global supply, after their initial efforts to support oil prices amid the coronavirus pandemic were blocked by Mexico.

The group, known as OPEC+, was expected to start a video conference at 1600 GMT.

On Thursday, OPEC+ outlined plans to cut output by more than a fifth, or by 10 million barrels per day (bpd), but Mexico balked at the production cuts it was asked to make, delaying the signing of a final deal.

"The ministerial meeting between OPEC and non-OPEC members is a follow-up after the April 9 meeting," the energy ministry of OPEC+ member Azerbaijan said on Sunday.

Measures to curb the spread of the coronavirus have destroyed demand for fuel and driven down oil prices, straining budgets of oil producers and hammering the U.S. shale industry, which is more vulnerable to low prices due to its higher costs.

OPEC+ also said it wanted producers outside the group, such as the United States, Canada, Brazil and Norway, to cut a further 5% or 5 million bpd.

Canada and Norway signalled willingness to cut and the United States, where legislation makes it hard to act in tandem with cartels such as OPEC, has said its output would fall steeply by itself this year due to low prices.

Mexico President Andres Manuel Lopez Obrador said on Friday that U.S. President Donald Trump had offered to make extra U.S. cuts on his behalf, an unusual offer by a Trump who has long railed against OPEC.

Trump, who had threatened Saudi Arabia with oil tariffs if it did not fix the market's oversupply problem, said Washington would help Mexico by picking up "some of the slack" and being reimbursed later.

He did not say how this would work and OPEC leader Saudi Arabia has so far refused to accept the fix, according to OPEC sources.

Global oil demand is estimated to have fallen by a third as more than 3 billion people are locked down in their homes due to the coronavirus outbreak.

A 15 percent cut in supply might not be enough to arrest the price decline, banks Goldman Sachs and UBS predicted last week, saying Brent prices would fall back to $20 per barrel from $32 at the moment and $70 at the start of the year.

(Reporting by Reuters OPEC Team, Nailia Bagirova in BAKU, Katya Golubkova in MOSCOW and Tamara Vaal in NUR-SULTAN; Writing by Andrey Ostroukh and Dmitry Zhdannikov; Editing by Jason Neely, Alsion Williams and Alex Richardson)

-reuters-

Oil market likely to rebalance early 2019: OPEC ministers

KUWAIT CITY, Kuwait -- Oil ministers from leading OPEC nations said Sunday they expect prices will arrest their recent slide and rebalance early next year, when a deal on new production cuts takes effect.

Oil prices have shed more than 36 percent since early October to trade at $54 per barrel, due to fears of oversupply and weak global demand.

But OPEC president and United Arab Emirates Energy Minister Suhail al-Mazrouei said the surplus in the oil market was small compared to 2017 and expected it to vanish in one or two months.

"Based on available figures, we have around 26 million barrels of surplus... compared to 340 million barrels in early 2017," the minister told a press conference in Kuwait City.

"I think that we can easily do with this surplus and reach market rebalance in one or two months... in the first quarter of next year," he said.

OPEC -- a cartel of producer countries that has long manipulated output of the commodity to influence global prices in members' favor - and non-OPEC members agreed in early December to trim production by 1.2 million barrels a day from January 1, in a bid to shore up sagging prices.

Mazrouei said that there has been higher than anticipated supply on the market in recent months, as US sanctions on Iran have had a less pronounced effect on the country's oil exports than had been expected.

Iraq's Oil Minister Thamer al-Ghadhban said that there is a consensus among OPEC and non-OPEC producers to comply with the new agreement to trim output in a bid to stabilize the market.

He said the new agreement is valid for 6 months and that the ministers will meet in April to assess the impact of the cuts.

Ghadhban said he believes that the new measures taken by producers will "stop the slide in oil prices."

Mazrouei said that producers are ready to renew the agreement or increase cuts in case the market does not balance.

"If the production cuts of 1.2 million barrels a day is not enough, we will meet again to see what is enough and apply it," he said.

During their meeting next April, the producers are also expected to sign a long-term agreement to formalize cooperation between OPEC and non-OPEC members over oil output.

OPEC has lately been cooperating closely with Russia and other non-cartel producers, in a bid to impose greater control over global output and prices.

source: news.abs-cbn.com

Brent crude oil hits 2015 high

LONDON - Oil rose more than 3 percent on Thursday, pushing Brent crude to a 2015 high above $63 per barrel on increasing evidence that U.S. production is peaking, balancing a market that has been in heavy oversupply for more than a year.

Oil prices collapsed in the six months to January, pushing Brent down more than 60 percent to almost $45 a barrel.

But the market has gradually recovered this year as much lower prices have discouraged oil exploration and production, especially in the United States.

"People are realising that the U.S. production juggernaut is slowing, at least for now," said Virendra Chauhan, oil analyst at London-based consultancy Energy Aspects.

"U.S. production is down for the second time in three weeks and refinery runs are spiking up, driving demand higher."

Brent crude futures for June on Thursday hit $63.29 a barrel, the highest since December, after the previous much weaker front-month futures contract, for May, expired on Wednesday.

By 0835 GMT, June Brent was at $62.52 a barrel, down 80 cents from the previous close for June, but up sharply from Wednesday's close for May at $60.32.

U.S. crude was at $56.00, down 39 cents after hitting a 2015 high of $56.69 on Wednesday.

U.S. crude has been logging its strongest upswing this year as ebbing fears of an inventory overflow and renewed hedging in far-distance futures flatten the forward curve.

"We turn extremely bullish on oil," Singapore-based energy brokerage Phillips Futures said in a note to clients.

"This whole rally was primarily due to drops in U.S. crude production. We see the four-week average for crude production turning negative for the first time since July '14," it added.

Reuters technical analyst Wang Tao told Reuters Global Oil Forum that Brent could rise towards $70 a barrel in the near term, but that a sharp downturn could happen after that.

U.S. oil prices jumped on Wednesday after U.S. inventories built up more slowly than expected, although still to a new record. Talks between major oil producers also triggered speculation of production cuts, even though most analysts said these were unlikely.

Despite the oil price rally, the market remains oversupplied, analysts say.

"The recent bounce comes despite a surge in OPEC crude oil production in March which is likely to have been sustained in April," ANZ bank said.

source: www.abs-cbnnews.com