WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Precise Consultants

Precise Consultants

’Precise Consultants is a London based technical recruitment consultancy that supplies specialist personnel to the offshore oil and energy industry. The company was founded by…

More Info

As Non-OPEC Compliance Hits 60%, Oil Prices Remain Stagnant

Oil terminal

When is 60 percent compliance a good thing? When it’s not 40 percent...

That is the latest status on the non-OPEC nations who agreed to November’s production cut, as discussed at the first meeting of the monitoring committee, held in Vienna last week. Kuwait chairs the five-member committee which also includes Algeria, Venezuela, Russia and Oman.

Asked by Reuters about compliance with the deal so far, Saudi energy minister Khalid al-Falih said it had been "very good" and the Russian Energy Minister Alexander Novak also said he was satisfied. Bloomberg reported that in January compliance was 48 percent, equating to an output reduction of 270,000.

However despite the February non-OPEC compliance figure being anywhere between 60 and 66 percent, the Oil Minister for Kuwait Essam al-Marzouq is calling for more action. As one insider told Reuters, “This shows the seriousness of OPEC and non-OPEC in implementing the agreed cut.”

To remind you, OPEC and 11 non-OPEC countries agreed back at the end of last year to almost 1.8 million bpd of cuts. The non-OPEC cut was 558,000 million bpd. As if you need reminding, it followed an historic collapse in prices lasting more than two years and a global glut in supply. The move has been credited with listing oil prices roughly 20 percent in the intervening months.

However the meeting came at a tough time, when OPEC was refuting the suggestion that the increases in U.S. shale oil was preventing their measures from having an impact. There’s hope according to the Secretary-General Mohammad Barkindo that they and President Trump might have an “energy dialogue” and that the U.S. could be “a partner – a strategic partner in the rebalancing process.” Related: Panic In Vienna: OPEC Needs To Bring Down Costs To Compete With U.S. Shale

OPEC has also come under fire from a Professor of Energy Policy at the University of Oxford, who says the current approach might be completely wrong. Dieter Helm addressed the International Petroleum Week held in London and told attendees that he believed prices would only ever really reduce. “For the NOC’s (National Oil Companies) in the Middle East and elsewhere, increasing production is quite a good idea, because you’re going to need the money and you might as well get your stuff out of the ground now rather than later. So, the opposite of what’s currently happening.” He put the eventual decrease down to an increased focus on climate change and renewable energy, with a decreasing demand on fossil fuels.

The good thing is you can always find someone with a completely different opinion than you, even when faced with the same facts. Marketwatch quotes a Citigroup strategist who said Brent oil could make its way up to $70 by the end of the year, and the even more optimistic Phil Flynn, he of the PRICE Futures Group said they’ve bene going for $73 pb for U.S. Crude and $71 pb for Brent since January.

All in all, the mood across the week in London was upbeat. Let’s give the final words to the EVP at Statoil, Jens Økland, who told reporters, “Some have started to predict the near end of our industry. I could not disagree more. I’m confident that we will play a constructive part as the world will need a lot of oil and gas even in a climate change scenario.”

By Precise Consultants

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Scott Leach on March 02 2017 said:
    Really...OPEC thinks they can have "re-balancing" talk with Trump?????!!!!

    The whole point of the American oil industry is to make the market free and fair so that Americans can become energy independent. The plan on the American side is working well and needs to keep increasing the pressure on OPEC collaborative corruption. I really believe that the fair price right now is $45.00 per barrel.

    The biggest threat to the world economy right now is that the industry has over-priced itself and over committed to a product not worth nearly what they are thinking it is. If we get a honest correction of value the world economy will be in a big hurt, but it's not the American Oil Industry or the Americans that should collude to avoid this. Instead we can take advantage of the corrupt OPEC ways!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News