Opec discipline so far not sufficient to slash bulging world stocks

[rooster59]

Opec discipline so far not sufficient to slash bulging world stocks

By MRIGANKA JAIPURIYAR 
SPECIAL TO THE NATION

 

THE DRAMATIC discipline shown by oil producers in adhering to the landmark production-cut deal reached late last year has no doubt taken the world market by surprise, but it has done little to make a dent in supply, prompting prices to hover in a tight range of US$50-$55 a barrel.

 

And with the refinery maintenance season looming, it is unlikely that international oil prices will break above $55 a barrel in the near term.

 

According to a survey by S&P Global Platts, out of a total refining capacity of around 32 million barrels a day in the Asia-Pacific region, about 2.9mmbd is expected to be shut down from this month to June, reducing demand for crude oil. The 10 members of the Organisation of the Petroleum Exporting Countries obligated to reduce output have achieved 98.5 per cent of their combined cuts over January and February, Platts’ latest Opec output survey showed.

 

Full story: http://www.nationmultimedia.com/news/business/EconomyAndTourism/30308603

 

 

-- © Copyright The Nation 2017-03-11

[Srikcir]

7 hours ago, rooster59 said:

THE DRAMATIC discipline shown by oil producers in adhering to the landmark production-cut deal reached late last year has no doubt taken the world market by surprise, but it has done little to make a dent in supply

Good reason oil producers have done little to cut world supply:

• December 2016 Russia was producing at record highs.
• Iran and Iraq are ramping up their production since 2016.
• North Sea oil production continues to increase.
• US is continuing to increase its oil production.

Cost of oil production generally has been coming down and allowing profit margins at lower oil prices.

[elgordo38]

1 hour ago, Srikcir said:

US is continuing to increase its oil production.

I hope these guys are not falling into another Saudi trap where they ramp up production drive prices down and put more shalers into bankruptcy. Not all shalers are making money at present oil prices they are pumping to stay appease their bankers. Banks now hesitate to put them into bankruptcy they would sooner just keep them working and paying on their loans you cannot get blood out of a stone.  

[elgordo38]

The Saudis are trying to keep oil prices high so that they can dump about 2 trillion dollars of Saudi Armco oil shares. Only a sucker would buy these as the oil market is to volatile and just how much reserves do they truthfully have left as this is a closely guarded secret. I just have trouble trusting someone that runs around dressed in a bed sheet sorry dressed like a Bedouin. Times must be tough in Saudiland the Sheik got away with only 500 TONNES on his last trip to Indonesia. He took 80 birds sorry Falcons along with him. I wonder how many went from the harem only the creme de la creme I would imagine (break here imagination still spinning). I hear he took a lot of grapes along to have popped in above his beard. Goes to show you we were definitely not all created equal. 

Edited March 11, 2017 by elgordo38

[ExpatOilWorker]

It is a waiting game for OPEC. Demand for oil is still growing and soon the good days of $75+ oil will be back again.

 

In the next few years, oil supply is growing in the United States, Canada, Brazil and elsewhere but this growth could stall by 2020 if the record two-year investment slump of 2015 and 2016 is not reversed. While investments in the US shale play are picking up strongly, early indications of global spending for 2017 are not encouraging.

 

https://www.iea.org/newsroom/news/2017/march/global-oil-supply-to-lag-demand-after-2020-unless-new-investments-are-approved-so.html

[ExpatOilWorker]

5 hours ago, Srikcir said:

Good reason oil producers have done little to cut world supply:

• December 2016 Russia was producing at record highs.
• Iran and Iraq are ramping up their production since 2016.
• North Sea oil production continues to increase.
• US is continuing to increase its oil production.

Cost of oil production generally has been coming down and allowing profit margins at lower oil prices.

All true, but the UK sector of the North Sea, that use to produce 3 million bpd around 1999 is still only a thin shadow of itself as they just broke 1 million bpd recently. The Norwegian sector is also limping along, but doing a bit better.