Tag Archive for: prices of oil

OPEC’s Stable Market Outlook Points to Status Quo at Meeting

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OPEC kept forecasts for global oil supply and demand unchanged in its last monthly assessment before members meet to review the market.

The 13 nations of the Organization of Petroleum Exporting Countries pumped 32.44 million barrels a day in April, slightly less than will be required to meet demand in the third quarter. Production rose as gains in Iran and Iraq compensated for losses in Nigeria and Kuwait. Investment by the global oil industry through 2018 will slump to less than half the amount spent from 2012 to 2014 following the collapse in prices, OPEC said.

Oil prices have rebounded more than 75 percent from the lows reached in February as U.S. shale production falters, signaling that Saudi Arabia’s strategy to re-balance oversupplied world markets is taking effect. OPEC, which failed to complete an accord with non-members last month on capping output, has no current plans to revive supply limits when ministers meet on June 2, six delegates said on May 4.

“We shouldn’t expect any freeze and definitely not any cut because OPEC sees things are improving from a fundamental point of view,” said Torbjoern Kjus, an analyst at DNB ASA in Oslo. “The structural decline based on lower investment is starting to show up in numbers for non-OPEC. That damage is done, even if prices recover in the second half.”

April Increase

OPEC production increased by 188,200 barrels a day last month to 32.44 million, according to the report. While the group’s supply has typically exceeded the required amount in recent months, April output is about 380,000 barrels a day below the 32.8 million that OPEC estimates will be needed in the third quarter. That potential shortfall is a further indication the organization’s policy is working.

Global oil demand will increase by 1.2 million barrels a day, or 1.3 percent, this year to 94.18 million a day, according to the report. Supplies from outside the group will shrink by 740,000 barrels a day to 56.4 million.

“A return to balance is a shared interest among consumers and producers alike,” the group’s Vienna-based research department said in the monthly report.

 

 

Font: Bloomberg

Oil at $50 Is ‘Gift to World’ as Abu Dhabi Sees Higher Prices

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Oil at $50 a barrel is a “gift to the world” as prices should be low enough to spur economic growth, according to the head of Abu Dhabi’s Department of Economic Development.

Prices will probably be at $60 next year, after hitting bottom at $45, Ali Al Mansoori, the department’s chairman, said in an interview Sunday in the capital of the United Arab Emirates, the fourth-largest oil producer in the Organization of Petroleum Exporting Countries. Benchmark Brent crude has dropped 16 percent this year amid a global oversupply and was trading Monday at $47.98 a barrel at 11:55 a.m. London time.

“It is a gift to the world that oil has dropped to $50,” Al Mansoori said. “Would we like for oil to stay at $50? Absolutely not. We would like oil to go to $70, $80, but beyond that I think it would hurt the economic growth.”

Oil demand growth will climb to a five-year high of 1.8 million barrels a day this year before slowing next year amid a weaker outlook for the world economy, the International Energy Agency forecast in its October market report. The market will probably remain oversupplied through 2016 as Iran exports more crude, should international sanctions be eased, it said.

‘Win-Win’

Oil at $50 to $60 a barrel is a “win-win situation” because it benefits consumers and producers alike, Al Mansoori said. For buyers, “it’s an opportunity for them now to use it as much as possible to set up their policies for economic growth in the next five years because ultimately the commodity is scarce.”

Declining oil prices will mean Abu Dhabi’s gross domestic product growth will be little changed next year, Al Mansoori said. The emirate is doing what it can to expand the economy, but “if we don’t, we take next year as a challenge and turn this challenge into opportunity and turn 2017 with strong growth,” he said.

Major projects in Abu Dhabi will continue. The Midfield Terminal Building at the Abu Dhabi International Airport is still slated to open in 2017, while a branch of the Louvre museum will open next year, Al Mansoori said. In addition, Al Mansoori said he’s meeting with architect Frank Gehry next month in Los Angeles to review the final design for the Guggenheim museum being built in Abu Dhabi, and move ahead with signing the museum’s contract.

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