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EIA Forecast Rising Production, Slightly Higher Pump Prices

08 March, 2017, 00:35 | Author: Paula Vaughn
  • US Biggest Beneficiary Of Output Cut By Saudi-Led OPEC – OpEd

That was the message of the International Energy Agency as the CERAWeek energy conference kicked off in Houston.

But that bullish sentiment has wavered with Russia's lackluster participation in the cuts, rising USA shale output and signs OPEC countries began increasing crude exports in February. Royal Dutch Shell (RDSA) was off 0.1%.

"Certain expansion is indicative of the alignment between the United States of America, under the Trump administration, and the Kingdom's energy strategies and policies", the minister said. During the same week a year ago, there were 392 active oil rigs only.

In a speech, Falih also swung hard at the idea that oil demand will soon peak.

During an oil dialogue at the start of the second day of CERAWeek by IHS Markit, Khalid Al-Falih said he was optimistic about members' compliance with the cuts that amount to a combined almost 1.8 million b/d, with 1.2 million of that from OPEC members. This fall has been attributed to the collapse of USA crude oil prices to near US$26 in February 2016, from over US$107 a barrel in June 2014.

During an interview with CNBC after his speech, Al-Falih said Russia's cuts in February weren't enough. "We want to increase our production. That's why Saudi Arabia does not support OPEC intervening to alleviate the impacts of long-term structural imbalances", he said.

Has April the giraffe finally given birth?
He added that April's pregnancy is not just live entertainment, but a teachable moment and source for education. As of Monday afternoon - after 11 days of livestreaming - April the giraffe has yet to give birth.

There's a worldwide glut of oil now, and the IEA said that supply looks adequate for the next three years, thanks to rising production from US shale producers and Canadian oilsands projects that were sanctioned before the oil price crunch began.

Within OPEC, the IEA said most new supply will come from low-priced Middle Eastern producers, namely Iraq, Iran, and the United Arab Emirates, while production in Nigeria, Algeria and Venezuela will decline.

That's the view of Fitch Ratings which suggests that high global inventories and recovering USA production will partially offset the effect of production cuts from both OPEC and non-OPEC members in the first half of this year, resulting in a slow return to its long-term equilibrium price forecast of $65 per barrel.

While he welcomes the return of investors to US shale, Al-Falih also warned that shale was growing too fast, especially in short-cycle projects.

The prices rose earlier in the day when media reported that Iraq said OPEC would likely need to extend its production cuts into the second half of 2017.

Iraqi Oil Minister Jabar Ali al-Luaibi also was cautious on the possibility of an extension.

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