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[grupo guitarlumber] 27/5/2018 17:21

Home > News > OPEC, allies said to have reached goal of wiping out oil-stock surplus
OPEC, allies said to have reached goal of wiping out oil-stock surplus
By Wael Mahdi and Grant Smith on 5/27/2018
KUWAIT and LONDON (Bloomberg) -- OPEC and allied oil producers including Russia concluded that the crude market re-balanced in April, when their collective production cuts achieved a key goal of draining the surplus in global stockpiles.

The excess in oil inventories, which has weighed on prices for three years, plunged in April to less than the five-year average for stockpiles in developed nations, according to people with knowledge of the data assessed at the meeting of the Joint Technical Committee of OPEC and other producers last week in Jeddah, Saudi Arabia.

The committee, known as JTC, determined that stockpiles held by developed nations dropped to about 20 MMbbl below their five-year average, for a total decrease of about 360 MMbbl since the start of 2017, three of the people said, asking not to be identified because the JTC discussions were private. The decline was due to producers’ greater adherence to their pledged output cuts -- their compliance rate reached 152% in April -- and to summer demand for crude and refined products, according to the people.

The JTC meeting precedes the producers’ main gathering next month in Vienna, where they will evaluate the results of output cuts they’ve been making since January 2017. With supplies from Iran and Venezuela now at risk, speculation abounds that the Organization of Petroleum Exporting Countries and its allies may ease the cutbacks. Top producers Saudi Arabia and Russia said last week that OPEC and other suppliers may boost output in the second half of the year, prompting a slide in prices which had reached $80/bbl for the first time since 2014.

The producers have so far relied on measuring stockpiles in countries of the Organization of Economic Cooperation and Development by looking at the moving 5-year average. At last week’s meeting in Jeddah, the JTC reviewed other ways to assess oil inventories. One option is to look at a longer-range, a 10-year average from 2004 to 2014, while another is to use the five-year average but exclude data from 2015 and 2016 because those were years of abnormally large stockpiles, the people said.

The International Energy Agency said on May 16 that OPEC and its allies have finally succeeded in clearing a glut, with inventories falling below their five-year average for the first time since 2014. However, Saudi Arabia and Russia have both said the five-year average is flawed. Years of excessive supplies mean that measure is itself higher than normal, while the patchy nature of data outside the OECD makes it difficult to make an accurate assessment of the entire world market.

[the grumpy old men] 27/5/2018 15:56

Oil's drop below $80 vindicates cautious investors trimming bets
By Christine Buurma and Catherine Ngai on 5/27/2018

NEW YORK (Bloomberg) -- Money managers’ reluctance to get behind the oil rally is finally paying off.

Hedge funds trimmed their net-long position -- the difference between bets on a price increase and wagers on a drop -- in Brent crude by the most in almost a year. The cuts came as the global benchmark capped its first weekly drop since early April, sliding below $80/bbl after Saudi Arabia and Russia said OPEC and its allies may boost oil output in the second half of the year.

“Traders thought that the market was in the process of topping out,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone Friday. Oil prices had a “swift reaction today to the musings by OPEC to potentially add more supply to the market. We will be very headline-driven over the next few weeks.”

Oil retreated from the highest prices in almost four years as Russian and Saudi energy ministers signaled that the coalition led by the Organization of Petroleum Exporting Countries may gradually raise oil production to assuage consumer anxiety about higher prices. Their comments mark a major shift in strategy for the historic alliance forged in 2016 to erase a global crude glut.

“I think in the near future there will be time to release supply” smoothly to avoid shocking the market, Saudi Energy Minister Khalid Al-Falih said at the St. Petersburg International Economic Forum in Russia. When OPEC, Russia and other major producers meet in June “we will do what is necessary” to reassure buyers, the minister said.

He spoke after talks with his Russian counterpart Alexander Novak, who said the output boost would start in the third quarter, if it’s approved by other members of the group. Both men said the size of the increase was still subject to negotiation.

Hedge funds lowered their Brent net-long position by 8.6% in the week ended May 22 to 501,634 contracts, according to ICE Futures Europe data on futures and options released Friday. That was the biggest decline since June 2017.

Money managers’ net-long position in West Texas Intermediate crude fell by 2% to 377,520 futures and options, the lowest since November, according to U.S. Commodity Futures Trading Commission released Friday. Longs slipped less than 0.1%, while shorts climbed 23%, the biggest jump since April.

“You want to get out of the long positions if you are expecting that OPEC is going to increase production,” James Williams, president of London, Arkansas-based energy researcher WTRG Economics, said by phone. “It makes perfect sense for the folks that are long to say, ‘How much longer can this thing continue to grow?’”

Disruption threat

Crude had rallied earlier this month on the dual threat of supply disruptions from Iran and Venezuela, which together account for about 14% of OPEC’s production. Still, the coalition is weighing the possibility of easing output limits at a time when drillers are pumping record amounts of crude from American shale basins.

“The market kind of overextended itself, ” Gene McGillian, manager of market research for Tradition Energy in Stamford, Conn., said by phone. “With the Saudis now saying they’re limiting their production cuts and geopolitical risk already priced in, there is going to be some uncertainty.”

A dearth of pipelines in West Texas’ Permian basin, the most prolific U.S. oil play, is leaving supplies trapped in the region. That’s expanding the nation’s surplus of the fuel as American production tops 10 MMbpd.

U.S. inventories climbed by 5.78 MMbbl to about 438 MMbbl in the week ended May 18, data from the Energy Information Administration showed. That was a surprise increase compared with the 2-MMbbl decline predicted in a Bloomberg survey.

But analysts and traders predict that stockpiles may decline in the coming weeks, bolstering prices. Data provider Genscape Inc. was said to report that inventories fell by about 475,000 bbl between May 18 and May 22 at the key pipeline hub in Cushing, Okla.

Oil prices have “been extremely extended for a long period of time,” Kyle Cooper, a consultant at brokerage Ion Energy Group LLC, said by phone Friday. The “EIA report was bearish with a nearly 6-MMbbl build in total petroleum. The more important thing is how that was followed up today with OPEC and Russia regarding the possibility of removing some of those supply constraints.”

[maxk] 26/5/2018 23:27

Petrol's going the same way.

No inflation tho.

[temmujin] 26/5/2018 19:29

looks like maestro was right again...diesel over £1.40p a litre in some places now

[waldron] 26/5/2018 10:51

Putin raps Trump over Iran oil sanctions move
Sat May 26, 2018 09:33AM

HomeIranEnergy

Russia’s President Vladimir Putin says the oil market must be fair and no “artificial restrictions” should be used against market players.
Russia’s President Vladimir Putin says the oil market must be fair and no “artificial restrictions” should be used against market players.

Russia’s President Vladimir Putin has criticized a controversial decision by US President Donald Trump to re-instate sanctions against Iran, warning that such a move would only harm the global economy.

Putin – who was speaking at the 2018 St. Petersburg International Economic Forum – also said that Trump’s decision had also plunged the fate of an oil production cut agreement with the world’s biggest producers into uncertainty.

He emphasized that Moscow would have to wait and see how the situation around the nuclear agreement with Iran would proceed before making a decision on whether and under what circumstances extend the oil production cut agreement with other producers from the Organization of the Petroleum Exporting Countries (OPEC).

"In general terms, it [the market] must be fair. No artificial restrictions caused by political considerations should be used. They do not benefit the global economy but only harm it," he was quoted as saying by TASS news agency.

Putin emphasized that consultations with the OPEC over ways to help stabilize oil prices still continued.

"Nothing unusual is taking place there, we are working in conditions agreed earlier. The practice will show what will happen further on. Indeed, much will depend on whether the nuclear deal with Iran is preserved or not and how it will affect the global energy market," he said.
PressTV-Russia warns oil to hit new highs, blames Trump
Igor Sechin, the chief executive officer of Russia’s oil giant Rosneft, says the decision by US President Donald Trump to pull America out of a nuclear agreement with Iran would push oil prices to new highs.

Putin said he believed that the global energy market was already balanced, stressing that he favored an oil price at $60 per barrel.

He said Russia would benefit from rising oil prices but was not in favor of what he described as the endless growth of energy prices.

"We are not interested in an endless growth of energy prices, of oil prices. If you asked me what price do we think is fair, then I'm telling you fair-not fair, but we were content with the price of $ 60 per barrel," he was quoted as saying by TASS news agency.

Putin added that prices above this level can cause "certain problems for consumers, what the main producers are also not interested in."

"Therefore, the small surge that we see today, it on the one hand benefits the Russian budget, our gold reserves are growing, and over the past year, the surplus of the trade balance amounted to $130 billion. All this, on the one hand, are positive elements, but on the other hand, we understand that the opportunities of our competitors, including shale oil producers in the US, are growing, they fill a certain part of the market, "Putin said. " He added that Russia doesn't have anything against it, since "this oil mainly goes to the American market."

[waldron] 26/5/2018 09:08

its ALBERTO so batten down the hatches

i wonder when B B ACOMIN

[grupo guitarlumber] 26/5/2018 09:05

YEP alberta being watched with a keen eye

[bountyhunter] 26/5/2018 08:53

for any newcomer's here - you can keep an eye on Alberta etc. in the weather map towards the end of the header

[maywillow] 25/5/2018 15:11

Judge Demands More Information from Oil Companies in Climate-Change Suits
24/05/2018 11:47pm
Dow Jones News

Shell B (LSE:RDSB)
Intraday Stock Chart

Today : Friday 25 May 2018
Click Here for more Shell B Charts.

By Alejandro Lazo and Miguel Bustillo

SAN FRANCISCO -- A federal judge on Thursday said he needed more information before deciding whether to dismiss lawsuits by San Francisco and Oakland alleging that five of the world's largest oil companies should pay to protect the cities' residents from the impacts of climate change.

U.S. District Judge William Alsup asked the oil companies and the cities to narrow their arguments regarding the merits of the suit. The judge also asked the companies to produce additional material backing up claims by some that they shouldn't be a part of the case because the court lacked jurisdiction over them.

The suits allege that the companies -- Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell PLC, BP PLC and ConocoPhillips -- created a public nuisance by producing fossil fuels they knew would result in harmful emissions.

San Francisco and Oakland are seeking to force the companies to pay for infrastructure, such as sea walls, that they expect to need due to rising sea levels and other changes linked to warming global temperatures. The cities haven't specified how much they are seeking, but have said the costs could run into the billions of dollars.

Several other U.S. cities and counties have filed similar lawsuits targeting oil companies, including New York City, King County, Wash., and Boulder, Colo. So far, none of the lawsuits has advanced to trial, and Thursday's hearing means it will be months before a judge decides whether the San Francisco and Oakland case warrants a trial.

Lawyers for the oil companies have sought to dismiss the suits by San Francisco and Oakland, arguing among other things that they were premised on an overreaching interpretation of public-nuisance law. They also have argued that Congress has given the Environmental Protection Agency the authority to regulate pollution effects under the Clean Air Act, and that the cases impinged on the agency's powers.

During the three-hour hearing, Judge Alsup cited the beneficial role oil and gas production had played in the development of the U.S. But he also said he remained open to the idea that, given society continues to reap the benefits of that activity, some damages may have to be paid considering the potential harm of climate change. He asked both sides to explore the matter further in separate briefs.

"You lived through the same period I did, and you understand how dependent our nation has been on oil," said the judge, addressing an attorney representing the cities.

Theodore Boutrous of Gibson, Dunn & Crutcher LLP, a lawyer representing Chevron, argued the cities were asking the court to create "a new regime to regulate oil and gas production around the U.S. and around the world."

"That is, to say the least, a big ask," Mr. Boutrous said.

The two sides have argued over the relative importance of a case that provides the closest parallel to what the cities are alleging. The case, known as AEP v. Connecticut, involved a coalition of states that sought to compel coal-burning electric utilities to reduce greenhouse-gas emissions, arguing they were a public nuisance.

That case reached the U.S. Supreme Court, which ruled in a 8-0 decision in 2011 that the utility companies couldn't be sued under federal common law because the Clean Air Act gave the authority over greenhouse-gas emissions to the EPA.

"The law of nuisance has been around forever and it has responded to changes," Steve Berman, an attorney representing Oakland and San Francisco, said during Thursday's hearing. "We are not doing something that is as novel as the defense claims."

Lawyers for the oil companies earlier persuaded Judge Alsup that the San Francisco and Oakland cases, filed last year in state court, belonged in federal court.

The Trump administration earlier this month filed a friend-of-the-court brief siding with the oil companies seeking to dismiss the San Francisco and Oakland cases. Three states -- California, New Jersey and Washington -- have filed briefs siding with the cities, while 15 states, including Indiana, Texas and Colorado, have filed briefs siding with the oil companies.



(END) Dow Jones Newswires

May 24, 2018 18:32 ET (22:32 GMT)

[marmar80] 25/5/2018 13:01

You can't buy Hawk shares. It's suspended. Assets auction next week. Bargain for oil companies, as hawk is a producer mcap £1m with $21m debt, but generating a lot of cash per month from own wells - $21m per annum! As a shareholder in hawk I would like to see more interest around their assets as current offer is very low and will cover debt only. Doing this also because directors failed and want to sell it quick to the first company!

[sarkasm] 25/5/2018 11:08

TOO RISKY FOR ME,IF EVEN ALLOWED TO BUY

[marmar80] 25/5/2018 10:50

Auction next week. Nighthawk Energy is selling urgently all assets in a week time. Reason - debt. Oil production 930 bopd average. This is $20m cash per year. Current offer from one interested party stands at $18m for the whole company and subsidiaries. 100% return from investment for them.

[joestalin] 25/5/2018 10:41

There are not that many oilcos that are not currently undervalued. Very little TO action so far.