Thursday, 20 February, 2020

New Saudi Energy Minister Calls for OPEC 'Cohesiveness'

Saudi Arabia has been shouldering the burden of oil output cuts that came into effect in January but other producers- notably Nigeria and Iraq- stand accused of exceeding their quotas New Saudi Energy Minister Calls for OPEC 'Cohesiveness'
Ginger Lawrence | 13 September, 2019, 09:59

Surging output from shale helped America ship nearly nine million barrels a day of crude and oil products in June, surpassing Saudi Arabia, the International Energy Agency said in a report, citing gross export figures.

The U.S. briefly overtook Saudi Arabia to become the world's top oil exporter thanks to its expanding shale production, said the International Energy Agency (IEA), adding that the global market is heading towards a "significant surplus" in the coming months.

The Saudi Energy Ministry said on Twitter that Prince Abdulaziz's comment "underscores the key objective of the Kingdom's oil policy, which is to achieve market stability & stresses the importance of maintaining a high degree of cohesiveness among OPEC and non-OPEC producers, led by Russian Federation".

OPEC and its non-cartel members on Thursday discussed further cuts to oil production and the possibility of Iran re-entering the global market but said that any decision would have to wait for a meeting in December.

Prices had ended lower on Tuesday, squeezed by speculation of sanctions-hit Iranian crude returning to the market following U.S. President Donald Trump's move to fire national security adviser John Bolton, a noted Iran policy hawk.

"Everyone committed to compliance but we've heard that before". The swelling American output, as well as deepening concerns over global demand fuelled by a prolonged U.S.

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"Oil prices are down on concern that the USA administration could ease its stance versus Iran, which could see disrupted Iranian oil barrels returning to the market if United States sanctions against Iran get eased".

"Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal", Goldman analysts wrote in a note.

Separately, the U.S. Energy Information Administration said domestic gasoline stocks decreased less than expected last week while crude stocks fell to the lowest in almost a year. The average price for a gallon of regular gasoline in the $2.56, down from $2.83 a year ago, according to AAA.

Russia, Iraq and Nigeria in August produced 600,000 bpd more than their quotas in the supply pact, the IEA said, but Saudi Arabia cut by more than it had pledged, keeping the overall agreement intact.

For the second half of 2019, we retain the view that with oil prices now about 20% lower than a year ago there will be support for consumers. -China trade war faded, leaving prices set for a weekly loss after days of wild gyrations.

Against this uncertain backdrop, the IEA left its oil demand growth forecasts for 2019 and 2020, lowered in its previous monthly report, unchanged at 1.1 million barrels per day and 1.3 mbd.