OPEC November oil output rises, led by Iraq, Saudi -Reuters survey
One OPEC delegate, who asked not to be named, said raising the ceiling to 31 million bpd would be discussed at the December 4 meeting and added he saw no impact on prices because Indonesian supply would simply be taken from non-OPEC to OPEC. “So to use the Saudis’ own logic, as far as Iranian production goes – bring it on”. The movement today is largely being attributed to investors hoping for a sigh of relief from OPEC, which would come if it decides to lower its production rates and support prices.
“The country, along with other Persian Gulf members of OPEC, opposed Venezuela’s proposal for an oil-price summit with non- OPEC producers”, the Wall Street Journal reported.
As OPEC prepares to meet on Friday in Vienna, Russia is sending a low-key delegation for talks which are very unlikely to result in any output deal.
The Opec’s rivals may face renewed pressure next year as Iran revives shipments constricted by three years of sanctions over its nuclear programme. “That is sparking a lot of interest”, said Michael Poulsen, oil analyst at Copenhagen-based Global Risk Management.
Saudi Arabia, the architect of the current strategy of pump and dump, has received increased criticism from within the cartel.
The yellow line shows OPEC crude oil production. That could happen around the end of the first quarter, Societe Generale estimates.
The EIA (U.S. Energy Information Administration) reported that United States oil production fell by 17,000 bpd (barrels per day) to 9.2 MMbpd (million barrels per day) for the week ending November 20, 2015. Earlier this month, Ali bin Ibrahim Al-Naimi, the Saudi Arabian minister for petroleum and mineral resources, indicated that the world’s largest crude exporter is ready to use all tools necessary in order to reduce instability in energy markets worldwide.
“The China slowdown is probably the biggest single influence that is depressing oil and other commodity prices; it’s not just a supply-side story”.
At around 0230 GMT, US benchmark West Texas Intermediate for delivery in January was up 10 cents to $41.81 and Brent crude for January was trading five cents lower at $44.81 a barrel.
Companies whose costs and profits are dependent upon $80-a-gallon oil are fighting for survival, or going bankrupt, in the current price atmosphere while even the well-capitalized oil giants – Exxon/Mobil and Chevron – are seeing significant profit declines. “It is sensible”, a second OPEC delegate said. Due to be published tomorrow, the Purchasing Managers’ Index for the manufacturing sector (PMI) is likely to remain below 50, confirming the weak industrial demand. “Iran will oppose the strategy because they can not survive with this price”. The dynamics of supply and demand will produce an equilibrium at some point. Some in the cartel say that Indonesia can offer insights in to oil consumers’ views as it is now a net oil importer.
“The rather slushy market will constitute a constraint on Iran’s capacity to ramp up”, Halff said. A further analysis of the survey indicated that Iraq would require $81 per barrel price to achieve balanced budget based on the country’s 13 per cent share of OPEC production.