Russia, Iraq: Too Soon To Talk Of Extending Oil Output Deal

“The recovery in USA drilling activity will drive up shale oil production in the second half of 2017, offsetting a portion of recent oil price gains”, the credit rating agency’s report released on Monday says. Developing countries, primarily in Asia, account for all the projected growth, or roughly 70% of production growth.

This would escalate risks of a sharp increase in oil prices across the globe, Birol noted.

WTI and Brent crude oil prices are likely to remain rangebound like they have been for the past 75 days, limited by concerns that US output may counter OPEC’s strategy to reduce production during the first half of the year.

“The United States responds more rapidly to price signals than other producers”.

Capping any upsurge has been an inevitable rise in USA shale oil drilling after WTI rose firmly above the $50 a barrel level in December following OPEC’s sealing of the deal, which also included several non-OPEC producers such as Russian Federation. According to the OPEC’s February figures, the organization has cut the output down to 32.1 million barrels per day by 890,200 barrels if to compare with December, implementing the deal’s provisions by over 90%.

The IEA outlook echoes the prediction by the industry consultant Wood Mackenzie that while industry finances and investment will improve this year, especially in the USA, the industry as a whole will still experience a decline in capital spending. Production rose to 9.03 million barrels a day during the same period, the highest since March 2016.

The OPEC Monitoring Committee has confirmed that Azerbaijan has achieved a 214-percent compliance with the conditions of the Vienna Agreement, according to the Ministry. Russia’s energy strategy provides for reaching the oil rate plateau of 500-550 mln tonnes annually, he said.

Latest data from the US Energy information Administration (EID) shows that the country imported 76.9 million barrels of the country’s oil in 2016.

Benchmark Brent gained while US crude eased slightly on Monday, after the market pushed higher early in the day on reports that Iraq would participate if OPEC extended oil production curbs into the second half of the year.

Novak said Russian Federation is now meeting 50% of its supply cut commitment and will likely have cut 200,000 b/d by the end of March. Eleven non-OPEC producers also agreed to cut production by 558,000 barrels a day over the first six months of the year.