Saudi's Rule Out Production Cuts, Oil Drops 4%

By Jessica Resnick-Ault, Reuters
Tuesday, February 23, 2016
Oil prices fell 4 percent on Tuesday after Saudi Oil Minister Ali Al-Naimi ruled out any production cuts, restating the kingdom's rationale for maintaining output was that demand would pick up excess crude that has crushed prices over the past 20 months.
 
Big oil exporters Saudi Arabia and Russia have proposed to freeze output at January levels, which were near record highs, only if other producers also do the same.
 
More meetings on the potential freezes will be held in March, al-Naimi told the IHS CERAweek conference in Houston, adding that he expects most of the countries that count to freeze crude production levels.
Analysts remain skeptical that the cuts will be effective in rebalancing the market.
 
"If they freeze production at January levels when you're already over supplied by around a million barrels per day it just prolongs that situation of oversupply," said Energy Aspects' analyst Dominic Haywood.
 
Also, Iran, now free of western sanctions that hurt its crude trade, is seen unlikely to agree to an output cap. According to a report from Iran's student news agency ISNA, the country's oil minister said the production freeze is "laughable," because it does not allow Iran to regain its production share.
 
Benchmark Brent crude futures were down $1.33, or 3.8 percent, at $33.36 a barrel by 11:03 a.m. EST (1603 GMT), while U.S. crude futures fell $1.51, or 4.5 percent, to $31.88 a barrel.
 
OPEC Secretary-General Abdullah al-Badri said on Monday that if successful, a freeze could trigger other action but the days when the producer group was responsible for cutting output alone are over.
 
He told the CERAWeek conference the tentative pact to freeze output reached last week between Saudi Arabia, Russia, Venezuela and Qatar was just a start. An estimated 1 million to 2 million barrels of oil are being produced daily in excess of demand.
Investment bank Jefferies expects OPEC output to hit 32.6 million barrels per day (bpd) in the second quarter, including higher Iranian output, with markets starting to rebalance by the third quarter as production outside OPEC falls by 800,000 bpd this year.
Oil prices jumped more than 5 percent on Monday on projections by the International Energy Agency (IEA) that U.S. shale oil production could fall by 600,000 bpd this year and another 200,000 bpd in 2017.
 
(Additional reporting by Sarah McFarlane in London and Henning Gloystein in Singapore; Editing by Marguerita Choy)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

VEB Guarantees $3 Bln of Yamal LNG Debt

Russian development bank VEB said on Friday it had provided a guarantee for $3 billion of debt to the Yamal liquefied natural gas (LNG) project, led by Russian gas firm Novatek.

US Oil Drillers Cut Rigs after 3 Weeks of Additions

U.S. oil drillers cut rigs this week for a 20th week this year after three weeks of additions, according to a closely followed report on Friday, as crude prices

World Stocks Tumble as Britain Votes for EU Exit

Global capital markets reeled on Friday after Britain voted to leave the European Union, with $2 trillion in value wiped from equity bourses worldwide, while money

Government Update

Indonesia Bans Ships for Philippines

The Indonesian Government has banned vessels flying Indonesias flag from sailing to the Philippines following the latest hostage incident.   According to a report in AP,

Traffic Separation Schemes off Western Australia

On 1 December 2016 two new Traffic Separation Schemes (TSS) will come into effect off the south-west coast of Western Australia. Australia’s proposal to establish

Austal Delivers LCS 8 to US Navy

Austal Limited (Austal) (ASX:ASB) delivered the future USS Montgomery (LCS 8) to the U.S. Navy, during a ceremony held aboard the ship at Austal USA’s shipyard in Mobile, Alabama, USA on 23 June.

Offshore Energy

POSH Bags Shell FLNG Contract

Singapore’s offshore marine services provider PACC Offshore Services Holdings Ltd. (POSH) has been awarded a contract to support Shell’s Prelude floating liquefied

US Oil Drillers Cut Rigs after 3 Weeks of Additions

U.S. oil drillers cut rigs this week for a 20th week this year after three weeks of additions, according to a closely followed report on Friday, as crude prices

Ulstein Delivers for BS Offshore

The first of two service operation vessels (SOV) ordered in 2015 by Bernhard Schulte Offshore (BS Offshore) and its client Siemens from Ulstein Verft in is now completed,

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Pod Propulsion Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0674 sec (15 req/sec)