Oil Supply / Demand

[dan_s]

If OPEC + Russian Group cut production by anything close to their agreements (1.8 MM Bbls per day), oil prices will go up. - Dan

On 1/27/2017, Reuters reported that OPEC oil output is set to fall by 900,000 b/d in January, pointing to a strong start by the exporter group in implementing its supply reduction deal. "OPEC supply is on track to decrease by 900,000 b/d in January, suggesting a high level of compliance thus far into the production curtailment agreement," Daniel Gerber, chief executive of Petro- Logistics, said in an email. Petro-Logistics is among a number of consultants that estimate OPEC supply.

On 1/23/2017, OPEC announced that the Joint OPEC/non-OPEC Ministerial Monitoring Committee (JMMC) had concluded its first meeting following the output agreement reached last year. OPEC officials publicly stated that they were making good progress in rolling back oil production, with Saudi Arabia’s energy minister Khalid al-Falih saying that the OPEC/non- OPEC group had collectively cut 1.5 million b/d since the agreement was struck. At the meeting, the JMMC (which is comprised of three OPEC countries: Algeria, Kuwait, and Venezuela, and two non-OPEC countries: Russia and Oman) discussed the framework for the “realization of the voluntary production adjustments,” specifically agreeing to the following stipulations: 1) The OPEC Secretariat will present a monthly data report by the 17th of each month on OPEC crude and participating non-OPEC liquids production; 2) Each of the JMMC committee members will nominate a technical contact to a Joint Technical Committee (JTC) which will work with the Secretariat in preparing the monthly report; 3) The JMMC will communicate monthly to consider each production report and will issue a press release on the progress toward implementation.

On 1/27/2017, Reuters advised that the first independent audit of Saudi Aramco’s oil reserves has confirmed the state oil company’s own figures, sources familiar with the situation said, ahead of its planned share market listing next year. Based on a figure of 265 billion barrels, Aramco’s fields contain about 15 percent of the world’s proven reserves. Any finding that the reserves are significantly above or below that could affect the company’s market value in the listing. “The independent audit produced no surprises,” a source familiar with the situation said on Friday. Aramco had asked two U.S. oil reserve auditing specialists to review its reserves. These are Gaffney, Cline and Associates, part of Baker Hughes (BHI-NC) and Dallas-based DeGolyer and MacNaughton. DeGolyer and MacNaughton completed its audit last year, two of the sources said.