Oil Market - January 8
Posted: Mon Jan 08, 2018 10:44 am
On 1/5/2018 Reuters reported OPEC deepened compliance with its oil supply agreement in December due to a further decline in Venezuelan output and extra cuts by Gulf exporters, a Reuters survey found, showing strong commitment to the deal despite higher prices. Adherence to the curbs rose to 128% from 125% in November, the survey found. The UAE, for the first time since the deal took effect in January 2017, pumped below its OPEC target, joining Saudi Arabia and Kuwait.
The survey shows no sign of producers boosting output to cash in on higher prices or to replace the decline in Venezuela, where output is dropping amid an economic crisis. Top exporter Saudi Arabia trimmed output by 60,000 b/d, below the kingdom's OPEC target. Production in Venezuela, where the oil industry is starved of funds due to a cash crunch, has fallen further below its OPEC target, the survey found. Both exports and refinery operations were lower in December. Output in northern Iraq is still down after falling in mid-October when Iraqi forces retook control of oilfields from Kurdish fighters who had been there since 2014. This has had the side-effect of boosting Iraqi compliance.
The U.S. energy industry braced for a major test to refineries and power plants as an intense winter storm roared up the Atlantic Coast, bringing heavy snowfall and high winds to a region already beset with several days of extreme cold. The extreme cold has stoked fears that a significant disruption could lead to a heating oil shortage, as inventories of distillate products, including heating oil, in the New England and Mid-Atlantic regions are at their lowest levels for this time of year since 2015. A number of tankers carrying diesel and heating oil from Europe are bound for the United States to address supply worries, reversing a traditional trade route. All reported by Reuters on 1/4/2018.
On 1/4/2018, Reuters reported that despite the strongest start for oil prices in four years, the world's top oil companies are hesitating to accelerate the search for new resources as a determination to retain capital discipline trumps the hope of making bonanza discoveries. Exxon Mobil (XOM-NC), Royal Dutch Shell (RDS-NC), Total (TOT-NC) and their peers are set to cut spending on oil and gas exploration for a fifth year in a row in 2018, according to consultancy Wood Mackenzie, despite a growing urgency to replenish reserves after years of reining back investment. Global investment in exploration, is estimated at $37 billion in 2018, down 7% from a year earlier and over 60% below the 2014 peak, according to WoodMac.
The survey shows no sign of producers boosting output to cash in on higher prices or to replace the decline in Venezuela, where output is dropping amid an economic crisis. Top exporter Saudi Arabia trimmed output by 60,000 b/d, below the kingdom's OPEC target. Production in Venezuela, where the oil industry is starved of funds due to a cash crunch, has fallen further below its OPEC target, the survey found. Both exports and refinery operations were lower in December. Output in northern Iraq is still down after falling in mid-October when Iraqi forces retook control of oilfields from Kurdish fighters who had been there since 2014. This has had the side-effect of boosting Iraqi compliance.
The U.S. energy industry braced for a major test to refineries and power plants as an intense winter storm roared up the Atlantic Coast, bringing heavy snowfall and high winds to a region already beset with several days of extreme cold. The extreme cold has stoked fears that a significant disruption could lead to a heating oil shortage, as inventories of distillate products, including heating oil, in the New England and Mid-Atlantic regions are at their lowest levels for this time of year since 2015. A number of tankers carrying diesel and heating oil from Europe are bound for the United States to address supply worries, reversing a traditional trade route. All reported by Reuters on 1/4/2018.
On 1/4/2018, Reuters reported that despite the strongest start for oil prices in four years, the world's top oil companies are hesitating to accelerate the search for new resources as a determination to retain capital discipline trumps the hope of making bonanza discoveries. Exxon Mobil (XOM-NC), Royal Dutch Shell (RDS-NC), Total (TOT-NC) and their peers are set to cut spending on oil and gas exploration for a fifth year in a row in 2018, according to consultancy Wood Mackenzie, despite a growing urgency to replenish reserves after years of reining back investment. Global investment in exploration, is estimated at $37 billion in 2018, down 7% from a year earlier and over 60% below the 2014 peak, according to WoodMac.