OPEC+ Powerless As Oil Prices Near $20

Must Read

List of latest Ponzi schemes in Nigeria

These are the latest and past Ponzi scams and shady investment products that Nigerians are putting their monies into. What...

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

Updated Cost Of Clearing Cars In Nigeria

The automotive industry in Nigeria is still in its early development stages and there are very few cars produced...

OilPrice.com Tuesday, April 14, 2020 – Oil has given up all the gains it had made since the start of the month as markets come to view the OPEC+ deal as inadequate. OPEC+ agreed to cut nearly 10 Mb/d, and depending on who is doing the accounting, additional cuts from other non-OPEC countries take the reductions up close to 20 mb/d. In reality, however, the market-based cuts from the likes of the U.S. will occur anyways and won’t be switched off overnight. Oil showed little life after the historic deal was announced, highlighting the magnitude of the massive drop in global demand.

Analysts say OPEC+ deal comes up short. Goldman Sachs said it was “too little and too late” for the oil market. JBC Energy said it was “just plaster on an open wound.” The 9.7-mb/d OPEC+ cut is likely not going to be enough to halt the build in oil inventories. Goldman estimates that even with full compliance of the OPEC+ cuts, another 4.1 mb/d of shut-ins are likely by May.

Duration of OPEC+ deal questioned. OPEC+ agreed to a two-year deal in an attempt to inspire confidence about market stability. However, analysts also questioned the solidity of that commitment. “The current deal has been forged under duress and is much more likely to fall apart over time,” Bjarne Schieldrop, chief commodities analyst at SEB, said in a statement. “Saudi Arabia’s economic need for a production volume of 12-13m bl/day in a $50/bl world, and Russia’s strong distaste for production cuts as a means for achieving higher prices, are fundamentals which the current deal cannot circumvent.”

Saudis say more cuts might be needed. Saudi Arabia said that more cuts are possible. “Flexibility and pragmatism will enable us to continue to do more if we have to,” Prince Abdulaziz bin Salman told reporters on a conference call yesterday. “We have to watch what’s happening with demand destruction or demand improvement, depending on how things evolve.”

- Advertisement -

IMF: Worst downturn since 1930s depression. Oil fell back not only because of the OPEC+ deal coming up short but also because the global economic outlook is dire. The IMF warned on Tuesday that global GDP will shrink by 3 percent in 2020 and that the economic shock would be worse than the recession a decade ago.

Texas RRC considers cuts. The Texas Railroad Commission held a hearing on Tuesday to weigh a proposed cut in production in the state. Pioneer Natural Resources (NYSE: PXD) CEO Scott Sheffield said the state should order a 20 percent cut in production, which would amount to a 1-mb/d reduction. Odds are low, according to some analysts. “It’s a very small minority that wants to take action so it’s hard to imagine the commissioners will impose limits”, Regina Mayor, KPMG International’s global head of energy, told Bloomberg. “It’d not only be un-American but unimaginably un-Texan.”

Read Also:  Is Oil On Its Way To $80? - Oil Price

China’s imports rise. China’s oil imports rose in March by 4.5 percent year-on-year, as refiners took advantage of cheap crude to stock up.

Saudi Arabia says U.S. shale was not a target. Saudi Arabia said that U.S. oil producers were not the target of the recent price war. “I made it clear that it was not on our radar or our intention to create any type of damage to their industry,” Saudi energy minister Prince Abdulaziz bin Salman said.

- Advertisement -

Fracking company hires restructuring advisers. FTS International (NYSE: FTSI), a hydraulic fracturing company, hired advisers to plan for a debt restructuring.

Gazprom: oil could hit $45 this year. If oil demand rebounds then oil prices could rebound to $45 per barrel by the end of the year, the chief executive of Gazprom said.

Shell shuts production in Gulf on Exxon leak. Royal Dutch Shell (NYSE: RDS.A) said that a leak at an offshore pipeline operated by ExxonMobil (NYSE: XOM) forced Shell to shut in production at its 100,000-bpd Perdido platform in the U.S. Gulf of Mexico.

Read Also:  OPEC Is Once Again Influencing Oil Markets - OilPrice Report

Chevron suspends work at Tengiz site. The Chevron (NYSE: CVX) led Kazakhstan venture will suspend construction work at the $45 billion Tengiz expansion project due to the coronavirus outbreak. Dozens of cases of the virus have been reported at a workers’ camp near the field.

- Advertisement -

Trump admin denies requests for royalty relief. The Interior Department said it would not issue blanket royalty relief for oil and gas companies but would offer relief on a case-by-base basis.

Saudis take $1 billion stake in European oil companies. Saudi Arabia’s sovereign wealth fund invested $1 billion in four European oil majors – Equinor (NYSE: EQNR)Royal Dutch Shell (NYSE: RDS.A)Total (NYSE: TOT) and Eni (NYSE: E).

More than half of global licensing rounds could be cancelled. The pandemic and the collapse of oil prices could lead to more than half of global licensing rounds for new oil and gas offerings getting cancelled, according to Rystad Energy. “This year was slated to be another remarkable year for exploration with about 45 countries launching at least 52 lease rounds, about 60% of them in offshore areas,” Rystad said in a report. Half of those could be cancelled.

Argentina’s Vaca Muerta on life support. Argentina’s YPF (NYSE: YPF) cut production at its flagship Loma Campana field by 50 percent as demand collapses and pipelines clog up. The Vaca Muerta, one of the most exciting shale basins in the world outside of North America is in freefall due to low oil prices.

- Advertisement -
OPEC+ Powerless As Oil Prices Near OPEC+ Powerless As Oil Prices Near

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

OPEC+ Powerless As Oil Prices Near OPEC+ Powerless As Oil Prices Near

Latest News

i-Maker offers Insights on Using Digital Marketing to Fend off COVID-19

HONG KONG, CHINA - Media OutReach - 13 July 2020 - COVID-19 has changed the way companies around the world conduct their...

Stanbic IBTC Unveils Upgraded Mobile App With Exciting Features

Nigeria’s leading end-to-end financial services provider, Stanbic IBTC Holdings PLC, a member of Standard Bank Group, has upgraded its mobile app by introducing exciting...

Customers to Enjoy Access to Funds, Flexible Repayment Plans with New UBA Credit Card

Pan African financial institution, United Bank for Africa (UBA) Plc, has introduced the new UBA Credit Card to its teeming customers in fulfilment of...

Nigeria’s Public Debt increases by N1.23trn in three months – NBS

Nigerian States and Federal Debt Stock data as at 31st March 2020 reflected that the country's total public debt portfolio stood at N28.63trn. According to the Nigerian...

FG Hands Over National Theatre To Private Investors For Renovation (Photos)

Forty-four years after its establishment, the Federal Government, on Sunday, handed over the National Arts Theatre in Lagos State to the private sector for...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -OPEC+ Powerless As Oil Prices Near OPEC+ Powerless As Oil Prices Near