Iraq increases oil exports from south to make up for Kirkuk shortfall

The increase in Basra exports keeps Iraq’s total output within the quota agreed with the OPEC. (Reuters)
Updated 21 October 2017
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Iraq increases oil exports from south to make up for Kirkuk shortfall

BAGHDAD: Iraq said it was increasing oil exports on Saturday from the southern Basra region by 200,000 barrels per day to make up for a shortfall from the northern Kirkuk fields.
The output from the northern Kirkuk region fell this week in the course of military operations to take it back from Kurdish fighters who have been there since 2014.
The increase in Basra exports keeps Iraq’s total output within the quota agreed with the Organization of Petroleum Exporting Countries, the oil ministry said in a statement citing Oil Minister Jabar Al-Luaibi.
He said 200,000 barrels per day will be shipped from southern Basra export terminal on top of the usual volumes exported daily which exceed 3.2 million barrels.
“These additional volumes will be produced until the northern oil output goes back to its previous level,” he said.
Iraq won’t be able to restore Kirkuk’s oil output to last week’s levels before Sunday because of missing equipment at two of the largest fields of the region, Avana and Bai Hasan, an oil ministry official told Reuters on Thursday.
Until these shutdowns, the northern oil region exported about 530,000 barrels per day, of which about half came from the semi-autonomous Kurdistan region and the rest from the disputed Kirkuk province, claimed by both the Kurds and the Iraqi central authorities.
Kurdish Peshmerga forces deployed in Kirkuk in 2014, when the Iraqi army fled its positions in the face of an advance by Daesh militants. The Kurdish move prevented the militants from taking control of its oilfields.


Oil mixed on tighter US outlook

Updated 21 August 2018
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Oil mixed on tighter US outlook

  • Traders said US markets were lifted by a tightening outlook for fuel markets in the coming months
  • The Iran supply cut may also be more than compensated for by production increases outside OPEC

SINGAPORE: Oil prices were mixed on Tuesday, with US fuel markets seen to be tightening while the Sino-US trade dispute dragged on international crude contracts.
US West Texas Intermediate (WTI) crude futures for September delivery were up 27 cents, or 0.4 percent, at 0306 GMT, at $66.70 per barrel. The contract expires on Tuesday.
The more active October futures were up 7 cents, or 0.1 percent, to $65.49 a barrel.
Traders said US markets were lifted by a tightening outlook for fuel markets in the coming months.
Inventories in the United States for refined products such as diesel and heating oil for this time of year are at their lowest in four years.
This is occurring just ahead of the peak demand period for these fuels, with diesel needed for tractors to harvest crops and the arrival of colder weather during the Northern Hemisphere autumn raising consumption of heating oil.
Outside the United States, Brent crude oil futures were somewhat weaker, trading at $72.18 per barrel, down 3 cents from their last close.
This followed the United States offering on Monday 11 million barrels of crude from its Strategic Petroleum Reserve (SPR) for delivery from Oct. 1 to Nov. 30.
The released oil could offset expected supply shortfalls from US sanctions against Iran, which will target its oil industry from November.
Because of the sanctions, French bank BNP Paribas said it expected oil production from the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, to fall from an average of 32.1 million barrels per day (bpd) in 2018 to 31.7 million bpd in 2019.
Still, traders said overall market sentiment was cautious because of concerns over the demand outlook amid the trade dispute between the United States and China.
A Chinese trade delegation is due in Washington this week to resolve the dispute, but US President Donald Trump told Reuters in an interview on Monday he does not expect much progress, and that resolving the trade dispute with China will “take time.”
The impact of the Iran sanctions is not yet clear.
China has indicated that it will continue to buy Iranian oil despite the US sanctions.
The Iran supply cut may also be more than compensated for by production increases outside OPEC.
BNP Paribas said non-OPEC output would likely grow by 2 million bpd in 2018 and by 1.9 million bpd next year.
“Depending on when pipeline infrastructure constraints are lifted in the US, non-OPEC supply growth by the end of 2019 may prove higher than currently assumed,” the bank said.
The search for new oil has increased globally in the last two years, with the worldwide rig count rising from 1,013 at the end of July 2016 to 1,664 in August 2018, according to energy services firm Baker Hughes.
The biggest increase was in North America, where the rig count shot up from 491 to 1,057 in the last two years.
How prices develop will also depend on demand.
“We see global oil demand growing by 1.4 million barrels per day in both 2018 and 2019,” BNP Paribas said, implying that global markets are likely to remain sufficiently supplied.