OPEC, partners face stiff test to agree oil cut deal

OPEC President and Energy Minister of the United Arab Emirates Suhail al-Mazrouei (4th R) opens the 175th OPEC Conference of Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria on December 6, 2018. (AFP)
Updated 07 December 2018
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OPEC, partners face stiff test to agree oil cut deal

  • Amid sharp differences over which way to go, the oil market continued under pressure
  • A glut on the market has led to oil prices falling by more than 30 percent

VIENNA: OPEC ministers resumed talks on Friday before further discussions with 10 key partner countries, including Russia, later in the day to thrash out an agreement on production cuts.
Amid sharp differences over which way to go, the oil market continued under pressure.
In early trade Friday, the price of Brent, the European benchmark, was again under the symbolic $60 mark after a slump Thursday when the cartel failed to reach an expected accord on cuts to stem price falls.
“No, I am not confident” about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of negotiations at OPEC headquarters in Vienna.
However, OPEC and non-OPEC members — who combined account for around half of global output — agree on one thing: a glut on the market has led to oil prices falling by more than 30 percent in the space of two months.


Australia overtakes Qatar as top global LNG exporter

Updated 10 December 2018
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Australia overtakes Qatar as top global LNG exporter

  • Australia shipped 6.79 million tons of LNG in November while Qatar exported 6.2 million tons
  • Australia has invested heavily in a number of LNG export projects over the last few years

LONDON: Australia has become the largest exporter of liquefied natural gas (LNG) in the world, overtaking Qatar for the first time, according to data published on Monday.

Australia shipped 6.79 million tons of LNG in November while Qatar exported 6.2 million tons, according to Refinitiv Eikon, the financial data arm of Thomson Reuters.

While LNG exports from Australia increased by more than 15 percent from the previous month, Qatar’s exports dropped by 3 percent.

Australia has invested heavily in a number of LNG export projects over the last few years. Just last month, the first LNG shipment left the country’s new offshore Ichthys project on the northwestern coast of Australia.

Analysts expect Australia will look to maintain its lead ahead of the Qataris.

“Competition between Qatar and Australia for the share of global LNG market is set to intensify further,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s global gas analytics in London.

“Australia has boosted its market share in recent years by bringing online a slew of LNG export projects. This is in stark contrast with the situation in Qatar where the export capacity has remained around 77 million tons per annum,” he said.

Ehsan Khoman, head of regional research and strategy at MUFG, in Dubai, said Australia has an advantage over Qatar due to it being geographically closer to major gas importers.

“The lower transportation freight costs will remain the backbone of Australia comparative advantage as an exporter vis-à-vis Qatar, given the country’s closer proximity to the largest LNG importers in Asia, namely, Japan, China and South Korea,” he said.

Rising LNG exports from US will add to the global market competition, he said.

“Going forward, the LG space is likely to undergo a major transformation driven by new supplies coming from the US, with our expectation of a three-way tug of war between the US, Australia and Qatar to intensify in the medium term for global leadership among LNG exporters, notably for a larger share of the key market in Asia.”

The data follows Qatar’s announcement last week that it would leave the Organization of Petroleum Exporting Countries (Opec) in early 2019 to focus on gas production.

Kumar said he expects Qatar to ramp up efforts to maintain its market position as competition grows from other exporters.

“Qatar has plans to vigorously defend its market share in the coming years as it is moving ahead with expanding the capacity of its Ras Laffan plant to around 110 million tons per annum by the end of 2025 or early 2026,” he said.