WEEKLY ENERGY RECAP: All eyes on OPEC’s meet next week

WEEKLY ENERGY RECAP: All eyes on OPEC’s meet next week
OPEC’s own forecast for global oil demand growth remains unchanged in 2020 at 1.08 million bpd. (AFP)
Updated 30 November 2019

WEEKLY ENERGY RECAP: All eyes on OPEC’s meet next week

WEEKLY ENERGY RECAP: All eyes on OPEC’s meet next week
  • OPEC will meet next week on Dec. 5-6

Although Brent crude dropped below $63 per barrel by the week closing, oil prices are still very close to the levels that prevailed around OPEC’s meeting six months ago when an output cut rollover was suggested till March 2020.

OPEC will meet next week on Dec. 5-6 and so far the efforts of the OPEC+ group of producers have been successful in absorbing the market surplus.

At the end of 2016 OECD stocks were 299 million barrels above the latest five-year average, which was OPEC’s key measure for its oil output strategy for those three years.

OECD commercial oil stocks for March 2018 were 40 million barrels below the latest five-year average, which meant that the OPEC+ output cuts of 1.8 million barrels per day (bpd) since January 2017 were successful in driving OECD commercial oil stocks below the five-year average within just 15 months of the new  production cut strategy.

The continuing efforts in the past three years have ensured that the market is in balance and preventing any surplus building up.

By January this year OECD commercial oil stocks were at 19 million barrels above the latest five-year average — which coincided with the latest OPEC+ output cuts of 1.2 million bpd.

According to the OPEC monthly oil market report  of November 2019, OECD commercial oil stocks stand at 28.2 million barrels above the latest five-year average. This means that OECD commercial crude stocks have been increasing regardless of OPEC+ output cuts. However, OPEC monthly reports forecast a sharp fall in calls on its crude in the first half of next year, while non-OPEC supply is set to increase ahead of weak global demand growth.

OPEC’s own forecast for global oil demand growth remains unchanged in 2020 at 1.08 million bpd, but demand is projected to be flat in the first and second quarter, when non-OPEC supply is set to rise by 1.79 million bpd.

However, there are many non-OPEC supply uncertainties in 2020. 

According to OPEC’s own outlook, a rollover remains the most likely outcome of the 177th meeting.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq


Jubail aims to build the first Saudi-made car by 2022

Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
Updated 16 January 2021

Jubail aims to build the first Saudi-made car by 2022

Engineering designs for the first Saudi-produced car by 2022 are in advanced stages. (Shutterstock/File Photo)
  • The move comes in coordination with South Korea’s SsangYong Motor Co. through setting up a car assembly center
  • Engineering designs are in advanced stages

RIYADH: The Royal Commission in Jubail started developing the infrastructure required for attracting three global automakers, Mohammad Al-Zahrani, Director of Industrial Investment Development Department told Al-Arabiya TV, expecting the first Saudi-made car in 2022.

The move comes in coordination with South Korea’s SsangYong Motor Co. through setting up a car assembly center. Engineering designs are in advanced stages, Al-Zahrani said.

The study conducted by the Royal Commission eyes to attract almost SR40 billion ($10.67 billion) direct investments to the automotive industry by 2040, Al-Zahrani added, noting that this sector will contribute SR80 billion to the Saudi Gross Domestic Product (GDP) and provide 27,000 direct jobs.

The Kingdom’s auto complex is part of the strategic industrial plan, as Jubail Industrial City and Ras Al-Khair Industrial City provide no less than 90 percent of the raw materials used in direct automobile manufacturing, he concluded.

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