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

  • 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


First tanker to load crude at Libya’s Hariga port since January

Updated 23 September 2020

First tanker to load crude at Libya’s Hariga port since January

  • The Delta Hellas tanker will enter Libya’s Hariga port on Wednesday and load 1 million barrels of oil from the port’s storage

BENGHAZI/LONDON: An oil tanker is expected to load crude at Libya’s Marsa el-Hariga terminal this week, the first since a blockade by eastern forces in January slashed the OPEC member’s oil production to a trickle.
The Delta Hellas tanker will enter Libya’s Hariga port on Wednesday and load 1 million barrels of oil from the port’s storage, the Arabian Gulf Oil Co. which operates the port said in a statement.
Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports, which depressed the OPEC member’s production down to around 100,000 barrel per day (bpd).
Trading arm of China’s Sinopec , Unipec- which prior to the blockade was one of the main lifters of Mesla and Sarir crude grades from the terminal- booked the tanker, two trading sources said.
Unipec also booked the Marlin Shikoku tanker, which according to Refinitiv Eikon shipping data is expected to arrive at Hariga on Thursday.
This comes as the National Oil Corporation (NOC) seeks to gradually boost production, with output expected to rise to around 260,000 bpd next week.
Before the blockade, Libya produced around 1.2 million bpd, or more than 1% of global production.
NOC, which said it would only resume at ports and oilfields that are free of military presence, has so far announced oil export resumption from the Hariga, Brega and Zueitina terminals.