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Posts Tagged ‘OPEC’

OPEC worried by high oil price, patchy global recovery

Posted by Admin on April 18, 2011

http://in.finance.yahoo.com/news/OPEC-worried-high-oil-price-reuters-5695835.html

On Monday 18 April 2011, 2:37 PM

 

OPEC building is pictured in the centre Vienna September 14, 2010. REUTERS/Herwig Prammer/Files

By Eman Goma

KUWAIT (Reuters) – High oil prices represent a potentially major burden for importers with global economic recovery still fragile, leading OPEC ministers said on Monday.

Saudi Oil Minister Ali al-Naimi, a day after confirming the kingdom slashed oil production by more than 800,000 barrels per day (bpd) in March due to weak demand, warned of continued weakness in the global economy.

“The recovery remains patchy, in many countries unemployment remains at unacceptable levels,” Naimi told a meeting of Middle Eastern and Asian energy officials, according to the text of his speech obtained by Reuters.

Consuming nations have warned that rising oil prices, which earlier this month touched $127 a barrel, their highest level since July 2008, pose a threat to economic growth.

OPEC ministers for the most part have acknowledged the risk high oil prices pose but say there is little the group can do about it as demand for crude is being met with sufficient supplies.

“At these high price levels, spending on oil imports could represent a significant economic burden for many import dependent countries,” Kuwait ‘s Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said in a speech at the meeting.

OPEC Secretary General Abdullah Al-Badri called on consuming nations to rein in speculators, saying they had added a $15 to $20 risk premium to the price of crude.

SAUDI SPECIAL BLEND REJECTED

Oil has been pushed higher since the start of the year by the wave of discontent that has swept through the Arab world, toppling the leaders of Tunisia and Egypt and touching off a civil war in Libya that has brought oil exports to a halt.

Saudi Arabia , Kuwait and the United Arab Emirates boosted output when Libyan supplies were lost but they have struggled to find buyers for the extra crude they are pumping.

Saudi Arabia tried to replicate Libya’s very low sulphur, high quality sweet oil with a special blend of crude, but refiners have only bought 2 million barrels of the blend.

“The market doesn’t want to change the Libyan crude, they still wait for the Libyan crude … I am surprised that nobody is buying the new ( Saudi ) crude,” Al-Badri, a former head of Libya’s OPEC delegation, told reporters.

The bulk of the crude oil produced by OPEC is sour, or high sulphur, while sweet crudes, like Libyan barrels, are highly prized for making transport fuels that have tight sulphur restrictions.

Iran ‘s OPEC Governor Mohammad Ali Khatibi told Reuters the market was well supplied with sour crude.

“There is a shortage of sweet crude, the Libyan kind, and as we enter the driving season there is higher demand for sweet crude,” he said.

(Additional reporting by Amena Bakr and Reem Shamseddine; writing by Robert Campbell; editing by James Jukwey)

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Iran says oil prices to reach $150 per barrel

Posted by Admin on April 6, 2011

Mahmoud Ahmadinejad, President of Iran

Belligerence and Hypocrisy

http://in.finance.yahoo.com/news/Iran-says-oil-prices-reach-reuters-728569414.html

On Monday 4 April 2011, 9:22 PM

 

TEHRAN (Reuters) – Iranian President Mahmoud Ahmadinejad said on Monday that oil prices will reach $150 per barrel and the current crude prices were “not real”.

“The price of oil will increase to $150 per barrel in a period of time … the current oil prices are not real,” Ahmadinejad told a news conference.

Oil traded above $119 a barrel for Brent on Monday, just off a two-and-a-half year high touched in February, spurred by political instability in the Middle East and North Africa.

Iran is OPEC ‘s second biggest crude producer after Saudi Arabia .

Disruption of Libyan exports because of violent unrest in the OPEC member country also provided an opportunity for Iran to sell some of the crude that had built up in floating storage.

A popular uprising in Libya has shut down almost all of the country’s 1.6 million barrels per day (bpd) of oil production, prompting Saudi Arabia to boost crude output to try to compensate for the loss and rein in oil prices.

(Editing by Jason Neely)

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Brent backs off $120, eyes on Libyan, Saudi supply

Posted by Admin on February 24, 2011

Traders work in the oil options pit on the floor of the New York Mercantile Exchange in New York City
By Christopher Johnson Christopher Johnson 29 mins ago

LONDON (Reuters) – Oil surged more than 7.5 percent to its highest since August 2008 on Thursday on concern that uprisings in Libya could spread to other major oil producers in the Middle East, including Saudi Arabia.

Brent crude oil for April spiked up $8.54 a barrel to a peak of $119.79 before easing to around $114 by 11:15 a.m. EST. U.S. crude futures for April rose as high as $103.41, the highest September 2009. They were up $1.00 at $99.10 at 11:15 a.m. EST.

Unrest in the world’s 12th-biggest exporter has cut at least 400,000 barrels per day (bpd) from Libya’s 1.6 million bpd output, according to Reuters calculations.

ENI Chief Executive Paolo Scaroni said Libyan output had fallen much more dramatically, estimating it was putting 1.2 million barrels per day less into the market.

The Financial Times quoted an unnamed official as saying Saudi Arabia was in active talks with European refiners who may be hit by a disruption in Libyan exports.

That would be the clearest sign yet that OPEC’s biggest exporter is ready to respond to the cut in Libyan output.

The kingdom had asked refiners “what quantity and what quality of oil they want,” the FT quoted the senior Saudi oil official saying on condition of anonymity.

Goldman Sachs said the spread of unrest to another producing country could bring oil shortages and require demand rationing.

“The market cannot accommodate another disruption, in our view,” analyst Jeffrey Currie said in a research note.

Also supporting oil prices were figures from the U.S. Energy Information Administration (EIA) showing a lower-than-expected build in crude inventories and hefty drawdowns in gasoline and distillate stocks last week.

EYES ON SAUDI

Major banks joined the chorus of calls on Thursday for OPEC to act quickly on fears the strong oil prices could derail the fragile economic recovery.

Barclays Capital and Citi said it saw no downward pressure on prices until more oil comes to the market.

“Unless we see an explicit move from … producer countries, i.e. Saudi Arabia, I don’t think there is necessarily going to be any downward pressure on prices,” said BarCap analyst Amrita Sen.

Eugen Weinberg, Commerzbank’s head of commodities research, said the situation called for “some extraordinary measures.”

“This is an opportunity for OPEC to prove whether they are really able to (step) into this production gap,” he said.

Eastern areas holding much of Libya’s oil have slipped from the control of Muammar Gaddafi, who has unleashed a bloody crackdown on protesters to keep his 41-year grip on power.

The cuts in Libyan oil output represent the first disruption to supply as a direct result of protests that have swept through the oil-producing regions of north Africa and the Middle East.

The concern for oil markets is how unrest might affect Saudi Arabia, which not only pumps around 10 percent of the world’s oil but is also the only holder of significant spare crude production capacity that can be used to plug outages.

The FT report said Saudi Arabia was waiting for a response from European customers before making a decision on whether or not to increase output. It said options included pumping more oil through an East-West pipeline or boosting shipments to Asia in order to free up West African crude for Europe.

Without Saudi Arabia’s 4 million bpd of spare capacity, there is little margin in the global oil supply system.

To date, Saudi Arabia has escaped popular protests that have raged across the Arab world, toppling the leaders of Egypt and Tunisia and spreading as far as Saudi neighbor Bahrain.

Saudi King Abdullah has unveiled benefits for Saudis worth $37 billion in an apparent bid to insulate the oil exporter from protests in the region. However, hundreds of people have backed a Facebook page campaigning for a ‘day of rage’ across the kingdom on March 11 to demand reforms and greater democracy.

U.S. crude oil inventories rose less than expected and refined product stocks fell last week as the United States imported less crude, according to a report from the IEA.

Domestic crude stocks rose 822,000 barrels to 346.7 million barrels in the week to February 18, the report showed, compared with expectations for a 1.2 million barrel build in a Reuters poll of analysts.

(Additional reporting by Nia Williams, Emma Farge, Claire Milhench and Dmitry Zhdannikov in London; Editing by Jason Neely and Alison Birrane)

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Oil rises as Libyan unrest disrupts supplies

Posted by Admin on February 23, 2011

http://news.yahoo.com/s/nm/20110222/bs_nm/us_markets_oil;_ylt=Alr_cjnQRICBiLJNFjuLIDZ34T0D;_ylu=X3oDMTJrc2l2ZHE4BGFzc2V0A25tLzIwMTEwMjIyL3VzX21hcmtldHNfb2lsBHBvcwMzMgRzZWMDeW5fYXJ0aWNsZV9zdW1tYXJ5X2xpc3QEc2xrA2Z1bGxuYnNwc3Rvcg–

Protesters stand in the street in this undated ...

Protesters stand in the street in this undated picture made available on Facebook February 20, 2011

NEW YORK (Reuters) – Brent crude rose and U.S. oil hit a 2-1/2 year high on Tuesday as the revolt in Libya disrupted the OPEC nation’s supplies and raised concern unrest could spread to other oil producing countries in the region.

More than 8 percent of Libya’s 1.6 million barrels per day (bpd) of oil production has been shut down by the political violence, with Italian ENI and Spain’s Repsol shutting in output.

Trade sources said the country’s marine oil terminals were disrupted by a lack of communications as rebel soldiers said the eastern region of the country had broken free from Muammar Gaddafi. Libya also declared force majeure on all oil product exports, traders said.

Oil gave up some early gains after Saudi Arabian Oil Minister Ali al-Naimi said that the Organization of the Petroleum Exporting Countries would be ready to meet any shortage from a supply disruption.

Brent crude traded up 76 cents to $106.50 a barrel at 11:44 a.m. EST, off earlier highs of $108.57 a barrel. Brent hit a 2-1/2 year high of $108.70 a barrel on Monday.

U.S. crude for March delivery, which expires at the end of the session, rose $5.65 to $91.85 a barrel, after touching $94.49 a barrel, which was the highest level since October 2008. The more actively traded April contract gained $5.15 to trade at $94.86 a barrel.

The stronger gains in U.S. crude was partly explained by the fact that while the contract was active in electronic trading on Monday, there was no settlement as the exchange in New York was closed for the Presidents Day holiday.

“Geopolitical events have sparked a move higher as oil prices have rocketed on the headlines out of Libya,” said Chris Jarvis, president of Caprock Risk Management in Hampton Falls, New Hampshire.

Saudi Arabia’s Naimi, speaking on the sidelines of the International Energy Forum in Riyadh, said worldwide oil spare oil capacity was between 5-6 million bpd.

(Reporting by Matthew Robinson, Gene Ramos, David Sheppard in New York; Claire Milhench in London and Francis Kan in Singapore; Editing by David Gregorio)

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World economy can withstand $100 oil price: Kuwait

Posted by Admin on December 26, 2010

CAIRO (Reuters) – The global economy can withstand an oil price of $100 a barrel, Kuwait’s oil minister said on Saturday, as other exporters indicated OPEC may decide against increasing output through 2011 as the market was well supplied.

Analysts have said oil producing countries are likely to raise output after crude rallied more than 30 percent from a low in May because they fear prices could damage economic growth in fuel importing countries.

European benchmark ICE Brent crude for February closed at $93.46 on Friday after hitting $94.74 a barrel, its highest level since October 2008.

Arab oil exporters meeting in Cairo this weekend said they saw no need to supply more crude as stocks were high and prices had been inflated temporarily by cold weather in Europe.

Asked by Reuters if the world economy could stand a $100 oil price, Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said: “Yes it can.”

Iraq’s new oil minister and the head of Libya’s National Oil Corporation both told Reuters that $100 was a fair price, while Qatar’s Minister Abdullah al-Attiyah said he did not expect OPEC to increase production in 2011.

“I do not expect an OPEC meeting before June because oil prices are stable,” he said.

Some delegates even called for exporters to comply better with agreed production limits. OPEC members’ compliance with promised cutbacks reached 56 percent in November, according to Reuters estimates.

When asked if output could be raised, Kuwait’s Sheikh Ahmad said: “No. More compliance, more compliance.”

MARKET “WELL SUPPLIED”

The Cairo meeting of the Organization of Arab Exporting Countries (OAPEC) brought together Arab members of OPEC including top exporter Saudi Arabia, which has traditionally been viewed as a price moderate, as well as non-OPEC countries Tunisia, Egypt, Syria and Bahrain.

OPEC cut output drastically after the global financial crisis struck in 2008 to prop up collapsing oil prices.

As demand has risen steeply in 2010 and is expected to rise further in 2011, the market is watching closely whether OPEC can release at least some of its spare capacity to prevent prices from soaring to around $150 per barrel as they did before the crisis struck in summer 2008.

OPEC’s most influential oil minister, Saudi Arabia’s Ali al-Naimi, said on Friday he was still happy with an oil price of $70-80 a barrel and there was no need for an extra OPEC meeting before the next scheduled one in June.

Others in the group have been pressing for a higher price, arguing that quantitative easing and a weakened U.S. dollar that spurred gains across financial markets mean the oil price strength is partly nominal.

Egyptian Oil Minister Sameh Fahmy said the current increase in oil prices was the result of higher demand on heating fuel because of the cold weather in Europe.

United Arab Emirates Oil Minister Mohammed al-Hamli said crude oil inventories are “quite high. It’s the highest over the five years average… The market is well supplied.”

(Reporting by Sherine El Madany, Shaimaa Fayed, Amena Bakr, Ashraf Fahim and Yasmine Saleh; Writing by Tom Pfeiffer; Editing by Mike Nesbit)

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