OPEC’s 165th meeting: ”Everybody is happy”

Posted on August 18, 2014

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OB062014

On 11 June OPEC held its 165th meeting in Vienna and the organisation’s 12 members decided to maintain its production volume of 30 millon barrels of oil per day (Mb/d). The meeting is reported in the OPEC Bulletin 6/14. They also decided to extend Abdalla Salem El-Badri’s term as general secretary of OPEC until the end of the year. After the meeting a press conference was held during which General Secretary El-Badri stated, “Right now we have a very comfortable crude oil price, the market is stable and OPEC is producing 30 Mb/d of crude, more or less. The consumers are getting their supplies and the producers a good price. Everybody is Happy.”

On the question of whether shale oil production in the USA was a threat to OPEC the answer was that it was not because the USA would not be an oil exporter. With regard to future investments El-Badri considered that OPEC had a good plan for investments and stated they would study the balance between demand and production. In conclusion he said that “OPEC will continue to play its part in supplying the world with enough crude oil”.

In the OPEC Bulletin some of the external guests to the meeting were also interviewed. Of special interest was the interview with Michael Rothman from Cornerstone Analytics in the USA. He stated that the market was very tight because the increase of 3 Mb/d that they had hoped for at the beginning of the year had not eventuated. Only half this amount had been achieved and this could indicate that OPEC must increase its production by 1.5 Mb/d if prices were not to rise. Regarding shale oil in the USA he commented that it was “a very short-life resource”. He also noted that many oil companies believed that their production in the USA would reach a maximum around 2016-7. Regarding global production he noted that there are 81 nations outside of OPEC that produce some form of oil and that 80 of these, (i.e. all except the USA), produce less oil today than they did five years ago. “So the hope that somehow US production will bail out the market from production problems is proving to be much more questionable than has not been generally recognized as yet”.

 

I have now checked for the nations presented in BP Statistical Review of World Energy and the statement about 80 of 81 is producing less than they did 5 years ago is not correct. About 10 nations produce around 100.000 b/d or more in 2013 than they did in 2008, but some nations are producing much less than 5 years ago, especially Norway and UK. US adds 3.220.000 b/d and plus and minus for the other nations is 140.000 b/d. This is the list:

Thousand barrels daily 2008           2013
US                                 6783 10003 3219,63
Canada                                3207 3948 741,44
Mexico                            3165 2875 -290,62
Argentina                 772 656 -115,47
Brazil                         1895 2114 219,48
Colombia                 588 1004 415,64
Peru                                99 104 5,13
Trinidad & Tobago  174 118 -55,87
Azerbaijan                895 931 36,74
Denmark                   287 178 -109,04
Italy                           108 116 7,22
Kazakhstan                1526 1785 258,73
Norway                   2466 1837 -629,00
Romania                   99 87 -12,16
Russian Federation  9950 10788 837,90
Turkmenistan     208 231 22,94
United Kingdom  1555 866 -688,82
Uzbekistan                 102 63 -38,93
Oman               757 942 184,95
Syria                    406 56 -350,53
Yemen                                      315 161 -153,89
Chad                                         127 94 -32,59
Rep. of Congo (Brazzaville) 235 281 46,01
Egypt                            715 714 -1,29
Equatorial Guinea  412 311 -100,92
Gabon                     240 237 -3,00
South Sudan                – 99 99,00
Sudan                        457 122 -334,95
Tunisia                       89 62 -26,24
Australia                             547 416 -131,37
Brunei                        175 135 -39,64
China                            3814 4180 365,69
India                            809 894 85,10
Indonesia                           1006 882 -123,47
Malaysia                          741 657 -84,32
Thailand                             362 459 97,46
Vietnam                                   311 350 38,24
Sum                                   3359,15

OPEC:

Ecuador                              507 527 20,64
Venezuela                          3222 2623 -598,63
Iran                                  4396 3558 -837,72
Iraq                                  2428 3141 713,00
Kuwait                                 2786 3126 340,54
Qatar                            1449 1995 546,12
Saudi Arabia                         10663 11525 862,73
United Arab Emirates           3026 3646 620,90
Algeria                              1969 1575 -394,52
Angola                        1901 1801 -99,91
Libya                          1820 988 -831,70
Nigeria                                  2113 2322 208,59
Sum                                            550,03

 

(Swedish)

Den 11 juni höll OPEC sitt 165:te möte i Wien och organisationens 12 medlemmar beslutade att ligga kvar på produktionsvolymen 30 miljoner fat olja om dagen. Mötet finns rapporterat i OPEC Bulletinen 6/14. Man beslutade också att förlänga Abdalla Salem El-Badris förordnande som generalsekreterare för OPEC fram till årsskiftet. Efter mötet hölls en presskonferens där generalsekreterare El-Badri förkunnade ”Right now we have a very comfortable crude oil price, the market is stable and OPEC is producing 30 Mb/d of crude, more or less. The consumers are getting their supplies and the producers a good price. Everybody is Happy.” På frågan om produktionen av skifferolja i USA var ett hot mot OPEC blev svaret att det var inget hot eftersom USA inte får exportera någon olja. Vad det gäller framtida investeringar ansåg han att OPEC har en bra investeringsplan och att man skulle studera balansen mella efterfrågan och produktion. Avslutningsvis sa han ”OPEC will continue to play its part in supplying the world with enough crude oil”.

Man har i OPEC bulletinen också intervjuat några av de externa besökarna på mötet. Särskilt intressant är den med Michael Rothman från Cornerstone Analytics i USA. Han menade att marknaden var mycket tight eftersom dne ökning på 3 Mb/d som man hoppats på i början av året inte hade blivit verklighet utan bara hälften och detta kunde indikera att OPEC måste öka sin produktion med 1.5 Mb/d om priserna inte skulle stiga. Vad det gäller skifferoljan i USA var hans kommentar att den var ”a very short-life resource”. Han noterade också att många oljebolag trodde att deras produktion i USA skulle nå ett maximum runt 2016-17. Vad det gäller den globala produktionen noterade han att det finns 81 länder utanför OPEC som producerar någon form av olja och att 80 av dess, dvs alla förutom USA, producerar mindre olja idag än vad de gjorde för 5 år sedan. ”So the hope that somehow US production will bail out the market from production problems is proving to be much more questionable than has not been generally recognized as yet”.

http://www.opec.org/opec_web/static_files_project/media/downloads/publications/OB062014.pdf

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