Russian Federation becomes world's top producer

Camille Francis
February 22, 2017

OPEC Secretary General Mohammed Barkindo Tuesday said any decision to extend a landmark oil production cut agreement past June will depend on global stock levels and an assessment of market fundamentals.

Mohammed Barkindo said that there was a "really unprecedented" level of commitment to uphold November's landmark agreement to curb supplies, both by Opec members and the 11 non-Opec members, including Russian Federation, that agreed to co-ordinated cuts. Specifically, Blanch predicts that USA shale oil production could grow by a whopping 3.5 million barrels per day over the next five years.

Earlier on Tuesday, the annual International Petroleum Week kicked off in London and will last through Thursday, comprising about 1,500 participants from over 50 countries to discuss the relevant issues of the global oil and gas industry.

Most of the OPEC members are complying with the deal as production figures appear to fall.

The cuts have spurred a speculative move into crude oil that has pushed prices towards the top of their recent ranges.

Barkindo acknowledged that that goal is still a ways off.

Retail stock to watch this morning: Wal-Mart Stores Inc(NYSE: WMT)
The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink . The company sees USA same-store sales rising 1.0% to 1.5% and Sam's Club same-store sales rising about 1%, excluding fuel.

Because of this process, shale oil is only profitable when oil prices are high.

"Assuming the USA oil rig count stays at the current level, we estimate United States oil production would increase by 405,000 (barrels per day) between fourth-quarter 2017 and fourth-quarter 2016 across the Permian, Eagle Ford, Bakken and Niobrara shale plays", Goldman Sachs said in a research note. To start with, OPEC excluded two of its biggest producers, Nigeria and Libya from the production cuts and it allowed Iran to raise its output slightly.

"I have got commitment from the highest level of government in Baghdad that they will implement their obligations fully", he said. "In the month to come, we will see even higher numbers from both sides".

On February 13, OPEC released a report that agreed with the earlier report from the IEA. The committee is scheduled to hold a technical meeting in Vienna starting Wednesday.

Yesterday, Russia reported that its cuts are ahead of schedule and today OPEC officials called for 100% compliance to the agreed cuts. Libya has stated its intent of increasing production to 1.2 million b/d, up from 0.7 million b/d in January.

"Presumably the decrease in production and exports in December should be seen against this backdrop, and could already have been undertaken to pre-empt the production cuts due to take force from January".

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