(Bloomberg) -- Oil faces a critical week as Saudi Arabia, Russia and other global producers work frantically to secure a deal aimed at stemming the crash in oil prices. The former partners-in-cuts traded barbs over the weekend over who’s to blame for crude’s crash, which led to a virtual meeting being re-scheduled for April 9.
Since the disintegration of the OPEC+ alliance in early March, crude futures have sunk to 18-year lows as excess supply coincides with a pandemic that has cut a third of global demand. While prices have recovered somewhat, producers still face a lack of storage and the prospect of wells closing.
A deal between the world’s oil powers is far from certain, as is U.S. participation in talks. Analysis prepared for OPEC members ahead of the meeting shows a 10 million barrel-a-day cut is being considered, according to a delegate. Here’s a look at the latest positions, with OPEC data compiled by Bloomberg and non-OPEC from the International Energy Agency. Russia and Kazakhstan is government data, while those for the U.S. are from the Energy Information Administration. The Organization of Petroleum Exporting Countries and its allies are set to meet by video conference at 4 p.m. Vienna time on Thursday.
Saudi Arabia
Production: 12 million barrels a day (April)
Saudi Arabia is delaying the release of its closely-watched monthly oil-pricing list until later this week as the kingdom awaits signs of what may happen when suppliers meet. State-run Aramco said it would keep flooding markets with historic levels of oil at least through May as it fights for market share following the breakup of the OPEC+ alliance. It ramped up output to above 12 million barrels a day on the first of April, with exports following suit. The kingdom has made clear it will not be carrying the bulk of any cuts this time.
Russia
11.29 million barrels a day (March)
Russia, which confirmed Tuesday it will take part in the April 9 meeting, would target a 1 million barrel-a-day cut in any new deal with other key oil producers, on condition the U.S. joins cuts, according to four people familiar with the sentiment in the industry. President Vladimir Putin said a cut in global oil production of about 10 million barrels a day is possible, and the nation is ready to participate “on a partnership” basis. But Russia won’t agree to take more than a tenth of the global cuts, according to one of the people, who spoke on condition of anonymity because the matter isn’t yet public. It’s minimal oil storage options, however, weaken its hand in negotiations. The Kremlin said Wednesday that market-driven declines shouldn’t be considered as cuts intended to stabilize the market.
U.S.
13 million barrels a day (end-March)
President Donald Trump sent shockwaves through the oil market last week after suggesting on Twitter he’d brokered a deal with Saudi Arabia and Russia to cut production by 10 million to 15 million barrels, sending prices soaring. Trump has so far shown little willingness to join in making cuts, and said a free market will curb U.S. oil output “automatically.” The president has threatened substantial oil tariffs should prices remain near the lowest levels in almost two decades. However, he’s also made it clear that he expects the former allies to reach a deal on cutting back production. Ahead of the meeting, the EIA slashed its 2020 oil-output forecast by more than 1 million barrels a day to 11.76 million, as collapsing prices and plummeting demand threaten to shutter production.
Brazil
3.06 million barrels a day (February)
Petroleo Brasileiro SA is taking the lead among oil majors to go beyond spending cuts and actually curb production in response to the price crash. The Rio de Janeiro-based company will lower oil production by 100,000 barrels a day and will idle high-cost platforms in shallow waters at projects it has been trying to sell, according to a statement last month. While other majors including Chevron Corp. and Royal Dutch Shell Plc have slashed outlays to shore up finances, they’ve so far refrained from shutting fields.
Norway
2.07 million barrels a day (February)
Norway, the biggest oil producer in western Europe, said it would consider cutting output if there was a broad international agreement to curb supply. The Nordic nation, whose oil production is set to grow over the next few years, hasn’t been a part of coordinated international cuts to support prices since 2002. Norway produces less than 2% of global supply.
Canada
5.78 million barrels a day (February)
No comments:
Post a Comment