Opec+ members discuss delay to planned output increase
Opec+ members are discussing the possibility of delaying a planned increase in production next month, according to sources.
The potential move follows a steep fall in oil prices in recent days against a backdrop of an increasingly poor Chinese economic outlook and despite an ongoing oil blockade in Libya.
Front-month Ice Brent crude futures closed at $73.75/bl on 3 September, down from over $81/bl at the start of last week and the lowest since around mid-December last year.
Eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — had planned to start unwinding 2.2mn b/d of "voluntary" cuts over a 12-month period starting in October, as agreed at a meeting in June. The alliance made it clear at the time of the June meeting that the return of this output would be dependent on market conditions. But up until now, market observers and delegates had expected production to rise as planned.
"[We are] now having a discussion on a possible delay of the monthly adjustment a bit," one delegate source told Argus. A second source confirmed that the talks are underway and a third said the group is at an "everything is possible point".
Asked about a timeframe for any delay, one source said it could be until December when Opec+ has a scheduled in-person ministerial meeting in Vienna.
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Opec+ members agree to delay output increase: Update
Opec+ members agree to delay output increase: Update
Adds details from Opec statement London, 5 September (Argus) — Opec+ members have agreed to delay a plan to start increasing output by two months, following a virtual meeting today. Eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — are now scheduled to start unwinding 2.2mn b/d of "voluntary" crude production cuts from December over a 12-month period, the Opec Secretariat said in a statement. They previously planned to start unwinding in October. The return of these barrels is still not a foregone conclusion. The eight members retain the "flexibility to pause or reverse the adjustments as necessary", the secretariat said. If they go ahead with their updated plan, their collective output targets will rise by around 180,000 b/d in December. The delay to the output increase follows a steep fall in oil prices in recent days after worse-than-expected economic data in China and the US, and despite an ongoing oil blockade in Libya. The Opec statement did not specify the reason for the decision, nor did it make any note of market fundamentals. The secretariat did, however, highlight assurances by Iraq and Kazakhstan to compensate for producing above their output targets since the start of the year. Both countries have "committed to adjust compensation plans for any over produced volumes in August", Opec said. By Aydin Calik, Nader Itayim and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec+ members agree to delay output increase
Opec+ members agree to delay output increase
London, 5 September (Argus) — Opec+ members have agreed to delay a plan to start increasing output by two months to December, a delegate source told Argus . Eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — had been preparing to start returning 2.2mn b/d of voluntary crude output cuts from October over a 12-month period, as agreed in June . The move follows a steep fall in oil prices in recent days after worse than expected economic data in China and the US, and despite an ongoing oil blockade in Libya. By Aydin Calik, Nader Itayim and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libyan crude prepares to load from eastern port
Libyan crude prepares to load from eastern port
London, 5 September (Argus) — Libya's eastern Marsa el Brega terminal is preparing to export a cargo of crude despite an oil blockade, according to a shipping source and tracking data. The Front Jaguar tanker, chartered by ExxonMobil, is at the terminal to load a 600,000 bl cargo of Brega grade crude. This would be the first cargo exported from one of Libya's five eastern terminals since 1 September, when a 600,000 bl cargo left nearby Zueitina. Libya's eastern-based government ordered an oil blockade on 26 August in response to an attempt to replace the central bank governor. This has seen Libya's production fall from almost 1mn b/d to around 300,000 b/d . The shutdown order was meant to halt operations the eastern oil terminals — Es Sider, Ras Lanuf, Zueitina, Marsa el Brega and Marsa el Hariga — but some exports could go ahead. A tanker chartered by China's Unipec — Energy Triumph — is close to Marsa el Hariga and is scheduled to export a 1mn bl cargo, according to loading programmes and tracking data. The TotalEnergies'-chartered Pacific Pearl is close to Es Sider where it is scheduled to load a 600,000 bl cargo. Neither have yet loaded. These apparent exports from eastern terminals, albeit at a much-reduced rate, may explain why some production in the oil heartland Sirte basin is able to continue. Argus understands the blockade, which is effectively being instituted by general Khalifa Haftar's Libyan National Army (LNA), could be more flexible than past iterations. A notable amount of output remains online in the east to supply domestic refineries and so oil-linked gas production can continue to supply power plants, and state-owned NOC will probably continue some exports as part of its crude-for-products programme. The UN's Libya mission is leading mediation efforts between parties that could help resolve the leadership crisis at the central bank . By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s 2023-24 oil, gas equity output recovers
Japan’s 2023-24 oil, gas equity output recovers
Tokyo, 4 September (Argus) — Japan's domestic and overseas oil and gas output rose during the April 2023-March 2024 fiscal year, mostly on the back of development of LNG projects abroad. Japan's equity output of oil and gas totalled 1.625mn b/d of oil equivalent (boe/d) for 2023-24, up by 2.9pc from the previous year's 1.578mn boe/d, according to data released by the country's ministry of trade and industry (Meti) on 3 September. The higher output was largely because of development of overseas LNG projects, Meti said, without disclosing further details. Output possibly recovered because the US' 15mn t/yr Freeport LNG export project fully resumed loading cargoes in February 2023 after it halted operations following a fire in June 2022. Japanese offtakers, including power producer Jera and gas retailer Osaka Gas, have stakes in the project. Increased equity output lifted the portion of Japan's total requirements to 37.2pc, up by 3.8 percentage points from a year earlier, Meti said. Japan is targeting to raise the ratio to over 50pc by 2030-31 and more than 60pc by 2040-41. Meti also attributed the output ratio increase to Japan's reduced demand for crude during 2023-24. Japan is strengthening the government's direct involvement in upstream gas investments overseas with a more aggressive financial approach. Meti has almost doubled its request for the country's fiscal investment and loan programme (FILP) on exploring upstream opportunities for LNG and minor metals to ¥122.4bn ($844mn) for the 2025-26 fiscal year, according to Meti's preliminary data released on 31 August. FILP aims to mobilise investment in areas, which are "too risky to be funded by the private sector alone", according to the country's finance ministry. Meti could be shifting its finance resources for upstream investment to FILP from the general account budget. The ministry cut its budget request for exploring oil and gas and/or buying related assets by more than half to ¥48.6bn for 2024-25. Financing more capital expenditure through FILP suggests that the country is strengthening its involvement in projects, since the programme requires increased profitability and involves more risks compared with allocations from the general account budget. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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