International cooperation on crude production has helped stabilize oil markets and is more important now than ever, Russian Energy Minister Alexander Novak said on Monday.
The Organization of the Petroleum Exporting Countries and other leading oil producers had agreed to cut their combined oil output but that deal expires at the end of this month.
Talks on whether to extend the deal are scheduled for July 1 to July 2 in Vienna.
“Today, more than ever, international cooperation is important,” Novak said in a speech at an energy forum in the Russian city of St Petersburg.
“There is a good example of successful cooperation on balancing the oil market between the OPEC countries and non-OPEC. Thanks to joint efforts, we today see a stabilization of world oil markets, an increase in the investment attractiveness of the sector, and the return of investment.”
Novak also said rivalry on global markets was heating up. “At the same time, we are encountering wider use of non-economic methods in the battle for consumers,” he said.
United States crude oil inventories decrease last week: EIA
U.S. crude oil inventories decreased during the week ending May 29, the United States Energy Information Administration (EIA) said in a report on Wednesday.
According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 2.1 million barrels from the previous week.
According to the EIA, total motor gasoline inventories increased by 2.8 million barrels last week and were about 10 percent above the five-year average for this time of year. Finished gasoline and blending components inventories both increased last week.
Distillate fuel inventories increased by 9.9 million barrels last week and were about 28 percent above the five-year average for this time of year.
Propane/propylene inventories increased by 3.1 million barrels last week and were about 12 percent above the five-year average for this time of year. Total commercial petroleum inventories increased last week by 15.1 million barrels last week.
United States crude oil refinery inputs increase last week: EIA
U.S. crude oil refinery inputs increased during the week ending May 29, the United States Energy Information Administration (EIA) said Wednesday.
U.S. crude oil refinery inputs averaged 13.3 million barrels per day (b/d) last week, 316,000 b/d more than the previous week’s average. Refineries operated at 71.8 percent of their operable capacity last week.
Gasoline production increased last week, averaging 7.8 million b/d. Distillate fuel production decreased last week, averaging 4.7 million b/d.
Total products supplied over the last four-week period averaged 16.1 million b/d, down by 19.4 percent from the same period last year.
Over the past four weeks, motor gasoline product supplied averaged 7.2 million b/d, down by 22.5 percent from the same period last year.
Distillate fuel product supplied averaged 3.4 million b/d over the past four weeks, down by 13.4 percent from the same period last year. Jet fuel product supplied was down 68.7 percent compared with the same four-week period last year.
Egypt announces new oil discovery in Western Desert
A new oil discovery was made in Egypt after drilling a well in the Western Desert that would produce massive amounts of crude oil and natural gas, an Egyptian petroleum company said in a statement on Wednesday.
“The new discovery has been put on the production plan at a rate of 4,100 barrels of crude oil per day and 18 million cubic feet of natural gas per day,” said the company.
Borg Al Arab Petroleum Company is a joint venture between the Egyptian General Petroleum Corporation and Kuwait Energy Egypt, and it is responsible for operations at Abu Sennan concession in the Western Desert.
The company said that its chief reported the new discovery to the Egyptian Petroleum Minister Tarek al-Molla.
In late 2019, the company announced a petroleum discovery in ASH-2 area of oil rich Abu Sennan, with an average production rate of 7,000 barrels of crude oil and 10 million cubic feet of natural gas per day.
Egypt saw a 7-percent surge of oil and gas production in 2019 by producing some 650,000 barrels of crude oil and 7.2 billion cubic feet of natural gas per day, according to a former statement by the Egyptian oil minister.
Egypt’s largest Zohr offshore gas field in the Mediterranean Sea, which was discovered by Italy’s giant Eni in 2015, greatly contributes to the country’s natural gas production as it produces alone about 2.7 billion cubic feet on a daily basis.
Alleged oil theft : DPR hands over 9 vessels to Navy, EFCC
The Department of Petroleum Resources (DPR) said nine vessels allegedly involved in oil theft had been handed over to the Nigerian Navy and the Economic and Financial Crimes Commission (EFCC).
The News Agency of Nigeria reports that Mr Sarki Auwalu, Director, DPR, made the disclosure on Wednesday during an online interactive session with the media on topical issues in the oil and gas industry.
Auwalu said the DPR had initiated Crude Oil and Liquefied Natural Gas (LNG) Tracking (COLT) to track vessels coming in or going out of the country in order to curb oil theft.
“They are under the Western Naval Command. We have arrested several vessels and some of the vessels are for oil thieves.
“We are working with the Nigerian Navy and we quickly alert the Navy whenever we see any suspicious vessel during surveillance,” he said.
Auwalu said that other measures were being implemented by the regulatory agency to improve accountability in the oil and gas sector, which include the National Production Monitoring System (NPMS) that focuses on data gathering.
“We have been able to track online/real time data of what our productions are and so we are now in the position to say what is the production done by this country.
“All our fields are largely tracked online now. So, it is not true that Nigeria cannot account for what it is producing, be it crude oil or gas, ” he said.
Oil barrel prices unlikely to return to $60 until 2022 – Equatorial Guinea’s minister
Oil prices are unlikely to return to the pre-crisis level of $60 per barrel until 2022, yet the market has adjusted to the oil price of $30 per barrel, Equatorial Guinea’s minister of mines and hydrocarbons, Gabriel M. Obiang, has said.
Obiang made this known in an interview with Sputnik on Wednesday.
don’t see oil going back to the pre-pandemic prices and $60 until 2022.
“There is a lot of cheap oil in the world. It’s going take time for the inventory to go down.
“People expecting oil to go to the $40 and $50, they are being very optimistic.
“I think that it’s more logical to be conservative and comfortable around $30 area, $30 to $39, $40,” Obiang said.
Although the price of $30
per barrel is not very comfortable and the producers would prefer a higher figure, it at least brings some stability and allows the budget to be managed, the minister noted.
In April, the prices of the West Texas Intermediate even went negative.
Edited By: Emmanuel Yashim (NAN)
Saudi, Russia reach deal on oil cuts, raising pressure on laggards
OPEC leader, Saudi Arabia and non-OPEC Russia, have agreed a preliminary deal to extend existing record oil production cuts by one month while raising pressure on countries with poor compliance to deepen their output cuts, OPEC+ sources told Reuters.
“Any agreement on extending the cuts is conditional on countries, who have not fully complied in May, deepening their cuts in upcoming months to offset their overproduction,’’ one OPEC source said.
OPEC+ agreed last month to cut output by a record 9.7 million barrels per day, or about 10 per cent of global output, in May and June to lift prices battered by plunging demand linked to lockdown measures aimed at stopping the spread of the coronavirus.
The group also considered holding an online meeting on June 4 to discuss output policy, after Algeria, which holds the presidency of the Organisation of the Petroleum Exporting Countries, proposed bringing forward a meeting planned for June 9-10.
The OPEC source said that an earlier meeting on June 4 is also conditional on compliance and that the discussions now are about implementing criteria for those countries who have not fully complied with the oil cuts and how they can compensate for overproducing in the coming months.
Edited By: Abdulfatah Babatunde (NAN)
Brent oil rises to $40 amid hopes for output cuts, recovery
Oil rose on Wednesday, with Brent at $40 for the first time since March, as optimism mounted that major producers will extend production cuts and recovery from the coronavirus pandemic will spur fuel demand.
The United States West Texas Intermediate (WTI) crude futures gained 68 cents, or 1.9 per cent, at $37.49 a barrel.
It rose to as much as $37.88, also the highest since March 6.
The contract ended the previous session up 3.9 per cent.
Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicentre of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread.
The Organisation of the Petroleum Exporting Countries (OPEC) and other major producers including Russia, a group known as OPEC+, may extend production cuts of 9.7 million barrels per day (bpd), or about 10 per cent of global output, into July or August, sources told Reuters.
The cuts are currently due to run through May and June, scaling back to a reduction of 7.7 million bpd from July to December, but Saudi Arabia has been pushing to keep the deeper cuts in place for longer.
“Even deeper cuts will speed up the process of rebalancing the market,’’ ING Economics said, noting the “market was already set to transition from surplus to deficit as we move into the second half of this year’’.
With the date of the meeting not yet set and some calling for it to be early as this week, much remains up in the air, however.
“As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,’’ Capital Economics said in a note, estimating that global oil consumption will fall to just under 92 million bpd on average in 2020.
The United States crude oil inventories fell by 483,000 barrels in the week to May 29, the American Petroleum Institute said on Tuesday.
Gasoline and distillate fuel stockpiles rose.
Official government inventory data will be released later on Wednesday.
Those figures still show the United States stockpiles remain high and are forecast to have risen for a second week in a row.
Edited By: Abdulfatah Babatunde (NAN)
2020 Budget: Senate increases oil price benchmark to $28
The Senate on Tuesday increased the 25 dollars per barrel oil price benchmark proposed by the executive in the revised Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) forwarded to it for approval.
The upper chamber made the increase on the oil price benchmark to 28 Dollars.
The resolution was sequel to the consideration and adoption of report of its Committee on Finance mandated to work on the revised documents by the executive during plenary.
The Chairman of the Committee, Sen. Solomon Olamilekan, presented the report.
Olamilekan in his submission said the increase effected on the oil price benchmark was as a result of the recent upward trend of the crude oil market which stood at 38 Dollars per barrel with a very strong expectation that the price would rise to as high as 40 to 45 Dollars per barrel.
The senate also reduced from 1.9 million barrel per day to 1.8 million barrel per day oil production proposed by the executive in the documents.
This is as it declared monies kept in the Natural Resources Development Accounts as waste.
Other assumptions cum proposals retained include N5.09 trillion Federal Government’s revenue, N10 .51 trillion proposed expenditure, N4.95 trillion fiscal deficit, N4.17 trillion new borrowings (including Foreign and domestic Borrowings).
The Senate also retained the critical components of the proposal as presented by the executive with adoption of N10.51 trillion as total expenditure, N4.93 trillion as total recurrent, N2.83 trillion for personnel cost and N2.23 trillion for capital expenditure.
In his remarks, President of the Senate, Ahmad Lawan urged the Senate Committee on Privatisation to liaise with the Bureau of Public Enterprise (BPE) in ensuring that the projected N260 billion from proceeds of privatised agencies was realised and accordingly used to fund the budget.
He frowned at some of the special accounts being kept by the executive, particularly the Natural Resources Development Accounts.
According to him, such accounts at this time of scarcity of funds to finance the budget are not all that necessary.
“Keeping monies in Natural Resources Development Accounts is more of waste than serving critical purposes,” he said.
Putin, Trump discuss G7 summit, oil markets over phone
Russian President Vladimir Putin had a phone conversation with his United States counterpart Donald Trump at the initiative of the United States side, discussing issues related to the Group of Seven (G7) Summit and oil markets, the Kremlin said Monday.
The importance of enhancing the bilateral dialogue on strategic stability and confidence-building measures in the military sector was noted.
“It was stated that this multilateral agreement, reached with the active support of the presidents of Russia and the United States, would lead to a gradual restoration of oil demand and price stabilization,” it said.
Putin and Trump also touched upon space cooperation and fighting coronavirus, agreeing to continue contacts at various levels, according to the statement.
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