FacebookInstagramTwitterContact

 

China Focus: Ice, Snow Fire Up Economy Of China's Winter Wonderland           >>           U.S. To Sell F-35 Jets To Belgium For 6.53 bln USD            >>           Oil Market To See Strong Growth In 2018: Business Executive           >>           World Champions Sui/Han Withdraws From Four Continents Figure Skating Championships           >>           Chelsea's Misguided Striker Targets Are A Bad Sign For Antonio Conte           >>           Chelsea Pursue Roma Teammates Edin Dzeko And Emerson Palmieri           >>           W2W4: Who Makes Way For Sanchez At United? Chelsea's Goal Struggles           >>           Atletico Madrid And La Liga Have Missed The Fiery, Furious Diego Costa           >>           This Week in Parliament (Jan. 15-19)           >>           Integration Key To Total Rehabilitation Of Citarum River, Says Jokowi           >>          

 

SHARE THIS ARTICLE




REACH US


GENERAL INQUIRY

[email protected]

 

ADVERTISING

[email protected]

 

PRESS RELEASE

[email protected]

 

HOTLINE

+673 222-0178 [Office Hour]

+673 223-6740 [Fax]

 



Upcoming Events


The Incredibles 5Km Fun Run
January 7th, 2018 | 00:00 AM


KIDS PANCAKE MAKING & DECORATING CLASS
January 21st, 2018 | 14:00 PM


THE 1 NATION FREE WORKOUT
January 21st, 2018 | 17:00 PM


20th Consumer Fair
January 24th, 2018 | 00:00 AM


Mazalina Wedding Expo
January 26th, 2018 | 00:00 AM





Prayer Times


The prayer times for Brunei-Muara and Temburong districts. For Tutong add 1 minute and for Belait add 3 minutes.


Imsak

: 05:03AM

Subuh

: 05:13AM

Syuruk

: 06:35AM

Doha

: 06:58AM

Zohor

: 12:32PM

Asar

: 03:54PM

Maghrib

: 06:27PM

Isyak

: 07:41PM

 



The Business Directory


 

 



World Business


  Home > World Business


OPEC’s ‘Heavy Lifting’ Is Not Done, Says Gunvor’s Fyfe


 


 October 13th, 2017  |  09:40 AM  |   468 views

BLOOMBERG.COM

 

David Fyfe, chief economist at Gunvor Group, says that legacy investments made pre-2014 in Brazil, Canada and Kazakhstan will come online in 2018, making OPEC’s job that much harder. OPEC and Russia could push for an extension of up to nine months when the group meets next month in Vienna, he said.

 

Fyfe was interviewed via email on Oct. 11. Comments have been edited and condensed.

 

What are your expectations for the OPEC meeting in November?

 

At the risk of tempting fate, with another month to go before ministers meet in Vienna, it looks like there are moves to try to extend the output deal, potentially by another six-to-nine months.

 

Saudi Arabia has signaled its determination to try to reduce stocks further with some pretty steep cuts to November export allocations. Arguably, OPEC might need to think about deepening its cuts, not just extending, if they wish to avoid some potentially bearish renewed stock builds in early-2018.

 

However, the flip side of the coin is that a need to voluntarily cut further might be offset by geopolitical issues affecting output in Iraq, Iran or Venezuela, or if we see another security deterioration affecting facilities in Libya or Nigeria.

 

Do you think Nigeria or Libya will be asked to make cuts?

 

It may be too early to ask either Libya or Nigeria to contribute voluntarily, but what will be interesting to see is if there is pressure on either Iraq or Iran to shoulder more of the burden. I’m not convinced agreement on that would be easy to attain, but those two producers saw the sharpest output gains in 2014-2016 and so far have held on to most of those increases in 2017.

 

Is OPEC still taking U.S. shale seriously?

 

I think the fact OPEC has made repeated overtures to U.S. producers to discuss the market shows they very much take the U.S. supply renaissance seriously. And actually if you take crude and NGLs combined, U.S. oil supply could increase by 800,000-to-900,000 barrels a day in 2018, up from over 600,000 barrels a day in 2017.

 

Legacy investments made pre-2014 in Brazil, Canada and Kazakhstan also come on stream in 2018, so the heavy lifting isn’t done yet for OPEC. I do think U.S. crude growth may settle down to more sustainable levels, say more than 300,000-to-400,000 barrels a day annually, after that, as greater financial discipline and cyclically rising costs materialize, but unless we get supply disappointments elsewhere in 2018, there could be renewed market softening for a while next year.

 

Has the balance of power tipped back toward OPEC and Russia?

 

Saudi Arabia and Russia have some common interests that are not just about oil. Speaking with experts from the geopolitical side, Saudi Arabia is likely seeking some diplomatic help in counteracting Iranian influence in the region.

 

 

But on the oil side, I think Russia and the kingdom will cooperate as long as it suits both their purposes. To be fair, they’ve achieved more than people thought possible in restricting supply, and both are probably happy with a $50 floor for prices. OPEC/Russia and the U.S. shale producers are both incremental sources of supply, though arguably OPEC producers can reactivate production more quickly than U.S. producers can.

 

OPEC has shuttered 1.5 million barrels a day that, in theory, can come back within one-to-two months, technically speaking. I doubt that even the currently high level of DUCs in the U.S. would amount to that volume in that time horizon. And of course new shale takes six-to-12 months to activate.

 

How concerned are you over Donald Trump’s rhetoric on Iran?

 

I’m trying to answer that ahead of Trump’s announcement whether he intends to decertify the nuclear deal as being in the U.S.’s interest. It looks like he might pass that on to Congress on Oct. 15 and then we have two months for Congress to try to reach agreement on whether Iranian action on ballistic missiles and other factors justify either sanction re-imposition or new sanctions.

 

I’m not sure though there is a real consensus on that in Congress. The threat of sanctions snapback might be used as a bargaining chip to get the Iranians back to the negotiating table, so I’m not convinced renewed restrictions on oil sales are imminent, but that threat could re-emerge later in 2018.

 


 

Source:
courtesy of BLOOMBERG

by Christopher Sell

 

If you have any stories or news that you would like to share with the global online community, please feel free to share it with us by contacting us directly at [email protected]

 

Related News


Sabahans’ Rights Guaranteed By Constitution – Pm

 2018-01-20 09:04:26

VPakistan Zainab Murder: DNA Suggests Suspect In Other Case Was 'Innocent'

 2018-01-20 09:14:31

MSCI Says South Korea May Harm Stock Market With Tax Plan

 2018-01-20 11:18:14