Leading Gulf oil producers Saudi Arabia and Kuwait gave the clearest signal yet that OPEC plans to extend into the second half of the year a deal with non-OPEC producers to curb oil supplies. Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister Khalid al-Falih said on 20 April.
Kuwait's oil minister Essam al-Marzouq said he expected to see an extension of the agreement. If OPEC and non-OPEC oil producers decide to extend their six-month agreement, the cuts may become less deep as oil demand is expected to be stronger for seasonal reasons in the second half of 2017, Marzouq said.
He said OPEC would extend the deal if there was consensus among non-OPEC producers, and that producers were always looking for more non-OPEC members to join the agreement. One African country has expressed interest in joining, Marzouq said, without identifying it.
OPEC is keen that non-OPEC countries play their part in reducing world inventories to support a price rise that has stalled near $55 a barrel. While inventories held at sea and in producer countries have dropped, they remain stubbornly high in consumer regions, particularly in Asia and the United States.
The International Energy Agency said last week that inventories in industrialised countries were still 10 percent above the five-year average, a key gauge for OPEC.
Warning about oil shortages : The head of Saudi Arabia’s state energy giant, ARAMCO, has warned of a looming oil shortage as a $1tn drop in investments into future production takes effect. Amin Nasser, chief executive of Saudi ARAMCO, said on Friday, 14 April, that 20m barrels a day in future production capacity was required to meet demand growth and offset natural field declines in the coming years. He warned that present investments were not large enough to meet this burgeoning demand. About $1tn in oil and gas investments had been deferred and cancelled since the oil downturn began in 2014.
May 2, 2017