is extending opec cuts a done deal
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

Is extending OPEC cuts a done deal?

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleIs extending OPEC cuts a done deal?

Jeddah - Arab Today

Last week, oil prices in New York saw their highest weekly gains since December. This is because some members of the Organization of the Petroleum Exporting Countries (OPEC) pledged to consider extending their pact to reduce supply and to restore balance in the market.
The market reacted in full swing, but can an extension of the cuts deal be considered a done deal?
There is mounting evidence to suggest that an extension of the deal that will otherwise expire in June is necessary.
First of all, the excess in stored oil worldwide is still high. Estimates from two OPEC countries, Kuwait and Qatar, puts it at around 285 million barrels above the five-year average. With daily global oil consumption of around 94 million barrels, the excess in stored crude in industrial countries is equal to a full three days of consumption.
With US crude stockpiles swelling to record levels and prices hovering around $50 a barrel, OPEC and its partners have little choice but to keep going.
Second of all, demand was low in the first quarter of this year due to refinery shutdowns for maintenance in the US. This by itself puts 1 million barrels a day of refining capacity out of service during the period.
For the deal to work well, demand must be at the highest rates in order to absorb the excess supply in the market that is stored in countries from the US to China.
So the best option is to extend the deal into the second half of the year and benefit from the third quarter, when demand throughout the year hits its highest point, as suggested by Qatar’s Energy Minister Mohammed Al-Sada last week in London.
Last of all, the compliance of member countries to the deal with their pledged cuts is still not at 100 percent. According to the OPEC and non-OPEC Ministerial Monitoring Committee (MMC), OPEC members and their non-OPEC allies had a combined compliance rate of 94 percent in February compared with 86 percent in January.
Although this improvement is hailed by the market and the ministers, it is not enough to dry up excess oil in storage. Kuwait’s Oil Minister Issam Al-Marzooq stressed on many occasions recently that 100 percent is needed in order for the market to rebalance in the third quarter of this year, otherwise rebalancing will take more time.
A compliance committee of OPEC ministers from Kuwait, Algeria and Venezuela and their counterparts from Russia and Oman concluded meetings in Kuwait City last Sunday with a statement asking OPEC to review the market and give them a recommendation in April on rolling over the cuts.
So it seems that an extension of the deal is on the way to becoming a done deal, yet there are voices that suggest to wait until more data is available to better assess the situation.
Russia’s Energy Minister Alexander Novak said last week that it is too early to talk about an extension and that his country will not make any pledges until April. Russia needs more time to assess the market, inventories, and production in the US and other non-OPEC countries, Novak said in an interview with Bloomberg television after the committee meeting in Kuwait.

Source: Arab News

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

is extending opec cuts a done deal is extending opec cuts a done deal

 



Themuslimchronicle, themuslimchronicle

GMT 08:32 2011 Monday ,25 July

Sabri accuses Yusri in Souad Hosni’s murder

GMT 12:07 2014 Monday ,03 February

Home design ideas

GMT 11:20 2017 Thursday ,02 March

Mexico central bank cuts growth outlook over Trump

GMT 08:31 2017 Tuesday ,28 November

Bangladesh upholds death sentence for 139 soldiers

GMT 14:33 2017 Thursday ,20 April

US defense secretary vows support for Egypt's Sisi

GMT 16:12 2017 Wednesday ,20 December

Myanmar bars UN rights investigator just before visit

GMT 08:21 2017 Wednesday ,30 August

United Technologies near deal to buy Rockwell Collins

GMT 18:27 2017 Friday ,21 April

ARCO condemns targeting of ERC convoy in Somalia

GMT 07:23 2017 Tuesday ,21 November

perched in Jerusalem's hills may soon vanish

GMT 19:33 2017 Tuesday ,10 October

US scientists engineer corn to boost protein

GMT 08:43 2017 Monday ,04 December

Brexit deal 'difficult but doable': diplomats

GMT 11:24 2017 Friday ,03 March

Lego honors 'Women of NASA'

GMT 11:35 2017 Tuesday ,05 December

Bahrain's top Shiite cleric hospitalised

GMT 21:39 2017 Saturday ,30 September

Abdel Karim praises Egypt’s role

GMT 10:11 2017 Tuesday ,12 December

Latest Grateful Dead resurrection -- a duo

GMT 15:43 2017 Monday ,04 December

Yemen's Huthi rebels claim ex-president Saleh killed

GMT 15:59 2017 Thursday ,30 November

Bahrain Bourse daily trading performance
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle