Crude prices rise amid output freeze talks

World oil prices nudged higher Tuesday as OPEC producers met to discuss a possible freeze to crude output levels in a bid to tackle a supply glut.

OIL

Around 1300 GMT, US benchmark West Texas Intermediate for delivery in April was up one cent at $33.40 a barrel.

Brent North Sea crude for April rose 18 cents to $34.87 compared with Monday’s close.

US crude had rebounded above $30 a barrel and European benchmark Brent climbed well over $34 Monday on hopes that discussions among key producers would lead to concrete action to stabilise the battered market.’

“Yesterday’s increase could have come mainly from OPEC trying to rally the market into thinking that there will be action to come between OPEC and non-OPEC producers” over production, Phillip Futures analyst Daniel Ang told AFP.

The leader of Nigeria, Africa’s number one oil producer, was in Saudi Arabia Tuesday, with analysts forecasting that his country will offer its support for an output freeze.

Nigerian President Muhammadu Buhari is to meet King Salman in the biggest producer in the 13-nation Organization of Petroleum Exporting Countries, before travelling on to fellow OPEC member Qatar.

Poorer OPEC members like Nigeria and Ecuador have been clamouring for a cut in production to support prices, which have plunged to near 13-year lows this month.

But OPEC’s richer members led by the Gulf states have refused to budge, preferring to fight for market share against rivals like the US.

However there is now talk of a freeze to current levels of output should OPEC, whose members together pump out about one-third of the world’s oil, convince major non-OPEC producers such as Russia and the US to also maintain their own production levels.

Analysts said traders will this week be monitoring also US growth data for a gauge on the economic health of the world’s top oil consumer.

Before Friday’s data, the US energy department will Wednesday release its inventory on commercial crude stockpiles for last week — a closely watched index measuring energy demand in the United States.

AFP

Crude prices rise amid output freeze talks

Oil slumps to $30, OPEC splits over meeting

The suggestion on Tuesday by Nigeria’s Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, for an emergency meeting of the Organisation of Petroleum Exporting Countries amid the sustained oil price slump met with opposition from another member of the cartel, the United Arab Emirates.

The global benchmark Brent crude extended its decline on Tuesday, slipping towards $30 per barrel for the first time since April 2004, before rising slightly above $31 per barrel. But the pick-up was short-lived as Brent later fell below $31.

Kachikwu, who briefly served as OPEC president last year before Nigeria’s tenure expired on December 31, was quoted as saying that OPEC would soon make efforts to convene before the next scheduled meeting in June as the slump in oil prices was hurting producers, including the world’s biggest exporter, Saudi Arabia.

The 13 members of the OPEC will work toward meeting in early March, Kachikwu said in an interview in Abu Dhabi on Tuesday.

Bloomberg quoted him to have said that members were already engaged in informal discussions with some non-OPEC producers, including Russia, to join any future production cut to shore up prices, he said.

“We are definitely looking at a time frame in very early March. You will very necessarily have to have an OPEC meeting because the group first has to meet and decide on its position before having formal meetings with other producers to coordinate a cut,” he said.

Brent crude closed at $43 per barrel on the day of the last OPEC meeting on December 4, and was trading at $30.54 per barrel at 6.10pm Nigerian time on Tuesday.

OPEC, which supplies about 40 per cent of the world’s oil, decided not to cut production in December, potentially worsening a glut created after producers from the US to Russia and Saudi Arabia pumped more than demand warranted.

The UAE, one of the Gulf nations in OPEC, has moved to quash the talk of a potential emergency meeting, with its Energy Minister, Suhail bin Mohammed al-Mazrou, saying the current strategy by the cartel was working.

“I’m not convinced OPEC alone can change or can solely unilaterally change this strategy just because we have seen a low in the market,” Mazroui was quoted by Reuters as saying.

He stated that while the first half of 2016 would be tough for the oil market, there would be a gradual recovery later in the year, aided by an expected drop in non-OPEC production.

“I think all the members, including Iran, have the right to increase their production. I don’t think we are going to restrict anyone,” Mazroui said.

A former Director of Research at OPEC, Chief Mike Olorunfemi, said in a telephone interview with one of our correspondents, “If the price should go below $30, there is likelihood that OPEC will want to meet. But the Iran and Saudi Arabia tension has added a new dimension to the problem.

“So, Saudi Arabia will not really want to come and meet because the fall in oil price affects Iran more than Saudi Arabia. And wherever Saudi Arabia moves to, that is where you will find the UAE and Kuwait.”

The Head of energy Research, Ecobank Capital, Mr. Dolapo Oni, is of the view that OPEC is really not somewhere where Nigeria has a lot of clout.”

Oil slumps to $30, OPEC splits over meeting

Jonathan"s courage made me OPEC President - Diezani

Diezani Alison-Madueke says she would not have been elected president of the Organisation of Petroleum Exporting Countries (OPEC), were it not for President Goodluck Jonathan’s courage in appointing her minister of petroleum resources.

Alison Madueke

Speaking on Wednesday at the end of the weekly federal executive council (FEC) meeting presided over by Jonathan, Alison-Madueke stated that her proposals as OPEC president would ensure that Nigeria doesn’t bear the brunt of the fall of oil prices. She said it was time for Nigeria to be more competitive.

“Nigeria has to be much more competitive at this time and going into the future. We cannot continue to do business as usual,” she said.

“We must ensure that we have the right enabling parameters and indices in this country to attract the right end-user markets, to attract the right end-user demand for our products because they are so many other countries that would be competing for those end-user markers and to get that end-user demand.

“So we will have to seat down and reformulate our entire approach over the next month or so, in fact immediately, to ensure that we are in fact at the cutting edge of competitiveness; we have to make ourselves competitive in the market and we have to ensure we are able to garner and take those end-user markets.”

She described her emergence as OPEC president as the result of President Goodluck Jonathan’s courage in appointing a woman as minister of petroleum resources.

“First of all, it wouldn’t have happened if the president had not had the courage to appoint a woman into the portfolio of Ministry of Petroleum Resources, which meant that I now headed the country’s delegation to OPEC.

“I must say that this was the daunting thing. It happened about three and half years ago; I went into a body which is completely male-dominated and mostly Arab-dominated as well. But I have found that they have come to respect me and respect Nigeria’s voice over the last three years in OPEC very highly.

“The position of the presidency some years ago was administratively made rotational but OPEC ensures that it must still elect, therefore it states very clearly that ‘we have elected’ Dieziani Allison-Madueke or whoever happens to be the president for that year into the position of the presidency of OPEC. And the reason in the constitution is very clearly stated that it is elected because it reserves the rights to reject any minister, head of delegation or person put forward by their country that OPEC feels is not of the right capabilities and experience and level to seat as OPEC president, because OPEC presidency is highly influential and it is in fact a high ranked position to that of the secretary-general of OPEC.”

“It is the OPEC president who seats as chairman of all OPEC conferences at all times during that year. It is the OPEC president who calls for extraordinary meetings of OPEC, which will possibly happen in the next quarter of next year if the downward trend in crude prices continues amongst other things and responsibilities that the presidency has today.”

Diezani Alison-Madueke, the first female to head the body, acknowledged that her tenure for the next one year would be a challenging one in the face of dwindling oil prices.

“This is a very challenging time, as you know, for OPEC and for the global crude oil wells as a whole. Quite clearly, there has been a battle of wills between certain OPEC countries, the big players and certain non-OPEC countries who are big players in the world crude oil production markets at this time.

“So it is a challenging time to take over as OPEC president and our prayer, of course, is that we will be able to stabilise the crude oil prices per barrel over this period because it is critical.

She pointed out that many countries, both OPEC and non-OPEC countries, are suffering immensely, citing countries that have adopted austerity measures as a means to cushion the effect of falling oil prices.

“Even as we speak, Venezuela has gone into austerity measures and is now measuring food because they were completely dependent on oil. Angola, Algeria, Iran are all under duress as is Nigeria because it has affected our budgetary benchmark. And even non-OPEC countries like Russia who will not cut production are already seeing a drop in the value of their rubuck.

“As OPEC president, you will be the one who is expected to call together the entire body at points where they are critical impact in the market from the price of the barrel and in this case the downward trend of the barrel of oil.”

Viewed 1 times
Jonathan"s courage made me OPEC President - Diezani

Alison-Madueke"s ambition dashed as OPEC retain incumbent Secretary General

The ambition of Nigeria and Nigeria’s Minister of Petroleum Resources, Diezani Alison-Madueke, to become the Secretary General of the influential Organisation of Petroleum Exporting Countries was dashed on Wednesday.

Diezani-Alison Madueke

This followed the decision of the members of OPEC to extend the tenure of the incumbent Secretary General, Abdullah al-Badri.

The tenure of al-Badri was extended till June 30, 2015.

The decision subsequently dashes the move by Nigeria to emerge as the secretary general.

The move came to the open on Tuesday.

However, at its meeting on Wednesday, the OPEC members decided to retain the current occupier of the position.

The initial proposal to have Alison-Madueke to occupy the position was to solve the deadlock over the post created by opposing candidates from Saudi Arabia and Iran, Iraq’s Oil Minister, Abdul Kareem Luaibi, said.

Meanwhile, OPEC agreed on Wednesday to renew its oil production ceiling of 30 million barrels a day for the second half of this year in a widely anticipated decision.

The 12-member organisation is satisfied with the $110 Brent crude oil price a barrel, which is above its preferred price of $100 a barrel, the ministers said.

Two member countries, Libya and Iran, are producing well below capacity because of civil conflict and sanctions respectively, helping to support prices.

In its end of meeting communique confirming the decision, OPEC also said the next meeting would take place on November 27.

Viewed 1 times
Alison-Madueke"s ambition dashed as OPEC retain incumbent Secretary General