And here is a quick summary of some opinions on the market about the potential supply cut:
- Goldman Sachs: said a planned oil output cut by producer cartel OPEC and other exporters like Russia has become a “greater possibility”, but warned that any reduction likely won’t be deep enough to re-balance markets in 2017.
- Goldman Sachs’ Currie: “The probability of an agreement has increased, but the probability having of a successful outcome given the fundamental picture has actually decreased.”
- Gunvor: “Clearly, they have put a floor on the market,” Gunvor Chief Executive Torbjorn Tornqvist told the Reuters Commodities Summit. “But I don’t think they can do any substantial cut. There are too many uncertain factors involved. These two countries [Libya and Nigeria] can wipe out any other deal that has been agreed.” “Realistically, they can’t do anything till January. We’re going to have quite a lot of oil in the market until then. I don’t have high expectations of sustained higher oil prices, certainly for the medium term,” Tornqvist said.
- Jeffries: OPEC Output Cut Unlikely
- WoodMac: “A long stretch, a lot of details to work out.”
- Bloomberg Godfly: OPEC’s Miracle Might Just Be a Mirage
- Bloomberg: OPEC Faces Half-Million-Barrel Dispute With Members on Cut
- IEA: IEA Sees Oil Market Rebalancing Faster If OPEC Respects Deal
- OPEC MOMR: Non-OPEC oil supply in 2016 is now expected to contract by 0.68 mb/d, following a downward revision of around 70 tb/d from the September MOMR to average 56.30 mb/d. This is mainly due to base line revisions. In 2017, non-OPEC supply was revised up slightly by 40 tb/d to show growth of 0.24 mb/d to average 56.54 mb/d, mainly due to new projects coming on stream in Russia. OPEC NGLs are expected to average 6.43 mb/d in 2017, an increase of 0.15 mb/d over the current year.
- Asset manager Pierre Andurand: “With the capex cuts that we’ve seen, and have carried on seeing, I think the non-OPEC declines are structural. So we don’t see a wall of supply coming in 2017. We see the opposite,” he said. “Even without an OPEC cut the markets were getting better and we were going to go up further.”
Amid various reports on the production cut/freeze, here is a recap who has said what so far:
- “Russia is ready to join in joint measures to limit output and calls on other oil exporters to do the same,” Putin said. “In the current situation, we think that a freeze or even a cut in oil production is probably the only proper decision to preserve stability in the global energy market.” – Bloomberg
- “Why should we do it?” Sechin, known for his anti-OPEC position, told Reuters in Istanbul on Monday evening, when asked if Rosneft, which accounts for 40 percent of Russia’s crude oil output, might cap its production. “Try to answer this question yourself: would Iran, Saudi Arabia or Venezuela cut their production?” – Reuters
- Kremlin: Rosneft CEO’s words on oil production freeze refusal quoted out of context – Tass
- Gazprom supports oil production freeze but not its cut, Deputy Chief Executive Officer of the Russian gas holding Alexander Medvedev said on Monday at the World Energy Congress.
- “Both oil and gas producers’ teams will attempt to stabilize production. Freeze, not contraction,” Medvedev said responding to a question whether Gazprom exactly supports production freeze. – Tass
- Oil companies will support Russian state position: VP Fedun
- “I have no doubt that there will be a freeze” or even cuts, Leonid Fedun, billionaire vice president of Lukoil PJSC, said at the World Energy Congress in Istanbul. “I’m sure everybody will join” any action the Russian government agrees, he said. – Bloomberg
- Many producers outside the group have expressed a willingness to cooperate on output caps, said Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih, who added that he was “optimistic” there’ll be a deal that could lift prices as high as $60 by year-end. – Bloomberg
- OPEC chief says freeze deal likely to last six months, then be reviewed. – Reuters
- OPEC’s Barkindo: Looking At How To Account For Iran In Accord – BBG TV (via twitter)
A history and management lesson in one.
Updated on 19 February 2016.
- Saudis and Russia agree to oil output freeze, talks with Iran to follow (Reuters)
- Saudi Arabia, Russia to Freeze Oil Output Near Record Levels (Bloomberg)
- RUSSIA, SAUDIS, QATAR, VENEZUELA READY TO FREEZE OIL OUTPUT IF OTHERS JOIN IN: NOVAK (Platts)
- Saudi Arabia may still consider oil cuts – source (FT)
- Four oil producing nations agree to freeze output (BBC)
- Iraq ready to freeze oil output at Jan levels pending deal-source (Reuters)
- IRAN, IRAQ, VENEZUELA, QATAR BEGIN KEY TALKS ON POSSIBLE OIL FREEZE (Platts)
- Iran’s Oil Will Just Make Life Worse for Gulf Rivals (Bloomberg)
- Foreign companies ready for Iran’s vast oil wealth (Nikkei Asian Review)
- Iran readied for sanctions lift with cut to Europe oil sales price (Reuters)
- Iran’s oil tankers point towards India and Europe as clock ticks down on sanctions (Reuters)
- Iran’s petroleum production expected to increase as sanctions are lifted (EIA)