It really was a surprise when at the end of the first day “No Press Conference Today” was announced. There was much conjecture beforehand, even that there would not be a deal, but it had to happen, with too much oil in the market and the price falling as OPEC wavered. In June they put 1mbpd in to the market and now they want it back.
Following the weather forecast is something that we all do, whether it’s for a day out, what to wear, or simply what will it be like when we get to our holiday destination. There are many services online offering varying degrees of service, from free to subscription. However, these free services will also give you a fair dose of advertisements while advising you that the forecast you are seeing is the basic, one and for something more up to date, without adverts, a modest subscription is required. For many of us, the basic forecast is adequate, such as the services offered by the BBC or the Meteorological Office (Met Office) directly. (more…)
The 173rd Meeting of the OPEC Conference and the 3rd OPEC and non-OPEC Ministerial Meeting
Vienna, Austria, 30th November, 2017
Like every OPEC Meeting, there was much conjecture beforehand but I felt there that there was only one option,
to hold where they were and roll on, supposedly, for at least another nine months. Ministers seemed keen not to fuel gossip and upset the markets before any official agreement had been made particularly as traders had already built the anticipated cut in to pricing.
The choice was clear – hold on and maintain prices at this level, falter and watch them crash, cut further, push them higher and open the Shale floodgates. Not actually that simple but an easy and quick explanation. However, in the short term that is the right easy solution and OPEC has often thought short term. Yet, following on from the original decision to bring in the cuts, the strategy has worked well particularly as only a couple of years ago OPEC was again being written off as having lost control of the market. But there was a plan that many couldn’t see. The issue now is that re-balancing in one sector requires something similar in another. With the price of oil holding around the $60 level, 14% up on where it was at the last meeting and 40% higher than it was two years ago, even higher prices could work against OPEC.
I recently made a comment following an OPEC Meeting when a colleague sent a message through – “Tesla, elephant in the room!” There is, of course, the view that the electric car revolution will knock out the oil industry, and this is the scenario that all producers fear. Sounds good, but I don’t think so. (more…)
The 172nd Meeting of the OPEC Conference and 2nd OPEC and non-OPEC Ministerial Meeting Vienna, Austria, 25th May, 2017
This Meeting was extremely important for OPEC and the Austrian authorities too, who were naturally very mindful of the atrocious terrorist attack in Manchester this week and others elsewhere beforehand.
Security had been stepped up to the highest level in years. It has always been in place for OPEC Meetings, but this time there was a greater awareness of the threat, with Ministers from twenty-four countries and market followers from around the world attending a series of meeting over the last few days.
During the opening address, HE Khalid A. Al-Falih, the Saudi Arabian Minister and Conference President announced that the market had moved towards balancing since the last Meeting in November, but that there was more work to do in terms of reducing inventories. International Oil Companies were publishing improved results and investment was returning to the upstream sector. He was optimistic about the future, expecting higher global GDP with healthy oil demand growth particularly from Asia, where most of OPEC’s business now lies. He was also very positive about the agreement between OPEC and non-OPEC producers.