OPEC to reach some kind of agreement this week - expert

OPEC to reach some kind of agreement this week - expert

Baku, Azerbaijan, Nov. 28
By Elena Kosolapova - Trend:
There are chances for the OPEC agreement on oil production cut, but its impact on oil prices will depend on the volume of cut, Arthur Berman, an independent US geological consultant with about 40 years of experience in petroleum exploration and production believes.

“I think that OPEC will reach some kind of agreement this week. There is considerable economic pressure on Saudi Arabia for higher margins to meet its fiscal budget requirements,” Berman told Trend by email.

The expert also noted that if OPEC ever had a strategy to stop the oil production in the US, it has not been overly successful. He reminded that US tight oil producers especially in the Permian basin have had ample access to capital especially when prices reach very low levels and investors see price upside.
Berman noted that in the past, Iran has been an obstacle to the OPEC agreement, but realistically, it cannot increase its production much more than it already has, without considerable investment in infrastructure and new drilling.

As for Iraq, it critically needs prices at or higher than current levels to maintain their fight against ISIS and to satisfy their budget needs, according to Berman.
The analyst also noted that Russia must be part of any agreement on oil production and it has signaled willingness to at least freeze the present output levels.

Meanwhile the expert stressed that OPEC is not a united front and has never been especially effective at assuring compliance among its members to past agreements. He reminded that production in Nigeria, Venezuela and Libya has decreased in the past few years due to civil unrests and economic problems.
“Of the three, Nigeria is more likely to increase output while Libya's and Venezuela's problems are more systemic and long-lived,” he said.

Commenting on OPEC agreement’s impact on oil prices, Berman noted that the agreement would increase prices by perhaps a few dollars although the market has already accommodated a few dollars into present prices in expectation of an agreement.

“A lot depends on how much OPEC actually cuts, given the range that has been discussed,” he said, adding that the current world production surplus is at least 1 million bpd and has shown little sustained momentum toward market balance.

According to OPEC’s November forecast, the world oil demand in 2016 will reach 94.4 million barrels per day. The world oil production in October, according to OPEC data, was 96.32 million barrels per day. Some 35 percent of the world liquids production comes from OPEC countries.

“If the OPEC cut approaches 1 million bpd, prices will stay higher longer but if the cut is only a few hundred thousand barrels per day, higher prices will be less durable,” Berman said.
The expert also noted that the US production has stopped declining and rig counts in the US tight oil plays have increased almost 20 percent since mid-September.

“Higher prices will provide incentive for higher levels of production [in the US],” he said.
In late September, OPEC agreed to cut its oil output for the first time since 2008. The group plans to reduce output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd. How much each country will produce is to be decided at the next formal meeting of OPEC on November 30.

Moreover OPEC officials were scheduled to meet with non-members including Russia on Nov. 28, but the meeting was cancelled last week after the Saudis decided not to take part. Saudi Arabia wants an OPEC deal in place before conversations with other producers such as Russia, one OPEC delegate told Bloomberg.

Follow the author on Twitter:@E_Kosolapova

Museums like War Trophy Park in Baku, open in many countries - Russian historian
Museums like War Trophy Park in Baku, open in many countries - Russian historian
Soldiers were unprepared for war with Azerbaijan - ex-secretary of Armenian Security Council
Soldiers were unprepared for war with Azerbaijan - ex-secretary of Armenian Security Council
Relatives of missing Armenian soldiers continue to hold building of MoD in blockade
Relatives of missing Armenian soldiers continue to hold building of MoD in blockade
Loading Bars
Volume of cargo exported by Azerbaijan via sea in 2021 disclosed
Raisina dialogue: Indo-Pacific epicentre of strategic competition, says Australia PM
Azerbaijan records sharp increase in cargo movement by air
Remittance inflows from Azerbaijan to Georgia show growth
Decrease in apartment prices in Georgia not expected - analyst
US investors aim to finance Georgian startups
Azerbaijan expanding network of seismic stations (PHOTO)
Turkmenistan prioritizes promotion of domestic goods to world markets
Kazakhstan boosts trade with Tajikistan despite COVID-19
Azerbaijan shows footage from Memer village of Gubadli district (PHOTO/VIDEO)
Nominal income of Azerbaijani population drops for Q12021
Foreigners show interest in making investments in Georgia
Azerbaijan's Azertutun company to be privatized - decree
Kazakhstan to amend rules for use of unmanned aircraft systems
Dozens of vehicles to be put up for state property auction in Azerbaijan
FAO working on approving Country Program Framing with Turkmenistan
U.S. housing starts increase more than expected in March
Photo capturing reaction to relative's death in Armenian attack on Azerbaijani Ganja named ‘Media Photo of Year’ in Turkey
Nokia expanding its activities in Georgia
SIEMENS AG modernizing thermal power plants in Uzbekistan’s Tashkent
Georgia shares data on dried fruit exports
Uzbekneftegaz JSC implementing modernization of unit at Uzbekistan's Shurtan Headings
Azerbaijan sees increase in inflation rate for Q12021
Turkmenistan leads in aviation oil exports to Georgia
Volume of Azerbaijan's 1Q2021 railway cargo traffic revealed
Russia's Yandex to launch e-grocery delivery in Paris then London
Kansas City revenue falls 3.5% as COVID-19 hits volumes
India To Spend $200 Million In Next 5-7 Years To Promote Hydrogen Use
Georgian Railway plans to issue Eurobonds in June 2021
Turkmenistan sees increase in number of registered business entities
Russian Hevel Energy Group commissions solar plant in Kazakhstan
UK PM Boris Johnson To Finalise "Roadmap 2030" With India: High Commission
India, France sign agreement for cooperation on Gaganyaan mission
Amazon announces $250 million fund for small, medium businesses in India
Sputnik V covid vaccine deliveries to India to begin this month
Anglo Asian Mining lowers gold output in Azerbaijan
International airport being built in Uzbekistan's Samarkand
Iran top OPEC oil producer for March 2021
Total assets of Azerbaijan's Kapital Bank increase
Japan provides loan to Uzbekistan within socio-economic dev't
Iran expects increase in production
Azerbaijan restoring roads in Tartar damaged during Second Karabakh War (PHOTO)
Memorandum of Understanding on co-op between Azerbaijan and OIC in field of statistics approved
COVID-19 affects trade turnover between Switzerland, Azerbaijan - ambassador
President of Afghanistan holds meeting with Nizami Ganjavi International Center (PHOTO)
Volume of natural gas industrial treatment at Turkmenistan’s Galkynysh field revealed
Iran has to take advantage of regional markets - Chamber of Commerce
Russia discloses volume of Sputnik V vaccine to be supplied to Azerbaijan
Azerbaijan shares data on cancelled tender, quotation poll results
Iran, Qatar may connect their power networks
Azerbaijan reveals 2M2021 data on cargo movement via TRACECA
Georgia sees increase in production of nuts and grapes
Meetings held in Azerbaijan with representatives of state bodies to switch to G-Cloud
Azerbaijan Airlines’ Supervisory Board holds first meeting (PHOTO)
China to invest in development of Iranian ports
Production of wheat and potato in Georgia increases
Switzerland sees potential in strengthening co-op with Azerbaijan in energy field
Uzbekistan interested in import of livestock from Kyrgyz Republic
Turkmenistan receives new industrial oil inflow
Uzbekistan discloses processing capacity of sunflower seeds by 2022
Azerbaijan talks reconstruction of several fish farms
VTB Group concludes deal for acquisition of Kazakhstan's KAZ Minerals
SOCAR boosts exports of oil, petrochemical and gas-chemical products
State Tax Service of Azerbaijan talks tax fees for online services
Passenger transportation indicators plummet in Kazakhstan
Azerbaijan's 1Q2021 GDP slightly decreases
Azerbaijani president, first lady view renovation, restoration work in Baku's Pirshaghi settlement (PHOTO)
Azerbaijan’s gas exports see 45% growth
Azerbaijan boosts gas exports via Baku-Tbilisi-Erzurum in 1Q2021
Azerbaijan records surplus in 1Q2021 state budget
Azerbaijan decreases oil exports via BTC
SOCAR increases gas output y-o-y
Uzbekistan to invest in viticulture dev't
Kazakhstan’s national postal service operator to buy consumables via tender
Uzbekistan continues ramping up flour, cereal exports
Mine explosion in Azerbaijan takes life of one more serviceman
Uzbekistan, Russia implementing numerous joint projects
Georgia reports 1,077 new cases of coronavirus for April 16
New Delhi a natural partner in shaping Indo-Pacific region: Australian PM Scott Morrison
Economist Intelligence Unit calculates 13 per cent growth for India, more than IMF prediction
Kazakhstan boosts exports to Russia over 2M2021
French Bouygues carries out construction of two new facilities in Turkmenistan
Azerbaijan's ADIF shares data on compensations paid to depositors of closed banks'
No point in discussing Nagorno-Karabakh problem in previous context - Russian expert
2021 to see over 3% increase in global gas demand
Georgia sees increase in hotel price index for March 2021
Kazakhstan unveils timeframe for large-scale crops sowing
Kazakhstan shares vehicle production data
Prices for precious metals up in Azerbaijan
Turkmenistan signs number of documents with international organizations
EBRD to invest in another project in Azerbaijan
National Bank of Georgia sells funds to stabilize lari exchange rate
Azerbaijan sees growth in retail turnover of ICT products from early 2021
IMF eyeing support to Kazakhstan's cybersecurity and risk management sectors
Iran - P5+1 on right track in Vienna talks - Deputy FM
Italian Senate delegation visits Azerbaijan's liberated Aghdam (PHOTO)
Islamic Solidarity Games-2021 may be postponed - Federation's Executive Committee
Azerbaijan’s pipeline gas deliveries set to increase by over 15%
1Q2021 volume of sold food products in Azerbaijan's trade network up
Denmark speeds up reopening as epidemic stabilises
All news