Showing posts with label IEA. Show all posts
Showing posts with label IEA. Show all posts

Wednesday, November 13, 2019

ADIPEC Day III: Oil demand, AI and robots

Day three of ADIPEC 2019 has just concluded here in Abu Dhabi, UAE and much was said about oil demand concerns. Morning discourse was coloured by the International Energy Agency's take that demand is set to plateau by 2030 due to a pick up in the use of electric vehicles around the world.

In its latest market projections, the IEA said overall demand for energy is set to increase by 1% every year until 2040, however headline demand will plateau ten years earlier than it had previously forecast.

Elsewhere in its World Energy Outlook report, the IEA said US shale output, which has made the country the world's biggest oil producer, is likely to stay higher for longer than previously projected, with the country accounting for 85% of the increase in global oil production by 2030, and for 30% of the increase in natural gas.

Meanwhile, switching tack to the coming 12 months, OPEC Secretary General Mohammed Barkindo said an uptick in demand for 2020 may be on the cards should the US-China trade stand-off end.

"We are confident that there will be a deal and the deal will be positive for the world economy and will remove the dark cloud that has engulfed the global economy because of the size of the countries," Barkindo said on the sidelines of ADIPEC.

Among the VIPs in town today was Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister and Ruler of neighboring Dubai. Alongside his visit, came that of nearly 900 local school kids to learn more about the industry, its processes, careers and well to marvel – perhaps like the rest of us – at some of the innovative robots and kits on display here.
And then there's the launch of a new branch of local government focused on research and development as well as an artificial intelligence (AI) joint venture inked by the Abu Dhabi National Oil Company (ADNOC) to take in.

The new Abu Dhabi Research and Development Authority will be tasked with inventions that tackle Earth's most pressing challenges. Under auspices of the emirate's Department of Education and Knowledge (ADEK), five virtual research institutes will focus on biotechnology, food security, sustainability, artificial intelligence and high-performance computing, and advanced materials. The announcement came in step with ADNOC's agreement at ADIPEC with UAE-based AI company, Group 42, on a joint venture to develop AI products for the energy sector.

In sync with this hot topic, the Oilholic also participated in ADIPEC Middle East Petroleum Club's Leadership dialogue on Human and machine collaboration and the impact this has on current business transformation.

IIoT, big data, augmented reality and virtual reality premised solutions, and the changing nature of the workforce were all under a lively 90-minute discussion with Greg Cross, Co-founder of Soul Machines and AI pioneer (third from left) leading the talk. 

Finally, here is one's analysis for Rigzone on why BP and Shell's low carbon overtures and portfolio tweaking hold both oil majors in good stead despite a dire set of numbers. That's all for the moment folks, more from here on the final day at ADIPEC tomorrow. Keep reading, keep it ‘crude’!

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© Gaurav Sharma 2019. Photo I: Day three of exhibition at ADIPEC 2019. Photo II: Industry robot at Total's stand. Photo III: AI pioneer Greg Cross speaks at ADIPEC Middle East Petroleum Club, Abu Dhabi, November 2019 © Gaurav Sharma 2019. 

Monday, March 11, 2019

IEA's take sets tone for CERAWeek 2019

The Oilholic is back in Houston Town for CERAWeek 2019 with talk of Saudi Arabia extending its oil export cuts to April, an OPEC summit due on April 17, and of course oil benchmarks still remaining largely range-bound.

The tone of the first day for IHS Markit's industry jamboree was set by the International Energy Agency's annual five-year market assessment. The agency's Executive Director Dr Fatih Birol, said here in Houston that there should be no doubt that a second wave of the US shale revolution was coming, with American production tipped to cap that of the Russians and the Saudis by 2024.

Later, speaking to the Oilholic, Birol said the agency's take does factor in rates of decline. Here's a full report for Forbes. There were loads of other catchy soundbites yours truly tweeted regularly from Day I of CERAWeek (welcome to follow here), but really Birol's words set the tone.

As for oil benchmarks; both Brent and WTI were down last week, and are up this week but haven't spiked in the strictest sense. For the Oilholic, Brent futures sentiment still isn't decisively bullish.

One reckons $64.50 per barrel support level is key over the coming weeks. If breached meaningfully, a drop to $60-62 likely; if held decisively an uptick to $70 might be on the horizon. But for all the kerfuffle oil futures are largely where they were 12 months ago stuck in a range-bound market. Here is one's pre-CERAWeek analysis in an interview with Victoria Scholar of IG Markets TV:



More from Houston soon! Keep reading, keep it crude!

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© Gaurav Sharma 2019. Photo: Dr Fatih Birol, Executive Director of International Energy Agency speaks at IHS Markit's CERAWeek 2019 conference.© Gaurav Sharma 2019. 

Sunday, July 16, 2017

A bearish view from Istanbul

The 22nd World Petroleum Congress circus has left Istanbul, Turkey in a distinctly bearish mood, at least that’s the Oilholic’s verdict! 

'Big Oil' boss after boss pointed out to the congress that IOCs were gearing up for a short-term breakeven of $50 per barrel, and working towards a $30 per barrel breakeven by the turn of the decade. Few, if any expect an uptick to a three figure oil price anytime soon. 

The International Energy Agency expects a flood of US shale barrels, so much so that its Executive Director Dr Fatih Birol noted that describing his outfit as being representative of energy consumers was sounding clichéd these days.

Afterall, IEA members US, Canada and United Kingdom, were also energy exporters. At the same time, global oil inventories remain stubbornly above 3 billion barrels, and not anywhere near the 2.7 billion five-year average OPEC is hoping to achieve via its cut. 

Tied in to all of this are two important considerations in light of what's on the horizon. Firstly, OPEC’s production cut in concert with 10 non-OPEC producers only lasts until March 2018 on paper. What happens after that? Surely more oil is coming our way. Secondly, most at the WPC, including the IEA, predicted US production to climb to 10 million barrels per day (bpd) and for some even as high as 10.3 million bpd. 

So what is there to be bullish about? Agreed - as many readers of this blog have pointed out - inventory rebalancing will gather steam towards the fourth quarter of this year, but not to the extent some are predicting. 

For arguments sake, if that is seen as being supportive of the oil price and that sustains oil futures above $55 for a period, more US and non-OPEC oil is bound to come on to the market. Draw your own conclusions where the ‘crude’ world would be heading to thereafter. In short, this blogger finds little evidence that the oil price would escape its current $45-55 per barrel range using Brent as a benchmark. 

Just a couple of things to flag up before yours truly takes your leave. Here is one’s IBT report from the WPC on how spooked the industry is about not being able to attract enough young recruits and qualified female professionals. Additionally, here is the Oilholic’s foray into the emergence of ‘crude’ robots, that could be coming to an oil and gas field near you. That’s all for the moment folks. Keep reading, keep it ‘crude’!

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© Gaurav Sharma 2017. Photo: An oil tanker in the Bosphorus, Istanbul, Turkey © Gaurav Sharma, July 2017.

Tuesday, March 15, 2016

Taiwan’s crude demands & IEA’s latest quip

The Oilholic has ventured further eastwards, some 6080 miles from London, to Taipei – the vibrant capital of Taiwan. On a rain soaked evening, yours truly absorbed splendid views of the city's 101 Tower (once Asia’s tallest building before) and pondered over the island nation’s oil supply-demand dynamic.

Perhaps unsurprisingly, according to government data, the country imports 98% of its domestic fuel requirements mostly from OPEC producers in the Gulf and Angola to the tune of 1 million barrels per day (bpd). It does have tiny proven oil reserves of around 2.3 million but nothing to write home about.

Despite wider historical and geopolitical tension with Beijing, Taiwan’s CPC and China’s state-owned China National Offshore Oil Corporation (or CNOOC) are jointly exploring the Strait of Taiwan for oil and gas. Initial prospection bids in shallow waters turned out to be duds, but deepwater exploration is “encouraging” say insiders.

Given such a setting in an era of low oil prices, the International Energy Agency’s latest quip – that the oil price may well have “bottomed out” – pricked ears both within and well beyond Taiwan. In a recent market update, the agency said, “There are clear signs that market forces... are working their magic and higher-cost producers are cutting output.”

It noted falling oil production stateside, in tandem with a decline in OPEC’s output by 90,000 bpd in February, albeit due to outages in Nigeria, Iraq and the United Arab Emirates, that knocked out a combined 350,000 bpd from the oil cartel's total output.

“Iran's return to the market has been less dramatic than the Iranians said it would be; in February we believe that production increased by 220,000 bpd and provisionally, it appears that Iran's return will be gradual,” the IEA added.

See now all that is well and good, but the Oilholic reckons that at some point crude in storage will need to come into play. That, coupled with lacklustre demand, is the market’s “known known” and how and to what extent it serves as a drag on the price remains to be seen.

The market has indeed been a lot calmer in recent days, but there are likely to be a few more twists and turns. As the IEA itself notes, “For oil prices, there may be light at the end of what has been a long, dark tunnel, but we cannot be precisely sure when in 2017 the oil market will achieve the much-desired balance. It is clear that the current direction of travel is the correct one, although with a long way to go.”

Fairly obvious and no biggie, methinks. That’s all from Taiwan folks. This blogger’s next stop is Tokyo. Keep reading, keep it ‘crude’!

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© Gaurav Sharma 2016. Photo: 101 Tower, Taipei, Taiwan © Gaurav Sharma, March 2016

Wednesday, September 10, 2014

‘Crude’ sanctions on others always hurt Japan

The Oilholic finds himself in a rain-soaked Tokyo one final time before the big flying bus home! How Asian importing countries cope with sanctions on major oil & gas exporting jurisdictions is an interesting topic in this region reliant on foreign hydrocarbons for obvious reasons.

Mentioning Iran and of late curbs on Russia, deliberations over the past week with market commentators here in Tokyo, as well as Shanghai and Hong Kong, resulted in a consensus of opinion that Japan’s 30-odd oil & gas companies and regional gas-fired utilities feel the pain of such curbs more than corporate citizens of most other Asian importing nations.

The reason is simple enough; of the quartet of major Asian importers – namely China, Japan, India and South Korea – it’s the Japanese who are the most compliant when international pressures surface. Now, whether or not they can afford to is a different matter. According to the EIA and local publications, Japan consumed nearly 4.6 million barrels per day (bpd) in 2013, down from 4.7 million bpd in 2012. 

Going by the IEA’s latest projections, Japan is the third largest petroleum consumer in the world, behind the US and China. Yet domestic reserves are paltry in the region of 45.5 million barrels of oil equivalent, concentrated along the country’s western coastline. Inevitably, Japan imports most of its hydrocarbon requirements as a major industrialised nation.

Given the equation, if sanctions knock out or have the potential to knock out imports from one of its major partners, finding an alternative is neither easy nor simple. Forward planning also gets thrown right out of the window. We’ll discuss the recent Russian conundrum in a moment, but let’s examine the 2012 Iranian sanctions and the Japanese response to them first.

The country, almost immediately complied with requests to import less oil from Iran when European Union and US sanctions escalated in Q1 2012. At the time, Japan accounted for 17% of Iranian exports, above South Korea and India, but below China. The Japanese phased bid to reduce Iranian oil imports was lauded by the West, whereas China largely ignored the call, South Korea asked for more time and the Indians came up with ingenious ways to make remittances to Iran, until curbs on the insurance of tankers carrying Iranian crude began to bite.

Make no mistake, the sanctions on Iran hurt all four back in 2012, but Japan had to contend with the biggest refocusing exercise based on the level and speed of its compliance in moving away from Iranian crude. In the Oilholic’s opinion, for better or worse, that’s the price of being a G7 nation; and “having internationalism factored into the thinking,” adds a contact.

Fast forward to 2014, and the potential for securing of natural gas supplies from Russia to Japan seems to be taking a hit in wake of the Ukraine crisis. At the 21st World Petroleum Congress in June, when the tension had not escalated to the current level, prior to the downing of MH17, policymakers in on both sides were cooing over the potential for cooperation. 

The Institute of Energy Economics, Japan and the Energy Research Institute of the Russian Academy of Sciences even put out a joint white paper at the Congress contemplating a subsea gas pipeline route from Korsakov, Russia, to Kashima, Japan with an onshore Ishikari-Tomakomai section. It was claimed that technical feasibility of the ambitious project, capable of carrying a projected 8 bcm of natural gas to the Pacific Coast of Eastern Japan, had been positive.

Now it’s all gone a bit cold. One can’t directly attribute it to Russia’s face-off with the West, but currently both Japan and Russia describe the project as “just another idea”. This blogger can assure you, people were way more excited about it in June at the WPC than they are at the moment, and one wonders why?

Afterall, post-Fukushima with the rise of natural gas in Japan’s energy mix, however wild a project might be, carries weight rather than being relegated to just an idea. Contrast this with China, which has recently inked a long-term supply contract with the Russians. Quod erat demonstrandum!


With the evening drawing to a close, it’s time to digress a little and disclose the venue of this animated conversation – that’s none other than Tokyo’s iconic Hotel Okura. While a wee tipple is not cheap (average JPY1,700 for a swig of single malt), visiting this modernist institution is something special. 

When Tokyo first hosted the Olympic Games in 1964, the hotel was built in preparation to welcome the world. Since then, Hotel Okura has hosted every serving US President from Richard Nixon onwards.

Author Ian Fleming made James Bond fictitiously check-in to the hotel while in Tokyo in a chapter of "You only live twice". In recent work of fiction, the hotel also makes an appearance in Haruki Murakami’s 1Q84. It’s eclectic lobby, paneling, general sense of tranquility and overall panache of modern Japan is simply splendid (see above left). 

So here’s to 007, Murakami, Queen and Country and all the rest; but also it could be the Oilholic’s last drink at Hotel Okura as we know it. Alas, this grand place is about to fall prey to cultural philistinism in the name of progress as Tokyo prepares to host the Olympic Games once again in 2020. 

Last time around, for the 1964 games, Tokyo got the wretched Nihonbashi Expressway, a ‘clever’ project which included building an expressway over the Nihonbashi bridge, obscuring the magnificent view of Mount Fuji from the bridge and covering-up an ancient river flowering through the heart of Tokyo with steel and much more (see below left)!

Now atop a lot of flattening and rebuilding plans all over town, it seems Hotel Okura’s original main wing has been marked for demolition in August 2015, leaving only the South Tower operational. A proposed spending plan of US$980 million will see the wing open in the spring of 2019, reborn according to an employee as a “mixed-use tower” with 550 guest rooms and 18 stories of office space.

Life it seems will never be the same again for Hotel Okura and its many admirers including the Oilholic, who’d made it his mission not to leave Tokyo without visiting. Glad one got to see it before the demolition men get in. Well that’s all from the Far East folks as its time to bid a sad goodbye to the region!

Tokyo, Hong Kong, Macau and Shanghai, planes, trains, speedboats and automobiles – it was one heck of a crude ride that one will treasure forever. Next stop is London Heathrow, a reminder that all good things must end! Keep reading, keep it ‘crude’!

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© Gaurav Sharma 2014. Photo 1: Tokyo Stock Exchange. Photo 2: Lobby of the Hotel Okura, Tokyo. Photo 3: The Oilholic at Hotel Okura’s Orchid Bar. Photo 4: Nihonbashi Expressway, Tokyo, Japan  © Gaurav Sharma, September, 2014.

Thursday, July 24, 2014

Hedge Funds have been ‘contangoed’

Recent events may have pushed the Brent front month futures contract back towards US$108 per barrel; but there's no denying some have been 'contangoed'! Ukrainian tensions and lower Libyan production are hard to ignore, even if the latter is a bit of a given.

Nonetheless, for a change, the direction of both benchmark prices this month indicates that July did belong to the physical traders with papers traders, most notably Hedge Funds, taking a beating.

It's astonishing (or perhaps not) that many paper traders went long on Brent banking on the premise of "the only way is up" as the Iraqi insurgency escalated last month. The only problem was that Iraqi oil was still getting dispatched from its southern oil hub of Basra despite internal chaos. Furthermore, areas under ISIS control hardly included any major Iraqi oil production zone.

After spiking above $115, the Brent price soon plummeted to under $105 as the reality of the physical market began to bite. It seems European refiners were holding back from buying the expensive crude stuff faced with declining margins. In fact, North Sea shipments, which Brent is largely synced with, were at monthly lows. Let alone bothering to pull out a map of Iraqi oilfields, many paper traders didn't even bother with the ancillary warning signs.

As Fitch Ratings noted earlier this month, the European refining margins are likely to remain weak for at least the next one to two years due to overcapacity, demand and supply imbalances, and competition from overseas. Over the first half of 2014, the northwest European refining margin averaged $3.3 per barrel, down from $4 per barrel in 2013 and $6.8 barrel in 2012.

Many European refineries have been loss-making or only slightly profitable, depending on their complexity, location and efficiency. They are hardly the sort of buyers to purchase consignments by the tanker-load during a mini bull run. The weaker margin scenario itself is nothing new, resulting from factors including a stagnating economy and the bias of domestic consumption towards diesel due to EU energy regulations

"This means that surplus gasoline is exported and the diesel fuel deficit is filled by imports, prompting competition with Middle Eastern, Russian and US refineries, which have access to cheaper feedstock and lower energy costs on average. Mediterranean refiners are additionally hurt by the interruption of oil supplies from Libya, but this situation may improve with the resumption of eastern port exports," explains Fitch analyst Dmitry Marinchenko.

Of course tell that to Hedge Funds managers who still went long in June collectively holding just short of 600 million paper barrels on their books banking on backwardation. But thanks to smart, strategic buying by physical traders eyeing cargoes without firm buyers, contango set in hitting the hedge funds with massive losses.

When supply remains adequate (or shall we say perceived to be adequate) and key buyers are not in a mood to buy in the volumes they normally do down to operational constraints, you know you've been 'contangoed' as forward month delivery will come at a sharp discount to later contracts!

Now the retreat is clear as ICE's latest Commitments of Traders report for the week to July 15 saw Hedge Funds and other speculators cut their long bets by around 25%, reducing their net long futures and options positions in Brent to 151,981 from 201,568. If the window of scrutiny is extended to the last week of June, the Oilholic would say that's a reduction of nearly 40%.

As for the European refiners, competition from overseas is likely to remain high, although Fitch reckons margins may start to recover in the medium term as economic growth gradually improves and overall refining capacity in Europe decreases. For instance, a recent Bloomberg survey indicated that of the 104 refining facilities region wide, 10 will shut permanently by 2020 from France to Italy to the Czech Republic. No surprises there as both OPEC and the IEA see European fuel demand as being largely flat.

Speaking of the IEA, the Oilholic got a chance earlier this month to chat with its Chief Economist Dr Fatih Birol. Despite the latest tension, he sees Russian oil & gas as a key component of the global energy mix (Read all about it in The Oilholic's Forbes post.)

Meanwhile, Moody's sees new US sanctions on Russia as credit negative for Rosneft and Novatek. The latest round of curbs will effectively prohibit Rosneft, Novatek, and other sanctioned entities, including several Russian banks and defence companies, from procuring financing and new debt from US investors, companies and banks.

Rosneft and Novatek will in effect be barred from obtaining future loans with a maturity of more than 90 days or new equity, cutting them off from long-term US capital markets. As both companies' trade activities currently remain unaffected, Moody's is not taking ratings action yet. However, the agency says the sanctions will significantly limit both companies' financing options and could put pressure on development projects, such as Novatek's Yamal LNG.

No one is sure what the aftermath of the MH17 tragedy would be, how the Ukrainian crisis would be resolved, and what implications it has for Russian energy companies and their Western partners. All we can do is wait and see. That's all for the moment folks. Keep reading, keep it 'crude'!

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© Gaurav Sharma 2014. Photo: Oil pipeline © Cairn Energy

Monday, July 15, 2013

Speculators make the oil price belie market logic

The fickle crude oil market is yet again giving an indication about how divorced it is from macroeconomic fundamentals and why a concoction of confused geopolitics and canny speculation is behind the recent peaks and troughs. To give a bit of background – the WTI forward month futures contract surpassed the US$106 per barrel level last week; the highest it has been in 16 months. Concurrently, the spread between WTI and Brent crude narrowed to a near 33-month low of US$1.19 in intraday on July 11 [versus a high of US$29.70 in September 2011].
 
Less than a couple of weeks ago Goldman Sachs closed its trading recommendation to buy WTI and sell Brent. In a note to clients, the bank’s analysts said they expected the spread to narrow in the medium term as new pipelines help shift the Cushing, Oklahoma glut, a physical US crude oil delivery point down to the Houston trading hub, thus removing pressure from the WTI forward month futures contract to the waterborne Brent.
 
Goldman Sachs' analysts were by no means alone in their thinking. Such a viewpoint about the spread is shared by many on Wall Street, albeit in a nuanced sort of way. While Cushing's impact in narrowing the spread is a valid one, the response of the WTI to events elsewhere defies market logic.
 
Sadly Egypt is in turmoil, Syria is still burning, Libya’s problems persist and Iraq is not finding its feet as quick as outside-in observers would like it to. However, does this merit a WTI spike to record highs? The Oilholic says no! Agreed, that oil prices were also supported last week by US Federal Reserve Chairman Ben Bernanke's comments that economic stimulus measures were "still" necessary. But most of the upward price pressure is speculators' mischief - pure and simple.
 
Less than two months ago, we were being peddled with the argument that US shale was a game changer – not just by supply-side analysts, but by the IEA as well. So if that is the case, why are rational WTI traders spooked by fears of a wider conflict in the Middle East? Syria and Egypt do not even contribute meaningfully to the global oil market supply train, let alone to the North American market. Furthermore, China and India are both facing tough times if not a downturn.
 
And you know what, give this blogger a break if you really think the US demand for distillates rose so much in 10 days that it merited the WTI spiking by the amount that it has? Let's dissect the supply-side argument. Last week's EIA data showed that US oil stocks fell by about 10 million barrels for a second consecutive week. That marked a total stockpile decline of 20.2 million barrels in two weeks, the biggest since 1982.
 
However, that is still not enough to detract the value of net US inventories which are well above their five-year average. Furthermore, there is nothing to suggest thus far that the equation would alter for the remainder of 2013 with media outlets reporting the same. The latest one, from the BBC, based on IEA figures calmly declares the scare over 'peak oil' subsiding. US crude production rose 1.8% to 7.4 million barrels per day last week, the most since January 1992 and in fact on May 24, US supplies rose to 397.6 million, the highest inventory level since 1931!
 
But for all of that, somehow Bernanke's reassurances on a continuation of Federal stimulus, flare-ups in the Middle East [no longer a big deal from a US supply-side standpoint] and a temporary stockpile decline were enough for the latest spike. Why? Because it is a tried and tested way for those who trade in paper barrels to make money.
 
A very well connected analogy can be drawn between what's happening with the WTI and Brent futures' recent "past". Digging up the Brent data for the last 36 months, you will see mini pretexts akin to the ones we've seen in the last 10 days, being deployed by speculators to push to the futures contract ever higher; in some instances above $110 level by going long. They then rely on publicity hungry politicians to bemoan how consumers are feeling the pinch. Maybe an Ed Markey can come alone and raise the issue of releasing strategic petroleum reserves (SPRs) and put some downward pressure – especially now that he's in the US Senate.
 
Simultaneously, of course the high price starts hurting the economy as survey data factors in the drag of rising oil prices, usually within a three-month timeframe, and most notably on the input/output prices equation. The same speculators then go short, blaming an economic slowdown, some far-fetched reason of "uptick" in supply somewhere somehow and the Chinese not consuming as much as they should! And soon the price starts falling. This latest WTI spike is no different.

Neither the underlying macroeconomic fundamentals nor the supply-demand scenarios have altered significantly over the last two weeks. Even the pretexts used by speculators to make money haven't changed either. The Oilholic suspects a correction is round the corner and the benchmark is a short! (Click graph above to enlarge)
 
Away from crude pricing matters to some significant news for India and Indonesia. It seems both countries are reacting to curb fuel subsidies under plans revealed last month. The Indian government agreed to a new gas pricing formula which doubled domestic natural gas prices to $8.40/million British thermal units (mmbtu) from $4.20/mmbtu.

Meanwhile, the Indonesian government is working on plans to increase the price of petrol by 44% to Rupiah 6,500 ($2.50) per gallon and diesel by 22% to Rupiah 5,500. With the hand of both governments being forced by budgetary constraints, that's good economics but bad politics. In Asia, it's often the other way around, especially with general elections on the horizon - as is the case with both countries.
 
Elsewhere, yours truly recently had the chance to read a Moody's report on the outlook for the global integrated oil and gas industry. According to the ratings agency, the outlook will remain stable over the next 12 to 18 months, reflecting the likelihood of subdued earnings growth during this period.

Analyst Francois Lauras, who authored the report, said, "We expect the net income of the global oil and gas sector to fall within the stable range of minus 10% to 10% well into 2014 as robust oil prices and a slight pick-up in US natural gas prices help offset ongoing fragility in the refining segment." 
 
"Although oil prices may moderate, we expect demand growth in Asia and persistent geopolitical risk to keep prices at elevated levels," he added.
 
The agency anticipates that integrated oil companies will concentrate on reinvesting cash flows into their upstream activities, driven by "robust" oil prices, favourable long-term trends in energy consumption and the prospects of higher returns.
 
However, major projects are exerting pressure on operating and capital efficiency measures as they are often complex, highly capital intensive and have long lead times. In the near term, Moody's expects that industry players will continue to dispose of non-core, peripheral assets to complement operating cash flows and fund large capex programmes, as well as make dividend payouts without impairing their balance sheets.
 
Finally, the agency said it could change its outlook to negative if a substantial drop in oil prices were triggered by a further deterioration in the world economy. It would also consider changing its outlook to positive if its forecast for the sector's net income increased by more than 10% over the next 12-18 months.

Moody's has maintained the stable outlook since September 2011. In the meantime, whatever the macroeconomic climate might be, it hardly ever rains on the speculators' parade. That's all for the moment folks! Keep reading, keep it 'crude'!
 
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© Gaurav Sharma 2013. Photo: Pump Jacks, Perryton, Texas, USA © Joel Sartore / National Geographic. Graph: WTI Crude Futures US$/barrel © BBC / DigitalLook.com

Saturday, May 18, 2013

On a 'crude' UK raid, IEA & the 'Houston glut'

There was only story in London town last week, when late in the day on May 14, European Commission (EC) regulators swooped down on the offices of major oil companies having R&M operations in the UK, investigating fuel price fixing allegations. While the EC did not name names, BP, Shell and Statoil confirmed their offices had been among those ‘visited’ by the officials.
 
More details emerged overnight, as pricing information provider Platts admitted it was also paid a visit. The EC said the investigation relates to the pricing of oil, refined products and biofuels. As part of its probe, it will be examining whether the companies may have prevented others from participating in the pricing process in order to "distort" published prices.
 
That process, according to sources, is none other than Platts’ Market On Close (MOC) price assessment mechanism. "Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position," the EC said, but clarified in the same breath that the raids itself did not imply any guilt on part of the companies.
 
The probe extends to alleged trading malpractices dating back almost over 10 years. All oil companies concerned, at least the ones who admitted to have been visited by EC regulators, said they were cooperating with the authorities. Platts issued a similar statement reiterating its cooperation.
 
So what does it mean? For starters, the line of inquiry is nothing new. Following a very vocal campaign led by British parliamentarian Robert Halfon, the UK's Office of Fair Trading (OFT) investigated the issue of price fixing and exonerated the oil companies in January. Not satisfied, Halfon kept up the pressure and here we are.
 
"I have been raising the issue of alleged fuel price fixing time and again in the House of Commons. With the EC raids, I'd say the OFT has been caught cold and simply needs to look at this again. The issue has cross-party support in the UK," he said.
 
In wake of the raids, the OFT merely said that it stood by its original investigation and was assisting the EC in its investigations. Question is, if, and it’s a big if, any wrongdoing is established, then what would the penalties be like and how would they be enforced? Parallels could be drawn between the Libor rate rigging scandal and the fines that followed imposed by US, UK and European authorities. The largest fine (to date) has been CHF1.4 billion (US$1.44 billion) awarded against UBS.
 
So assuming that wrongdoing is established, and fines are of a similar nature, Fitch Ratings reckons the companies involved could cope. "These producers typically have between US$10 billion and US$20 billion of cash on their balance sheets. Significantly bigger fines would still be manageable, as shown by BP's ability to cope with the cost of the Macondo oil spill, but would be more likely to have an impact on ratings," said Jeffrey Woodruff, Senior Director (Corporates) at Fitch Ratings.
 
Other than fines, if an oil company is found to have distorted prices, it could face longer-term risks from damage to its reputation. While these risks are less easy to predict and would depend on the extent of any wrongdoing, scope does exist for commercial damage, even for sectors with polarising positions in the public mind, according to Fitch. Given we are in the 'early days' phase, let's see what happens or rather doesn't.
 
While the EC was busy raiding oil companies, the IEA was telling the world how the US shale bonanza was sending ripples through the oil industry. In its Medium-Term Oil Market Report (MTOMR), it noted: "the effects of continued growth in North American supply – led by US light, tight oil (LTO) and Canadian oil sands – will cascade through the global oil market."
 
While geopolitical risks persist, according to the IEA, market fundamentals were indicative of a more comfortable global oil supply/demand scenario over the next five years at the very least. The MTOMR projected North American supply to grow by 3.9 million barrels per day (mbpd) from 2012 to 2018, or nearly two-thirds of total forecast non-OPEC supply growth of 6 mbpd.
 
World liquid production capacity is expected to grow by 8.4 mbpd – significantly faster than demand – which is projected to expand by 6.9 mbpd. Global refining capacity will post even steeper growth, surging by 9.5 mbpd, led by China and the Middle East. According to the IEA, having helped offset record supply disruptions in 2012, North American supply is expected to continue to compensate for declines and delays elsewhere, but only if necessary infrastructure is put in place. Failing that, bottlenecks could pressure prices lower and slow development.
 
Meanwhile, OPEC oil will remain a key part of the oil mix but its production capacity growth will be adversely affected by "growing insecurity in North and Sub-Saharan Africa", the agency said. OPEC capacity is expected to gain 1.75 mbpd to 36.75 mbpd, about 750,000 bpd less than forecast in the 2012 MTOMR. Iraq, Saudi Arabia and the UAE will lead the growth, but OPEC's lower-than-expected aggregate additions to global capacity will boost the relative share of North America, the agency said.
 
Away from supply-demand scenarios and on to pricing, Morgan Stanley forecasts Brent's premium to the WTI narrow further while progress continues to be made in clearing a supply glut at the US benchamark’s delivery point of Cushing, Oklahoma, over the coming months. It was above the US$8 mark when the Oilholic last checked, well down on the $20 it averaged for much of 2012.However, analysts at the investment bank do attach a caveat.

Have you heard of the Houston glut? There is no disguising the fact that Houston has been the recipient of the vast majority of the "new" inland crude oil supplies in the Gulf Coast [no prizes for guessing where that is coming from]. The state's extraction processes have become ever more efficient accompanied by its own oil boom to complement the existing E&P activity.
 
Lest we forget, North Dakota has overtaken every other US oil producing state in terms of its oil output, but not the great state of Texas. Yet, infrastructural limitations persist when it comes to dispatching the crude eastwards from Texas to the refineries in Louisiana.
 
So Morgan Stanley analysts note: "A growing glut of crude in Houston suggests WTI-Brent is near a trough and should widen again [at least marginally] later this year. Houston lacks a benchmark, but physical traders indicate that Houston is already pricing about $4 per barrel under Brent, given physical limitations in moving crude out of the area."
 
The Oilholic can confirm that anecdotal evidence does seem to indicate this is the case. So it would be fair to say that Morgan Staley is bang-on in its assessment that the "Houston regional pricing" would only erode further as more crude reaches the area, adding that any move in Brent-WTI towards $6-7 a barrel [from the current $8-plus] should prove unsustainable.
 
Capacity to bring incremental crude to St. James refineries in Louisiana is limited, so the Louisiana Light Sweet (LLS) will continue to trade well above Houston pricing; a trend that is likely to continue even after the reversal of the Houston-Houma pipeline – the main crude artery between the Houston physical market and St. James.
 
On a closing note, it seems the 'Bloomberg Snoopgate' affair escalated last week with the Bank of England joining the chorus of indignation. It all began earlier this month when news emerged of Bloomberg's practice of giving its reporters "limited" access to some data considered proprietary, including when a customer looked into broad categories such as equities or bonds.
 
The scoop – first reported by the FT – led to a full apology by Matthew Winkler, Editor-in-chief of Bloomberg News, for allowing journalists "limited" access to sensitive data about how clients used its terminals, saying it was "inexcusable". However, Winkler insisted that important and confidential customer data had been protected. Problem is, they aren't just any customers – they include the leading central banks in the OECD.
 
The US Federal Reserve, the European Central Bank and the Bank of Japan have all said they were examining the use of data by Bloomberg. However, the language used by the Bank of England is the sternest so far. The British central bank described the events at Bloomberg as "reprehensible."
 
A spokesperson said, "The protection of confidential information is vital here at the bank. What seems to have happened at Bloomberg is reprehensible. Bank officials are in close contact with Bloomberg…We will also be liaising with other central banks on this matter."
 
In these past few days there have been signs that 'Bloomberg Snoopgate' is growing bigger as Brazil’s central bank and the Hong Kong Monetary Authority (the Chinese territory's de facto central bank) have also expressed their indignation. Having been a Bank of England and UK Office for National Statistics (ONS) correspondent, yours truly can personally testify how seriously central banks take issue with such things and so they should.
 
Yet, in describing Bloomberg's practice as "reprehensible", the Bank of England has indicated how serious it thinks the breach of confidence was and how miffed it is. The UK central bank has since received assurances from Bloomberg that there would be no repeat of the issue! You bet! That's all for the moment folks! Keep reading, keep it 'crude'!
 
To follow The Oilholic on Twitter click here.
 
© Gaurav Sharma 2013. Photo: Abandoned gas station © Todd Gipstein / National Geographic 

Wednesday, April 17, 2013

‘9-month’ high to a ‘9-month’ low? That's crude!

In early February, we were discussing the Brent forward month futures contract's rise to a nine-month high of US$119.17 per barrel. Fast forward to mid-April and here we are at a nine-month low of US$97.53 – that’s ‘crude’!

The Oilholic forecast a dip and so it has proved to be the case. The market mood is decidedly bearish with the IMF predicting sluggish global growth and all major industry bodies (OPEC, IEA, EIA) lowering their respective global oil demand forecasts.

OPEC and EIA demand forecasts were along predictable lines but from where yours truly read the IEA report, it appeared as if the agency reckons European demand in 2013 would be the lowest since the 1980s. Those who followed market hype and had net long positions may not be all that pleased, but a good few people in India are certainly happy according to Market Watch. As the price of gold – the other Indian addiction – has dipped along with that of crude, some in the subcontinent are enjoying a “respite” it seems. It won’t last forever, but there is no harm in short-term enjoyment.

While the Indians maybe enjoying the dip in crude price, the Iranians clearly aren’t. With Brent below US$100, the country’s oil minister Rostam Qasemi quipped, "An oil price below $100 is not reasonable for anyone." Especially you Sir! The Saudi soundbites suggest that they concur. So, is an OPEC production cut coming next month? Odds are certainly rising one would imagine.

Right now, as Stephen Schork, veteran analyst and editor of The Schork Report, notes: "Oil is in a continued a bear run, but there's still a considerable amount of length from a Wall Street standpoint, so it smells like more of a liquidation selloff."

By the way, it is worth pointing out that at various points during this and the past week, the front-month Brent futures was trading at a discount to the next month even after the May settlement expired on April 15th. The Oilholic counted at least four such instances over the stated period, so read what you will into the contango. Some say now would be a good time to bet on a rebound if you fancy a flutter and “the only way is up” club would certainly have you do that.

North Sea oil production is expected to fall by around 2% in May relative to this month’s production levels, but the Oilholic doubts if that would be enough on a standalone basis to pull the price back above US$100-mark if the macroclimate remains bleak.

Meanwhile, WTI is facing milder bear attacks relative to Brent, whose premium to its American cousin is now tantalisingly down to under US$11; a far cry from October 5, 2011 when it stood at US$26.75. It seems Price Futures Group analyst Phil Flynn’s prediction of a ‘meeting in the middle’ of both benchmarks – with Brent falling and WTI rising – looks to be ever closer.

Away from pricing, the EIA sees US oil production rising to 8 million barrels per day (bpd) and also that the state of Texas would still beat North Dakota in terms of oil production volumes, despite the latter's crude boom. As American companies contemplate a crude boom, one Russian firm – Lukoil could have worrying times ahead, according to Fitch Ratings.

In a note to clients earlier this month, the ratings agency noted that Lukoil’s recent acquisition of a minor Russian oil producer (Samara-Nafta, based in the Volga-Urals region with 2.5 million tons of annual oil production) appeared to be out of step with recent M&A activity, and may indicate that the company is struggling to sustain its domestic oil output.

Lukoil spent nearly US$7.3 billion on M&A between 2009 and 2012 and acquired large stakes in a number of upstream and downstream assets. However, a mere US$452 million of that was spent on Russian upstream acquisitions. But hear this – the Russian firm will pay US$2.05 billion to acquire Samara-Nafta! Unlike Rosneft and TNK-BP which the former has taken over, Lukoil has posted declines in Russian oil production every year since 2010.

“We therefore consider the Samara-Nafta acquisition as a sign that Lukoil is willing to engage in costly acquisitions to halt the fall in oil production...Its falling production in Russia results mainly from the depletion of the company's brownfields in Western Siberia and lower than-expected production potential of the Yuzhno Khylchuyu field in Timan-Pechora,” Fitch Ratings notes.

On a closing note, the Oilholic would like to share a brilliant article on the BBC's website touching on the fallacy of the good biofuels are supposed to do. Citing a Chatham House report, the Beeb notes that the UK's "irrational" use of biofuels will cost motorists around £460 million over the next 12 months. Furthermore, a growing reliance on sustainable liquid fuels will also increase food prices. That’s all for the moment folks. Until next time, keep reading, keep it crude! 

To follow The Oilholic on Twitter click here. 


© Gaurav Sharma 2013. Photo: Oil Rig © Cairn Energy Plc.

Sunday, January 20, 2013

Algeria’s ‘dark cloud’, PDVSA’s ratings & more

The terrorist strike on Algeria’s In Amenas gas field last week and the bloodbath that followed as the country’s forces attempted to retake the facility has dominated the news headlines. The siege ended on Saturday with at least 40 hostages and 32 terrorists dead, according to newswires. The number is likely to alter as further details emerge. The hostage takers also mined the whole facility and a clear-up is presently underway. The field is operated as a joint venture between Algeria's Sonatrach, Statoil and BP. While an estimated 50,000 barrels per day (bpd) of condensate was lost as production stopped, the damage to Algeria’s oil & gas industry could be a lot worse as foreign oil workers were deliberately targeted.
 
In its assessment of the impact of the terror strike, the IEA said the kidnapping and murder of foreign oil workers at the gas field had cast a ‘dark cloud’ over the outlook for the country's energy sector. The agency said that 'political risk writ large' dominates much of the energy market, 'and not just in Syria, Iran, Iraq, Libya or Venezuela' with Algeria returning to their ranks. Some say it never left in the first place.
 
Reflecting this sentiment, BP said hundred of overseas workers from IOCs had left Algeria and many more were likely to join them. Three of the company’s own workers at the In Amenas facility are unaccounted for.
 
Continuing with the MENA region, news emerged that Saudi Arabia’s output fell 290,000 bpd in December to 9.36 million bpd. Subsequently, OPEC’s output in December also fell to its lowest level in a year at 30.65 million bpd. This coupled, with projections of rising Chinese demand, prompted the IEA to raise its global oil demand forecast for 2013 describing it as a 'sobering, 'morning after' view.'
 
The forecast is now 240,000 bpd more than the IEA estimate published in December, up to 90.8 million bpd; up 1% over 2012. "All of a sudden, the market looks tighter than we thought…OECD inventories are getting tighter - a clean break from the protracted and often counter-seasonal builds that had been a hallmark of 2012," IEA said.
 
However, the agency stressed there was no need for rushed interpretations. "The dip in Saudi supply, for one, seems less driven by price considerations than by the weather. A dip in air conditioning demand - as well as reduced demand from refineries undergoing seasonal maintenance - likely goes a long way towards explaining reduced output. Nothing for the global market to worry about," the IEA said.
 
"The bull market of 2003‐2008 was all about demand growth and perceived supply constraints. The bear market that followed was all about financial meltdown. Today's market, as the latest data underscore, has a lot to do with political risk writ large. Furthermore, changes in tax and trade policies, in China and in Russia, can, at the stroke of a pen, shakeup crude and products markets and redraw the oil trade map," the agency concluded.
 
Simply put, it’s too early for speculators to get excited about a possible bull rally in the first quarter of 2013, something which yours truly doubts as well. However, across the pond, the WTI forward month futures contract cut its Brent discount to less than US$15 at one point last week, the lowest since July. As the glut at Cushing, Oklahoma subsides following the capacity expansion of the Seaway pipeline, the WTI-Brent discount would be an interesting sideshow this year. 
 
The IEA added that non-OPEC production was projected to rise by 980,000 bpd to 54.3 million bpd, the highest growth rate since 2010. Concurrently, BP said that US shale oil production is expected to grow around 5 million bpd by 2030. This, according to the oil major, is likely to be offset by reductions in supply from OPEC, which has been pumping at historical highs led by the Saudis in recent years.
 
BP's chief economist Christof Ruehl said, "This will generate spare capacity of around 6 million bpd, and there's a fault line if there is higher shale production then the consequences would be even stronger." But the shale revolution will remain largely a "North American phenomenon," he added.
 
"No other country outside the US and Canada has yet succeeded in combining these factors to support production growth. While we expect other regions will adapt over time to develop their resources, by 2030 we expect North America still to dominate production of these resources," Ruehl said.
 
Along the same theme, CNN reported that California is sitting on a massive amount of shale oil and could become the next oil boom state. That’s only if the industry can get the stuff out of the ground without upsetting the state's powerful environmental lobby. Yeah, good luck with that!

Returning to Saudi Arabia, Fitch Ratings said earlier this month that an expansionary 2013 budget based on a conservative oil price will support another year of healthy economic growth for the country and a further strengthening of the sovereign's net creditor position. However, overall growth will slow “due to a decline in oil production that was already evident in recent months.”
 
In the full year to December-end 2013, the Saudi budget, unveiled on December 29, projected record spending of US$219 billion (34% of GDP), up by almost 20% on the 2012 budget. Budgeted capital spending is 28% higher than in 2012, though the government has struggled to achieve its capital spending targets in recent years.
 
While an 18% rise in Saudi revenues is projected in the budget, they are based on unstated oil price and production assumptions, with the former well below prevailing market prices. Fitch anticipates Saudi production and prices will be lower in 2013 than 2012.

"With no new revenue-raising measures announced and little scope for higher oil revenues, the revenue projection appears less cautious than usual. However, actual revenues generally substantially exceed budget revenues (by an average of 82% over the past five years) and should do so again in 2013," the agency said.
 
Meanwhile, political uncertainty continues in Venezuela with no clarity about the health of President Hugo Chavez. It has done Petróleos de Venezuela's (PDVSA), the country’s national oil company, no favours. On January 16, ratings agency Moody’s changed PDVSA's rating outlook to negative.

It followed the change in outlook for the Venezuelan government's local and foreign currency bond ratings to negative. "The sovereign rating action reflects increasing uncertainty over President Chavez's political succession, and the impact of a possibly tumultuous transition on civil order, the economy, and an already deteriorating government fiscal position," Moody’s said.
 
On PDVSA, the agency added that as a government-related issuer, the company's ratings reflect a high level of imputed government support and default correlation between the two entities. Hence, a downgrade of the government's local and foreign currency ratings would be likely to result in a downgrade of PDVSA's ratings as well.
 
Away from a Venezuela, two developments in the North Sea – a positive and a negative apiece – are worth taking about. Starting with the positive news first, global advisory firm Deloitte found that 65 exploration and appraisal wells were drilled on the UK Continental Shelf (UKCS), compared with 49 in 2011.
 
The activity, according to Deloitte, was boosted by a broader range of tax allowances and a sustained high oil price. The news came as Dana Petroleum said production had commenced at the Cormorant East field which would produce about 5,500 bpd initially. Production will be processed at the Taqa-operated North Cormorant platform, before being sent to BP's Sullom Voe terminal (pictured above) for sale.
 
Taqa, an Abu Dhabi government-owned energy company, has a majority 60% stake in the field. Alongside Dana Petroleum (20%), its other partners include Antrim Resources (8.4%), First Oil Expro (7.6%) and Granby Enterprises (4%).
 
While Taqa was still absorbing the positives, its Cormorant Alpha platform, about 160 km from the Shetland Islands, reported a leak leading to a production shut-down at 20 other interconnected North Sea oilfields.
 
Cormorant Alpha platform handles an output of about 90,000 bpd of crude which is transported through the Brent pipeline to Sullom Voe for dispatch. Of this only 10,000 bpd is its own output. Thankfully there was no loss of life and Taqa said the minor leak had been contained. It is currently in the process of restoring 80,000 bpd worth of crude back to the Brent pipeline system along with sorting its own output.
 
Finally, as the Oilholic blogged back in October on a visit to Hawaii, Tesoro is to close its Kapolei, O'ahu refinery in the island state in April as a buyer has failed to turn-up (so far). In the interim, it will be converting the facility to a distribution and storage terminal in the hope that a buyer turn up. The Oilholic hopes so too, but in this climate it will prove tricky. Tesoro will continue to fulfil existing supply commitments.
 
That’s all for the moment folks except to inform you that after resisting it for years, yours truly has finally succumbed and opened a Twitter account! Keep reading, keep it ‘crude’!
 
To follow The Oilholic on Twitter click here.
 
© Gaurav Sharma 2013. Photo: Sullom Voe Terminal, BP © BP Plc.

Wednesday, December 12, 2012

Initial soundbites before things kick-off at OPEC

The delegates and ministers have walked in, the press scrum (or should you choose the term g*ng b*ng) is over and the closed door meeting has begun – all ahead of a decision on production quotas and the possible appointment of a new secretary general.

Smart money is on OPEC maintaining output at its current level of 30 million barrels per day (bpd), with the Saudis curbing their breaches of set quotas and the cartel reporting a real terms cut in November. No one smart would put money on who the new OPEC Secretary General might be.

But before that, there are as usual some leaks here and some soundbites there to contend with. These generally nudge analysts and journalists alike in the general direction of what the decision might be. Arriving in Vienna ahead of the meeting, Saudi Arabia’s oil minister Ali al-Naimi, the key man at the table, shunned the international media to begin with and chose to issue a statement via his country’s national press agency.

In his statement, Naimi said the main aim of the December 12 meeting is to keep the balance of the global crude markets in order to serve the interests of producers and consumers. He added that balancing the market will help the growth of the global economy. Since then, he has maintained the same line in exchanges with journalists.

As expected, the Iranians feel a cut in production was needed, saying their fellow members are producing 1 million bpd more than they ought to be. Iran said OPEC’s statement last month, that economic weakness in some major consuming countries could shave off 20% from its global demand growth outlook for 2013, lends credence to their claim. However, a delegate admitted there was "little need to change anything" and that the current US$100-plus OPEC basket price was "ok."

Walking in to OPEC HQ, UAE Energy Minister Mohammad bin Dhaen al-Hamli told the Oilholic that he "hopes to solve" the issue of who will be the next Secretary General. Libya's new oil minister Abdelbari al-Arusi, said he was "happy with OPEC production levels.”

Meanwhile, two key men are not in Vienna – namely Kuwait’s oil minister Hani Abdulaziz Hussein and Venezuela’s Rafael Ramirez. According to a Venezuelan scribe, the latter has sent Bernard Mommer, the OPEC representative for Venezuela’s oil ministry, in his place so he could support President Hugo Chavez, who is undergoing cancer surgery in Cuba. Ramirez added that Venezuela did not believe it was necessary for OPEC to increase production quotas and that the market was “sufficiently” supplied.

Finally, in his opening address, Iraqi oil minister and president of the conference Abdul-Kareem Luaibi Bahedh said OPEC faces a period of continuing uncertainty about the oil market outlook. "To a great extent, this reflects the lack of a clear vision on the economic front. The global economy has experienced a persistent deceleration since the beginning of the year...In the light of this, world oil demand growth forecasts for this year have been revised down frequently," he added.

Turning to the oil price, he said it had strengthened in the six months since June. "For its part, OPEC continues to do what it can to achieve and maintain a stable oil market...However, this is not the responsibility of OPEC alone. If we all wish to benefit from a more orderly oil market, then we should all be prepared to contribute to it. This includes consumers, non-OPEC producers, oil companies and investors, in the true spirit of dialogue and cooperation," said the Iraqi oil minister.

Meanwhile, as a footnote, the IEA raised its projections for non-OPEC supply in 2013 in its Monthly Oil Market Report published on December 12. The agency said global oil production increased by 730,000 bpd to 91.6 million bpd in November. With non-OPEC production rebounding "strongly" in November to 54.0 million bpd, the IEA revised up its forecasts for non-OPEC fourth quarter supply by 30,000 bpd to 53.8 million bpd. For next year, IEA expects non-OPEC production to rise to 54.2 million bpd; the fastest pace since 2010.

It also added that OPEC supply rose by "a marginal" 75,000 bpd to "31.22 million bpd". IEA said the OPEC crude supply increases were led by Saudi Arabia, Angola, Algeria and Libya but offset by recent production problems in Nigeria. Keep reading, keep it 'crude'!

© Gaurav Sharma 2012. Photo:  OPEC briefing room at 162nd meeting of OPEC, Vienna, Austria © Gaurav Sharma, December 2012.