OPEC's Friday numbers game

So here we are back again at Helferstorferstrasse 17 on Friday (December 7), for another packed room at the "5th OPEC and non-OPEC Ministerial Meeting." That's after having received no formal announcement on the level of OPEC cuts overnight at the "conclusion" of the 175th OPEC Ministers Meeting, and Saudi Oil Minister Khalid Al-Falih having told CNN a deal on a production cut may not materialise. 

The morning after extreme volatility in the oil markets, OPEC's numbers game continues. The latest that multiple sources seem to suggest is that OPEC is inclined to cut 650,000 barrels per day (bpd), and non-OPEC countries another 350,000 barrels per day, all tallying up to a possible 1 million bpd cut proposed overnight. 

Question is - will the market be convinced, especially if Iran and a few smaller members decline to participate? The Oilholic doesn't think so (and Iran continues to play hardball and the formal OPEC /non-OPEC meeting has not even begun yet @12:46 GMT). 

To support a $70 oil price, a 1 million bpd cut won't do, but may serve to de-risk a huge decline. Anything above that appears unlikely. We wait and see! More from Vienna soon. Keep reading, keep it 'crude'!

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© Gaurav Sharma 2018. Photo: OPEC Media Briefing room, Vienna, Austria, December 2018 © Gaurav Sharma 2018

Tillerson kicks things off with a bit of nostalgia

The current US Secretary of State and the former ExxonMobil boss Rex Tillerson got things off to a nostalgic start by telling the 22nd World Petroleum Congress he misses the industry. 

In town to collect the Dewhurst Award, Tillerson joked he’d be heading to retirement by now, but things just didn’t turn out that way, when President Donald Trump came calling. (Here’s a full IBTimes UK report).

If things didn’t quite turn out the way Tillerson imagined, the WPC – so far – is turning out to be exactly the way half the world’s media thought it would between the Saudis and Qataris who are entrenched in a diplomatic row and keeping their distance from each other.

Qatar’s energy minister Mohammed Saleh Al Sada said his country’s exports of liquefied natural gas (LNG) to major partners remain unaffected by the boycott of Doha by Saudi Arabia and its allies United Arab Emirates, Bahrain and Egypt.

The Qatari minister told the WPC its LNG exports to the UAE, Saudi Arabia and Bahrain accounted for less than 8% of its total. The country's exports to Japan, India, South Korea and China – accounting for nearly 75% of the total - have not been affected.

"Qatar remains committed to all its agreements with its partners and is determined to maintain this status despite the illegal and unjust embargo imposed on it," he added. What’s more, the Qataris are taking legal action against the aforementioned blockaders. (More here).

And just before for one takes your leave, it’s also worth mentioning that OPEC Secretary General Mohammed Sanusi Barkindo has said there would be no further discussion on crude production cuts, since it would be “premature” to discuss this. 

Concurrently, Kuwait's Oil Minister Issam Almarzooq has told Bloomberg that Libya and Nigeria – the two OPEC members exempt from production cuts – may be invited to consider capping production pretty soon.That’s all from Istanbul for the moment folks! Keep reading, keep it ‘crude’!

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© Gaurav Sharma 2017. Graph: Oil benchmark prices year to date © Gaurav Sharma 2017.