Page 6 - MEOG Week 34 2022

MEOG POLICY & SECURITY MEOG

Prince Abdulaziz: OPEC ready to

make cuts to correct price drop

OPEC SAUDI Arabia’s Energy Minister and OPEC can’t reflect the realities of the physical funda-
kingpin Prince Abdulaziz bin Salman Al Saud mentals in a meaningful way and can give a false
said this week that the OPEC+ group is prepared sense of security at times when spare capacity is
to reduce oil output as a means to correct the severely limited and the risk of severe disrup-
recent fall in prices. tions remains high.”
Speaking to Bloomberg, he said the group Noting that the paper and physical markets
had shown that it was prepared to act to coun- are becoming increasingly disconnected, he
teract market volatility and was committed to do added that the market is “in a state of schizo-
so again if required. phrenia”, with “erroneous signals” being sent
Noting that oil futures have dropped owing to “at times when greater visibility and clarity and
Targets (mbpd)
perception rather than physical shortages, Prince well-functioning markets are needed more than
August 2022 September 2022 Increase (mbpd)
Abdulaziz said: “The paper oil market has fallen ever to allow market participants to efficiently
OPEC
into a self-perpetuating vicious circle of very thin hedge and manage the huge risks and uncertain- 0.002
1.057
1.055
Algeria
liquidity and extreme volatility undermining the ties they face.” 1.525 1.529 0.004
Angola
market’s essential function of efficient price dis- Congo (Brazzaville) 0.325 0.325 0
Having announced a quota increase of just
covery, [which makes] the cost of hedging and 100,000 barrels per day (bpd) following its latest 0
0.127
0.127
Equatorial Guinea
managing risks for physical users prohibitive.” meeting, OPEC and its deal with non-member 0.001
0.186
Gabon
0.187
Concerns about Chinese demand and reces- producing nations have come under increasing
Iran
sion in the West have seen crude prices fall by scrutiny. Exempt Exempt
4.663
4.651
around $25 per barrel in recent weeks, down by Iraq Prince Abdulaziz said that the group would 0.012
Kuwait
2.811
2.818
more than a third since the early year highs of begin working on a new deal “beyond 2022 0.007
Exempt
Exempt
Libya
the mid $140s. which will build on our previous experiences,
1.826
Nigeria
The minister said: “This is detrimental achievements and successes”, seeking to prevent 1.83 0.004
Saudi Arabia
because without sufficient liquidity, markets market volatility.™ 11.004 11.03 0.026
UAE 3.179 3.186 0.007
Venezuela Exempt Exempt
Targets (mbpd) Total 26.689 26.752 0.063
August 2022 September 2022 Increase (mbpd)
OPEC Non-OPEC
Algeria 1.055 1.057 0.002 Azerbaijan 0.717 0.718 0.001
Angola 1.525 1.529 0.004 Bahrain 0.205 0.205 0
Congo (Brazzaville) 0.325 0.325 0 Brunei 0.102 0.102 0
Equatorial Guinea 0.127 0.127 0 Kazakhstan 1.706 1.71 0.004
Gabon 0.186 0.187 0.001 Malaysia 0.594 0.595 0.001
Iran Exempt Exempt Mexico 1.753 1.753 0
Iraq 4.651 4.663 0.012 Oman 0.881 0.883 0.002
Kuwait 2.811 2.818 0.007 Russia 11.004 11.03 0.026
Libya Exempt Exempt Sudan 0.075 0.075 0
Nigeria 1.826 1.83 0.004 South Sudan 0.13 0.13 0
Saudi Arabia 11.004 11.03 0.026 Total 17.167 17.201 0.034
UAE 3.179 3.186 0.007 OPEC+ 43.856 43.953 0.097
Venezuela Exempt Exempt
Total 26.689 26.752 0.063
Non-OPEC
Azerbaijan 0.717 0.718 0.001
0
P6 Bahrain 0.205 0.205 www. NEWSBASE .com Week 34 24•August•2022
0.102
0.102
Brunei
0
Kazakhstan 1.706 1.71 0.004
Malaysia 0.594 0.595 0.001
Mexico 1.753 1.753 0
Oman 0.881 0.883 0.002
Russia 11.004 11.03 0.026
Sudan 0.075 0.075 0
South Sudan 0.13 0.13 0
Total 17.167 17.201 0.034
OPEC+ 43.856 43.953 0.097