Page 6 - MEOG Week 05 2022

MEOG PRICES & PERFORMANCE MEOG

OPEC+ makes quick decision but

adding production will be harder

OPEC+ THE OPEC+ group this week agreed to ease an oil price above $100 per barrel in Q3, noting
their collective production restraint by a fur- that spare capacity could reach historic lows of
ther 400,000 barrels per day (bpd) in March in a around 1.2mn bpd around that time.
meeting that lasted just 16 minutes. S&P Global Platts quoted delegates as saying
The 23 members’ rapid decision came as oil that there had been no discussion on countries
prices rose beyond $90 per barrel on the back using spare capacity to fill supply gaps left by
of geopolitical concerns in the Middle East others failing to reach their targets, with Sau-
and Eastern Europe. Despite the move, supply di-based Jadwa Investment this week suggesting
concerns are likely to linger, with a Bloomberg the Kingdom’s output could average 10.3mn bpd
survey suggesting that the 13 OPEC members in 2022.
were only able to achieve a production increase While it is likely that Middle Eastern nations
of 50,000 bpd in January, as output from Nigeria could make short-term gains – Kuwait and Saudi
rose by 160,000 bpd during the month. How- Arabia are pressing ahead with field expansion
ever, the group actually ended up registering a projects, both domestically and in their shared
drop of 90,000 bpd following the shutdown of Partitioned Neutral Zone (PNZ), while Iraq has
Libya’s Sharara oilfield. The wider OPEC+ group already said it intends to export around 100,000
fared even worse, underproducing by more than bpd more in February – OPEC will need to play
820,000 bpd in January. a delicate balancing act between the market and
As smaller producers struggle to raise their its relations with Russia.
output, Middle Eastern countries may need One of Platts’ sources said that this relation-
to ramp up disproportionately, with industry ship could be strained if OPEC members begin Baseline (mbpd)
Targets (mbpd)
estimates suggesting that 90% of the group’s overproducing and claim Russia’s share of the Until end May 2022 May 2022 onwards
February 2022
March 2022
spare capacity is now held by Saudi Arabia and market. “I do not imagine that Russia will accept
OPEC
the UAE. The pair have maximum production the principle that countries which have addi- 0.992 1.057 1.057
0.982
Algeria
capacities of 12mn bpd and 4mn bpd respec- tional spare capacity can increase their produc- 1.435 1.528 1.528
1.421
Angola
tively, though work is ongoing in both countries tion when it cannot do so,” he said. 0.303 0.306 0.325 0.325
Congo (Brazzaville)
The group is unlikely to be rushed into any
to add another 1mn bpd each. Equatorial Guinea 0.118 0.12 0.127 0.127
According to data compiled by IGM Energy, knee-jerk moves, though, with JP Morgan’s 0.175 0.187 0.187
0.173
Gabon
OPEC+’s top five producers in January were: Christyan Malek telling the FT: “OPEC+ is not Exempt Exempt Exempt
Iran
Exempt
Russia (just over 10mn bpd); Saudi (just under in any rush to raise production too quickly or to 4.37 4.653 4.803
4.325
Iraq
10mn bpd); Iraq (4.3mn bpd); the UAE (2.9mn backfill for members that might be struggling to
Kuwait
2.612
bpd) and Kuwait (2.6mn bpd). meet their targets, no matter the concerns over 2.639 2.809 2.959
Libya
Exempt
With Middle East oil ministers and executives Ukraine or the return of $90 oil. They have a plan Exempt Exempt Exempt
1.701
Nigeria
calling out IOCs for underinvestment in new they want to stick to and don’t want to be seen to 1.718 1.829 1.829
Saudi Arabia
production globally, Goldman Sachs anticipates be pushed around.”™ 10.227 10.331 11.000 11.500
UAE 2.946 2.976 3.168 3.500
Venezuela Exempt Exempt Exempt Exempt
Targets (mbpd) Total Baseline (mbpd) 24.808 25.062 26.683 27.815
February 2022 March 2022 Until end May 2022 May 2022 onwards
OPEC Non-OPEC
0.66
Algeria 0.982 0.992 Azerbaijan 1.057 1.0578 0.675 0.718 0.718
Angola 1.421 1.435 Bahrain 1.528 1.5281 0.193 0.205 0.205
0.19
0.09
Congo (Brazzaville) 0.303 0.306 Brunei 0.325 0.3255 0.096 0.102 0.102
0.127
Equatorial Guinea 0.118 0.12 Kazakhstan 0.1279 1.605 1.709 1.709
1.58
Gabon 0.173 0.175 Malaysia 0.187 0.1874 0.559 0.595 0.595
0.55
Iran Exempt Exempt Mexico Exempt Exempt3 1.753 Exempt Exempt
1.75
0.82
Iraq 4.325 4.37 Oman 4.653 4.8031 0.829 0.883 0.883
Kuwait 2.612 2.639 Russia 2.809 10.227 10.331 11.000 11.500
2.959
0.07
Libya Exempt Exempt Sudan Exempt Exempt 0.071 0.075 0.075
0.12
Nigeria 1.701 1.718 South Sudan 1.8291 0.122 0.130 0.130
1.829
Saudi Arabia 10.227 10.331 Total 11.000 11.500 16.234 15.417 15.917
16.089
3.500
UAE 2.946 2.976 OPEC+ 3.168 40.897 41.296 42.1 43.732
Venezuela Exempt Exempt Exempt Exempt
Total 24.808 25.062 26.683 27.815
Non-OPEC
Azerbaijan 0.668 0.675 0.718 0.718
Bahrain 0.191 0.193 0.205 0.205
Brunei 0.095 0.096 0.102 0.102
Kazakhstan 1.589 1.605 1.709 1.709
P6 Malaysia 0.554 www. NEWSBASE .com 0.595 Week 05 02•February•2022
0.595
0.559
Mexico 1.753 1.753 Exempt Exempt
Oman 0.821 0.829 0.883 0.883
Russia 10.227 10.331 11.000 11.500
Sudan 0.07 0.071 0.075 0.075
South Sudan 0.121 0.122 0.130 0.130
Total 16.089 16.234 15.417 15.917
OPEC+ 40.897 41.296 42.1 43.732