Page 12 - FSUOGM Week 10 2021

FSUOGM PERFORMANCE FSUOGM

Azeri oil output stable in February

AZERBAIJAN AZERI oil production was unchanged in Febru- the market as enjoying “a perfect cocktail of
ary versus the previous month’s level of 593,000 bullish news.”
Brent soared over $70 barrels per day, according to preliminary data “On the balances front, gains are still fuelled
per barrel on March 8 published by national oil company SOCAR. by last week’s OPEC+ meeting excitement,” Rys-
on the back of OPEC+'s Supply was 2,000 bpd below Azerbaijan’s OPEC+ tad Oil markets analyst Louise Dickson com-
decision and other quota of 595,000 bpd. mented in a note. “The alliance’s agreement to
factors. The data shows that production at the BP-op- roll over the existing production cuts was far
erated Azeri-Chirag-Gunashli (ACG) fields in more conservative than the market expected
the Caspian Sea decreased by 7,700 bpd month and traders are still pricing in the stock draws
on month to 492,000 bpd, but this decline was that will follow in the coming months. We do not
fully offset by an equal rise at fields run by expect the price fever to cool down in the short
SOCAR, which delivered 101,000 bpd during term.”
the month. OPEC+’s decision to keep the taps off “will
Azerbaijan’s OPEC+ quota restricts produc- yield an extraordinarily tight oil market, with
tion of oil but not gas condensate, the supply stock draws perhaps accelerating towards
of which grew to 159,000 bpd in January from 1.3mn bpd in April, and even deeper beyond
101,800 bpd the previous month, according to 2.5mn bpd if supply restraint spills into May,”
Azerbaijan’s energy ministry. the analyst continued. “If vaccine campaigns
OPEC+ members agreed in a meeting on accelerate and oil demand recovers from sum-
March 11 to extend existing quotas until the end mer onwards, healthy prices can be maintained
of April rather than ease them. The oil producers even if OPEC+ eventually brings back some
meet on a monthly basis to set policy, creating output.”
volatility in oil markets. During the previous market recovery in
Brent soared over $70 per barrel on March 8 2016 and 2017, US oil production rebounded to
for the first time since the coronavirus (COVID- pre-downturn levels very quickly, putting down-
19) pandemic began, on the back of the OPEC+ ward pressure on prices. This will not be the case
decision, up from a previous close of $69.36 per this time around, with US output taking until the
barrel. There were other factors at play, with Nor- end of 2023 to return to the pre-pandemic level
wegian consultancy Rystad Energy describing of 12.8mn bpd, according to Rystad. ™

P12 www. NEWSBASE .com Week 10 10•March•2021