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Iran Says OPEC Must Address Rising Libya, Nigeria Oil Output

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  • Iran Says OPEC Must Address Rising Libya, Nigeria Oil Output

OPEC’s commitment to cutting production to clear a global glut is working, but the group needs to address rising output from Libya and Nigeria, Iran’s Oil Minister Bijan Namdar Zanganeh said.

Compliance with the output cuts is “acceptable,” Zanganeh told reporters Sunday in Tehran. The Organization of Petroleum Exporting Countries should focus on “the situation with Libya and Nigeria,” he said, referring to the two countries exempted from capping production due to their internal strife. Nigeria will be able to participate in cuts when its output stabilizes at 1.8 million barrels a day, Oil Minister Emmanuel Kachikwu said Friday.

“OPEC’s actions are working and compliance is acceptable overall, although there needs to be some change,” Zanganeh said, referring to OPEC members’ compliance with their pledges to pump less. “Changes are really related to Libya and Nigeria and the 100 percent compliance of everyone.” He didn’t elaborate.

OPEC and other global producers including Russia agreed to maintain output cuts through March to end a price rout that has battered their economies since 2014. Iran was part of the deal reached last year, though it was given special permission to raise output by 90,000 barrels a day. Libya and Nigeria were not part of the deal and have since increased production, complicating the efforts of the suppliers to reduce the glut. Benchmark Brent crude has dropped by about half from its 2014 peak.

OPEC backs any action to help stabilize the oil market, and if a meeting is needed for the group to decide whether to extend the cuts that expire in March, “we’ll arrange it,” Zanganeh said.

Iraqi Production

Iran “will consider everything within the framework of our national interest and cooperation with OPEC,” he said when asked whether the country would adjust its output.

Iraq supports OPEC’s efforts to pare oil output and clear a global glut even as the group’s second-biggest producer plans to expand its own capacity to pump more, Iraqi Oil Minister Jabbar al-Luaibi said Sunday at a news conference in Baghdad.

The country’s plan to boost capacity to 5 million barrels a day by the end of the year won’t affect crude markets, he said. Iraq won’t export all of its additional output, he said. The nation pumped 4.49 million barrels a day in August, data compiled by Bloomberg show.

“The oil market’s status is stable, and we don’t accept that any country exceed its share” under OPEC’s deal to cut production, he said. “We support OPEC’s position to stabilize markets.”

Nigeria Rebound

Nigeria’s production of 1.7 million to 1.75 million barrels a day has climbed from an all-time low of about 1 million barrels a day, Kachikwu said Friday in a Bloomberg TV interview. Output will be “back in full swing” in five to six months, he said.

The United Arab Emirates, also participating in OPEC’s output cuts, is 100 percent compliant with its commitment to the agreement, and its crude exports have dropped as much as 10 percent in the past two months, Energy Minister Suhail Al-Mazrouei said Monday in Abu Dhabi. Oil prices should improve in the second half, and by next year crude inventories should decline to below their five-year average, he said. OPEC’s goal with the cuts is to reduce global inventories to the five-year historical average.

When OPEC meets next, some members that aren’t subject to output cuts may be asked to join the agreement, Mazrouei said. “The meeting will discuss whether to extend the production cut and also the possibility of including some countries” that don’t already have an output cap, he said.

Kurdish Referendum

Iraq is seeking to rebuild its energy industry after decades of conflict, and al-Luaibi sought to reassure oil markets a day before the country’s energy-rich, self-governing Kurdish area plans to vote on a referendum on independence. The central government opposes the vote, which many global powers say could create further instability in a region convulsed by war. The Kurds plan to include the disputed Kirkuk region, home to Iraq’s oldest producing oil fields, in the referendum.

Oil should be left out of the political wrangling over control of Kirkuk, al-Luaibi said. Kurds, Arabs and Turkmens are all competing to control Kirkuk, making it a potential flashpoint for conflict. The Baghdad-run North Oil Co. is currently pumping 500,000 barrels a day in northern Iraq, he said.

Iraq’s government is still in discussions with Royal Dutch Shell Plc, which quit Iraq’s southern Majnoon field and plans also to withdraw from the West Qurna-1 deposit, al-Luaibi said. It’s not talking with any other oil companies about replacing Shell, he said.

“We have no problems in finding international companies” to replace the oil major, al-Luaibi said, adding that Iraqi staff are capable of taking over from Shell.

Iraq will soon sign a deal with Iran to jointly invest in two oil fields, he said, without giving a date. It’s also in talks with Kuwait to jointly develop four fields and to ship surplus natural gas to Kuwait, he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Gold Hit 26.8% ROI YTD, the Highest Increase in Value Among Top Assets

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Gold Delivers 26.8% Return on Investment Year-t-Date

As the world’s earliest form of currency, gold has long been considered a reliable store of value. Unlike banknotes, stock, or other assets, the precious metal managed to preserve the investors’ wealth throughout the years, especially in times of turmoil in the financial markets.

According to data presented by AksjeBloggen, gold hit a 26.8% YTD return on investment, the highest increase in value among top assets.

Gold Return Rate 8.5% Higher than in 2019

Investors tend to focus on gold in times of market volatility, considering it to be a ‘safe haven’ in crises like the coronavirus. In 2019, the value of gold increased by 18.3%, revealed the Blackrock data. The precious metal continued the impressive performance in 2020 with a 26.8% YTD return, 8.5% more than in 2019.

Statistics show that last year, the S&P 500 index increased in value by 31% but was outperformed by Nasdaq, which grew by 35.2%. The MSCI Europe index rose by 26.1% in 2019. China A-shares followed with a 22.3% ROI.

However, the COVID-19 crisis had a massive impact on popular assets, causing a sharp fall in their values during the first half of 2020. The Blackrock data revealed the Nasdaq YTD return hit 23.9%, 11.3% below the 2019 performance. China A stocks reached 10% ROI YTD, much under the 22.3% return in 2019.

Statistics show the S&P 500 index had an 8.4% value increase in the nine months of 2020, almost four times less than in 2019. MSCI Emerging Market Index reached a 4.9% value increase in the same period, compared to 13% in 2019.

The Blackrock data show that crude oil, FTSE 100, and MSCI Europe index witnessed the most significant drop in the nine months of 2020, with their values falling by 34.6%, 22.4%, and 11.5%, respectively.

Global Demand for Investment Gold Surged by 100% YoY

Although many investors value gold as an important portfolio asset, the economic downturn caused by the COVID-19 pandemic led to a surge in global demand for the precious metal.

The World Gold Council data showed the global demand for investment gold increased significantly since the beginning of the year.

In the fourth quarter of 2019, it amounted to 279.2 metric tons. By the end of March, this figure jumped by more than 93% to 539.6 metric tons. The increasing trend continued in the second quarter of the year, with global demand for investment gold hitting 582.9 metric tons, an almost 100% jump year-over-year.

Statistics indicate the global demand for gold for investment purposes hit a record-breaking 1,152 metric tons in the first half of 2020, the highest figure so far.

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Oil Prices News: Oil Gains Following Drops in US Crude Inventories

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Oil Prices Gain Following Drops in US Crude Inventories and OPEC High Compliance Level

Global oil prices extended their 2 percent gains on Thursday after data showed U.S crude oil inventories declined last week.

The price of Brent crude oil, against which Nigerian oil is measured, gained 0.2 percent or 7 cents to $43.39 a barrel as at 12:10 pm Nigerian time. While the U.S. West Texas Intermediate (WTI) crude appreciated by 8 cent or 0.2 percent to $41.12 barrels.

Oil prices extended their three days gain after the American Petroleum Institute said the U.S crude inventories declined by 5.4 million barrels in the week ended October 9.

The report released after the market closed on Wednesday revealed that distillate stockpiles, which include diesel and heating oil, declined by 3.9 million barrels. Those stated drawdowns almost double analysts’ projections for the week.

Much of the fall is due to the effects of Hurricane Delta shuttering U.S. production in the Gulf of Mexico, and as such, will be a transitory effect,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

“Therefore, I am not getting too excited that a turn of direction is upon markets, although both contracts are approaching important technical resistance regions.”

Also, the report that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, referred to as OPEC+ attained 102 percent compliance level with their oil production cuts agreements bolstered global oil outlook. Suggesting that demands for the commodity are likely not growing and could drag down prices in few weeks, especially when one factor in the reopening of Libya’s Sharara oil field, workers returning to operation in Norway and the Gulf of Mexico.

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Oil Prices Gain on Tuesday Despite Expected Surge in Global Oil Supplies

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Oil Prices Rise Despite Expected Surge in Global Oil Supplies

Oil prices gained on Tuesday despite Libya opening Sharara oil field for production, labour in Norway reaching an agreement with oil firms to return back to work and oil workers in the U.S returning to the Gulf of Mexico region after the Hurrican Delta.

Brent crude oil, against which Nigerian oil price is measured, gained 1.77 percent to $42.46 per barrel as at 11:15 am Nigerian time on Tuesday.

While the US West Texas Intermediate (WTI) crude oil gained 2 percent to close at $40.22 per barrel.

The improvement in prices was after oil prices plunged as much as 3 percent on Monday following a resolution reached by Libyan rebels and government to commence oil production at the nation’s largest oil field, Sharara Oil Field.

This coupled with labour agreement with oil firms in Norway was expected to boost global oil supplies and eventually weighed on prices and disrupt OPEC+ production cuts strategy.

However, prices surged after Nancy Pelosi said she would commence talks on $1.8 trillion stimulus package following President Trump’s return to the White House after he was rushed to hospital following a positive COVID-19 test.

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