ECUADOR RENEGES ON OPEC DEAL
Ecuador said it would no longer comply with a deal forged with other members of the Organization of the Petroleum Exporting Countries to scale back oil production, Benoit Faucon reports.
Ecuadorian energy minister Carlos Perez said the South American country could not limit its oil output “because of the needs that the country has.” While Ecuador is among OPEC’s smallest members, the country’s decision is a “symbolic setback for the 14-nation cartel,” Mr. Faucon noted.
OPEC members and other producers including Russia reached an agreement last November to limit production through March 2018 as part of an effort to fight a global oil supply glut and an ongoing low price environment.
DAIMLER TO MAKE EMISSIONS ADJUSTMENTS
Daimler AG, the maker of Mercedes-Benz cars, said it would modify the engine software on over three million diesel vehicles in order to improve emissions of toxic pollutants, William Boston reports.
The news comes as the company faces investigations in U.S. and Europe into whether some Mercedes-Benz diesel cars were equipped with so-called defeat devices to sidestep emissions regulations, similar to Volkwagen AG.
“In Germany, public concern about diesel bans has led to a sharp drop in diesel sales and forced Chancellor Angela Merkel’s government to create a round table to encourage the auto industry to adopt voluntary measures to curb diesel pollution and prevent cities from banning diesel vehicles,” Mr. Boston noted.
BHP TO UP U.S. SHALE PRODUCTION
Australia’s BHP Billiton Ltd. said it plans to increase its production in U.S. oil-and-gas shale fields, despite resistance from activist investors, Robb M. Stewart reports.
The company said it expects to double its number of rigs operating in shale fields to 10 in the coming year. The announcement comes on the heels of recent calls by Elliott Management Corp. the world’s largest listed mining company to spin off its U.S. petroleum business.
“The push by Elliott and other shareholders has drawn BHP’s petroleum division into the spotlight and revived questions about the billions of dollars spent picking on onshore U.S. assets at the height of the natural-gas boom,” Mr. Stewart wrote.
Oil prices were mainly flat Wednesday morning, as investors awaited new U.S. government data that was expected to show an increase in U.S. crude inventories last week.
Brent crude, the global benchmark, was up marginally, by 0.04%, to $48.86 a barrel, in London mid-morning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading flat, at $46.40 a barrel.
The American Petroleum Institute projected Tuesday that U.S. crude stocks had grown by 1.6 million barrels in the week ended July 14. If the estimate is confirmed by official U.S. data later Wednesday, it would constitute the first inventory rise in two weeks. The market had initially been expecting a drawdown of roughly 3 million barrels.