OIL INVESTORS’ SURPRISE NEW WORRY: AN-OVERACHIEVING OPEC
Some investors are worried that OPEC’s supply cut could send prices too high next year and dampen consumer appetite for crude, reports The Wall Street Journal.
“The Organization of the Petroleum Exporting Countries’ 14 members and other major producers like Russia are widely expected to strike an agreement this week to continue withholding about 2% of global oil supply from the market,” write Georgi Kantchev and Summer Said.
The national energy ministers of about two dozen countries are set to meet Thursday at the oil cartel’s headquarters in Vienna.
But a continuation of the supply cuts could overstimulate the market, say some analysts.
“There’s actually a chance the market will over-tighten and prices go close to $70 soon,” said Doug King, chief investment officer of the Merchant Commodity hedge fund, which has $165 million under management. “But they are also vulnerable if they don’t extend, that will spook the market.”
Oil prices eased Monday, ahead of the widely anticipated meeting between major crude producers.
Brent crude, the global oil benchmark, fell 0.4% to $63.6 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were down 0.8% at $58.43 a barrel.
“The only uncertainty is the form of cooperation between OPEC and Russia,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
Saudi Arabia supports an extension, while Russia has been sending mixed messages about the duration and the timing of the deal.
STATOIL BUYS TOTAL’S STAKES IN NORWEGIAN ASSETS
Statoil ASA has agreed to buy stakes in two Norwegian oil assets from Total SA for $1.45 billion, expanding its presence in a region that offers low production costs, writes Dominic Chopping for the Dow Jones Newswires.
The deal, announced Thursday, will see Statoil’s interest in the Martin Linge field in the North Sea rise to 70% from 19%. The field has estimated recoverable resources in excess of 300 million barrels of oil equivalent.
Statoil will also acquire Total’s 40% stake in the Garantiana field which has a recoverable resource potential of between 50 million and 70 million barrels of oil equivalent.
VENEZUELAN GENERAL WITH NO OIL-INDUSTRY EXPERIENCE TO LEAD STATE SECTOR
Venezuela’s President Nicolás Maduro named an active general with no experience in the energy sector to lead the state oil industry, writes Anatoly Kurmanaev.
National Guard Maj. Gen. Manuel Quevedo will be the new energy minister and president of state-run Petróleos de Venezuela SA, known as PdVSA, which accounts for almost all the country’s foreign-currency income.
The appointment follows the arrests of several industry veterans for alleged corruption.