With crude oil prices nudging steadily higher, market expectations are for crude-pumping nations to prolong their deal to curb output at a meeting at OPEC headquarters in Vienna tomorrow.
However, markets could be disappointed, with Russia reportedly not yet fully on board about signing up to extending the agreement, due to expire on March 31, until the end of next year, experts said.
The deal by 24 producers reduced production by 1.8 million barrels per day, first struck a year ago, has already been extended once.
It has borne fruit, helping reduce a global glut that sent crude oil prices to less than US$30 a barrel early last year, a level which helped consumers, but blew a hole in producers’ finances.
Brent Crude is now nearing US$65 per barrel, while fellow benchmark West Texas Intermediate has been heading for US$60, with inventories approaching more normal levels.
The price has also been helped by growing optimism about the global economy and its effect on buoying oil demand, not least from China.
“We have accomplished what naysayers thought would be impossible,” OPEC secretary-general Mohammad Sanusi Barkindo said on Monday. “The current market conditions, the returning level of confidence and optimism in the industry are all evidence of the outcome of our joint efforts.”
However, for one of OPEC’s founder members things are far from rosy.
Venezuela, whose oil reserves are the world’s biggest, is a whisker away from an all-out debt default.
Just as the South American nation needs foreign currency more than ever, oil output is forecast to fall for a seventh successive year next year to the lowest level since 1989.
As a result, Venezuela is producing even less than it vowed to under the output agreement, further reducing the global glut and giving others extra breathing space.
Venezuela “is significantly below the target level and shows no sign of being able to turn that around in the near term or even over 2018,” Richard Mallinson of Energy Aspects said.
Members of the OPEC cartel and Russia have crafted the outline of an agreement to extend the curbs to the end of next year, according to Bloomberg News.
Saudi Arabia is thought to be particularly keen since higher crude oil prices would help boost the value of national oil company Saudi Arabian Oil Co, some of which it wants to sell next year.
However, OPEC and Russia are still hammering out crucial details, Bloomberg reported.
Russian oil companies are reported to be particularly reluctant.
In September, Russian Minister of Energy Alexander Novak suggested it was premature to discuss an extension, saying he wanted to wait until January for further data.
A further possible complication could be the dramatic deterioration of relations between regional rival Saudi Arabia and Iran, both of which are members of OPEC.
Saudi Arabian Crown Prince Mohammed bin Salman last week called Iran’s supreme leader “the new Hitler of the Middle East.”
Iran, following the lifting of sanctions under the 2015 nuclear deal, was allowed a moderate increase in oil production under the producers’ accord, but Mallinson said that, like in the past, such as during the Iran-Iraq war between 1980 and 1988, the rivals should still be able to work together at OPEC, albeit through gritted teeth.
“So that shouldn’t be too much of a concern for the oil market,” he said.
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li
Dutch brewing company Heineken NV on Friday announced an investment of NT$13.5 billion (US$414.62 million) over the next five years in Taiwan. The first multinational brewing company to operate in Taiwan, Heineken made the statement at a ceremony held at its brewery in Pingtung County. It also outlined its efforts to make the brewery “net zero” by 2030. Heineken has been in the Taiwanese market for 20 years, Heineken Taiwan managing director Jeff Wu (吳建甫) said. With strong support from local consumers, the Dutch brewery decided to transition from sales to manufacturing in the country, Wu said. Heineken assumed majority ownership and management rights
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI