Venezuela supports oil cuts proposed by OPEC

Caracas, Feb 12 (Prensa Latina) The Ministry of Oil of Venezuela has announced its support of the recommendation to cut the production of crude oil presented by the Joint Technical Committee (JTC) of the Organization of Petroleum Exporting Countries (OPEC).

With its support to the production adjustment, Venezuela reaffirms its policy to achieve stability of the hydrocarbons international market, and help the just relation between the countries that produce, consume and invest in oil.

During the extraordinary meeting in Vienna, the JTC, presided by Saudi Arabia and Russia, recommended additional production cuts during the second trimester of the year, to face the drop in oil demand as a result of the Covid-19 epidemic.

The body recommended extending the voluntary production adjustments until the end of 2020, and proceed with and additional adjustment until the end of the second trimester, as per a communiqué, which does not specify, however, the extent of the initial cut.

The committee's recommendations are a result of the coronavirus epidemic having a negative impact on the oil demand and oil markets, says the text issued by the current OPEC president, Minister of Energy of Algeria, Mohammed Arkab.

The next meeting of the organization is to take place in March 5th and 6th, when it will be decided how many oil barrels will be retired from the market.

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Cuba and OPEC sign new loan agreement

Antonio Carricarte, Cuban first deputy minister of Foreign Trade and Investment, and Abdulhamid Alkhalifa, director general of the OPEC Fund for International Development (OFID) signed a Loan Agreement in Havana today.

The memorandum, signed at the ministry of foreign trade and investment office, provides 25 million dollars in financing for a project to improve the sewage and drainage situation in the municipalities of La Lisa, Playa and Marianao in western Havana.

Alkhalifa referred to the long-standing relationship between his organization and Cuba, in particular OFID's support for the Caribbean nation's economic development programs and policies through 2030.

The representative of OPEC (Organization of Petroleum Exporting Countries) is on an official visit to Cuba to celebrate the 500th anniversary of the founding of Havana and is planning meetings with ministers and tours of projects financed by the organization.

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OPEC and Allies Agree to Meet in Early July

Vienna, Jun 23 (Prensa Latina) The Organization of Petroleum Exporting Countries (OPEC) and a group of major oil producers, including Russia, officially agreed to postpone their meetings to July 1 and 2.

It was reported that the 176th ordinary meeting of OPEC, to be attended by the ministers of Energy and Oil from all 14 member countries, will take place on July 1.

On July 2, the OPEC ministerial meeting will be held, with participation of ten oil-producing countries that are allies of the bloc.

The group and the other countries that make up the pact are expected to agree on extending the deal to cut oil production until late 2019.

In 2018, the organization and its allies agreed to reduce production by 1.2 million barrels a day during the first semester of this year, in order to increase and control prices.

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Iran Not Backing Down: IRGC Navy Vows To Block US Ships From Important Waterway

The Trump administration announced on Monday that they would be cancelling waivers to eight countries buying oil from Iran as they tighten the economic blockade against the Persian Gulf nation. 

The spokesperson for the Iranian Foreign Ministry, Abbas Mousavi, issued a statement on Monday that warned of "adverse consequences" if the U.S. ended their sanctions waiver on the Persian Gulf nation's oil imports.

RELATED:US Ends Sanction Waivers for Countries Importing Iranian oil

"Given the illegal nature of the U.S. sanctions, Iran has not and will not consider any value for the waivers granted," Mousavi said. "However, in view of the negative effects in politics of these sanctions ... Iranian Foreign Ministry has been continuously in touch with relevant domestic institutions while holding comprehensive consultations with many foreign partners, including Europeans."

The Trump administration announced on Monday that they would be cancelling waivers to eight countries buying oil from Iran as they tighten the economic blockade against the Persian Gulf nation. 

Mousavi said Iran will take appropriate actions to counter the U.S. move, adding that his government will make it public. 

Not everyone in the Iranian government and military were as cordial as Mousavi, the commander of the Islamic Revolutionary Guard Corps' Navy, Alireza Tangsiri, vowed to take harsher actions against the U.S.

Tangsiri vowed to close the important Strait of Hormuz, which would be a major blow to the U.S. Navy who is currently docked at their largest Middle Eastern naval base in Bahrain.  

“If we are prevented from using it, we will close it,” Tangsiri said, as cited by the state-run Fars News Agency. “In the event of any threats, we will not have the slightest hesitation to protect and defend Iran’s waterway.”

Iran's oil exports have dropped to about 1 million barrels per day (bpd) from more than 2.5 million bpd prior to the re-imposition of sanctions.

U.S. Secretary of State Mike Pompeo, in a briefing Monday, said "we're going to zero across the board," saying the United States had no plans for a grace period for compliance beyond May 1.

The White House intends to deprive Iran of its lifeline of $50 billion in annual oil revenues, Pompeo said, as it pressures Tehran to curtail its nuclear program, ballistic missile tests and support for conflicts in Syria and Yemen.

A senior administration official said President Donald Trump was confident Saudi Arabia and the United Arab Emirates will fulfill their pledges to compensate for the shortfall in the oil market. U.S. Assistant Secretary of State for Energy Resources Frank Fannon said Riyadh was taking "active steps" to ensure global oil markets were well supplied.

Saudi Arabian Energy Minister Khalid al-Falih, in a statement on Monday, did not commit to raising production, saying it was "monitoring the oil market developments" after the U.S. statement, and that it would coordinate with other oil producers to ensure a balanced market. OPEC is next scheduled to meet in June.

While Saudi Arabia is expected to boost output again, analysts fear the U.S. move - along with sanctions on Venezuela - will leave the world with inadequate spare capacity.

The international Brent crude oil benchmark rose to more than $74 a barrel on Monday, the highest since November, due to the uncertainty surrounding increased supply from Saudi Arabia and other OPEC nations, while U.S. prices hit a peak of $65.92 a barrel, the highest since October 2018.

 
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Venezuela to Promote Fair Oil Prices in OPEC by 2019

Venezuela continues today its call to promote in the Organization of Petroleum Exporting Countries (OPEC) fair prices that allow better investments and the flow of oil to consumer states in 2019.

In recent statements, the minister of the sector, Manuel Quevedo, said that for the coming year the nation assumes the presidency of the Conference of the agency, a scenario to take action on the value of hydrocarbons. In the meetings held in 2018 with OPEC and non-OPEC nations, favorable scenarios were evidenced as a result of the actions taken to set the stabilization of the market, the minister said.

Two years after having reached the Declaration of Cooperation for the Voluntary Adjustment of Crude Production, this initiative promoted by President Nicolas Maduro confirms the joint work between these countries with the objective of stabilizing the world oil market, he said.

During the 175th OPEC meeting, held on December 6 in Vienna, Austria, it was agreed to lower the daily pumping from 2019 to balance the market, which will be distributed between OPEC and non-OPEC countries.

The former will adjust their production to 800 million barrels per day while the non-OPEC nations will maintain the index of 400 million barrels per day.

For the Conference of the agency in 2019 will be taken into account the figures of supply and demand of crude that threw the recent reports that, although they show a balance, also demonstrate the volatility of the costs by operational and geopolitical variables.

According to the state-owned company Petroleos de Venezuela, the South American delegation to the meeting will ratify its interest to maintain the balance for the development and economic prosperity of the member countries and the oil world. Likewise, it will propose converting Petro cryptocurrency into the future of oil transactions worldwide, as well as a bridge for the internationalization of this Venezuelan asset.

 

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In Major Shift, US Now Exports More Oil Than It Ships In

The United States last week exported more crude oil and fuel than it imported for the first time on record, according to data released on Thursday, the same day OPEC ended a meeting without a decision to curb global output to balance out the historic surge in U.S. supply.

When adding in all imports and exports of crude and refined products, the U.S. exported a net 211,000 barrels per day for the week through Nov. 30 - the first time that has happened, according to U.S. Energy Department figures dating to 1973. That was on the back of a jump in crude exports to a weekly record of more than 3.2 million bpd.

"So when does the U.S. send a delegate to OPEC meetings?" said Kyle Cooper, consultant at ION Energy in Houston. "It's really quite amazing. I do think that will occur more and more often in coming years."

The United States historically has been a heavy importer of crude oil in part due to a four-decade ban on crude exports that was lifted in late 2015 by then-President Barack Obama.

Petroleum exports until recently were dominated by products like gasoline and diesel, but that has changed since the U.S. shale revolution that has sped up drilling and extraction of oil, helping boost overall U.S. production to a record 11.7 million bpd.

The data comes on the same day that the Organisation of the Petroleum Exporting Countries adjourned a meeting without announcing a supply-cut agreement as it grapples with sinking prices due in part to the surge in U.S. output that has upended the global supply equation.

Crude inventories fell 7.3 million barrels last week, the first drawdown since September, as net crude imports hit a record low of 4 million bpd, the U.S. Energy Information Administration said on Thursday.

Graphic: U.S. turns into net exporter of oil (https://tmsnrt.rs/2Rz57Xn)

U.S. crude prices have sagged almost a third since hitting a four-year high near $76 a barrel in October. That was in part due to concerns about oversupply coming to the fore again as U.S. production rose in tandem with increased output from Saudi Arabia and Russia. The three countries are the world's largest producers of oil.

That has created a dilemma for Saudi-led OPEC, which wants to maintain higher prices but avoid ceding more market share to shale producers. On Thursday, OPEC adjourned its meeting in Vienna, aiming to reach an agreement with Russia on Friday.

"It seems EIA has a habit of sending bad news to OPEC during its Vienna meetings. In the past, it has been surging U.S. production numbers. But this time was truly remarkable and historic showing data for net crude imports as -211,000 bpd," said Joe McMonigle, analyst at Hedgeye in Washington.

U.S. crude production is expected to average more than 12 million bpd in 2019, according to the EIA, an increase of more than 3 million bpd in 2016. Shale production surged in the early part of the decade as companies started to use hydraulic fracturing, or fracking, to extract oil in basins in Texas, North Dakota and other states.

U.S. output rose to 9.7 million bpd in mid-2015, just shy of the nation's all-time high set in 1970, but fell off when OPEC flooded the world markets with supply to try to hinder the shale industry. But OPEC was forced to curb output in 2016 as oil-producing nations faced budget shortfalls, and as prices recovered, shale's output accelerated.

"Every single month, every single year, we're going to become more of a global pie and that's a part of the pie you can't control - it's completely different than the OPEC piece," said Bernadette Johnson, vice president in market intelligence at Drillinginfo in Denver.

For the week, the United States also posted net exports of 4.2 million bpd of products like gasoline and diesel.

The weekly figures are subject to wide fluctuations, however, so the sudden shift may be a temporary occurrence. Andrew Lipow, president of Lipow Oil Associates in Houston, said he was not surprised this happened in the winter, a seasonally slow period for domestic gasoline demand.

U.S. oil prices ended Thursday lower, due to concern that planned OPEC production cuts will be smaller than originally anticipated. U.S. crude futures lost 2.7 percent on the day, while Brent crude dropped by 2.4 percent.

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Iran threatens to cut cooperation with nuclear body after Trump move

LONDON (Reuters) - Iran could reduce its co-operation with the U.N. nuclear watchdog, President Hassan Rouhani told the body’s head on Wednesday, after he warned U.S. President Donald Trump of “consequences” of fresh sanctions against Iranian oil sales.

In May, Trump pulled out of a multinational deal under which sanctions on Iran were lifted in return for curbs to its nuclear program, verified by the International Atomic Energy Agency (IAEA). Washington has since told countries they must stop buying Iranian oil from Nov. 4 or face financial measures.

“Iran’s nuclear activities have always been for peaceful purposes, but it is Iran that would decide on its level of cooperation with the IAEA,” Iranian state news agency IRNA quoted Rouhani as saying after meeting IAEA head Yukiya Amano in Vienna.

“The responsibility for the change of Iran’s cooperation level with the IAEA falls on those who have created this new situation,” he added.

Rouhani said earlier in the day Tehran would stand firm against U.S. threats to cut Iranian oil sales.

“The Americans say they want to reduce Iranian oil exports to zero ... It shows they have not thought about its consequences,” Rouhani was quoted as saying by IRNA.

On Tuesday, Rouhani hinted at a threat to disrupt oil shipments from neighboring countries if Washington tries to cut its exports.

He did not elaborate, but an Iranian Revolutionary Guards commander explicitly said on Wednesday Iran would block any exports of crude for the Gulf in retaliation for hostile U.S. action.

“If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz,” Ismail Kowsari was quoted as saying by the Young Journalists Club (YJC) website.

Major-General Qassem Soleimani, commander of the Quds force, in charge of foreign operations for the Revolutionary Guards, said in a letter published on IRNA: “I kiss your (Rouhani’s) hand for expressing such wise and timely comments, and I am at your service to implement any policy that serves the Islamic Republic.”

“SELF HARM”

Rouhani, in Vienna trying to salvage the nuclear deal, said U.S. sanctions were a “crime and aggression”, and called on European and other governments to stand up to Trump.

“Iran will survive this round of U.S. sanctions as it has survived them before. This U.S. government will not stay in office forever ... But history will judge other nations based on what they do today,” he said.

Rouhani told reporters that if the remaining signatories - the Europeans Britain, France and Germany as well as China and Russia - can guarantee Iran’s benefits: “Iran will remain in the nuclear deal without the United States.”

Iran’s OPEC governor, Hossein Kazempour Ardebili, said on the Iranian oil ministry news agency SHANA:

“Trump’s demand that Iranian oil should not be bought, and (his) pressures on European firms at a time when Nigeria and Libya are in crisis, when Venezuela’s oil exports have fallen due to U.S. sanctions, when Saudi’s domestic consumption has increased in summer, is nothing but self harm.

“It will increase the prices of oil in the global markets,” he said. “At the end it is the American consumer who will pay the price for Mr. Trump’s policy.”

The European Union, once Iran’s biggest oil importer, has vowed to keep the 2015 deal alive without the United States by trying to keep Iran’s oil and investment flowing. But European officials acknowledge that U.S. sanctions make it difficult to give Tehran guarantees.

Foreign ministers from the five remaining signatories will meet Iranian officials in Vienna on Friday to discuss how to keep the accord alive.

Reporting by Bozorgmehr Sharafedin; additional reporting Francois Murphy and Kirsti Knolle in Vienna; Editing by Toby Chopra and Robin Pomeroy.

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Saudis, Iran Dash Hopes for OPEC Oil Deal in Algeria

The Saudi and Iranian economies depend heavily on oil, but Iran is seeing the pressure easing as it emerges from years of sanctions.

Saudi Arabia and Iran on Tuesday dashed hopes that OPEC oil producers could clinch an output-limiting deal in Algeria this week as sources within the exporter group said the differences between the kingdom and Tehran remained too wide.

RELATED: Algeria Will Not Leave OPEC 'Empty Handed'

"This is a consultative meeting ... We will consult with everyone else, we will hear the views, we will hear the secretariat of OPEC and also hear from consumers," Saudi Energy Minister Khalid al-Falih told reporters.

Iranian Oil Minister Bijan Zanganeh said: "It is not the time for decision-making." Referring to the next formal OPEC meeting in Vienna on Nov. 30, he added: "We will try to reach agreement for November."

The Organization of the Petroleum Exporting Countries will hold informal talks at 2:00 p.m. GMT on Wednesday. Its members are also meeting non-OPEC producers such as Russia on the sidelines of the International Energy Forum, which groups producers and consumers.

Brent crude oil prices have more than halved from 2014 levels due to oversupply, prompting OPEC producers and rival Russia to seek a market rebalancing that would boost revenues from oil exports and help their crippled budgets.

The predominant idea since early 2016 among producers has been to agree to freeze output levels, although market watchers have said such a move would fail to reduce unwanted barrels.

Sources told Reuters last week that Saudi Arabia had offered to reduce its output if Iran agreed to freeze production, a shift in Riyadh's position as the kingdom had previously refused to discuss output cuts.

On Monday, Iranian Oil Minister Bijan Zanganeh said expectations should be modest and several OPEC delegates said the positions of Saudi Arabia and Iran remained too far apart. Oil prices were down more than 1 percent in Tuesday trade. [O/R]

Three OPEC sources said Iran, whose production has stagnated at 3.6 million barrels per day, insisted on having the right to ramp that up to around 4.1-4.2 million barrels per day, while OPEC Gulf members wanted its output to be frozen below 4 million.

"Don't expect anything unless Iran suddenly changes its mind and agrees to a freeze. But I don't think they will," an OPEC source familiar with discussions said.

What Iran Wants

Russian Energy Minister Alexander Novak was due to meet Zanganeh on Tuesday in what sources said was a new attempt to persuade Tehran to play ball.

RELATED: Latin America Oil Producers Push to Bolster Prices

Iranian oil sources said Tehran wanted OPEC to allow it to produce 12.7 percent of the group's output, equal to what it was extracting before 2012, when the European Union imposed additional sanctions on the country for its nuclear activities.

Sanctions were eased in January 2016.

Between 2012 and 2016, Saudi Arabia and other Gulf OPEC members have raised output to compete for market share with higher-cost producers such as the United States.

As a result, Iran believes its fair production share in OPEC should be higher than its current output, which it says should rise once Tehran agrees to new investments with international oil companies.

"Iran believes this is a just volume of production, which it had prior to the sanctions. This has been discussed more than once," Novak said on Tuesday.

The Saudi and Iranian economies depend heavily on oil, but Iran is seeing the pressure easing as it emerges from years of sanctions. Riyadh, on the other hand, faces a second year of record budget deficits and is being forced to cut the salaries of government employees.

Falih said he was, nevertheless, optimistic about the oil market although rebalancing was taking longer than expected.

"The market is trending in the right direction, slower than what we had hoped for a few months ago but the fundamentals are moving in the right direction," Falih told reporters.

"From that aspect we are feeling good about the market and I think the rebalancing is here but taking (longer) than what we had hoped."

He said record global stocks of oil had started to decline: "How fast will it take place, it also depends on the production agreement. If there is a consensus on one in the next few months, Saudi Arabia will be with the consensus view."

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