Emerging indications from the Secretary-General of the Organization of Petroleum Exporting Countries (OPEC), Mohammad Barkindo, have shown that the joint output curb is succeeding at rebalancing the global oil market.
This comes straight after OPEC raised its estimates for the amount of crude it would need to produce to meet demand by 0.4 mb/d to 33.4 mb/d in October, nearly 0.8 mb/d above the group’s Q3’17 production.
Amid this, OPEC expects global crude stockpiles to diminish quicker than earlier anticipated, but will meet on the 30th of November to agree on the fate of the current output cut post-March 2018. It remains to be seen whether Nigeria would retain its exemption from the agreement at that time, as OPEC data shows the country’s production stabilizing just below 1.8 mb/d (exlc. Condensates).
Business Hilights recalls that Minister of State for Petroleum, Dr. Ibe kachukwu had tentatively backed the proposition of Nigeria’s production being capped at 1.9 mb/d (excl. Condensates) once that level is reached. Overall, we see firm producer action from OPEC supporting global oil prices in 2018 – particularly in the first quarter – which would, in turn, buoy Nigeria’s oil earnings.
Business Hilights further gathered that throughout last week, Global markets were mixed with investors focusing on corporate earnings, down trending commodity prices and economic data. U.S. markets opened the week strong, with the Dow closing higher on news of M&A activity across select large cap stocks.
However, the market retreated shortly after, as energy stocks dipped on a new IEA study which slashed 2018 oil demand projections by 100,000 barrels. Positive sentiment however re-emerged in the market on Thursday amidst better-than-expected corporate earnings from heavyweights, Walmart and Cisco.
Meanwhile, European markets started the week bearish and sustained losses through midweek as basic resources stocks slumped in reaction to lower commodity prices. Tides eventually turned on Thursday as investors reacted to better than expected corporate earnings. Asian markets were however mixed with a bearish bias through the week amidst contrasting economic and corporate announcements such as Japan announcing that the Trans-Pacific Partnership deal was being concluded, Alibaba reporting a record sales figure and China’s Industrial production & retail sales figures missing consensus estimates.