Crude Oil: OPEC supply falls by 200,000 bpd. OPEC production fell by 200,000 bpd in March, on the back of declining output in Venezuela, Libya, Iraq, Angola and Saudi Arabia. The group’s production levels are now at a one-year low at 31.958 mb/d.
Saudi Arabia’s energy minister said that OPEC would not sit by and allow an oil supply glut to return, although the cartel would also not let oil prices jump to “unreasonable levels.” Khalid al-Falih said he was content with the current state of the oil market, according to Reuters. “I think a lot of the glut has been cleared,” said Falih. When asked if $80 per barrel was an appropriate price for oil, al-Falih said “There is no such thing as a target price by Saudi Arabia,” before adding that upstream investment is falling short of what might be needed in the future. “We’re seeing many regions declining. The only way to offset this is for the financial markets to start financing and funding upstream projects. I don’t know what is the price that will provide that equilibrium. All we know is in 2018 we’re still not seeing that.”
Saudi Aramco and a consortium of Indian refiners agreed to build a $44 billion refinery and petrochemical project on India’s West Coast, according to Reuters. The project would consist of a 1.2-million-barrel-per-day refinery integrated with petrochemical facilities. For Aramco, the deal offers downstream assets abroad while also locking in sales for its crude oil. Meanwhile, India’s fast-growing economy is hungry for petroleum products. |
