Monday , October 25 2021

OPEC is considering reducing oil production – fearing overproduction in 2019


"It was agreed that there would be too much oil in the market in 2019," said Oman oil minister Mohammed bin Hamad al-Rumhy in The Wall Street Journal after a ministerial meeting at the OPEC Committee to monitor the oil market. The meeting took place in Abu Dhabi on Sunday.

Oman is not a member of the Organization of Oil Exporting Countries (OPEC), but participates in the decisions of organizations that regulate production.

The plans, which are planned, make the 15 OPEC countries, which are mostly oil nations in the Middle East, prevent a dramatic fall in prices.

Saudi Arabia and several other oil-exporting countries met in Abu Dhabi this weekend. The oil production was reduced by 1 million barrels. The decision will be taken at the OPEC ministerial meeting in Vienna on December 6. Saudi Arabia must be ready for half of this cut; 500,000 barrels.

Russian doubt

Russian oil minister Alexander Novak told CNBC on Sunday that no hasty decisions should be made.

"The market is unstable, and hasty decisions on production cuts can increase the impact," he said.

He did not rule out that Russia, which is not a member of OPEC, can participate in production cuts in December.

Saudi Arabia's Oil Minister Khalid al-Falih said it was too early to say what would be the conclusion of the December ministerial meeting, but that OPEC would not be ashamed to make the cut that was necessary.

At the geopolitical level, US sanctions against Iran also pose challenges in the oil market. In addition, a significant increase in oil production in the United States.

Dramatic decline in the case of North Sea oil

The North Sea oil barrel was sold for around US $ 85 on the cash market in mid-October, and Friday was a price under $ 70, but ended at $ 70.94. This means a 20 percent drop in prices in less than a month.

This can be read on the basis of share prices in oil-related companies. Equinor (previously Statoil) fell by 7.4 percent during this period, Aker BP, which has Kjell Inge Røkke as the dominant owner, fell 21.9 percent. According to Finansavisen, this means that Aker BP paper on paper has become 30 billion kroner worth less in a month.

In the Saturday issue, the newspaper returned the stock market for oil-related shares last month.

According to Finansavisen, companies providing services to oil companies also recorded a fall in oil prices. For example, the seismic company Petroleum Geo Services fell 34.1 percent. One third of the value has disappeared.

No, Ekofisk was not a Christmas gift

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