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In the Big OPEC++ Output Deal, Who’s In and Who’s Out?


By Christopher Sell

(Bloomberg) 
Oil faces a critical week as Saudi Arabia, Russia and other global producers work frantically to secure a deal aimed at stemming the crash in oil prices. The former partners-in-cuts traded barbs over the weekend over who’s to blame for crude’s crash, which led to a virtual meeting being re-scheduled for April 9. Since the disintegration of the OPEC+ alliance in early March, crude futures have sunk to 18-year lows as excess supply coincides with a pandemic that has cut a third of global demand. While prices have recovered somewhat, producers still face a lack of storage and the prospect of wells closing.A deal between the world’s oil powers is far from certain, as is U.S. participation in talks. Analysis prepared for OPEC members ahead of the meeting shows a 10 million barrel-a-day cut is being considered, according to a delegate. Here’s a look at the latest positions, with OPEC data compiled by Bloomberg and non-OPEC from the International Energy Agency. Russia and Kazakhstan is government data, while those for the U.S. are from the Energy Information Administration. The Organization of Petroleum Exporting Countries and its allies are set to meet by video conference at 4 p.m. Vienna time on Thursday.

Saudi Arabia

Production: 12 million barrels a day (April)

Saudi Arabia is delaying the release of its closely-watched monthly oil-pricing list until later this week as the kingdom awaits signs of what may happen when suppliers meet. State-run Aramco said it would keep flooding markets with historic levels of oil at least through May as it fights for market share following the breakup of the OPEC+ alliance. It ramped up output to above 12 million barrels a day on the first of April, with exports following suit. The kingdom has made clear it will not be carrying the bulk of any cuts this time.

Russia

11.29 million barrels a day (March)

Russia, which confirmed Tuesday it will take part in the April 9 meeting, would target a 1 million barrel-a-day cut in any new deal with other key oil producers, on condition the U.S. joins cuts, according to four people familiar with the sentiment in the industry. President Vladimir Putin said a cut in global oil production of about 10 million barrels a day is possible, and the nation is ready to participate “on a partnership” basis. But Russia won’t agree to take more than a tenth of the global cuts, according to one of the people, who spoke on condition of anonymity because the matter isn’t yet public. It’s minimal oil storage options, however, weaken its hand in negotiations. The Kremlin said Wednesday that market-driven declines shouldn’t be considered as cuts intended to stabilize the market.

U.S.

13 million barrels a day (end-March)

President Donald Trump sent shockwaves through the oil market last week after suggesting on Twitter he’d brokered a deal with Saudi Arabia and Russia to cut production by 10 million to 15 million barrels, sending prices soaring. Trump has so far shown little willingness to join in making cuts, and said a free market will curb U.S. oil output “automatically.” The president has threatened substantial oil tariffs should prices remain near the lowest levels in almost two decades. However, he’s also made it clear that he expects the former allies to reach a deal on cutting back production. Ahead of the meeting, the EIA slashed its 2020 oil-output forecast by more than 1 million barrels a day to 11.76 million, as collapsing prices and plummeting demand threaten to shutter production.

Need to Step Up

Brazil

3.06 million barrels a day (February)

Petroleo Brasileiro SA is taking the lead among oil majors to go beyond spending cuts and actually curb production in response to the price crash. The Rio de Janeiro-based company will lower oil production by 100,000 barrels a day and will idle high-cost platforms in shallow waters at projects it has been trying to sell, according to a statement last month. While other majors including Chevron Corp. and Royal Dutch Shell Plc have slashed outlays to shore up finances, they’ve so far refrained from shutting fields.

Norway

2.07 million barrels a day (February)

Norway, the biggest oil producer in western Europe, said it would consider cutting output if there was a broad international agreement to curb supply. The Nordic nation, whose oil production is set to grow over the next few years, hasn’t been a part of coordinated international cuts to support prices since 2002. Norway produces less than 2% of global supply.

Canada

5.78 million barrels a day (February)

Alberta Energy Minister Sonya Savage will participate in an OPEC+ call aimed at resolving the global oil price war and will “keep an open mind” on how the province can participate in a solution, Premier Jason Kenney said Friday. “We cannot have a meaningful impact on global prices because of our landlocked status,” he said. “But we are open to playing a role if there’s a larger effort to stop the madness.” In a televised address on Tuesday, Kenney warned that there is a “very real possibility” of negative prices for Alberta’s energy products. He also said measures to deal with the crises may cause Alberta’s budget deficit this year to almost triple to C$20 billion ($14 billion).

Iraq

4.62 million barrels a day (March)

Iraq, OPEC’s second-biggest producer, is optimistic that the meeting of supplier nations planned for April 9 will reach a new deal on oil output. All producers are in the same boat and must cooperate to achieve their common goals, Iraq’s Oil Ministry said in a statement, citing Minister Thamir Ghadhban. An agreement will require the support of suppliers in the OPEC+ coalition as well as the U.S., Canada, Norway, it said.

U.A.E.

3 million barrels a day (March)

Following Saudi Arabia’s lead, OPEC’s third-largest producer has ramped up output. Abu Dhabi National Oil Co. has been pumping more than 4 million barrels a day so far in April, according to people with knowledge of the matter. It produced 3.56 million barrels a day in March, one of the people said. The emirate said Sunday an urgent meeting of OPEC+ and other oil producers is needed to ensure oil-market stability.

Kuwait

2.67 million barrels a day (March)

Like Aramco, Kuwait Petroleum Corp. will delay the release of its crude official selling prices for May until after April 19, citing “foreseen OPEC+ meeting implications on the oil market,” according to people who received the notice. The country’s oil production increased to 3.15 million barrels a day for April, state-run Kuwait News Agency said, citing deputy head of KPC Hashem al Hashem.

Nigeria

1.93 million barrels a day (March)

After throwing itself into the battle for market share — offering main export crudes at the lowest price relative to the international benchmark in more than a decade — Africa’s biggest crude producer said it is ready to help return stability to the global oil market. Nigeria is “prepared to join the rest of the world in making the necessary sacrifices needed to stabilize the crude oil market and to prevent what is likely to be a major global economic meltdown,” Timipre Sylva, minister of sate for petroleum resources, said in a statement Monday.

Kazakhstan

1.87 million barrels a day (March)

Kazakhstan will participate in the OPEC+ virtual meeting on April 9, the energy ministry said by email Tuesday. “Efforts of only OPEC+ countries won’t be enough and situation requires active participation” of everyone in the oil market. Last month, the country cut its output forecast to 86m tons from 90m tons this year.



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