opec loses its battle to keep the market’s balance
Thursday 29 May 2025
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

Although it will keep fighting

Opec loses its battle to keep the market’s balance

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleOpec loses its battle to keep the market’s balance

Opec appears to be losing its battle
Riyadh - Muslimchronicle

With world oil inventories swelling despite a global pact on cutting output and crude prices falling by a fifth in the past month, Opec appears to be losing its battle to balance the market.

But there is one crucial fight the oil-exporting group has been winning so far: its members have earned more money this year than last and the prospect of higher revenues is likely to motivate oil cartel Opec to stick with output cuts or even deepen them.

Opec’s first output cut in eight years has earned the group $1.64bn a day so far this year, up more than 10% from the second half of 2016, according to Reuters calculations based on Opec figures for average production and its crude basket price up until June 20.

Compared with the first half of 2016, when oil prices sank to a 12-year low near $27 a barrel, the increase in income is a dramatic 43%, even though production by Opec was little changed.

Income could rise in the rest of the year if, as Opec hopes, a supply glut is banished. Opec plus Russia and other non-Opec producers agreed on May 25 to extend supply cuts to March, after an initial deal to keep them in place for the first half of 2017.

"I expect the gains for Opec to be higher during the second semester 2017 due to a tight market in the third and fourth quarter, despite an oversupply from non-Opec not tied to the Opec agreement and higher-than-expected production from Libya and Nigeria," said Chakib Khelil, Algeria’s former oil minister.

He estimated Opec revenues rose about 8% in the first half of 2017, following its move at the end of 2016 to cut overall output by about 4%. "The overall gain in revenues for Opec would be in the 9%-10% range for the whole of 2017 compared to 2016," the former minister said.

Opec’s decision in late 2016 to return to a policy of limiting supply, in co-operation with Russia and other nonmembers, marked the end of a two-year period in which the group pumped at will in a Saudi-led shift to curb rival output and boost market share, which accelerated a drop in prices.

"I think the extent to which Saudi Arabia bled revenue during 2014-2016 forced them back to the Opec table before the job of really turning the screw on US shale and other non-Opec supply was completed," said David Fyfe, chief economist at trading firm Gunvor.

"However, the production deal has at least stanched the cash haemorrhage for now," he said. The Reuters calculation is based on data from the International Energy Agency (IEA) and figures published by Opec about its production according to estimates by six secondary sources.

For the price, Reuters used the Opec basket, an index of the crudes sold by the member countries. It is intended to illustrate the general trend for oil revenues and does not aim to give exact estimates of countries’ oil export earnings.

Opec and non-Opec allies led by Russia initially agreed to cut about 1.8-million barrels a day in the first half of 2017. But with the supply glut proving slow to shift, they agreed on May 25 to prolong the deal to the first quarter of 2018. A drop in prices since then has prompted some Opec delegates to question whether the deal is enough, but the group is in no rush to deepen its output cut.

Rising US production has undermined some of the impact of the Opec-led cuts. In addition, Libya and Nigeria, two Opec members exempted from the curbs, have increased output although not by enough to alter the overall picture of lower Opec output in the six-month period.

 

 

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

opec loses its battle to keep the market’s balance opec loses its battle to keep the market’s balance

 



Themuslimchronicle, themuslimchronicle

GMT 07:38 2017 Thursday ,12 October

'Many' Fed members favor December rate hike

GMT 07:53 2017 Wednesday ,18 October

Saudis Al Hilal into AFC Champions Lea gue final

GMT 13:04 2017 Wednesday ,19 July

'Despacito' declared most streamed song ever

GMT 20:33 2017 Friday ,03 November

Apple’s iPhone X hits Asia stores as profits soar

GMT 11:35 2017 Thursday ,16 February

Time-saving tips for you to have a little break

GMT 06:14 2012 Wednesday ,12 December

Pope set to send 1st tweet

GMT 09:30 2016 Sunday ,20 November

5 ways Indians are dodging 'black money' crackdown

GMT 13:21 2017 Thursday ,15 June

Palestinian reconciliation has not achieved

GMT 10:50 2012 Sunday ,04 March

Shortbread

GMT 13:44 2017 Wednesday ,19 April

US Pentagon chief meets Saudi king with Iran in focus

GMT 11:42 2017 Sunday ,03 December

England dismiss Smith as Aussies dig

GMT 16:47 2017 Thursday ,27 July

Egyptian President El-Sisi due in Riyadh today
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2025 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2025 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle