No Relief in Sight | Russell T. Rudy Energy LLC
Looking at recent articles in “World Oil” there appears to be scant hope of any crude oil price relief in the near future. Abdullah bin Hamad al-Attiyah, Qatar’s former energy minister, has indicated that OPEC will not change its policy of maintaining market share at the expense of crude prices. OPEC is not scheduled to meet again until June, and even then, Attiyah stated that OPEC will not change policy unless non-OPEC producers join in a collective production cut.
That seems unlikely as non-OPEC members Mexico, Russia and the U. S. are all increasing production. PEMEX, Mexico’s state oil company, announced that its production rose from 2.25 million barrels per day (bpd) in January to 2.33 million in February. Russia also hit a new post-Soviet high of 10.71 million bpd. More at http://www.worldoil.com/news/2015/3/10/opec-seen-by-attiyah-keeping-oil-policy-unless-others-cut-output .
Meanwhile, the U. S. Energy Information Administration (EIA) reduced its oil price forecast in its monthly “Short Term Energy Outlook” report. In spite of drastic cuts to capital budgets and falling rig counts, inventories and production are both rising. The EIA now projects U. S. production to rise to 9.35 million bpd, a 50,000 bpd increase over its estimate last month.
The EIA also predicts that global oil production will grow to 94.1 million bpd, but global demand will be only 93.1 bpd. More at http://www.worldoil.com/news/2015/3/10/us-cuts-2015-wti-forecast-as-oil-production-rises .
With OPEC demanding production cuts, competitors increasing production, and demand stagnating, it does not appear that there will be significant price improvement in the short to intermediate term.
