Don’t bet your shirt in the output sweepstake

The Opec and IEA reports this week pretty much buried any remaining hopes of substantial market rebalancing this year.

Opec knocked some 200,000 b/d off the forecast fall in 2016 non-Opec production shrinkage. And ominously, it now sees non-Opec production rising next year compared with 2016, albeit by just 200,000 b/d. That’s despite two producers — Gabon and Indonesia — migrating from the non-Opec to the Opec camp. For all the pain of lower prices and prioritisation of market share, forecast non-Opec supply in 2017 is seen at just 400,000 b/d down on 2015.

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Congruence in the Mideast Gulf?

The big beasts are tantalising market watchers ahead of an informal gathering of producer countries on the fringes of the International Energy Forum on 24-26 September. Even as the political rhetoric from regional rivals Saudi Arabia and Iran bubbles up again with the approach of the Hajj pilgrimage, the mood music promises a more harmonious discussion among Opec members than any since the 2014 price collapse.

But more interesting than a possible short-run convergence of Saudi and Iranian oil policy is a message given out by Iran on its long-term perspective.

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London-listed oil shares shrug off EU vote

The index of London-listed oil and gas producer share prices hit a more than one year high this morning. Of course, an index that embraces everything from the most tiddlerish of minnows through to the blue whales of BP and Shell contains many fallers as well as risers. But as an Argus blog noted on the day of the UK EU referendum result, the kneejerk sell-off of BP and Shell shares that morning was just a blip on a 12-month graph of prices, as was the down dip in crude prices.

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