Presenting BP’s Statistical Review of 2016 today, chief executive Bob Dudley said: “The oil market returned broadly back into balance by mid-year, but prices continued to be depressed by the large overhang of built-up inventories.”
Dudley’s definition of balance here is a straightforward matching of production and demand. Opec and its partners in output cuts prefer to factor in the inventories that are weighing on prices. And weighing they are. Brent has failed to break above the mid-$50s/bl, despite a disciplined cuts programme that has been in place since the start of this year, and has found itself most comfortable at well below $50/bl — below year-earlier levels — since last month’s agreement to extend the cuts.
The crisis pitting Saudi Arabia and the UAE against Qatar is the most serious turbulence to afflict the Gulf Co-operation Council (GCC) bloc since what is now called ‘the First Gulf War’, when non-member Iraq briefly invaded and occupied member state Kuwait.
The major difference between today’s crisis and those dramas, of course, is that there is no military dimension now, and no military escalation is to be expected. But the political fallout is massive.
This week’s deliberations in Vienna have not done a lot for the near-term oil price — front month Brent is well under $52/bl today, less than 5pc higher than it was one year ago when a production cut was just a twinkle in the eye of the harder-pressed Opec members. Continue reading
The temporary power outage at the start of a Mexican fuel marketers meeting outside Mexico City last week was an apt reminder of the challenges faced by the country’s nascent gasoline and diesel market. Continue reading
Three unpopular presidents from big oil-producing countries walk into a bar. The bartender starts fixing their regulars, a Caipirinha, a Mojito and a virgin White Russian. “I´ll take mine to go,” one of the beleaguered presidents says. Which president was it? Continue reading