OPEC Report Shows Iran's Oil Production And Exports Down In January
- Author: Anthony Vega Feb 14, 2019,
Feb 14, 2019, 0:47
US sanctions on Iran and Venezuela have choked off supply of the heavier, more sour crude that tends to yield larger volumes of higher-value distillates, as opposed to gasoline.
"In terms of crude-oil quantity, markets may be able to adjust after initial logistical dislocations", said the Paris-based IEA, which advises major economies on energy policy.
The American Petroleum Institute (API) on Tuesday said that USA crude inventories fell by 998,000 barrels in the week to February 8 to 447.2 million, compared with analyst expectations for an increase of 2.7 million barrels.
West Texas Intermediate (WTI) crude saw a 0.42-percent rise to $52.63 a barrel, while Brent blend was up 0.44 percent and trading at $61.78 per barrel as of 06:34 GMT.
Growing U.S. supply and a potential economic slowdown this year could also cap oil markets.
"With so far no sign of change in government, we see increasing risks that production losses could be larger and sooner than our forecast for a 0.33 million-bpd supply loss in 2019", U.S. bank Goldman Sachs said in a note on Wednesday.
The country's average heavy crude price was also reported to be $56.29 since beginning of 2019 up to the report's publishing day. OPEC members (excluding Iran, Venezuela and Libya) are responsible for two thirds of production cut.
"Crude oil quality is another issue, and, in the wider context of supply in the early part of 2019, it is even more important", the IEA said. The dense crudes are much more hard to refine and tend to contain significant quantities of sulfur and other impurities that are costly to remove.
In the meantime, the political rift between Venezuela and the United States continues with the US sanctions against the South American nation giving prices a slight boost.
Hassan Rouhani's government would face even a much worse scenario if the USA decides to bring Iran's oil exports down to zero.
In the OECD, 2019 USA growth was revised lower to 2.5 percent, following growth of 2.9 percent in 2018, while eurozone growth was also revised down to 1.3 percent for 2019, after growth of 1.8 percent in 2018, it said. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million bpd until the end of June.
OPEC is partnering with 10 non-member nations, including Russian Federation, to keep 1.2 million bpd off the market.
Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, has written to the Russian President Vladimir Putin saying Moscow's deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the hands of the United States. The so-called OPEC+ alliance aims to prevent another price-crushing oil glut like the one that gripped the market between 2014 and 2016.