Wednesday , December 8 2021

OPEC is considering reducing oil production – fearing overproduction in 2019


"It was agreed that there will be too much oil on the market in 2019," said Oman Mohammed bin Hamad al-Rumhi, Minister of Oil for The Vall Street Journal after a ministerial meeting in the OPEC oil monitoring committee. The meeting was held in Abu Dhabi on Sunday.

Oman is not a member of the Organization of Oil Exporting Countries (OPEC), but takes part in the organization's decisions to regulate production.

The cuts that are being planned are made up of 15 OPEC countries, which are mainly oil countries in the Middle East, in order to prevent a dramatic drop in prices.

Saudi Arabia and some other oil exporting countries that met in Abu Dhabi this weekend. One talked about reducing oil production by a million barrels. The decision will be made at the OPEC ministerial meeting in Vienna on December 6th. Saudi Arabia must be ready to take half of this cut; 500,000 barrels.

Russian suspicion

Russian Oil Minister Alexander Novak told CNBC on Sunday that no hasty decisions should be made.

"The market is unstable and the speed of decisions to reduce production can make the impact bigger," he said.

He did not rule out that Russia, which is not a member of the OPEC, could participate in reducing production in December.

Saudi oil minister Khalid al-Falah said it is too early to say which will be the conclusion of a ministerial meeting in December, but that OPEC will not move away from reducing the necessary reduction.

At the geopolitical level, in spite of that, US sanctions against Iran create challenges in the oil market. In addition, a significant increase in oil production in the United States.

A dramatic drop in oil in the North Sea

On the barrel of the nautical market in mid-October, it traded for about $ 85 aft of oil in the North Sea, and Friday it's priced below $ 70, but it ended at $ 70.94. That means a drop of 20 percent in less than a month.

This can be read on stock prices in petroleum related companies. Ekuinor (earlier Statoil) fell 7.4 percent during the period, Aker BP, which has Kjell Inge Røkke as the dominant owner, dropped 21.9 percent. According to Finansavisen, this means that Aker BP on paper has become less than 30 billion crores in a month.

Newspapers published last year's stock market for oil stocks.

According to Finansavisen, companies that provide services to oil companies also recorded a fall in oil prices. For example, the seismic company Petroleum Geo Services dropped by 34.1%. One-third of the value has disappeared.

No, Ecofisk was not a Christmas present

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