Nearly two years ago, the world’s oil producers slammed on the brakes and drastically cut production as the pandemic gripped the world’s economies. The sharp pullback came with an implicit promise that as factories reopened and planes returned to the air, the oil industry would revive, too, gradually scaling up production to help economies return to pre-pandemic health.

It is not exactly turning out that way. Oil producers are finding it harder than expected to ramp up output. Members of the cartel OPEC Plus, which agreed to cut output by about 10 million barrels a day in early 2020, are routinely falling well short of their rising monthly production targets.

“In a lot of places, once output has been reduced, it is not easy to bring it back,” said Richard Bronze, head of geopolitics at Energy Aspects, a London-based research firm.

Production in the United States, the world’s largest oil producer, has also been slow to recover from its 1-million-barrel-a-day plummet in 2020, as companies and investors are wary of committing money amid climate change concerns and volatile prices. The Energy Information Administration forecasts that U.S. crude output in 2022, while rising, is likely to average 500,000 barrels a day below 2019 levels.

This global pattern of lagging production has helped push oil prices to seven-year highs, stoking inflation, which has become a political issue in the United States and elsewhere. Brent crude, the international standard, is close to $84 a barrel, while West Texas Intermediate, the U.S. benchmark, is selling for close to $82.

A prolonged period when more oil has been consumed than pumped has drained tank farms to low levels. Investment in new drilling for new oil has also fallen to multiyear lows, though it is expected to pick up this year. At the same time, demand is expected to grow strongly, reaching pre-pandemic levels this year.

“The oil market appears to be heading for a period with little margin of safety,” Martijn Rats, an analyst at Morgan Stanley, the investment bank, wrote in a recent note to clients.

The gap between the target announced by OPEC Plus, which makes up nearly half the world’s oil output, and actual output seems to be growing. The International Energy Agency, a Paris-based forecasting group, pegged the shortfall of the 19 OPEC Plus countries covered by quotas at 650,000 barrels a day for November. Energy Aspects forecasts that the deficit will reach just over 1 million barrels a day this month, or 1% of world supplies, and will probably increase later in the year.

That deficit could be problematic because policymakers and some analysts may be overestimating how much more oil the group can add.

“OPEC Plus has been viewed as the main place that additional supply is going to come from,” Bronze said.

Of course, higher prices are likely to encourage a substantial increase of shale oil production in the United States. The tight market also gives Washington an incentive to lift sanctions on sales of Iranian oil by reaching a deal on Iran’s nuclear program.

Forecasters are split on the oil outlook, with the International Energy Agency saying in its most recent monthly report in December that “much-needed relief for tight markets is on the way.” The Energy Information Administration has forecast that oil prices will fall later this year.

Still, undershooting by countries like Nigeria and Angola has become the norm as their oil industries struggle. A variety of factors are causing production in some countries to fall short, including political turmoil, outmoded regulatory regimes and pressures on international oil companies to rethink their investments so as to bolster profits and reduce carbon emissions. That shift could leave developing countries that depend on oil income out in the cold.

“There are many basins that are simply of no interest anymore,” said Gerald Kepes, president of Competitive Energy Strategies, a consulting firm, referring to petroleum-bearing regions. In the eyes of international oil companies, even a country like Nigeria, Africa’s largest producer, “doesn’t make the cut,” he added.

Oil industry giants for decades courted Nigeria, investing billions of dollars, but production has been slipping. In November, the country was supposed to pump about 1.6 million barrels a day but missed that target by more than 300,000 barrels a day, according to the International Energy Agency.

A welter of problems lie behind the shortfall. Nigeria’s industry is plagued by damage to infrastructure caused by oil thieves and others, problems that have worsened in recent months, according to the industry.

International companies including Shell, which has long been a major investor in Nigeria, are gradually reducing their presence in swampy areas where their installations are vulnerable. They are being replaced by smaller companies with less capital to spend, analysts say.

Without investment in drilling and technology, even the best-endowed oil states will see their output dwindle. A case in point is troubled Venezuela, where, amid neglect of the industry, production has shrunk to relatively minuscule levels of less than 1 million barrels a day — less than one-tenth of Saudi Arabia’s output — despite claims to have the world’s largest reserves, about 300 billion barrels.

Kuwait, a wealthy Persian Gulf oil state, has seen its capacity to produce decline about 18% over three years. Kamel al-Harami, a Kuwaiti analyst, said that the domestic industry “does not have the experience and the expertise to deal with old and aged oil fields” but that public opinion is resistant to bringing in international companies.

Even Russia, which is roughly tied with Saudi Arabia as the leading producer in OPEC Plus, is close to the short-term limit of what it can produce, analysts say. Saudi Arabia, on the other hand, produces about 10% of the oil on the world’s market and could produce more.

“Most OPEC producers are becoming capacity-constrained,” said Bill Farren-Price, director of intelligence at Enverus, an energy market research firm. “But Saudi Arabia is a different story. Its appetite for active oil market management is undiminished,” he added.

Each month since the pandemic hit, OPEC Plus members have met to set output quotas. Following a schedule agreed to in July, the group plans to raise the overall output by 400,000 barrels a day each month, even though they are missing the targets.

Stung by gasoline prices that have risen about 40% in the last year, the White House has leaned on the Saudis and their allies to go faster in opening up the throttle, but OPEC officials have so far been unwilling to lower the quotas of those who are not able to hit targets and reassign them to other countries.

“We have to keep what they are allotted,” Prince Abdulaziz bin Salman, the Saudi oil minister, told journalists late last year. The alternative, he added, would be a monthly debate over “who gets what.”

Analysts say Saudi officials do not want to unilaterally increase output and risk busting up the arrangement with other producers that gives them so much control. In addition, the lagging countries serve as a stealthy way to trim the cartel’s output, helping the Saudis enjoy high prices while increasing their own production.

And time may not be on the side of the Biden administration and others urging more oil on the markets. As producers reach the limits of what they can make in the coming months, “it is going to be less and less impactful to demand that OPEC add more,” Bronze said.

Nearly two years ago, the world’s oil producers slammed on the brakes and drastically cut production as the pandemic gripped the world’s economies. The sharp pullback came with an implicit promise that as factories reopened and planes returned to the air, the oil industry would revive, too, gradually scaling up production to help economies return to pre-pandemic health.

Nearly two years ago, the world’s oil producers slammed on the brakes and drastically cut production as the pandemic gripped the world’s economies. The sharp pullback came with an implicit promise that as factories reopened and planes returned to the air, the oil industry would revive, too, gradually scaling up production to help economies return to pre-pandemic health. It is not exactly turning out that way. Oil producers are finding it harder than expected to ramp up output. Members of the cartel OPEC Plus, which agreed to cut output by about 10 million barrels a day in early 2020, are routinely falling well short of their rising monthly production targets. “In a lot of places, once output has been reduced, it is not easy to bring it back,” said Richard Bronze, head of geopolitics at Energy Aspects, a London-based research firm. Production in the United States, the world’s largest oil producer, has also been slow to recover from its 1-million-barrel-a-day plummet in 2020, as companies and investors are wary of committing money amid climate change concerns and volatile prices. The Energy Information Administration forecasts that U.S. crude output in 2022, while rising, is likely to average 500,000 barrels a day below 2019 levels. This global pattern of lagging production has helped push oil prices to seven-year highs, stoking inflation, which has become a political issue in the United States and elsewhere. Brent crude, the international standard, is close to $84 a barrel, while West Texas Intermediate, the U.S. benchmark, is selling for close to $82. A prolonged period when more oil has been consumed than pumped has drained tank farms to low levels. Investment in new drilling for new oil has also fallen to multiyear lows, though it is expected to pick up this year. At the same time, demand is expected to grow strongly, reaching pre-pandemic levels this year. “The oil market appears to be heading for a period with little margin of safety,” Martijn Rats, an analyst at Morgan Stanley, the investment bank, wrote in a recent note to clients. The gap between the target announced by OPEC Plus, which makes up nearly half the world’s oil output, and actual output seems to be growing. The International Energy Agency, a Paris-based forecasting group, pegged the shortfall of the 19 OPEC Plus countries covered by quotas at 650,000 barrels a day for November. Energy Aspects forecasts that the deficit will reach just over 1 million barrels a day this month, or 1% of world supplies, and will probably increase later in the year. That deficit could be problematic because policymakers and some analysts may be overestimating how much more oil the group can add. “OPEC Plus has been viewed as the main place that additional supply is going to come from,” Bronze said. Of course, higher prices are likely to encourage a substantial increase of shale oil production in the United States. The tight market also gives Washington an incentive to lift sanctions on sales of Iranian oil by reaching a deal on Iran’s nuclear program. Forecasters are split on the oil outlook, with the International Energy Agency saying in its most recent monthly report in December that “much-needed relief for tight markets is on the way.” The Energy Information Administration has forecast that oil prices will fall later this year. Still, undershooting by countries like Nigeria and Angola has become the norm as their oil industries struggle. A variety of factors are causing production in some countries to fall short, including political turmoil, outmoded regulatory regimes and pressures on international oil companies to rethink their investments so as to bolster profits and reduce carbon emissions. That shift could leave developing countries that depend on oil income out in the cold. “There are many basins that are simply of no interest anymore,” said Gerald Kepes, president of Competitive Energy Strategies, a consulting firm, referring to petroleum-bearing regions. In the eyes of international oil companies, even a country like Nigeria, Africa’s largest producer, “doesn’t make the cut,” he added. Oil industry giants for decades courted Nigeria, investing billions of dollars, but production has been slipping. In November, the country was supposed to pump about 1.6 million barrels a day but missed that target by more than 300,000 barrels a day, according to the International Energy Agency. A welter of problems lie behind the shortfall. Nigeria’s industry is plagued by damage to infrastructure caused by oil thieves and others, problems that have worsened in recent months, according to the industry. International companies including Shell, which has long been a major investor in Nigeria, are gradually reducing their presence in swampy areas where their installations are vulnerable. They are being replaced by smaller companies with less capital to spend, analysts say. Without investment in drilling and technology, even the best-endowed oil states will see their output dwindle. A case in point is troubled Venezuela, where, amid neglect of the industry, production has shrunk to relatively minuscule levels of less than 1 million barrels a day — less than one-tenth of Saudi Arabia’s output — despite claims to have the world’s largest reserves, about 300 billion barrels. Kuwait, a wealthy Persian Gulf oil state, has seen its capacity to produce decline about 18% over three years. Kamel al-Harami, a Kuwaiti analyst, said that the domestic industry “does not have the experience and the expertise to deal with old and aged oil fields” but that public opinion is resistant to bringing in international companies. Even Russia, which is roughly tied with Saudi Arabia as the leading producer in OPEC Plus, is close to the short-term limit of what it can produce, analysts say. Saudi Arabia, on the other hand, produces about 10% of the oil on the world’s market and could produce more. “Most OPEC producers are becoming capacity-constrained,” said Bill Farren-Price, director of intelligence at Enverus, an energy market research firm. “But Saudi Arabia is a different story. Its appetite for active oil market management is undiminished,” he added. Each month since the pandemic hit, OPEC Plus members have met to set output quotas. Following a schedule agreed to in July, the group plans to raise the overall output by 400,000 barrels a day each month, even though they are missing the targets. Stung by gasoline prices that have risen about 40% in the last year, the White House has leaned on the Saudis and their allies to go faster in opening up the throttle, but OPEC officials have so far been unwilling to lower the quotas of those who are not able to hit targets and reassign them to other countries. “We have to keep what they are allotted,” Prince Abdulaziz bin Salman, the Saudi oil minister, told journalists late last year. The alternative, he added, would be a monthly debate over “who gets what.” Analysts say Saudi officials do not want to unilaterally increase output and risk busting up the arrangement with other producers that gives them so much control. In addition, the lagging countries serve as a stealthy way to trim the cartel’s output, helping the Saudis enjoy high prices while increasing their own production. And time may not be on the side of the Biden administration and others urging more oil on the markets. As producers reach the limits of what they can make in the coming months, “it is going to be less and less impactful to demand that OPEC add more,” Bronze said.

Oil producers aren’t keeping up with demand, causing prices to stay high

OPEC and its allies, including Russia, announced Thursday they would gradually increase oil production over the next three months.

In agreeing to modest output increases, Saudi Arabia appears to have yielded to pressure from Russia and other producers who are eager to raise output. They want to take advantage of what they see as a likely growing global thirst for oil as economies slowly expand after pandemic lockdowns.

The group, known as OPEC Plus, has been withholding 8 million barrels a day from the market.

On this occasion, the Saudis “decided to go with the consensus of the members,” said Helima Croft, a commodity strategist at RBC Capital Markets, an investment bank.

Under the agreement, OPEC Plus will increase production by 350,000 barrels a day in both May and June and by 441,000 barrels a day in July. Over the same period, Saudi Arabia will gradually unwind additional cuts of 1 million barrels a day that it has been making voluntarily.

Prince Abdulaziz said during a news conference after the meeting that OPEC Plus wanted to test out increased production but would still be able to change plans if demand failed to materialize.

“We can freeze; we can increase; we can decrease,” he said.

For now, the oil market has accepted the prospect of increases that would amount to less than 1% of global consumption per month. Larry Goldstein, an oil analyst at the Energy Policy Research Foundation, said that the approach to relaxing cuts was “very modest and conservative” and would tend to bolster prices over the coming months.

In addition, Croft said, OPEC’s willingness to increase output is seen as a vote of confidence in the global economic recovery.

OPEC and its allies, including Russia, announced Thursday they would gradually increase oil production over the next three months. In agreeing to modest output increases, Saudi Arabia appears to have yielded to pressure from Russia and other producers who are eager to raise output.

OPEC and its allies, including Russia, announced Thursday they would gradually increase oil production over the next three months. In agreeing to modest output increases, Saudi Arabia appears to have yielded to pressure from Russia and other producers who are eager to raise output. They want to take advantage of what they see as a likely growing global thirst for oil as economies slowly expand after pandemic lockdowns. The group, known as OPEC Plus, has been withholding 8 million barrels a day from the market. On this occasion, the Saudis “decided to go with the consensus of the members,” said Helima Croft, a commodity strategist at RBC Capital Markets, an investment bank. Under the agreement, OPEC Plus will increase production by 350,000 barrels a day in both May and June and by 441,000 barrels a day in July. Over the same period, Saudi Arabia will gradually unwind additional cuts of 1 million barrels a day that it has been making voluntarily. Prince Abdulaziz said during a news conference after the meeting that OPEC Plus wanted to test out increased production but would still be able to change plans if demand failed to materialize. “We can freeze; we can increase; we can decrease,” he said. For now, the oil market has accepted the prospect of increases that would amount to less than 1% of global consumption per month. Larry Goldstein, an oil analyst at the Energy Policy Research Foundation, said that the approach to relaxing cuts was “very modest and conservative” and would tend to bolster prices over the coming months. In addition, Croft said, OPEC’s willingness to increase output is seen as a vote of confidence in the global economic recovery.

OPEC and its allies agree to gradual increases in oil production

Oil prices rose on Thursday on optimism over a U.S. government spending plan and hopes that OPEC and its allies will keep production curbs in place when they meet on Thursday.

Brent crude was up by 91 cents, or 1.5%, at $63.65 a barrel by 0849 GMT. U.S. oil was up 99 cents, or 1.7%, at $60.15 a barrel.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group called OPEC+, meet on Thursday to reassess output policy. 
OPEC+ will debate options from May and beyond, including a rollover of existing cuts and a gradual increase of production, three OPEC+ sources said.

OPEC+ is currently curbing output by just over 7 million barrels per day (bpd) to support prices and reduce oversupply. Saudi Arabia has added to those cuts with a further 1 million bpd.

"Given the recent wobble in prices, along with demand concerns re-emerging once again, there is a growing consensus that the OPEC+ will likely roll over current cuts for an additional month," ING analyst Warren Patterson said.

OPEC+ has trimmed its oil demand growth forecast for this year by 300,000 bpd over renewed lockdowns, making it more likely the group will agree to sustain its curbs.

France entered its third national lockdown and schools closed for three weeks to push back a third wave of COVID-19 infections that threatens to overwhelm hospitals. Several other European countries have also increased restrictions.

Oil also found some support in U.S. economic strength after President Joe Biden outlined a $2.3 trillion spending plan to invest in traditional projects such as roads and bridges alongside tackling climate change.

U.S. crude stocks also fell unexpectedly last week, helping to support oil prices, Energy Information Administration data showed.

"The inventory data ... showed that the situation is continuing to normalise on the U.S. oil market," Commerzbank analyst Eugen Weinberg said.

Other factors, including the rise of gasoline demand in the United States, also supported prices, Weinberg said.

Oil prices rose on Thursday on optimism over a U.S. government spending plan and hopes that OPEC and its allies will keep production curbs in place when they meet on Thursday.

Oil prices rose on Thursday on optimism over a U.S. government spending plan and hopes that OPEC and its allies will keep production curbs in place when they meet on Thursday. Brent crude was up by 91 cents, or 1.5%, at $63.65 a barrel by 0849 GMT. U.S. oil was up 99 cents, or 1.7%, at $60.15 a barrel. Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group called OPEC+, meet on Thursday to reassess output policy. OPEC+ will debate options from May and beyond, including a rollover of existing cuts and a gradual increase of production, three OPEC+ sources said. OPEC+ is currently curbing output by just over 7 million barrels per day (bpd) to support prices and reduce oversupply. Saudi Arabia has added to those cuts with a further 1 million bpd. "Given the recent wobble in prices, along with demand concerns re-emerging once again, there is a growing consensus that the OPEC+ will likely roll over current cuts for an additional month," ING analyst Warren Patterson said. OPEC+ has trimmed its oil demand growth forecast for this year by 300,000 bpd over renewed lockdowns, making it more likely the group will agree to sustain its curbs. France entered its third national lockdown and schools closed for three weeks to push back a third wave of COVID-19 infections that threatens to overwhelm hospitals. Several other European countries have also increased restrictions. Oil also found some support in U.S. economic strength after President Joe Biden outlined a $2.3 trillion spending plan to invest in traditional projects such as roads and bridges alongside tackling climate change. U.S. crude stocks also fell unexpectedly last week, helping to support oil prices, Energy Information Administration data showed. "The inventory data ... showed that the situation is continuing to normalise on the U.S. oil market," Commerzbank analyst Eugen Weinberg said. Other factors, including the rise of gasoline demand in the United States, also supported prices, Weinberg said.

Oil up as OPEC+ meets to decide on production policy

OPEC and Russia have reached a historic deal to cut oil production. But, the oil markets may not cheer the truce just yet. WION's Palki Sharma decodes the biggest headline in the oil industry in more than a decade.

Gravitas: OPEC & Allies ink historic oil deal

President Donald Trump said Sunday the US is "locked and loaded" to respond to attacks on Saudi oil infrastructure that <a href="https://www.wionews.com/world/iran-dismisses-us-claim-it-was-behind-saudi-oil-attacks-says-ready-for-war-249810">Washington blamed on Iran</a>, which have sent<a href="https://www.wionews.com/world/saudi-races-to-restore-oil-supply-after-strike-blamed-on-iran-249851"> oil prices soaring</a>.

It is the first time the president has hinted at a potential American military response to the drone attacks, which slashed Saudi oil production by half and led both the kingdom and the United States to announce they may tap their strategic reserves.

"Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!" Trump tweeted.

The Tehran-backed Huthi rebels in Yemen, where a Saudi-led coalition is bogged down in a five-year war, claimed Saturday's strikes on two plants owned by state energy giant Aramco.

But US Secretary of State Mike Pompeo pointed the finger squarely at Tehran, saying there was no evidence the "unprecedented attack on the world's energy supply" was launched from Yemen.

"The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression," the top US diplomat said.

That drew an angry response from Tehran, where foreign ministry spokesman Abbas Mousavi said: "Such fruitless and blind accusations and remarks are incomprehensible and meaningless."

The remarks were designed to damage Iran's reputation and provide a pretext for "future actions" against the Islamic republic, he added.

Baghdad, caught between its two main allies -- Tehran and Washington -- also denied any link to the attacks amid media speculation that the drones were launched from Iraq.

Saudi de facto ruler Crown Prince Mohammed bin Salman has said the kingdom is "willing and able" to respond to this "terrorist aggression."

But a tit-for-tat strike on Iranian oil fields is "highly unlikely," Middle East expert James Dorsey told AFP.

"The Saudis do not want an open conflict with Iran. The Saudis would like others to fight that war, and the others are reluctant," said Dorsey, from the S. Rajaratnam School of International Studies in Singapore.

'Genie is out of the bottle'

Oil prices soared by 10 per cent in early Asia trading on Monday, while Saudi Arabia focused on restoring production at the plants.

Saturday's explosions set off fires that engulfed the Abqaiq plant, the world's largest oil processing facility, and nearby Khurais, which hosts a massive oil field.

Saudi's energy infrastructure has been hit by the Huthis many times before, but this strike was of a different order, abruptly halting 5.7 million barrels per day (bpd) or about six per cent of the world's oil supply.

"The genie is out of the bottle," said Bill Farren-Price, director of the London-based RS Energy Group.

"It is now clear that Saudi and other Gulf oil facilities are vulnerable to this kind of attack, which means that the geopolitical risk premium for oil needs to rise."

No casualties were reported but the full extent of the damage was not clear.

Aramco also said it will dip into its reserves to offset the disruption. On Saturday, CEO Amin Nasser said that "work is underway" to restore production, but the incident could affect investor confidence ahead of Aramco's stock market debut.

A significant volume of oil production can be restored within days but the company would need weeks to reach full output again, Bloomberg News reported Sunday, citing unnamed sources.

Trump tweeted that he had "authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount" that is "sufficient to keep the markets well-supplied."

The president also "informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States," without naming specific projects.

Loggerheads

Following a phone call between Trump and Prince Mohammed, the White House condemned the attacks on "infrastructure vital to the global economy."

Tehran and Washington have been at loggerheads since May last year, when Trump pulled the US out of a landmark 2015 deal with world powers that promised Iran relief from sanctions in return for curbs on its nuclear program.

Despite the US accusation, the White House said on Sunday Trump may still meet his Iranian counterpart Hassan Rouhani at the upcoming United Nations assembly.

Saudi Arabia has spent billions on military hardware but recent events have underscored the vulnerability of its infrastructure to attack.

The Huthis have staged repeated cross-border missile and drone attacks targeting Saudi air bases and other facilities in what they say is retaliation for the Riyadh-led bombing campaign on rebel-held areas in Yemen. 
&nbsp;

President Donald Trump said Sunday the US is "locked and loaded" to respond to attacks on Saudi oil infrastructure that Washington blamed on Iran, which have sent oil prices soaring.

President Donald Trump said Sunday the US is "locked and loaded" to respond to attacks on Saudi oil infrastructure that Washington blamed on Iran, which have sent oil prices soaring. It is the first time the president has hinted at a potential American military response to the drone attacks, which slashed Saudi oil production by half and led both the kingdom and the United States to announce they may tap their strategic reserves. "Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!" Trump tweeted. The Tehran-backed Huthi rebels in Yemen, where a Saudi-led coalition is bogged down in a five-year war, claimed Saturday's strikes on two plants owned by state energy giant Aramco. But US Secretary of State Mike Pompeo pointed the finger squarely at Tehran, saying there was no evidence the "unprecedented attack on the world's energy supply" was launched from Yemen. "The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression," the top US diplomat said. That drew an angry response from Tehran, where foreign ministry spokesman Abbas Mousavi said: "Such fruitless and blind accusations and remarks are incomprehensible and meaningless." The remarks were designed to damage Iran's reputation and provide a pretext for "future actions" against the Islamic republic, he added. Baghdad, caught between its two main allies -- Tehran and Washington -- also denied any link to the attacks amid media speculation that the drones were launched from Iraq. Saudi de facto ruler Crown Prince Mohammed bin Salman has said the kingdom is "willing and able" to respond to this "terrorist aggression." But a tit-for-tat strike on Iranian oil fields is "highly unlikely," Middle East expert James Dorsey told AFP. "The Saudis do not want an open conflict with Iran. The Saudis would like others to fight that war, and the others are reluctant," said Dorsey, from the S. Rajaratnam School of International Studies in Singapore. 'Genie is out of the bottle' Oil prices soared by 10 per cent in early Asia trading on Monday, while Saudi Arabia focused on restoring production at the plants. Saturday's explosions set off fires that engulfed the Abqaiq plant, the world's largest oil processing facility, and nearby Khurais, which hosts a massive oil field. Saudi's energy infrastructure has been hit by the Huthis many times before, but this strike was of a different order, abruptly halting 5.7 million barrels per day (bpd) or about six per cent of the world's oil supply. "The genie is out of the bottle," said Bill Farren-Price, director of the London-based RS Energy Group. "It is now clear that Saudi and other Gulf oil facilities are vulnerable to this kind of attack, which means that the geopolitical risk premium for oil needs to rise." No casualties were reported but the full extent of the damage was not clear. Aramco also said it will dip into its reserves to offset the disruption. On Saturday, CEO Amin Nasser said that "work is underway" to restore production, but the incident could affect investor confidence ahead of Aramco's stock market debut. A significant volume of oil production can be restored within days but the company would need weeks to reach full output again, Bloomberg News reported Sunday, citing unnamed sources. Trump tweeted that he had "authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount" that is "sufficient to keep the markets well-supplied." The president also "informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States," without naming specific projects. Loggerheads Following a phone call between Trump and Prince Mohammed, the White House condemned the attacks on "infrastructure vital to the global economy." Tehran and Washington have been at loggerheads since May last year, when Trump pulled the US out of a landmark 2015 deal with world powers that promised Iran relief from sanctions in return for curbs on its nuclear program. Despite the US accusation, the White House said on Sunday Trump may still meet his Iranian counterpart Hassan Rouhani at the upcoming United Nations assembly. Saudi Arabia has spent billions on military hardware but recent events have underscored the vulnerability of its infrastructure to attack. The Huthis have staged repeated cross-border missile and drone attacks targeting Saudi air bases and other facilities in what they say is retaliation for the Riyadh-led bombing campaign on rebel-held areas in Yemen.

Trump says US 'locked and loaded' after Saudi attacks as oil prices surge

<a href="https://www.wionews.com/videos/saudi-arabia-says-drones-attacked-oil-facilities-249652">Saudi Arabia</a> has temporarily halted production at two <a href="https://www.wionews.com/videos/drone-attack-at-saudi-arabias-oil-refinery-massive-fire-broke-out-249565">Aramco oil facilities </a>that were attacked by Yemeni rebels, interrupting about half of the company's total output, the energy minister said Saturday.

The attacks "resulted in a temporary suspension of production at Abqaiq and Khurais plants," Prince Abdulaziz bin Salman, the energy minister said in a statement carried by the official Saudi Press Agency.

It led to the interruption of about 50 per cent of total production, he added.

"These attacks resulted in production suspension of 5.7 million barrels of crude oil per day," the state-owned Aramco said in a separate statement.

Aramco CEO Amin Nasser said work was underway to restore production and a progress update would be provided in the next two days.

The Huthi rebel drone attacks on Abqaiq and Khurais, two key Aramco facilities in eastern Saudi Arabia, are the latest in a series of raids on the kingdom's oil installations in recent months.

Nasser said "no injuries" were reported in the attacks.

The Iran-linked Huthi rebels said they launched "a large-scale operation involving 10 drones" on the facilities, the group's Al-Masirah television reported.

US Secretary of State Mike Pompeo blamed Iran for the strikes.

"Iran has now launched an unprecedented attack on the world's energy supply," Pompeo said.

Saudi Arabia, a key ally of Washington, has repeatedly accused Iran of supplying arms to the rebels. Tehran denies the charge.

Growing rebel attacks underscore how Saudi infrastructure, including oil installations, are increasingly vulnerable to the Huthis' steadily advancing weaponry -- from ballistic missiles to unmanned drones.

Saudi Arabia has temporarily halted production at two Aramco oil facilities that were attacked by Yemeni rebels, interrupting about half of the company's total output, the energy minister said Saturday.

Saudi Arabia has temporarily halted production at two Aramco oil facilities that were attacked by Yemeni rebels, interrupting about half of the company's total output, the energy minister said Saturday. The attacks "resulted in a temporary suspension of production at Abqaiq and Khurais plants," Prince Abdulaziz bin Salman, the energy minister said in a statement carried by the official Saudi Press Agency. It led to the interruption of about 50 per cent of total production, he added. "These attacks resulted in production suspension of 5.7 million barrels of crude oil per day," the state-owned Aramco said in a separate statement. Aramco CEO Amin Nasser said work was underway to restore production and a progress update would be provided in the next two days. The Huthi rebel drone attacks on Abqaiq and Khurais, two key Aramco facilities in eastern Saudi Arabia, are the latest in a series of raids on the kingdom's oil installations in recent months. Nasser said "no injuries" were reported in the attacks. The Iran-linked Huthi rebels said they launched "a large-scale operation involving 10 drones" on the facilities, the group's Al-Masirah television reported. US Secretary of State Mike Pompeo blamed Iran for the strikes. "Iran has now launched an unprecedented attack on the world's energy supply," Pompeo said. Saudi Arabia, a key ally of Washington, has repeatedly accused Iran of supplying arms to the rebels. Tehran denies the charge. Growing rebel attacks underscore how Saudi infrastructure, including oil installations, are increasingly vulnerable to the Huthis' steadily advancing weaponry -- from ballistic missiles to unmanned drones.

Saudi halts production at attacked oil plants: Minister

Russia on Monday warned of a strong risk of global overproduction of oil that could lead crude prices to drop below $40 a barrel.

"There are really great risks of overproduction today," Russian Energy Minister Alexander Novak said during a meeting with Saudi counterpart Khalid al-Falih in Moscow.

"We have to analyse everything... in order to take a balanced decision in July," he said, referring to a key meeting of the so-called OPEC+ alliance between OPEC members and other oil-producing countries including Russia.

The alliance is set to meet in Vienna at the beginning of July according to the Saudi minister, to decide whether to extend an agreement on production levels.

Russia has agreed with OPEC member countries on cutting production of crude to build up prices after the crash of 2014-15.&nbsp;

The 25-member alliance agreed to cut output by 1.2 million barrels per day from the start of this year after oil prices dipped by more than 30 per cent late last year.

"Prices can drop below $40 and even down to $30 a barrel," Russian Finance Minister Anton Siluanov told lawmakers on Monday, quoted by Russian agencies.

Novak also said that such a scenario "cannot be ruled out".

"A lot depends on the situation on the market in the second and third quarter, from the balance of supply and demand, and how the situation develops with uncertainties, trade wars, and sanctions pressures on several countries," he said.

"We are working to take preventative steps to avoid the scenario that was discussed," Falih said regarding the prospects of prices falling to $30 a barrel, in translated comments.

Massive drops in exports by Iran and <a href="https://www.wionews.com/business-economy/venezuelas-oil-exports-drop-17-in-may-as-sanctions-kick-in-report-224373">Venezuela</a> plus the agreed output cuts implemented by the OPEC+ group since January have cut supplies.

US President Donald Trump has urged OPEC to boost oil production in order to tamp down rising prices.

Russia on Monday warned of a strong risk of global overproduction of oil that could lead crude prices to drop below $40 a barrel. "There are really great risks of overproduction today," Russian Energy Minister Alexander Novak said during a meeting with Saudi counterpart Khalid al-Falih in Moscow.

Russia on Monday warned of a strong risk of global overproduction of oil that could lead crude prices to drop below $40 a barrel. "There are really great risks of overproduction today," Russian Energy Minister Alexander Novak said during a meeting with Saudi counterpart Khalid al-Falih in Moscow. "We have to analyse everything... in order to take a balanced decision in July," he said, referring to a key meeting of the so-called OPEC+ alliance between OPEC members and other oil-producing countries including Russia. The alliance is set to meet in Vienna at the beginning of July according to the Saudi minister, to decide whether to extend an agreement on production levels. Russia has agreed with OPEC member countries on cutting production of crude to build up prices after the crash of 2014-15. The 25-member alliance agreed to cut output by 1.2 million barrels per day from the start of this year after oil prices dipped by more than 30 per cent late last year. "Prices can drop below $40 and even down to $30 a barrel," Russian Finance Minister Anton Siluanov told lawmakers on Monday, quoted by Russian agencies. Novak also said that such a scenario "cannot be ruled out". "A lot depends on the situation on the market in the second and third quarter, from the balance of supply and demand, and how the situation develops with uncertainties, trade wars, and sanctions pressures on several countries," he said. "We are working to take preventative steps to avoid the scenario that was discussed," Falih said regarding the prospects of prices falling to $30 a barrel, in translated comments. Massive drops in exports by Iran and Venezuela plus the agreed output cuts implemented by the OPEC+ group since January have cut supplies. US President Donald Trump has urged OPEC to boost oil production in order to tamp down rising prices.

Russia warns of 'great risk' of oil overproduction

Oil fell more than 1 per cent on concerns over rising US&nbsp;production and as equities fell, erasing earlier gains driven in part by the firing of US&nbsp;Secretary of State Rex Tillerson.

Brent crude futures dropped 31 cents, or 0.5 per cent, to settle at $64.64 per barrel. US&nbsp;West Texas (WTI) crude futures fell 65 cents, or 1.06 per cent, to $60.71 per barrel.

The market has been buffeted by a number of factors in an active session, including weakness in the equity market, which has trended in tandem with oil of late.

US&nbsp;production has reached an all-time record and weekly data last week showed overall output rising further, to more than 10.3 million barrels per day.

US&nbsp;crude production from major shale formations was expected to rise in April to a record 6.95 million bpd, the US&nbsp;Energy Information Administration (EIA) said on Monday.

&quot;There&rsquo;s no stopping us and OPEC&#39;s frustration levels are going to grow,&quot; said Philip Streible, senior market strategist at RJO Futures in Chicago, referring to efforts by major producers to curb output since last year.

Tillerson&#39;s firing increases risks to the multilateral agreement to limit Iran&#39;s nuclear capabilities, raising questions about potential effects on output by the third largest crude oil producer in the Organization of the Petroleum Exporting Countries.

CIA director Mike Pompeo is the pick to replace Tillerson; he has called for the 2015 Iran nuclear deal to be scrapped.

Trump has threatened to withdraw from the accord between Iran and six world powers unless Congress and European allies &quot;fix&quot; it with a follow-up pact.

&quot;The market is having a wobble on the back of the potential impact on future supply from Iran and also for the ramifications for the Middle East as a whole,&quot; Ole Hansen, senior manager at Saxo Bank, said.

Concerns about supply have had an effect in the forward curve in the futures market, where the May contract has outperformed April, putting May&#39;s price higher than April&#39;s, known as &quot;contango.&quot;&nbsp;

When the front-month contract is trading at a lower level than a later-dated contract, it suggests emerging concerns about growing supply, and reduced need to buy oil now.

&quot;The market switched from backwardation to contango in the crude oil curve today... that&rsquo;s a situation that implies weakness; it&rsquo;s a situation that, if it persists, will lead to an increase in storage,&quot; said Bob Yawger, director of energy futures at Mizuho in New York.

Data from the American Petroleum Institute will be released at 4:30 p.m. on Tuesday, and is expected to show a build US&nbsp;crude inventories for the third straight week.

US crude production from major shale formations was expected to rise in April to a record 6.95 million bpd

Oil fell more than 1 per cent on concerns over rising US production and as equities fell, erasing earlier gains driven in part by the firing of US Secretary of State Rex Tillerson. Brent crude futures dropped 31 cents, or 0.5 per cent, to settle at $64.64 per barrel. US West Texas (WTI) crude futures fell 65 cents, or 1.06 per cent, to $60.71 per barrel. The market has been buffeted by a number of factors in an active session, including weakness in the equity market, which has trended in tandem with oil of late. US production has reached an all-time record and weekly data last week showed overall output rising further, to more than 10.3 million barrels per day. US crude production from major shale formations was expected to rise in April to a record 6.95 million bpd, the US Energy Information Administration (EIA) said on Monday. "There’s no stopping us and OPEC's frustration levels are going to grow," said Philip Streible, senior market strategist at RJO Futures in Chicago, referring to efforts by major producers to curb output since last year. Tillerson's firing increases risks to the multilateral agreement to limit Iran's nuclear capabilities, raising questions about potential effects on output by the third largest crude oil producer in the Organization of the Petroleum Exporting Countries. CIA director Mike Pompeo is the pick to replace Tillerson; he has called for the 2015 Iran nuclear deal to be scrapped. Trump has threatened to withdraw from the accord between Iran and six world powers unless Congress and European allies "fix" it with a follow-up pact. "The market is having a wobble on the back of the potential impact on future supply from Iran and also for the ramifications for the Middle East as a whole," Ole Hansen, senior manager at Saxo Bank, said. Concerns about supply have had an effect in the forward curve in the futures market, where the May contract has outperformed April, putting May's price higher than April's, known as "contango." When the front-month contract is trading at a lower level than a later-dated contract, it suggests emerging concerns about growing supply, and reduced need to buy oil now. "The market switched from backwardation to contango in the crude oil curve today... that’s a situation that implies weakness; it’s a situation that, if it persists, will lead to an increase in storage," said Bob Yawger, director of energy futures at Mizuho in New York. Data from the American Petroleum Institute will be released at 4:30 p.m. on Tuesday, and is expected to show a build US crude inventories for the third straight week.

US crude prices fall over rising production, Tillerson firing

&nbsp;Russia, the Syrian regime&#39;s main backer, plans to help Damascus relaunch its energy industry which has been devastated by years of conflict, Energy Minister Alexander Novak has said.

&quot;We have signed a roadmap, not only in the field of electricity, but also oil and gas, covering the restoration of oil fields and the development of new deposits,&quot; Kovak was quoted as saying by Russian news agencies yesterday.

He did not name any Russian companies that may be involved.

As the main international backer of Syrian President Bashar al-Assad&#39;s regime, Russia has committed itself to aiding in the country&#39;s reconstruction.

Last week an agreement was signed on the &quot;rehabilitation, modernisation and construction of new energy facilities in Syria&quot; Russia&#39;s energy ministry said on its website.

&quot;We attach great importance to restoring the Syrian economy, especially the oil and gas sectors which will certainly contribute to the normalisation of the economic and social situation in the country,&quot; said Novak.

In December a Russian business and political delegation visited Damascus to discuss investment and reconstruction with Assad, including oil and gas projects but also electricity, phosphates, transport and trade.

&quot;Syria is a land of unlimited riches,&quot; Russian Deputy Prime Minister Dmitry Rogozin, who led the delegation, said at the time.

&quot;Russian companies have the moral right to develop large-scale economic projects here,&quot; Rogozin said then.

Russia intervened in the Syrian conflict in September 2015 in support of Assad.

In December last year, President Vladimir Putin ordered the partial retreat of Russian troops from Syria.

'We have signed a roadmap, not only in the field of electricity but also oil and gas, covering the restoration of oil fields and the development of new deposits,' Alexander Novak

Russia, the Syrian regime's main backer, plans to help Damascus relaunch its energy industry which has been devastated by years of conflict, Energy Minister Alexander Novak has said. "We have signed a roadmap, not only in the field of electricity, but also oil and gas, covering the restoration of oil fields and the development of new deposits," Kovak was quoted as saying by Russian news agencies yesterday. He did not name any Russian companies that may be involved. As the main international backer of Syrian President Bashar al-Assad's regime, Russia has committed itself to aiding in the country's reconstruction. Last week an agreement was signed on the "rehabilitation, modernisation and construction of new energy facilities in Syria" Russia's energy ministry said on its website. "We attach great importance to restoring the Syrian economy, especially the oil and gas sectors which will certainly contribute to the normalisation of the economic and social situation in the country," said Novak. In December a Russian business and political delegation visited Damascus to discuss investment and reconstruction with Assad, including oil and gas projects but also electricity, phosphates, transport and trade. "Syria is a land of unlimited riches," Russian Deputy Prime Minister Dmitry Rogozin, who led the delegation, said at the time. "Russian companies have the moral right to develop large-scale economic projects here," Rogozin said then. Russia intervened in the Syrian conflict in September 2015 in support of Assad. In December last year, President Vladimir Putin ordered the partial retreat of Russian troops from Syria.

Russia wants to help Syria relaunch oil production

Ever imagined a world devoid of oil and gas? France seems to have already been working toward what sounds like utopia.&nbsp;

The Emmanuel Macron administration Tuesday passed legislation to end all its oil and gas exploration and production by 2040; however, the country will continue to import and refine oil.&nbsp;

France becomes the first country in the world to give a nod to such a move; the country also plans to end the sale of gasoline and diesel vehicles by 2040.&nbsp;

&quot;Very proud that France has become the first country in the world today to ban any new oil exploration licences with immediate effect and all oil extraction by 2040,&quot; Macron tweeted.

<div class="ui-state-default" contenteditable="false">
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<blockquote class="twitter-tweet" data-lang="en">
Very proud that France has become the first country in the world today to ban any new oil exploration licences with immediate effect and all oil extraction by 2040. <a href="https://twitter.com/hashtag/KeepItInTheGround?src=hash&amp;ref_src=twsrc%5Etfw">#KeepItInTheGround</a> <a href="https://twitter.com/hashtag/MakeOurPlanetGreatAgain?src=hash&amp;ref_src=twsrc%5Etfw">#MakeOurPlanetGreatAgain</a>
&mdash; Emmanuel Macron (@EmmanuelMacron) <a href="https://twitter.com/EmmanuelMacron/status/943195485640241152?ref_src=twsrc%5Etfw">December 19, 2017</a></blockquote>
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<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

Reportedly, France produces only about six million barrels of hydrocarbons a year and manages to consume just about a per cent of the same.&nbsp;

Macron&#39;s move to end oil exploration and production, in a bid to secure a cleaner environment, was opposed by French conservative Republicans who voted against the bill.

(With inputs from Reuters)&nbsp; 
&nbsp;

The country also plans to end the sale of gasoline and diesel vehicles by 2040

Ever imagined a world devoid of oil and gas? France seems to have already been working toward what sounds like utopia. The Emmanuel Macron administration Tuesday passed legislation to end all its oil and gas exploration and production by 2040; however, the country will continue to import and refine oil. France becomes the first country in the world to give a nod to such a move; the country also plans to end the sale of gasoline and diesel vehicles by 2040. "Very proud that France has become the first country in the world today to ban any new oil exploration licences with immediate effect and all oil extraction by 2040," Macron tweeted. Very proud that France has become the first country in the world today to ban any new oil exploration licences with immediate effect and all oil extraction by 2040. #KeepItInTheGround #MakeOurPlanetGreatAgain — Emmanuel Macron (@EmmanuelMacron) December 19, 2017 × Reportedly, France produces only about six million barrels of hydrocarbons a year and manages to consume just about a per cent of the same. Macron's move to end oil exploration and production, in a bid to secure a cleaner environment, was opposed by French conservative Republicans who voted against the bill. (With inputs from Reuters)

France passes bill to end oil production by 2040

Imports of crude oil by Iran&#39;s four major buyers in Asia in September jumped more than 70 per cent from a year ago as the producer continued to recoup market share lost under sanctions.

Iran&#39;s top four Asian buyers, China, Japan, India and South Korea, imported nearly 1.8 million barrels per day (bpd) in September, government and ship-tracking data showed. That is down from the highest level in at least 5-1/2 years in August.

But oil-purchase arrivals could rise again in October, with Asian buyers loading 1.83 million bpd of crude oil and condensate this month and about 1.96 million bpd in September, according to a source with knowledge of Iran&#39;s tanker schedules.

Economic sanctions targeting the OPEC member&#39;s disputed nuclear programme were lifted in January. Tehran has been battling to raise its output and export levels since then back to where they were before toughened sanctions went into force in early 2012.

Japan&#39;s trade ministry on Monday released official data showing its imports rose 80 per cent from a year earlier to nearly 313,000 bpd in September.

India&#39;s imports more than doubled from a year earlier to 552,200 bpd, down from 575,900 bpd in August, the highest in at least 15 years.

Imports by South Korea also more than doubled, while Chinese imports were up by 18 per cent.

(Reuters) 
&nbsp;

Iran has been battling to raise its oil export levels since economic sanctions on the OPEC member's nuclear project were lifted in January

Imports of crude oil by Iran's four major buyers in Asia in September jumped more than 70 per cent from a year ago as the producer continued to recoup market share lost under sanctions. Iran's top four Asian buyers, China, Japan, India and South Korea, imported nearly 1.8 million barrels per day (bpd) in September, government and ship-tracking data showed. That is down from the highest level in at least 5-1/2 years in August. But oil-purchase arrivals could rise again in October, with Asian buyers loading 1.83 million bpd of crude oil and condensate this month and about 1.96 million bpd in September, according to a source with knowledge of Iran's tanker schedules. Economic sanctions targeting the OPEC member's disputed nuclear programme were lifted in January. Tehran has been battling to raise its output and export levels since then back to where they were before toughened sanctions went into force in early 2012. Japan's trade ministry on Monday released official data showing its imports rose 80 per cent from a year earlier to nearly 313,000 bpd in September. India's imports more than doubled from a year earlier to 552,200 bpd, down from 575,900 bpd in August, the highest in at least 15 years. Imports by South Korea also more than doubled, while Chinese imports were up by 18 per cent. (Reuters)

Asia's September imports of Iranian oil rise 73% from last year

Members of the Organisation of Petroleum Exporting Countries (OPEC) have finally decided to cut down their oil production&nbsp;after eight long years of large scale production.

The decision has, however, shocked analysts and market watchers given that it included two rival nations -&nbsp;Saudi Arabia and Iran.

The last few years have seen a global&nbsp;slump in oil prices owing to an increase in the supply of crude oil. The increased supply was not matched by an equally increased demand resulting in an oil glut across the world.

The 2008 financial crisis had a severe impact on the global demand for oil, reducing the energy demand across industries and nations.

Ships carrying crude oil were reported to be stranded at sea for days due to the lack of enough demand.

After OPEC&rsquo;s decision to cut oil production, crude oil prices marked an increase of six per cent.

<h3>Kazakhstan opening Kashagan oil field</h3>

 
Recently, non-OPEC member Kazakhstan announced that it is opening its Kashagan oil field at the North Caspian sea.

It is one of the largest oil discoveries in the past 40 years but the project has been stalled since 2013. The government of Kazakhstan has made an investment of around USD 50 billion in the project.

Kazakhstan has also announced the expansion of its Tengiz oil field simultaneously. This decision too would increase global oil supply and disturb the crude oil market.

The central Asian country has been experiencing high current account deficit for the last couple of years and the export of oil can help it better the deficit.

Countries like Venezuela face a&nbsp;serious threat with such announcements as oil is their most crucial source of income for this South American nation. During the boom period, Venezuela had focused so much on oil that when the fall in prices had a severe impact on its economy.

(WION)

The decision that has been long pending led to a six per cent increase in crude oil prices

Members of the Organisation of Petroleum Exporting Countries (OPEC) have finally decided to cut down their oil production after eight long years of large scale production. The decision has, however, shocked analysts and market watchers given that it included two rival nations - Saudi Arabia and Iran. The last few years have seen a global slump in oil prices owing to an increase in the supply of crude oil. The increased supply was not matched by an equally increased demand resulting in an oil glut across the world. The 2008 financial crisis had a severe impact on the global demand for oil, reducing the energy demand across industries and nations. Ships carrying crude oil were reported to be stranded at sea for days due to the lack of enough demand. After OPEC’s decision to cut oil production, crude oil prices marked an increase of six per cent. Kazakhstan opening Kashagan oil field Recently, non-OPEC member Kazakhstan announced that it is opening its Kashagan oil field at the North Caspian sea. It is one of the largest oil discoveries in the past 40 years but the project has been stalled since 2013. The government of Kazakhstan has made an investment of around USD 50 billion in the project. Kazakhstan has also announced the expansion of its Tengiz oil field simultaneously. This decision too would increase global oil supply and disturb the crude oil market. The central Asian country has been experiencing high current account deficit for the last couple of years and the export of oil can help it better the deficit. Countries like Venezuela face a serious threat with such announcements as oil is their most crucial source of income for this South American nation. During the boom period, Venezuela had focused so much on oil that when the fall in prices had a severe impact on its economy. (WION)

OPEC nations to finally cut down oil production

Canadian oil production will decline by one per cent this year due to lower investment and disruptions from wildfires, says a report released Tuesday.

 
The study also projected that for the first time ever, Canada&#39;s oil sector will lose money,&nbsp;billions, in fact,&nbsp;two years in a row.

 
Canada is the world&#39;s&nbsp;sixth-largest oil producer, and its sector has been hit hard by plunging crude prices over the past two years.

 
An Alberta oil sands production stoppage in May due to wildfires sweeping across the region,&nbsp;which holds the world&#39;s third-largest oil reserve,&nbsp;further exacerbated its woes.

 
The Conference Board of Canada said the sector is on track to post an annual loss of $10 billion ($7.6 billion US) this year, following a record loss of&nbsp;$11 billion ($8.4 billion US) in 2015.

 
&quot;Canadian oil producers continue to be challenged by the extended battle for market-share that has kept global crude prices stubbornly low,&quot; Conference Board economist Carlos Murillo said in a statement.

 
&quot;For the first time in recorded history, the (Canadian) oil industry is expected to post not only the largest level of losses but also back-to-back consecutive losses,&quot; he said.

 
Profitability concerns led to the significant pullback in investment, resulting in lower production levels, said the report. From 2014 to 2017, investment in the Canadian oil industry will have been cut by an estimated $38 billion ($29 billion US).

 
Companies have been also slow to cut costs, as revenues fell.

 
The Conference Board did offer one glimmer of hope, predicting the industry will return to the black in 2017 if oil prices recover.

(AFP)

For the first time ever, Canada's oil sector might lose money, billions, in fact, two years in a row

Canadian oil production will decline by one per cent this year due to lower investment and disruptions from wildfires, says a report released Tuesday. The study also projected that for the first time ever, Canada's oil sector will lose money, billions, in fact, two years in a row. Canada is the world's sixth-largest oil producer, and its sector has been hit hard by plunging crude prices over the past two years. An Alberta oil sands production stoppage in May due to wildfires sweeping across the region, which holds the world's third-largest oil reserve, further exacerbated its woes. The Conference Board of Canada said the sector is on track to post an annual loss of $10 billion ($7.6 billion US) this year, following a record loss of $11 billion ($8.4 billion US) in 2015. "Canadian oil producers continue to be challenged by the extended battle for market-share that has kept global crude prices stubbornly low," Conference Board economist Carlos Murillo said in a statement. "For the first time in recorded history, the (Canadian) oil industry is expected to post not only the largest level of losses but also back-to-back consecutive losses," he said. Profitability concerns led to the significant pullback in investment, resulting in lower production levels, said the report. From 2014 to 2017, investment in the Canadian oil industry will have been cut by an estimated $38 billion ($29 billion US). Companies have been also slow to cut costs, as revenues fell. The Conference Board did offer one glimmer of hope, predicting the industry will return to the black in 2017 if oil prices recover. (AFP)

Canadian oil production to fall: Report

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