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Oil producers meeting breaks up in disarray, no deal on freeze

THE recent Doha meeting of oil producing countries appeared to have broken up in disarray, as neither the Iranians or the Libyans attended, while Saudi Arabia tried to cap Iran's output, reported London's Tanker Operator. 

Oil producers meeting breaks up in disarray, no deal on freeze

THE recent Doha meeting of oil producing countries appeared to have broken up in disarray, as neither the Iranians or the Libyans attended, while Saudi Arabia tried to cap Iran's output, reported London's Tanker Operator. 

Oil producers meeting breaks up in disarray, no deal on freeze
26 April 2016 - 05:05

Oil producers meeting breaks up in disarray, no deal on freeze
THE recent Doha meeting of oil producing countries appeared to have broken up in disarray, as neither the Iranians or the Libyans attended, while Saudi Arabia tried to cap Iran's output, reported London's Tanker Operator. 
The cheap oil increased seaborne trade to existing and new markets, supported land based commercial and strategic storage, while increased price volatility and stimulated arbitrage driven shipments.
At the same time, excess crude supply not only elevated floating storage (mainly for operational reasons) but also translated into delays and inefficiencies in the supply chain, London brokers Gibson said in a report written just before the meeting.
Finally, owners were able to take advantage of lower bunker costs.The prolonged period of low oil prices hurts both OPEC and non-OPEC producers alike. US crude output is being hit the hardest and production started to decline during the middle of last year.
The latest Energy Information Administration (EIA) projections - again released before the meeting - are for total US crude output to drop by over 800,000 barrels per day this year and by around 550,000 barrels per day in 2017 to just over eight million barrels per day.
Although so far only modest changes in production were seen in other non-OPEC countries, major cutbacks to oil company CAPEX will apply the breaks on future potential. There is also considerable pressure on budgets of producing countries where revenues from oil sales are used to finance fiscal policies.
Although US crude output is falling, global production is at or close to record high levels.
Last January, when Iran's nuclear sanctions were lifted, authorities in Tehran claimed that the country's crude output will increase by 500,000 barrels per day within weeks and by another 500,000 barrels per day during the following six months.
The reality is somewhat different, as the IEA estimated that Iranian crude production was at 3.3 mill barrels per day in March, up by 0.3 mill barrels per day from January. 
The volume of Iranian crude/condensate in floating storage also remained at high levels. In fact, the number of VLCCs used for storage of Iranian barrels increased modestly by the end of March, relative to January estimates.

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