06/11  Closing Prices / revised 06/12/2024 07:53 GMT 06/11 OPEC Basket  $82.36   +$1.43 cents 06/11 Mexico Basket (MME) $72.63  +$0.43  cents  | 04/30 Venezuela Basket (Merey)   $74.91   +$3.93 cents | 06/11 NYMEX WTI Texas Intermediate July CLN24 $77.90  +$0.16 cents  | 06/11 ICE Brent August  BRNQ24    $81.92  +$0.29 cents  | 06/11 NYMEX Gasoline June RBN24  $2.40  +0.1%  |  06/11 NYMEX  Heating Oil July  RBN 24    $2.42  +0.3% | 06/11 Natural Gas July NGN24  $3.12   +7.7%  | 06/07 Active U.S. Rig Count (Oil & Gas)   594  -6  | 06/12 USD/MXN Mexican Peso   18.6503  (data live)  | 06/12 EUR/USD     1.0745 (data live)  | 06/12 US/Bs. (Bolivar)   $36.43850000 ( data BCV)

OPEC May Need to Cut Again as Fragile Members Recover, Citi Says – Bloomberg

It may soon be time to show the flag. (Bloomberg)

Grant Smith, Bloomberg News

EnergiesNet.com 08 25 2023

OPEC’s core members may need to consider further production cuts as some of the group’s most troubled nations achieve unexpected supply growth, according to Citigroup Inc. 

The “fragile five” of Iran, Iraq, Libya, Nigeria and Venezuela — which have struggled with output losses and disruptions for the past few years — will add roughly 900,000 barrels a day of production this year and at least the same in 2024, the bank estimates. That’s enough to satisfy coming growth in oil demand, it said.

“All of a sudden they are sources of growth, and they will be sources of growth for five, four years — or maybe even longer in the case of Iraq and Venezuela,” Ed Morse, Citigroup’s head of commodities research, said in an interview. “It strikes us that the core OPEC+ countries have a problem on their hands.”

The five nations are all showing positive signs of supply recovery, while growth in oil demand will be constrained by fading expansion in China, Morse said. 

Iranian output has recovered as it sends a flood of exports to China while engaging in tentative diplomacy with the US. Iraq may restore supplies when it reaches agreement on a shuttered pipeline to Turkey, and also add capacity. Nigeria has improved security in its restive oil-rich delta, Venezuela is in talks with Washington on easing sanctions, and even Libya, long wracked by instability, has potential for expansion.

As a result, OPEC leader Saudi Arabia and its Persian Gulf allies — which have slashed production this year to shore up crude prices — may face pressure to cut output further, Morse said. The kingdom has already curbed supplies to a two-year low near 9 million barrels a day. 

“It’ll be a big problem,” Morse said. “I think they’ll have to cut, and I don’t know how easy it is for them to do that.”

bloomberg.com 08 24 2023

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