Daily Brief, Monday, March 2nd
Welcome to the daily brief the world. Oil podcast network daily review of market news emerging trends new technologies and the people who are advancing the oil and gas industry. Here's Cameron Wallace with your top news. Stories of the day. Good afternoon and welcome to the World. Oil Daily brief podcast. I'm Cameron Wallace. And these are your top oil and gas headlines for Monday March. The second oil is climbing again on signals that OPEC and central bankers may be ready to PROP UP FINANCIAL MARKETS. Opec production is sinking. Thanks to a combination of careful planning and events. Outside the group's control an election in Ghana will determine who holds the purse strings and suddenly oil-rich nation and two of the world's largest energy conferences were cancelled yesterday. After the World Health Organization raised its virus threat level. I up. Oil Rose the most. In five months amid expectations central banks will move to prop up financial markets and OPEC will curb supplies in response to the virus driven. Demand shock futures surged as much as five point five percent on Monday in New York. After six straight losing sessions equities also surged central bankers from some of the world's most advanced economies offered reassurances. They'll take stabilization measures. Meanwhile the Organization of Petroleum Exporting Countries and its allies including Russia are preparing to discuss output this week in Vienna OPEC and its allies are expected to agree on deeper production cutbacks. When they meet in Vienna according to a Bloomberg survey all but two of the twenty nine analysts traders and brokers and a global poll predicted that the group will announce new curbs when average expectation of seven hundred and fifty thousand barrels a day OPEC output plunged again last month. As the group's voluntary cutbacks were amplified by conflicts and Libya that halted exports west Texas intermediate futures. For April delivery rose two point two percent to forty six ninety seven a barrel at eleven forty five. Am on the New York Mercantile. Exchange meanwhile Brent futures for May delivery climbed two point three percent to fifty one ninety eight on the Ice Futures Europe exchange after gaining as much as four point eight percent earlier in the day. Today's episode of the daily brief is brought to you in part by Siemens with a global population expected to rise nearly thirty percent by twenty fifty. The world is evolving rapidly and so are the challenges harmful emissions chief among them therefore the solutions must evolve rapidly if we are to meet society's ever-growing demand for clean energy Siemens partners with oil and gas customers to navigate the new normal delivering what matters most safety efficiency reliability sustainability and ultimately peace of mind. Today's upstream operators face unique challenges including remote locations space constraints and the high costs associated with non-productive. Siemens has an extensive track record of helping operators improve performance and mitigate risk in offshore environments visit Siemens Dot com slash oil and gas to learn more about Siemens Engineering Services and technologies for platforms in vessels including F. Pso's and let secure a sustainable energy future together. Opec's output plunged again last month. As the group's voluntary cutbacks were amplified by conflict that halted exports from Libya production declined by about four hundred and eighty thousand barrels. A day to twenty seven point nine one million a day in February according to a survey that's the lowest since two thousand nine when the group had just slash supplies during the global financial crisis get OPEC finds itself under pressure to reduce output even further in response to the corona virus. The outbreak that started in China and to spreading around the world could be the biggest commodity demand shock since the great recession of two thousand eight. Two thousand nine according to Goldman Sachs. The Corona viruses battering ruled fuel consumption as industries. Shut down entire cities are quarantined and air travel slumps sending crude prices plunging. Opec and his partners were already struggling to manage the price impact from the US shale boom. They launched a new round of supply curbs at the start of this year and the survey showed a mixed rate of implementation among the cartels members. The poll is based on information from officials chip tracking data and estimates from consultants including rice dead JBC and rapid and energy group. The comparison between output in February and historical data is affected by membership changes with Ecuador Guitar in Indonesia having left the group all Congo Gabon and Equatorial Guinea. Have joined though Saudi Arabia as OPEC's biggest member delivered its pledges in full Iraq Nigeria which have repeatedly demonstrated poor implementation actually increased their production those increases however were eclipsed by a plunge in Libya where a rebel military commander has blockaded oil ports all haggling over peace settlement with the national government. Libya's output tumbled by six hundred forty thousand barrels a day or about eighty percent to just one hundred fifty thousand barrels a day the country has long been exempt from making cuts as part of the opaque plus deal because of its internal struggles. The North African producer has lost almost one million barrels a day since the start of the year because of the conflict roughly equivalent to all the voluntary curbs that OPEC and its allies. Promised as part of their latest intervention. Libya's misfortune is spurring other OPEC members from an even deeper route in crude prices. Opec is expected to cut deeper at this week's meeting all the two twenty-nine analysts traders and brokers surveyed predict that the OPEC plus coalition will announce substantial additional reductions when it meets than average estimate of seven hundred and fifty thousand barrels a day the alliance spans all thirteen OPEC nations plus ten non-members such as Russia and accounts for about half of the world's oil supplies. Saudi Arabia has been pressing OPEC plus to act for several weeks. There has been reluctance from Russia. Their most important partner there are signs that Moscow now recognizes the need for some kind of response. The situation in global markets is certainly serious with prices near their lowest in more than two years and a growing contingent of trading desks anticipated that demand growth could all but wiped out for the first time in more than a decade control of the world's fastest growing economy and its massive offshore. Oilfields are up for grabs today. As Guliani votes in national elections the business friendly administration of David Grainger is seeking reelection facing if Ron Ali of the People's Progressive Party. Who is pledging to renegotiate? Some oil contracts the winners and what is forecast to be a close election will shepherd the remote jungle-clad nation through a bonanza that the International Monetary Fund says will propel economic growth of eighty six percent. This year the fastest in the world the deposit which Exxon Mobil first successfully drilled in two thousand fifteen is so large relative to the population of seven hundred eighty thousand by the middle of the decade. Yana may overtake Kuwait and become the world's largest per capita crude producer. The winner of the election will lead the sixty five seat National Assembly for a five-year term. Just production starting at the offshore fields which are estimated to hold the equivalent of eight billion barrels of crude energy companies including Hess China's synock until Oh have invested in the country for the oil industry a win for the opposition. People's Progressive Party would test the country's commitment to contract law. It's a touchy subject in a country that has been criticized for giving away its resources to cheaply a global witness report recently criticised Grainger's government for signing a quote exceptionally bad contract. Exxon the deprive the country of fifty five billion over the life of the deal. Exxon and Grainger both disputed the findings Grainger's competitor. Ali said that some of the contracts are even more lopsided than that of the Exxon deal rather than rewrite the contracts in practice and Ali government would probably try to get companies to commit to more social spending and job creation will also setting stricter terms and future contracts. The olive opposition is estimated to have a seventy five percent chance of winning the presidency government. Revenues are forecast to rise. Thirty seven. Fold to ten billion dollars a year in a decade. According to oslo-based research company Rice that energy given the stakes whoever loses is likely to contest the result in the courts. Such a challenge would test the institutional strength of a country that's only had two democratic changes of government in its history both sides have floated plans to create thousands of jobs spent heavily in education and build out roads and other infrastructure. The country is braced for REPA- transitioning from relatively poor expert of sugar and gold into one of South America's richest countries. Grainger told a crowd earlier this year that the guy needs. We'll never be poor again and launching the campaign for the political alliance known as the Partnership for National Unity. He said that oil wealth belongs to you and this government will make sure you benefit from this oil wealth results from the vote which will determine the makeup of the National Assembly as well as who controls. The presidency are not likely to be announced for several days as electoral authorities gather ballot-boxes from remote settlements. The world's best performing economy borders Venezuela which is undergoing the world's deepest slump to top. It all off. Jonah has a longstanding territorial dispute with its neighbour finally today two of the world's largest and most important energy industry gatherings were cancelled by organizers. Ihs market on Sunday amid mounting concerns about the corona virus outbreak. Sarah Week due to start in Houston on March the ninth and the World Petrochemical Conference in New Orleans later. This month have both been canceled. Sarah Week has been an annual industry fixture over more than three decades and has become an important forum for its biggest players. This year's event promised to attract thousands of delegates around the world the chief executive officers of Saudi Aramco. Bp until towel were among those due to speak during the events five day program last week International Petroleum Week went ahead and London but oil producers including BP and Saudi Aramco trading houses and brokers cancelled many events scheduled to take place on the sidelines of the official event other companies including Repsol didn't send representatives Ip Week. Is the largest conference. In Europe usually attracting about three thousand people including a WHO's who of the industry in Europe the Middle East Africa the cancellation of Sarah Week. Follow the rising confirmed cases of the cove nineteen virus in the US and elsewhere and as more companies initiate travel bans on Saturday. The US confirmed its first. Death and Washington state declared an emergency after an outbreak. America has warned against travelling to northern Italy and parts of South Korea where the virus is spreading in Switzerland last week the Geneva International Motor Show and the Basil World Watch and jewellery show were both scrapped. Ihs SAYS IT plans to go ahead with Sarah Week. Twenty twenty one in Houston on March first or the fifth of next year. And there you have it our top oil and gas news stories for Monday march. The second content is courtesy of world oil magazine and the Bloomberg News Service to read more on. Today's topic's please visit world oil dot com slash. News. I'm Cameron Wallace. Thanks for listening today. Thanks for listening to the daily brief on the world oil podcast network. If you have any questions or comments on the program please email editorial at world oil dot com and check the show notes for more information about today's episode. Don't forget to subscribe either on Apple podcasts. 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