The markets shrugged at the historic meeting between President Trump and North Korean dictator Kim Jong Un. Both sides hailed the summit as a breakthrough, with a pledge towards denuclearization, but as expected, there was a lack of even the most basic details on how they might get there. Oil was flat at the start of Tuesday.
Iraq opposes output increase.
Opposition to an increase in the OPEC/non-OPEC production limits continues to grow, with Iraq coming out against such a move. OPEC’s second largest producer said that the production cuts have not yet achieved the intended objective of balancing the oil market. “Producers from within and outside OPEC have not yet reached the goals set,” Iraq’s oil minister Jabbar al-Luaibi said in a statement. Iraq “rejects unilateral decisions made by some producers which do not consult with the rest.” He went on to add: “We shouldn’t exaggerate the need of the oil market for more oil at the present time, and which could cause great damage to global markets.” The statement of opposition comes after Iran and Venezuela also called upon the group to keep the limits in place. The open resistance from a growing number of OPEC members to what seems to be a likely outcome (a softening of the production curbs) is setting the stage for a contentious meeting.
Saudi Arabia and Russia increase production.
Despite opposition from some OPEC members, the two most important producers, Saudi Arabia and Russia, are already signaling their intent to raise output. Saudi Arabia also added production last month, which, marking a significant change in strategy. OPEC’s secondary sources said Saudi Arabia increased production by 85,000 bpd in May while the Saudis themselves said production rose by 161,000 bpd. Russia also increased output at the beginning of June from 10.95 million barrels per day to 11.09 mb/d. The data suggests the two producers are laying the groundwork for higher output.
Venezuela production plunges again.
Venezuela told OPEC that it increased production in May by 28,000 bpd, but those communications tend to lack credibility. OPEC’s secondary sources say that Venezuelan output actually fell by 42,000 bpd, putting overall output at a new low of 1.392 mb/d, or roughly 750,000 bpd below 2016 levels.
Second half of 2018 highly uncertain-OPEC
In its latest monthly Oil Market Report, OPEC said that there is a “wide forecast range” for the second half of the year, with demand for the group’s oil running at 1.7 mb/d between the upper and lower bounds of the forecast. In other words, the group says demand growth is highly uncertain, which provides little insight into what the cartel might do in Vienna in less than two weeks. “Looking at various sources, considerable uncertainty as to world oil demand and non-OPEC supply prevails,” OPEC said. “This outlook for the second half of 2018 warrants close monitoring.”
Oil workers protest at Aiteo’s OML 29 in Bayelsa
Surveillance workers in Opu-Nembe in Nembe Local Government Area of Bayelsa on Tuesday staged a protest at OML 29 operated by Aiteo Eastern Exploration and Production Company.
The News Agency of Nigeria (NAN) reports that Shell Petroleum Development Company had in September 2015 divested from OML 29 located at Odema Creek and Santa Babara flow station.
It was gathered that the workers were aggrieved over the company’s refusal to pay them their outstanding salaries.
The protesters carried placards with inscriptions such as “Aiteo, stop your divide and rule tactics among your host community’, and “Aiteo, you promised to be better than Shell.’’
Other inscriptions included” Aiteo, community contractors need fairer deals, give us our due.”
Leading the protesters who numbered over 100, their spokesperson, Nicholas Ebiye, challenged the company to meet its contractual obligations to enable the workers get their remunerations promptly.
Ebiye asked the company to review upward the contract value of their employers to enable their pay to be at par with newly employed surveillance workers.
The protesters also demanded that Aiteo provide speedboats for free mobility as well as the provision of safety protection equipment.
They also demanded payment of bonus at the end of every six months and arrears owned them since 2015 when Shell divested and assigned the facility to the company.
The protesters further asked Aiteo to make prompt payment of their monthly emoluments at the end of every month.
They gave the company two weeks within which to comply to avoid breach of industrial harmony.
The group regretted Aiteo’s inability to meet its responsibilities since inception over two year ago.
The oil company, the group alleged, had refused to pay over N300 million it owned its host community, Opu-Nembe, over hiring of the community’s speedboats, MV Ogbodo 1 and 2.
Responding, the Acting Operational Supervisor at the field, Mr Umezurike Oyinbuchi , assured the protesters that he would channel their grievances to the management of the company for dialogue with their representatives.
The Director of Security Services at Odema Flow station,Mr Girgi Vershima , told the protesters that surveillance workers from Odioma community had shut down the flow station and urged them to embrace dialogue.
