Is OPEC and non-OPEC on the cutting edge? Oil ministers from Iraq and Nigeria are suggesting that OPEC and non-OPEC may further cut their output quotas by another 1% to their 1.8-million-barrel cut. While Russian Energy Minister Alexander Novak has said there is no official proposal to cut, he is interested in working with OPEC and other oil producers to stabilize crude prices. The meeting is in Vienna on Friday.
Peak oil Demand? Not So Fast! The Financial Times reports that not only is demand rising for oil, the OECD countries are also driving the world demand for good, old fashioned gas guzzling cars. The FT writes that, “A decade’s worth of efforts to cut oil consumption in industrialized countries is at risk of being reversed, as low fuel prices boost demand and send motorists flocking back to larger gas-guzzling cars."
Poor Little Dictator
Venezuelan President Nicolas Maduros wants to sell oil but not in dollars after President Trump hurt his feelings. Dow Jones reports that PDVSA, the state owned oil company, is asking partners in at least two oil ventures to consider selling crude oil in euros after the U.S. imposed financial sanctions, according to people with knowledge of situation. U.S. refineries have shown they are amenable to idea.
Figures from the International Energy Agency and other forecasters show OECD oil demand, which declined between 2005 and 2014, has been growing rapidly for the last three years after oil prices crashed from above $100 a barrel to about $55 today. If the trend continues roughly 62% of the reduction in OECD oil consumption since 2008 will have been reversed by the end of next year, despite governments targeting fuel efficiency, alleviating air pollution and cutting reliance on foreign crude.
Robust oil use in the developed world, which for years had been expected to decline, just as emerging markets consume more, has cast uncertainty around when global demand will peak. Some energy companies, including Royal Dutch Shell, had warned this could happen as soon as next decade.
Dow Jones report that S&P Global Ratings said it downgraded China’s rating to A-plus from AA-minus, while changing its outlook to stable from negative. The action brings all the three major credit-rating firms in line in terms of their views of the creditworthiness of the world’s second-largest economy. Fitch Ratings lowered China’s rating in 2013, and Moody’s Investors Service did so in May. Oil Demand Worry?