Tag archive: OPEC

News: Petrol Prices Rise in Australia as OPEC-Led Deal Takes Effect

Petrol prices have risen by up to 20 cents a litre in a number of areas in Australia, following the December agreement between the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers to cut production.

According to the Australian Institute of Petroleum, the national average price of unleaded increased by 2.2 cents over the week to Sunday to 128.3 cents per litre.

While Melbourne prices remained steady at $1.22 per litre, Sydney and Adelaide’s prices reached above $1.40. Other capital cities fell in between these extremes, with prices around $1.30 a litre.

There were also some local variations, with some parts of Tasmania – such as Hobart and Launceston – reaching $1.46 a litre.

Experts have recommended motorists to fill up quickly before the prices rise even further.

“The low petrol prices are not sustainable and prices are likely to lift markedly in coming days,” said Savanth Sebastian of stockbroking firm CommSec.

The Australian Competition and Consumer Commission (ACCC) warned that the price hike could be exacerbated by the falling Australian dollar.

“The ACCC is concerned that petrol prices are increasing in Sydney, and those in Melbourne, Brisbane and Adelaide may increase in the coming days,” said ACCC chairman, Rod Sims.

“Motorists should get in early, shop around, and consider filling their tanks before prices jump.”

Sebastian said the petrol price hikes would be applied around the world.

“The focus now shifts to see if oil producers comply with the stated production cuts,” said Sebastian.

“The early indications are that producers are already notifying customers in Asia, Europe and the US of cuts to oil deliveries from January. Importantly for motorists it means higher pump prices in the medium term.”

Oil rig

News: Investors Expect Oil Selloff Should OPEC Deal Collapse

As tensions arise between OPEC countries in the runup to the November 30 meeting, investors are preparing for the worst and expecting a fall in energy stocks should a deal fail to be clinched.

On Monday crude price fell by 0.3 per cent to $US47.1 per barrel, and energy stocks declined by 1.8 per cent.

Iran and Iraq have reportedly persisted on higher output numbers, according to unnamed sources.

“We hope we (will) have agreement,” said Jabar Ali al-Luaibi, Iraq’s Oil Minister on Monday upon arriving in Vienna for the talk. “We will cooperate with OPEC members to reach agreement acceptable to all.”

Experts expect oil selloff should OPEC fail to reach a deal. “People know if OPEC doesn’t do a deal, all the short-term drivers for the oil price will be off the table,” said Romano Sala Tenna, portfolio manager at Katana Asset Management.

Collapse in talks could send crude prices below $US40, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co.

Others are more optimistic. There is a chance that OPEC could agree to cut production by more than 500,000 barrels, said Helima Croft, RBC Capital Markets’ global head of commodity strategy.

“OPEC’s leadership is cognizant of the risks posed by failing to reach a deal,” Croft wrote in a report. Should a deal be reached, Croft said oil prices could climb back to $US55 per barrel.

The Organisation of the Petroleum Exporting Countries will meet on Wednesday, November 30 in Vienna to establish the terms of its first production cut in eight years.

Oil rig

Market: Oil Prices Fall Following Iraq’s Backtracking on OPEC Output Curb

Oil prices have fallen following Iraq’s statement that it sought to be exempt from the OPEC’s planned output cuts, as the group seeks to stabilise crude market.

Iraqi officials were reported on Sunday saying they would not reduce output, which is currently at 4.77 million barrels per day, because the country needed more fund to fight Islamic State militants.

Oil prices fluctuate around US$50 per barrel, mostly down 30 cents or 0.6%. West Texas Intermediate for December delivery dropped 33 cents to close at $US50.52 per barrel on the New York Mercantile Exchange. Brent fell 32 cents to $US51.46 per barrel.

Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), behind Saudi Arabia.

“Iraq’s request to be exempted from a deal to cut output has further clouded the prospect of OPEC strategy to stabilise the oil market succeeding,” said Danske Bank analyst, Jens Naervig Pedersen.

“There is a risk that Iraq’s refusal could trigger a domino effect that other producers would ask to be exempt from the cuts too,”  SCI International energy analyst, Gao Jian said.

OPEC members Iran, Libya and Nigeria expected to be spared from the deal. “If they do nothing, OPEC production next year is likely to average at least 34 mbpd (million barrels a day) with a real threat of it reaching close to 35 mbpd if the chaos in Libya and Nigeria were to be resolved,” broker PVM said.

OPEC produced a record of 33.75 million barrels per day in September, with Saudi Arabia producing 10.58 million of them.