According to the Saudi ARAMCO chief saying on Thursday, that the oil market is moving towards a balance between supply and demand with the help of an agreement reached between OPEC and others to cut production and to maintain it further. Our article today follows on yesterday’s The United Kingdom gave up its use of coal and is about OPEC and others’ oil and gas uncertain future.
Meanwhile, what this person does not say is best covered by The Banker of April 3rd, 2017 article on Kuwait undertaking strategic changes with respect to its economic standing are very illustrative on the going-ons of all MENA’s oil producing countries with regard to their respective future.
We reproduce excerpts of this article but it is recommended to read the whole article of Kit Gillet for a better view of the country’s many challenges it is confronting.
Like many oil-reliant countries, Kuwait has faced a challenging few years. The drop in global oil prices hit the country hard: Kuwait derives about 60% of its gross domestic product and more than 90% of its exports from hydrocarbons. It was therefore a welcome development when an international deal was finally struck in November 2016 to temporarily reduce oil production with the aim of rebalancing the market as well as drawing down existing stockpiles.
The deal, the first production cut in eight years, saw oil-producing countries agree to reduce global supply by almost 2 million barrels per day (bpd). By late January 2017, the 13 members of the Organisation of the Petroleum Exporting Countries (OPEC), as well as 11 non-OPEC countries, had cut daily output by more than 1.5 million barrels, out of a total of 1.8 million barrels that was agreed, according to the Saudi Ministry of Energy and Industry. OPEC compliance was more than 90%, while for non-OPEC countries it was estimated at about 50%.
A level of optimism returned to the market, though prices are still below the break-even level in many Gulf countries.
For its part, Kuwait agreed to cut production by 133,000 bpd, though the country may end up seeing overall output fall by between 146,000 bpd and 148,000 bpd, according to oil minister Essam al-Marzouq, who says Kuwait is using this period to carry out maintenance on existing facilities. “We used this opportunity to do maintenance at some wells, whether they were at Burgan field or the northern fields,” Mr al-Marzouq told Sky News Arabia in early March.