Oil Price Comment
April Brent is trading at US$55.77, up 10c/bbl vs yesterday morning despite a muchbigger than market forecast build in crude inventories in the weekly DoE stats (albeit inline with the earlier released API stats), driven by a high level of imports. On thesupportive side the USD index weakened countering its steady strengthening trendseen this month. This eerie calm in pricing is driving the oil VIX to close to 3 year lows.
Libyan oil production currently at ~700kb/d
Bloomberg yesterday reported, citing an interview with Jadalla Alokali (a board memberat the NOC), that Libya's oil production is currently running at ~700kb/d - flat vs mid-January following delays restarting the El Feel field in the southwest. The larger ElSharara field re-opened in December but El Feel has remained shut due to local securityguards demanding benefits. According to the article output at El Feel is due to resumein the next month and add ~75kb/d, although the fact that security personnel are stillable to keep a field shut emphasises the fragility of the recovery in Libyan production (itwas this issue that saw the fields shut-in originally in 2015). (Bloomberg, UBS)
Iran criticises Total for delaying South Pars 11 investment decision
Iran's oil minister, Bijan Zanganeh has criticised Total's decision to delay in signing acontract for the development of a South Pars 11 project in southern Iran. Last week,Total's CEO Patrick Pouyanne said that it aimed to make a final investment decision onthe US$2bn project by the summer, however the decision hinges on the renewal of USsanctions waivers. Zanganeh said the reasons were "unacceptable" to Tehran. (Reuters)
Monthly Agency Data - 2016 oversupply not as bad as it seemed (Rigby)
All three agencies upgraded 2016 baseline demand this month, the IEA adding110kb/d (primarily on very strong 4Q16 OECD heating-related demand), OPEC adding180kb/d (partly a 110kb/d revision to 2015 and earlier) and the EIA adding a huge900kb/d after reviewing its Chinese and African consumption data. The large revisionsto 2016 demand data made by all three agencies emphasised the continued challengepresented by preliminary data that tends to understate consumption.