OPEC cut to af­fect up­stream sec­tors

China Daily (USA) - - BUSINESS - By ZHENG XIN By zhengxin@chi­nadaily.com.cnZHENG XIN zhengxin@chi­nadaily.com.cn

OPEC’s agree­ment to curb crude OPEC’s pro­duc­tion agree­ment­for the first to curb­time in crude eight pro­duc­tionyears will have for the more first im­pact­time in eighton years­the will up­stream have sec­torsmore im­pactof China’s on theoil gi­ants, up­stream an­a­lysts sec­tors said. of China’s Do­mes­ti­coil gi­ants, oil an­a­lysts com­pa­nies said. that Do­mes­tic­fo­cus on oil up­stream com­pa­nies­sec­tors, that fo­cus in­cludin­gon up­stream ex­plo­ration sec­tors, and pro­duc­tion,in­clud­ing ex­plo­ration­are likely to and­see a pro­duc­tion,rise in rev­enue are as like­lythe to deal see reacheda rise in by rev­enueOPEC on as the Wed­nes­day­deal reachedis be­lievedby OPECto on help Wed­nes­day­bol­ster glob­alis be­lieve­doil prices to hel­pat least bol­sterin the glob­al­short term,oil prices­said at Wang least Lu, in an the Asia-Pacific­short term,oil saidand gas Wang in­dus­tryLu, an an­a­lyst Asi­aPaci­ficfrom oil Bloomber­gand gas in­dus­tryIn­tel­li­gence. an­a­lyst from Bloomberg In­tel­li­gence.“The State-owned China Na­tional“The State-ownedOff­shore Oil Chi­naCorp, Na­tion­al­which has Off­shore­more up­streamOil Corp, which busi­ness has re­lated more to up­streamoil and busi­ness­gas ex­plo­ration re­lated and to pro­duc­tion,oil and gas ex­plo­rationwill be more and ex­posed pro­duc­tion,to oil prices will thanbe mor­e­its other ex­posedtwo to com­peti­tors—oil prices than Chi­naNa­tion­al­its other two Pe­tro­leum com­peti­torsCorp and— Chi­naChina Na­tional Petro­chem­i­cal Pe­tro­leum Cor­po­ra­tion,” Corp and saidWang. China Petro­chem­i­cal Cor­po­ra­tion,”The im­pact saidon CNOOCWang. is be­lievedThe im­pactto be on the CNOOC­great­est is among be­lieved the to three,be the with great­est­the re­cov­ery amon­gof oil the prices three, im­prov­ing with the re­cov­ery CNOOC’s of rev­enueoil price­sand im­provin­g­op­er­at­ing in­come, CNOOC’sshe said. rev­enue CNPC and op­er­atin­gand Sinopec, in­come, she ac­cord­ing­said. to Wang, fo­cus more CNPCon down­strea­mand Sinopec,oil and ac­cord­ing­gas sec­tors, to in­clud­ingWang, fo­cus­re­fin­ing more and on mar­ket­ing, down­stream which oil and gives gas them sec­tors,an edge in­clud­ing­when the re­finingoil price is and­low. mar­ket­ing, which OPEC give­shas reachedthem an a edgede­ci­sion when to the re­duceoil price out­putis low. by about OPEC 1.2 has mil­lion reached bar­relsa de­ci­sion­per day to to 32.5 re­duce mil­lion out­put bpd byin about Jan­uary. 1.2 mil­lion bar­rels per Oil day pricesto 32.5 have mil­lion dropped bpd in dras­ti­cally Jan­uary. since the sec­ond half Oil of prices2014. Over­sup­ply­have droppedand dras­ti­callya slug­gish world since econ­o­mythe sec­ond were half amon­gof 2014.the fac­tors Over­sup­plythat drove and the a prices slug­gish down. world

OPECpro­duces about onethird econ­o­myof werethe world’s among oil, the ac­cord­ing­fac­tors that to drove Reuters. the prices down. How­ever, Wang said it still takes OPEC time pro­ducesto tell how big about­the im­pact one-thirdof theof the move world’sin ac­cel­er­at­ing oil, ac­cord­ing the to in­dus­try’s Reuters. re­cov­ery How­ever,would be. Wang said it still “A takes prom­ise time to to cut tell is howone thing,big the but im­pactto de­liv­erof the moveit is an­other,”in ac­cel­er­at­ing saidWang. the in­dus­try’s “The re­cov­eryOPEC agree­ment­would be. to cut out­put has im­proved mar­ket sen­ti­ment and led to the price surge on Wed­nes­day. It will take months to mon­i­tor whether OPEC mem­bers ac­tu­ally de­liver their prom­ise. ”

the amount of daily out­put re­duc­tion set by OPEC mem­bers from Jan­uary

“A prom­ise to cut is one thing, but to de­liver it is an­other,” said Wang.

“The OPEC agree­ment to cut out­put has im­proved mar­ket sen­ti­ment and led to the price surge on Wed­nes­day. It will take months to mon­i­tor whether OPEC mem­bers ac­tu­ally de­liver their prom­ise. ”

Li Li, en­ergy re­search di­rec­torLi Li, with en­ergy ICIS re­search China, di­rec­tor­said: “OPEC’s with deal ICIS will China, surely said: have “OPEC’s some deal short-termwill surely ef­fect have in some bol­ster­ing short-term global ef­fec­toil pricesin bol­steringand help­ing global oil oil price­sand gas and firms help­in­gin China.”oil and gas An­a­lysts­firms in China.”said soar­ing oil prices An­a­lystsin the said next soar­ing three oil to prices­five yearsin the would next be three un­like­lyto five con­sid­er­ingyears would the be cur­ren­tun­likely con­sid­er­ingde­mand and the sup­ply cur­rent sit­u­a­tion de­mandin the and oil sup­ply mar­ket. sit­u­a­tion US in shalethe oil oil mar­ket.is likely to re­turnUS shaleto vol­umeoil is likely growthto re­turn­next year. to “US vol­ume shale growthoil may next serve year.as the “US sta­bi­liz­er­shale oil to may oil serve prices as and the cap sta­bi­liz­erthe amountto oil price­sof re­cov­ery,”and cap Wang the said. amount of “All re­cov­ery,”the mov­ingWang said. parts, in­clud­ing“All the the mov­ing OPEC parts, cut in­cludin­gand de­mandthe OPEC growth, cut make­and de­mandthe re­bal­ance growth, a make dy­nam­ic­the re­bal­an­ce­pro­cess anda dy­nam­ic­not easy process to fore­cast.”and not easy to fore­cast.”

the amount of daily out­put re­duc­tion set by OPEC mem­bers from Jan­uary See more

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