Algeria’s energy exports stagnate in 2015
Production of crude, condensate fall 2.8 pct
Algeria’s energy exports stagnated in 2015, held back by lower oil and gas production and a rise in domestic consumption, official data seen by Reuters on Monday showed.
The North African OPEC member is trying to increase oil and gas production which has stagnated for a decade. But many foreign oil companies are reluctant to invest because of Algeria’s contract terms and the drop in world oil prices.
Total energy sales reached 100 million tonnes of oil equivalent, unchanged from the previous year, while production declined 1.3 percent to 153 million tonnes of oil equivalent, the data from the energy ministry said.
Energy sales make up 60 percent of the state budget and account for 95 percent of Algeria’s total exports despite efforts to diversify the economy.
Crude oil and condensate production fell 2.8 percent to 58.9 million tonnes of oil equivalent, while natural gas output dropped 1 percent to 82.5 billion cubic metres, the data showed.
Liquefied natural gas (LNG) production declined 7.6 percent to 27 million cubic metres. Oil refined products output dropped 4.6 percent to 29.3 million tonnes, and petroleum liquefied gas output rose 2 percent to 9.6 million tonnes.
Algeria relies on earnings from the energy sector to pay for its imports and a wide range of subsidies, from food to housing. But public finances have been hit by low oil prices, forcing the government to freeze some infrastructure projects and raise the price of some subsidised products.
The government has also launched a campaign to reduce domestic energy consumption but demand is still on the rise.
Demand for refined products, mainly gasoline and diesel oil, rose 5.5 percent to 18.3 million tonnes, while natural gas consumption increased by 5 percent to 39.5 billion cubic metres.
Demand for electricity rose 8 percent last year.
New orders for US factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth slowed further in the first quarter.
The Commerce Department said on Monday new orders for manufactured goods declined 1.7 percent as demand fell broadly, reversing January’s downwardly revised 1.2 percent increase. Orders have declined in 14 of the last 19 months. They were previously reported to have increased 1.6 percent in January.
The department also said orders for non-defense capital goods excluding aircraft fell by a steeper 2.5 percent in February instead of the 1.8 percent drop reported last month. These socalled core capital goods are seen as a measure of business confidence and spending plans.
“This morning’s report suggests a more sluggish manufacturing sector in the early part of the quarter,” said Jesse Hurwitz, an economist at Barclays in New York.
The report added to weak consumer spending and trade data in suggesting economic growth moderated further at the turn of the year after slowing to a 1.4 percent annualized pace in the fourth quarter. Estimates
for first-quarter gross domestic product growth are currently below a 1 percent rate.
US government bond prices were little changed after the data, while the dollar fell to a two-week low against the yen. US stocks were trading marginally lower.
Manufacturing, which accounts for about 12 percent of the economy, has been pressured by a strong dollar and weak global demand, which have undermined exports of factory goods, as well as efforts by businesses to reduce
an inventory overhang. The sector has also been slammed by investment cuts by energy firms as they adjust to reduced profits from cheaper oil.
But the worst of the factory slump appears to be over, with a survey last week showing manufacturing activity expanded in March for the first time in six months.
After gaining about 20 percent versus the currencies of the United States’ main trading partners between June 2014 and December 2015, the greenback is flat on a trade-weighted
basis so far this year. In addition, the slide in oil prices has slowed. “We remain hopeful for some upcoming improvement in the data as many of these headwinds have either passed or faded,” said Daniel Silver, an economist at JPMorgan in New York.
“We have also been encouraged somewhat by some other more timely manufacturing indicators that have turned more mixed lately following a period of more widespread and severe weakness.”