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Page added on February 16, 2015
Kuwait Sees Crude Recovering
The surplus in global crude supply is smaller than the 1.8 million barrels a day Kuwait estimated last month, and prices will continue to recover, Oil Minister Ali Al-Omair said.
The Persian Gulf state producer plans by next year to add 40 more drilling rigs and raise production capacity to 3.15 million barrels a day, a 5 percent increase from today, Hashem Hashem, chief executive officer of state-run Kuwait Oil Co., told reporters at a conference in Kuwait City.
“We were expecting oil prices to recover in the second half, but they recovered faster than what we expected,” Al-Omair said Monday at the same event. “I expect oil prices to keep improving.”
Rising U.S. supply is contributing to a worldwide crude surplus. Qatar and the United Arab Emirates, OPEC members like Kuwait, estimated the excess at 2 million barrels a day, while the producer group’s Secretary-General Abdalla El-Badri said Jan. 26 the surplus was 1.5 million barrels. The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, decided not to cut output in November, leaving more expensive operators to reduce supply.
Brent crude futures, a benchmark for more than half of the world’s oil, gained 7.9 percent in London this year, after plunging 48 percent in 2014. The contract rose as much as $1.05 in trading Monday and was at $61.72 a barrel at 3:07 p.m. on the ICE Futures Europe exchange.
Burgan Field
“Brent is near $62, and there is a sense of optimism surrounding this issue,” Qatar’s Energy Minister Mohammed bin Saleh Al Sada said in Doha, the Qatari capital. The general trend in prices has changed over the past two weeks, he said.
Kuwait Oil has signed at least $12 billion in development projects during the last two years and will have 120 rigs in service by 2016 compared with its current force of 80, according to Hashem, the Kuwaiti company’s CEO.
“We are growing our activity from the drilling side,” he said.
The state producer will boost Kuwait’s daily output capacity by 150,000 barrels of oil and 300 million standard cubic feet of natural gas, Hashem said. It will commission the first development phase of the Burgan oil field by the end of March, he said. Burgan is the world’s second-biggest field, after Saudi Arabia’s Ghawar deposit, and has a production capacity of about 1.7 million barrels a day.
‘Positive’ Talks
Kuwait pumped 2.85 million barrels daily in January, making it OPEC’s third-largest producer, according to data compiled by Bloomberg. The Persian Gulf country has discovered new oil deposits and is appraising its reserves, said Al-Omair, the oil minister.
Kuwait had “positive” discussions Sunday with neighboring Saudi Arabia on their joint operations in the Neutral Zone, a border area where they’re jointly developing oil fields, he said.
Production at the shared Wafra fields, where a Chevron Corp. unit is the operator, has dropped 20 percent since October, two people with knowledge of the matter said Feb. 9. Kuwait stopped issuing work permits for Saudi Chevron employees at Wafra because Kuwait’s ministry of labor and social affairs halted services to the company, three people with knowledge of the matter said Oct. 28. The development coincided with a shutdown of the shared Khafji offshore fields on Oct. 16.
5 Comments on "Kuwait Sees Crude Recovering"
Makati1 on Mon, 16th Feb 2015 6:20 pm
Everyone is still guessing what oil is going to do. No one knows. Too many variables in this game where the rules change almost daily.
Plantagenet on Mon, 16th Feb 2015 6:31 pm
Kuwait’s mega-projects designed to increase their oil production will tend to prolong the oil glut, and drive oil prices even lower.
Perk Earl on Mon, 16th Feb 2015 10:46 pm
“The surplus in global crude supply is smaller than the 1.8 million barrels a day Kuwait estimated last month, and prices will continue to recover, Oil Minister Ali Al-Omair said. The Persian Gulf state producer plans by next year to add 40 more drilling rigs and raise production capacity to 3.15 million barrels a day, a 5 percent increase from today,”
Surely going from 1.8 mbd to 3.15 is a greater increase than 5%.
forbin on Tue, 17th Feb 2015 3:50 am
Kuwait pumped 2.85 million barrels daily in January, the capacity figure would indicate a 3.00Mb potential , which they state will rise to 3.15Mb, for the cost of god knows as that $12Billion is a 2 year project for oil and gas
150 million capacity increase when they have already 150 million capacity gap……. interesting
150M x $60 per barrrel = 9000 million = $9Billion
hmm peanuts figures , if they can actually pump it ( figures indicate from them that they pumped 2.65M since November 2012 until recently )
Forbin
Davy on Tue, 17th Feb 2015 6:18 am
“The surplus in global crude supply is smaller than the 1.8 million barrels a day”. Does this matter if there is a disconnect from a bifurcated global economy of the digital and the real? Does this number matter if we have left the bumpy plateau and shifted into the bumpy descent? You can discount these words all you like but they are a possibility.
It is possible we are at limits and diminishing returns of the oil and financial complex. These are foundational elements of the global economy with no substitution. There are no alternative systems or substances to take their place. If we are in fact at the early stages of a bumpy descent then oil supply may remain in a slight glut or close to a glut. This relationship is likely beginning stages of a vicious cycle of demand and supply destruction.
This reality is masked by human nature of the markets projecting a digital reality that is nothing more than a grand Ponzi scheme on a level never seen in human history. It is total and global. My thesis is it is highly likely this supply glut is not over and if it bounces into a tighter market situation it won’t last. The economy will have acid reflux with rates rising so will the economy have issues with high oil prices ($100).
The QE we seen in the past from the FED is not likely again at a level and effectiveness we saw for the last few years. That tool is over. The other central banks are not an effective source of QE. China’s economy is clearly bifurcating from a monumental mal-investment credit increase never before seen by man. The physical realities of this mal investment are in decline with industrial over capacity and the ending of a cancerous construction boom. Yet, China’s speculative digital side is rapacious.
We are seeing macro structural changes from the end of cheap economic oil and the end of the effectiveness of debt monitarization. This is very likely a new and significant paradigm shift to modern man. This is the bumpy descent that can be masked by the digital economy for a time. The top is completely infiltrated except in Russia. The investors that matter are globally all in with this policy of repression and wealth transfer. The pie is shrinking so the real and physical is slowly eroding. Any time Ponzi scheme gets starved of food they die. There is no substitute for the real and physical to a global Ponzi scheme.