PARIS: The Organization of the Petroleum Exporting Countries (OPEC) is complying with a landmark deal to reduce a worldwide glut in oil, but it will take some time yet before the oil market feels the full impact of the reduction in output and prices stabilize, the International Energy Agency (IEA) said on Wednesday.
“The implementation of the OPEC production agreement appears in February to have maintained the solid start seen in January,” the IEA said in its latest monthly report.
“OPEC kept up robust adherence to its ... supply cut. For the first two months of the deal the compliance rate averaged 98 percent,” it said, adding that “global oil supplies rose in February as (both) OPEC and non-OPEC producers pumped more.”
At the end of November, OPEC agreed to cut output by 1.2 million barrels per day (bpd) from Jan. 1, initially for a period of six months.
Then in December, non-OPEC producers led by Russia agreed to cut their own output to 558,000 bpd.
The aim was to reduce a glut in global oil supply that has depressed prices, which currently stand at around $48-$51 per barrel.
Nevertheless, global oil supplies increased by 260,000 bpd to 96.52 million bpd in February, the IEA calculated. OPEC increased output by 170,000 bpd to 32 million bpd and non-OPEC oil production increased by 90,000 bpd to 57.8 million bpd, largely due to higher US output.
This meant that OPEC’s compliance rate with the agreed output cut stood at 91 percent, down from 105 percent in January.
And after a compliance rate of 40 percent in January for the 11 non-OPEC countries, there was still little information available on production levels in February, the IEA said.
Nevertheless, the non-OPEC output was seen “slightly higher following rising output from Kazakhstan and Sudan/South Sudan and with Russian production essentially unchanged,” it added.
The IEA said that Saudi Arabia was shouldering the bulk of the cuts in overall OPEC production.
“The market needs time for the full impact of the big supply cuts under the output reduction agreements to be felt,” the report said.
“If current production levels were maintained to June when the output deal expires, there is an implied market deficit of 500,000 bpd for the first half of 2017, assuming, of course, nothing changes elsewhere in supply and demand,” the agency stated.
“It is unclear at this stage whether OPEC will extend its six-month supply pact to the end of the year,” the IEA said.
Impact of OPEC oil cuts will take time to be felt: IEA
Impact of OPEC oil cuts will take time to be felt: IEA
Stc Group issues US dollar-denominated sukuk with a total value of $2bn
RIYADH: Stc Group has issued US dollar-denominated sukuk with a total value of $2 billion across two tranches.
The group clarified that the issuance included the offering of $750 million in sukuk with a 5-year maturity at a yield of US Treasury plus 75 basis points, and an issuance of $1.250 billion with a 10-year maturity at a yield of UST plus 90 basis points, according to the Saudi Press Agency.
It noted that the total order book exceeded $8 billion across both tranches, with a coverage rate exceeding 4 times, and participation from over 300 investors in the subscription.
The issuance garnered strong demand from a broad and diverse base of international investors, reflecting solid confidence in the robustness and efficiency of stc Group’s business model and strategy.
This strategy is aimed at strengthening its digital leadership, seizing infrastructure opportunities, enabling massive projects, and contributing to the realization of Vision 2030 objectives, with a focus on achieving sustainable growth based on operational efficiency and maximizing shareholder value.
This issuance enhances stc Group’s access to international capital markets and solidifies investor confidence in the strength of its credit position.
It also supports its strategic role in accelerating the pace of digital transformation in the Kingdom and building a thriving digital economy.
