OPEC, allies to keep oil market stability beyond 2020

A poor economic outlook has depressed oil prices. (Reuters)
Updated 15 October 2019

OPEC, allies to keep oil market stability beyond 2020

  • Compliance with production quotas among OPEC and its allies was at 136 percent, says Barkindo

NEW DELHI: OPEC and its allies are committed to maintaining oil market stability beyond 2020, with physical supplies relatively tight globally, OPEC Secretary-General Mohammad Barkindo said on Tuesday.

He added that compliance with production quotas among OPEC and its allies was at 136 percent, curbing global supplies, while production growth in North America including US shale basins was decelerating.

OPEC, Russia and other oil producer allies, a grouping known as OPEC+, have pledged to cut production by 1.2 million barrels per day (bpd) until March 2020 to support oil prices. The producers are scheduled to meet again on Dec. 5-6.

“I have been hearing a resounding chorus from all the players that they are determined not to allow a relapse to the downturn that we just navigated out of,” Barkindo told the India Energy Forum by CERAWeek, referring to a period of low oil prices in 2014-2015 that had led OPEC to cut output. 

“They will do whatever is possible within their powers to ensure relative stability is sustained beyond 2020,” he said.

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OPEC, Russia and other oil producer allies, a grouping known as OPEC+, have pledged to cut production by 1.2 million barrels per day (bpd) until March 2020.

In its latest monthly report for October, OPEC trimmed its forecast for world economic growth in 2020 to 3 percent from 3.1 percent. The report stated: “It seems increasingly likely that the slowing growth momentum in the US will carry over to 2020.”

A poor economic outlook has depressed oil prices, with Brent down about 22 percent from its 2019 peak of $75.60 a barrel reached on April 25.

The US-China trade war is affecting the global economy and oil demand, and financial markets have an increasingly bearish view of economic growth, Barkindo said.

Still, India remains a major driver of global oil demand with growth of 127,000 bpd in August, he said.


Sales of grounded Boeing jets lift off at Dubai Airshow

Updated 10 min 9 sec ago

Sales of grounded Boeing jets lift off at Dubai Airshow

  • Saudi Arabian budget airline Flynas confirms deal to buy ten long-range Airbus narrow-body planes

DUBAI: Boeing’s 737 MAX took center stage at the Dubai Airshow on Tuesday as airlines announced plans to order up to 50 of the jets worth $6 billion at list prices despite a global grounding in place since March.

Kazakhstan flag carrier Air Astana said it had signed a letter of intent to order 30 Boeing 737 MAX 8 jets for its Fly Arystana subsidiary.

Air Astana, which operates Airbus and Embraer jets in its main network, said it was confident in Boeing’s ability to resolve problems with the MAX.

Global regulators banned commercial flights of Boeing’s fastest-selling jet in March after two fatal accidents.

Plans for the jet’s return to commercial service have been pushed back to early 2020 as Boeing finalizes software and training revisions that need regulatory approval.

“We are making flying affordable for the people of Kazakhstan,” Air Astana Chief Planning Officer Alma Aliguzhinova said, adding that budget carrier Fly Arystana would start taking the jets in late 2021.

The airline plans to hold 15 aircraft directly and may finance the rest through a lease transaction, she said, adding that Air Astana would not change the composition of its main fleet.

Separately, another airline signed a firm order for 10 Boeing 737 MAX 7 and 10 Boeing MAX 10 jets, a person familiar with the matter said. The airline’s name was not disclosed.

Boeing has used the past two major industry events to try to secure market momentum for the grounded MAX, which is seen as key to the planemaker’s financial health over the coming decade.

A letter of intent between Boeing and British Airways owner IAG for 200 jets, which grabbed the spotlight at the Paris Airshow in June, has yet to be finalized as the European holding company discusses the fleet change with subsidiaries that use Airbus for medium-haul operations.

In other business coinciding with the largest Middle East air show on Tuesday, Saudi budget airline Flynas agreed to buy 10 long-range Airbus A321XLR jets.

The airline’s chief executive had said on Monday that Flynas was in talks to exercise purchasing options for some or all of 40 Airbus A320neo narrow-body jets.. Airbus unveiled a provisional order in Dubai for eight of its small A220 jets from Air Senegal. Britain’s easyJet exercised options for 12 more Airbus A320neo aircraft.

Also coinciding with the show, leasing giant GECAS was expected to confirm an order for 25 Airbus planes, including 12 A330neo jets powered by engines from Rolls-Royce, a competitor to GECAS parent company General Electric.

However, there were no immediate signs that Dubai’s Emirates was ready to finalize a provisional order for 40 Boeing 787 Dreamliners.