Russia and Saudi Arabia were coming around to the idea Friday that they need to ease the OPEC/non-OPEC production cuts, which have gone overboard in recent months, removing much more than the 1.72 million b/d of supply they had pledged to curb under the November 2016 agreement.
There was no formal statement by the time we closed this report Friday evening in Asia, but there was talk of putting 1 million b/d more into the market to cool overheated crude prices, according to media reports citing sources privy to the discussions taking place between energy ministers on the sidelines of the St. Petersburg International Economic Forum in Russia.
The proposed addition of 1 million b/d would be a fair correction, in line with our estimate that the market has been deprived of as much as 3 million b/d of supply from the 22 OPEC/non-OPEC producers in the reduction pact in recent months.
Benchmark crude futures, which had closed more than $1/barrel lower Thursday on talk of OPEC looking to ease supply, plummeted by another $2/barrel on Friday’s headlines out of St. Petersburg. Brent, which had pierced the $80/barrel psychological mark a few times during intraday trading over the past fortnight, had slid below $77, while WTI was changing hands under $69 as of 1300 GMT.
Russian Energy Minister Alexander Novak took the lead Thursday, telling reporters that the supply restrictions could be unwound gradually, though the output cut deal should remain in place. Novak said he and Saudi Arabia had a common position on the future of the deal, suggesting an amicable meeting of the minds between the de facto leaders of the OPEC and non-OPEC blocs.
Novak, Saudi Energy Minister Khalid Al-Falih, UAE Energy Minister and current OPEC president Suhail al-Mazrouei, and OPEC secretary-general Mohammad Barkindo were scheduled to hold discussions on the global oil markets in St. Petersburg.
The leaders have less than four weeks to chart a new course, which would be formally adopted at the OPEC/non-OPEC ministerial meeting in Vienna on June 22. Deciding to release more barrels into the market might be the easier part. Agreeing on how exactly it will be done could prove to be far more difficult.
A major reason behind the OPEC/non-OPEC supply cuts reaching far deeper than agreed over the past few months has been the inability of several producers in both groups to fulfill their agreed quotas. The most prominent OPEC member with production woes is Venezuela, which languished around 460,000 b/d below its quota of 1.972 million b/d on average in the first four months of this year. Angola has also been struggling to maintain its output, falling short of its target by around 160,000 b/d in April, according to the latest OPEC data.
Libya and Nigeria, which do not have production limits, continue to be plagued by outages from militant attacks on infrastructure. The only voluntary overshooting of the targeted cut within OPEC has been by Saudi Arabia, which could be corrected, but that would put only about 100,000 b/d more into the market.
Within the non-OPEC group of 10 collaborators, Russia has the capacity to raise output by the 300,000 b/d that it took off the market gradually starting in 2017. However, at least three major producers in this bloc — Mexico, Kazakhstan and Azerbaijan — have under-delivered against their targets in recent months, causing a collective shortfall of nearly 730,000 b/d in March, according to the latest monthly data available. Of these, Kazakhstan is expected to catch up to its ceiling in the second half of this year, but not Mexico and Azerbaijan.
This means Russia and Saudi Arabia will have to do most of the heavy lifting to put more barrels into the market. That would mark a major departure from OPEC’s policy of apportioning any agreed reductions or additions in supply to all members in proportion to their share of the group’s overall production.
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Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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