OPEC Secretary General to Make First Visit to Fujairah as Global Oil Markets Tighten

By The Gulf Intelligence

Image Attribute: The file photo of OPEC Secretary General, H.E. Mohammed Barkindo / Source: The Gulf Intelligence

Fujairah, UAE (Sept. 17, 2018) – The OPEC Secretary General, H.E. Mohammed Barkindo, will make his inaugural visit this week to Fujairah, the Middle East’s largest commercial storage hub for oil products, amid an emerging tightness between supply and demand in global oil markets.

The Organization of Petroleum Exporting Countries and its non-OPEC partner countries participating in the Vienna “Declaration of Cooperation” achieved a compliance level of 109% in July with targeted cuts of 1.8 million barrels a day. The 23-country alliance stated in its latest monthly report that this level of conformity, while still high represented a drop from previous months, and showed “significant progress” towards the goal set at the 4th OPEC and Non-OPEC Ministerial Meeting on June 23rd, 2018, to expand supplies and reverse a growing market tightness.

Brent crude oil prices have averaged around $71 a barrel this year.

OPEC’s spare production capacity, which measures their bandwidth to ramp up production to cushion price fluctuations, is below 3% of total global demand. Lower spare production levels restrict how capable OPEC is to respond to a sharp rise in prices. Around the world, oil producers everywhere are showing signs of slowing production growth. Mexico's incoming President is considering stopping auctions for leases from foreign oil companies, and toying with joining OPEC. Venezuela continues its free-fall as the vulture funds circle the state-run CITGO.

“The OPEC Secretary General arrives in the UAE with a good story to report to its member states as Brent crude sits firmly in the $70s, but there are growing signs that oil demand could be choked-off as an emerging trade war between the world’s two largest oil consumers – the U.S. and China -- heats up,” said Sean Evers, Managing Partner, Gulf Intelligence. “And there are supply side challenges looming for OPEC with resurgent US shale oil producers capturing market share in Asia from Middle East producers,” he added.

The OPEC Secretary-General will be attending the 8th Gulf Intelligence Energy Markets Forum alongside H.H. Sheikh Saleh Bin Mohammed Bin Hamad Al Sharqi, Chairman of Department of Industry and Economy, Fujairah & Chairman of the Board of Port of Fujairah. Other energy industry leaders attending include Abdulaziz M. Al-Judaimi, Senior Vice-President of Downstream at Saudi Aramco, Yusr Sultan Al Junaidy, Managing Director, Horizons Terminals ENOC GROUP, Andrew Tan, Chief Executive Officer, Maritime & Port Authority of Singapore, Marco Dunand, Chief Executive Officer, Mercuria Trading, and Martin Fraenkel, President, S&P Global Platts. The Forum is supported by industry partners including Port of Fujairah, S&P Global Platts, Vitol, National Bank of Fujairah, PETRONAS and Uniper.