Oil buyers in Asia are sure of one thing as OPEC prepares to meet: They’ll emerge as winners from the group’s rift over production.Much more at the link.
Members of the Organization of Petroleum Exporting Countries will gather Dec. 4 in Vienna, where Iran has said it will announce plans to boost production by 500,000 barrels a day. That may further lift the 12-member group’s output, which has exceeded its target for 17 months. The increase in volumes would exacerbate a global glut and benefit the biggest oil- consuming region’s refiners, which are seeking cheaper sources of crude.
OPEC is forecast to stick with its strategy of defending market share by maintaining output and driving down higher-cost production elsewhere, according to analysts and traders surveyed by Bloomberg . That’ll leave members including Saudi Arabia free to continue pumping even amid calls from Iran to make room for its extra supply after international sanctions over its nuclear program are lifted.
“This is probably the best time we’ve ever had as a buyer,” said Kim Woo Kyung, a spokeswoman for SK Innovation Co., South Korea’s largest refiner. “We are enjoying an overflow of oil.”
OPEC has exceeded its output target of 30 million barrels a day since June 2014 as it pumps near record amounts of crude, boosted by increases from its biggest members, Saudi Arabia and Iraq. The group’s strategy to defend market share has helped lift refining margins for Asian processors, who have been treated to a steady flow of cheap cargoes from the Middle East to Mexico, Nigeria and Russia.
Profits from turning crude into naphtha, which is used to produce gasoline as well as petrochemicals, surged to $9.42 a barrel this month, the highest level since at least May. Purchasing costs for refiners have slumped. Japan, Asia’s second-biggest oil consumer, spent an average of $51.22 a barrel in September for supplies, down from $113.47 in January 2014.
A Note to the Granddaughters
What seven classic novels have to say about the stages of life, from Edward Mendelson's The Things That Matter, c. 2006. Here are the seven classic novels:
- Frankenstein, Mary Shelley
- Middlemarch, George Eliot
- Mrs Dalloway, Virginia Woolf
- To The Lighthouse, Virginia Woolf
- Between The Acts, Virginia Woolf
- Wuthering Heights, Emily Brontë
- Jane Eyre, Charlotte Brontë
In anticipation of her grandmother coming home later this week, Sophia is sweeping the kitchen floor.