Seaborne oil exports of the Organization of Petroleum Exporting Countries, excluding Angola and Ecuador, will fall to a 5-year low in the four weeks to Mar. 28, according to analyst Oil Movements.
Exports from the group will average 22.76 million b/d, down 350,000 b/d from 23.11 million b/d, in the 4-week period to Feb. 28, Oil Movements said in its weekly estimate.
“On the evidence available late last month, the rate of decline in OPEC sailings had looked set to accelerate,” Oil Movements said.
It noted, however, that “provisional estimates for the rest of this month instead show ongoing steady decline, at a rate of 0.3-0.4 million b/d per month.”
The analyst observed that OPEC oil ministers met the same weekend as the finance ministers of G20 countries. Both meetings are to address problems running out of control.
“OPEC opted for ‘shock and awe’ in December but has failed to take ownership of prices, up to this point,” it said.
“Whatever further action on further production restraint OPEC opts for this week, the impact on long haul crude arriving in the region will not become fully visible until late April-early May,” Oil Movements said.
Meanwhile, production cuts through the year to date have “certainly had an effect on the tanker market, but not to the scale implied by the size of the targeted cuts.”
Fixtures for OPEC cargoes show volumes slipping below those of a year ago through the year to date (and for most of the time since last November). But the year-ago difference has rarely climbed above 1.5 million b/d so far, and is not very different from the gap visible in estimated sailings.
“In a downswing of the order implied by OPEC target cuts, the spot market would normally take most of the adjustment; full compliance would have imposed a much heavier burden than this,” the analyst noted.
Considerable stock “overhang” at yearend was in the Atlantic Basin, and although OPEC's supply cuts have fallen short of targets, the cuts that have surfaced have fallen mainly in this quarter.
Westbound sailings from the Gulf are around 1 million b/d below year ago, and a high proportion of that difference is likely to be accounted for by Saudi initiatives on compliance.
As a result, with the help of the recent recovery in eastbound crude flows out of the area, the year-ago deficit in Atlantic Basin net inflows will reach 0.7 million b/d at end quarter.
Moving into the spring quarter, according to Oil Movements, “this will help to move stock figures back into line.”
