OIL - Qatar And OPEC

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Summary

Sharp increase of oil price at the beginning of December.

Qatar stock market changes.

How will the OPEC conference influence the rate of oil production?

Changeable volumes of oil export in October – November.

Qatar is one of the richest countries. GDP per capita is so high that Qatar has a leading position in the world. Latest news show this growth clearly enough.

On the 1st of December Qatar stock markets rose quite significantly in early trading. This is due to the news about the first agreement among the countries of OPEC during the last 8 years.

Pending the conclusion of this agreement contributed to the fact that oil prices have increased in the Gulf on the eve. But the deal also identified a large reduction in production of oil. That is why the price of oil continued to rise on Thursday morning. Brent crude broke the six-week-old record ($52.73 per barrel), but later the price again began to decline gradually.

Data on the stock market of Qatar rose 1.1 percent as the company Petrochemical Industries Qatar added 2.9 percent, while the indices supplier of drilling rigs in the Gulf International Services increased by 5.8 per cent.

In Vienna, on the 30th of November, 2016 there was the Conference (the 171st one) of the Organization of Petroleum Exporting Countries (OPEC). Chairman of the meeting was the official OPEC President, HE Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry of the State of Qatar and the head of its delegation.

Oil production allowed for OPEC members has already been identified, but there are still many controversial issues, so a dialogue on the conditions of the contract continues. Thus, we will be able to see the start implementation of the agreement when a group of 13 countries - members of OPEC total production will reduce by 4.5%, or 1.2 million barrels a day.

Now we are to look at the oil export features, so let us turn to a tanker data.

Qatar oil exports pie chart November 2016

(source: tanker tracking data, Bull And Bear Investor's calculations)

As we can see, Japan and Korea became the main recipients of oil from Qatar in October - November. The total oil volume delivered to these countries represents almost half of total Qatar oil exports.

Oil flows from Qatar to Japan in November 2016

(source: tanker tracking data, Bull And Bear Investor's calculations)

The presented graph shows that at various dates from October 30th to November 12th, 10.7 million barrels of oil were sent to Japan.

The oil also comes to the other countries (the Netherlands, Hong Kong, Vietnam and to the Suez Canal), but their shares are rather small in comparison with the countries-importers given above. According to bad weather conditions the tanker data from the Persian Gulf may be incomplete.

Speaking about the changes taking place in the oil export volumes from Qatar in October - November, turn to the following schedule.

Qatar oil exports cumulative in October and November 2016 (source: tanker tracking data, Bull And Bear Investor's calculations)

The volume of oil export at the end of October was rather changeable. There were several outflows on the 26th, 29th and 31st of November. The same situation is seen at the beginning of November, but they do not change the total picture. Later there was a constant line at the beginning of November, but then it declined. What is more, it actually stopped. Since the 22nd of November tankers have not left Qatar.

To sum it up, oil production growth was observed in recent years in almost all countries, among them not only OPEC country, but also many others. Despite the fact that the preliminary surveys and statements by the representatives of these states indicate their willingness to carry out the reduction or freezing of oil production, the likelihood of achieving full agreement is quite small. This is due, of course, that this list includes countries that have the right not to comply with the terms of the proposed agreement, accordingly, they may continue to increase oil production. The non-OPEC countries will meet the organization next Friday. According to the agreement, oil production will be reduced by about 1.2 million barrels per day in the organization. Combining export decline at the end of the month (according to our tanker data) and OPEC decision, we can say that December oil outflow from Qatar will likely be lower than in November. To be updated soon.

Our articles are typically based on tanker tracking data, which is not available for free anywhere else. If you want to receive notifications on when our articles are published, please go to the top of this page next to my profile, click the "Follow" button and then click on "Real-time alerts on this author."

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Additional disclosure: The material presented in this article is provided for informational purposes only and is based upon information that is considered to be reliable.

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