Oil price rebounds seems unlikely Supply to grow faster despite OPEC members compliance – IEA

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Oil prices seemed to have stabilized at new, lower levels after a massive decline last week. WTI has some support at about $59-$60 per barrel and Brent at $62. But fears of a shale wave cut seemed to have ended the bullish sentiment and reduced the likelihood of a rebound in prices in the short run.

The IEA reiterated its position that global oil supply will grow faster than demand this year. The agency noted that global oil and product inventories have declined dramatically, and are very close to the five-year average, but that surging U.S. supply could tip the balance back into surplus. Production is growing so fast that it resembles the original shale wave from years ago.

This “second wave of growth [is] so extraordinary” that the supply growth from the U.S. alone could equal total global demand growth in 2018. “[T]he underlying oil market fundamentals in the early part of 2018 look less supportive for prices,” the IEA wrote.

Natural gas exports and crude oil exports are both rising, after a long history in which the U.S. was a major importer of both.

To be sure, the U.S. is still one of the largest net-importers of crude oil, but the rising volume of exports is cutting down on that total.

In future scenarios in which oil prices are higher relative to a baseline assumption, the U.S. becomes a net energy exporter sooner, due to higher levels of production and lower levels of domestic consumption.

The EIA’s most aggressive scenario could have the U.S. as a net exporter as soon as 2020.

However, Russia’s energy minister Alexander Novak said that his country would be interested in some sort of cooperative arrangement with OPEC for the long haul. “Taking into account the current political and economic relationship and projects that we’re considering, I think our relationship will be of long-term nature,” he said, according to S&P Global Platts

Organisation of Petroleum Exporting Countries (OPEC) continues to maintain high compliance levels with the production limits, keeping about 1.8 mb/d of supply off of the market. But at the same time, as the oil market has tightened significantly in recent months, OPEC officials are becoming more confident that they will be able to ramp up output at some point in the not-so-distant future. S&P Global Platts notes that several oil ministers from OPEC countries have trumpeted their plans to raise production capacity. Kuwait will add 225,000 bpd of capacity by the end of March; Iran’s minister said it could add 100,000 bpd immediately after the expiration of the agreement; Iraq said it would hit 5 mb/d of capacity by the end of the year; and the UAE will add a whopping 500,000 bpd in late 2018. This doesn’t necessarily mean a wave of supply will soon come online from OPEC, but the comments loom as a threat over the oil market.

OPEC’s monthly Oil Market Report revised up its expectations of U.S. shale growth, putting non-OPEC supply 1.4 mb/d higher than last year, an upward revision of 250,000 bpd from last month’s report. Still, the projection is much more sanguine than the cartel’s counterparts in the EIA and IEA, which foresee much more bearish fundamentals ahead. OPEC says the oil market will balance later this year. REA to collaborate with Jigawa state on solar mini-grids,Jigawa Energy City

The Rural Electrification Agency (REA) is set to collaborate with Jigawa State on  solar mini-grids and Energy City.

The REA and the government of Jigawa state had a collaborative meeting with the Jigawa State Government on the development of solar mini-grids in the state as well as the proposed Jigawa Energy City recently.

This took place during a visit by Managing Director /Chief Executive Officer of the Rural Electrification Agency, Damilola Ogunbiyi  to the Deputy Governor, Mr. Ahmad Mahmud’s  in Jigawa

They also commenced negotiations to enable Jigawa to deploy solar electricity solutions to reduce its monthly expenditure on street lights in its 27 local governments by adopting solar power.

The Deputy Governor said there were off grid communities in which the distribution companies may not want to invest money in and he was hoping REA would develop off grid standalone solutions in these villages.

The REA has been responsible for implementing the Federal Government’s commitment to aggressive rural electrification across the country through the use of renewable energy and mini grids.

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