OPEC Looks To Dial Back Production Cuts
Last week’s surprise drawdown in crude inventories may be the last for a while, as analysts are expecting a reversal in stocks this week.
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– China became the second largest LNG importer in 2017, surpassing South Korea.
– China’s LNG imports of 5 billion cubic feet per day (Bcf/d) was second only to Japan’s 11 Bcf/d.
– The surge in LNG imports is helping China fuel its rapid switchover from coal to gas. China has run into gas shortages amid its aggressive push to clean up air pollution by shutting down coal.
Market Movers
• Sanchez Energy (NYSE: SN) saw its stock jump more than 3 percent after it announced it would pay dividends on series A and B convertible perpetual preferred shares in cash rather than stock.
• The share price of Carrizo Oil & Gas (NASDAQ: CRZO) fell by more than 6 percent after hours after reporting that its 2018 production could dip 10 percent, while also predicting that oilfield services costs would see a “double-digit increase” this year.
• Schlumberger (NYSE: SLB) and Baker Hughes (NYSE: BHGE) were upgraded by Bank of America to a Buy rating, while Halliburton (NYSE: HAL) was downgraded to Neutral.
Oil prices gained a bit over the past few trading days, after a surprise drawdown in crude stocks last week. But analysts see that to be a one-off, with expectations that inventories will resume climbing this week.
IEA: U.S. to become world’s largest oil producer by next year. The IEA’s executive director said that the U.S. will surpass Russia to become the world’s largest oil producer “definitely next year,” if not in 2018. “U.S. shale growth is very strong, the pace is very strong … The United States will become the No.1 oil producer sometime very soon,” Fatih Birol told Reuters.
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