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OPEC’s incoming top official says keeping OPEC+ pact is top priority

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OPEC’s secretary general-elect told Reuters on Monday a top priority for him is to keep the group’s pact with Russia and other producers in place, saying it was in the wider interest of the oil industry.

OPEC on Monday agreed to appoint Haitham al-Ghais, a former Kuwaiti governor to OPEC, as its new secretary general, to succeed Nigeria’s Mohammad Barkindo, who has held the position since 2016.

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Al-Ghais will take over the role on Aug. 1.

The OPEC+ alliance between OPEC and other oil producers, called the Declaration of Cooperation (DoC), has helped to support the global market since 2017 when it was set up. Oil prices have recovered, in part because of record OPEC+ output cuts agreed in April 2020 as the pandemic hit demand.

“That’s one of my top priorities – to support the continuation of this Declaration of Cooperation,” al-Ghais told Reuters, asked if he supported keeping the pact into 2023.

“It’s in the wider interest of the industry and all the 23 countries that have signed up to this agreement.”

In line with the April 2020 pact, which OPEC+ has agreed should say in place until the end of this year, the producers have been easing their output curbs. They are expected to confirm another increment to supply in February when they meet on Tuesday.

Al-Ghais, a veteran of Kuwait Petroleum Corp. and Kuwait’s OPEC governor from 2017 to June 2021, currently serves as Deputy Managing Director for International Marketing at KPC.

He said he was “proud and humbled” by the support he received at the OPEC meeting. “Everyone was so supportive and kind with their words,” he said.

His appointment, early into a meeting lasting about an hour, contrasts with previous protracted elections when several OPEC countries had nominated candidates.

Al-Ghais said he brought a strong commitment to the role plus experience of OPEC+ panels such as the Joint Technical Committee (JTC) and the Joint Ministerial Monitoring Committee (JMMC), which study the market and help the full group of OPEC+ ministers to decide policy.

“My personal commitment and of course Kuwait’s commitment to the DoC is unwavering,” he said. “I have hands-on experience of what the JTC does, what the JMMC does. I’ve attended all these meetings since 2017, I haven’t missed a single meeting even when I had a broken leg.”

Read more: OPEC+ likely to stick to existing policy at Jan. 4 meeting: Sources

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Iran gas flow to Turkey cut by technical failure: Officials

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Iran has cut gas flows to Turkey due to a technical failure, prompting Turkish authorities to order gas-fueled power plants to cut gas use by 40 percent, sector officials said on Thursday.

Turkish natural gas distributors were also asked to reduce supply to 60 percent for large consumers except for that used for heating, the Turkish sector officials said, adding that schools and hospitals will be exempted.

Iran notified Turkey of 10-day cut to natural gas flows, but talks are ongoing to start flows earlier, the officials added.

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Turkey, UAE sign FX swap deal worth $5 billion

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Turkey signed a $4.9 billion currency swap agreement with the UAE, boosting dwindling foreign-exchange reserves depleted by the country’s financial turmoil.

The three-year deal reflects a warming of ties that began last year after a decade of frosty relations that rippled across the Middle East. Turkey has already signed swap deals with Qatar, South Korea and China to prop up its reserves, which shrank more than 10 percent in December as the central bank intervened in the foreign-exchange market to stem the lira’s decline.

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Reserves totalled just under $110 billion on Jan. 7, according to official data, but fall significantly below zero when the central bank’s liabilities from swap deals with foreign counterparts or commercial lenders are stripped out. The lira, meanwhile, still lost about 40 percent of its value last month alone, when investors fled lira assets in search of protection against a worsening inflation outlook.

The run on the currency began after the central bank started a cycle of interest rate cuts in September at President Recep Tayyip Erdogan’s demand. Erdogan argues that lower borrowing costs will curb price pressures, contrary to what most central bankers think.

The size of Wednesday’s swap agreement in local currencies is 18 billion UAE dirhams or 64 billion Turkish liras, according to separate statements by both monetary authorities.

The deal followed a visit by Abu Dhabi’s Crown Prince, Sheikh Mohammed bin Zayed Al Nahyan, to Turkey in November.

Read more:

Turkey, UAE say they want deeper cooperation, trade after Dubai talks

UAE establishes $10 bln fund to support investments in Turkey

Turkey, UAE to sign accords on energy, technology at talks: Officials

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UAE energy minister looks ahead to supply 400,000 bpd, ‘not worried’ about short term

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UAE energy minister Suhail al-Mazrouei said on Wednesday that he was “not worried about the short term” when asked about predictions that oil prices will rise above $100.

The price of benchmark Brent crude gained 0.33 percent on Wednesday to $87.76 per barrel, as oil rose for a fourth day as an outage on a pipeline from Iraq to Turkey added to worries about an already tight supply outlook.

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“I will never give a prediction on a price. We will continue to do our work of increasing the supply of 400,000 bpd,” he told reporters on the sidelines of the Abu Dhabi Sustainability Week.

“I am not worried about the short term,” he said. “I am worried about the long term if there are voices saying we should not invest.”

Analysts are forecasting tight oil supply in 2022, driven in part by demand holding up much better than expected as the highly contagious omicron coronavirus variant spreads, with some predicting the return of $100 oil.

Mazrouei said all producing countries and international oil companies should invest in hydrocarbons to ensure a smooth energy transition.

Read more:

UAE’s ADNOC works to ensure reliable supply after fuel depot incident

Key Iraq oil pipeline to restart after explosion in Turkey

Global oil demand expected to remain ‘robust’ despite COVID omicron variant: OPEC

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