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OPEC oil revenues destined to go down
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Tuesday, 30 Jul 2013
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The Saudi Gazette quoted the Energy Information Administration, the US Department of Energy's analytic arm as saying that all members of the Organization of the Petroleum Exporting Countries except Iran earned nearly USD 982 billion in net oil export revenues in 2012. That's 5.4% increase from 2011. After adjusting for inflation with 2005 dollars as a constant, OPEC's revenue increased by 3.2% to USD 835 billion in 2012.

The EIA said that and Riyadh remained the kingpin accounting for 32% of the total OPEC revenues in 2012 with USD 311 billion. In its July market report, the OPEC had reported Saudi Arabia producing 9.7 million barrels of oil per day last year, a 4.3% increase from 2011.

However, the EIA also points out that in the wake of the market trends, OPEC sales revenue will tumble by 4.3% to USD 940 billion in 2013 and by further 3.9% to USD 903 billion in 2014. In its first projections for 2013, released on July 10, even the OPEC conceded that the demand for its crude will slip by 300,000 barrels a day next year to 29.6 million barrels or 2.6% less than the group is pumping now. That is below OPEC's current output. As per the monthly oil market report of the Paris-based International Energy Agency, OPEC pumped 30.61 million barrels a day in June compared with 30.98 million barrels in May exceeding the target of 30 million barrels per day output.

Prices are softening. Oil prices fell on Friday on worries over a looming Chinese economic slowdown and decades-high oil output in the United States, staying just above USD 107 per barrel due to a weak US dollar and possible supply disruptions. Prices were initially hit by disappointing, weaker-than-expected existing home sales in the US. The National Association of Realtors early last week said that US home sales fell 1.2% to an annual rate of 5.08 million in June. The average analyst estimate was for a rise to 5.28 million in June.

Mr Ali Aissaoui senior consultant at the Al Khobar based Arab Petroleum Investments Corporation said that "With the exception of Kuwait, whose production cost has come down due to declining investment, 2013 estimates of fiscal break even prices have increased for all countries, mostly however for Venezuela, Iran and Angola. Prices vary from USD 58 per barrel in Qatar to USD 144 per barrel in Iran compared with USD 53 and USD 127 respectively in the 2012 estimates. In between, Saudi Arabia's break even price has increased from USD 94 per barrel in 2012 to USD 98 in 2013. Accordingly, OPEC output weighted average has risen from USD 99 per barrel in 2012 to USD 105 in 2013."

Source - The Saudi Gazette

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