December 3, 2018 / 5:53 PM / 16 days ago

ANALYST VIEW-Energy markets assess fallout of Qatar's exit from OPEC

    Dec 3 (Reuters) - Days before an OPEC-led meeting aimed at
tackling a recent slide in oil prices, Qatar, the Organization
of the Petroleum Exporting Countries' (OPEC) smallest oil
producer and also the world's biggest liquefied natural gas
(LNG) exporter, has announced it would quit the group in
January.
    The following are analysts' views on the likely impact on
oil and LNG markets:

AYHAM KAMAL, EURASIA GROUP:
     "The withdrawal of one of the first states to join the
organization will not have a material impact on OPEC's influence
and ability to manage market cycles. 
    "The Qatari leadership is no longer interested in remaining
an active part of an organization that largely shuns it. OPEC is
now practically under the influence of Saudi Arabia and the UAE,
with Qatar either intentionally or unintentionally left on the
margins."    
     
WOOD MACKENZIE:        
OIL: "Qatar has minimal spare capacity so its exit won't affect
the volume of oil supply in the market during 2019 or risk
OPEC's goal of reducing output next year."
    "However, it does come at a time when OPEC needs to hammer
out a deal in the face of market scepticism in the cartel's
ability to control production."
LNG: "Since lifting the 12-year ban on development of the North
Field in April 2017, Qatar unveiled ambitious plans to increase
its LNG capacity from 77 million tonnes per annum to 110 million
tonnes per annum." 
    "Qatar's OPEC exit underlines the country's aim to maintain
its place in the global LNG market."              
    
FRANK SCHALLENBERGER, HEAD OF COMMODITY RESEARCH, LBBW:     
OIL: "With an output of some 0.6 mbpd (million barrels per day)
and very limited possibilities for increases, Qatar is not an
important player on the supply side. 
    "Basically it only means one problem less for Saudi Arabia -
as relations between OPEC's de facto leader and Qatar have not
always been the best."
LNG: "Qatar said they wanted to focus on natural gas production
- so this could be a first step to bigger supply and lower
prices."
    "I think in the short term this will make not a big
difference on the LNG market. If they really are able to boost
production, of course this could mean that their share of the
LNG market will even get bigger - and that the U.S. will lose
market share on the export markets in the future."

NAEEM ASLAM, CHIEF MARKETS ANALYST, THINK MARKETS:     
OIL: "Qatar leaving the OPEC isn't as great news for the oil
market and the market participants haven't digested the full
impact of this news. Basically, Qatar is have brought the
biggest weapon out and it only means more instability between
the Qatari and Saudi relationship." 
    "In fact, we would not be surprised if other counties start
to follow the same path and then we have no control over supply
or demand as each individual country could just do what they
like."  
LNG: "Other producers can certainly look towards Qatar and work
directly with Qatar, and mitigate their dependence on countries
such as the U.S., which does not have the same position as Qatar
or have the reserves that Qatar has."
    "Major impact would be on China's dependency on the U.S. and
we see that relationship definitely going down from here.”
    
CARLO ALBERTO DE CASA, CHIEF ANALYST, ACTIVTRADES:     
"Analysts are probably focusing on the symbolic impact of this
decision, which is showing some conflict inside the producers'
organisation." 

COMMERZBANK:    
"It remains to be seen whether Qatar will sign up to the
production cuts even as a non-OPEC member. Qatar recently
produced 610,000 barrels per day and contributed 38,000 barrels
per day to the production cuts."
    
JIM RITTERBUSCH, PRESIDENT, RITTERBUSCH AND ASSOCIATES,
PRESIDENT:     
"While we are not viewing Qatar's exit from the Cartel as a
significant price driver, it does appear to diminish the
historical clout of OPEC while increasing the importance of a
Saudi-Russian alliance in coordinating production decisions." 

 (Reporting by Swati Verma and Arpan Varghese in Bengaluru
Editing by Marguerita Choy)
  
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