Oil prices temporarily stabilized after the last-week surge. The Brent prices stand slightly above $66/bbl at the moment. Some market participants attribute this to a halt in the US-China negotiations while in fact the developments are driven by lower oil output in Saudi Arabia on the accident at its largest offshore field. The details and consequences of the accident are yet to be disclosed. Oil production and exports may even fall below 9.8 million bbl per day and 6.9 million bbl per day as expects Minister of Energy Khalid al-Falih.
The Venezuelan issue will also affect OPEC's oil production volumes in February. The country keeps on cutting oil supplies, but now the dynamics can be quite diverse. In the meantime, the US sanctions against Oil Minister of Venezuela and the head of the state oil company PDVSA Manuel Quevedo should not restrain supply from the country. According to the OPEC estimates, the general performance of the cartel will not be depressed even though Quevedo is a member of its board.
In spring, the impact on the production will come from the progress in the US-Iran relationships. Washington launched new sanctions in November which led to lower production. In February, however, the figure rose, either due to the fact that some countries (China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey) got a 6-month easing of the sanctions and ramped out imports or new supply routes that are being sought to avoid sanctions. Further dynamics of oil production in Iran will depend on whether the countries worldwide are ready to buy Iranian oil given possible escalation of the US sanctions.
Nigeria postponed the date of the presidential election from February 16 to 23, which may affect oil production in the country. There might be rebels that can perform new attacks on oil infrastructure if the current president stays. Production can drop by up to 1 million bbl per day.
In addition, OPEC members are also concerned that Russia can raise output instead of cutting it. Nevertheless, oil prices will gradually respond to all the developments along with new expectations and concerns.