Qatar to exit OPEC in January to focus on gas production

Qatar to exit OPEC in January to focus on gas production

In other oil-related news, Qatar announced it was leaving the OPEC from January to focus on its gas ambitions but said it will still attend this week's meeting on December 6. The emirates' oil minister, Saad Sherida Al-Kaabi, told reporters today that Doha had made the decision in order to focus on its gas industry and dismissed speculations that the withdrawal was connected to politics.

Qatar would continue to produce oil and seek deals in countries including Latin America's top oil producer Brazil, said Kaabi.

Experts suggested that the exit of Qatar from OPEC would have little long-term impact on oil prices, although the price of Brent crude did jump by 4.7 percent on to $62.24 in early trading on Monday.

State oil producer Qatar Petroleum confirmed the decision and amplified Kaabi's remarks on its Twitter account, quoting him saying the pullout from OPEC is part of a "future strategy based on growth and expansion, both in its activities at home and overseas".

It is also deepens the rift between Qatar and Saudi Arabia, Opec's de facto leader, after Saudi diplomatic crackdown on its neighbour last summer.

There was no comment from Vienna-based OPEC, which meets Thursday to discuss possible production cuts.

The decision was announced on Monday by the country's Energy Minister, Saad al-Kaabi.

The group, along with non-OPEC member Russian Federation, is expected to announce cuts aimed at reining in a production surplus that has pulled down crude prices by around a third since October.

According to OPEC, Qatar produced only about 1% of OPEC member states' total output of petroleum in October 2018, the most recent month for which there is data.

It was also pointed out that in focusing on natural gas, Qatar is betting on the vast resources it controls in the waters that surround it. Consumption of liquefied natural gas, which is chilled to liquid form and transported on special ships, is growing faster than that of natural gas or oil. The global oil market is suffering from an oversupply, exacerbated in part by massive USA shale oil production.

One OPEC source told Reuters the decision was more symbolic than anything else. With these factors together, the nation is cutting ties with OPEC.

USA light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent, before easing slightly to around $53.50 by 0830 GMT.

A Saudi-led coalition implemented a blockade on Qatar in June a year ago, severing diplomatic, trade and transport links based on accusations that stemmed from its funding of extremist groups and relations with Iran.

Among its members, Saudi Arabia is by far its largest oil exporter, hitting a record high in November of over 11 million barrels of oil a day.

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