The global oil demand must rise faster to absorb OPEC+'s hike
According to analysts, data and industry sources, the global oil demand growth must accelerate in the coming months, or else, the market may struggle to absorb a planned increase in oil production by OPEC+ starting in October. The United States and China, the two largest oil consumers in the world, failed to meet expectations for the growth of oil demand during the first seven-month period of the year. This was even before renewed fears about a U.S. economic recession led to a sell-off of global stocks and bonds this week. Oil demand will probably slow down if the economy continues to slow.
Upset by Trump's Iran Waivers, Saudis Push for Deep Oil Output Cut
When U.S. President Donald Trump asked Saudi Arabia this summer to raise oil production to compensate for lower crude exports from Iran, Riyadh swiftly told Washington it would do so.But Saudi Arabia did not receive advance warning when Trump made a U-turn by offering generous waivers that are keeping more Iranian crude in the market instead of driving exports from Riyadh's arch-rival down to zero, OPEC and industry sources say.Angered by the U.S. move that has raised worries about over supply, Saudi Arabia is now considering cutting output with OPEC and its allies by about 1.4 million barrels per day (bpd) or 1.5 percent of global supply…
OPEC Agrees to Modest Oil Supply Hike
OPEC agreed on Friday on a modest increase in oil production from next month after its leader Saudi Arabia persuaded arch-rival Iran to cooperate, following calls from major consumers to help reduce the price of crude and avoid a supply shortage.However, the decision confused some in the market as OPEC gave opaque targets for the increase, making it difficult to understand how much more it will pump. Oil prices rose as much as 3 percent."Hope OPEC will increase output substantially. Need to keep prices down!" U.S. President Donald Trump wrote on Twitter less than an hour after OPEC announced its decision.The United States…
OPEC Agrees Oil Cut Extension to End of 2018
OPEC agreed on Thursday to extend oil output cuts until the end of 2018 as it tries to finish clearing a global glut of crude while signalling it could exit the deal earlier if the market overheats. Non-OPEC Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn't flip into a deficit too soon, prices don't rally too fast and rival U.S. shale firms don't boost output further. The producers' current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March.
OPEC Nearing Deal to Extend Output Cut to March 2018
OPEC and non-member oil producers moved closer on Wednesday to clinching a deal on extending output cuts by nine months to clear a global stocks overhang and prop up the price of crude. The Organization of the Petroleum Exporting Countries meets in Vienna on Thursday to consider whether to prolong the accord reached in December in which OPEC and 11 non-members agreed to cut oil output by about 1.8 million barrels per day in the first half of 2017. The market sees an extension by nine months as the base-case scenario since OPEC's de facto leader Saudi Arabia and top non-member Russia said this month they favoured such a move.
PIRA Expects $50-60/barrel Oil from OPEC Deal
The Organization of Oil Exporting Countries' decision to embrace production cuts will help move crude prices toward a target of $50 to $60 per barrel, Gary Ross, chairman of consultancy PIRA Energy Group, told reporters on Wednesday. OPEC's policy has shifted as Saudi Arabia is targeting that price range and Iran has become more willing to accept an agreement. Ross said at a news conference that U.S. shale producers were likely to hedge future output more selectively after OPEC decided to limit output. Shale producers and oil-consuming companies were under-hedged, he said, adding that industrial and airline buying would support prices.
Saudi Position Softens but OPEC Deal Still Elusive
Iran wants much higher share of OPEC production, but Saudi economic problems aggravate situation. OPEC might still agree an oil output-limiting deal later this year after failing to do so in Algeria this week as the economic problems of its de-facto leader Saudi Arabia force Riyadh to cede more ground to arch-rival Iran. Saudi Energy Minister Khalid al-Falih said on Tuesday Iran, Nigeria and Libya would be allowed to produce "at maximum levels that make sense" as part of any output limits which could be set as early as the next OPEC meeting in November.
Latam Oil Producers May Help Rebalancing
Latin American crude producers under financial strain may help provide a vehicle for market rebalancing that OPEC members and other oil states failed to deliver at a meeting in Doha on Sunday. Iran's refusal to discuss a ceiling for its growing output at last weekend's meeting prompted Saudi Arabia to scuttle an agreement that only months ago optimists were betting would gain adherents to redress the worst rout of a generation. "There's no question that Mexico, Venezuela and Colombia, are all declining. Clearly, it's the Atlantic Basin that is being hit on the production side and the rebalancing is well on its way…
U.S. Refinery Cuts Quicken, Impact Crude Markets
For the past six years, U.S. refiners from Texas to Philadelphia have bought every barrel of crude they can lay their hands on to cash in on a golden era of healthy margins. Now, at least five refiners - including two of the country's largest - have voluntarily cut output of gasoline and distillate in the most widespread cuts since the global financial crisis, moves that may deepen crude's prolonged rout as storage tanks at Cushing, Oklahoma, the main U.S. oil hub, near capacity. Independent refiners including Valero Energy Corp, PBF Energy INC…
New Global Oil Deal Could Draw Lessons from 1998
OPEC rifts and pact with Russia under scrutiny; secret talks led by Mexico pulled off tricky deal in 1998. After a year of secret diplomacy and hushed-up private talks around the world, OPEC's mighty Saudi Arabia and rival Venezuela were persuaded to cut a deal by non-OPEC Mexico which overcame mutual acrimony and led to a much-needed rise in oil prices. It was 1998, trust had long broken down within the Organization of the Petroleum Exporting Countries and it took outside mediation as a last resort to stop the squabbling to clinch deals at secret meetings in Riyadh, Madrid and Miami.
U.S. Shale Snaps up $50 Oil Hedges
Welcome to the oil market's new vicious cycle. This past week, as oil prices barreled over 9 percent higher to break out of a weeks-long trading range, U.S. shale producers jumped at the chance to lock in $50-plus crude for the first time in months, making up for lost time after holding off hedging during the market's late-summer slump. U.S. crude oil futures for December 2016 delivery, a favored contract for hedgers, saw trading volume spike to a weekly record high of nearly 190 million barrels, twice as much as the average for the previous four weeks, in what market sources and industry executives said was the biggest wave of hedging since a fleeting rush in late August.
OPEC to Keep Pumping, Global Glut Fears Persist
Oil group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday, setting aside warnings of a second lurch lower in prices as some members such as Iran look to ramp up exports. Concluding a meeting with no apparent dissent, Saudi Arabian Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries had rolled over its current output ceiling, renewing support for the shock market treatment it doled out late last year when Saudi Arabia, the world's top supplier, said it would no longer cut output to keep prices high. The group will meet again on Dec. 4, Naimi said.
Oil Dips Below $62 on U.S. Inventory
U.S. crude stocks rose 5.5 million barrels last week. Industry leaders say demand will push prices higher. Oil prices dipped under $62 a barrel on Wednesday after industry data showed a build in U.S. crude inventories for the 15th straight week, adding to concerns of a global supply glut. The American Petroleum Institute (API) said on Tuesday that U.S. crude stocks rose by 5.5 million barrels last week, higher than the 2.9-million-barrel build expected by analysts in a Reuters survey, to 480.2 million barrels. Stocks at the key delivery point of Cushing, Oklahoma rose by 572,000 barrels, the API said.
S. Arabia Raised Output in Sept
Top oil exporter Saudi Arabia told OPEC it raised its oil production in September by 100,000 barrels per day, adding to signs it has yet to respond to a drop in prices well below $100 a barrel by trimming output. In a monthly report issued on Friday, the Organization of the Petroleum Exporting Countries (OPEC) said Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August. The lack of a Saudi cut could add to perceptions of traders and analysts that the kingdom is looking to defend market share, not prices.
