Oil rises 1% on settlement amid fears of supply shortages

[yota691]

OPEC's oil output fell in June, led by Iran

11 July 2019 02:38 PM
From: Noha Al - Nahhas

Mubasher : OPEC's oil production fell last month by 68,000 bpd led by Iran.

The monthly report of the Organization of Petroleum Exporting Countries (OPEC) said Thursday that production fell in June to 29.830 million barrels per day, compared with 29.898 million barrels in May.

Iran led the decline in production as its oil supplies fell by 142,000 barrels per day to 2.225 million bpd.

Libya's oil production fell by 58,000 bpd to 1.113 million bpd.

On the other hand, Nigeria recorded an increase in production by 129 thousand barrels per day, recording 1.855 million barrels per day.

Saudi Arabia was the second-largest producer by 126,000 bpd last month at 9.813 million bpd.

 

By 11:25 am GMT, the benchmark Brent crude for September delivery rose 0.4 percent to $ 67.26 a barrel.

US crude futures for August delivery rose 0.4 percent to $ 60.65 a barrel.

[yota691]

OPEC outlines the oil market in 2020

 11 July 2019 08:12 PM
From: Sally Ismail

Mubasher: OPEC announced the first forecast of the oil market in 2020, with reference to the potential negative risks, primarily trade tensions and Brixet.

According to OPEC's monthly report released on Thursday, the 2020 forecast assumes no additional downside risks, particularly on trade issues, as it excludes further escalation.

Growth risks also include continuing challenges in many emerging and developing economies, and the BRIC poses additional risks, as does the ongoing slowdown in manufacturing activity, the organization said.

Global economic growth is expected to reach 3.2 percent in 2020, while the United States and China are likely to slow slightly and the OECD member economy is expected to slow to 1.6 percent.

 

GDP growth forecast for 2019 and 2020 - (Source: OPEC report)

The report of the Organization of Petroleum Exporting Countries for the month of June, Harizan, the first forecast of the oil market in 2020.

The Organization expects global demand for oil to grow by 2020 by 1.14 million barrels per day (bpd), to exceed the total global consumption threshold of 100 million barrels per day, recording 101.01 million barrels per day.

The expected demand for Opec oil next year will be 29.3 million bpd, 1.3 million bpd less than the projected levels for 2019.

According to the monthly report, OPEC production fell by about 68 thousand barrels per day in June last year to 29.83 million barrels per day, higher than the expectations of demand next year.

The transport sector is expected to drive strong demand growth next year for automotive and aircraft fuel, and demand from the chemicals sector will remain strong, albeit slightly lower in the United States.

World oil demand growth forecast for 2019 and 2020 (Source: OPEC report)

On the non-OPEC oil supply side, it is expected to grow by 2.4 million bpd in 2020, higher than this year's figures.

The report pointed out that in the light of uncertainty affecting the global oil market and in an effort to avoid the accumulation of oil stocks, the Member States of the Organization and non-OPEC producers agreed to participate in the announcement of cooperation to extend the production adjustments until 31 March 2020.

The move to reduce production levels reaffirms a continued commitment to boosting oil market stability, according to the OPEC report.

 

[yota691]

Oil prices rise and Brent above $ 67

Friday 12 July 2019 41

 

(Reuters)

Oil prices ranged from a six-week high on Friday, as US oil producers in the Gulf of Mexico cut production by more than half in the face of a tropical storm.

Brent crude futures rose 53 cents, or 0.8 percent, to $ 67.05 a barrel. Global benchmark crude fell 0.7 percent on Thursday after hitting a 30-year high of $ 67.65 a barrel.

Western Texas Intermediate crude futures rose 42 cents, or 0.7 percent, to $ 60.62 a barrel. US benchmark crude <CLc1> hit its highest level since May 23 at $ 60.94.

By Thursday, oil companies in the Gulf of Mexico cut output by more than 1 million barrels per day, or 53 percent of the region's output, due to tropical storm Bari, which could reach the coast of Louisiana on Saturday.

US crude inventories fell for four weeks in a row, and the US Energy Information Administration said crude inventories fell 9.5 million barrels in the week ending July 5, more than three times the 3.1 million barrels forecast by analysts.

"Brent crude and West Texas crude are expected to remain at current levels due to the sharp drop in US crude stocks and geopolitical risks," said Kim Kwang Rai, analyst at Samsung Futures in Seoul.

[yota691]

Energy Information Administration expects to increase oil production in August

 15 July 2019 10:51 PM
Mubasher : The US Energy Information Administration (EIA) forecast a rise in US oil production in August.

US oil production from the seven main oil fields will rise by 49,000 bpd to 8.546 million bpd next month, according to data released by the Energy Information Administration on Monday.

The data showed that the basin of "Permian" one of the regions that will see an increase in production during the next month by about 34 thousand barrels per thousand barrels per day, to reach 4.206 million barrels per day, compared to the expectations of July.

By 7:40 pm GMT, the benchmark Brent crude for September delivery fell 0.6 percent to $ 66.33 a barrel.

On the settlement, the price of NYMEX crude futures for August delivery fell 1.1 percent to $ 59.58 a barrel.

 

[Pitcher]

https://oilprice.com/Energy/Crude-Oil/The-Only-OPEC-Member-That-Could-Challenge-Saudi-Oil-Dominance.html
 

The Only OPEC Member That Could Challenge Saudi Oil Dominance

Jul 15, 2019, 6:00 PM CDT

In line with its targets for increasing crude oil production to 6.2 million barrels per day (bpd) by end-2020 and 9 million bpd by end-2023, up from the current 4.6 million bpd or so and on a par with Saudi Arabia’s output, Iraq has made it clear to foreign and domestic oil field developers alike that increases must be made or contracts will be reviewed. Three key fields are currently in the spotlight – Rumaila, West Qurna 1, and Gharraf – with more to follow shortly. Ongoing infrastructure constraints, however, may continue to thwart the realisation of these ambitions on schedule.

According to figures released recently by Iraq’s Oil Ministry, the long-time stalwart field of Iraq’s oil production – Rumaila (which together with Kirkuk has produced around 80% of Iraq’s total cumulative oil production) – produced 1.467 million bpd over the course of 2018, its highest annual rate of production for 30 years. This figure is above the 1.173 million bpd initial target output figure agreed with BP in the original 2008 contract but still well below the plateau target at that time of 2.850 million bpd, although the re-negotiated plateau target is 2.1 million bpd. Although the field has been operational for many years, it still has 55% of its ultimately recoverable resources of 35 billion barrels in place, according to the International Energy Agency (IEA). As with the vast majority of Iraq’s oil fields both north and south, the lifting cost for oil remains among the lowest in the world at around U$2-3 pb, on a par with that of Saudi Arabia.

The increase to the 1.4+ million bpd figure does reflect some improvements put into place by the field’s developers – BP and China National Petroleum Corporation (CNPC) through its PetroChina operation – in the past couple of years. Aside from a new power plant that supports Rumaila’s day-to-day functioning, new dehydrator and desalter production trains increased production capacity by 124,000 bpd. In addition, 31 new wells were drilled last year alone, and BP’s renovation of the Qarmat Ali Water Treatment Plant means that it is now capable of treating up to 1.3-1.4 million bpd of river water, allowing for greater extraction of oil from the field’s Mishrif reservoir (triple the amount, in fact, that was extracted in 2010). According to industry figures, Rumaila requires around 1.4 barrels of water for each barrel of oil produced from the north of the field, whilst the Mishrif formation in the south will require much higher water injection rates to support production. Related: IEA: Huge Oil Glut Coming In 2020

Recent production increases at the adjunct Zubair field, principally operated by ENI (plus KOGAS and Iraqi partners), can also be attributed in significant part to BP’s efforts in Rumaila, as around 14% of the water from the Qarmat Ali Water Treatment Plant goes to Zubair. With an initial target of 201,000 bpd, Zubair now produces around 475,000 bpd, and is due to receive a further boost from the construction of a 380 megawatt power plant. These advances are likely to increase oil production to around 600,000 bpd, although not until 2030, according to the IEA and it is still far off the initial plateau target of 1.2 million bpd.

This brings Iraq back to the central problem that still constrains dramatic further gains in oil production of the level needed for it to hit its new oil output targets. “To effect any meaningful increase in Iraq production you cannot get around the fact that the CSSP [Common Seawater Supply Project] needs to be in place across the country and fully functioning, otherwise not only will Iraq not be able to effect such output improvements but also output from existing fields will be jeopardised,” Richard Mallinson, head of Middle East analysis for global energy consultancy, Energy Aspects, in London, told OilPrice.com. “Some companies – like ENI for the Zubair field and BP in Rumaila – have built their own mini-facilities and solutions but this requires a huge commitment and level of confidence that not every company on every site wants to make,” he said.

As it stands, the CSSP - which originally involved taking and treating 12.5 million bpd of seawater from the Persian Gulf and then transporting it via pipe lines to six oil production facilities for water injection to boost pressure at these key reservoirs – is on hold for reasons exclusively revealed by OilPrice last month. The IEA now estimates that in order for Iraq to hit just under 6 million bpd – slightly below Iraq’s new official first phase target although still sufficient for it to overtake Canada as the world’s fourth-largest producer – it will need a total of 8 million bpd of water being used in selected fields, up from around the 5 million used currently. If the CSSP is not online then this volume of water will need to be met by other sources such as produced water, expansion of existing water treatment facilities, industrial water and so on. However, the fact that ExxonMobil (alongside PetroChina, and Itochu) is still working on the development of West Qurna 1 – and increasing production at the field – implies that there is still some prospect of the U.S. supermajor re-engaging at least on some version of the CSSP, if not the fully scaled-up Southern Iraq Integrated Project.

According to the most recent figures, production at West Qurna 1 – with proven reserves of 47 billion barrels of oil - has reached 465,000 bpd, up from about 440,000 bpd. This increase was largely a product of new crude processing facilities and oil storage tanks coming into operation, which, once functioning at full capacity, should boost crude oil output to at least 490,000 bpd by the end of 2020 at the latest. This compares to an initial target for ExxonMobil under the terms of the 2008 contract of 268,000 bpd and a plateau target of 2.825 million bpd, although again this has been re-negotiated down, this time to 1.6 million bpd. Related: China’s Refineries Hit New All-Time Operating Record

In the context of its end-2020 oil target, the Oil Ministry has also put pressure on Japan’s Japex to speed up its work increasing production at the Gharaf field, up from the current 90,000 bpd to at least 230,000 bpd. This was the original plateau figure, after the initial target of 35,000 bpd had been reached, and the Japanese firm recently announced that it has allocated US$460 million for the fiscal year 2019-20 to further develop the field. Although generally regarded as a lesser field at the moment in Iraq’s oil reservoir line-up, success at Gharraf could well lead to Japex – and the other participating foreign firm, Petronas – being offered an “exceptionally favourable deal” to develop the adjacent DhiQar field of Nassiriya – according to a senior oil and gas industry source who works closely with the Oil Ministry.

Although last year saw the Ministry assign responsibility for developing Nassiriyah to two local companies, there are still ambitions to attract foreign companies to the site that has a conservatively estimated 4.36 billion barrels of reserves in place. Discovered by the Iraq National Oil Company (INOC) in 1975, only for all development plans to be shelved by Iran-Iraq war, the field came on stream in 2009 and was listed on the 2009-2010 fast-track plan.

This aimed to raise its output to about 50,000 bpd, and the first half of 2009 saw ENI, Nippon Oil, Chevron, and Repsol submit bids to develop the field on an Engineering Procurement Construction contract basis, with a consortium comprised of Nippon Oil, Inpex, and JGC Corporation looking set to win the contract before negotiations broke down again. The prospect for the field was later complicated by the addition of plans to construct a 300,000 bpd refinery as well in what would be the ‘Nassiriyah Integrated Projected’ but, with the two local firms in place, the site is now producing around 100,000 bpd, with plans to double this by the end-2020 target date.

[Pitcher]

https://oilprice.com/Latest-Energy-News/World-News/Small-Crude-Draw-Cant-Stop-Oil-From-Plunging.html

Small Crude Draw Can’t Stop Oil From Plunging

The American Petroleum Institute (API) reported a small crude oil inventory draw of 1.401 million barrels for the week ending July 11, compared to analyst expectations of a 2.69-million barrel draw.

The inventory draw this week is disappointing after last week’s large draw of 8.129 million barrels, according to the API. A day later, the EIA had estimated an even bigger inventory drawdown of  9.5 million barrels.

After a string of inventory draws, the net build is now just 12.16 million barrels for the 29-week reporting period so far this year, using API data.

Oil prices were trading down on Tuesday after shocking reports that US Secretary of State Mike Pompeo announced that Iran was ready to negotiate about the details of its missile program. Tensions over oil flows near the Strait of Hormuz have kept a floor under oil prices that would otherwise have fallen on recent weak oil demand growth projections.

At 3:35pm EST, WTI was trading down by $1.70 (-2.85%) at $57.88—nearly flat week on week. Brent was trading down $1.75 (-2.63%) at $64.73—up slightly from last week.

The API this week reported a 476,000-barrel draw in gasoline inventories for week ending July 11. Analysts estimated a draw in gasoline inventories of 925,000 barrels for the week.

Distillate inventories grew by 6.226 million barrels for the week, while inventories at Cushing fell by 1.115 million barrels.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending July 05 rose slightly this week to 12.3 million bpd, just 100,000 bpd off the all-time high of 12.4 million bpd.

The U.S. Energy Information Administration report on crude oil inventories is due to be released at its regularly scheduled time on Wednesday at 10:30a.m. EST.

By 4:43pm EST, WTI was trading at $58.12 while Brent traded at $64.97.

[Pitcher]

WTI down 3.52% 

Doesn’t surprise me with the Hurricane situation now over and Iran fears have calmed down for the time being.  

 

On a a good note,  Airlines and some transports are higher.  

Trading action was light today. I was long Roku for awhile and shorted Fang 

Summer Trading can be an exercise in overcoming boredom.  

[yota691]

Oil and oil divergence continues losses after rising inventories

 

Arab and international Economy News _ Baghdad Oil prices diverged on Thursday as US crude continued its losses after falling in the previous session following data showing US inventories of products such as gasoline rose strongly last week, suggesting weak demand during the summer travel season.  By 0333 GMT, Brent crude futures were up 6 cents, or 0.1 percent, at $ 63.72 a barrel. Global crude futures were down 1.1 percent on Wednesday.  WTI fell 8 cents, or 0.1 percent, to $ 56.7. Crude fell 1.5 percent in the previous session.  Data from the US Energy Information Administration on Wednesday showed a lower-than-expected drop in crude stocks last week, but traders are focusing on large increases in refined product inventories, pushing prices down. The US Energy Information Administration said US crude inventories fell 3.1 million barrels, exceeding analyst expectations for a 2.7 million barrel drop.  But gasoline stocks rose 3.6 million barrels, compared to analysts' forecasts in a Reuters poll of 925,000 barrels.  "Gasoline consumption is worryingly poor, given that US consumers are at the peak of the travel season," said Steven Ince of Vanguard Markets.  Last week's oil production was marred by the storm Barry, who arrived on land on Saturday in central Louisiana as a Category 1 hurricane, the first major storm to hit the Gulf of Mexico this summer.  Oil prices fell this week as tensions over a Middle East conflict, oil production resumed in the Gulf of Mexico after the storm and concerns over China's economy grew. Views 8   Date Added 18/07/2019

[Pitcher]

https://oilprice.com/Energy/Energy-General/A-New-Gasoline-Glut-Is-In-The-Making.html
 

A New Gasoline Glut Is In The Making

By Nick Cunningham - Jul 18, 2019, 11:00 AM CDT

The downstream refining sector has rebounded a bit, shrugging off the glut of gasoline seen earlier this year. But another product surplus could be looming in the second half of 2019 and into 2020.

Refiners worked at elevated levels last year, helping to produce a global gasoline surplus that ran into the early part of this year. However, refiners undertook extensive maintenance in the first few months of 2019, and the volume of refining capacity that has been offline recently has been higher than normal. According to Bank of America Merrill Lynch, refining outages have run about 300,000 bpd above year-ago levels so far in 2019. The downstream outages have been a big negative for crude oil, but they have helped trim the glut of refined products.

That helped bring gasoline stocks drastically down in a rather short period of time. “OECD gasoline inventories started 2019 at five year highs, but refinery issues and weak margins helped draw stocks down to three year lows by May,” Bank of America Merrill Lynch wrote in a note. Earlier this year, refining margins were in the dumps, but they have strengthened more recently.

(Click to enlarge)

“The US driving season has peaked but the global gasoline market remains tight, and cracks are holding firm,” Bank of America said.

However, the respite could be brief. The global economy continues to slow. Global manufacturing activity, as measured in PMI estimates, was in negative territory for two consecutive months in May and June for the first time since 2012. The U.S.-China trade war may not be getting worse, but it is frozen in place with 25 percent tariffs on $200 billion worth of Chinese imports, and reciprocal tariffs on U.S. imports to China. Meanwhile, auto sales around the world have pulled back sharply. Related: Mexico Confirms Major Tax Cut For PEMEX

All of these factors serve to undercut demand for gasoline. “In the US, gasoline demand stalled recently after several years of very strong growth,” Bank of America said. “As a whole, OECD gasoline demand has contracted by 70k b/d over the past year. The last time OECD demand declined for four consecutive quarters was in 2013.”

The investment bank said that demand could move a bit higher due to falling prices. Fuel demand is price elastic, especially in developing economies.

But in addition to weaker economic growth, another big problem looming for gasoline markets is the expansion of refining capacity. “Significant growth in processing capacity and higher runs at China's teapot refineries have overwhelmed the Asian product markets, and new refinery starts will only compound this problem,” Bank of America warned. “Asian margins have already slumped to levels that force economic run cuts and should remain weak until capacity rationalization occurs, regional demand growth emerges from its slump, or more volume finds a home in the Atlantic basin.”

Ultimately, this spells bad news for gasoline margins and prices. “Gasoline cracks had a rough start to the year and although fundamentals improved through mid-year thanks to refinery outages, cracks for the remainder of 2019 and 2020 look weak from a historical perspective,” Bank of America concluded. Related: Is This Big Oil’s Next Secret Weapon?

One of the most disruptive events in years affecting the downstream sector is a few months away. New rules from the International Maritime Organization (IMO) on sulfur concentrations for marine fuels take effect at the start of 2020. In the recent past, many analysts thought that the IMO regulations would wreak havoc on various markets – gasoline, diesel and ultimately for crude oil. A shortage of low-sulfur fuels would, in theory, lead to a spike in diesel prices, which would push up crude oil as well. This was particularly true since the crude oil market was considered to be tightening at various points last summer and earlier this year.

But economic malaise is likely going to take the sting out of the new IMO rules. The recent slide in distillate prices can be seen as evidence of a slowdown in manufacturing, trade and construction. Motorists everywhere might not mind lower gasoline prices, but refiners won’t be too pleased.

[yota691]

Oil prices rise to $ 62.74 a barrel

Date of release:: 2019/7/19 13:34 • 75 times read

{International: Al Furat News} Oil prices rose on Friday as tensions raged in the Middle East.

Record oil prices are heading towards the biggest weekly drop in seven weeks, after falling sharply earlier in the week on hopes of easing tensions in the Middle East as well as concerns about demand and the impact of a US storm. 
By 0642 GMT, London Brent crude was up 81 cents, or 1.3 percent, at $ 62.74 a barrel, after climbing to $ 63.32. 
Brent fell 2.7 percent on Thursday, retreating for a fourth consecutive session and heading for a weekly drop of more than 6 percent. 
US crude futures rose 59 cents, or 1.1 percent, to $ 55.89 a barrel, after touching $ 56.36 a barrel. 
US crude futures closed down 2.6 percent in the previous session and are heading towards a weekly drop of more than 6 percent

[yota691]

International energy does not expect a significant increase in oil prices

Release date: 2019/7/19 10:26 • 113 times read

The International Energy Agency (IEA) chief executive Fatih Birol said on Friday that the agency did not expect a surge in oil prices due to a slowdown in demand and that there was a glut in global crude markets.

"Prices are determined by the markets ... If we look at the market today, we see demand slowing significantly," Berrol said in a public comment at a two-day energy conference in New Delhi. 
Last year, the IEA predicted global demand for oil in 2019 would grow by 1.5 million bpd, but reduced its growth forecast to 1.2 million bpd in June. 
"Large quantities of oil come from the United States, about 1.8 million barrels a day, as well as oil from Iraq, Brazil and Libya." 
"Under normal conditions, he does not expect a significant increase in crude oil prices," he warned, warning that serious political tensions could affect market mechanisms. 
Oil prices rose about 2 percent on Friday after a US Navy ship destroyed an Iranian rally in the Strait of Hormuz

[Jaygo]

Above $60 is right where we need to be! 

[Pitcher]

https://oilprice.com/Energy/Crude-Oil/Why-Goldman-Sachs-Thinks-Oil-Should-Be-Trading-Higher.html
 

Why Goldman Sachs Thinks Oil Should Be Trading Higher

By Nick Cunningham - Jul 22, 2019, 6:00 PM CDT

Fears of weak oil demand are taking over the market, overshadowing tanker battles in the Persian Gulf, something that would have typically sent oil prices skyrocketing. However, demand may also rebound in the second half of this year, offering some upside to oil prices.

Demand only grew at a 0.95 million-barrel-per-day (mb/d) rate in the first half of 2019, according to Goldman Sachs, which the investment bank admitted was 0.4 mb/d lower than its estimate at the start of the year. It’s also the weakest start to any year since 2011.

“Despite this poor start, we see increasing scope for oil demand to finally start exceeding beaten-down expectations,” Goldman Sachs analysts wrote in a note. The investment bank cited a few reasons for the prediction, including strong consumer demand, recent positive data from the refining sector on end-use demand, plus an overall strengthening of the macroeconomic picture.

In other words, the economy soured in the first half of 2019 (and particular in the second quarter) but now things are starting to look up again.

By now, some of the data points and drivers that characterized the first six months of the year are well-known: slowing manufacturing activity, the U.S.-China trade war, tepid trade volumes and weak auto sales, to name a few. The slowdown has a direct effect on oil and product markets – weak manufacturing and industrial activity translates into lower-than-expected demand for diesel, bunker fuels and bitumen, as Goldman noted. At the same time, the consumer economy has held up better, which means that demand for products like gasoline and jet fuel has been more robust. Related: U.S. Shale Is Doomed No Matter What They Do

But Goldman said that some of the weakness can be chalked up to weather, which may have destroyed 0.2 mb/d of demand in emerging markets in the first half of the year. Also, the increased use of natural gas in power generation in several countries – including Egypt, Saudi Arabia, Iraq and Pakistan – shaved off oil demand for electricity. In that context, the poor demand figures are less worrying that they might appear at first glance.

“While by no means an unequivocal turn in data, sequentially better macro releases in the face of low net speculative oil positioning could finally lead demand to being a supportive force to oil prices, creating transient upside risks to our 3Q19 $66/bbl Brent price forecast before the Permian basin becomes debottlenecked this fall,” Goldman Sachs said. “All else constant, we estimate that an upward revision of consensus 2019 oil demand growth expectations to our 1.275 mb/d forecast would rally Brent prices by $6/bbl.”

The investment bank also pointed to timespreads in the futures market, which have rallied. “From an oil market bottom up perspective, recently rallying product timespreads, cracks and refinery margins point to sturdy end demand,” analysts wrote. Some of the more recent economic data from China and the U.S. also points to a nascent rebound.

If things are picking up, what should we make of the recent slowdown? Goldman Sachs calls it a “transient manufacturing recession, similar although less extreme than in 2015-2016.” As a result, economic growth could resume. “With healthy consumer spending given low unemployment rates and rising wage growth, such end-demand should allow for manufacturing activity to restart,” Goldman analysts said. Related: Why Saudi Arabia’s Crown Prince Keeps The Aramco IPO Alive

Finally, the wave of interest rate cuts from multiple central banks around the world could also juice the economy. China is also undertaking heavy infrastructure spending as a form of economic stimulus, which could offset the negative impacts of the trade war.

The conclusions from Goldman Sachs suggests that the cracks in the global economy are not as bad as feared. That would seemingly create a lot more room on the upside for crude oil.

However, at this point, most analysts are predicting that not only was the oil market in a state of supply/demand surplus in the first half of 2019, but that the surplus coming in 2020 could be even worse, absent deeper cuts from OPEC+. If Goldman Sachs is right, demand might be just a tad stronger than most other analysts believe. But that won’t be enough to stop a price slide if supply growth continues to outpace demand.

[Pitcher]

https://oilprice.com/Energy/Energy-General/Morgan-Stanley-Why-Tanker-Wars-Arent-Causing-An-Oil-Price-Spike.html
 

Morgan Stanley: Why Tanker Wars Aren’t Causing An Oil Price Spike

By Tsvetana Paraskova - Jul 22, 2019, 4:00 PM CDT

The oil market has changed so much over the past five years that fast-growing non-OPEC oil production limits oil price gains from a spike in tensions in the Middle East, where Iran seized a British oil tanker last week, Morgan Stanley says.

“There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,” Morgan Stanley’s global oil strategist Martijn Rats told CNBC on Monday, commenting on the muted price reaction to Iran seizing a British tanker in Middle Eastern waters on Friday.

If such an incident in the most important oil shipping lane in the world, the Strait of Hormuz, happened just five years ago, oil prices wouldn’t have risen just 1-2 percent, the spike would have been “much, much more significant,” Rats told CNBC.

Oil prices were up early on Monday at 08:00 a.m. EDT, with WTI Crude rising 1.11 percent at $56.38 and Brent Crude up 1.25 percent at $63.25. Prices had eased back somewhat by 10:00am.

We are in a fundamentally well-supplied oil market, Morgan Stanley’s Rats said, adding that with non-OPEC oil production growing very fast and oil demand somewhat soft, it’s actually “quite remarkable that we’re only at $63 a barrel, despite these concerns.”

At the beginning of this month, just after OPEC and its allies rolled over their production cuts into 2020, Morgan Stanley revised down its long-term Brent Crude forecast to $60 from $65 a barrel. Over the next three quarters, the bank sees Brent at around $65 per barrel, a downward revision from a previous forecast of $67.50 a barrel.

On Friday, before news broke that Iran had seized a tanker, Fatih Birol, the executive director of the International Energy Agency (IEA), said that slowing oil demand growth and a persistent global glut would cap oil prices and keep them from rising too much, barring serious escalations in geopolitical tensions.  

[yota691]

UPDATE 1-Oil rises 1% on settlement amid fears of supply shortages

 22 July 2019 09:55 PM
Mubasher: Oil prices rose more than 1 percent at Monday's trading, thanks to continuing geopolitical tensions and supply shortages.

The gains in the price of black gold come on the back of fears that Iran's seizure last week of aBritish tanker to cut supplies in the Middle East.

At the same time, the National Oil Corporation in Libya announced the lifting of the status of force majeure in the largest oil field has a "spark".

Analysts at Goldman Sachs cut estimates of world oil demand growth this year to 1.275 million bpd, according to the US network CNBC.

In view of the US exploration activity , US oil drilling platforms fell for a third consecutive week as the country's crude production slumped .

On settlement, US crude futures for August delivery rose 1.1 percent to $ 56.22 a barrel on the last day of the decade.

By 6:50 pm GMT, the benchmark Brent crude for September delivery rose more than 1 percent to $ 63.15 a barrel.

 

[yota691]

International energy is assured of abundant oil supply

Wednesday 24 July 2019 52

 

Paris / Follow-up  

 

The International Energy Agency (IEA) announced yesterday that it was "ready to intervene" after recent tensions in the Strait of Hormuz, but confirmed the abundant supply in the oil markets at the moment.

The Paris-based agency said in a statement that it "closely monitors developments in the Strait of Hormuz, including the detention of a British flag carrier, and confirms its willingness to intervene when necessary."

"It considers that the right to freedom of transit of energy is essential to the world economy and must be preserved," the agency said.

 

Energy security

The International Energy Agency was created in 1974, one year after the 1973 oil crisis, and aims to ensure energy security for most countries

 Progress.

Member States should maintain contingency stocks equivalent to at least 90 days of oil imports that could be used in a coordinated move.

The country currently holds 1.55 billion barrels of oil in its public emergency stockpiles, and companies maintain 550 million barrels at the request of governments, and this reserve can be used when needed.

 

Oil supply

"Their emergency stockpiles are abundant enough to cover any oil supply disruptions across the Strait of Hormuz for a period 

long".

In the past, member states of the International Energy Agency acted in a coordinated manner before the Gulf War in 1991 and after Katrina and Rita hurricanes that hit the Gulf of Mexico in 2005 and after the unrest in the production sector as a result of the civil war in Libya in

 2011.

"Consumers can be reassured about the abundance of supply in the oil markets, especially as oil production outstripped demand in the first quarter," the agency said.

 

Investors fear

Oil prices rose more than 1 percent yesterday, as investors feared potential supply disruptions from the rich Middle East

 Powered. 

Brent crude futures rose 79 cents to 1.3 percent to settle at $ 63.26 a barrel. WTI closed up 59 cents, or 1.1 percent, at $ 56.22 Per barrel.

 

Economic concerns

But the limit of gains lifted the case of force majeure in the loading of crude oil field Libyan oil, the largest in the country, which closed on Friday, lost production of about 290 thousand barrels per day.

Last week, West Texas dropped more than 7 percent and Brent lost more than 6 percent, weighed down by economic concerns and the return of US production in the Gulf

 Mexico.

"Some selling pressure from demand concerns seems to have evaporated this week," said Jane McGillian, vice president of market research at Tradeshow Energy in Stamford, Conn. "Concerns about geopolitical factors seem to have stopped some selling pressure 

That".

The commercial oil stocks of OECD member countries are 2.9 billion barrels, more than the five-year averageLast.