Updated: oil falls 5% upon settlement, with geopolitical concerns calm

[Pitcher]

 

By Irina Slav - Dec 24, 2019, 9:00 AM CST

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West Texas Intermediate will trade at an average $58.50 per barrel next year, a poll among analysts conducted by Bloomberg has shown.

That’s lower than the current price of the U.S. benchmark but a little higher than the average for 2019, which is about $56.95 a barrel.

 

 

According to the same analysts, Brent crude will average $64.25 per barrel next year. For most of the year, excluding a couple of peaks above $70 a barrel and troughs of below $60, Brent has, like WTI, traded in a tight band.

The Bloomberg poll follows price forecast updates from Goldman Sachs and JP Morgan, which both expected benchmarks to rise, albeit modestly, in 2020 from 2019. In comparison, an analyst poll by the Wall Street Journal suggested prices will remain relatively stable at current levels at least during the first quarter of the new year despite OPEC’s deeper production cuts.

The overall sentiment on oil prices seems to be leaning towards the bearish. Even though OPEC and its partners led by Russia agreed earlier this month to cut an additional 500,000 bpd from their combined production, problems around the compliance of some cartel members have made traders and analysts equally wary of rejoicing.

This week, Russia added pressure to benchmarks. Energy Minister Alexander Novak said the OPEC+ partners may at some point reconsider the deeper cuts. Related: The Best And Worst Oil Predictions Of 2019

 

 

“We can consider any options, including gradual easing of quotas, including a continuation of the deal,” Novak told Russia’s RBC TV channel. To add insult to injury, Novak also said he expected Russian oil production to hit another record in 2020.

Outside OPEC, the United States will lead the rise in global oil supply in the company of Norway, Brazil, and Guyana. The latter, a newcomer on the international oil scene, earlier this month saw the start of production at Exxon’s Liza-1 well. The well was drilled in the Stabroek block where Exxon made a string of major finds in the last couple of years.

 

 

https://oilprice.com/Energy/Energy-General/What-Will-The-Average-Oil-Price-Be-In-2020.html

 

[yota691]

Updated .. oil prices rise 1% in a short session to celebrate Christmas

 December 24, 2019 9:52 PM
Mubasher: Oil prices rose by about 1 percent when settling trading on Tuesday, in a short session on the background of Christmas celebrations.

Crude has benefited from expectations of a drop in US oil inventories for the second week in a row, which is scheduled to be announced this weekend instead of Wednesday, due to the Christmas holidays.

It is reported that Russian Energy Minister Alexander Novak stated that cooperation with OPEC to support the market will continue as long as it is effective and pays off.

Global markets are experiencing weak trading volumes in conjunction with Christmas and New Year holidays.

Upon settlement, US NYMEX crude for February delivery rose 1 percent to $ 61.11 a barrel.

By 6:45 pm GMT, Brent crude for February delivery, the price of futures rose 1.2 percent to $ 67.16 a barrel.

 

[blueskyline]

https://www.nytimes.com/2019/12/24/business/saudi-arabia-kuwait-oil.html.....

The agreement over a shared region could bring more oil to the global market and benefit Chevron.

 

 

An agreement announced on Tuesday is likely to be seen as the latest victory for Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, center.Credit...Ronald Zak/Associated Press

By Stanley Reed

• Published Dec. 24, 2019Updated Dec. 25, 2019, 3:20 a.m. ET

Saudi Arabia and Kuwait said Tuesday that they were ending a long-running dispute over an oil-rich strip of land shared by the two countries, a move that will allow as much as 500,000 barrels of crude per day to return to the world market.

The news was welcomed by Chevron, the big American producer that has an agreement to pump oil from some of those fields.

The deal, marked with a signing ceremony in Kuwait with officials from both countries, gives Saudi Arabia access to a kind of heavy crude that is in short supply in world markets. And it is a likely to be seen as the latest in a series of wins for the Saudi energy minister, Prince Abdulaziz bin Salman, who was named to the job in September and recently presided over the initial public offering of Saudi Aramco, the national company and the world’s largest oil producer.

But the opening of additional spigots of oil may be a mixed blessing because the Organization of the Petroleum Exporting Countries and Russia agreed this month to reduce output to prop up prices.

 

The Saudis and Kuwaitis now have a tricky task in convincing the markets that they are not going to unleash a flood of new crude that would weigh on prices.

Prince Abdulaziz said the oil from the shared fields “will not affect the level of the kingdom’s supplies to global markets,” according to the official Saudi Press Agency.

 

 

The agency did not say how the Saudis would maintain their recently agreed-upon quota of about 9.7 million barrels a day. Analysts said the Saudis and the Kuwaitis might compensate for any increases by dialing back output at other fields.

So far, the markets have shrugged the deal off. On Tuesday, oil prices were up about 1.2 percent to about $67.20 a barrel for Brent crude, the main international benchmark.

The shared fields, in the 2,200-square-mile area known as the neutral zone, were shut down in 2015 after Saudi Arabia and Kuwait feuded over land use and environmental issues.

Some analysts said the deal reflected efforts by Crown Prince Mohammed bin Salman, Saudi Arabia’s chief policymaker, to ease tensions with countries in the region, perhaps to nurture an improved environment for economic growth.

“The real import is that this is part of the big Saudi outreach to its neighbors,” said Bhushan Bahree, an OPEC analyst at IHS Markit, a research firm.

A big beneficiary is expected to be Chevron. Although Saudi Aramco holds a near monopoly on production in the kingdom, Chevron operates a large field called Wafra in the shared zone on behalf of the Saudis.

 

The Saudi-Kuwaiti feud has cost Chevron about 100,000 barrels a day in lost production.

In a statement on Tuesday, Chevron said it expected to restore full output “within 12 months.” Despite frustrations caused by the shutdown, Chevron executives said the shared fields could be a major source of growth.

For instance, Chevron wants to increase the use of steam to loosen up the deposits of molasses-like oil beneath the sands. “We remain committed to playing a role in further unlocking” these resources, the company said.

The kind of heavy crude found in the area may be one reason that the Saudis and the Kuwaitis were able to reach a deal at what seems like an awkward time. Analysts say the market is low on this oil because of the sharply reduced output of Venezuela and Iran.

“The world really needs that kind of crude after we have lost Venezuelan barrels and Iranian barrels,” said Amrita Sen, chief oil analyst at Energy Aspects, a market research firm.

Ms. Sen also said output from the neutral zone would give the Saudis the option of shutting down parts of the key Abqaiq processing facility for more extensive repairs after it was damaged by an aerial attack in September and then quickly patched up.

Prince Abdulaziz, who is an older half brother of Prince Mohammed, helped push for the Saudi Aramco’s I.P.O., which raised more than $25 billion for the kingdom. He is also credited with overseeing the rapid restoration of production at Aramco after aerial attacks blamed on Iran temporarily slashed output by more than 50 percent.

This month, the prince persuaded fellow OPEC members and Russia at a meeting in Vienna to agree to new output cuts aimed at bolstering flagging oil prices. That agreement has given oil prices a modest lift.

But with crude production from the United States, Norway, Brazil and other countries expected to increase, analysts say he may have more to do to win over skeptical markets.

[yota691]

Oil rises to 3-month high with hopes of boosting demand

 December 27, 2019 1:18 PM
Mubasher: Oil prices rose to their highest levels in three months during Friday's trading, supported by hopes of boosting economic growth against the backdrop of increased consumer spending in the United States, which in turn will be reflected positively in demand for crude.

A survey yesterday Thursday showed that electronic purchases for the holidays by US consumers reached a record level this year, exceeding analysts' expectations, which pushed US stock indices to new highs.

In spite of the calm in stock trading on the background of the Christmas celebrations, commodities and metals witnessed remarkable gains.

Oil prices received support with hopes of ending the trade war between China and the states, a conflict that negatively affected global economic growth and left questions about the future of oil demand .

The US oil inventory data is slated to be released later in the day, amid expectations of a second consecutive weekly drop.

By 9:47 am GMT, the price of US NYMEX crude for February delivery rose 0.3 percent, to $ 61.86 a barrel .

Brent crude futures for February delivery rose about 0.4 percent to $ 68.18 a barrel, the highest level since September.

 

[yota691]

Russia: The agreement to cut oil production will not last forever

 December 27, 2019 03:29 PM
Direct:  The Russian Energy Minister said that the agreement of the "OPEC" and its allies to reduce oil production has achieved stability in the global market, but it cannot continue forever.

Alexander Novak said in an interview with Russia 24 today, Friday, that the reduction in oil production cannot continue indefinitely, indicating that his country will need to gradually exit from the agreement.

OPEC and a number of oil producers from outside it, especially Russia, have approved an agreement to extend the agreement to reduce production to next March, while deepening the reduction to 1.7 million barrels per day.

"Novak" added that Russia needs to defend its market share and allow its oil companies to develop new projects.

Russia has failed over the past months to fulfill its commitment to the agreement to reduce oil production, as data showed "Bloomberg" that Russia pumped 11.252 million barrels per day on average this month, an increase of 62 thousand barrels from the target.

By 11:21 am GMT, the price of Brent crude for February delivery, rose 0.2 percent to 68.08 dollars a barrel.

 

[yota691]

Updated: oil rises at the settlement to achieve strong weekly gains

 December 27, 2019 10:51 PM
Direct:  Oil prices rose to their highest levels in more than three months when settling transactions on Friday, after the US crude inventories data, to record strong weekly gains.

Oil inventories in the United States fell by about 5.5 million barrels last week, more than analysts had expected.

Meanwhile, US oil production rose to a record again at 12.900 million barrels per day during the past week.

The Baker Hughes company data revealed that the number of oil exploration platforms in the United States has decreased by 8 during this week.

Oil prices received support with hopes of ending the trade war between China and the states, a conflict that negatively affected global economic growth and left questions about the future of oil demand .

For his part, the  Russian Energy Minister said that the agreement of "OPEC" and its allies to reduce oil production has achieved stability in the global market, but it cannot continue forever.

Upon settlement, US NYMEX crude for February delivery rose 0.1 percent, to $ 61.72 a barrel, the highest level for this most active contract since mid-September.

During the week ending today, US crude gained 2.1 percent.

By 7:45 pm GMT, the price of Brent crude for February delivery, rose by 0.3 percent, to record $ 68.11 a barrel.

 

[Pitcher]

The Biggest Threat To The Energy Sector

 

In engineering there are credible and incredible failures. Nuclear power plants were designed against what was believed to be a “maximum credible accident.” Then came Fukushima, incredible.

In early December, a report from the National Infrastructure Advisory Council (NIAC) raised the possibility that a huge electric failure, the result of a concerted cyberattack or other event, could knock out electric supply in large swathes of the country for an extended period, weeks even months. A failure with consequences which would have been beyond thinkable before the computer age.

 

 

The report, which comes from an advisory council whose mission is to inform the president, has a weight that a think-tank study, for example, would not have. Here, it is the voice of the energy establishment speaking.

I found in reading this report and talking to people in the industry and in academia, it is easy to predict the end of social order as we know it.

It is a painful mind game to try to think how long families could survive without electricity. First off, you would be hot or cold, every appliance in the home would not work. Even if you have a generator, in short order the fuel, natural gas or gasoline, would be gone. How much non-perishable food do you have? I suspect most families would be going hungry after a few days. I would. Cell phones would run down and stay down and the networks would collapse.

 

https://oilprice.com/Geopolitics/International/The-Biggest-Threat-To-The-Energy-Sector.html

[Butifldrm]

 

The American bombing of Iraq and Syria raises oil prices in the global markets

Economy

 2019/12/30 01:42:19

 

Shafaq News / Oil prices rose to a three-month high on Monday, supported by optimism about an expected trade agreement between the United States and China, as traders closely monitor the Middle East after US air strikes .

The markets showed a limited initial response to the news of the US-led air attacks in Iraq and Syria against an Iranian-backed armed group, even after US officials warned of possible "additional measures ".

By 0529 GMT, US West Texas Intermediate crude futures rose five cents to $ 61.77 a barrel. American crude is about 36 percent high since the beginning of this year .

Brent crude futures recorded $ 68.36 a barrel, up 20 cents, or 0.3 percent. Global benchmark crude rose nearly 27 percent in 2019 .

"(Trades) is a bit lukewarm due to the absence of the parties in the holiday season, " said Margaret Young, market analyst at CMC Markets .

"Oil prices have reached their highest levels since the attack ... Saudi in mid-September, so traders are cautious about the potential for profits, " she added.

On Sunday, the Chinese Ministry of Commerce said it was in close contact with the United States on signing a long-awaited trade agreement .

Oil prices are also supported by a drop in US oil inventories, which fell 5.5 million barrels in the week ending December 20, far exceeding expectations in a Reuters poll of 1.7 million barrels .

https://www.shafaaq.com/ar/اقتصـاد/القصف-الامريكي-على-العراق-وسوريا-يرفع-اسعار-النفط-في-الاسواق-العالمية/

[yota691]

High oil prices thanks to optimism in trade

Monday 30 December 2019 56

 

Singapore / Continue  

 

Oil prices rose to a three-month high yesterday, supported by optimism about an expected trade agreement between the United States and China.

By 0529 GMT, US West Texas Intermediate crude futures rose five cents to $ 61.77 a barrel. American crude is about 36 percent high since the beginning of this year.

Brent crude futures recorded $ 68.36 a barrel, up 20 cents, or 0.3 percent. Global benchmark crude rose nearly 27 percent in 2019.

"(Trades) is a bit lukewarm due to the absence of the parties in the holiday season," said Margaret Young, market analyst at CMC Markets.

"Oil prices have reached their highest levels since the Saudi attack in mid-September, so traders are cautious about the potential for profits," she added.

The Chinese Ministry of Commerce said it was in close contact with the United States on signing a long-awaited trade agreement.

Oil prices are also supported by a drop in US oil inventories, which fell 5.5 million barrels in the week ending December 20, far exceeding expectations in a Reuters poll of 1.7 million barrels.

[yota691]

Oil rises with trade optimism and tensions in the Middle East

 January 2, 2020 11:17 AM
Mubasher: Oil prices rose during the first trading sessions of the new year today, Thursday, with trade optimism and tensions in the Middle East.

Black Gold was affected positively by the optimism that surrounded the investors about the trade deal likely to be signed this week between the two largest economies around the world, as it may contribute to reducing concerns about the global demand for crude.

At the same time, increasing tensions in the Middle East have raised concerns about the oil supply of crude.

Crude prices also received support from preliminary data on US oil inventories in the week ending December 27, which showed a decline of 7.8 million barrels, with the US Energy Information Administration releasing official figures tomorrow, Friday.

However, gains were limited with the release of industrial activity data in China, which showed the PMI fell more than expected, although it was still within the scope of the expansion of activity.

This January represents the beginning of the implementation of the amendment of the production reduction agreement approved by the Organization of Petroleum Exporting Countries OPEC and crude producers from outside it to 1.7 million barrels per day instead of 1.2 million barrels per day, a decision that is supposed to remain in effect until the end of the first quarter.

By 7:51 am GMT, the price of Brent crude for March delivery was up 0.6 percent to $ 66.38 a barrel.

The price of futures contracts for US NYMEX crude for February delivery increased by more than 0.4 percent to $ 61.31 a barrel.

It is noteworthy that the oil markets were suspended from trading yesterday, Wednesday, on an official holiday to celebrate the New Year.

Khami Brent and Nymex managed to record annual gains in 2019, the largest since 2016.

 

[yota691]

BUSINESS NEWS

JANUARY 2, 2020 / 9:16 PM / UPDATED AN HOUR AGO

Brent jumps nearly $3 after U.S. air strike kills Iran, Iraq officials

Seng Li Peng, Florence Tan

2 MIN READ

 

SINGAPORE (Reuters) - Brent crude futures jumped close to $3 on Friday to their highest since September after a U.S. air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.

FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. Picture taken February 11, 2019. REUTERS/Nick Oxford/File Photo

Brent crude futures LCOc1 jumped nearly $3 to hit a high of $69.16 a barrel, the highest since Sept. 17. The front-month Brent March contract was at $68.25 a barrel, up $2.00, or 3%, by 0258 GMT.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose $1.76, or 2.9%, to $62.94 a barrel. Earlier, it touched $63.84 a barrel, highest since May 1.

“The supply side risks remain elevated in the Middle East and we could see tensions continue to elevate between the U.S. and Iran-backed militia in Iraq,” said Edward Moya, analyst at brokerage OANDA, in an e-mail to Reuters.

 

An air strike at the Baghdad International Airport early on Friday killed Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis, an Iraqi militia spokesman told Reuters.

The Pentagon later confirmed it was a U.S. air strike that killed Soleimani.

Oil prices were also lifted by China’s central bank saying on Wednesday it was cutting the amount of cash that banks must hold in reserve, releasing around 800 billion yuan ($115 billion) in funds to shore up the slowing Chinese economy.

This came shortly after data showed China’s production continued to grow at a solid pace and business confidence shot up.

 

“Oil prices still have room for further upside as many analysts are still having to upgrade their demand forecasts to include a rather calm period on the trade front,” Moya said, referring to the warming trade relation between China and the United States.

“President Trump is likely to take a break on being ‘tariff man’ until we get beyond the presidential election in November.”

[6ly410]

 

[horsesoldier]

We keep Double Tapping Iranian Big Knobs, Oil will be at $100 a barrel in no time flat. 

[jmartin1145]

2 minutes ago, horsesoldier said:

We keep Double Tapping Iranian Big Knobs, Oil will be at $100 a barrel in no time flat. 

I don't think so. Not with Trump at the helm.

[horsesoldier]

47 minutes ago, jmartin1145 said:

I don't think so. Not with Trump at the helm.

 

Agreed . . . I guess I didn't do a very good job of a satirical sentence construct.

 

DJT looks to have things well in hand. He continues to surprise. These are Bold Strokes, I like it.

[Pitcher]

https://oilprice.com/Energy/Energy-General/Prospect-Of-War-Pushes-Oil-To-Seven-Month-High.html
 

Prospect Of War Pushes Oil To Seven Month High

By Tom Kool - Jan 03, 2020, 2:00 PM CST

Oil prices spiked immediately after the U.S. killed Iranian General Qassem Soleimani on Thursday. Soleimani, as head of the Quds force of the Revolutionary Guard, was a very powerful Iranian official, often likened to a shadow foreign minister. Iran promised “severe retaliation,” and many analysts fear a broader regional war. At a minimum, attacks on U.S. military installations in the Middle East are expected. Brent prices shot up by more than 3 percent.

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Friday, January 3rd, 2020

U.S. oil workers leaving Iraq. Dozens of workers in the southern oil fields in Iraq are leaving the country and the American embassy urged all U.S. citizens to leave the country immediately. Iraqi officials said production would not be affected.

Supply risks? The big question at this point is how Iran might respond. Rapidan Energy said that the vessels and oil facilities are at risk. “[T]he risk of another major attack against Gulf oil vessels or facilities is now above 50%,” the firm said.

Equity markets sink on attack. Equity markets fell after the attack on Soleimani, interrupting the bullish mood for stocks. The conflict could “dash market hopes for a rebound of the global economy that is still to emerge from under the cloud of the U.S.-China trade war,” Valentin Marinov, head of G-10 currency research at Credit Agricole SA, told Bloomberg. “Risk sentiment should remain fragile also because central banks may be slow to respond or simply no longer have the arsenal to respond in an adequate way.”

$200 billion in shale debt due in next four years. Roughly $200 billion in North American oil and gas debt will mature in the next four years, according to the Wall Street Journal, which includes $41 billion due this year. More than 200 companies have already filed for bankruptcy since 2015, but that number will continue to rise as drillers struggle amid the crushing weight of debt. The huge obligations will force drillers to cut spending, potentially bringing the shale boom to a halt.

Russia’s oil production hits post-Soviet record. Russia appears to be defying the OPEC+ deal, ramping up production to a new post-Soviet record high last year. According to Bloomberg, output exceeded its agreed upon limit in 9 out of 12 months in 2019. Related: China Grants Export License To Teapot Refiners

OPEC production declines. OPEC production declined in December to 29.55 mb/d, according to Bloomberg, down 90,000 bpd from a month earlier.

Greece, Israel and Cyprus agree on gas pipeline. Greece, Cyprus and Israel signed a deal to build a 1,180-mile subsea pipeline that will move natural gas from the Eastern Mediterranean to Europe. The agreement aims to have a final investment decision by 2022, with the pipeline aiming for completion by 2025. The project is opposed by Turkey, however. 

Problems with new IMO compliant fuel. Reuters reports that some routine tests have turned up problems with new low-sulfur fuels. The new IMO rules took effect on January 1, requiring lower sulfur concentrations. The rules are expected to cut 77 percent of sulfur oxide emissions from the sector. But the implementation could be a bit rocky at first. Marine fuel suppliers “are struggling with sediments,” a specialist told Reuters.

India to import 90 U.S. LNG cargoes. India’s state-owned utility GAIL plans on importing 90 LNG cargoes in FY 2020-2021, double the volumes from the current fiscal year, according to S&P Global Platts.

Tullow Oil falls again on bad Guyana result. Tullow Oil (LON: TLW) briefly plunged by 20 percent after it reported disappointing drilling results in Guyana, before seeing its share price rebound to post just a 6 percent loss on Thursday. “Expectations were high going into this,” David Round, an analyst at BMO Capital Markets, told Bloomberg. “There will be a level of disappointment about the size.” The bad result comes just weeks after Tullow lowered its forecast for its Ghana operations, sending its share price careening down. Tullow is now trading at about $60 per share, down by more than two-thirds from over $200 per share as recently as November.

Is Big Oil the next Big Tobacco? Scrutiny on fossil fuels amid a worsening climate crisis could make oil as toxic as Big Tobacco. But there are lessons to be learned from the tobacco industry’s reckoning, such as spending cuts and an increase in investor payouts.

Hess best 2019 performer. Hess (NYSE: HES) was the best performer in the S&P 5000 Energy Index last year, rising by 65 percent. This is largely due to its success as a partner of ExxonMobil (NYSE: XOM) in Guyana. The first phase of production came online in December. Related: Why The Saudis Suddenly Agreed To This Mega Oil Deal

EVs in Norway reach 42 percent. EVs captured 42 percent of the market in Norway last year, up from 31 percent the year before. Norway was already the world’s largest EV market per capita, and the country aims to have zero emissions cars make up all new sales by 2025.

Permian pipeline glut. Five new oil pipelines are set to open in the Permian in the next two years, which could add as much as 3.5 mb/d in midstream capacity on top of the current 6 mb/d, way above upstream production, which currently stands at 4.72 mb/d. Pipeline companies are in cutthroat competition, cutting rates to attract interest. “There is a chance that some of the projects would get canceled or consolidated and that would depend on shipper commitment,” Sandy Fielden, director of research for Morningstar Inc., told Bloomberg.

Tesla delivers record 112,000 cars, meets sales goal. Tesla (NASDAQ: TSLA) delivered 112,000 vehicles globally in the fourth quarter, topping Wall Street estimates. That allowed the company to meet its sales goal of 360,000-400,000 for the year.

[Pitcher]

https://oilprice.com/Energy/Oil-Prices/Oil-Set-To-Move-Higher-As-Markets-Await-Iranian-Retaliation.html
 

Oil Set To Move Higher As Markets Await Iranian Retaliation

By Jim Hyerczyk - Jan 03, 2020, 1:00 PM CST

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures hit their highest levels since April on Friday after the killing of a top Iranian general sparked fears of a broader conflict that could disrupt the energy supply and drag down the global economy.

Short-covering and aggressive speculative buying drove crude oil prices sharply higher after the U.S. airstrike ordered by President Donald Trump killed Iran’s top general, Qasem Soleimani, in Baghdad. Soleimani had been a key figure in Iranian politics, and his death has raised concerns over a potential retaliation from the Iranian forces.

So far there has not been a disruption in supply so gains have been limited. However, Iran has vowed to retaliate. Previous aggressive activity has included bombing a Saudi Arabian production facility and attacking oil tankers.

Shortly after the attack, Iranian Foreign Minister Mohammad Javad Zarif warned Friday that the targeted killing of Soleimani was “extremely dangerous & a foolish escalation.”

“The U.S. bears responsibility for all consequences of its rogue adventurism,” Zarif said on Twitter.

Prior to the jump in prices on Friday, the markets were being underpinned by traditional supply and demand fundamentals that controlled the price behavior from December 1 until the end of the year.

Short-Term Factors Supporting Crude Oil

A thaw in U.S.-China trade relations is raising hopes for…

[jmartin1145]

After what happened? It only went 3%. The old days of war are over. We are energy independent. (Thank you Trump)

[Pitcher]

https://oilprice.com/Energy/Energy-General/The-Biggest-Wild-Card-In-2020-Oil-Markets.html
 

The Biggest Wild Card In 2020 Oil Markets

By Irina Slav - Jan 05, 2020, 4:00 PM CST

Concern about global oil demand and OPEC+ production cuts are now part of the oil price landscape and few expect any surprises coming from these directions. There is, however, a wild card: U.S. shale production.

CNBC this week quoted an analyst from Macro-Advisory, who included U.S. shale production growth prospects on a list of three factors to watch when it comes to prices.

“The big uncertainty this year — and it is already beginning to be talked about — is: Can or will U.S. producers be able to continue to add as much extra volume as they have been for the last seven or eight years? This is a huge question,” said Chris Weafer.

According to other reports, the question might not be as huge. The Wall Street Journal, for one, has been warning of a slowdown in shale oil production for months now. Despite an upbeat production report from the EIA that showed oil production hat hit a record of 12.66 million bpd in October, the outlook remains uncertain.

A couple of days before the EIA report for oil production in October was released, the Wall Street Journal published another story, about well yields falling short of forecasts as they mature.  A few days earlier still, the daily carried another warning for energy investors: banks are tightening their purse strings for shale oil drillers.

It’s almost as if the WSJ has a personal grudge against the U.S. shale industry. Related: A Record Number Of Oil CEOs Dethroned In 2019

But the WSJ is not alone, and is merely joining the chorus of analysts who have been warning about the impending slowdown in production growth in the U.S. shale patch for years. While few, these voices, often coming from the industry itself, are aware that first, shale oil production is a lot more capital-intensive than many conventional oil projects and second, that investor patience only goes so far.

This patience is wearing thin now that shale drillers face over $40 billion debt maturing this year, according to Moody’s, as reported by the Wall Street Journal. No wonder, then, that some analysts are expecting a major slowdown in production growth. According to some, who spoke to Reuters, this growth could decelerate to as little as 100,000 bpd. That’s a lot less than what the IEA forecast for U.S. shale in December: the agency forecast growth could slow down to 1.1 million bpd this year, from 1.6 million bpd in 2019.

This should be music to the ears of oil bulls and the Saudi royal family. U.S. shale oil production growth has been a spanner in the works of OPEC’s price-boost plans for years now. The enemy they tried to beat with the maximum-production strategy survived and kept growing, forcing them to cut their own production, but now it may have to stop growing, at least for a while. If it does, prices will rebound.

Just how long the rebound will hold, however, is a different question. Some members of OPEC and its biggest partner, Russia, are eagerly awaiting the end of the production cuts to restart boosting their own production. The likelihood of these eager producers continuing to cut output in the face of slowing down U.S. shale production growth is not particularly great. On the contrary, chances are some OPEC members and Russia would call for an end to the cuts the moment they have enough evidence that the U.S. shale production boom is losing steam.

What this means for prices in 2020 is that we might reasonably expect a rally at some point, the point when the U.S. slowdown becomes a fact. Yet this rally is unlikely to be particularly great or long: that concern about global oil demand is not going anywhere, even with the U.S.-China trade deal.

[yota691]

23 minutes ago, Pitcher said:

Can or will U.S. producers be able to continue to add as much extra volume as they have been for the last seven or eight years? This is a huge question,”

Lol no it not a huge question but it hasn't been the last 7 or 8 years,  it start Nov 2016 then went into 2107/2018 when the US took the lead in pumping oil and making the USA self sufficient when it comes to oil. 4 more years of Trump and the price per barrel could be cut in half for the USA, while the Arab depend on high prices just to make budgets year after year. Which they been warn many times for years you have to do more beside sell a barrel of oil...

23 minutes ago, Pitcher said:

banks are tightening their purse strings for shale oil drillers.

It’s almost as if the WSJ has a personal grudge against the U.S. shale industry.

They sound like Never Trumpers or Democrat...or that Federal reserve guy...

[yota691]

Survey: OPEC cuts oil production in December

 January 06 2020 11:20 PM
Mubasher : A recent survey stated that the Organization of Petroleum Exporting Countries (OPEC) cut its crude production in December, led by Nigeria.

The results of the survey conducted by "Reuters" agency released on Monday revealed that the average production of the 14 OPEC members reached 29.50 million barrels per day during the last month, a decrease of 50 thousand barrels per day compared to the previous month.

OPEC and its allies agreed to reduce oil production from last year by 1.2 million barrels per day, and then agreed last month to an additional reduction of 500 thousand barrels per day from January to the end of the first quarter of 2020.

According to the survey, the level of OPEC's commitment to the production reduction agreement rose to 158 percent in December, compared to 153 percent in November, with Iraq and Nigeria making some progress in compliance with the agreement.

Nigeria was the largest producer in OPEC, reducing oil production last month by about 80 thousand barrels per day, and Saudi Arabia and Iraq reduced production by 50 thousand barrels per day.

By 7:40 p.m. GMT, the price of Brent crude for March delivery rose 0.4 percent to $ 68.89 a barrel.

The price of US NYMEX crude for February delivery rose 0.4 percent to $ 63.27 a barrel upon settlement.

 

[yota691]

Oil exceeds $ 70 as Iran and Trump clash with threats

 

Monday - 11 Jumada I 1441 AH - 06 January 2020 CE

 

 

Oil refinery (archives - AP)

London: «Middle East Online»

Oil prices rose more than 1% today (Monday), driving Brent above $ 70 a barrel, as tensions in the Middle East flared up due to statements issued by the United States, Iran and Iraq after a US air strike that killed an Iranian military commander.
Brent crude futures rose to $ 70.74 a barrel and recorded $ 69.55 at 11:50 GMT, up 95 cents, or 1.38%, from the Friday settlement.
US West Texas Intermediate crude hit $ 63.77 a barrel, up 72 cents, or 1.14%, after earlier touching $ 64.72, its highest price since April.
And gains continue after the rise of more than 3% on Friday, after a US air strike in Iraq killed the Iranian military commander Qassem Soleimani that day, which increased fears of a growing conflict in the Middle East and the potential impact on oil supplies.
The region contributes about half of the world's crude production, while a fifth of global oil shipments pass through the Strait of Hormuz. And yesterday (Sunday), President Trump threatened to impose sanctions on Iraq, the second largest producer in the Organization of Petroleum Exporting Countries (OPEC), in the event that US forces are forced to withdraw from it.
Baghdad had earlier called on other US and foreign forces to leave Iraq. Trump also said that the United States would respond if Tehran responded to the assassination.
"The situation is adding a lot of blurring, with attempts to geopolitical forecasting reactions," said Norbert Rucker, head of economics at Swiss bank Julius Bayer. While the closure of the Strait of Hormuz remains very unlikely. The deterioration in Iraq carries risks to supply. The geopolitical aspects are usually a temporary force in oil markets and we believe that there is nothing new this time. We raise our short-term forecasts to $ 65 a barrel, and we maintain a neutral view. ”

[yota691]

Updated .. oil retracts when settlement for the first time in 4 sessions

 January 7, 2020 11:06 PM
Mubasher: Oil prices fell for the first time in 4 consecutive sessions when settling dealings on Tuesday, with calm geopolitical concerns, as investors reassess fears related to the conflict between the United States and Iran.

The black gold witnessed noticeable gains over the past two sessions on the background of geopolitical tensions, bringing Brent crude to its highest level since September, and NYMEX crude reached its highest level since April.

These gains came with fears of an escalation of the conflict, which would disrupt oil supplies after the killing of the Iranian, "Qassem Soleimani."

As for the production of the Organization of Petroleum Exporting Countries (OPEC), it is expected to reach 29.50 million barrels per day last month, a decrease of 50 thousand barrels per day from the November numbers after adjusting them, according to a survey conducted by Reuters .

Looking at US crude stocks, it is likely to continue falling for the fourth consecutive week, down 4.1 million barrels in the week ending January 3.

The American Petroleum Institute is expected to disclose preliminary figures for oil stocks in the United States, with the US Energy Information Administration announcing the official reading tomorrow, Wednesday.

Upon settlement, the price of future US NYMEX crude for February delivery fell by 0.9 percent to $ 62.70 a barrel.

By 7:55 p.m. GMT, Brent crude futures for March delivery fell 0.9 percent to $ 68.24 a barrel.

 

[yota691]

Al-Ghadban: The OPEC agreement will be implemented by Iraqi oil companies only

 

Thamer Al-Ghadban, Minister of Oil

energy Economy News - Baghdad: The Minister of Oil, Thamer Al-Ghadban, stressed that the reduction of oil production will be in the oil fields that are managed by Iraqi companies. Al-Ghadhban said in a statement published by Russia Today and viewed by "Al-Iqtisad News", that the Russian companies "Lukoil" and "Gazprom Oil" will not reduce their production in their projects in Iraq under the OPEC + agreement. He added that "the reduction will be in the oil fields that are managed by Iraqi companies ." And the group "OPEC +" announced a new reduction in production of half a million barrels per day, in addition to the current reduction of 1.2 million barrels per day. Number of views 43   Date added 08/01/2020

[yota691]

OPEC: Iraq’s oil production continues, and facilities are safe

 

OPEC Secretary-General Mohamed Barkindo «Economy News»

energy Economy News - Baghdad OPEC Secretary-General Mohamed Barkindo stressed on Wednesday that Iraq's oil production is continuing and facilities are safe. "I am confident that the leaders of the Middle East are doing everything they can to bring the situation back to normal," Barkindo added. OPEC Secretary General Mohamed Barkindo said he is optimistic that Iraq will reach a compliance rate of 100% with OPEC cuts in a timely manner despite the current tensions, noting that it is expected that the global demand for oil will reach about one million b / d. He described demand expectations as "not strong but not a cause for concern." He drew attention to the OPEC Secretary-General, in a letter to US President Donald Trump, that OPEC alone could not bear the responsibility to keep the oil market balanced. Oil prices jumped to their highest levels in months, Wednesday, after the Iranian military strike on the American "Ein Al-Assad" base in Iraq, which raises fears of a conflict that disrupts oil supplies. Number of views 69   Date added 08/01/2020