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Oil posts its worst day in three weeks, falling $2

  
Analysis, Crude

WTI crude oil down $1.99 to $82.66 in the worst fall since Oct 6

There was a report of a 200k bpd outage in Libya today and some other issues in Nigeria but the market didn’t see enough demand in the weekly inventories reports to keep the bid alive for oil.
To be far, a correction is way overdue. Oil has risen for nine straight weeks. Lately there have been impressive late-day bids in the US in oil but that didn’t materialize today. Instead, WTI went into settlement down $1.99 to $82.66.
There have only been a handful of bad days for oil in this run that started Aug 20 and even those days weren’t particularly bad. Technically, though, you can see the momentum waning in the past week or so:
WTI crude oil down $1.99 to $82.66 in the worst fall since Oct 6

Saudi Aramco warns that spare oil production capacity is shrinking, a “huge concern”

  
Analysis, Crude

Saudi Aramco is the world’s largest oil exporter, its head spoke in a Bloomberg interview.

  • said that “spare capacity is shrinking”, adding that it was a “huge concern”.
  • forecast that a pick up in the aviation sector in 2022 could deplete spare capacity
  • “It’s now getting to a situation where there’s limited supply — whatever is left that’s spare is declining rapidly.”
OPEC+ next meet on November 4 and so far there is no indication of an increase in supply beyond what is already planned. A tight market is contributing to high prices, these comments from Saudi Aramco indicate that won’t be changing much soon.
Saudi Aramco is the world's largest oil exporter, its head spoke in a Bloomberg interview.

Putin said OPEC+ countries are increasing oil output a bit more than agreed

  
Analysis, Crude
Russian President Vladimir Putin said the OPEC+ group of leading oil producers was increasing output slightly more than agreed, but:
  • “Not all oil-producing countries are in a position to ramp up production quickly”
Putin also provided some broader background comments, none of this is new but a useful recap if you need:
  •  “From 2012-2016, investment in oil production totalled around $400 billion/year, and in recent years, even before the pandemic, this decreased by 40%, and now it amounts to $260 billion”
  • said that investment cycles for energy projects are 15-30 years
Underinvestment is contributing to the recent rise in prices for oil.
Oil price update:
Oil news out of Russia overnight

ING on oil and OPEC – cartel under pressure to pump more but is reluctant

  
Analysis, Crude

Noting this snippet from an ING note on oil and OPEC.

  • Continued strength in oil prices means that pressure on OPEC+ to pump more will only grow.
  • Already there are calls from the US, India and Japan for the group to increase output more aggressively
  • However, OPEC+ is reluctant to do so, which suggests that oil prices will remain well supported for the remainder of this year
The next 22nd OPEC and non-OPEC Ministerial Meeting (OPEC+) is scheduled for 4 November
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