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OPEC+ reportedly said to have no plans to deepen output cuts in December meeting

  
Analysis, Crude

Reuters reports, citing two sources on the matter

Adding that OPEC+ is likely to extend the existing oil output cuts until June next year when they meet up in Vienna next month.

I don’t think this really comes as much of a surprise to anyone as this is pretty much the baseline expectation going into the meeting. In any case, it presents a chance of an upside surprise if they commit to any form of deeper cuts when the time comes.
But then again, it’s OPEC. There’s always a leak somewhere.

Crude oil inventories build of 1379K vs 1500K estimate

  
Analysis, Crude

DOE inventory data for the week of November 15.

The weekly crude oil inventories came in with a build less than expectations. The build was 1379K vs 1500K estimate. That was also lower than the private inventory data released last night at 5954K build.
  • Crude oil inventories 1379K versus 1500K.  Last week 2219K
  • Cushing OK crude inventories -2295K versus -1229K last week
  • gasoline inventories 1756K versus 750K estimate.  Last week 1861K
  • distillates -974K versus -1000K. Last week -2477K
  • US refinery utilization 1.7% versus 1.00% estimate
  • crude oil implied demand 18575 versus 18233 last week
  • gasoline implied demand 10081.3 versus 10134.7 last week
  • distillates implied demand 5578.1 versus 5628.9 last week/
The private inventory data released last night showed:
DOE inventory data for the week of November 15.The price of crude oil has moved higher after the lower than expected build. The price currently trades at the high for the day at $56.12. The lower earlier in the day extended down to $55.16.
The price of crude oil has moved higher after the report

IEA sees ‘hefty’ oil supply cushion building in 1H 2020

  
Analysis, Crude

EA comments in its latest report on the oil market

Oil

The agency says that it expects global oil markets to remain “calm” next year as soaring non-OPEC production and high inventories will keep consumers comfortably supplied.

Adding that non-OPEC supplies will increase by 2.3 mil bpd next year, almost twice the expansion in global oil demand. That is a 100k bpd upgrade from its estimate last month.

“The calmness is supported by a well-supplied market and high inventories. This may continue into 2020 because non-OPEC countries will grow their production significantly.

The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month.

However, a continuously well-supplied market will lend support to a fragile global economy.”

OPEC still sees oil surplus in early 2020 ahead of meeting next month

  
Analysis, Crude

OPEC comments in its latest monthly report

  • Signals that oil markets remain on course for a surplus in early 2020
  • Expects global supplies to exceed demand by about 645k bpd in 1H 2020
  • That is even if OPEC producers keep output at current levels
It could be a bit of a push to its other members to pursue deeper cuts next month, though so far many are disinterested in the idea. It’s going to be interesting to take stock of the oil outlook next year in light of recent supply/demand debate.

OPEC Barkindo: Could see sharp supply fall in 2020 from US shale output

  
Analysis, Crude
#  #  #  #  #

OPEC Secretary-General Barkindo

OPEC Secretary-General Barkindo is on the news wires:
  • likely C# downward revisions of supply going into 2020 especially from United States shale output
  • fundamentally global economy range strong
  • there is no sign of global economic recession
  • Demand numbers for 2020 has potential for an upside swing
  • confident OPEC+ members will continue with their agreement in 2020
  • some US oil companies see shale output growth in 2020 only up by around 300,000-400,000 BPD. That it is not as high as OPEC optimistic estimates
  • Saudi authorities have reassured US that Aramco IPO won’t affect kingdom’s role within OPEC as the biggest producer
  • no one in OPEC+ wants to return to where we came from during oil prices downturn
  • The Aramco IPO won’t affect Saudi Arabia’s participation in supply adjustments to ensure oil market stability

OPEC’s Barkindo: Too early to say if there is a need for further output cuts

  
Analysis, Crude

Comments by OPEC secretary general, Mohammed Barkindo

OPEC
  • Premature to discuss OPEC+ decision in December
  • OPEC still to hold five technical meetings before December meeting in Vienna
  • OPEC is following progress in US-China trade talks closely
They don’t sound too committed to deeper cuts next month. As such, I think expectations will be low going into the decision so oil prices may have little to cheer about in the build up. However, a surprise decision could yet give oil a decent boost in such a case.

Crude oil inventories for Nov 1 week 7929K versus 2000K estimate

  
Analysis, Crude

Crude oil inventories for November 1, 2019 week

A much larger build crude oil inventories
  • crude oil inventories 7929K vs 2000K estimate
  • gasoline inventories -2828K vs -2000K estimate
  • distillates inventories -622K vs -1250K estimate
  • Cushing OK crude inventories 1714K vs 1572K last week
  • US refinery utilization -1.7% versus 0.73% estimate
  • crude oil implied demand 17544 vs 18482 last week
  • gasoline implied demand 10153.3 versus 10435.9 last week
  • distillates implied demand 5269.9 versus 5275.4 last week
The big surprises the crude oil inventory which came in much higher than expectations and even above the better-than-expected private data last night.
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