Archives of “Crude” category

rss

The bottom falls out of oil again

  
Analysis, Crude
#  #  #

Fresh lows for WTI

It’s turned into a brutal day for oil. WTI is now down nearly 5% as another wave of selling hits into the settlement.
It’s legged lower in another quick move to $56.30 from $57.15. It had been propped up by some laughably bad geopolitical rumors but it’s rolled over again into the floor.
Fresh lows for WTI
The settlement is $56.25, down just shy of $3 per barrel.
As traders we often fret about the markets humbling us, but the same market just humbled OPEC, who ostensibly has more control over it than anyone.

Global growth worries continue to weigh on oil

  
Analysis, Crude
#  #  #  #  #

This selloff is getting ugly

This selloff is getting ugly
WTI crude is now down nearly 4% on the day as gloom about the global economy sets in.
The big news this week was OPEC but they did as much as could have been reasonably expected by extending cuts for 9 months. This may be a sell-the-fact trade but it looks more like the market is jittery about demand.
The US Treasury market is sending the same worrisome signals today, despite the China-US truce.
One worry is that Trump’s administration announced fresh European tariffs yesterday. The amount of goods overall is small but it’s moving in the wrong direction and a US-Europe trade war would sink growth expectations once again.
The chart doesn’t look great as we top out well-ahead of the previous highs.

Saudi oil minister says OPEC has agreed on draft cooperation charter with OPEC+

  
Analysis, Crude

Comments by Saudi oil minister, Khalid Al-Falih

  • Says 9-month extension is to prevent 100 mil barrels build-up
  • Says that all countries have promised to improve on compliance to cuts
  • Says OPEC+ still working on which inventory metric to be used in the charter
This might as well be the press conference and the official announcement because the cat has long been out of the bag. An OPEC delegate also chimes in now to say that a 9-month extension has already been agreed in principle.
In short, all there’s left is the formality to sign off on the agreement but we’re basically there now and oil prices aren’t looking that enthused as markets have had quite some time to price and factor in the news. WTI is still down by 0.3% at $58.93 currently.

Russia said to approve of OPEC+ output cuts extension for 9 months

  
Analysis, Crude

Reuters reports, citing an unnamed OPEC source

That’s hardly news as this has already been made somewhat official since the weekend. The source adds that the official pact will be signed soon. But at least we know there aren’t any hiccups along the way I guess.

Oil isn’t faring all too well on the day despite the headlines from Vienna with WTI down by 0.4% to $58.85 currently.

UAE oil minister says very confident OPEC+ will approve output cuts extension

  
Analysis, Crude

It’s practically a given at this point

OPEC

Expect them to announce an extension for nine months in the joint press conference later on. This has very much been the story since the weekend after Saudi’s Al-Falih and Russia’s Novak struck a deal themselves prior to the meetings in Vienna yesterday and today.

As for oil market reaction, I still reckon we could see a bit of a pop on the official headline/announcement but it’s not going to spin into a massive rally of sorts. Should they stick with the current production quotas in the deal, I reckon the bigger picture still looks a bit cloudy for the oil market in having to deal with the oversupply issue.

Saudi’s Falih: OPEC already agreed on principles of output rollover

  
Analysis, Crude

Most want 9 months vs 6 month of output cut rollover

The Saudi oil minister Al-Falih is on the wires as OPEC meeting underway today and tomorrow:
  • already agreed on principles of rollover
  • more countries want 9 months than 6 months
  • Saudi July all production seen at about 9.7M B/D
  • Saudi oil output be below 10 B/D
  • OPEC+ conformity will be a lot better in 2H
  • demand not necessarily looking grim for 2020
  • Iran doesn’t want OPEC to condemn US at this meeting
  • we are already seeing oil demand pickup
  • it’s all pointing in the right direction
  • hopes for agreement on OPEC+ charter tomorrow
  • Iran agreed on all issues in meeting with Russia’s Novak
  • IRAQ: there’s a glut in oil market, therefore the rollover of output cuts
  • there is a unilateralism that’s a threat to OPEC
  • we take security of supply for world very seriously
  • Saudi’s plan to keep oil production reduced through March
  • market share is not the top priority for Saudi Arabia
  • we won’t pursue endless production cuts
  • we have cut production deepen of
  • not Saudi policy to keep cutting output endlessly
  • OPEC is more vibrant than ever
  • market is not unreasonably tight
  • consumers in US, elsewhere find market is very reasonable place

Russia’s Novak: All ministers approve 9-month OPEC+ cuts extension

  
Analysis, Crude
#  #  #  #  #  #  #

Comments by Russia’s energy minister, Alexander Novak

Russia OPEC
  • No proposal to extend cuts longer than 9 months
  • Iran confirmed in meeting that 9-month extension is good
  • All current OPEC+ quotas will be retained in the extension
It’ll be interesting to see how long the optimism here can last for oil. Nine months is certainly better than six months but with the same production quotas being restricted, I doubt it’ll help to address the oversupply issue in the market or at least it will struggle to do so.
We’ve already seen the struggles in 1H 2019 and what more in the second half of the year when seasonal demand tends to suffer a little more during the summer time.

Iran oil minister questions why OPEC decision was made in Osaka and not in Vienna

  
Analysis, Crude
#  #  #  #  #  #  #

Comments by Iranian oil minister, Bijan Namdar Zanganeh

Iran oil
  • If OPEC wants to stay relevant, decision should be made at OPEC meetings
  • Says Iran has no difficulty with OPEC output cuts deal extension
  • Says 6 to 9-months extension are acceptable either way
  • But rejects any long-term OPEC+ charter
  • Says unilateral decision by some OPEC member can lead to group’s collapse
  • Sanctions must be lifted as first step towards talks with the US
  • If US wants change, it should respect Iran
He’s mainly alluding to reports that Saudi Arabia and Russia had come to an agreement to extend the OPEC+ output cuts deal for about six to nine months over the weekend, before the OPEC/OPEC+ meetings take place later today and tomorrow.
In either case, most OPEC decisions in the past had long been a “Saudi-led majority” so it doesn’t surprise me that the most influential member of the pact pulls off a stunt like this. After all, they want oil prices higher and at the same time wants to eat into Iran’s market share amid US sanctions.

Iraq’s oil minister says under $70 a barrel is too low

  
Analysis, Crude

Comments from Iraq’s oil minister ahead of the OPEC meeting beginning Monday in Vienna.

  • we have open mind on oil output deal extension
  • fully endorses extension to end of year, no objection to nine months
  • any decision by OPEC, OPEC+ must be taken within premises of OPEC
  •  on deeper cuts, says it’s too early to say
  • says oil prices are on the low side, $70 plus is a good price

Weekend oil news – Russia & Saudi Arabia agree to extend OPEC+ oil output curbs

  
Analysis, Crude
#  #  #  #  #  #  #  #

Russian President Vladimir Putin, over the weekend, said Russia has agreed with Saudi Arabia to extend the deal with OPEC on reducing oil output.

  • For 6 to 9 months
  • “We will support the extension, both Russia and Saudi Arabia. As far as the length of the extension is concerned, we have yet to decide whether it will be six or nine months. Maybe it will be nine months,”
Saudi Energy Minister Khalid al-Falih also said deal would likely be extended.
The output agreement is expected to be extended in its current form and with the same volumes.
OPEC plus (OPEC plus key oil producing allies) begin their meeting today, Monday 1 July
Russian President Vladimir Putin, over the weekend, said Russia has agreed with Saudi Arabia to extend the deal with OPEC on reducing oil output.
Go to top