Archives of “Crude” category

rss

Saudi Aramco CEO says there is no adequate investment in the oil sector

  
Analysis, Crude
  • Regulators, policymakers need to support more investment in the sector
  • Otherwise, we will face major problems
  • There is no adequate investment in the sector
  • Today’s investment is not adequate to sustain global demand in short to medium-term
  • Close to reaching pre-pandemic level in terms of supply
  • Sees pick up in demand in the rest of the world
  • Spare capacity today is very low and it is declining fast

OPEC & oil comments out of UAE, Saudi Arabia, Iraq

  
Analysis, Crude
  • Arab oil nations met and spoke – statements issued after (see below)

Headlines via Reuters, not much here to sink your teeth into really:

  • Kuwait oil minister says OPEC+ is very sensitive on how markets react
  • Iraq oil minister says OPEC+ should continue with the current agreement
  • Iraq oil minister says we need to stick with current agreement to avoid surprises
  • UAE energy minister says tensions are causing high prices not supply and demand
  • UAE energy minister says he hopes for de-escalation for oil prices to fall
  • Saudi energy minister says we have been transparent but not getting reciprocality
  • Saudi energy minister says OPEC+ believes it has delivered for members and entire industry

BREAKING : Iran nuclear deal draft mostly agreed, text highlights sequencing – report

  
Analysis, Crude, Politics
leaders of the US and Iran

Reuters is out with a report saying “much of the text” of a 20-page Iran nuclear deal has been agreed but some thorny issues remain.

  • Sequencing starts with Iran suspending nuclear enrichment above 5%
  • That will come with unfreezing $7B in Iranian funds held in South Korean banks along with the release of western prisoners
  • Once in place the main phase of sanctions-lifting will begin
  • Timeline of between 1 and 3 months from agreement to full implementation
  • New agreement will be like the old one where the US grants sanctions waivers renewing every few months
  • Iran continues to demand the US guarantee it will not withdraw again
  • Compromise may include agreement that Iran can enrich up to 60% again if US violates pact
  • Final round of negotiations may require face to face meetings between Iran and US

That last headline is an important one. If that meeting is scheduled or takes place, it will be a sign that an agreement is close at hand.

Oil falls into negative territory on scope for Iran deal

  
Analysis, Crude

Oil bulls could be facing a double-whammy within days.

1) It appears as though Russia-Ukraine fears were overblown. Citi suggested a $10 geopolitical bid in oil and given the sharp fall on the climb-down yesterday, that’s not out of the question.

2) An Iran nuclear deal is inching towards conclusion. Iran’s top negotiator had his most-optimistic comments yet today. I would have thought this was priced in more because the signs of have been growing for some time but given the $2 drop on the Iran headlines, this appears to have caught the market off guard.

WTI crude is now trading at $91.56, down from $95.00 earlier. That’s a swift drop.

oil drop

Add in concerns about inflation, rate hikes and the overall market mood and the risks for oil continue to mount.

Technically, the bulls shouldn’t be too worried so long as $88.40 holds but it might be a case of easy-come, easy-go. Yesterday I highlighted the $78-81 area as a spot to eye on the downside.

Iran nuclear negotiator says ‘closer than ever’ to agreement

  
Analysis, Crude

1) The US wants oil prices to be lower

2) Iran can add 500k bpd right away and another 500k bpd by year end

That’s the recipe for a deal. There’s been a small further dip in oil prices on these headlines.

After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of past 4yrs. Time for their serious decisions.
WTI

I think a high probability of a deal should be priced in but you never know with the oil market. Between this and the growing likelihood of peace in Ukraine, there’s plenty of reason to suspect we will have lower oil prices by month end.

Go to top