OIL, NATURAL GAS

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REUTERS

"Brazil wants to buy as much diesel as it can from Russia, foreign minister says"


By Michelle Nichols

JULY 12, 2022

UNITED NATIONS (Reuters) - Brazil is looking to buy as much diesel as it can from Russia and the deals are being closed “as recently as yesterday,” Brazilian Foreign Minister Carlos Franca said on Tuesday, without giving further details on the transactions.

“We have to make sure that we have enough diesel to the Brazilian agribusiness and, of course, for Brazilian drivers,” Franca told reporters during a visit to the United Nations in New York.

“So that’s why we were looking for safe and very reliable suppliers of diesel - Russia is one of them.”


Brazil is looking to buy “as much as we can” from Russia, he said.

It was not immediately clear how Brazil would buy Russian diesel without coming up against Western sanctions, imposed on Moscow over its Feb. 24 invasion of Ukraine.

When asked if there had been any Western pushback over the plan to buy diesel from Russia, Franca said: “I don’t think so.”

“Russia is a strategic partner of Brazil."

"We are partners at BRICS,” he said, referring to the group comprising Brazil, Russia, India, China and South Africa, a bloc seen as a powerful emerging-market alternative to the West.


“We rely heavily on fertilizers export from Russia and from Belarus as well."

"And of course, Russia it’s a great provider of oil and gas."

"You can ask Germany about that."

"Can ask Europe about that."

"So Brazil, we are in short supply of this,” he said.

Brazilian President Jair Bolsonaro said on Monday that a deal was close with Moscow to buy much cheaper diesel, in what would appear to be the latest tangible benefit stemming from his friendly relationship with President Vladimir Putin.

High fuel prices have hurt Bolsonaro’s re-election hopes ahead of an October vote, leaving him trailing in polls to leftist former leader Luiz Inacio Lula da Silva.

Reporting by Michelle Nichols at United Nations and Kanishka Singh in Washington; Editing by Matthew Lewis

https://www.reuters.com/article/brazil- ... SL1N2YT1Q4
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RIGZONE

"Oil Steadies After Following Broader Market Swings"


by Bloomberg | Julia Fanzeres and Alex Longley

Wednesday, July 13, 2022

Oil ended the day little changed after a volatile session in which the latest US inflation report and data showing high prices hitting US fuel demand roiled prices.

West Texas Intermediate crude futures eked out a small gain to settle above $96 a barrel.

Government figures showing the highest inflation in decades and an unseasonable drop in gasoline demand capped market strength.

US gasoline demand tumbled last week to 8.06 million barrels a day, lower than same week in 2020 and the lowest seasonally since 1996, according to the Energy Information Administration.

US consumer prices jumped in June by 9.1% year-on-year, the largest gain in over four decades.

Market participants fear the report will keep the Federal Reserve geared for another big interest-rate hike and lead to possible economic slowdown.

“The oil market might be tight, but high energy costs are clearly leading to crude demand destruction,” said Ed Moya, senior market analyst at Oanda Corp.

Crude prices pose a high risk to global economic recovery, with signs that fuel costs are starting to “take their toll” on demand growth, the International Energy Agency said in a report.

Increases in the energy sector accounted for nearly half of all consumer price spikes in the US June inflation report, according to Labor Department data released Wednesday.

Concerns over an economic slowdown have overshadowed tight physical crude markets.

OPEC’s first outlook for 2023 suggests that there will be no relief for squeezed consumers, with more oil needed from the group even though most members are already pumping flat out.

“The physical market is still screaming that it’s very, very tight,”said Damien Courvalin, head of energy research at Goldman Sachs in a Bloomberg TV interview.

Prices:

WTI for August delivery rose 46 cents to settle at $96.30 in New York.

Brent for September settlement rose 8 cents to settle at $99.57 a barrel.

Meanwhile, US President Joe Biden has repeatedly called on OPEC to pump more and is scheduled to visit Saudi Arabia this week during a tour of the Middle East.

The kingdom along with the United Arab Emirates are the only cartel members with significant volumes of unused production capacity.

China’s exports expanded at a faster pace than expected in June as Covid disruptions continued to ease, though concerns about virus outbreaks remain.

Some residents in Shanghai have been urged to stockpile food and medicines as the fear of returning to lockdown hangs over the city.

(with assistance from Gerson Freitas Jr.)

https://www.rigzone.com/news/wire/oil_s ... 7-article/
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BUSINESS INSIDER

"Russia plans to launch a national oil trading platform to foil Western energy measures, report says"


jsor@insider.com (Jennifer Sor)

14 JULY 2022

*Russian officials and oil producers are in discussion to create a global benchmark for Russian crude.

* The initiative been sped along by talk of a price cap on Russian oil, a source told Bloomberg.

* The country is seeking to sell oil without restrictions, hoping to evade western sanctions.


Russia plans to create its own national oil benchmark in an attempt by the country to blunt Western sanctions and evade a possible price cap imposed on Russian oil.

Russian officials said that the country's oil suppliers and its central bank have begun discussions to launch a national oil trading platform in the fall of this year, Bloomberg reported.

The trading platform would be meant to attract enough buyers to establish Russian crude as its own benchmark by mid-2023, adjacent to WTI crude and Brent crude on the global commodities market.

Russia has attempted — and so far, failed — to establish a benchmark for its Urals blend crude for the past 10 years, but the idea has grown more attractive to its oil producers and policymakers after the country was hit with a flurry of sanctions from Western countries, with plans underway to impose a price cap on Russian oil.

Recent discussions between currently plan to cap Russian crude to $40-$60, although the Russian officials have previously suggested such a proposal will "collapse" and will result in retaliation, spiking oil prices even higher.

If that's the case, oil could be as expensive as $150 a barrel, analysts said.

The country is currently seeking to sell as much oil as it can without any restrictions, two sources familiar with the matter told Bloomberg.

One source added that the decision to implement an oil benchmark was partly spurred by ongoing talks of a price cap at the G-7 summit earlier this month.

In order for the new benchmark to be recognized globally, Russia must sort out any necessary legal framework prior to the launch of the platform, which the government has yet to do, a document leaked to Bloomberg said.

The trading platform would also need to amass high enough trading volume, which the country has failed to do in the past at other commodity exchanges.

But Russia's fuel economy has been hot, making it possible the country will reach that threshold.

Despite offering a steep discount to its allies, Russia has pulled in nearly $100 billion in revenue from its fuel exports in its first 100 days of invading Ukraine, and pulled in $24 billion from Chinese and Indian buyers alone in the first three months of the war.

https://www.msn.com/en-us/money/markets ... a1fcc018ac
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RIGZONE

"Oil Slips to Lowest Level Since February"


by Bloomberg | Julia Fanzeres and Alex Longley

Thursday, July 14, 2022

Oil pared losses after dropping to levels not seen since before Russia’s invasion of Ukraine as record US inflation intensifies fears of a recession.

West Texas Intermediate traded near $95 a barrel after earlier slipping below $91 a barrel, the lowest since late February when crude began its ascent into triple digits.

Broader markets recovered from the day’s lows after Federal Reserve officials calmed traders expecting an even more aggressive pace of rate hikes after this week’s blistering monthly inflation report.

Oil futures have been in decline since early June on escalating fears the US may be pushed into a recession.

Nonetheless, global oil supply remains tight, as can be seen in time spreads showing a wide premium for immediately available barrels.

Goldman Sachs Group Inc. said the market is “screaming” tightness and that this week’s selloff has been driven by low liquidity and technical factors.

“Crude is in free fall as demand data is softer and macro risk factors completely overwhelm the fundamentally tight physical market,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.

“Risks over the next few weeks look skewed to the downside, keeping even the most convicted bulls in wait-and-see mode.”

President Joe Biden landed in the Middle East on Wednesday just as a report showed US inflation soared to a four-decade high last month, much of it driven by energy costs.

There were signs that high US gasoline prices are starting to take their toll on consumption.

US gasoline demand fell to the lowest level for this time of year since 1996, even slipping below the same week in 2020, according to the Energy Information Administration.


The four-week rolling average of gasoline demand was the lowest on a seasonal basis since 2000.

Crude stockpiles rose by 3.25 million barrels.

Prices:

WTI for August delivery fell 42 cents to $95.88 a barrel at 2:19 p.m. in New York.

Brent for September settlement lost 39 cents to $99.18 a barrel.

Renewed Covid-19 outbreaks in China have also weighed on the outlook for oil demand.

Shanghai’s flareup appears to be easing, but other regions are being locked down and facing restrictions to curb the spread of the virus.

Nationwide, 292 cases were recorded on Wednesday.

(with assistance from Sophie Caronello)

https://www.rigzone.com/news/wire/oil_s ... 2-article/
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CNBC

"Yellen says price cap on Russian oil is ‘one of our most powerful tools’ to address inflation"


Su-Lin Tan @SULIN_TAN

PUBLISHED THU, JUL 14 2022

KEY POINTS

* “We’re seeing negative spillover effects from [the Russia-Ukraine] war in every corner of the world, particularly with respect to higher energy prices, and rising food insecurity,” Yellen said the Group of 20 finance ministers and central bank governors meeting in Bali.

* “A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families across the world are feeling at the gas pump and the grocery store right now,” she added.


BALI, Indonesia — A cap on Russian oil prices will be crucial to help bring down inflation as U.S. consumer inflation soared to a 40-year high of 9.1% this week, U.S. Treasury Secretary Janet Yellen said on Thursday.

Speaking before the start of the Group of 20 finance ministers and central bank governors meeting in Bali, Yellen said efforts must be expended to rein in two key economic fallouts from the Russia-Ukraine crisis — that is, high fuel prices and rising food insecurity which are sweeping across the U.S. and globally.


High energy costs contributed heavily to the spike in U.S. inflation this week, she added.

“We’re seeing negative spillover effects from [the Russia-Ukraine] war in every corner of the world, particularly with respect to higher energy prices, and rising food insecurity,” Yellen said.

She said the U.S. will continue conversations with other countries to see “what we can do together to help others around the world impacted by Russia’s war.”

It includes addressing food insecurity, and the design and implementation of a price cap on Russian oil, she added.

“A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families across the world are feeling at the gas pump and the grocery store right now."

"A limit on the price of Russian oil will deny Putin revenue his war machine needs.”

As Washington bans Russian oil and European countries look to cut Russian oil use, prices of oil have surged.

Crude oil prices rose above $120 a barrel in March after the Russia-Ukraine war started.

Economists have warned that further bans could propel prices to as high as $175 a barrel.

The price cap mechanism involved the U.S. and other countries forming a cartel to buy Russian oil at a low enough price to keep Russian oil production profitable and supply forthcoming but at the same time starve Russia from being able to fund its war in Ukraine.

“We’ll build on the historic sanctions we’ve already implemented that make it more difficult for him to wage his war or grow his economy,” Yellen said.


Russia has been silent on the proposal, while other countries like India have not weighed in.

On Thursday, China indicated the price cap could worsen the Ukraine crisis.

Chinese Ministry of Commerce spokeswoman Shu Jueting said a price cap would be complicated and instead urged countries to pursue peace talks in order to end the war.

Yellen said she is hopeful the price cap will be attractive to many Russian oil importing companies as it will mitigate the high costs of import due to insurance and financial bans on Russian oil deliveries.


Late last month, the European Union imposed a ban on insuring ships transporting Russian oil.

“So I’m hopeful that China and India will see that observing a price cap would serve their own interests in lowering the price that they pay for Russian oil, they’re important importers,” Yellen said.

“But even if they don’t observe the price cap, I think it’s certain that many countries that import Russian oil will be affected by the insurance and financial services ban that the EU, and presumably the UK and the U.S. will put into effect."

The Treasury Secretary said that without the price cap, “we would likely see very much higher global prices because that ban would result in ... a significant amount of a shut in for Russian oil.”

— CNBC’s Evelyn Cheng contributed to this report.

https://www.cnbc.com/2022/07/14/yellen- ... ation.html
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FOX BUSINESS NEWS

"As Biden asks Saudis for oil help, US energy reps say they're tired of 'vilification'"


Tyler Olson

14 JULY 2022

As President Biden travels to Saudi Arabia this week to ask for increased energy production from the Middle Eastern nation, American energy industry representatives say Biden should be looking stateside instead.

"We think Texas is a lot closer than Saudi Arabia,' American Exploration and Production Council CEO Anne Bradbury told Fox News Digital.

"And President Biden does not need to be traveling halfway around the world searching for solutions to this energy crisis when the solution is right here at home,"

"If the administration is serious about increasing supply, they should be meeting with producers here at home instead of looking to governments overseas," American Petroleum Institute spokeswoman Christina Noel said.

Biden's trip to the Middle East includes visits to multiple countries, including Israel.

The White House says the president will tackle a swath of geopolitical issues while he's there.

But with high gas prices and burning hot inflation, his Friday visit to Saudi Arabia, and energy diplomacy in the Oil Kingdom, will be the most closely watched part of the trip.

That is especially the case amid human rights criticism of Saudi Arabia, including for its treatment of gay people and the killing of Jamal Khashoggi.

"We will have the opportunity, among this very broad agenda, to talk about energy security with the leaders of the OPEC nations in the Middle East, just as we discussed energy security when he was on his trips in Europe and in the Indo-Pacific," National Security Adviser Jake Sullivan told reporters Monday.

"Human rights — are a strategic interest of the United States."

"So is energy security, so is stopping terrorism, so is seeking peace in a place like Yemen," Sullivan also said.

Energy Workforce and Technology Council CEO Leslie Beyer, however, told Fox News Digital Biden wouldn't need to ask the Saudis for more oil if he would just change his administration's stance on domestic production.

"First and foremost, the vilification of the industry keeps us from being able to access the capital that we need for our long term investments for production."

"That is really the primary area that they are able to really hinder production," Beyer said.

"It also damages our ability to get workers."

Beyer also slammed proposed regulations from the Securities and Exchange Commission and said the Department of Interior five-year plan on oil lease sales is inadequate.

"You can't say on one hand, ‘Industry, I need you to produce more,’ and on the other hand, tie our hands," she said.

"The inconsistent and hostile messages and policies that we've seen out of this administration have been a significant headwind," Bradbury added.

The White House, meanwhile, touted that domestic oil production is up and said oil companies have plenty of ability to produce more.

"Under President Biden, U.S. oil production is up, and will soon reach a record high."

"In fact, the United States produced more oil under President Biden’s first year in office than under the first two years of the prior Administration, and an additional 9,000 approved drilling permits remain unused by oil companies," White House spokesman Abdullah Hasan told Fox News Digital.

Hasan added: "President Biden is committed to doing everything he can to bring prices down at the pump, and oil and gas companies must not use this moment as an excuse for not passing along their savings to consumers at the pump."

The White House's comment on oil and gas leases is one that industry representatives have previously taken issue with.

Bradbury called that a "red herring," while Beyer said "some permits are viable and some are not," is the reason for why many are sitting unused.

Biden also recently demanded that gas stations lower their prices, as oil prices dipped off their recent highs.

And the White House has accused oil producers of taking advantage of price increases during the Russian war on Ukraine to pad their profits, when their costs are not actually increasing.

But Beyer and Bradbury said comments like show the White House doesn't understand the realities of the energy economy.

"The fundamental flaw in that is that it doesn't recognize the economics and the global industry markets," Beyer said.

"So it is not refiners, it is not oil producers that set the oil price or the natural gas price."

"It's the global market."

Bradbury added: "It shows a really fundamental misunderstanding of our industry."

"Our industry are price takers, not price setters."

"And, you know, I didn't hear a lot of sympathy from those Democrats when, you know, prices went negative a year and a half ago."

The White House earlier this week would not detail any specific demands Biden will have while in Saudi Arabia, where the high temperatures are expected to be above 110 degrees for the next two weeks, with lows in the high 80s.

But it did make clear Biden will ask for more oil from the Saudis.

"I’m not going to get into a specific characterization on what constitutes ‘enough.’"

" What I will say is the President believes that the price of gas is too high and that we need to do more with respect to global energy supplies," Sullivan said.

"And he will take every step in his power, both here at home and in terms of his diplomatic engagement in the world, to try to bring that about."

https://www.msn.com/en-us/money/markets ... a1fcc018ac
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RIGZONE

"Oil Posts Another Weekly Loss with Heightened Recession Fears"


by Bloomberg | Julia Fanzeres and Alex Longley

Friday, July 15, 2022

Oil ended the week below $100 a barrel for the first time since early April after another volatile period of trading marked by escalating concerns over an economic slowdown.

West Texas Intermediate settled above $97 a barrel, down 6.9% this week.

Oil saw another hugely volatile week of trading, which saw prices at one point wipe out all of their gains since Russia invaded Ukraine.

Earlier this week, a report showed that US inflation rose to its highest in four decades while high US gasoline prices are starting to take their toll on consumption.

“Oil has been volatile, particularly to the downside in recent days because of concerns about the state of the Chinese economy and the red-hot inflation print from the US this week,” said Rohan Reddy, director of research at Global X Management.

On Friday, prices pared some of their weekly losses with President Joe Biden’s trip to Saudi Arabia set to yield no announcement on oil supply and as prospects receded for a full percentage-point rate hike by the Federal Reserve.

Crude has fallen since early June on escalating fears the US may be pushed into a recession as central banks hike rates to combat inflation.

At the same time, Libya is restarting its oil exports and production from all of its fields after reaching a deal with protesters, ending months-long blockade that had halved the OPEC nation’s output.

Prices:

WTI for August delivery rose $1.81 to settle at $97.59 in New York.

Prices are down 6.9% this week

Brent for September settlement rose $2.06 to settle $101.16 a barrel.

A stronger dollar and Covid-19 outbreaks in China also added to pressure on oil this week.

Shanghai’s flareup appears to be stabilizing, but authorities are still locking down parts of the city and housing compounds.

Still, data Friday showed Chinese growth at the slowest pace since the country’s first Covid outbreak.

Despite the decline in futures prices this week, global oil supply remains strained.

This can be seen in timespreads showing a wide premium for immediately available barrels.

Attention will turn to OPEC+’s next production moves in early August.

https://www.rigzone.com/news/wire/oil_p ... 8-article/
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REUTERS

"U.S. not expecting Saudi Arabia to immediately boost oil output"


By Jarrett Renshaw, Maha El Dahan and Aziz El Yaakoubi

July 15, 2022

Summary

* Comments come ahead of Biden visit to kingdom

* Saudi Arabia, UAE hold bulk of spare capacity within OPEC

* U.S. eager for more oil to ease high cost of gasoline, inflation


JEDDAH, Saudi Arabia, July 15 (Reuters) - The United States does not expect Saudi Arabia to immediately boost oil output and awaits the outcome of an OPEC+ meeting on Aug. 3, the U.S. national security adviser said on Friday, lowering expectations as U.S. President Joe Biden visits the kingdom.

"I don't think you should expect a particular announcement here bilaterally because we believe any further action taken to ensure that there is sufficient energy to protect the health of the global economy, it will be done in the context of OPEC+," Jake Sullivan said.


Earlier on Friday, a U.S. official had also told Reuters that Washington was not expecting any immediate output rise as a result of the visit.

Biden landed in Jeddah on Friday on a trip that is designed to reset the U.S. relationship with the kingdom and during which energy supply, human rights and security cooperation are on the agenda.

The U.S. could secure a commitment that OPEC+ will boost production in the months ahead, which could send a signal to the market that supplies are coming if necessary.

Saudi Arabia, alongside the United Arab Emirates, holds the bulk of spare capacity within the OPEC+ group, an alliance between the Organization of the Petroleum Exporting Countries and other exporters, notably Russia.

Soon after his landing, Biden met and shook hands with the Saudi king and held a meeting with Crown Prince Mohammed bin Salman and other ministers, including energy minister Prince Abdulaziz bin Salman.

But the kingdom has repeatedly indicated it would not act unilaterally.

OIL AROUND $100

Brent crude prices are trading around $100 a barrel, having fallen from a 14-year high of $139.13 in March as investors weigh the impact on demand of COVID-19 lockdowns in top importer China and recession fears.

"Saudi Arabia prefers to manage the market through the Organization of the Petroleum Exporting Countries and allied producers (OPEC+), not through unilateral moves," Ben Cahill, a senior fellow at the Center for Strategic and International Studies, wrote in an analyst note.

"Saudi energy minister Abdulaziz bin Salman has consistently emphasized the importance of OPEC+ cohesion, including a central role for Russia," he said.

Anwar Gargash, diplomatic advisor to UAE President Sheikh Mohammed bin Zayed, also said on Friday his country wanted a more stable oil market and that it would abide by OPEC+ decisions.

"The UAE is very much pro supporting and following U.S. discussions with Saudi Arabia on oil because we are part of the greater OPEC group, OPEC+, so we would very much like to see more stability in the market and ability to produce more and we are going to follow where the group will follow," he said.

The U.S. is eager to see Saudi Arabia and its OPEC partners pump more oil to help bring down the high cost of gasoline and ease the highest U.S. inflation in four decades.

"The decision to increase oil production is subject to several factors and considerations and does not depend on a U.S. request," Abdulaziz Sager, Chairman of the Riyadh-based Gulf Research Center, said.

"There are technical, political and economic complications related to that decision."

Spare capacity within OPEC is running low, with most producers pumping at maximum capacity.

It is unclear how much extra Saudi Arabia could bring to the market and how quickly.

Biden said at the end of June that he would not ask Saudi leaders directly to increase oil production.

Instead, he would continue to make the case that all Gulf states should raise oil output.


OPEC+ decided last month to increase output targets by 648,000 barrels per day (bpd) in August, ending record production cuts that it implemented at the height of the pandemic to counter collapsing demand.

Reporting By Jarrett Renshaw, Maha El Dahan and Aziz El Yakoubi; additional reporting by John Irish in Paris and Ahmad Ghaddar in London; Editing by Kirsten Donovan, Philippa Fletcher and Barbara Lewis

https://www.reuters.com/business/energy ... 022-07-15/
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RIGZONE

"OPEC Will Struggle To Balance Supply And Demand In 2023"


by Bloomberg | Julian Lee

Monday, July 18, 2022

OPEC producers will need to pump crude at the fastest pace in five years in 2023 if they are to balance oil supply and demand.

Capacity constraints suggest they may struggle.


The latest forecasts from the International Energy Agency, the US Energy Information Administration and the Organization of Petroleum Exporting Countries all show global oil demand rising strongly again in 2023, despite growing fears over mounting inflation and weakening economic growth.

A lack of investment in new crude production capacity means that the OPEC group of producers will need to pump more to meet that demand.

All three forecasters see global oil demand increasing by at least 2 million barrels a day next year, taking it back above the 2019 level for the first time since the Covid-19 pandemic struck in early 2020.

The forecasters at the producer group are much more bullish about oil demand than their counterparts in the IEA and EIA.

Combining growth estimates for 2022 and 2023, they see an increase over the two years of more than 6 million barrels a day.

That compares with 3.9 million barrels a day seen by the IEA and 4.3 million barrels a day from the EIA.

The latest report from OPEC assumes that neither the Covid pandemic, the Russian invasion of Ukraine, nor global financial tightening amid soaring inflation undermines economic growth to a significant degree and that major economies “revert back towards their growth potentials.”

It does note, though, that the uncertainties around its forecast “remain to the downside.”

OPEC sees that growth taking global oil demand to 103 million barrels a day on average in 2023.

The IEA and EIA see the figure at 101.3 million barrels and 101.6 million barrels a day respectively.

Those demand numbers put growing pressure on the OPEC countries to pump more, even as most of them are already producing as much as they can.

Combining the demand and non-OPEC supply outlooks, the 13 members of OPEC will need to deliver more than 30 million barrels a day on average in 2023, according to both OPEC and the IEA.

The EIA outlook puts the figure at 29.4 million barrels a day.

That’s not a record production level for the group, but it would be the highest since 2018, according to OPEC’s own figures.

More importantly, it would push the group’s spare capacity to a multi-year low of about 2 million barrels a day, based on Bloomberg’s assessment of sustainable production capacities in OPEC countries.

The last time the current members of OPEC collectively pumped more than 30 million barrels a day, the combined output of five of them — Algeria, Iran, Libya, Nigeria, and Venezuela — was almost 2.75 million barrels a day higher than it was in June.

Just three members — Iraq, Saudi Arabia, and the United Arab Emirates — pumped more last month than they did on average in 2018.

That’s not a result of voluntary restraint.

The 10 members of OPEC bound by the terms of the production accord they struck in 2020 with a group of non-OPEC allies pumped over 1 million barrels a day less than their targets allowed last month.

OPEC members haven’t pumped as much as they were permitted since July 2020.

Initially, that helped balance over-production by its allies.

More recently, it has reflected an inability to boost output in line with rising targets.

Most of them are already pumping as much as they can.

OPEC producers’ inability to raise production rates with oil prices above $100 a barrel and soaring demand for their crude doesn’t bode well for the future.


The group will need to pump about 1.36 million barrels a day more on average next year than it did last month.

That’s going to put pressure on the production capacities of almost all of them.

Unless, of course, demand growth doesn’t turn out to be anywhere near as strong as the forecasters are suggesting.

https://www.rigzone.com/news/wire/opec_ ... 9-article/
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RIGZONE

"Oil Rises on Supply Concerns and Weaker Dollar"


by Bloomberg | Julia Fanzeres

Monday, July 18, 2022

Oil rallied above $100 after the Saudis declined to make any promises regarding future output increases, while a weaker dollar also helped put wider commodity markets on firmer footing.

West Texas Intermediate rose 5.1% to settle above $102 a barrel on Monday.

Saudi ministers insisted at the conclusion of President Joe Biden’s visit last week that oil policy decisions would be dictated by market logic and with coalition agreement.

Iraq’s oil minister told Bloomberg he sees oil trading above $100 for the rest of the year.

This week’s opening rebound is largely driven by a weaker US Dollar and higher equity markets, said Dennis Kissler, senior vice president of trading at BOK Financial.

“Saudi Arabia gave no signs of immediate production increases coming, which sums up to last week’s selloff probably being overexaggerated.”

Crude has slumped since mid-June as concerns about a potential recession ripped through commodity markets, eroding gains that followed Russia’s invasion of Ukraine.

Nonetheless, Biden remains eager to get the Organization of Petroleum Exporting Countries to add supplies to bring prices down further and help quell inflation.

OPEC and its allies next meet on Aug. 3 after members agreed to revive the crude supplies that were halted during the coronavirus pandemic.

Analysts at RBC see Saudi Arabia and a handful of other producers likely to making another modest supply hike.

The kingdom will likely “craft an arrangement to compensate for the members that have consistently failed to meet their monthly production targets,” Helima Croft, chief commodities strategist at RBC Capital Markets, wrote in a report.

Prices:

WTI for August delivery rose $5.01 to settle at $102.60 a barrel in New York.

Brent for September settlement increased $5.11 to settle at $106.27 a barrel.

Elsewhere, Libya was in the process of restarting crude shipments.

Prime Minister Abdul Hamid Dbeibah said the country’s exports are on track for a full resumption after months of outages as he justified his replacement of the leadership at state-run oil National Oil Corp.

South Africa’s largest fuel producer declared force majeure on the supply of petroleum products due to delays in crude deliveries to the Natref refinery it jointly owns.

(with assistance from Alex Longley)

https://www.rigzone.com/news/wire/oil_r ... 0-article/
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