REUTERS
"EXCLUSIVE India can buy as much Russian oil as it wants, outside price cap, Yellen says"
By David Lawder
November 11, 2022
NEW DELHI, Nov 11 (Reuters) - The United States is happy for India to continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of Western insurance, finance and maritime services bound by the cap, U.S. Treasury Secretary Janet Yellen said on Friday.
The cap would still drive global oil prices lower while curbing Russia's revenues, Yellen said in an interview with Reuters on the sidelines of a conference on deepening U.S.-Indian economic ties.
Russia will not be able to sell as much oil as it does now once the European Union halts imports without resorting to the capped price or significant discounts from current prices, Yellen added.
"Russia is going to find it very difficult to continue shipping as much oil as they have done when the EU stops buying Russian oil," Yellen said.
"They're going to be heavily in search of buyers."
"And many buyers are reliant on Western services."
India is now Russia's largest oil customer other than China.
Final details of the price cap to be imposed by wealthy G7 democracies and Australia are still coming together ahead of a Dec. 5 deadline.
The existence of the cap would give India, China and other major buyers of Russian crude leverage to push down the price they pay to Moscow, Yellen said.
Russian oil "is going to be selling at bargain prices and we're happy to have India get that bargain or Africa or China."
"It's fine," Yellen added.
Yellen told Reuters that India and private Indian oil companies "can also purchase oil at any price they want as long as they don't use these Western services and they find other services."
"And either way is fine."
The cap is intended to cut Russia's oil revenues while keeping Russian crude on the market by denying insurance, maritime services and finance provided by the Western allies for tanker cargoes priced above a fixed dollar-per barrel cap.
A historical Russian Urals crude average of $63-64 a barrel could form an upper limit.
The cap is a concept promoted by the United States since the EU first laid out plans in May for an embargo on Russian oil to punish Moscow for its invasion of Ukraine.
INDIA WARY
Yellen's remarks were made after India's foreign minister said last week that his country would continue to buy Russian crude because it benefits India.
India's finance and energy ministries were not available for comment on Yellen's remarks, but other officials have said they were wary of the untested price cap mechanism.
"I do not think we will follow the price cap mechanism, and we have communicated that to the countries."
"We believe most countries are comfortable with it and it is in no one's case that Russian oil should go offline," one Indian government official told Reuters, speaking on condition of anonymity.
The official added that stable supplies and prices are most important.
Rosneft, Russia's largest oil exporter, is expanding its tanker charter business to avoid its buyers having to find tankers, insurance or other services as the price cap.
Yellen said that even with Russian tankers, Chinese tankers and a "shadow" fleet of older, decommissioned tankers and re-flagged vessels, "I just think they will find it very difficult to sell all the oil that they have been selling without a reasonable price."
Reporting by David Lawder; additional reporting by Aftab Ahmed in New Delhi; Editing by Will Dunham and Heather Timmons
https://www.reuters.com/business/energy ... 022-11-11/
OIL, NATURAL GAS
Re: OIL, NATURAL GAS
REUTERS
"Oil settles higher, posts weekly loss as China eases COVID curbs"
By Laura Sanicola
November 11, 2022
Nov 11 (Reuters) - Oil prices settled higher on Friday but fell week-on-week after health authorities in China eased some of the country's heavy COVID-19 curbs, raising hopes for improved economic activity and demand in the world's top crude importer.
Brent crude futures settled up $2.32 at $95.99 a barrel, extending a 1.1% rise from the previous session but falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude futures settled up $2.49, or 2.9%, at $88.96 a barrel, after climbing 0.8% in the previous session but down nearly 4% on the week.
The easing curbs include shortening quarantine times for close contacts of cases and inbound travelers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers.
The benchmark oil contracts fell during the week due to rising U.S. oil inventories, and lingering fears over capped fuel demand in China, but late-week gains limited the losses.
"China’s changing response to stubbornly high COVID-19 cases has added to the oil market’s price volatility and, should this new Chinese policy continue, the energy complex could be poised to erase most of this week’s decline," said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
A weaker U.S. dollar also supported oil prices as it makes the commodity cheaper for buyers holding other currencies.
Prices also picked up on Friday after milder-than-expected U.S. inflation reinforced hopes that the Federal Reserve would slow down rate increases, boosting chances of a soft landing for the world's biggest economy.
Saudi Arabia's energy minister Prince Abdulaziz bin Salman said OPEC+ will remain cautious on oil production, noting that members saw "uncertainties" in the global economy ahead of the bloc's next meeting in December, Bloomberg News reported on Friday.
The Organization of the Petroleum Exporting Countries and allies led by Russia, collectively known as OPEC+, last month agreed to steep production cuts, and will meet again on Dec. 4 to set its policy.
China's COVID-19 caseload soared to its highest since the lockdown in Shanghai earlier this year.
Both Beijing and Zhengzhou reported record daily cases.
Besides work-from-home orders reducing mobility and fuel demand, travel across China remained subdued as people wanted to avoid the risk of being caught up in quarantine, ANZ Research analysts said in a note.
Additional reporting by Ahmad Ghaddar in London Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; editing by David Evans,Tomasz Janowski and Jonathan Oatis
https://www.reuters.com/business/energy ... 022-11-11/
"Oil settles higher, posts weekly loss as China eases COVID curbs"
By Laura Sanicola
November 11, 2022
Nov 11 (Reuters) - Oil prices settled higher on Friday but fell week-on-week after health authorities in China eased some of the country's heavy COVID-19 curbs, raising hopes for improved economic activity and demand in the world's top crude importer.
Brent crude futures settled up $2.32 at $95.99 a barrel, extending a 1.1% rise from the previous session but falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude futures settled up $2.49, or 2.9%, at $88.96 a barrel, after climbing 0.8% in the previous session but down nearly 4% on the week.
The easing curbs include shortening quarantine times for close contacts of cases and inbound travelers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers.
The benchmark oil contracts fell during the week due to rising U.S. oil inventories, and lingering fears over capped fuel demand in China, but late-week gains limited the losses.
"China’s changing response to stubbornly high COVID-19 cases has added to the oil market’s price volatility and, should this new Chinese policy continue, the energy complex could be poised to erase most of this week’s decline," said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
A weaker U.S. dollar also supported oil prices as it makes the commodity cheaper for buyers holding other currencies.
Prices also picked up on Friday after milder-than-expected U.S. inflation reinforced hopes that the Federal Reserve would slow down rate increases, boosting chances of a soft landing for the world's biggest economy.
Saudi Arabia's energy minister Prince Abdulaziz bin Salman said OPEC+ will remain cautious on oil production, noting that members saw "uncertainties" in the global economy ahead of the bloc's next meeting in December, Bloomberg News reported on Friday.
The Organization of the Petroleum Exporting Countries and allies led by Russia, collectively known as OPEC+, last month agreed to steep production cuts, and will meet again on Dec. 4 to set its policy.
China's COVID-19 caseload soared to its highest since the lockdown in Shanghai earlier this year.
Both Beijing and Zhengzhou reported record daily cases.
Besides work-from-home orders reducing mobility and fuel demand, travel across China remained subdued as people wanted to avoid the risk of being caught up in quarantine, ANZ Research analysts said in a note.
Additional reporting by Ahmad Ghaddar in London Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; editing by David Evans,Tomasz Janowski and Jonathan Oatis
https://www.reuters.com/business/energy ... 022-11-11/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Prices Down on Demand Outlook Concerns"
by Bloomberg | Ilena Peng
Monday, November 14, 2022
Oil settled at the lowest price in nearly three weeks as a dollar rally and waning optimism over demand wiped out last week’s gains stemming from China’s less restrictive approach to Covid-19.
West Texas Intermediate futures settled below $86 a barrel, dropping 3.5%.
Broader markets fluctuated as traders tried to divine what path the Federal Reserve would follow on subsequent rate hikes.
Meanwhile, US oil and gas companies fracked fewer wells than they drilled for the first time in two years, suggesting pessimism about the demand outlook going forward.
Over the weekend, Fed Governor Christopher Waller said there was still some ways to go on hikes.
Monday afternoon Vice Chair Lael Brainard said it would be appropriate for the central bank to soon slow its pace.
Oil ignored the subsequent rally in equity markets as optimism fizzled over China’s recovery from lockdowns.
“Crude prices were dragged down as the short-term demand outlook looks like it is heading much lower,” said Ed Moya, senior market analyst at Oanda.
“China’s COVID situation is not improving and the US economy appears to be quickly weakening.”
Traders balanced broader market fears with ongoing risks to supply, which have kept futures locked in a tight range over the past month.
An increase in Chinese crude consumption could lead to further tightening of the market, which is facing European Union sanctions on Russian oil flows next month.
OPEC cut its forecasts for global oil demand on Monday, which some analysts said could signal further production cuts ahead.
“The Covid-19 situation in China is cutting both ways in that right now obviously there’s a big increase in cases weighing things down but it looks like they are finally preparing to pivot,” said John Kilduff, founding partner at Again Capital.
“The oil market’s been highly reactive to any hope or optimism about the reopening.”
US Treasury Secretary Janet Yellen said Russia will likely have to shut in some of its oil production if it doesn’t abide by a price cap.
The European Union is “ready to go” with an effort to impose a price cap on Russian oil, according to the president of the group’s executive arm, Ursula von der Leyen, though a price level has not yet been decided.
Prices:
WTI for December delivery fell $3.09 to settle at $85.87 a barrel.
Brent for January settlement dropped $2.85 to $93.14 a barrel.
https://www.rigzone.com/news/wire/oil_p ... 1-article/
"Oil Prices Down on Demand Outlook Concerns"
by Bloomberg | Ilena Peng
Monday, November 14, 2022
Oil settled at the lowest price in nearly three weeks as a dollar rally and waning optimism over demand wiped out last week’s gains stemming from China’s less restrictive approach to Covid-19.
West Texas Intermediate futures settled below $86 a barrel, dropping 3.5%.
Broader markets fluctuated as traders tried to divine what path the Federal Reserve would follow on subsequent rate hikes.
Meanwhile, US oil and gas companies fracked fewer wells than they drilled for the first time in two years, suggesting pessimism about the demand outlook going forward.
Over the weekend, Fed Governor Christopher Waller said there was still some ways to go on hikes.
Monday afternoon Vice Chair Lael Brainard said it would be appropriate for the central bank to soon slow its pace.
Oil ignored the subsequent rally in equity markets as optimism fizzled over China’s recovery from lockdowns.
“Crude prices were dragged down as the short-term demand outlook looks like it is heading much lower,” said Ed Moya, senior market analyst at Oanda.
“China’s COVID situation is not improving and the US economy appears to be quickly weakening.”
Traders balanced broader market fears with ongoing risks to supply, which have kept futures locked in a tight range over the past month.
An increase in Chinese crude consumption could lead to further tightening of the market, which is facing European Union sanctions on Russian oil flows next month.
OPEC cut its forecasts for global oil demand on Monday, which some analysts said could signal further production cuts ahead.
“The Covid-19 situation in China is cutting both ways in that right now obviously there’s a big increase in cases weighing things down but it looks like they are finally preparing to pivot,” said John Kilduff, founding partner at Again Capital.
“The oil market’s been highly reactive to any hope or optimism about the reopening.”
US Treasury Secretary Janet Yellen said Russia will likely have to shut in some of its oil production if it doesn’t abide by a price cap.
The European Union is “ready to go” with an effort to impose a price cap on Russian oil, according to the president of the group’s executive arm, Ursula von der Leyen, though a price level has not yet been decided.
Prices:
WTI for December delivery fell $3.09 to settle at $85.87 a barrel.
Brent for January settlement dropped $2.85 to $93.14 a barrel.
https://www.rigzone.com/news/wire/oil_p ... 1-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises After Reports of Russian Missiles Hitting Poland"
by Bloomberg | Ilena Peng
Tuesday, November 15, 2022
Commodities from oil to corn jumped following media reports of Russian missiles crossing into Poland, as the potential for a widening conflict jolted the market out of slowdown-related concerns.
West Texas Intermediate futures climbed as much as 3.3% following a quick succession of reports signaling Russia’s offensive in Ukraine may be spilling across borders.
Futures pared gains to settle near $87 a barrel.
The Associated Press reported two people were killed in Poland by Russian missiles.
Amid a barrage of shelling that struck Kyiv and other targets in Ukraine, Hungarian energy company MOL said a power station serving Europe’s largest pipeline was struck by artillery fire, halting deliveries on the Druzhba pipeline.
The US is aware of the reports of missiles landing in the NATO member country and is looking into them, said a Pentagon spokesman at a press briefing.
Russia’s defense ministry denied that its military had aimed missiles at targets near the border with Poland.
“The market is going to have to recalibrate the potential risk to global oil supplies if this war escalates,” said Phil Flynn, a senior market analyst at Price Futures Group.
“It’s going to be critical to see how NATO and the United States decide to respond to this provocation.”
While crude has lost about a third of its value since early June on economic slowdown concerns, markets remain volatile as geopolitical risk constantly threatens already tight fuel balances.
As investors continue to watch for any clues about how much further central banks will pursue measures to slow down inflation -- risking a recession --the International Energy Agency noted Tuesday that oil inventories in developed nations have sunk to the lowest since 2014.
European Union sanctions on Russia will curb flows from December.
Crop futures also jumped on concern that any potential escalation in the war may endanger a deal that has allowed exports of grains from Ukraine through the Black Sea.
Chicago wheat erased an earlier decline to rise as much as 2.9%, before trimming some of the gains to settle 1.2% higher at $8.48 a bushel.
Corn rose 1.5% and soybeans 1.2%.
Prices
WTI for December delivery rose $1.05 to settle at $86.92 a barrel.
Brent for January settlement added 72 cents to $93.86 a barrel.
(with assistance from Julia Fanzeres)
https://www.rigzone.com/news/wire/oil_r ... 7-article/
"Oil Rises After Reports of Russian Missiles Hitting Poland"
by Bloomberg | Ilena Peng
Tuesday, November 15, 2022
Commodities from oil to corn jumped following media reports of Russian missiles crossing into Poland, as the potential for a widening conflict jolted the market out of slowdown-related concerns.
West Texas Intermediate futures climbed as much as 3.3% following a quick succession of reports signaling Russia’s offensive in Ukraine may be spilling across borders.
Futures pared gains to settle near $87 a barrel.
The Associated Press reported two people were killed in Poland by Russian missiles.
Amid a barrage of shelling that struck Kyiv and other targets in Ukraine, Hungarian energy company MOL said a power station serving Europe’s largest pipeline was struck by artillery fire, halting deliveries on the Druzhba pipeline.
The US is aware of the reports of missiles landing in the NATO member country and is looking into them, said a Pentagon spokesman at a press briefing.
Russia’s defense ministry denied that its military had aimed missiles at targets near the border with Poland.
“The market is going to have to recalibrate the potential risk to global oil supplies if this war escalates,” said Phil Flynn, a senior market analyst at Price Futures Group.
“It’s going to be critical to see how NATO and the United States decide to respond to this provocation.”
While crude has lost about a third of its value since early June on economic slowdown concerns, markets remain volatile as geopolitical risk constantly threatens already tight fuel balances.
As investors continue to watch for any clues about how much further central banks will pursue measures to slow down inflation -- risking a recession --the International Energy Agency noted Tuesday that oil inventories in developed nations have sunk to the lowest since 2014.
European Union sanctions on Russia will curb flows from December.
Crop futures also jumped on concern that any potential escalation in the war may endanger a deal that has allowed exports of grains from Ukraine through the Black Sea.
Chicago wheat erased an earlier decline to rise as much as 2.9%, before trimming some of the gains to settle 1.2% higher at $8.48 a bushel.
Corn rose 1.5% and soybeans 1.2%.
Prices
WTI for December delivery rose $1.05 to settle at $86.92 a barrel.
Brent for January settlement added 72 cents to $93.86 a barrel.
(with assistance from Julia Fanzeres)
https://www.rigzone.com/news/wire/oil_r ... 7-article/
Re: OIL, NATURAL GAS
Investing.com
"Oil inventories drop by more than expected 5.8M barrels last week: API"
By Yasin Ebrahim
Nov 15, 2022
Investing.com -- U.S. crude stockpiles fell much more than expected last week, though product inventories including gasoline increased, the API reported Tuesday.
West Texas Intermediate, the U.S. benchmark, traded at $86.80 a barrel following the report after settling up 1.2% at $86.92 a barrel.
U.S. crude inventories fell by 5.8 million barrels for the week ended Nov. 11.
That compared with a build of 5.6M barrels reported by the API for the previous week.
Economists were expecting a draw of just 400,000 barrels.
API data also showed that gasoline inventories rose by about 1.7M barrels last week, and distillate stocks increased by 850,000 barrels.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 440,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2945157
"Oil inventories drop by more than expected 5.8M barrels last week: API"
By Yasin Ebrahim
Nov 15, 2022
Investing.com -- U.S. crude stockpiles fell much more than expected last week, though product inventories including gasoline increased, the API reported Tuesday.
West Texas Intermediate, the U.S. benchmark, traded at $86.80 a barrel following the report after settling up 1.2% at $86.92 a barrel.
U.S. crude inventories fell by 5.8 million barrels for the week ended Nov. 11.
That compared with a build of 5.6M barrels reported by the API for the previous week.
Economists were expecting a draw of just 400,000 barrels.
API data also showed that gasoline inventories rose by about 1.7M barrels last week, and distillate stocks increased by 850,000 barrels.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 440,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2945157
Re: OIL, NATURAL GAS
RIGZONE
"Oil Falls on Demand Concerns as Geopolitical Tensions Ease"
by Bloomberg | Julia Fanzeres
Wednesday, November 16, 2022
Oil dropped as a pipeline carrying Russian crude to Europe was reported to have restarted and tensions over Poland eased, pushing demand concerns to the market’s forefront.
West Texas Intermediate fell 1.5% to settle above $85 after a volatile session on Wednesday where futures swung in a $3 range.
Crude sold off after a section of the Druzhba oil pipeline, Europe’s largest crude oil conduit, was reported to have restarted following a power supply disruption.
Oil experienced a volatile 24 hours after a renewed injection of geopolitical risk.
An oil tanker linked to an Israeli billionaire was hit by a projectile about 150 miles off the coast of Oman, according to a statement from its owner.
Tuesday, a rocket hit a Polish village near the Ukrainian border.
NATO and Polish leaders say the incident was unlikely to have been an intentional attack.
In the past few weeks, crude has been largely stuck in a $10 range.
Concerns that a global economic slowdown will deepen are still weighing on the demand outlook, offsetting, for now, the risk posed by low fuel inventories.
The International Energy Agency this week said oil stockpiles in developed nations are at the lowest since 2004.
Traders are waiting to see what impact Russian oil sanctions, which kick in early next month, will have on global balances.
Meanwhile, price reaction was muted after a US government report showed large crude draws in conjunction with small builds in fuel inventories.
“The macro is overtaking the micro in terms of crude,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors, which manages roughly $8 billion in energy-related assets.
Concerns over Chinese demand coming back and how oil demand will withstand a potential recession are overwhelming supply fundamentals, he added.
Prices:
WTI for December delivery dropped $1.33 to settle at $85.59 a barrel in New York.
Brent for January settlement fell $1 to settle at $92.86 a barrel.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_f ... 3-article/
"Oil Falls on Demand Concerns as Geopolitical Tensions Ease"
by Bloomberg | Julia Fanzeres
Wednesday, November 16, 2022
Oil dropped as a pipeline carrying Russian crude to Europe was reported to have restarted and tensions over Poland eased, pushing demand concerns to the market’s forefront.
West Texas Intermediate fell 1.5% to settle above $85 after a volatile session on Wednesday where futures swung in a $3 range.
Crude sold off after a section of the Druzhba oil pipeline, Europe’s largest crude oil conduit, was reported to have restarted following a power supply disruption.
Oil experienced a volatile 24 hours after a renewed injection of geopolitical risk.
An oil tanker linked to an Israeli billionaire was hit by a projectile about 150 miles off the coast of Oman, according to a statement from its owner.
Tuesday, a rocket hit a Polish village near the Ukrainian border.
NATO and Polish leaders say the incident was unlikely to have been an intentional attack.
In the past few weeks, crude has been largely stuck in a $10 range.
Concerns that a global economic slowdown will deepen are still weighing on the demand outlook, offsetting, for now, the risk posed by low fuel inventories.
The International Energy Agency this week said oil stockpiles in developed nations are at the lowest since 2004.
Traders are waiting to see what impact Russian oil sanctions, which kick in early next month, will have on global balances.
Meanwhile, price reaction was muted after a US government report showed large crude draws in conjunction with small builds in fuel inventories.
“The macro is overtaking the micro in terms of crude,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors, which manages roughly $8 billion in energy-related assets.
Concerns over Chinese demand coming back and how oil demand will withstand a potential recession are overwhelming supply fundamentals, he added.
Prices:
WTI for December delivery dropped $1.33 to settle at $85.59 a barrel in New York.
Brent for January settlement fell $1 to settle at $92.86 a barrel.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_f ... 3-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Tumbles as Demand Fears Reignite"
by Bloomberg | Julia Fanzeres
Thursday, November 17, 2022
Oil tumbled as everything from Wall Street sentiment to sagging demand for physical barrels of crude pointed toward an economy headed toward a slowdown.
Brent futures fell below $90 a barrel for the first time in six weeks and West Texas Intermediate settled at the lowest since September.
While Federal Reserve officials reiterated their resolve to continue raising interest rates and warned of pain ahead, lackluster demand among oil traders for crude this winter signaled a slowdown may already be underway in energy markets.
Pullbacks were evident along most of the oil-trading complex.
Prices for crude cargoes in trading hubs from Houston to Singapore have fallen, surprising traders who expected prices to rise ahead of the European Union’s approaching ban on Russian oil imports.
The oil curve, a reflection of where the market sees future prices, has collapsed, with the US oil market on the cusp of flipping into a structure that signals oversupply for the first time since last year.
Crude bids have collapsed as the reality sets in that Chinese demand most likely gets worse before it gets better, said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.
“Front month time spreads -- the backbone of tight markets -- are the weakest they have been since March 2021 signaling demand concerns are real and investors should be cautious when buying the dip.”
While lower-than-usual inventories and geopolitical risks have lead to occasional spikes, recessionary fears have weighed heavily on crude prices in the second half of this year.
JPMorgan Chase & Co. projected the US will enter a “mild” recession next year due to interest-rate hikes.
Meanwhile, traders are keeping their eyes peeled on rising Covid cases in China as an indicator for crude consumption.
A short burst of optimism from China’s decision to ease some quarantine restrictions last week fizzled as it’s become apparent that rising Covid cases there will continue to stymie travel.
Prices:
WTI for December delivery fell $3.95 to settle at $81.64 a barrel in New York.
Brent for January settlement fell $3.08 to settle at $89.78 a barrel.
Oil traders are also having to grapple with surging rates to charter ships to haul oil across the globe.
On Wednesday, benchmark earnings for supertankers that can haul 2 million barrels jumped above $96,000 a day.
Ships on the US-to-China route now cost almost $15 million, the most since April 2020.
The strength in freight is weighing on the crude market’s structure, the Citigroup analysts said.
https://www.rigzone.com/news/wire/oil_t ... 9-article/
"Oil Tumbles as Demand Fears Reignite"
by Bloomberg | Julia Fanzeres
Thursday, November 17, 2022
Oil tumbled as everything from Wall Street sentiment to sagging demand for physical barrels of crude pointed toward an economy headed toward a slowdown.
Brent futures fell below $90 a barrel for the first time in six weeks and West Texas Intermediate settled at the lowest since September.
While Federal Reserve officials reiterated their resolve to continue raising interest rates and warned of pain ahead, lackluster demand among oil traders for crude this winter signaled a slowdown may already be underway in energy markets.
Pullbacks were evident along most of the oil-trading complex.
Prices for crude cargoes in trading hubs from Houston to Singapore have fallen, surprising traders who expected prices to rise ahead of the European Union’s approaching ban on Russian oil imports.
The oil curve, a reflection of where the market sees future prices, has collapsed, with the US oil market on the cusp of flipping into a structure that signals oversupply for the first time since last year.
Crude bids have collapsed as the reality sets in that Chinese demand most likely gets worse before it gets better, said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.
“Front month time spreads -- the backbone of tight markets -- are the weakest they have been since March 2021 signaling demand concerns are real and investors should be cautious when buying the dip.”
While lower-than-usual inventories and geopolitical risks have lead to occasional spikes, recessionary fears have weighed heavily on crude prices in the second half of this year.
JPMorgan Chase & Co. projected the US will enter a “mild” recession next year due to interest-rate hikes.
Meanwhile, traders are keeping their eyes peeled on rising Covid cases in China as an indicator for crude consumption.
A short burst of optimism from China’s decision to ease some quarantine restrictions last week fizzled as it’s become apparent that rising Covid cases there will continue to stymie travel.
Prices:
WTI for December delivery fell $3.95 to settle at $81.64 a barrel in New York.
Brent for January settlement fell $3.08 to settle at $89.78 a barrel.
Oil traders are also having to grapple with surging rates to charter ships to haul oil across the globe.
On Wednesday, benchmark earnings for supertankers that can haul 2 million barrels jumped above $96,000 a day.
Ships on the US-to-China route now cost almost $15 million, the most since April 2020.
The strength in freight is weighing on the crude market’s structure, the Citigroup analysts said.
https://www.rigzone.com/news/wire/oil_t ... 9-article/
Re: OIL, NATURAL GAS
RIGZONE
"Saudi Arabia Cuts Oil Exports"
by Bloomberg | Grant Smith
Thursday, November 17, 2022
Saudi Arabia has cut oil exports sharply this month as the kingdom delivers on an OPEC+ agreement to shore up global crude markets.
Saudi shipments were down by about 430,000 barrels a day, or roughly 6%, by mid-November compared with the previous month, according to data from energy analytics firm Kpler Ltd.
An even bigger slump of 676,000 barrels a day was observed by another consultant, Vortexa Ltd.
The kingdom, which leads the Organization of Petroleum Exporting Countries, is fully committed to the agreement struck last month between the group and its allies, according to an official who asked not to be identified.
“Saudi Arabia is cutting a lot, going down for a second straight month,” said Viktor Katona, an analyst at Kpler in Vienna.
US President Joe Biden slammed Riyadh and its partners last month, saying the hefty 2 milllion barrel-a-day cut would endanger the global economy and aid fellow OPEC+ member Russia in its war in Ukraine, though oil-market trends have since given the decision some vindication.
Crude prices have retreated about 4% this week to near $90 a barrel amid a fragile backdrop for demand.
Saudi Energy Minister Prince Abdulaziz bin Salman defended the cutbacks last week at the COP27 climate talks in Egypt, saying they were needed to offset extreme economic uncertainties.
He said the group would remain “cautious.”
The kingdom has often sought to lead OPEC+ by example, swiftly delivering its pledged curbs -- or even exceeding them -- to encourage other members to follow.
Exports from OPEC’s 13 members are down “very significantly in the first half of November, by more than 1 million barrels a day,” said Daniel Gerber, chief executive officer of tanker-tracker Petro-Logistics SA in Geneva.
While an uptick is likely in the second half of the month, flows are on track for an average monthly drop of 1 million a day -- roughly equivalent to the group’s full pledged reduction, according to the firm, which has monitored tanker traffic for four decades.
Iraq, UAE
Among Saudi Arabia’s OPEC counterparts in the Middle East, signs of cuts were more mixed, though shipping data for the first half of the month can give a fragmentary picture, prone to distortion if cargo loadings fall just inside or outside the date range.
Iraq showed a drop of 308,000 barrels a day, or about 9%, in shipments in the first two weeks of November and Kuwait’s flows appeared broadly flat, but exports from the United Arab Emirates rose by 379,000 barrels a day, or roughly 12%, according to Kpler.
Shipments from the UAE are usually concentrated at the beginning of the month and subside later in the period, Bloomberg tanker-tracking indicates.
The country’s Energy Ministry and state-run producer Adnoc didn’t immediately respond to requests for comment.
Abu Dhabi has in the past been more eager to deploy the new production capacity it’s invested in than curtail supplies, triggering a dispute last year that almost splintered the OPEC+ alliance.
Some OPEC+ delegates have privately said that Abu Dhabi didn’t initially support the group’s cutbacks, though others have disputed the claim, and UAE Energy Minister Suhail Al Mazrouei said last month that the decision was the right one.
The full 23-nation OPEC+ alliance will meet to consider production policy for early 2023 on Dec. 4 in Vienna.
--With assistance from Prejula Prem, Anthony Di Paola and Salma El Wardany.
https://www.rigzone.com/news/wire/saudi ... 8-article/
"Saudi Arabia Cuts Oil Exports"
by Bloomberg | Grant Smith
Thursday, November 17, 2022
Saudi Arabia has cut oil exports sharply this month as the kingdom delivers on an OPEC+ agreement to shore up global crude markets.
Saudi shipments were down by about 430,000 barrels a day, or roughly 6%, by mid-November compared with the previous month, according to data from energy analytics firm Kpler Ltd.
An even bigger slump of 676,000 barrels a day was observed by another consultant, Vortexa Ltd.
The kingdom, which leads the Organization of Petroleum Exporting Countries, is fully committed to the agreement struck last month between the group and its allies, according to an official who asked not to be identified.
“Saudi Arabia is cutting a lot, going down for a second straight month,” said Viktor Katona, an analyst at Kpler in Vienna.
US President Joe Biden slammed Riyadh and its partners last month, saying the hefty 2 milllion barrel-a-day cut would endanger the global economy and aid fellow OPEC+ member Russia in its war in Ukraine, though oil-market trends have since given the decision some vindication.
Crude prices have retreated about 4% this week to near $90 a barrel amid a fragile backdrop for demand.
Saudi Energy Minister Prince Abdulaziz bin Salman defended the cutbacks last week at the COP27 climate talks in Egypt, saying they were needed to offset extreme economic uncertainties.
He said the group would remain “cautious.”
The kingdom has often sought to lead OPEC+ by example, swiftly delivering its pledged curbs -- or even exceeding them -- to encourage other members to follow.
Exports from OPEC’s 13 members are down “very significantly in the first half of November, by more than 1 million barrels a day,” said Daniel Gerber, chief executive officer of tanker-tracker Petro-Logistics SA in Geneva.
While an uptick is likely in the second half of the month, flows are on track for an average monthly drop of 1 million a day -- roughly equivalent to the group’s full pledged reduction, according to the firm, which has monitored tanker traffic for four decades.
Iraq, UAE
Among Saudi Arabia’s OPEC counterparts in the Middle East, signs of cuts were more mixed, though shipping data for the first half of the month can give a fragmentary picture, prone to distortion if cargo loadings fall just inside or outside the date range.
Iraq showed a drop of 308,000 barrels a day, or about 9%, in shipments in the first two weeks of November and Kuwait’s flows appeared broadly flat, but exports from the United Arab Emirates rose by 379,000 barrels a day, or roughly 12%, according to Kpler.
Shipments from the UAE are usually concentrated at the beginning of the month and subside later in the period, Bloomberg tanker-tracking indicates.
The country’s Energy Ministry and state-run producer Adnoc didn’t immediately respond to requests for comment.
Abu Dhabi has in the past been more eager to deploy the new production capacity it’s invested in than curtail supplies, triggering a dispute last year that almost splintered the OPEC+ alliance.
Some OPEC+ delegates have privately said that Abu Dhabi didn’t initially support the group’s cutbacks, though others have disputed the claim, and UAE Energy Minister Suhail Al Mazrouei said last month that the decision was the right one.
The full 23-nation OPEC+ alliance will meet to consider production policy for early 2023 on Dec. 4 in Vienna.
--With assistance from Prejula Prem, Anthony Di Paola and Salma El Wardany.
https://www.rigzone.com/news/wire/saudi ... 8-article/
Re: OIL, NATURAL GAS
The Daily Caller
"Biden’s Proposed Plan To Address Diesel Shortages Could Hike Prices Even Further"
Jack McEvoy
15 NOVEMBER 2022
President Joe Biden is proposing a plan that would require fuel suppliers to maintain a minimum amount of diesel in their inventories this winter to stave off severe shortages and prevent extreme price hikes.
However, it could create a demand surge and drive up already high prices, according to Bloomberg.
The plan would force diesel vendors to take supplies off the market which could cause short-term diesel demand to soar and drive up prices in the Northeast, where fuel shortages are most severe, according to Bloomberg.
Russia’s invasion of Ukraine has exacerbated the East Coast’s fuel shortages as the region has become dependent on Russian imports due to the region’s constrained pipeline capacity.
“We also want to make sure there’s enough fuel in the United States,” Energy Secretary Jennifer Granholm said when asked about U.S. fuel exports to energy-starved Europe during an interview at the COP27 climate conference in Egypt.
“It may not be a business choice that they make, but we’re asking, as the companies that are operating in America, to do what they are doing in other countries.”
The national average price of diesel is $5.31 per gallon and is $1.58 higher than it was in November 2021, according to the Energy Information Administration (EIA).
The Midwest region’s wholesale diesel prices skyrocketed in July after pipeline operator Magellan Midstream Partners increased the minimum inventory levels for fuel held throughout its pipeline, according to Bloomberg.
The European Union (EU) required its member-states to fill natural gas storages to 80% of full capacity in order to prepare for potential winter shortages, according to the European Council press release.
Europe is currently heavily reliant on U.S. oil and gas imports as Russia has continuously disrupted natural gas deliveries through the Nord Stream 1 pipeline in retaliation to EU sanctions.
Americans who use heating oil (a form of diesel) will spend an average of $2,354 to heat their homes this winter which represents a 27% increase from winter 2021 and the highest price point in more than 25 years, according to the EIA.
The White House did not immediately respond to the Daily Caller News Foundation’s request for comment.
https://www.msn.com/en-us/money/other/b ... 6ea67090ae
"Biden’s Proposed Plan To Address Diesel Shortages Could Hike Prices Even Further"
Jack McEvoy
15 NOVEMBER 2022
President Joe Biden is proposing a plan that would require fuel suppliers to maintain a minimum amount of diesel in their inventories this winter to stave off severe shortages and prevent extreme price hikes.
However, it could create a demand surge and drive up already high prices, according to Bloomberg.
The plan would force diesel vendors to take supplies off the market which could cause short-term diesel demand to soar and drive up prices in the Northeast, where fuel shortages are most severe, according to Bloomberg.
Russia’s invasion of Ukraine has exacerbated the East Coast’s fuel shortages as the region has become dependent on Russian imports due to the region’s constrained pipeline capacity.
“We also want to make sure there’s enough fuel in the United States,” Energy Secretary Jennifer Granholm said when asked about U.S. fuel exports to energy-starved Europe during an interview at the COP27 climate conference in Egypt.
“It may not be a business choice that they make, but we’re asking, as the companies that are operating in America, to do what they are doing in other countries.”
The national average price of diesel is $5.31 per gallon and is $1.58 higher than it was in November 2021, according to the Energy Information Administration (EIA).
The Midwest region’s wholesale diesel prices skyrocketed in July after pipeline operator Magellan Midstream Partners increased the minimum inventory levels for fuel held throughout its pipeline, according to Bloomberg.
The European Union (EU) required its member-states to fill natural gas storages to 80% of full capacity in order to prepare for potential winter shortages, according to the European Council press release.
Europe is currently heavily reliant on U.S. oil and gas imports as Russia has continuously disrupted natural gas deliveries through the Nord Stream 1 pipeline in retaliation to EU sanctions.
Americans who use heating oil (a form of diesel) will spend an average of $2,354 to heat their homes this winter which represents a 27% increase from winter 2021 and the highest price point in more than 25 years, according to the EIA.
The White House did not immediately respond to the Daily Caller News Foundation’s request for comment.
https://www.msn.com/en-us/money/other/b ... 6ea67090ae
Re: OIL, NATURAL GAS
RIGZONE
"Oil Posts Largest Weekly Loss Since April"
by Bloomberg | Julia Fanzeres
Friday, November 18, 2022
Oil dropped the most in a week since April as the full weight of languishing Chinese demand and more economic tightening radically shifted the market’s sentiment.
West Texas Intermediate fell 1.9% to settle just over $80 a barrel.
US futures fell 10% this week, the most since Biden ordered a historic discharge of crude from the Strategic Reserves in April.
Swelling Covid cases in China and aggressive monetary tightening by central banks have combined to erase all the gains earned last month when OPEC and its partners slashed production by 2 million barrels a day.
Pullbacks were evident along most of the oil-trading complex.
On Friday, the US prompt-spread flipped into contango, a structure that signals oversupply, for the first time since last year.
Meanwhile, a deteriorating market for physical barrels has also weighed on prices as demand for winter-delivery cargoes has weakened.
The collapsing gauges of market health sent bulls running for the exits.
Hedge funds slashed bullish bets for Brent crude the most in four months.
Money managers’ net-long positions on the international benchmark fell around 30,000 contracts, according to data from the U.S. Commodity Futures Trading Commission released Friday.
Crude is trading below several key moving averages, sparking so-called technical-based selling.
A further collapse in the market’s structure on Friday added to the selling.
Prices:
WTI for December delivery lost $1.56 to settle at $80.08 a barrel in New York.
Brent for January fell $2.16 to settle at $87.62 a barrel.
Coronavirus cases in China have climbed to near their highest level of the pandemic, as authorities signal they’re preparing for even more infections.
The increases will likely prove a test for any loosening of the country’s Covid rules.
https://www.rigzone.com/news/wire/oil_p ... 9-article/
"Oil Posts Largest Weekly Loss Since April"
by Bloomberg | Julia Fanzeres
Friday, November 18, 2022
Oil dropped the most in a week since April as the full weight of languishing Chinese demand and more economic tightening radically shifted the market’s sentiment.
West Texas Intermediate fell 1.9% to settle just over $80 a barrel.
US futures fell 10% this week, the most since Biden ordered a historic discharge of crude from the Strategic Reserves in April.
Swelling Covid cases in China and aggressive monetary tightening by central banks have combined to erase all the gains earned last month when OPEC and its partners slashed production by 2 million barrels a day.
Pullbacks were evident along most of the oil-trading complex.
On Friday, the US prompt-spread flipped into contango, a structure that signals oversupply, for the first time since last year.
Meanwhile, a deteriorating market for physical barrels has also weighed on prices as demand for winter-delivery cargoes has weakened.
The collapsing gauges of market health sent bulls running for the exits.
Hedge funds slashed bullish bets for Brent crude the most in four months.
Money managers’ net-long positions on the international benchmark fell around 30,000 contracts, according to data from the U.S. Commodity Futures Trading Commission released Friday.
Crude is trading below several key moving averages, sparking so-called technical-based selling.
A further collapse in the market’s structure on Friday added to the selling.
Prices:
WTI for December delivery lost $1.56 to settle at $80.08 a barrel in New York.
Brent for January fell $2.16 to settle at $87.62 a barrel.
Coronavirus cases in China have climbed to near their highest level of the pandemic, as authorities signal they’re preparing for even more infections.
The increases will likely prove a test for any loosening of the country’s Covid rules.
https://www.rigzone.com/news/wire/oil_p ... 9-article/