Oil Market News, OPEC+, sanctions and price shocks

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The Commodities Feed: Saudis stick to supply cut​

Despite the ongoing conflict between Israel and Hamas, the oil market is decreasingly concerned that the conflict will disrupt oil supplies. However, we continue to expect a tight market for the remainder of this year

Oil futures rose Monday after Saudi Arabia and Russia, as expected, confirmed they would extend production cuts through the end of December, while investors continue to monitor the Israel-Hamas war for potential spillovers that could affect crude supplies.
“The confirmation from these producers that they would continue with cuts shouldn’t come as too much of a surprise. However, what the market will be more interested in is if they extend these cuts into early 2024,” Warren Patterson and Ewa Manthey, commodity strategists at ING, said in a note.

“Our oil balance shows that the market will be in surplus in 1Q24, which may be enough to convince the Saudis and Russians to continue with cuts through the seasonally weaker demand period of Q1,” they wrote.

A look at the day ahead in U.S. and global markets from Mike Dolan

World markets are trying to calibrate last week's steep rally in stocks and bonds - tempering some of the overcaffeinated rate cut hopes that emerged but sustaining the bulk of the gains and lapping up a fresh oil price slide.

A look at the day ahead in U.S. and global markets from Mike Dolan

With the more substantive of Federal Reserve Chair Jerome Powell's two appearances this week still to come, markets have stalled as the week's surprising plunge in oil prices and bond yields levelled off.

A look at the day ahead in U.S. and global markets from Mike Dolan

Ebbing oil prices are cheerleading this week's renewed optimism on U.S. disinflation - with retail soundings still perky into the Thanksgiving period and as the data diary shifts to housing and industry.

This week's stock and bond surge on news of a fresh decline in headline and 'core' U.S. consumer price inflation last month was underscored on Wednesday by data showing the biggest decline in producer prices in three and a half years.

A look at the day ahead in U.S. and global markets from Mike Dolan

A cratering of oil prices and more signs of a cooling economy have seen Treasury yields plumb their lowest in two months, underpinning Wall St stock indexes despite notable single stock plunges in Walmart, Cisco and Alibaba.

U.S. two-year Treasury yields skidded below 4.80% on Friday for the first time since September 1, with 10-year yields dropping under 4.40% to September lows too.

November 22 - Last week, the European Union unveiled a pioneering regulation aimed at mitigating climate change. This proposed new methane performance standard will introduce penalties akin to a carbon import tax for producers who fail to demonstrate exceptionally low methane emissions.

By 2027, suppliers exporting to the EU will be mandated to present reliable measurements of their methane emissions. This is in anticipation of import penalties that will come into effect in 2030. The regulation imposes even stricter requirements on domestic producers within the EU, over whom the EU has more direct control.


FUJAIRAH DATA: Oil product stocks jump to six-week high​

Stockpiles of oil products at the UAE's Port of Fujairah jumped 12% in the week ended Nov. 20 to a six-week high, according to data from the Fujairah Oil Industry Zone.



South Korea capitalizes on narrow Brent-Dubai spread, buys 7 VLCCs of US crude in Oct​

South Korea's crude oil imports in October rose 4.4% from a year earlier with refiners taking full advantage of narrow Brent-Dubai price spread to bring in around 7 VLCCs of US crude in the month, while traders also remained confident over Middle Eastern sour crude supply security for winter and 2024, industry sources said over Nov. 17-22 based on the latest customs data.



Unviable East-West arbitrage pushes Singapore ULSD differential to six-month low​

Sustained weakness in East-West arbitrage economics, coupled with softer demand in Asia and Northwest Europe has pushed the benchmark FOB Singapore 10 ppm sulfur gasoil cash differential to a six-month low, but industry sources expect demand to rebound on low inventory.

Platts assessed FOB Singapore 10 ppm sulfur gasoil cash differential over Mean of Platts Singapore gasoil assessments at a discount of 31 cents/b at the Asian close Nov. 21, down 12 cents/b on the day and tumbling from premium of $1.55/b at the start of the month, S&P Global Commodity Insights data showed.

MOSCOW/LONDON, Nov 23 (Reuters) - Three major Greek shipping firms have stopped transporting Russian oil in recent weeks in order to avoid U.S. sanctions now being imposed on some shipping firms carrying Russian oil, four traders told Reuters and shipping data showed.

The development is a blow to Russia as it narrows the number of shipping firms that are ready to transport Russian oil to consumers in Asia, Turkey, the Middle East, Africa and South America - although traders said Moscow still had enough shipping firms for now.

HOUSTON, Nov 27 (Reuters) - Oil prices fell on Monday, with the Brent benchmark dipping below $80 a barrel as investors awaited this week's OPEC+ meeting and expected curbs on supplies into 2024.

Brent crude futures were down 60 cents, or 0.7%, at $79.98 a barrel. U.S. West Texas Intermediate (WTI) crude futures lost 68 cents, or 0.9%, to $74.86. Both contracts lost $1 in early trading.

MOSCOW/DELHI (Reuters) - One of Russia's most lucrative oil trade routes since the imposition of Western sanctions over the Ukraine conflict faces a major challenge because of the drawbacks of payment in currency other than dollars, with no short-term solution in sight.

For decades, the U.S. dollar has been the currency of international oil trade and efforts to find alternatives have been thwarted by the difficulties of conversion, as well as political obstacles.

Oil tanker owners in Greece, the world’s most powerful shipowning nation, scaled back how much Russian crude they’re hauling, a decision that could ultimately disrupt the flow of Moscow’s petroleum.

The number of Greek-owned tankers going to Russia will fall by a quarter this month compared with last, and is down 60% from June, ship tracking data compiled by Bloomberg show. That may well alarm officials in the Kremlin because the country still needs assistance from foreign vessel operators to get all its barrels to the global market.

LONDON, Nov 30 (Reuters) - Oil prices were little changed on Thursday as investors eagerly awaited the outcome of an anticipated OPEC+ meeting that could lead to deeper supply cuts in 2024.

Brent crude futures for January climbed 70 cents to $83.80 a barrel by 0935 GMT, on subdued volumes given the contract is meant to expire today. The more active February contract was up 58 cents at $83.46 a barrel.

Meanwhile, U.S. West Texas Intermediate crude futures crept up 55 cents at $78.41 a barrel.

... the delayed OPEC+ meeting concluded with the expanded cartel agreeing on an additional 1 million barrels in production cuts, alongside an extension of Saudi Arabia's 1 million bpd in voluntary "lollipop" cuts.
... we also learned that Brazil has been invited to join the OPEC+ alliance in 2024 and is considering the invitation. The move would draw one of the world’s most significant sources of new supply growth into the cartel just as it tightens its squeeze on production. The Latin American giant exported an average of 1.8 million barrels a day of oil in the third quarter, an increase of 40% from a year earlier, according to official data. Better-than-expected production growth from Brazil, along with the US, is helping to lift up global supply by 1.7 million barrels a day this year to a record level, according to the International Energy Agency.

Interesting that Brazil is potentially joining OPEC. The overlap between OPEC and BRICS growing?

Oil Markets Confused and Underwhelmed by OPEC+ Cuts​

Friday, December 1st, 2023

Oil markets welcomed the new OPEC+ deal that pledged 2.2 million b/d in voluntary cuts for the first quarter of 2024 in a very lukewarm manner, with Brent erasing all its earlier gains and dropping back to $81 per barrel. With even the most seasoned industry watchers starting to lose track of which country will be cutting what amount against which reference level, the production target confusion was aggravated by the fact that markets expected deeper cuts, going over and above what Saudi Arabia or Russia have already curbed from their output.

Good stuff here:

Dec 3 (Reuters) – Brazil will never join the OPEC+ group of oil-producing nations as a full member and instead only seeks to participate as an observer, Brazilian President Luiz Inacio Lula da Silva said on Sunday.


Saudi Prince Says Oil Output Cuts Could Extend Beyond March​

Dec 04, 2023, 3:00 PM CST
  • The market’s reaction to the OPEC+ voluntary cuts announcement was a further decline in oil prices.
  • The Saudi energy minister has criticized the market’s response to the OPEC+ announcement, accusing commentators of wanting to be “conspiratorial” and failing to understand the deal.
  • Prince Abdulaziz said on Monday that OPEC+ production cuts could extend beyond March 2024.
Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg on Monday that OPEC+ production cuts could extend beyond March 2024 if the market requires it, criticizing commentators for failing to understand the output deal.

On November 30, eight members of the expanded cartel announced voluntary cuts of around 2.2 million barrels per day for the first-quarter of next year, including Saudi Arabia’s current voluntary cuts of 1 million barrels per day, as well as Russia’s 500,000 bpd voluntary cuts. That leaves us with “additional”, “voluntary” cuts of less than 900,000 bpd not already been priced in. Additional voluntary cuts were pledged from Iraq, UEA, Kuwait, Kazakhstan, Algeria and Oman.



Is A New Oil Price War Looming?​

Dec 04, 2023, 6:00 PM CST

U.S. crude oil production broke another record in September, putting additional pressure on the OPEC+ group, which looks to keep oil prices above $80 per barrel by controlling "market stability."

The underwhelming OPEC+ meeting last week showed that there is dissent within the group about deeper cuts and production quotas. The Saudis rolled over their extra voluntary cut of 1 million barrels per day (bpd) and Russia – the leader of the non-OPEC allies in OPEC+ – pledged to deepen its supply cut to 500,000 bpd from 300,000 bpd.



America’s energy boom: Crude exports soar to record high​

As diplomats convene at the United Nations’ COP 28 climate change summit, fossil fuel production and consumption are hitting new highs, and tanker owners are in prime position to profit from rising trade flows.

The Biden administration is a leading proponent of decarbonization, yet the U.S. is pumping out record volumes of hydrocarbons. America is on track to be the world’s largest producer and exporter of natural gas this year, as well as the leading exporter of refined products and liquefied petroleum gas.

There are also big wins — for energy producers and shipowners, not decarbonization advocates — on the crude oil front.

The U.S. produced 13.2 million barrels per day (b/d) of crude oil in September, according to data released Thursday by the Energy Information Administration. That is the country’s highest monthly production level ever.

And not only is America producing more crude, it is exporting a larger share of the crude it produces, further boosting volumes aboard tankers bound for Europe and Asia.


This one's a bit different. Good stuff (imo)

The Shadow Fleet Fueling Russia’s War | Bloomberg Investigates​

Dec 6, 2023


An armada of aging oil tankers is helping to keep Russian oil flowing. Hundreds of vessels are part of a “shadow fleet” that’s allowed the Kremlin to dodge Western sanctions over its war on Ukraine. Bloomberg set out to uncover the traders, intermediaries and investors that make up this network, and how they’re getting rich in the process.

Putin and Saudi Arabia's MbS urge all OPEC+ powers to join oil cuts​

MOSCOW, Dec 7 (Reuters) - Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman called on Thursday for all OPEC+ members to join an agreement on oil output cuts, saying they were for the good of producers and the broader global economy.

Putin held a hastily-arranged meeting in Riyadh with the Saudi crown prince on Wednesday after a pledge by OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, to further cut output.


The USA increased output. There is more pressure on OPEC+ to make deeper cuts. This is another vector in the new cold war between east (BRICS) and west.

Did A Load of Russian Oil Just Sail Past the Atlantic Fleet and Offload in Norfolk, VA?​

Dec 7, 2023


- Marine Traffic: Avenca https://www.marinetraffic.com/en/ais/...
- IMTT https://imtt.com/our-company/
- United States Bans Imports of Russian Oil, Liquefied Natural Gas, and Coal https://www.whitehouse.gov/briefing-r...
- GHouse - Avenca https://www.ghouse-sa.com/en/frota/av...
- Equasis equasis.org
- ABS Record https://absrecord.eagle.org/#/absreco...
- Oryx Shipping LLC https://oryx-shipping.com/

Oil slips as weak sentiment counters Middle East tensions​

  • Yemen's Houthis claim attack on Norwegian tanker
  • Draft COP28 climate deal drops call to 'phase out' fossil fuels
  • U.S. crude inventories likely fell last week
  • Coming up: U.S. inflation, API oil supply reports
LONDON, Dec 12 (Reuters) - Oil slipped on Tuesday, giving up earlier gains, as concern over excess supply and slowing demand growth outweighed escalating supply risks in the Middle East after an attack by the Iran-aligned Houthis on a tanker.

A cruise missile launched from Houthi-controlled Yemen struck a commercial chemical tanker, causing a fire and damage but no casualties in the latest such attack to heighten safety risks for tankers in vital shipping lanes.



How Venezuelan invasion of Guyana could impact tanker shipping​

Shipping already faces fallout from two wars: trade shifts due to Russia’s invasion of Ukraine and vessel attacks off Yemen in the wake of the Israel-Hamas conflict.

Could there be a third simultaneous war — and even more trade complications for shipping?

Venezuela is threatening to invade Guyana and annex Guyana’s oil-rich Essequibo region, claiming the jungle territory and its offshore areas were stolen from Venezuela in 1899. Essequibo comprises around two-thirds of Guyana.



Big deals in US shale may not mean boom times are back | FT Energy Source​

Dec 12, 2023

High energy prices have generated bumper profits for fossil fuel supermajors, and some are spending big to acquire significant producers in US shale. But as the FT’s Jamie Smyth reports, this may not mean a return to the boom times for the industry, especially in the American Midwest.

Oil major BP joined the growing list of shipping companies that are suspending their operations passing through the Red Sea and Suez Canal as the security situation was increasingly being called into question. World oil markets reacted to the news as shipping experts have warned of the potential for growing delays and an impact on global supply chains due to the disruption of shipping operations.

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