This topic discusses developments in Oil and Gas market.
- Yesterday, Saudi Arabia extended its 1 million barrel per day voluntary crude oil production cut until the end of the year.
Interesting they are doing this when oil has been actually going up. Will probably start to work on an article about the energy markets, since this could be key to inflation if it continues to increase, as input prices could eventually start to increase again.
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Diesel prices have climbed more than 40% in the U.S. and Europe since May, when surprise output cuts by Saudi Arabia and some other members of the OPEC+ oil cartel took effect, Argus data showed. Most actively traded futures prices for Brent crude and West Texas Intermediate, the benchmarks for crude oil, are up 13% and 14% in the same time frame.
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As Brent crude surges past $91 a barrel, some analysts are starting to get worried. They’ve seen this movie before. And it can be highly disruptive.
Prices were turbocharged to the highest of the year after OPEC forecast a dearth of supply after Saudi Arabia’s planned output cuts. US gasoline prices are now pushing up against $4 again — not a comfortable development when most investors are leaning into the ideas of “soft landing,” “resilience” and “disinflation.”
Oil Rally Stokes Inflation Risk, Sowing Doubt on When Fed Can Stop Hikes - Bloomberg
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- The Russian government lifted the ban on diesel exports delivered to sea ports via pipelines.
- However, only manufacturers who sell “at least 50% of the diesel fuel produced to the domestic market” stand to benefit.
- Russia’s government also intoduced a duty of 50,000 roubles ($495.6) per ton for resellers of petroleum products in an effort to eliminate purchase of fuel through unauthorized channels.
- Oil prices rose 4% after an attack on Israel by Palestinian militants Hamas.
- Israel and Palestine do not produce any oil, but the war could have ramafications on major world oil suppliers.
- If Iran is sucked into the war, its oil exports and production (3.2 million barrels per day) could dwindle.
- Additionally, the war could affect supply through the Strait of Hormuz.
- 40% of world crude oil exports go through the Strait of Hormuz.
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Oil prices rose by about 4% after U.S government tightened sanctions against Russian crude oil exports.
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U.S imposed sanctions on two oil companies that it said violated the G7′s oil price cap.
“This action underscores the Treasury Department’s commitment with its international partners to responsibly reducing Russian government oil profits and constraining the Russian war machine,” Treasury department said in a statement.
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Incredible they let this happen, when oil reached 60s prices some months ago.
18 days left, as if they is no production at all, just as a reference.
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Saudi Arabia is asking others in the OPEC+ coalition to reduce their oil-output quotas in a bid to shore up global markets but some members are resisting.
The 23-nation OPEC+ alliance in crude markets, following a 17% drop in prices over the past two months amid plentiful supplies and a darkening economic backdrop. Markets could weaken further in early 2024, when forecasters including the International Energy Agency anticipate the emergence of a new supply surplus.
Oil prices have had a significant decline since early October
https://www.bloomberg.com/news/articles/2023-11-27/saudi-arabia-seeks-opec-oil-production-quota-cuts-while-some-members-resist
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OPEC agreed to make 1 million barrels a day of additional oil-supply cuts at a meeting on Thursday, delegates said.
That reduction comes alongside the much-anticipated extension into next year of Saudi Arabia’s voluntary output curb of the same size.
The new group-wide OPEC+ cut of 1 million barrels a day could actually be only half as big in real terms, Amrita Sen, director of research at consultant Energy Aspects Ltd., said. That’s because some countries are already pumping below their targets, she said.
https://www.bloomberg.com/news/articles/2023-11-30/opec-agrees-on-1-million-barrels-of-additional-oil-output-cuts
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Saudi Energy Minister Prince Abdulaziz bin said OPEC+ production cuts announced last week can continue past the first quarter if needed.
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Oil is reaching high prices again.
Last year it proved to be temporary, but at least the next 2-3 months will be a headwind to headline inflation.
Apparently, today’s price action is due to some geopolitical news. I don’t really know or understand if they pose real threat.
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OPEC+ members agreed to delay October output hike by two months due to a slump in prices.
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