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OPEC+ Delays Revival of Its Oil Production by Three Months

OPEC+ NUCLEAR OPTION

OPEC+ delayed the revival of its oil production by three months, delegates said, the third time it’s deferred the move while crude prices struggle amid a looming surplus. The group led by Saudi Arabia and Russia pushed back the series of supply increases, which had been due to begin with a hike of 180,000 barrels a day in January. It will instead start in April and unwind the cuts at a slower place than previously planned, according to one delegate who asked not to be named because the information isn’t public. The Organization of Petroleum Exporting Countries and its partners had first announced in June that they would restore output halted since 2022, reviving 2.2 million barrels per day in monthly tranches. But its plans have been thwarted as oil demand falters in top consumer China, while supplies boom from the US, Brazil and Canada. Global markets face a surplus in 2025 even if OPEC+ doesn’t add a single barrel, according to the International Energy Agency. In an indication of OPEC+’s supply predicament, Thursday’s agreement means the group will only have fully unwound its so-called voluntary production cuts by September 2026, a full year later than initially planned.

Full year of OPEC+ curbs won’t avert surplus

Source: Bloomberg calculations using IEA data

Oil prices have declined about 18% since early July as traders shrugged off turmoil in Middle East and focus instead the slowdown in China, which has grappled with a range of economic challenges. Citigroup Inc. and JPMorgan Chase & Co. have predicted that crude will keep sliding into the $60s next year, even if OPEC+ continues to restrain production. That poses a financial threat for many members including the Saudis, who have already been forced to cut spending on lavish economic transformation plans. Their oil-market ally, Russian President Vladimir Putin, seeks revenue to continue waging war on Ukraine. Pausing the supply restart also gives OPEC+ some time to assess the impact of President-Elect Donald Trump’s return to the White House. He has signaled he could renew the campaign of “maximum pressure” on crude exports from Iran, deployed during his first term to curtail Tehran’s nuclear program. Squeezing the Islamic Republic’s oil sales could leave a gap for its Middle East adversaries to fill. On the other hand, Trump has also warned of punitive trade tariffs on several countries including China, which could deliver a fresh blow to Beijing’s economic activity and fuel consumption

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WTI Falls as Economic Data Weighs on Market

Oil fell 2% to settle below $69 a barrel as tepid US economic data undercut OPEC+’s progress on a deal to keep output constrained. The decline comes after crude futures tested their 50-day moving average, a key level that had spurred some technical buying. But slowing US services activity growth and swelling fuel stockpiles — both signals of weak demand — weighed on the market.

“The failure of WTI to hold above $70 and its 50-day moving average reinforces these levels as resistance,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “Additionally, volumes today are significantly lighter than the 10-day average, indicating this could be a ‘wait-and-see’ market as we approach year-end.”

Crude has been locked in a band of roughly $6 since the middle of October, buffeted by the imminent Donald Trump presidency, geopolitical tensions in the Middle East and Ukraine, and a lackluster demand outlook from top importer China. Mixed energy data from the US on Wednesday further muddied the picture, with weak diesel demand and record oil production offsetting a surprise draw in crude inventories.

Still, fresh US sanctions on Iran’s shadowfleet, and an expected agreement by OPEC+ nations to delay production increases for another three months are keeping a floor under prices. OPEC+ is due to finalize supply plans at an online meeting on today. Even before OPEC+ ministers start toddy’s meeting on oil production, traders are looking beyond it. For the past week, the cartel led by Saudi Arabia and Russia has been holding preliminary talks to once again delay plans for reviving halted barrels. The group is firming up an agreement — to be finalized at Today’s gathering — that would push back a sequence of monthly hikes from January until the second quarter. Unfortunately for the alliance, crude traders already assumed the pause was unavoidable and have priced it in. Benchmark Brent futures have barely budged in the week since OPEC+ began negotiations, hovering around $74 a barrel. That could be complacency: The Saudis have a habit of springing bullish surprises to deter short sellers. Nonetheless, investors are looking past the decision, focusing on oil-market conditions in early 2025 — and those don’t augur well for prices. Global demand growth is cooling as top consumer China falters, while supplies from the US, Guyana and Canada are booming, according to the International Energy Agency. A hefty surplus looms, even if OPEC+ doesn’t add a single barrel next year. The Organization of Petroleum Exporting Countries and its partners have already twice postponed their road map for restoring 2.2 million barrels a day in monthly tranches. Further delays may strain the group’s cohesion. Analysts increasingly wonder whether OPEC+ will eventually throw in the towel. The United Arab Emirates appears eager to deploy new production capacity, driving up exports last month to the highest in seven years. “They don’t want to collapse the price,” Bank of America Corp. notes, but “patience is running a little thinner than it used to.” Even Iran — one of OPEC’s founding members — acknowledged last week that the cartel’s strategy has proved self-defeating as the pursuit of higher oil prices finances an endless tide of rival supply. As brokers PVM Oil Associates Ltd. write today: “One cannot help but ponder how long the organization and its members are willing to sacrifice market share” for “a seemingly dubious, and chiefly ineffective, project.”

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Oil Prices Predicted to Plummet Below $60 Under Trump

A new survey from law firm Haynes Boone LLC has revealed that banks are gearing up for oil prices to fall below $60 a barrel by the middle of President-elect Donald Trump’s new term, Bloomberg reported on Monday.

The survey of 26 bankers showed that they expect WTI prices to drop to $58.62 a barrel by 2027, more than $10 lower than the intraday price of $69.87 at 11.00 am ET on Wednesday.

Trump says he’ll push shale producers to ramp up output, even if it means operators “drill themselves out of business.” However, it’s not clear he intends to accomplish this feat since U.S. oil is produced by independent companies and not a national oil company (NOC). Exxon Mobil’s (NYSE:XOM) Upstream President Liam Mallon recently dismissed the notion that U.S. producers will dramatically increase output under a second Trump term.

“I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing,” Mallon said last week at a conference in London.

Meanwhile, StanChart notes that following Scott Bessent’s recent nomination as Treasury Secretary, his Manhattan Institute June session where he spoke at a conference entitled ‘Towards a New Supply-Side: The Future of Free Enterprise in the United States’ is being scrutinised as a potential guide to policy.  The commodity analysts point out that U.S. oil and gas output is currently ~40.7 mboe/d; U.S. oil and gas output has grown by an average of about 123 kboe/d per month since 2015, meaning adding 3 mboe/d would take less than 25 months.  The commodity experts have noted that 41% of the post-2015 increase has come from natural gas, 28% from natural gas liquids (NGLs) and just 28% from crude oil. StanChart has predicted that the crude oil element of the next 3 mboe/d increase is likely to be significantly less than 20%, with natural gas likely to be the main instrument for meeting the new administration’s energy goals as crude oil output growth becomes increasingly difficult. Recently, Morgan Stanley predicted that the U.S. natural gas market is poised to enter a new cycle of demand growth thanks to surging LNG exports and rising electricity demand. NN: I believe oil will fall by over  $10 a barrel and IF i am right and IF i can guess lucky again we could make a bundle. 

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EIA: US crude inventories down by 5.1M barrels

Summary of Weekly Petroleum Data for the week ending November 29, 2024

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.1 million barrels from the previous week. At 423.4 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.

U.S. crude oil refinery inputs averaged 16.9 million barrels per day during the week ending November 29, 2024, which was 615 thousand barrels per day more than the previous week’s
average. Refineries operated at 93.3% of their operable capacity last week. Gasoline production decreased last week, averaging 9.5 million barrels per day. Distillate fuel production increased last week, averaging 5.3 million barrels per day. U.S. crude oil imports averaged 7.3 million barrels per day last week, increased by 1.2 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.9 million barrels per day, 5.0% more than the same four-week period last year. Total
motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 511 thousand barrels per day, and distillate fuel imports averaged 116 thousand barrels per day. Total motor gasoline inventories increased by 2.4 million barrels from last week and are about 4% below the five year average for this time of year. Finished gasoline inventories decreased while blending
components inventories increased last week. Distillate fuel inventories increased by 3.4 million barrels last week and are about 5% below the five year average for this time of year.
Propane/propylene inventories decreased by 0.7 million barrels from last week and are 10% above the five year average for this time of year. Total commercial petroleum inventories decreased by 4.7 million barrels last week.
Total products supplied over the last four-week period averaged 20.4 million barrels a day, up by 4.0% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, up by 2.8% from the same period last year. Distillate fuel
product supplied averaged 3.7 million barrels a day over the past four weeks, even with the same period last year. Jet fuel product supplied was up 7.1% compared with the same four-week period last year.

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OPEC Secrecy Isn’t Helping Its Exit Strategy from Production Cuts

  • OPEC+ faces a dilemma: easing production cuts risks further price drops below $70 per barrel, but maintaining cuts supports non-OPEC+ supply growth.
  • Saudi Arabia is pushing to delay the easing of cuts by 3–6 months.
  • The group’s decision may hinge on how President Trump’s return in January 2025 impacts Iran, Venezuela, and global oil demand.

This week, the OPEC+ group is meeting to discuss when and how to begin easing the ongoing production cuts. The alliance looks to have dug itself deeper into a position between a rock and a hard place, again. Although they are not publicly admitting it, OPEC and its allies want to keep oil prices fairly high, as many of these need oil to trade at least above $80 per barrel to avoid budget deficits, and even above $90 a barrel for most, including Saudi Arabia.   However, higher oil prices are also helping non-OPEC+ supply growth, not only from the United States but also from producers such as Guyana and Brazil. For the umpteenth time, OPEC is caught between its own revenue needs and the loss of market share to rival non-OPEC+ supply. OPEC, of course, has been stating for years that it isn’t going for a specific oil price with the production cuts—rather it’s all about ensuring and keeping “market stability.” But as prices have stabilized at just over $70 per barrel Brent in recent weeks, OPEC faces another dilemma at the December 5 meeting, which was postponed from the originally planned date December 1. If the cartel and its allies begin unwinding the cuts in January – as currently planned – they risk a certain slide of Brent Crude prices below $70 a barrel and possibly further down as demand doesn’t appear great and the oversupply next year would only grow.   Lower prices could hurt U.S. drillers, but they would also hurt OPEC and Russia, the ultimate petrostates for which oil revenues are the single biggest budget income.

In this situation, OPEC’s exit strategy from the production cuts is now more unclear than ever. If OPEC+ producers want to bankrupt U.S. drillers as they have attempted – and achieved – in the past, they would have to bust their own budgets and endure a prolonged period of price pain until demand begins outstripping supply again.

Yet, the leader of the cartel and the OPEC+ group, Saudi Arabia, needs oil income pouring in, a lot of it, to fund the Crown Prince’s Vision 2030 program of tech and construction and tourism wonders that would reduce the Kingdom’s reliance on oil.

The group has limited options in easing the production cuts as these restrictions, aimed at supporting oil prices, helped non-OPEC+ supply, especially from the United States, Iran’s Governor for OPEC, Afshin Javan, wrote in a column of Iranian state news agency Shana last week.

It is as a rare admission from an OPEC member that the cartel’s policies to boost oil prices are boosting U.S. oil production growth, too, Bloomberg Opinion columnist Javier Blas argues. In the post, which briefly appeared online, Iran’s Javan wrote that “This strategy in support of prices has effectively encouraged higher supply outside the group, particularly on the part of the US.” And acknowledged, “That would leave a limited room for maneuvering by OPEC+ to ease its restrictions.” Javan also cited “bleak economic prospects” in China as throwing in another challenge at OPEC’s plans to ease the production cuts. Weak fundamentals could prompt the OPEC+ group to delay – once again – the output increase currently planned to begin in January, according to recent market speculation. Saudi Arabia is pushing for a delay of between three and six months, OPEC+ delegates have told Bloomberg’s Blas. The Saudis have even sought support for extra cuts, but none of the other producers in the alliance has expressed willingness to support additional cuts, according to the delegates. The OPEC+ group is likely to delay the unwinding of the production restrictions, not least to see what U.S. President Donald Trump will do with Iran and Venezuela when he returns to the White House in January. Analysts widely expect Trump to tighten the screws on Iran and attempt stricter enforcement of the U.S. sanctions. If a fairly large chunk of Iran’s supply – which goes mostly to China – is taken off the market, OPEC+ will have a reasonable justification for starting to ease the production cuts. However, if President Trump follows through with his tariff threats, global trade and economies could suffer and reduce the expected oil demand growth, analysts say. OPEC+’s best play for this week’s meeting may be to postpone the cuts until the end of March 2025, to see how the first policies of the new Trump administration would affect the oil market and the economy.

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WOKE DOPE BROKE…..Its ok to be a straight white male again

This landslide election has sent the lefties Commies woke dopes LGBTTRANS  reeling. 

Nearly 60% percent of white men voted Trump. A lot of Black and Brown men moved in that direction too. This year’s election results do not bode well for LIBERALS, man hating women or LGBTQ people of all races/ethnicities.

 It’s time for  whites  to declare their innocence in relation to white privileges, slavery that occurred hundreds of yeas ago and the plight of some black  drug addicted criminals who use the distant past as an excuse to not better themselves.

Its true EDUCATED SKILLED WHITES get the best jobs, are the wealthiest people on the planet. Because they are hard working and  invented everything around us that makes this the prospers advanced world we live in.

Rather than waste resources  on queer folks  gender affirmation and people of color incarceration  lets educate them so they can become productive members of a peaceful  society. And prosper from their hard work rather then protesting for more handouts.

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Oil Surges on US Sanctions and OPEC+ Delays

Oil rose the most in more than two weeks as the US imposed more sanctions targeting Iranian crude and OPEC+ made progress on a deal to keep output off the market. West Texas Intermediate advanced 2.7% to settle near $70 a barrel, the biggest one-day jump since Nov. 18, as OPEC+ delegates said the group is firming up an agreement to delay its oil-production revival by another three months. The alliance is due to finalize plans at an online meeting on Thursday. Brent climbed to settle above $73 a barrel. Crude extended gains after the US Treasury sanctioned 35 entities and vessels for their role in transporting illicit Iranian oil to foreign markets. A possible return to President-elect Donald Trump’s hawkish sanctions on Iran could threaten the nation’s output, which has increased by about 1.2 million barrels a day since he left office.

“Much of the future of oil hinges on sanctions on Iran and Venezuela, and of course OPEC,” Francisco Blanch, head of commodities research at Bank of America, said during a media roundtable. If the two countries’ output declines, Brent could rise as high as the $80-per-barrel range, Blanch said.

In another sign of potential risk to Middle East flows, Israel attacked and killed Hezbollah’s liaison to the Syrian army, the Israel Defense Forces said. The civil war in Syria, an ally of Iran that borders key oil-producing nation Iraq, is flaring up after rebel forces captured the city of Aleppo this weekend. In Asia, China’s top leaders plan to map out economic targets and stimulus for 2025 at a major gathering next week, potentially supporting demand for crude. Still, gauges of implied volatility for oil have sunk to the lowest in about two months as futures remain stuck in a range of about $6 since mid-October. In Brazil, one of the main engines of non-OPEC supply growth, output continued to falter. Oil production was down about 6% from a month earlier and 8% on a year earlier, according to data from the nation’s oil regulator.

Oil Prices:

  • WTI for January delivery rose 2.7% to settle at $69.94 a barrel.
  • Brent for February settlement climbed 2.5% to $73.62 a barrel.

NN: This is a selling opportunity. Pax Trump is coming to the Middle East and OPEC+ is drooling at the opportunity to put the 5 MPD its  holding back into the oil  market….. and DRILL BABY DRILL……. And Gretta is losing her cookies its beyond a spanking….. Its time for a exorcism.

 

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API reports US oil inventories up by 1.23M barrels

Crude oil inventories in the United States increased by 1.232 million barrels in the week that ended November 29, beating expectations, the American Petroleum Institute’s (API) private data reportedly showed on Tuesday. Reserves in Cushing, Oklahoma, were said to have risen by 112,000 barrels. Gasoline reserves grew by 4.623 million barrels. Meanwhile, distillate stocks went up by 1.014 million barrels.

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US military says it took out ‘threats’ in Syria

The United States Central Command (CENTCOM) announced the destruction of multiple weapon systems in eastern Syria near Military Support Site Euphrates. The strike eliminated three truck-mounted rocket launchers, a T-64 tank, an armored personnel carrier and mortars, allegedly used to fire on US troops. “The US mission in Syria remains unchanged,” CENTCOM stated, reaffirming its focus on defeating terrorist threats. It added that current operations and support for regional partners are also “unrelated to recent events in northwest Syria.” NN: With Trump warming up in the wings, US military “men” are starting to let the hair on their balls grow back. Time the commanders stop concentrating on the latest WOK lecture, the asses of the troops in the shower and reclaim their status as the worlds  foremost fighting machine.

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Oil prices up 1% ahead of OPEC+ meeting

The prices of crude oil futures rose by 1% on Tuesday as traders awaited the meeting of the Organization of the Petroleum Exporting Countries and its partners (OPEC+) scheduled for Thursday, December 5. The organization is widely expected to extend its latest round of production cuts until the first trimester of 2025 due to the oversupply outlook, which has dragged prices down. West Texas Intermediate (WTI) for deliveries in January climbed by 1.13% to $68.87 per barrel at 6:27 am ET. A minute later, Brent for February settlements jumped by 1.04% to go for $72.60 per barrel.