Oil prices have remained largely rangebound over the last month as bullish and bearish factors continue to counterbalance each other. The flatlining of oil prices continued this week despite positive trade data coming out of China and impressive Indian oil demand, with a continued build-up in US crude inventories and skepticism vis-à-vis OPEC+’s extended voluntary cuts offsetting that positive momentum. The last time ICE Brent futures settled outside of the $80-85 per barrel bandwidth was on February 7, suggesting the end of this week will mark a month-long sideways drift for oil.
OPEC+ Failed to Hit Its Production Cut Target Yet Again in February
The OPEC+ group’s combined crude oil production in February was little changed from January and still above the overall output quota that OPEC and its allies pledged when they announced extra voluntary supply reductions, according to the latest Platts survey by S&P Global Commodity Insights. The survey showed total OPEC+ oil production flat in February from January at around 41.21 million barrels per day (bpd), which, per Platts’ estimates, was about 175,000 bpd higher than the overall quota. OPEC+ members collectively decided to voluntarily cut 2.2 million bpd from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut. Last weekend, the members of the OPEC+ alliance that had pledged the Q1 cuts announced they would roll over the supply reductions until the end of the second quarter. Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude oil production and exports in the first half of 2024 with extra voluntary reductions, on top of voluntary cuts OPEC+ previously announced in April 2023 and later extended until the end of 2024. The production estimates for February have shown that some of these – especially Iraq and Kazakhstan – continued to overproduce above their respective quotas. In the middle of February, both Iraq and Kazakhstan pledged to comply with the cuts they had announced. OPEC’s second-largest producer, Iraq, is committed to its voluntary cut in the OPEC+ agreement and will produce no more than 4 million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said last month. Non-OPEC oil producer Kazakhstan, for its part, vowed to compensate over the coming months for a lack of compliance with the cuts in January. “Kazakhstan has always supported the initiatives of the OPEC+ member countries,” the country’s Energy Ministry said in a statement in February. NN: liar liar pants on fire
German producer prices down 4.4% in January
Producer prices in Germany saw an annual decline of 4.4% in January, the country’s statistical office Destatis revealed in a report on Friday. Month on month, the index rose 0.2%. In the reported month, energy prices dropped 11.7% compared to the same timeframe a year ago and edged down 0.1% compared to December 2023. Prices of intermediate goods slid by 3.7% from January 2023 and rose 0.2% from the prior month. Meanwhile, prices of capital goods jumped 3% annually and grew 0.7% month-on-month. An annual rise of 1.6% and a monthly increase of 0.3% were observed in the prices of durable consumer goods. Non-durable consumer goods prices were 1.1% higher year-over-year and up 0.1% in comparison to the previous month.
Israel reportedly rejects permanent ceasefire
Israel has rejected a proposal for a permanent ceasefire in the Gaza Strip tabled by Hamas, Al Jazeera reported on Thursday. Hamas submitted its conditions earlier this week in response to terms proposed by Egyptian and Qatari mediators. The Palestinian group later accused Israel of “evading” its proposal. The report cited unnamed sources as saying that the latest round of ceasefire negotiations in Cairo ended unsuccessfully as Israel “rejected Hamas’ request for a permanent ceasefire, the army’s withdrawal from the Gaza Strip, and the return of the displaced without conditions.” NN: This is how negotiations work with terrorists. Once again Israel will be forced to stop before it kills the beast.
German factory orders down 11.3% in January
Seasonally and price-adjusted new factory orders in Germany declined by 11.3% in January compared to the previous month, the country’s Federal Statistical Office Destatis revealed in a report published on Thursday. Foreign orders dropped by 11.4% compared to December, while domestic orders declined by 11.2%. New orders from the euro area plunged by 25.7%, while new orders from other countries increased by 1.6% month on month. New orders of intermediate goods decreased by 9.3% and capital goods orders plummeted by 13.1%, while orders of consumer goods declined by 5.7%. On an annual basis, calendar-adjusted new factory orders decreased by 6% in January. NN: This is known as a economic slow own. No matter how much blue sky them try to blow up your ass oil demand is plunging.
API Reports US oil inventories up by 423,000 barrels
Crude oil inventories in the United States increased by 423,000 barrels in the week that ended March 1st, private data from the American Petroleum Institute (API) reportedly showed on Tuesday. Distillate inventories are said to have declined by 1.8 million barrels, whereas gasoline stockpiles saw a decline of 2.8 million barrels. During the corresponding week, reserves in Cushing, Oklahoma, allegedly added 500,000 barrels.
On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.7 million barrels as of March 1. Inventories are now at 361 million barrels—the highest level since May 2023.
Cushing inventories rose again this week, by 500,000 barrels after rising by 1.825 million barrels in the previous week.
Eurozone’s retail sales down 1% in January…… US factory orders down by 3.6% in January
Retail trade in the euro area slipped by 1% in January compared to the same month a year ago, while in the entire European Union, the figure fell by 0.6%, Eurostat revealed in its report on Wednesday. On a monthly basis, the reading was up 0.1% in the Eurozone and rose 0.3% in the entire EU. The sales of non-food products in the Eurozone and the EU decreased by 0.2% and increased by 0.1% month on month, while food, drinks, and tobacco retail trade rose by 1% and 0.8% in the corresponding regions. The sales of automotive fuels grew by 1.7% in the euro area and were up by 1.2% in the EU. Countries marking the highest monthly growth in retail sales were Luxembourg with 7.6%, Romania with 3.8%, and Cyprus with 1.5%. Conversely, the biggest falls were observed in Estonia, where they reached negative 2.6%, and Slovakia and Latvia, which recorded negative 1% and negative 0.8%.
US factory orders down by 3.6% in January
New orders for manufactured goods in the United States observed a monthly decrease of 3.6% or $21.5 billion to come in at $569.7 billion in January, the Census Bureau said in its report published on Tuesday. Shipments decreased $5.7 billion or 1% to stand at $572.3 billion. Unfilled orders increased by $2.1 billion or 0.2% to $1,4 billion. Inventories decreased by 0.1% or $800 million month-on-month to reach $855.8 billion. The inventories-to-shipments ratio was 1.50, up from 1.48 in December. Meanwhile, new orders for manufactured durable goods decreased $21.5 billion or 3.6% to $569.7 billion. NN: like i been saying a global economic slow down.
US must pressure Israel into accepting Gaza ceasefire deal, Hamas says
Hamas senior official: It is now in the hands of the Americans if they are serious about achieving a ceasefire before Ramadan
The United States must pressure Israel to reach a ceasefire and hostage deal agreement with Hamas, a senior official from the Gazan terror group told NBC on Tuesday. “It is now in the hands of the Americans if they are serious about achieving a ceasefire before Ramadan,” NBC quoted the official as saying in a voice note, “to exercise enough pressure on the Israelis.” Hamas negotiators will remain in Cairo for another day at the request of mediators, keeping ceasefire talks going after two days with no breakthrough, another official from Hamas said on Tuesday. The Cairo talks have been billed as a final hurdle to reach the first extended ceasefire in the war between Hamas and Israel- a 40-day truce during which Israeli hostages would be freed and aid pumped into Gaza – ahead of Ramadan, which is due to begin at the start of next week. “The delegation will remain in Cairo on Tuesday for more talks; they are expected to wrap up this round later today,” a Hamas official told Reuters. Egypt’s Qahera television also reported the talks had been extended for a third day but said they were “facing difficulties.” Earlier, senior Hamas official Bassem Naim told Reuters the terrorist group had presented its proposal for a ceasefire agreement to the mediators and was now waiting for a response from the Israelis, who have stayed away from this round. “(Prime Minister Benjamin) Netanyahu doesn’t want to reach an agreement, and the ball is now in the Americans’ court” to press him for a deal, Naim said. A senior Israeli official asked about Naim’s comments that Israel was holding up the deal, said: “The claim is incorrect. Israel is making every effort to reach an agreement. We are awaiting a response from Hamas.”
Oil drops 1% amid China economy growth target
Crude oil for front-month settlements fell by over 1% on Tuesday as targets set by China, the world’s largest crude oil importer, regarding its economic growth, failed to raise optimism among investors. Namely, Chinese Premier Li Qiang announced that the economic authorities set a gross domestic product growth target of approximately 5% for 2024. Additionally, the Asian country aims to bring its unemployment rate to 5.5%, while it plans to increase its military budget to 7.2%. Meanwhile, Chinese President Xi Jinping remarked that the country will introduce extraordinary measures in order to “deepen reforms in all-round way.” West Texas Intermediate (WTI) for April contracts declined 1.42% to $77.67 a barrel at 8:31 am ET. Brent for May deliveries dropped by 1.27% to trade at $81.93 per barrel at the same time. NN: this shoots the demand part of the oil equation in the ass.
Cairo Talks Boycotted by Israel End With No Breakthrough……. U.S. Demands Rafah Humanitarian Plan
Egyptian source to Sky News: Despite difficulties in talks, reports on no Cairo breakthrough are false
The latest round of ceasefire talks have broken up without a breakthrough. Meanwhile, global internet cables have been cut in the Red Sea that provide data to Africa, Asia and the Middle East. Without a temporary truce over Ramadan, which begins 10 March, the conflict could get worse both in Gaza and on the West Bank, he said. “We could see Hamas fomenting some kind of uprising on the West Bank and that could be made worse by the far-right members of Netanyahu’s Israeli government talking about restricting access to Temple Mount”. Temple Mount, in Jerusalem, is host to Dome of the Rock and al Aqsa mosque, two Muslim holy sites, as well as being a sacred place for Jews, with the Western Wall located there. Hamas have called for Palestinian Muslims to ignore any restrictions and march on the mosque. Israel have also threatened to begin a ground offensive in Rafah should Hamas not release all hostages by Ramadan. “The question now is whether the talks can be put back together over the coming days before the Ramadan holy month begins,” said Bunkall. He said we could be seeing “stalling tactics” that precede a breakthrough – or things may “go from bad to worse”.