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OPEC Lifts Production in February

OPEC raised its oil production in January despite voluntary production cuts that the group was supposed to be adhering to, according to new data published on Friday by Bloomberg.

A new Bloomberg survey showed that OPEC’s production rose by 110,000 barrels per day to 26.68 million barrels per day—with Libya accounting for much of the increase as it brought production back online at its Sharara oilfield.

Iraq—a chronic overproducer, did lower its February production, but it is still producing more than its agreement with OPEC calls for. The survey showed that the UAE also produced more than its quota. OPEC voluntarily agreed to deepen its oil production cuts for the first quarter of this year, although several members have been struggling to meet those commitments. Several countries have promised to make up for any overages in subsequent months. Most analysts predict that OPEC+ will extend its production cuts into the second quarter, and the market is eagerly awaiting the news from the group regarding their plans for April and beyond. OPEC+’s voluntary production cuts could even be extended through the end of the year, three OPEC+ sources told Reuters earlier this week. The sources said that extending the cuts into the second quarter was “likely”. 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. Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, has always left the door open to extending the cuts, saying as far back as December that the production cuts could extend beyond March should the market require it. NN: They are playing lip service to production cuts. Do not be fooled.

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Israel said to reject talks without list of alive hostages……. Egypt expects ceasefire deal to be agreed by Ramadan

Israeli representatives informed Qatari and Egyptian mediators that they are not ready to continue negotiations on the ceasefire deal until Hamas provides the list of the hostages who are still alive and gives a concrete response on the number of Palestinian prisoners that the mediators suggested to be released, Axios reported on Friday citing two Israeli officials with knowledge of the matter. Egypt and Qatar previously promised they would put more pressure on Hamas if Israel accepted sending its delegation to Doha for talks. “The mediators promised that Hamas would give numbers and that didn’t happen,” an Israeli official told the media outlet, adding that the country’s delegation returned from Qatar on Thursday without answers. Israel is currently waiting to hear whether United States President Joe Biden’s talks with representatives of Qatar and Egypt, held on Thursday, will have any effect and push Hamas to provide answers.

Egypt expects ceasefire deal to be agreed by Ramadan

Egyptian Foreign Minister Sameh Shoukry  said on Friday that his country expects the agreement on a ceasefire in the Gaza Strip to be reached by Ramadan, which should begin on March 10 or 11. “We are hopeful that we can reach a cessation of hostilities and exchange of hostages. Everyone recognizes that we have a time limit to be successful before the start of Ramadan,” the minister stated at the Antalya Diplomacy Forum in Turkey. Previously, United States President Joe Biden said that he hoped a ceasefire deal to be reached by Monday, March 4, but retracted it on Thursday after the Israeli military opened fire on Palestinians waiting for humanitarian aid in Gaza City, leaving over a hundred dead.

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Nick Note Oil Market

NN: OPEC has got a big problem here. Any perceived market tightness is VERY TEMPORARY. All we are seeing is a 10 to 15 day delay as oil avoids the red s ea. A lot of DELAYED cargoes, but none lost, start arriving this month. And as we continue to publish Europe and China are in a real slow down. Add to that the Middle East is as ugly as it gets. And no oil has been lost to that war. So the two  variables are OPEC extending production cuts and peace in the middle east. OPEC is widely expected to extend production cuts. But at $84 Brent no one is going to comply with the cuts. And they are over their dream price.  In the Israel Hamas war i believe its run its course. Biden is about to step on Israels dick and shut off its water. THE MARKET  IS SOON A SELL. WAIT FOR PEACE IN THE VALLEY

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WTI rises above $80 per barrel, hits highest level since Nov

The price of a WTI barrel soared to heights not seen since November as the market braces for an OPEC+ decision on oil production levels in April and beyond. Behind the rise in price is the market’s anticipation that OPEC+ will extend its voluntary production cuts for the next quarter and the volatility that could come from updated U.S. crude oil and crude products inventory data that will be released from the American Petroleum Institute (API) at 4:30 pm ET on Tuesday. WTI prices are now at their highest level since early November 2023. The market is anxiously awaiting a decision from OPEC+ on the plan for Q2 2024. The group has yet to divulge a date when it will meet to discuss the issue with its members, although April is quickly approaching. OPEC+ will need to determine whether it will stay the course and extend the current voluntary production cuts into the second quarter, whether it will deepen the cuts, or whether it will scale them back or scrap the cuts altogether. Most industry watchers favor the first option, arguing that OPEC+ has no choice but to extend the current level of production cuts if it wants to keep prices from falling. This weeks  price rise does provide OPEC+ with a bit of cover, although OPEC+ still insists it is not managing prices but managing supply based on market needs. NN: OPEC has got a big problem here. Any perceived market tightness is VERY TEMPORARY. All we are seeing is 10 to 15 day delay as oil avoids the red s ea. A lot of DELAYED cargoes none lost start arriving this month. And as we continue to publish Europe and China are in a real slow down. Add to that the Middle East is as ugly as it gets. And no oil has been lost to that war. So the two  variables are OPEC extending production cuts and peace in the middle east. OPEC is widely expected to extend production cuts. But at $84 Brent no one is going to comply with the cuts. And they are over their dream price.  In the Israel Hamas war i believe its run its course. Biden is about to step on Israels dick and shut off its water. THE MARKET  IS SOON A SELL. WAIT FOR PEACE IN THE VALLEY

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Saudi Arabia Likely to Keep Oil Prices to Asia Unchanged

Saudi Arabia is expected to announce in a few days little changes to the price of its crude going to Asia in April, amid a rise in Middle Eastern oil benchmarks, a Reuters survey of refiners showed on Friday. Saudi Aramco, the world’s top crude oil exporter, is set to keep the price of its flagship Arab Light grade for Asia for next month unchanged or raise it slightly by up to $0.20 per barrel over the Oman/Dubai average, the benchmark off which Middle Eastern crude exports to Asia are priced, the survey of six refining sources found. Saudi Arabia typically announces its official selling prices (OSPs) for the following month around the fifth of each month, and does not comment on the pricing.  This month, the Saudis could announce the price of their crude for April after the OPEC+ decision whether to roll over the existing production cuts, a decision expected in early March. The market expects a rollover of the current cuts into the second quarter of 2024. Last month, Saudi Arabia unexpectedly kept the price of Arab Light for March unchanged for Asia from the February price, at $1.50 a barrel over the Oman/Dubai average. The current Arab Light premium over the Middle Eastern benchmark is the lowest in more than two years.

Now Aramco is expected to stick to this policy as the Dubai market structure has strengthened while the Saudis would want to push more barrels into Asia amid the disruption to oil shipping in the Red Sea for barrels going to Europe and the Mediterranean.

“The market structure and product cracks didn’t change too much compared to last month, and I think now with Red Sea shipping still having uncertainty … probably they will want to push the barrels to Asia,” one of the refining sources told Reuters. Saudi Arabia is expected to keep the price of the other crude grades to Asia little changed, too, according to the survey. NN: Which means they are not expecting the recent price rises to stick.

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Eurozone manufacturing PMI worsens in February……… UK manufacturing slump persists…. German manufacturing PMI suffers fresh setback in Feb

The Eurozone Manufacturing PMI worsened in February 2024, S&P Global and Hamburg Commercial Bank (HCOB) shared in a report on Friday. The figure stood at 46.5, down from last month’s 46.6, reaching a 2-month low and remaining in contractionary territory. “The attacks by the Houthis on commercial vessels in the Red Sea have had a temporary impact, leading to a brief lengthening of delivery times in January, followed by a subsequent reduction in lead times in February,” HCOB Chief Economist Cyrus de la Rubia commented. The drop in the manufacturing sector was mainly driven by Germany, “which registered its sharpest deterioration in four months,” followed by Austria and France. However, Greece and Ireland witnessed their strongest expansions in 24 and 20 months, respectively. Spain, after almost a year, finally returned to growth.

UK manufacturing slump persists amidst Red Sea crisis

The UK manufacturing sector’s downturn persisted in February, with the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) at 47.5, slightly up from the previous month’s 47.0. According to the report, the sector issues continued through February 2024, as weak demand and the ongoing crisis in the Red Sea compounded challenges, disrupting production and vendor delivery schedules. Manufacturers reported that these disruptions have increased costs as they seek alternative suppliers from more expensive, closer markets. “UK manufacturers faced challenging circumstances in February, as the ongoing impact of the Red Sea crisis delayed raw material deliveries, inflated purchase prices, and impacted production capabilities. There were also knock-on effects for demand, as new export orders were hit by both supply disruptions and higher shipping costs. Production volumes subsequently contracted for the twelfth successive month while total new orders fell at the sharpest rate since October,” Rob Dobson, Director at S&P Global Market Intelligence, said.

German manufacturing PMI suffers fresh setback in Feb

Germany Manufacturing Purchasing Managers’ Index (PMI) stood at 42.5 in February, down from an 11-month high of 45.5 in January, according to the latest report by S&P Global and Hamburg Commercial Bank published on Friday. The sector saw accelerated declines in both output and new orders, marking a concerning setback as the quarter progressed. The output index similarly fell to 42.3 from 45.7, indicating the fastest rate of contraction since October of the previous year. This downturn was primarily driven by a sharp decrease in demand, affecting both domestic and international sales. February’s data highlighted an increase in factory job losses, the most significant since August 2020, amid falling backlogs of work and dwindling expectations for future activity. “All hope has been dashed – for the moment. After a steady increase of the PMI over the last half a year, the index plunged to its lowest point since last October.  The drop was the result of a broad-based deterioration of indicators like the accelerated fall in new orders, the faster downturn in output, and the more aggressive trimming of jobs.

The widespread nature of the downturn offers little hope for a turnaround in the near future.” Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank said. NN:: falling economies means falling demand for oil

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Oil prices edge up by 1% on Middle East turmoil

Oil futures prices rose on Friday, as escalating tensions in the Middle East have raised concerns about the potential spillover of the conflict across borders and its wider impact on crude supply.

The uncertainty surrounding ceasefire negotiations between Israel and Hamas, coupled with the recent incident in Gaza where Israeli forces targeted unarmed Palestinians who were collecting aid, resulting in a reported death toll of over 100 according to Hamas, has contributed to the heightened sense of unease.

Additionally, the ongoing Houthi attacks on Red Sea shipping have further added risk to oil prices. West Texas Intermediate (WTI) for April contracts jumped 1.52% to $79.48 per barrel at 06:27 am ET. Brent for May deliveries increased 1.50% to $83.13 per barrel. NN: a worsening crises pushing oil higher and a cease fire and hostage release will take the $12 war premium out of the market… Place your bet.

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Israel’s Gallant: Military ready for action in Rafah….. White House: Firing at civilians serious incident

Israel’s Defense Minister Yoav Gallant said on Thursday that the Israeli Defense Forces (IDF) is ready for the ground operation in the city of Rafah, in the southern Gaza Strip.”We are closing in on Hamas. We are preparing to act in Rafah, as well as in the central camps, in order to reach the next stage [which] we will decide according to our priorities,” Gallant stated during his visit to Israeli troops in northern Gaza. Furthermore, the minister claimed that the Israeli military is on its way to destroy Hamas, adding that the militant group is “getting weaker with each passing day.”

White House: Firing at civilians serious incident

The White House described on Thursday the reported firing at Palestinian civilians in Gaza City conducted by the Israel Defense Forces (IDF) as a “serious incident.” “We mourn the loss of innocent life and recognize the dire humanitarian situation in Gaza, where innocent Palestinians are just trying to feed their families,” United States President Joe Biden’s administration remarked in a statement. “This underscores the importance of expanding and sustaining the flow of humanitarian assistance into Gaza, including through a potential temporary ceasefire.” Earlier in the day, the IDF fired at the crowds that gathered around the trucks carrying humanitarian aid but insisted that “dozens of Gazans were killed and injured” due to “the pushing, trampling and being run over by the trucks.” NN: Can you imagine trying to move, house and feed one million of theses people before invading Rafah?  Can you imagine the fun Humas will have arranging another panic driven slaughter?

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Analysts Expect Oil Prices to Remain Close to $80 This Year

Sufficient supply and uninterrupted oil trade flows despite the Middle Eastern conflicts are set to keep oil prices close to the $80 per barrel threshold this year, the monthly Reuters poll of analysts showed on Thursday.

For the fourth consecutive month, more than three dozen analysts and economists continued to revise down slightly their forecast for the average price of the two most traded benchmarks, Brent and WTI, the Reuters poll found.

According to the experts, Brent Crude prices will average $81.13 a barrel this year, a slight downgrade from the $81.44 a barrel average consensus in the January poll. For WTI Crude, the surveyed analysts expect an average price of $76.54 per barrel in 2024, down from $77.26 a barrel expected in last month’s poll. Early on Thursday, both benchmarks were set to post their second monthly gain in a row after a period of losses last year, with traders anticipating an extension of the OPEC+ production cuts. An extension would contribute to a perception of a tightening oil market that has served to keep oil prices elevated for most of the past two months. As of 7:45 a.m. EST on Thursday, Brent prices were slightly down by 0.13% at $83.62, while the U.S. benchmark, WTI Crude, traded 0.17% higher at $78.65.

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Biden: Gaza ceasefire probably not by Monday

United States President Joe Biden said on Thursday that the potential ceasefire agreement between Israel and Hamas is unlikely to be reached by March 4 as he had initially predicted, Agence France Presse (AFP) reported. In response to the correspondent’s question whether Israel’s attack on the Gaza aid line, which is said to have killed over a hundred Palestinians, would complicate the warring parties’ negotiations on a temporary armistice, Biden said, “I know it will.” “We’re checking that [incident] right now. There are two competing versions of what happened, I don’t have an answer yet,” the US president stressed.