BlackMask Breaking News

 

 

Energy Information Administration reported an estimated inventory increase of 1.6 million barrels for the week to November 24. This compared with a sizeable build for the previous week, at 8.7 million barrels, which pushed prices lower last week, contributing to other bearish factors. A day earlier, the American Petroleum Institute estimated a crude oil inventory dip of a little over 800,000 barrels for the week to November 24. In fuels, the EIA estimated inventory builds for the week to November 24. In gasoline, the agency reported a stock increase of 1.8 million barrels for the third week of November, with production averaging 9.3 million barrels daily. This compared with a modest inventory increase of 700,000 barrels for the previous week, when production averaged 9.4 million barrels daily.In middle distillates, the Energy Information Administration estimated an inventory build of 5.2 million barrels for the reporting period, with production averaging 5 million barrels daily.

This compared with a middle distillate inventory draw of 1 million barrels for the previous week, when production stood at an average 4.9 million bpd.

Oil prices, meanwhile, remained volatile ahead of the OPEC+ meeting on Thursday, when most expect the cartel to announce an extension of its production cuts. Since the extension is already factored into prices, chances are the official announcement will not prompt any significant changes.

Yet some expect deeper cuts from Saudi Arabia and this could move prices higher, according to analysts. Just how much higher and for how long is a different question.

“All eyes are on OPEC+ policy and demand outlook toward the end of this year, but WTI is expected to hover around $76, with a range of $5 each above and below, for a while unless OPEC+ significantly expands production cuts,” the president of Nissan Securities’ NS Trading, Hiroyuki Kikukawa, told Reuters.  ING analysts, meanwhile, cautioned that OPEC may delay its meeting yet again if it fails to reach an agreement on policy in advance. Internal disagreements were the cause of the first postponement. If the meeting is delayed again, prices will likely fall, ING said.

An OPEC+ source told Reuters on Monday that the expanded cartel is considering bigger oil output cuts during its November 30 meeting, which was originally delayed for four days over a production quota dispute between OPEC leaders and African nations. The unnamed OPEC+ source told Reuters he expected an option for a “collective further reduction” in oil production during the next meeting. The source’s comments echo similar comments made earlier in November suggesting that additional cuts would be considered. Last week, analysts increasingly chimed in to predict either an extension of the existing 1 million-barrel-per-day voluntary cuts or additional cuts to support prices which have fallen from highs of close to $100 per barrel in September to barely holding down $80 currently. Late last week, reports emerged that OPEC+ was making progress in talks with its African producers over their oil output quotas next year after Angola and Nigeria requested a higher production ceiling next year. Both countries took a cut in their quotas at the June 2023 meeting of OPEC+ as they had consistently failed to pump to their quotas. At the same time, for next year, the UAE is set to increase exports of its flagship Murban crude grade after negotiating a higher production quota in the OPEC+ deal. For years, the UAE has argued it should be allowed to pump more than its current OPEC+ quota as it is raising its production capacity. At the June meeting, the UAE won an upward revision of its quota that will take its production up by 200,000 barrels per day (bpd) to 3.219 million bpd for 2024.Earlier on Monday, the OPEC General Secretariat slammed the International Energy Agency (IEA) for its “moment of truth” report on the oil and gas industry released last week. The IEA suggested that the world now has a stark choice between oil and gas and worsening climate change. OPEC criticized the agency for vilifying the industry and ignoring cost and energy security issues. NN:

Despite the dramatic reaction of oil markets to news that the OPEC+ meeting would be postponed, oil prices are set to end the week with little real change as traders now await the outcome of the November 30th meeting. The seesawing in oil prices seen over the past weeks has wound down as the market awaits the OPEC meeting, postponed from this week to November 30 and changed from an in-person summit to an online event. ICE Brent front-month futures have settled within a narrow frame of $81-83 per barrel the entire week, with the Thanksgiving holidays in the US keeping the main developments firmly focused on the Eurasian landscape. A better outlook for China’s property sector was offset by higher US inventories, so OPEC+ will be the trendsetter for the next weeks’ pricing direction.NN: I learned a long time ago before the masses became aware of fake news a important lesson. Watch what thet instead of listening to what they say, And here is what they are doing:

According to Standard Chartered, the U.S. oil hedge book are 62% below 2020 levels.

Now let me tell you what they are DOING. You hear the bullshit about oil going into the sixites because demand is collapsing for oil. That ts the bullshit they tell you. If they beloved that they would be hedging at $80 oil to protect their profits. They flat out are not. Which means they are planning for much higher oil prices. Oil producers typically use a short hedge to lock in oil prices during times of falling crude prices, if they believe prices are likely to go even lower in the future. U.S. producers obviously  are not convinced there’s much downside to oil prices, as current hedging activity proves. 

The OPEC+ group has made progress in talks with its African producers over their oil output quotas next year, three OPEC+ sources told Reuters on Friday, after the alliance had to postpone this weekend’s meeting over the spat.   On Wednesday, OPEC said that the OPEC+ meeting scheduled for this weekend would be postponed to November 30, which sent oil prices tumbling over fears of disagreements in the group about the next move in its oil production policy. OPEC’s African members Angola and Nigeria have reportedly asked to have a higher production ceiling next year, after taking a cut in their quotas at the June 2023 meeting of OPEC+ as they had consistently failed to pump to their quotas. Angola, Congo and Nigeria were forced to commit to lower oil production in 2024, and the originally scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis express discontent over compliance with the deal as it shoulders the bulk of the burden, according to reports this week.   Before the announcement of a delay in the meeting, which will be held online next week, most analysts had expected that OPEC’s top producer, Saudi Arabia, would extend its voluntary cut of 1 million barrels per day (bpd) into 2024, considering the latest slide in oil prices to $80 and the typically weak period for oil demand in the first quarter of every year. Market talk was also intensifying that OPEC+ could announce a deeper cut. OPEC+ will likely reach an agreement at the meeting next week, one of Reuters’ sources said on Friday, feeling “with 99% of confidence” there would be a deal. Two other sources told Reuters that the group was close to reaching a compromise with the African producers on the levels of their crude oil production next year.  NN: A  deal has been done for significant shared production cuts.

Three major Greek shipping firms have halted transport of Russian crude in recent weeks due to the heightened risk of facing U.S. sanctions, Reuters has reported. Greek shippers Minerva Marine, TMS Tankers and Thenamaris have stopped carrying Russian oil to customers in the Middle East, Asia, Turkey, Africa and South America, although traders have reported that Moscow still had enough shipping firms for now. The three firms have been among the most active shippers of Russian oil and fuels but have lately scaled down their involvement. The three companies operate more than 100 oil tankers with enough capacity to handle almost all the oil exports from Russia’s European ports of roughly 10 million tonnes a month or 2.4 million barrels per day.

“The dark fleet might not be enough to transport all of Russian oil,” a trader involved in Russian oil shipping has told Reuters. ‘‘Dark fleet” refers to the emergence of shippers that move oil from Russia and Iran, but are not covered by Western insurance.

Last year, Washington imposed sanctions on owners of tankers in Turkey and the United Arab Emirates carrying Russian oil after buying above the G7’s price cap of $60 a barrel. Last week, it imposed more sanctions on three ships. Greece emerged as a new hub for Russian oil via ship-to-ship (STS) loadings after the U.S. and Europe slapped heavy sanctions on Russian crude. Shipments of Russian crude and fuel oil reached several multiples higher at the height of the trade than volumes before the sanctions. However, Greek shippers started cutting their volumes of Russian crude after the price of Urals surpassed the US$60/bbl price cap for the first time in July.  According to Argus Media, Greek tanker operators cut volumes of Russian crude by 482,000 bbls in July, with Russian crude falling to 35% of all cargoes compared to 45% in the previous months. With Russian crude now more costly, Chinese buyers have increasingly been turning to other markets which further disincentivizes Greek operators from remaining in the Russian trade due to the complications of remaining sanctions-compliant.

 

 

OPEC+ has delayed its ministerial meeting to set output policy to Nov. 30 from Nov. 26 as previously scheduled, OPEC said in a statement on Wednesday. The group was supposed to hold the Joint Ministerial Monitoring Committee and OPEC and non-OPEC ministerial meetings on November 25 and 26. Prices of oil futures continued to tumble after the announcement was made, with both West Texas Intermediate and Brent for deliveries in January 2024 falling over 4%. The OPEC+ meeting has been delayed as talks ran into trouble amid Saudi dissatisfaction with other members’ oil production levels. Ministerial meetings will now take place on Nov. 30, OPEC said on its website, without giving a reason for the delay. Saudi Arabia, which has been making an additional 1 million barrel-a-day output cut since July, was in difficult talks with other members about their production levels, delegates said, asking not to be named because the discussions are private. The Organization of Petroleum Exporting Countries and its allies face an increasingly fragile picture for oil prices. Crude is down about 18% from its September peak, defying expectations that production cuts would cause a rapid tightening in markets. The outlook for next year looks even weaker, with potential for a renewed surplus

“I think we need a cut,” Pierre Andurand, the renowned oil trader and founder of Andurand Capital Management, said in an interview with Bloomberg television earlier on Wednesday. “The Saudis will probably want the other countries to cut as well, so I think it’s going to be a negotiation.” Riyadh has been widely expected to extend its unilateral 1 million barrel-a-day curb through the first quarter of next year to keep markets in balance. But the kingdom could reverse the measure if its counterparts don’t contribute further to the supply reductions, Andurand said. Securing the cooperation of other OPEC+ producers could be a tall order. At the last meeting in June, African OPEC nations Angola, Congo and Nigeria were pressed to accept lower production quotas for 2024 because their capacity has deteriorated. If these countries were subsequently asked to make further production cuts from those lower quota levels, it could be difficult to accept. The African countries secured the right to a review of their production capacity by external consultants, and Nigeria at least has shown recently it can surpass its new limits. It pumped 1.416 million barrels a day last month, or 36,000 barrels a day above the target for 2024. Meanwhile, the United Arab Emirates has got the right from OPEC+ to increase production modestly in January in order to deploy recent capacity additions. It may be reluctant to forsake that long-awaited opportunity. The revised meeting date of Nov. 30 will coincide with the first day of the United Nations climate talks, known as COP28, which are taking place in the UAE city of Dubai. “If you are in OPEC+ shoes, they must be thinking that something needs to be done,” Christof Ruehl, senior analyst at Columbia University’s Center on Global Energy Policy, said on Bloomberg television. Yet “it will be more difficult for them to do something than people expect. It’s hard to see how they could get on the same page.” NN: this is a negotiation. They will be cutting oil production by a lot, They cancel meetings all the time to whip the members back in line.

Israeli President Isaac Herzog in a statement commented on the hostage release deal Israel reached with Hamas, describing it as “painful and difficult.” Herzog acknowledged the existing challenges of the agreement, but deemed Prime Minister Benjamin Netanyahu’s decision to approve the deal as a significant step toward returning all abductees home. He emphasized the moral and ethical obligation to redeem captives, claiming that is Israel’s top priority. “The State of Israel, the IDF and the security forces will continue to act in every way to achieve this goal, alongside the restoration of absolute security for the citizens of Israel,” Herzog stated. NN: This move on the part of Israel Reality is they will be back at it again real soon. This gives Israel global political cover to continue to slaughter the pigs. The sooner this is done the sooner their will be real peace.

The Iran-aligned Houthi rebels of Yemen have seized a cargo ship linked to an Israeli company in the Red Sea in the latest flare-up in the Middle East that could roil the oil market ahead of the OPEC+ meeting next weekend. Houthi spokesperson Yahya Saree said in a statement that the rebels “carried out a military operation in the Red Sea, the results of which were the seizure of an Israeli ship and taking it to the Yemeni coast,” The Times of Israel reported. The vessel, Galaxy Leader, is owned by a company registered under Isle of Man-headquartered Ray Car Carriers – a unit of Tel Aviv-incorporated Ray Shipping, per LSEG data cited by Reuters.  Israel blamed directly Iran for the cargo ship seizure, while Iran denied any involvement in the incident. “Israel strongly condemns the Iranian attack against an international vessel,” a statement by Israel’s Prime Minister’s Office said on Sunday. “The ship, which is owned by a British company and is operated by a Japanese firm, was hijacked with Iran guidance by the Yemenite Houthi militia.” “This is another act of Iranian terrorism and constitutes a leap forward in Iran’s aggression against the citizens of the free world, with international consequences regarding the security of the global shipping lanes,” Benjamin Netanyahu’s office added. Iran, for its part, rejected Israeli claims it was involved in the seizure of the ship. “These accusations are false and caused by the difficult conditions that the Zionist regime is dealing with,” Iranian media quoted Iran’s Foreign Ministry spokesman Nasser Kanani as saying on Monday. “Unlike the US, Iran does not have proxy forces and the resistance groups in the region are the representatives of their nations, and they act based on their interests, and their actions are part of the reactions to the regime’s crimes. It is a Zionist who is committing genocide and war crimes in Gaza under the support of US,” the Iranian foreign ministry spokesman added. The latest Iran-Israel flare-up comes days before the OPEC+ group of oil producers is set to decide their production policy for early next year after oil prices fell in each of the four past weeks.

Speculative funds have continued to move towards the short side of crude oil markets, analysts at Standard Chartered noted in a new report sent to Rigzone this week. “Money-manager shorts across the four main Brent and WTI contracts rose week on week by 31.7 million barrels to 209.5 million barrels in the latest positioning data, while money-manager longs fell by 16.0 million barrels to 456.4 million barrels,” the analysts stated in the report.

The reduction in the crude oil net long over the past six weeks has been 258.3 million barrels, the analysts highlighted in the report. They pointed out that this is the largest six-week move of money-manager funds to the short side since early March 2020 “at the start of the pandemic”.

“Long-short ratio indicators tell a similar story, with the ratio in the Chicago Mercantile Exchange (CME) WTI contract falling to 2.0 in the latest data, a sharp fall from 11.4 six weeks ago,” the analysts said in the report. “The main theme that emerges among money managers as their motivation for such a large move to the short side is a fear of future extreme demand weakness,” they added. “We think the dynamic behind current speculative flows is a reoccurrence of the macro-led concerns – about the U.S. and China economies in particular – that temporarily took Brent below $72 per barrel in May this year,” they continued. “Speculative net selling was a little slower in May (the six-week rate peaked at 231.6 million barrels, 10 percent less than over the past six weeks). However, the narrative among speculative traders of weakening demand conditions seems very similar,” they went on to state. In the report, the analysts noted that a few supply strands have attached themselves to the main demand weakness concerns. “However, most of them seem to be confusion about seasonality and the relationship between exports and production,” they said in the report. In the report, the analysts noted that a few supply strands have attached themselves to the main demand weakness concerns. “However, most of them seem to be confusion about seasonality and the relationship between exports and production,” they said in the report. The scale of the current speculative move in oil is not justified by fundamental data, the Standard Chartered analysts stated in the report. “Our supply and demand model shows global demand rising 2.02 million barrels per day year on year in October and we forecast demand growth will stay above 1.5 million barrels per day in November, December, and January, with our forecast for 2024 growth at 1.5 million barrels per day,” they continued.