The prices of oil futures declined on Thursday after Angola announced its decision to leave the Organization of the Petroleum Exporting Countries (OPEC). The move seemingly stirred investors’ hopes there would be more supply as the African country previously voiced opposition to the group’s recent decisions, including the one on production cuts. West Texas Intermediate (WTI) for deliveries in February decreased by 1.52% at 7:50 am ET to sell for $72.11 per barrel. At the same time, Brent for the same month’s settlements dropped by 1.37% to go for $78.55 per barrel. Angola and another African OPEC member, Nigeria, had a spat with the other cartel members before the latest meeting regarding their oil production quotas. At a meeting in June, Angola and Nigeria were given lower crude oil production quotas as part of the OPEC+ agreement, after the two producers had underperformed and failed to pump to their quotas for years, due to a lack of investment in new fields and maturing older oilfields. The most recent spat within OPEC about the African countries’ quotas was one of the reasons for the cartel to postpone its latest meeting within a few days. African OPEC members Angola, Congo, and Nigeria were forced to commit to lower output in 2024, and the originally scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis expressed discontent over compliance with the deal as it shoulders the bulk of the burden.
Houthis claim airstrikes on ships in Red Sea….. US allegedly issues warning to Houthi rebels
Yemen-based Houthi rebels claimed responsibility on Friday for the attacks on two vessels in the southern Red Sea when the crews disregarded warnings by the armed faction. The group has previously stated its intention to stop all ships en route to Israel until its conflict with Hamas is resolved. “The naval forces of the Yemeni Armed Forces, with the help of Allah Almighty, carried out a military operation against two container ships, MSC Alanya and MSC PALATIUM III, which were headed towards the ‘israeli’ entity. They were targeted with two appropriate maritime missiles,” the Yemeni Armed Forces posted on Telegram. Earlier, a report from Axios stated that the United States issued a warning to the militia, urging them to cease their attacks on the vessels and to refrain from launching any attacks against Israel.
US allegedly issues warning to Houthi rebels
The United States supposedly sent messages to Yemen-based Houthi rebels, warning them to stop their attacks on ships in the Red Sea, Axios reported. The Biden administration allegedly also warned the Houthis against attacking Israel, the news outlet said, citing US officials. The warning comes following the ever-increasing escalation of attacks made by Houthi rebels, targeting ships and using drones in the Red Sea. NN: Their is more than one way to get a rally going in oil.
Bullish Bets on Oil Fell to Lowest on Record This Week
- Hedge funds have cut their bullish bets on crude oil to record lows.
- Money managers have slashed their net long positions in both WTI and Brent crude oil by 59,094 lots to just 149,272 in the week ending December 12.
- Crude oil prices have been on the decline over the last month, although spot prices for both benchmarks were trading up on Friday.
Hedge funds have cut their bullish bets on crude oil to record lows as the market reacts to increasing U.S. inventories and fear that OPEC+ will not fully deliver on its promises to voluntarily cut production come January 1. Money managers have slashed their net long positions in both WTI and Brent crude oil by 59,094 lots to just 149,272 in the week ending December 12. This is “the lowest in exchange and regulatory data going back to 2011,” Bloomberg suggested on Friday. The record lows were a result of short-only bets reaching to the highest in nearly four years, while long-only bets fell, ICE Futures Europe and the Commodity Futures Trading Commission data show. Crude oil prices have been on the decline over the last month, although spot prices for both benchmarks were trading up on Friday. WTI was trading up $0.21, at $71.79 per barrel on Friday afternoon, a 0.29% increase on the day. While an increase on the day, it is down from $76.79 a month ago. Brent crude oil prices were also trading up on the day, at $76.90 per barrel, trading up $0.29 per barrel (0.38%). Brent was trading at $81.18 per barrel just a month ago. The news comes just a couple days after the Energy Information Administration (EIA) lowered its crude oil forecast for 2024. In December’s Short Term Energy Outlook (STEO), the EIA forecast that Brent crude oil would trade at an average of $93 per barrel, it is a decrease from the forecast the agency published in November. As for OPEC+, the EIA estimated that OPEC+ crude production would fall by another 600,000 bpd next year. Crude oil prices fell on Tuesday by more than 4% to a six-month low as the consumer price index in the United States increased. NN: I predict that Tuesdays oil price in the$72 area will be a great money making opportunity. Buy the shit out of this drop. Christmas did indeed come early
Oil Prices Stage a Comeback After Hitting Six-Month Low
This week, the oil market witnessed a significant rebound, driven by a confluence of factors including a weaker dollar and revised demand forecasts from major energy organizations. After a period of decline that saw prices reaching a six-month low, the market’s recovery highlights its dynamic nature and sensitivity to global economic indicators. The International Energy Agency (IEA) has updated its oil demand forecast for 2024, projecting an increase in global consumption by 1.1 million barrels per day (bpd). This adjustment, which cites an improved outlook for the U.S. economy and the influence of lower oil prices, marks a significant shift from the IEA’s previous stance. Contrastingly, the Organization of the Petroleum Exporting Countries (OPEC) maintains a more bullish forecast, anticipating a much larger increase in demand. Meanwhile, the U.S. Energy Information Administration (EIA) has moderated its price forecast for Brent crude in 2024 to $83 per barrel, reflecting a nuanced perspective on global supply and demand dynamics. This divergence in forecasts by major agencies underscores the ongoing debates and uncertainties in predicting future oil market trends. The recent developments in the oil market are also closely tied to the monetary policy signals from the U.S. Federal Reserve. The Fed’s indication of a potential reduction in borrowing costs. Oil prices are on course for their first weekly increase in eight weeks, a shift in sentiment that was driven in large part by the Federal Reserve pledging to cut interest rates next year. As the price of Brent rose toward $77 per barrel, the oil markets are on course for the first week-on-week increase in eight weeks. Despite continuous attacks on tankers in the Red Sea, it was the United States that provided most of the bullish sentiment. First, the Federal Reserve’s pledge to start cutting interest rates next year buoyed the markets in general before a larger-than-expected US inventory draw pushed oil even higher.
OPEC Blames Oil Price Decline on Exaggerated Concerns. Publishing the December monthly oil report this week, OPEC reiterated its optimism for 2024 oil demand growth of 2.46 million b/d and blamed the recent drop in oil prices on exaggerated demand concerns impacting market sentiment.
Houthis Attack Product Tanker, Again. A product tanker carrying jet fuel from India was attacked whilst transiting the Red Sea, however managed to avoid being boarded thanks to military assistance, only two days after Houthi rebels claimed responsibility for an attack on a Norwegian tanker.
Shell Talks with Venezuela Derailed over Price. The future of the 4.2 TCf Dragon offshore gas field, to be fed into Atlantic LNG, might have run into an impasse after talks between Venezuela’s oil authorities and presumed project operator Shell (LON:SHEL) failed to agree on future LNG prices.
French Banks the First to Stop Fossil Funding. France’s second-largest bank Credit Agricole (XXX:CAGR) announced that it would stop financing new fossil fuel projects and publish its oil industry exposure as part of its new climate goals, joining French banking peer Banque Postale in doing so. NN: BlaskMask Pod Cast:
i am getting that hot warm gushy feeling
IEA: Global Oil Inventories Fell in October Oil rises on IEA demand upgrade.. Crude prices jump over 3% on US inventory draw
Global observed oil inventories fell in October, with the first drop in oil product stocks for the first time in four months, the International Energy Agency (IEA) said on Thursday.Global observed oil inventories dropped by 19.6 million barrels in October, with crude inventories largely unchanged, but with the first decline in refined petroleum stocks in four months. The falling product stocks in October reversed the trend from the third quarter when oil product stocks rose by 1.3 million barrels per day (bpd), while crude drew 1.6 million bpd on average, the IEA said. The latest OPEC+ cuts announced for the first quarter of 2024 are aimed at preventing a potential inventory build, the agency said. But it also noted that soaring supply from non-OPEC+ producers – led by the United States – and slowing global demand growth this quarter could make OPEC+’s task to support prices more difficult.
Oil rises on IEA demand upgrad
World oil consumption will rise by 1.1 million barrels per day (bpd) in 2024, the IEA said in a monthly report, up 130,000 bpd from its previous forecast, citing an improvement in the outlook for the United States and lower oil prices. Prices were also boosted by a larger-than-expected draw from the U.S. crude inventory, Teng added. The U.S. Energy Information Administration (EIA) said energy firms withdrew a bigger-than-expected 4.3 million barrels of crude from stockpiles in the week ended Dec. 8 as imports fell. [EIA/S]
Crude prices jump over 3% on US inventory draw
Crude oil prices for front-month settlements continued to climb further on Thursday following a large drawdown from US crude stockpiles, excluding those held in the Strategic Petroleum Reserve (SPR). A larger-than-expected weekly draw from crude inventories in the United States seemingly raised concerns about the stability of the crude supply amid winter months in the Northern Hemisphere. The upward movement of prices was likely supported by the optimism that the Federal Reserve could begin cutting interest rates next year. West Texas Intermediate (WTI) for January contracts surged 3.11% to sell at $71.71 a barrel at 9:21 am ET. Brent for February deliveries soared 3.06% to go at $76.53 per barrel.
Russia’s economy reportedly under severe stress due to war
Russia’s economy is under significant stress due to the war in Ukraine, a new Financial Times report said Thursday. Based on a draft text conducted by the US Treasury Department, the report mentions that the Russian economy would have grown by 5% if it had not invaded its neighbor. Besides, the invasion of Ukraine has caused an increase in domestic consumer prices, and one-third of the national budget was allocated to defense. Consequently, according to the Treasury Department’s Chief Sanctions Economist, Rachel Lyngaas, the combination of the war, sanctions by US allies, and Moscow’s policy responses are putting considerable economic pressure on the country. The conflict has led to higher spending, a depreciating ruble, rising inflation, and a tight labor market due to worker emigration, significantly affecting Russia’s economic performance compared to other energy-exporting countries. NN: Russia’s source of hard currency is oil. And oil in the seventies is slow death. Your damn right they will participate in cutting production.
OPEC revises 2023 global growth estimates up to 2.9%……. EIA: US crude inventories down by 4.3 million barrels
The Organization of Petroleum Exporting Countries (OPEC) revised up its 2023 global economic growth forecast by 0.1 percentage points to 2.9%, according to its monthly report released on Wednesday. The 2024 global economic growth projections were left unchanged at 2.6%. The United States gross domestic product (GDP) growth is anticipated to stand at 2.4% in 2023, and 1% in 2024, up 0.1 percentage points from previous estimates. The euro area GDP growth prospects were left unchanged at 0.2% for 2023 and 0.5% for 2024. China’s 2023 economic growth forecast also remained the same at 5.2% for 2023, and 4.8% for the next year. Russia’s economy is expected to grow by 2.2% this year, and 1.3% in 2024, up 0.3 percentage points and 0.1 percentage points from the previous estimates, respectively.
“Near-term support for global economic growth may arise from a less pronounced inflationary environment, enabling major central banks to consider relatively more accommodative monetary policies … A potentially more robust growth trajectory in China, supported by further government-led stimulus measures, has the potential to support global economic growth in the near term,” it was noted in the report.
EIA: US crude inventories down by 4.3 million barrels
Commercial crude oil inventories in the United States, not considering those in the Strategic Petroleum Reserve (SPR), decreased by 4.3 million barrels to 440.8 million barrels in the week ending December 8, the Energy Information Administration (EIA) stated in its report published on Wednesday.
Oil refinery inputs averaged 16.1 million barrels per day (bpd) during the week ending December 8, falling by 104,000 bpd compared to the previous week’s average. Refineries operated at 90.2% of their operable capacity. Meanwhile, gasoline production increased and averaged 9.5 million bpd. Crude oil imports decreased by 1 million bpd week-on-week to average 6.5 million bpd. Total commercial petroleum inventories decreased by 10 million barrels last week.
Oil Rebounds as DOE Looks To Buy 3 Million Barrels For SPR In March
With oil plunging an (almost) unprecedented 7 weeks in a row, the longest such stretch since 2018… and many momentum chasing experts – the same ones who two months ago were calling for triple digit oil – already predicting that Saudi Arabia will soon be forced to do what it did in March 2020 when it flooded the market with oil to crush higher cost competitors, this morning we got a reminder of just why oil isn’t trading far, far higher. For those confused, the reason why oil is not in the triple digits is the drain of more than 300 million of barrels of oil from the SPR under the Biden administration which slammed oil prices during late 2022 and early 2023 as the initial shock from the Ukraine war faded and as the US slashed its emergency reserve to offset declining global stockpiles as well as to flood the market. The problem is that having eliminated roughly half of the US strategic petroleum reserve at a time when China has tactically built up its own to over 1 billion barrels (why oh why, would China be doing this, the narrator asked rhetorically), has left the US not only exposed to any true emergency (and there will be plenty) but also threatens to collapse the salt caverns which make up the SPR and which have not been this empty since the 1980s. It’s also why there has been pressure on Biden to at least start refilling the SPR. And today, Biden’s DOE announced that it was seeking 3 million barrels for the Strategic Petroleum Reserve for delivery in March, according to a solicitation Friday. The news pushed oil to session highs, above $71, after trading as low as $68.8 yesterday, the lowest price since July. And while we applaud the DOE initiative to at least pretend to refill the SPR, we point out that there is a reason why the refilling process is so slow: if 3 million barrels bought over 1 month is enough to push the price of oil almost $2 higher, the DOE – whose primary mandate is to not push oil, and thus gasoline, prices higher in the election 2024 year – may just get cold feet after this latest solicitation and shelve any future refills. And even if the current pace of refilling continues, assuming 3 million barrels per month, it will take 96 months, or just about 8 years, for the SPR to go back to where it was at the start of the Biden administration.
Iran warns of escalation in Middle East after US veto…… Saudi FM to Blinken: Int’l peace threatened by war in Gaza
Iranian Foreign Minister Hossein Amir-Abdollahian (pictured) on Saturday warned about the situation in the Gaza Strip, citing the risk of an “uncontrollable explosion” after the US vetoed a UN Security Council resolution for a ceasefire, the Agence France-Presse reported. The diplomat reportedly called for an immediate opening of the Rafah border crossing for humanitarian aid to Gaza, and emphasized the potential for a regional crisis as long as the US supports what Iran calls the “crimes of the Zionist regime.” NN: take a minute and listen to the news conferee. posted above, the pro terrorists for the most part media refuse to publish,
Saudi FM to Blinken: Int’l peace threatened by war in Gaza
Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan Al-saud (pictured) told United States Secretary of State Antony Blinken that the war in Gaza is threatening international peace and security. In a statement posted on the ministry’s X account, released after the two diplomats met in Washington, the foreign minister underlined that it is important to take “all urgent steps to achieve a ceasefire in Gaza,” while also making an effort “to reduce the pace of escalation and ensure that the violence does not expand.” The Saudi diplomat further underscored that the safety of relief corridors must be ensured so that humanitarian aid can be delivered to Gaza. NN: . Do not be fooled. Their is a great chance of Mohammad’s terrorists spreading the conflict throughout the middle east. And the oil rich regions