NEW YORK, July 28 (Reuters) – Oil prices rose on Friday and notched a fifth straight week of gains as investors were optimistic that healthy demand and supply cuts will keep prices buoyant. Risk appetite in wider financial markets has been fueled by growing expectations that central banks such as the U.S. Federal Reserve and European Central Bank are nearing the end of policy tightening campaigns, boosting the outlook for global growth and energy demand. Bolstered by supply cuts from the OPEC+ alliance announced earlier this month, both oil benchmarks gained nearly 5% for the week – a fifth straight week of gains. The benchmarks are on track to gain over 13% for the month. Brent crude settled 75 cents higher to $84.99 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 49 cents to $80.58 a barrel. Both benchmarks fell by as much as $1 briefly earlier in the session, as investors took profits after WTI rose above $80 per barrel, Price Futures Group analyst Phil Flynn said. Bullish demand expectations were boosted on Thursday after U.S. second quarter gross domestic product grew at a forecast-beating 2.4%, supporting Federal Reserve Chairman Jerome Powell’s view that the economy can achieve a so-called “soft landing.” Investors are warming up to the idea of peak rates getting ever closer, while it is looking increasingly probable that the United States will avoid recession, said PVM analyst Tamas Varga. Fresh data released on Friday showed some of the euro zone’s top economies displayed unexpected resilience in the second quarter even as a raft of indicators pointed to renewed weakness ahead, as manufacturing ails and services slow. Meanwhile, policymakers in China have pledged to step up stimulus measures to invigorate the post-COVID recovery after the world’s second-largest economy grew at a frail pace in the second quarter. In an interview on Friday, Exxon Mobil (XOM.N) chief Darren Woods said he expected record oil demand this year and next. On the supply side, U.S. oil rigs fell by one to 529 this week, their lowest since March 2022, energy services firm Baker Hughes (BKR.O) said on Friday. The data is an indication of future supply. Evidence of tightening is mounting, given declining U.S. inventories and Saudi Arabia’s voluntary cut of 1 million barrels per day, Commerzbank analysts said, highlighting this month could have seen OPEC oil production plunge to its lowest level since the autumn of 2021. Saudi Arabia is expected to extend the voluntary oil output cut for another month to include September, five analysts said, to provide additional support for the oil market.
Heartland Tri-State Bank 5th to fail in US this year
Heartland Tri-State Bank in Kansas has been forced to halt operations by regulators after it became insolvent, marking it the fifth bank to collapse in the United States this year. After determining that the bank, which had its headquarters in Elkhart, had fallen insolvent, Kansas Bank Commissioner David Herndon appointed the Federal Deposit Insurance Corporation (FDIC) as a receiver. “Heartland Tri-State Bank became insolvent due to an isolated event. Overall, the Kansas banking industry is unaffected by this event and Kansas banks remain strong,” the State Bank Commissioner’s office said in a statement. The bank is set to reopen as part of the Dream First Bank on July 31. NN: They lost half their depositors in a single “isolated” event. Wonder how that happened. Where were the bank examiners?
Russia to meet oil output cut goal in August….. Gasoline and Oil Prices at 7 Month High
- Gasoline prices have gained around 20% year-to-date.
- This week gasoline approached per gallon $3.00 a gallon.
- In the United States, gasoline inventories are below the five-year average.
- Crude Oil bases Brent topped $84.00 a barrel a 7 month high.
- In July the world consumed the most energy ever
Russian Minister of Energy Nikolay Shulginov said on Friday that Russia will meet its target for oil export cuts in August. The country decided to impose a voluntary output cut of 500,000 barrels per day (bpd) in March and again in August in line with similar measures taken by other OPEC+ nations. Shulginov said Russia already started cutting exports in July in order to reach its goal. In its latest oil demand outlook, OPEC projected that 2023 world oil demand growth will reach 2.4 million bpd, 100,000 bpd higher compared to its previous monthly report. Gasoline, one of the six most traded petroleum contracts on the global futures market, has gained over 20% in the year to date, according to a recent Bloomberg report. According to the EIA, gasoline stocks are some 7% below the five-year average for this time of the year. And oil drillers are not drilling more. They are drilling less. At the start of this year, Brent crude was trading around $78 per barrel. This week the spot contract closed over $84 per barre on Fridayl. Gasoline, meanwhile, started the year at less than $2.50 per gallon. This week gasoline approached $3.00. . This is fueling concern about more inflation pain despite the efforts of central banks in Europe and North America to tame it with a series of rate hikes. NN: Their are profound changes taking place… Many we predicted and some we did not. Key is the binary trade that China is reopening. Chinese refiners are producing millions of barrels of gasoline and diesel. They are, in fact, producing so much that there were recently pressuring refining margins for the whole region. But most of the gasoline and diesel that Chinese refiners produce gets consumed locally. Because although it’s the world’s biggest EV market, China is also a giant non-EV market. And fuel demand is on the rise. It was obvious that OPEC+ including Russia at war would cut oil production. The liberal shift to anti oil policies was sure to drive oil prices higher. I am all for a zero carbon footprint. But the technology is not their yet. Nor is the proliferation of existing technologies. And the big Bugaboo is the fact that we just do not have the necessary alternatives to fossil fuels. Because they have not been invented yet. The is the record breaking heat wave sucking up fossil fuel inventories necessary for winter. So today we have unprecedented global warming. This winter we may have record breaking global cooling.
Crude Oil and Gasoline Prices Highest in 8 Months……..
U.S. retail gasoline prices reached their highest levels since November. Average gasoline prices have risen by 13.4 cents from a week ago today, according to AAA data published on Thursday. The current price for the average gallon of retail gasoline in the United States climbed to $3.714 per gallon on Thursday—up from $3.687 per gallon the day before. A week ago, gasoline was $3.580 per gallon. It is the highest price we’ve seen yet this year, and is the second-highest price for this time of year over the last decade, behind last year, AAA data suggests. Earlier this week drivers saw the largest single-day increase in more than a year after a price hike of more than 4 cents per gallon. The EIA estimated that gasoline inventories fell again in the previous week by another 800,000 barrels, and are 7% below the five-year average for this time of year, with gasoline production dipping to 9.5 million barrels per day. It is the lowest seasonal inventory level since 2015. Exxon Mobil had to shut down a gasoline unit at one of the largest refineries in the United States for expected repairs at the beginning of this week, sending gasoline futures up more than 5% on the news. The refinery has a capacity of 522,000 barrels per day, and may be closed for up to four weeks before repairs are completed. According to GasBuddy data released earlier in the week, U.S. retail gasoline demand rose 0.6% in the week ending Saturday—a week that typically represents peak summer driving season in the country. The largest demand hike for the week was seen in PADD 2, according to GasBuddy. Gasoline prices only .70 cents per gallon they were averaging this time last year, when the Biden Administration was still desperate to bring them down and was willing to sell off 180 million barrels of crude oil from the nation’s Strategic Petroleum Reserve to do it. NN: Gasoline is just a dollar lower then its Russian invasion high. And they achieved the temporary low bsy massive liquidation of the worlds strategic oil reserves. Which for the most part are depleted. Now you have embargoes, OPEC+ production cuts and Greenieewinnies successfully stopping pipeline, existing producing fields, permits for new ones and new exploration. And don’t forget record fossil fuel consumption generating electricity in this global heat wave.
PJM Interconnection LLC declared an Energy Emergency Alert Level 1
Scorching heat stresses US power grids, prices soar
July 27 (Reuters) – U.S. power prices rose to their highest in months in a couple of markets as homes and businesses cranked up their air conditioners to escape a brutal heatwave blanketing much of the country this week, stressing electric grids. Extreme weather reminds consumers of the fatal freeze in February 2021 that left millions of Texans without power, water and heat for days and a brutal heatwave in August 2020 that forced the California grid operator to impose rotating outages for a couple of day that affected around 800,000 customers. In the spot market, next-day power for Thursday jumped to their highest since December 2022 at the Palo Verde hub in Arizona and the highest since February at the PJM Western Hub , which covers an area from northwestern Pennsylvania to Washington, D.C. AccuWeather meteorologists forecast temperatures would reach the 90s Fahrenheit (35 Celsius) in New York, Los Angeles, Chicago and Houston over the next few days and over 110 F in Phoenix. BlackMask Pod Cast:
Record Heatwave Record Energy Consumption
DOW booking it biggest win streak since 1987….. Right before the crash
Dow is having its longest winning streak in more than 35 years
The Dow Jones Industrial Average managed to pull off a 13th day in the green on Wednesday — it’s longest winning streak since Jan. 20, 1987. There’s no question that the Dow’s latest milestone is one for the history books. One more day in the green and the blue-chip gauge will be able to claim its longest winning streak in more than 125 years. It’s a notable reversal of fortune for a U.S. equity index that has lagged its peers all year. But what does the Dow’s performance so far tell us about how stocks’ might perform over the next year? Generally speaking, the index was higher one year later after rising for 12 days or more, according to Dow Jones Market Data. Meanwhile, the index was higher three months after each 12-day streak of gains. Unfortunately the sample size here is pretty limited: there have only been five such streaks, including the current one, since the late 19th Century.
And although the blue-chip gauge has been on average 9.4% higher one year later after such a protracted winning streak, there has been at least one notable exception:
The Black Monday market crash, which saw the Dow drop more than 22% in a single day, occurred nine months after a 13-day Dow winning streak ended in January 1987. One year later, the index was down 10.7%.
What’s more, the Dow narrowly missed another 12-day streak during the month of July 1929, when it climb What’s more, the Dow narrowly missed another 12-day streak during the month of July 1929, when it climbed for 11 days through July 8, 1929 (this was back when the New York Stock Exchange still offered U.S. stock trading on Saturdays), according to DJMD. Three months afterward, the stock market collapsed, ushering in the start of the Great Depression. That the Dow recorded outsize winning streaks in 1929 and 1987 means there’s “something for everyone if you want to play the analogy game,” said Jonathan Krinsky, chief technical strategist at BTIG, in a Wednesday research note. It’s also notable that none of the 12- or 13-day streaks, when they ended, marked the end of the rally. Of course, 1929 and 1987 did see historic crashes later in the year, Krinsky added. Looking at the Dow performance compared with the start of recession leaves investors with a similar takeaway. While the blue-chip gauge’s gains have usually occurred during periods of economic strength, they haven’t always. “The Fed is still determined to get inflation back down to 2%, and that could mean that rates stay around these levels until something breaks,” Cox said in emailed commentary. NN: You are dam straight something is going to break,,,,, The StockMarket
EIA: US crude inventories down by 600,000 barrels
Crude oil stockpiles in the United States went down by 600,000 to come in at 456.8 million barrels in the week ending July 21
The Energy Information Administration (EIA) reported published on Wednesday. Crude oil refinery inputs averaged 16.5 million barrels per day (bpd), declining by 107,000 bpd compared to the past week’s average. Refineries operated at 93.4% of their capacity. Meanwhile, gasoline production reduced week-on-week and averaged 9.5 million bpd. Crude oil imports dropped by 807,000 bpd compared to the previous week and averaged 6.4 million bpd. Additionally, total commercial petroleum inventories declined by 0.5 million barrels. Gasoline stocks shed 800,000 barrels in the week to July 21, which compared with an inventory draw of 1.1 million barrels for the previous week. This compared with inventory decline of 700,000 barrels for the previous week that kept inventories slightly above the five-year seasonal average. Gasoline production averaged 9.5 million barrels daily last week, a small decline on a week earlier. In middle distillates, the authority estimated an inventory draw of 200,000 barrels, which compared with a slight increase for the previous week, too small for the EIA to put a number on. Middle distillate production averaged 4.8 million barrels daily last week, which compared with 5 million barrels daily during the previous week.
China announces measure to bolster its economy.
- China is implementing measures to stimulate economic growth, focusing on private investment and foreign financing.
- The NDRC is inviting private capital to national projects and key industrial chains.
- Changes in policy aim to improve business conditions, treating private companies the same as state-owned enterprises.
In the face of emerging economic challenges, China has outlined a series of strategic initiatives aimed at invigorating its economic landscape. The series of measures, which target distinct sectors and promise a more appealing climate for private and foreign investors, are being implemented ahead of an imminent Politburo meeting assessing China’s economic performance in the first half of the year. One of China’s primary strategies is to foster private investment, a fact underscored by the country’s economic planning agency, the National Development and Reform Commission (NDRC). In a detailed plan, the NDRC seeks to stimulate private capital engagement in the construction of national projects and integral industrial supply chain ventures. This commitment to private investment is a notable shift from previous trends. Over recent years, private businesses faced considerable challenges within the Chinese economic landscape. Now, the Chinese leadership is making amends through high-level commitments designed to improve the overall business climate. These include assuring equal treatment for private businesses and state-owned enterprises, from areas of intellectual property rights and land rights to financing and labor supply. The NDRC’s plan is far-reaching, with the agency pledging support for private investment in sectors like clean energy, advanced manufacturing, modern agriculture facilities, water conservancy, transportation, and new infrastructure. Additionally, the NDRC encourages private initiatives to leverage real estate investment trusts (REITs) in the infrastructure sector to diversify assets and broaden private investment’s financing channels. In a move to stimulate foreign investment, The People’s Bank of China and the State Administration of Foreign Exchange have modified their cross-border financing guidelines, permitting Chinese companies to secure increased funding from overseas sources. The NDRC remains proactive, vowing to invigorate consumption and stimulate growth. Their wide-ranging plans focus on enhancing household income, improving the business environment for private firms, and stabilizing youth employment. The Chinese Commerce Ministry further supplemented this plan by announcing an initiative aimed at enhancing domestic consumption of consumer goods and services. Among its strategies are encouraging local governments to renovate old homes, enhancing online commercial platforms, and fostering “15-minute cities.” As part of the overall growth strategy, China is looking to enhance its automobile sector, with particular emphasis on “new-energy” vehicles. In an effort to increase the ownership of electric vehicles, the NDRC announced plans to improve rural power grid capacity and mitigate the costs associated with purchasing and charging electric vehicles. This effort was underscored by Beijing’s recent decision to extend tax breaks for electric vehicle purchases. China’s new steps for economic growth demonstrate the country’s willingness to rethink past strategies and implement new measures in an effort to address current economic challenges and foster a more inviting business environment. The world will be closely watching to see how these changes influence China’s economic performance in the second half of the year. NN: The Chinese are not Americans. They do things slowly with total control. The Red Dragon is coming alive. And he will be the worlds biggest consumer of everything. Soon their economy in most all categories will exceed the US. Get use to it. America has been regulated and social experimented and drugged to death.
Goldman Sachs Sees Oil Prices Rising On Record Demand
Oil prices are set to rise to $86 per barrel at year-end, from $80 now, as record-high oil demand and lowered supply will lead to a large market deficit.
“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Daan Struyven, head of oil research at Goldman Sachs,
While demand is set for a record high this summer, supply is shrinking. The production and export cuts from OPEC+ and the slowdown in U.S. oil production growth will also play a part in large deficits in the third quarter this year.
According to Goldman’s Struyven, “We expect U.S. crude supply growth to slow down pretty significantly to a sequential pace of just 200 barrels per day from here.”
The total rig U.S. count fell to 669 last week, according to Baker Hughes data on Friday. So far this year, Baker Hughes has estimated a loss of more than 100 active drilling rigs. Last week’s count is also 406 fewer rigs than the rig count at the beginning of 2019, prior to the pandemic. Also last week, oilfield services giants Halliburton and Baker Hughes both signaled softer demand for drilling on the North American market. At the same time, there is already evidence of lower supply from OPEC+.
Russian crude oil exports have shown signs of decline for a second consecutive week and are estimated to have sunk to a six-month low in the four weeks to July 16.
Russia is preparing to cut 500,000 barrels per day (bpd) off its oil exports in August, and shipping plans so far suggest that Russia could deliver on at least part of its pledge to reduce oil exports next month. Saudi Arabia’s crude oil exports have also started to decline, to below 7 million bpd in May, for the first time in many months. Crude shipments out of the world’s top exporter could further decline as Saudi Arabia is now cutting its production by 1 million bpd in July and August.
China and India’s Oil Demand Is Soaring…. U.S. oil demand will rise to 12.5 million barrels per day this year
- Oil prices are set to rise in the second half of the year, as supply struggles to meet demand, according to an International Energy Forum official.
- Joseph McMonigle, secretary general of the International Energy Forum, attributes the push in oil prices to an increasing demand from China and India – two of the biggest oil consumers right after the U.S.
Oil prices are set to rise in the second half of the year as supply struggles to meet demand, according to the Secretary General of the International Energy Forum.
Oil demand bounced back to pre-Covid levels quickly, “but supply is having a tougher time in catching up,” said Joseph McMonigle, secretary general of the International Energy Forum, adding that the only factor moderating prices right now is the fear of a looming recession.
“So, for the second half of this year, we’re going to have serious problems with supply keeping up, and as a result, you’re going to see prices respond to that,” McMonigle told CNBC on the sidelines of a meeting of energy ministers from the group of the 20 leading industrial economies (G20) in Goa, India, on Saturday. McMonigle attributes the push in oil prices to increasing demand from China — the world’s largest importer of crude oil — and India. “India and China combined will make up 2 million barrels a day of demand pick-up in the second half of this year,” the Secretary General said. China and India oil demand to rise by 2 million barrels a day in H2 2023: IEF
Asked if oil prices could once again spike to $100 a barrel, he noted that prices are already at $80 per barrel and could potentially go higher from here. “We’re going to see much more steep decreases in inventory, which will be a signal to the market that demand is definitely picking up. So you’re going to see prices respond to that,” McMonigle said. However, McMonigle is confident that the Organization of the Petroleum Exporting Countries and its allies — collectively known as OPEC+ — will take action and increase supply, if the world eventually succumbs to a “big supply-demand imbalance.” “They’re being very careful on demand. They want to see evidence that demand is picking up, and will be responsive to changes in the market.” Brent crude futures with September expiry last settled at $81.07 per barrel on the Friday close, while West Texas Intermediate crude with September delivery ended the trading day at $76.83.
U.S. oil demand will rise to 12.5 million barrels per day this year, U.S. energy secretary says.
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