BlackMask Breaking News

SINGAPORE, May 15 (Reuters) – Oil prices slipped on Monday as concerns about fuel demand in top global oil consumers United States and China offset bullish sentiment about tightening supplies from any OPEC+ cuts and a resumption in U.S. buying for reserves.

Brent crude futures fell 62 cents, or 0.84%, to $73.55 a barrel by 0348 GMT while U.S. West Texas Intermediate crude was at $69.48 a barrel, down 56 cents, or 0.8%.

Last week, both benchmarks fell for a fourth consecutive week, the longest streak of weekly declines since September 2022, over concern the United States could enter a recession on “significant risk” of a historic default within the first two weeks of June. Investors sought safe havens such as the U.S. dollar, strengthening the currency and making dollar-denominated commodities more expensive for holders of other currencies. “Oil prices are still under pressure on sluggish demand outlooks as China’s economic reopening progress seems bumpy,” CMC Markets analyst Tina Teng said, adding that the U.S. banking rout has also caused market jitters.Investors will scour China’s slew of economic data on industrial output, fixed assets investment and retail sales in the week ahead for signs of oil demand improvement, she said. “With the uneven re-opening in China and concerns that the U.S is facing a growth slowdown at a time when the X-date for the debt ceiling is rapidly approaching, topped off by a rally in the U.S dollar, market sentiment towards crude oil will remain tepid at best,” IG analyst Tony Sycamore said.

Still, global crude supplies could tighten in the second half as the OPEC+ grouping, the Organization of the Petroleum Exporting Countries and its allies including Russia, is making additional output cuts that are reducing sour crude availability.

The group announced in April that some members will cut output further by around 1.16 million barrels per day, bringing the total volume of cuts to 3.66 million bpd, according to Reuters calculations. However, Iraq does not expect OPEC+ to make further cuts to oil output at its next meeting in June, its oil minister Hayan Abdel-Ghani said. The U.S. could start repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale in June, Energy Secretary Jennifer Granholm told lawmakers on Thursday. This announcement was followed by a weekly report by energy services firm Baker Hughes Co (BKR.O) which showed U.S. oil rigs fell by two to 586 this week, their lowest since June 2022, while gas rigs plunged by 16 to 141. Meanwhile, leaders of the Group of Seven (G7) nations could announce new measures at their May 19-21 meetings that target sanctions evasion involving third countries, said officials with direct knowledge of the discussions. The tightening of sanctions will also seek to undermine Russia’s future energy production and curb trade that supports the Russian military, the people said. India and China, the world’s No. 3 and No. 1 crude importers, respectively, have been the key buyers of Russian crude since the European Union embargo started in December.

NIIGATA, Japan, May 13 (Reuters) – Treasury Secretary Janet Yellen on Saturday called a showdown over raising the U.S. debt ceiling “more difficult” than in the past but said she remained hopeful a solution could be found to avert a first ever U.S. default Yellen told Reuters in an interview on the sidelines of a meeting of Group of Seven finance officials in Japan that she hoped to update the U.S. Congress within the next couple of weeks about when exactly Treasury would run out of funds to pay the government’s bills. The U.S. Treasury chief has called repeatedly for Congress to agree to raise the $31.4 trillion cap on federal borrowing to avert the “economic and financial catastrophe” that would ensue if the United States defaulted on its debts. British finance minister Jeremy Hunt told reporters the standoff posed a “very serious” threat to the global economy. “It would be absolutely devastating if America… was to have its GDP knocked off track by not reaching agreement,” Hunt said on the sidelines of the G7 meetings. Yellen said her estimate last week that the Treasury may not be able to meet payment obligations as early as June 1 was consistent with Friday’s report from the Congressional Budget Office warning of a “significant risk” of default in the first two weeks of June. President Joe Biden, a Democrat, insists Congress has a constitutional duty to raise the limit without conditions to fund previously approved spending. Republicans, who control the House of Representatives, want Biden to agree to sweeping budget cuts to secure their agreement. Unlike most developed countries, the U.S. sets a ceiling on how much it can borrow. Because the government spends more than it takes in, lawmakers must periodically raise that cap. Yellen said the first major standoff over the debt ceiling since 2011 reflected continuing U.S. polarisation after the presidency of Donald Trump.

She said it was a positive sign that “pretty much everyone” at a meeting Biden hosted with congressional leaders on Tuesday agreed it would be unacceptable for the U.S. to default. Biden, who is expected to reconvene the group early next week, still viewed attending the G7 summit starting on Friday in Hiroshima as a priority, Yellen said, although she noted that he had said he could cancel the trip if there was not sufficient progress on ending the impasse. Despite the debt ceiling fight, Yellen said she remained convinced that the Biden administration had re-established U.S. leadership in the world and other G7 leaders were grateful they had turned “the dial 180 degrees relative to the Trump administration”. She argued there were no good options for prioritising payments in the event of a default, but conceded it would be technically possible to process them one day at a time as revenue came in, resulting in a sort of rolling default. Principal and interest payments are handled separately. In a report this week, the Bipartisan Policy Center said some Treasury officials had viewed the approach as the most plausible and least harmful during the 2011 standoff.”We shouldn’t be talking about that,” Yellen said. “We should be talking about raising the debt ceiling. Every plan has serious downsides.” NN: This could end  badly!

 

United States Federal Reserve Board of Governors member Philip Jefferson underlined that the latest reading of the core inflation was “discouraging,” pointing to a slower-than-projected rate of decline in core goods prices. “Supply and demand imbalances in the goods sector seem to be resolving less quickly than expected,” the policymaker said in a speech before Standford University’s Hoover Institution. “I expect slower consumer spending growth over the remainder of the year in response to tight financial conditions, depressed consumer sentiment, greater uncertainty, and declines in overall household wealth and excess savings,” Jefferson explained, but argued that the Federal Reserve’s monetary policy is “well on track.”

Fed’s Goolsbee: Inflation is too high, but going down

 

NEW YORK/HOUSTON, May 12 (Reuters) – Sour crude oil supplies for U.S. Gulf Coast oil refiners will be squeezed in coming weeks, market participants said, as global demand rises following this month’s OPEC+ production cut. The oil producing group’s 500,000 barrel per day cut will reduce stocks of sour crudes as U.S. oil refiners ramp up purchases for summer driving season. Shell Plc’s shut-in of its 375,000-bpd Zydeco line in the Gulf of Mexico last month because of a leak also reduced supplies, traders and analysts said.Cash prices for Mars Sour , a key sour grade, have climbed recently, firming on Tuesday to a $1.60 premium to U.S. crude futures , the strongest since September 2020, traders said. “We see sour demand being quite strong globally,” said Jenna Delaney, head of North American crude at consultancy Energy Aspects. New refinery capacity coming online east of the Suez Canal also will increase the call for sour barrels “for the remainder of the year,” Delaney added. A lot of refiners in the U.S. Gulf Coast are configured to process the high sulfur crude, and are currently pulling in minimal sour barrels from the Middle East, instead ramping up Venezuelan crude imports, said Matt Smith, lead oil analyst for the Americas at Kpler. “Middle East barrels are priced so high as to deter any additional buying from U.S. Gulf Coast refiners, leaving them to search for sour seaborne barrels from predominantly Latin America,” Smith said.

Meanwhile, exports of popular U.S. and Canadian sour grades ramped up in March, mainly as Chinese refiners snapped up the barrels, Kpler data showed.

Top U.S. refiners Valero Energy Corp (VLO.N) and Marathon Petroleum Corp (MPC.N) as well as BP Plc’s (BP.L) Whiting refinery in the Midwest are top buyers of sour crude, said Hillary Stevenson, a senior director at IIR Energy. In April, Chevron Corp (CVX.N) exported 140,876 barrels per day of Venezuela’s heavy and sour oil, according to data from Refinitiv Eikon and PDVSA, under a U.S. license allowing the first imports in four years. An expected rise in Canadian production could add sour barrels to the market and ease premiums, refining executives said. But the expansion of the Trans Mountain pipeline next year will redirect more Canadian oil to the Pacific coast, instead of the U.S. Gulf Coast, Kpler’s Smith said. NN: Let me tell you what the forgot to mention. The key stone pipeline was going to get the cheap Canadian crude and deliver it to US refineries.  When the US no dick clueless liberal lefties kept cancelling it the Canadians said what the fuck. So they ran a pipe line to their west coast to export this crude to China. In other words the US former great empire fucked itself once again,,, But at least the tribal ansasters can roam the planes and not trip over this pipeline in the dark..

The U.S. Administration could begin crude oil repurchases to fill the Strategic Petroleum Reserve as early as in June, after a Congressionally-mandated sale from the SPR is completed next month, U.S. Secretary of Energy Jennifer Granholm said on Thursday.   “That congressionally mandated sale of 26 million barrels will be completed by June, and it’s at that point where we will flip the switch and then seek to purchase,” Granholm said during a hearing in the U.S. House of Representatives.  October of last year, the administration announced that it would repurchase crude oil for the reserve when prices were at or below about $67-$72 per barrel. The move would be dual purpose in that not only would it replenish the nation’s depleted reserves, but it would boost demand when prices were low instead of sending them into orbit at a time of regular prices. Early on Friday, the U.S. benchmark, WTI Crude, was trading at around $70 per barrel and on track for a fourth consecutive weekly loss.   After selling more than 200 million barrels of crude from the SPR last year, the U.S. Administration has left the strategic petroleum reserve at its lowest level since 1983, at 372 million barrels of crude. Earlier this year, Secretary Granholm had suggested that the Administration would start repurchasing crude oil for filling the SPR in the autumn of this year, and that the refilling could take years. The Administration has previously said that repurchases could begin in the fourth quarter of this year, after maintenance is completed on two sites storing the nation’s crude oil reserves in Texas and Louisiana. Thursday’s comments from Secretary Granholm “reflect an intense messaging campaign likely intended to mollify Republicans angry about the big SPR draws,” Bob McNally, an energy policy analyst at Rapidan Energy, told Reuters. NN:The US will deeply regret emptying the strategic reserve. Her enemies are watching. At some point their will be a energy shock…

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