Oil rose for the fourth time in a row on Monday buoyed by the prospect that top exporter Saudi Arabia will push OPEC and maybe Russia to cut supply towards the end of this year.
Brent crude futures were up 24 cents at $67.00 a barrel by 1000 GMT, while U.S. futures rose 38 cents to $56.84.
“Oil prices continued to recover … (as) the market will be watching closely for the possible impact of a (supply) cut,” said Sukrit Vijayakar, director of Indian energy consultancy, Trifecta.
The Organization of Petroleum Exporting Countries, led by Saudi Arabia, is pushing for the group and its partners to reduce output by one million to 1.4 million barrels per day to prevent a build-up of unused fuel.
“It appears that the market takes a production cut for granted. We’ll see if it is right after the next OPEC meeting on December 6.
“It is not unreasonable to anticipate stable prices until then,” PVM Oil Associates strategist Tamas Varga said.
Russian Energy Minister, Alexander Novak, said on Monday that Russia, which is not an OPEC member, planned to sign a partnership agreement with the group, and that details would be discussed at OPEC’s Dec. 6 meeting in Vienna.
Despite Monday’s gains, Brent is almost 25 per cent below early October’s 2018 peak of $86.74, as evidence of slowing demand has materialized and output from the United States, Russia and Saudi Arabia hit historic highs.
A U.S. decision to grant waivers to some of Iran’s oil customers, who faced the prospect of a drop-off in supply from sanctions that came into force in early November, has also helped soothe concern about the availability of crude.
A trade dispute between the United States and China is one reason investors are a lot warier about the outlook for oil demand growth next year.
Fund managers cut their bullish exposure to crude futures and options to the lowest since around mid-2017 this month.
Weekly exchange data shows money managers hold a combined net long position equivalent to around 364 million barrels of U.S. and Brent crude futures and options, down from over 800 million barrels two months ago.
“The main trend remains bearish as investors no longer believe in a risk of supply tightness for crude,” ActivTrades chief analyst Carlo Alberto De Casa said.
OPEC talks end in deadlock
The Organisation of Petroleum Exporting Countries (OPEC) has ended talks in Vienna without a deal on oil production cuts. The size of Russia’s contribution remained a sticking point before further talks today.
Saudi Arabia’s Energy Minister Khalid Al-Falih said he was not confident of an agreement after discussions of a combined one million barrel-a-day output reduction concluded without a consensus.
That left the oil market dangling in uncertainty before non-OPEC allies joined a second day of talks yesterday.
“Not everybody is ready to cut equally,” Al-Falih told reporters in Vienna. “Russia is not ready for a substantial cut,” he said.
Oil in London tumbled as much as 5.2 per cent to $58.36 a barrel, before paring losses to $59.34.
Minister of State, Petroleum Resources Ibe Kachikwu, said the country cannot exceed 800,000 barrels per day or at most one million barrels per day, in view of the current state of the global oil industry.
He said global oil industry is currently challenged as prices went down as low $65 per barrel at the market.
Dr. Kachikwu said: “I do not see Nigeria exceeding 800,000 barrels or one million barrels per day, as the industry is industry is challenged today by factors that are beyond immediate solution. Prices have gone down to $61 per barrel, far from what it used to be in recent times.”
The minister said prices of oil should be around $65 per barrel or $67, urging everybody to contribute their quota to the growth of the market.
Kachikwu said: “Everybody should see his or her self-contributing to the industry positively. The bigger the size of the industry, the more difficult it is to contribute to and also the smaller the size of the sector is, the easier it is to contribute to its development.”
OPEC conference President Suhail Mohamed Al Mazrouei, has acknowledged the receipt of Qatar’s notice to withdraw from the membership of the organisation from January 1.
Al Mazrouei, who is also the UEA, Minister of Energy and Industry, made this known in his opening address at the 175th meeting of the OPEC conference in Vienna, Austria.
A statement by the group reads: “It should also be noted that the Organisation has received a letter from the state of Qatar giving notice of its intention to withdraw from its membership of OPEC, pursuant to Article 8 of the OPEC Statute, with effect from 1 January 2019.”
The Kingdom’s dependence on Russia shows how much OPEC has changed since 2016, when the two countries ended their historic animosity and started to manage the market together.
“The alliance has transformed OPEC into a duopoly in which Russia, which isn’t a formal member of the cartel but part of the production-cuts alliance, is asserting its power.
“The impression that the group can’t really come to a decision without first checking with Moscow is going to be difficult for some members to swallow,” said Derek Brower, a director at consultant RS Energy Group.
“The market won’t care if tomorrow they manage a sizable cut with proper metrics, but that’s still a big if,” he said.
Earlier yesterday, ministers were discussing a proposal to curb combined OPEC and non-OPEC output by about 1 million barrels a day, said a delegate. That was in line with Saudi Arabia’s preference for a moderate reduction that wouldn’t “shock the market.”
The group is under pressure after a collapse in oil prices last month. Saudi Arabia, the largest producer in the cartel, is seeking to walk a fine line between preventing a surplus next year and appeasing President Donald Trump. Striking that balance got even trickier as the United States (U.S.) government data showed the shale boom turned the country into a net oil exporter last week for the first time in 75 years.
The summit in Vienna was not the only story yesterday, as ministers sat down at the headquarters of the OPEC, Russian Energy Minister Alexander Novak flew to St. Petersburg to meet President Vladimir Putin to decide on their country’s contribution. If the group’s most important ally in the OPEC+ alliance decides to make a sizable cut, the cartel would follow up
41st US president, George Bush Snr. dies aged 94
George Herbert Walker Bush, the 41st president of the United States, has died, after months of declining health. He was aged 94.
His death was announced by his family Friday night on Twitter.
“George Herbert Walker Bush, World War II naval aviator, Texas oil pioneer, and 41st President of the United States of America, died on November 30, 2018. He was 94 and is survived by his five children and their spouses, 17 grandchildren, eight great grandchildren, and two siblings,” the former president’s office said in a statement.
“He was preceded in death by his wife of 73 years, Barbara; his second child Pauline “Robin” Bush; and his brothers Prescott and William or “Bucky” Bush.”
His son George W. Bush, who served as the country’s 43rd president, released a statement of his own from the family.
“Jeb, Neil, Marvin, Doro, and I are saddened to announce that after 94 remarkable years, our dear Dad has died,” George W. Bush said. “George H. W. Bush was a man of the highest character and the best dad a son or daughter could ask for. The entire Bush family is deeply grateful for 41’s life and love, for the compassion of those who have cared and prayed for Dad, and for the condolences of our friends and fellow citizens.”
Bush was admitted to Houston Methodist Hospital with a blood infection on April 22 — two days after the funeral for his wife of 73 years, former first lady Barbara Bush.
He is survived by his five children, including former President George W. Bush and former Florida Gov. Jeb Bush.
Bush was with his wife when she died at the age of 92 on April 17.
“He of course is broken-hearted to lose his beloved Barbara, his wife of 73 years. He held her hand all day and was at her side when [she] left this good earth,” a statement from his office said after her death. “But it will not surprise all of you who know and love him, that he also is being stoic and strong, and is being lifted up by his large and supportive family.”
The elder Bush, a Republican like his sons, also served as vice president for eight years during Ronald Reagan’s two terms as president, before being elected to the White House himself.
He defeated former Massachusetts Governor Michael Dukakis, the Democratic nominee, in the 1988 presidential campaign, and lost his 1992 re-election bid to Democrat Bill Clinton.
He made a lot of money in crude oil business.
President Trump has issued a condolence message to the Bush family.
Royal Pregnancy: Prince Harry and wife, set to move to an historic cottage
Prince Harry and his pregnant wife Meghan Markle will move into a historic cottage on the royal family’s Windsor Estate early next year, Kensington Palace said on Saturday.
The couple, given the titles the Duke and Duchess of Sussex after marrying in Windsor in May, will live in Frogmore Cottage, a two-storey stucco-faced house in Windsor Home Park close to the castle.
They will relocate to their new home, around 20 miles (32 kilometres) southwest of London, “as they prepare for the arrival of their first child,” the palace said in a statement.
“Windsor is a very special place for their royal highnesses and they are grateful that their official residence will be on the estate,” it added.
Prince Harry and Meghan, who returned earlier this month from a 16-day tour Pacific tour, currently live in Nottingham Cottage on the grounds of Kensington Palace in west London.
Described as cosy and “modest”, it consists of two reception rooms and two bedrooms.
The Palace said the couple’s office would remain there. It provided no further details on the new official residence.
Crude oil prices set for lowest drop
Oil prices tumbled yesterday, with the United States (U.S.) benchmark heading for its lowest finish in over a year. Investors’ attention remains fixed on supply ahead of a key meeting of major oil producers early next month.
Global benchmark January Brent -5.69 per cent shed $2.85, or 4.3 per cent, to $63.94 a barrel, with prices looking at their lowest settlement since March.
Among the factors contributing to the steep decline, October U.S. petroleum inventory stands above the five-year average and the decline in Iranian oil exports has been less than anticipated, said James Williams, an energy economist at WTRG Economics.
The market is also experiencing seasonally weak fall demand and hasn’t yet seen commitments by members of the Organisation of the Petroleum Exporting Countries (OPEC) to “strongly support a cut” when they meet on Dec. 6, he said.
“However, if the price is anywhere near today’s price on [Dec. 6], I expect OPEC to make cuts” to production, said Williams. “The lower the price, the higher the probability of a cut.”
Against that backdrop, January West Texas Intermediate crude CLF9, -5.52 per cent on its first full session as the front-month contract, dropped $2.87, or five per cent, to $54.33 a barrel on the New York Mercantile Exchange. A settlement around this level would be the lowest for a front-month contract since October 2017, according to FactSet data.
Politics7 days ago
I never said Buhari was cloned – Nnamdi Kanu
Politics6 days ago
Staff of NASS disrupt legislative actives over unpaid salaries
Politics6 days ago
AAC presidential candidate, Omoyele Sowore calls for transparency on campaign fund
Politics3 days ago
ASUU CRISIS: LECTURERS FIGHT DIRT IN EKITI