Oil Prices Climb as OPEC+ Extends Production Cuts to Late 2024

Oil Prices Climb as OPEC+ Extends Production Cuts to Late 2024: Oil prices increased significantly on Monday,
driven by the OPEC+ alliance’s decision to extend voluntary production
cuts for an additional month amid challenges faced by oil markets due to weak global demand,
particularly from China, and increased supply from non-member countries.
Brent crude futures for January delivery rose by 1.70%, or $1.24, reaching $74.34 per barrel at 9:00 a.m. Mecca time.
U.S. WTI crude futures for December delivery also climbed by 1.83%, or $1.27, reaching $70.76 per barrel.

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The OPEC Secretariat confirmed in a statement that the eight key member countries of the OPEC+
alliance: Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman
had agreed to extend the additional voluntary production adjustments announced in November 2023.
The voluntary cuts, totaling 2.2 million daily barrels, will continue through December 2024.
The Saudi Press Agency reported that these nations reaffirmed their commitment
to the Declaration of Cooperation and voluntary adjustments,
which will be monitored by the Joint Ministerial Monitoring Committee,
which held its 53rd meeting on April 3, 2024.

The statement also included a plan to offset any excess production since January 2024,
with this compensation to be completed by September 2025.
The alliance reaffirmed its commitment to achieving agreed
objectives to maintain market stability amid current challenges.

The decision to extend the cuts comes as global oil demand,
especially from China, declines alongside rising supply from non-member countries,
increasing pressure on oil prices.
The alliance aims to protect prices from falling and stabilize
oil markets while ensuring that members adhere to the agreed production cuts.

Oil Prices Climb as OPEC+ Extends Production Cuts to Late 2024

Oil Prices Rise Supported by Increased Risk Sentiment and Global Market Optimism

Oil Prices Rise Supported by Increased Risk Sentiment and Global Market Optimism: Oil prices maintain their strength with increasing risk sentiment in global markets.
Amid mixed forecasts, oil prices have risen this month, helping to reduce their quarterly losses.

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Oil Price Increase

Mixed Forecasts for Oil Markets

Price Differentials and Their Benefits

Oil Price Increase

Oil prices have seen their biggest increase in a week as broader market risk appetite overshadowed mixed crude forecasts.
Brent crude traded above $84 a barrel after rising 2% on Monday,
while West Texas Intermediate (WTI) crude rose near $80.
Stock markets are experiencing significant gains, with the S&P 500 index achieving its thirtieth record high this year,
despite the Federal Reserve lowering its expectations for interest rate cuts. The optimistic outlook in broader markets helps support oil prices.

Mixed Forecasts for Oil Markets

Despite mixed forecasts, oil prices have risen this month,
reducing their quarterly losses after the OPEC+ alliance agreed to extend production cuts.
Any subsequent decision to pump more oil into the market depends on market conditions.
Demand in Asia appeared relatively weak, with signs of declining gasoline consumption in India and sluggish refining activity in China
. Additionally, data from China on Monday showed that industrial activity is expanding slower than expected.

Price Differentials and Their Benefits

Nevertheless, the price differentials between the nearest two Brent contracts indicate underlying strength in the short term.
In a “backwardation” scenario, the differential reached 75 cents a barrel,
indicating rising prices, which is double the differential seen about a week ago.

In summary, despite challenges and mixed forecasts, oil prices continue to rise,
supported by increased risk sentiment and broader market optimism.

Oil Prices Rise Supported by Increased Risk Sentiment and Global Market Optimism

Oil escalates as Asian stocks rise

Oil escalates as Asian stocks rise under volatility as the US dollar stabilizes

Oil rose on Thursday morning,
Brent crude reached $97.20 per barrel and stock markets in the Asia-Pacific region grew steadily
on Thursday due to a decline in geopolitical tension in the region,
while the US dollar index stabilized, leading to higher gold prices.

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The price of Brent rose moderately after the slump last night

Asian stock markets rise as geopolitical tensions ease in the region

European stock futures rise

The dollar index stabilized on Thursday after rising 1% so far this week.

The price of Brent rose moderately after the slump last night

Oil prices showed a slight rise on Thursday morning after a sharp decline in the previous session,
given data on the increase in fuel inventories in the United States last week.

The cost of Brent crude futures for October on the London Futures Exchange was 42 cents,
0.4 percent, at $97.20 per barrel by 0250 GMT,
which was $0.17 higher than the previous session’s closing price of 0.18 percent.

According to previous trading results,
the futures price fell by $3.76, or 3.7 percent, to $96.78 per barrel.

WTI futures for September were priced on electronic trading of the New York Commercial Exchange
(NYMEX) at $90.9 per barrel by this time,
which is $0.24 more than the previous session’s final value,
with the market closing the previous day,
the value of these futures had fallen by $3.76 by 4 percent to $90.66 per barrel.

As it became known on Wednesday from a US Department of Energy report,
the country’s oil reserves jumped by 4.47 million barrels last week.

In the meantime, gasoline inventories rose by 163 thousand barrels,
while distillate inventories fell by 2.4 million barrels.

Experts expect a decline of 1.5 million barrels in oil inventories,
a fall of 1.5 million barrels in gasoline inventories
and an increase of 1 million barrels in distillate inventories.

OPEC + decided at a meeting on Wednesday to slightly increase
the share of oil production in September by only 100 thousand barrels per day,
explaining the lack of capacity in both production and processing.

Asian stock markets rise as geopolitical tensions ease in the region

In recent days, investors have been following the position on US House Speaker Nancy Pelosi’s visit to Taiwan.

Pelosi arrived in Taiwan on Tuesday evening and held several meetings with local officials on Wednesday,
heading to the next destination of her Asia Pacific tour, South Korea.

Pelosi arrived in Taiwan on Tuesday evening and held several meetings
with local officials on Wednesday,
heading to the next destination of her Asia Pacific tour, South Korea.

The Hang Singh index rose by 1.4 percent by this morning,
and the Shanghai Composite Index rose by 0.15 percent.

China’s Wharf Real Estate Investment Company rose by 3.4 percent,
despite reporting a net loss in the first half of the year
and declining revenue as demand fell due to the coronavirus outbreak.

Japan’s Nikkei 225 index rose by 0.6 percent by 8:20 am,
South Korea’s Kospi rose by 0.4 percent
and Australia’s S & P/ASX 200 advanced by 0.07 percent.

Exports jumped by 5.1 percent to $61.527 billion,
driven mainly by an increase in iron crude shipments,
and imports in June rose by 0.7 percent to $43.857 billion.

European stock futures rise

European stock markets are expected to open slightly higher on Thursday,
as investors cautiously await a meeting on the Bank of England’s latest policy condition
as well as more quarterly corporate profits.

At 0600 GMT, Germany’s DAX futures rose by 0.4 percent,
France’s CAC 40 futures rose by 0.1 percent,
and the UK’s FTSE 100 futures rose by 0.1 percent.

On Thursday, European stocks were expected to benefit largely
from the previous session’s gains,
boosted by largely positive corporate earnings,
as well as strong Wall Street closures after the US ISM non-manufacturing purchasing
managers’ index showed a sudden rebound in July,
easing the concern of an economic recession.

The dollar index stabilized on Thursday after rising 1% so far this week.

The dollar retained recent gains on Thursday,
helped by several US Federal Reserve officials who rejected suggestions
that it would slow the rate hike,
while sterling settled ahead of the Bank of England’s policy decision.

The Bank of England is expected to raise interest rates by 50 basis points to 1.75 percent,
the highest since late 2008,
but sterling was little changed in Asian trading before the decision,
due at 1100 GMT, at $1.2148.

The Bank of England has not raised its bank interest rate by half a point since it became independent in 1997.

The dollar index, which measures the greenback against six peers,
held steady at 106.37 after making small gains overnight,
rising by about 0.5 percent this week,
reversing the trend of the past two weeks.

The Australian dollar was at $0.695 on Thursday,
rising by 0.15 percent after gaining 0.46 percent the day before,
trying to return above the symbolic level of $0.70
that fell earlier in the week after seemingly pessimistic statements from the central bank.

The euro also stabilized at $1.01635,
and the Japanese yen lost slightly to 134.06 yen per dollar.

In addition, gold futures rose 0.6 percent to $1786.80 per ounce,
while the euro/US dollar rose at 1.0165.

Oil price falls unexpectedly as it approaches $110

Oil price falls unexpectedly as it approaches $110:This week, the American Petroleum Institute (API) declared a sudden decline of 6.1 million barrels in U.S. crude stockpiles;
however analysts expected a rise of 2.796 million barrels.

Evest follows market developments in the following report.

Topics

U.S. crude stockpiles declined

Oil prices for the week

Oil production weekly rates

Latest decisions made by the market’s drivers

The oil sector updates

U.S. crude stockpiles declined

The U.S. crude stockpiles declined by 80 million barrels since 2021’s beginning and about 22 million barrels since 2022’s beginning.

Thus the world’s stockpiles declined too, the markets fear that stockpiles would lower to bad levels if Russian supplies of crude shrank due to sanctions.

In the last week the API proclaimed a rise of 5.983 million barrels in crude stockpiles while analysts forecasted a rise of 767.000 barrels, below the API data.

The API stated a drop of 2.5 million barrels in gasoline stockpiles for the week to Jan 25, compared with the previous week’s rise of 427.000 barrels.

Oil prices for the week

On Tuesday, oil prices rose sharply before data was released,
even after the ministerial meeting of the international energy agency approved the release of 60 million barrels of the strategic reserves around the world.

By midday West Texas Intermediate (WTI) crude rose 8.81% to $104.15 a barrel, $12 up throughout the week.

Brent crude rose 7.80% to $105.61 a barrel, $9 up throughout the week.

At the end of the day West Texas Intermediate (WTI) was for $106.07(+10.81%) and Brent crude traded for $107.26 (+9.48%).

Oil production weekly rates

The U.S. production of crude remained constant for the third week in a row.

For the week to February 18 _ the last week,
the EIA reported data about the production ,
U.S. production of crude remained at 11.6 million barrels per day (bpd).

The production declined by 1.5 million bpd, below pre-pandemic rates.

Latest decisions made by the market’s drivers

British Petroleum (NYSE:BP), a giant British oil company, has become the first to withdraw from Russian operations;
leaving behind a 19.75% share of $25 billion, controlled by Rosneft on the background of the intensive Russian invasion of Ukraine.

Many of sovereign wealth fund followed British Petroleum, amongst was the Norwegian fund of about $2.8 billion.

Norway’s Equinor (NYSE:EQNR) declared it will sell its share,
in many of the common blends that helped in the development of the thick oil in the west of Siberia for $1.2 billion.

Shell (LON:SHEL), which joined the initiative, will sell its share of 27.5% in Sakhalin ii,
for liquified natural gas besides any conjoined projects with Gazprom, for about $3 billion.

Stocks of Chevron (NYSE:CXV), an American oil company,
hit high for about $105 per stock, and it promised to double its rebuying stocks program to 5-10 billion dollars annually
that led to an increase in forecasts of cash flow by 2026.

Reports have shown that Nord stream 2, headquartered in Switzerland and the operator of a pipeline named after the same name,
doesn’t wish to declare bankruptcy and seeks to resolve demands before the end date of the American penalties.

Last week, Total Energies (NYSE:TTE) rose as a winning bidder for the U.S. offshore wind auction,
it got the deal of GW3 in the New York Bright privilege for $800 million, as it has been the biggest renewable project of the company so far.

The oil sector updates

The international energy agency releases 60 SPR million barrels

To face the potential rise for long times in oil prices, the international energy agency has released 60 million barrels of the strategic reserves;
half of the amount came from the U.S.

Goldman Sachs predicts for commodities’ prices to rise

In an analytical report from Goldman Sachs (NYSE:GS), it predicts a rise in prices of all commodities coming from Russia,
including gas, oil, palladium, nickel, wheat and corn. It raised its forecasts for crude’s prices in only one month to $115 a barrel.

OPEC defends the African oil investments

Muhammad Barkindo, OPEC’s minister said “ There would be a tragedy if the African countries managed not to benefit from their luxurious oil imports,
as they shape less than 3% of the global emissions.”, saying the continent’s needs for development should be a priority.

The European Union links Ukraine to the energy network

Energy ministers of the European Union have agreed to link Ukraine’s energy network,
to the Union as the Western Europe’s state detached its network from Russia,
so Russia can’t control technical sides such as the net frequency.

Chevron buys a diesel producer for $3 billion

Reports have shown that Chevron (NYSE:CXV), an American oil company,
will buy the producer of fossil fuel in Iowa for renewable energy for $3 billion as a part of net zero investment campaign of 2050.

Germany builds two liquefied natural gas stations

As Germany concerns about its dependence on the Russian gas,
Germany’s government decided to accelerate the building process of liquefied natural gas stations in Brunsbüttel and Wilhelmshaven
(8 & 10 billion cubic meters per year in a row , none of them really exists), both are on the state’s north sea’s coast.

Kurdistan disobeys Iraq’s federal court

The regional government of Kurdistan has denied the Iraqi federal court’s decision,
as the court sees that the oil activities of Kurdistan region are unconstitutional and should be handed over to Baghdad,
considering 425.000 bpd to be in the hands of Erbil.

Pemex loses again

As Mexico’s national oil company has marked great losses in the fourth quarter of 2021 of about $6.05 billion on the basis of tax rise and currency losses,
it is predicted to rely more on the government’s cash fund than the past year, as it was $10 billion.

Total challenges the calls to flee from Russia

It has been clear that the giant French, Total Energies (NYSE:TTE) is the only western leader to continue work in Russia,
but it announced that it will not afford any capital for any new projects in the state.

Ukraine crisis may push oil prices $20 up

Ukraine crisis may push oil prices $20 up: Executives of the oil industry have met in London to attend the international petroleum week,
to assert again their progressive vision about oil prices,
the foreign policy of Russia came on top adding a new layer of progressive fears by moving its army towards the east of Ukraine.
Gas prices have risen in Europe followed by oil prices due to fears of any cuts in Russian supplies,
or the potential penalties to lead to tighter markets than they really are today.

Evest follows Oil market developments in the following report

Topics:

Changes in oil prices for the week

Latest decisions by the market’s drivers

The oil sector updates

Changes in oil prices for the week

The last escalation between Russia and Ukraine led to a rise in oil prices of about $100 per barrel earlier on Tuesday.

Brent crude recorded its highest new level in seven years at $99.50 a barrel just before it backed off to $97 a barrel.

Late on Monday the Russian president Vladimir Putin acknowledged,
two separate areas in the east of Ukraine and ordered to spread troops there,
yet this has been the most dangerous escalation of the crisis so far.

Brent crude was for $99 a barrel earlier on Friday before it backs off later.

By the beginning of the week it was obviously seen that prices are going up to $100, as Ukraine has sent its troops,
nevertheless OPEC has failed in achieving its targeted production,
yet the executives of the industry forecasted a consecutive surge of prices.

Oil prices have risen to their highest level since 2014,
following Moscow’s recognition of Donetsk and Luhansk as two separate and independent areas,
and it moved its troops to the east of Ukraine to raise European concerns about supplies.

In the last week Brent instant prices were above $100 per barrel,
but now ICE Brent futures contracts seem to surge progressively to this step again.

The decline of Brent crude is the highest in a decade as there is a $2.40 per barrel between April and May contracts.

Oil prices may jump another $20 per barrel if the Russian-Ukrainian crisis escalates, according to U.S. BOFA bank.

Latest decisions by the market’s drivers

Exxon Mobil (NYSE:XOM), a giant American oil company, has struck a deal with Papua New Guinea’s government,
to develop the suspended P’nyang gas field,
it agreed to a 63% from the government.

As oil prices surged, Saudi Aramco has managed to get unexpected gains.

The Saudi national oil company is conducting talks with Chinese companies to raise investments on the refinery sector and petrochemicals.

Reports have shown that the giant American oil company, Chevron (NYSE:CVX),
is looking forward to selling its assets in Equatorial Guinea,
that were taken over when it took over Noble energy for $13 billion in 2020,
seeking to get $1 billion of the deal.

The oil sector updates

Germany has suspended Nord Stream 2

Germany’s government suspended certification of the Nord Stream 2 on the basis of the deployment of Russia in Ukraine,
to lead to a rise of 10% per day in instant chests to 80 euros/megawatts hour ($29/million Btu).

OPEC, the commitment is still an obstacle

According to media reports, OPEC’s commitment to its targeted production rose in Jan to 129%, 7 points higher than December 2021

.As the weak performance spread over OPEC 10 to 133% in the last month.

Liquefied natural gas supplies hit high in the USA

It is expected for venture global Calcasieu pass to start its commercial production despite there are only 4 out of 18 liquefying trains are working.

The liquefied natural gas supplies are building up in the USA to about 13 billion cubic feet per day.

The European Union considers the obligatory gas storing

The European Union is studying whether it will authorize its countries to fill their natural gas storing capacity,
as Brussels wants to appoint the minimum level of storing to avoid any stock shortages this year amid the decline of the Russian supplies.

Another discovery for Total Energies in Suriname

Total Energies (NYSE:TTE), a giant French company, and its partner APA corporation (NASDAQ:APA) ,
have made a great oil discovery in block 58 on Suriname’s coasts as its Krabdagu-1 well encountered about 90 meters of net oil,
yet it is the fifth greatest discovery in the South American state.

Qatar assures the shortfall of maneuverability

According to Saad Al kaabi, Qatar’s minister of energy, Qatar can only shift 10-15% of its exports to clients with no contracts,
saying “ It is hardly impossible” to replace Russia’s supplies to Europe.

Finally Paramount refinery insurance contract ends

Syndicates’ workers who have been excluded for 10 months have voted for the acceptance of a new contract by Exxon Mobil (NYSE:XOM),
to give Paramount TX refinery of 370.000 bpd the opportunity to avoid an unfamiliar strike and resume the ordinary work.

Canada stops funding Trans Mountain amid balloons costs

Canada’s government has announced it will suspend any funding for Trans Mountain pipeline of 890.000 bpd as its costs have risen,
70% to $17 billion and postpones finishing it nine months to the third quarter of 2023.

Somalia isn’t ready yet for discoveries

Somalia’s prime minister had a quarrel with his energy ministry and denied the oil drilling,
contract that was signed with Coastline Exploration, headquartered in the U.S.,
explaining that any deals can’t be signed during the period prior to elections.

Kuwait has launched natural gas liquefying terminal

Finally Kuwait has begun its full operations in Al Zor facility for liquefied natural gas importing by capacity of 22 million tons per year,
just eight months after it has delivered the first cargo there to help the country well deal with the progressive demand for electricity.

The Pentagon wants to enhance the reserves of Lithium and rare minerals

Reports have shown that the U.S. department of defense is planning to enhance its strategic reserves of rare minerals,
Lithium and Cobalt to lessen its dependence on China, keeping the domestic production at first use.

Fuel runs out off in Sri Lanka

As a testimony to the consecutive troubles that startup economics face, such economics only have little foreign exchange reserves,
Sri Lanka has launched an emergency diesel bid as the state has got gas only enough for three days.

Nickel and Aluminum surge

The prices of nickel and aluminum rose to their highest levels in years due to fears of cuts in supplies from Russia,
as the late one was for $24.500 per metric ton on Tuesday

Stability of the oil market and Wall Street and forthcoming decisions from the United States

استقرار في سوق النفط ووول ستريت وقرارات منتظرة من الولايات المتحدة

Stability of the oil market and Wall Street and forthcoming decisions from the United States

Stability of the oil market and Wall Street and forthcoming decisions from the United States :News about the United States continues to affect markets,
with Biden announcing his continued confidence in Jerome Powell, to lead the Federal Reserve for a second term,
while the US president prepares to upend the oil market by announcing the sale of the country’s Strategic Reserve from crude.

Evest follows all this in the following report.

Topics:

Biden nominates Powell as Fed chair for a second term

US indices are closing stable And a collective rally of Morgan Stanley, JPMorgan Chase and Goldman Sachs

A rise in sales of existing homes in the United States

Oil is unstable and the United States may announce the sale of the strategic reserve today

Futures contract prices

Biden nominates Powell as Fed chair for a second term

Traders’ attention focused on the news that US President Joe Biden has nominated current FRS President Jerome Powell for a second term in office.

The White House announced that on Monday.

In the meantime, Lael Brainard a member of the Federal Reserve System Board of Governors, was nominated as its deputy.

“I am fully confident that President Powell and Dr. Brainard will provide support to the country through strong leadership,
having been” tested “over the past 20 months,” Biden said in a statement.

Powell’s four-year term as Chairman of the Federal Reserve Board expires in February 2022.

US indices are closing stable And a collective rally of Morgan Stanley, JPMorgan Chase and Goldman Sachs

Major US stock market indices closed steady on Monday after initial gains.

Major US bank stocks and US Treasury yields rose against the backdrop of news coming from the Federal Reserve.

At the close of trading, the Dow Jones Industrial Index rose by 0.05% to 35619.25 points.

Standard & Poor’s 500 Index fell by 0.32% to 4682.94 points.

While the Nasdaq composite index fell by 1.26% to 15854.76 points.

Morgan Stanley’s stock rose by 2.5%, while JPMorgan Chase & Co. Rose by 2.1%,
Wells Fargo & Co. by 3.1%, Goldman Sachs Group Inc. by 2.3%.

The index of the US cloud service provider Vonage Holdings Corp rose by 27%.

Swedish telecom equipment maker Ericsson AB bought the company for $6.2 billion.

The Activision Blizzard stock is down 0.3% on the back of reports,

that company president Bobby Kotick plans to consider resigning if he cannot restore the company’s reputation.

Tesla’s stock price rose by 1.7% after CEO Elon Musk said Tesla might start selling the S Plaid electric car in China by spring 2022.

And the US exchanges are supposed to close their doors for Thanksgiving weekend, next Thursday.

A rise in sales of existing homes in the United States

Growth in US economic activity accelerated in October after a weak rebound in previous months, according to the Federal Reserve Bank (FRB) index in Chicago.

The Federal Reserve National Activity Index in Chicago rose to 0.76 points in October from 0.18 points the previous month,
while analysts surveyed by FactSet forecast the figure at 0.17 points.

The positive value of the index indicates an increase above the historical trend and a negative value below.

On the other hand, sales of existing homes in the United States rose by 0.8% in October to 6.34 million on an annual basis,
according to a report by the National Association of Real Estate Intermediaries (NAR).

It’s the highest figure since January of this year. In September, the resale was 6.29 million.

According to surveys by Trading Economics and Watch, experts predicted an average contraction of 1.4% last month to 6.2 million homes.

NAR reported that home resale growth was observed last month in two of the four major areas of the United States.

Oil is unstable and the United States may announce the sale of the strategic reserve today

The Wall Street Journal reported that benchmark oil prices are falling in anticipation ,
of a possible announcement that the United States would start selling fuel from strategic reserves.

This could happen early Tuesday, according to Oanda analysts.

For his part, White House spokesman Jeanne Basaki said that the U.S. administration would urge OPEC to increase production,
regardless of whether it used strategic oil reserves.

“Anyway, we will seek through OPEC to ensure that oil supplies meet demand,” he told reporters.

Basaki noted that the United States had been conducting such negotiations with major oil exporters for a long time.

He did not comment on previous media reports on United States President Joe Biden’s plans to use part of the strategic reserve to reduce oil prices.

The Secretary-General of the International Union for Energy, Joseph McMonigle, said on Monday that the OPEC + countries would adhere to their current plans to increase oil production,
but that those plans could change in the event of unexpected factors such as the release of strategic reserves or new quarantine due to the pandemic.

Futures contract prices

Brent crude futures for January on the London Futures Exchange fell by $0.36 (0.45%), to $79.34 per barrel.

On Monday, its price rose by $0.81 (1%) to $79.7 per barrel at the closure.

The price of West Texas Intermediate crude futures in January in electronic trading on the New York Mercantile Exchange (NYMEX),
fell in the morning by $0.5 (0.65%) to $76.25 per barrel.

Its price rose by $0.81 (1.1%) as a result of the previous session, ending today at about $76.75 per barrel.

Yesterday, Monday, Bloomberg announced Biden’s plans, citing sources.

The report indicated that the official announcement could be made, as soon as possible, as early as Tuesday,
while India, Japan and South Korea were expected to take similar measures with the United States.

The agency described it as an “unprecedented effort by the major consuming countries to reduce oil prices ,
after the OPEC + countries did not respond to US calls to increase production significantly.”