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Oil stabilizes What’s with the OPEC meeting?

Oil stabilizes What’s with the OPEC meeting?

Oil stabilizes What’s with the OPEC meeting: OPEC meeting and continuing with the plan to gradually increase production, had a key role yesterday.

This gave markets an opportunity to take stock again. 

Evest follows market developments in the following report.

topics:

Oil stabilizes after yesterday’s sharp rally

The next OPEC + meeting

Which OPEC country will grow in production?

OPEC experts develop three scenarios for market development

In the case of a low scenario

Under the high scenario

For the first time in history Toyota is the bestseller in the United States

 

Oil stabilizes after yesterday’s sharp rally

Oil prices change slightly during the Asian trading on Wednesday, after rising sharply on Tuesday due to OPEC +’s decision ,

to keep the plan to increase oil production by 400 thousand barrels per day in February.

The cost of March Brent oil futures on the London Stock Exchange Futures is $80.06 per barrel on Thursday, $0.06 (0.08%) higher than the closing price of the previous session.

As a result of Monday’s trading, these futures rose by $1.2 (1.3%) to $80.00 per barrel.

The price of West Texas Intermediate crude futures for February in electronic trading on the New York Mercantile Exchange (NYMEX) is $77.01 per barrel,
$0.02 (0.03%) higher than the final value of the previous session.

By the end of Tuesday’s trading, the value of these futures had increased by $0.91 (1.2%) to $76.99 per barrel.

After the January meeting, OPEC + ministers decided to abide by the plan previously adopted to increase production in February,

despite expectations of a market surplus and the spread of the new Omicron virus strain.

 

The next OPEC + meeting

The next OPEC + meeting is scheduled for February 2.

Peter McNally of Third Bridge said that new OPEC + oil shipments indicate “a consensus of a group of producing countries that oil demand,
will continue to grow despite some restrictions caused by Omicron.”

Sources said that the American Petroleum Institute said on Tuesday evening that US crude inventories fell by 6.4 million barrels in the week ending December 31.

At the terminal in Cushing, where oil traded on the New York Stock Exchange is stored, reserves rose by 2.3 million barrels.

Official inventory data will be released on Wednesday, and in a Standard & Global Platts poll,
analysts predicted that the US Department of Energy report would indicate a 4.4 million barrel reduction in oil inventories.

The oil market remains uncertain due to the spread of the Omicron strain, but it does not affect the change in oil demand. 

Which OPEC country will grow in production?

Iraq is the largest beneficiary of compensation now – almost 800 thousand barrels per day of low production,
the country plans to increase 30 thousand barrels per day in January 2022, 50 thousand barrels per day in February,
100 thousand barrels per day in March, 150 thousand barrels per day in April,
200 thousand barrels per day in May and 250 thousand barrels per day in June.

Kazakhstan, which will have to make up just over 500 thousand barrels per day,
plans to cut 100 thousand barrels per day in May and 400 thousand barrels per day in June

Meanwhile, OPEC + reported that OPEC countries produced 580 thousand barrels per day less than the plan
(Angola produced 300 thousand barrels per day less, Nigeria – 250 thousand barrels per day) in November,
OPEC + produced 113 thousand barrels less (Malaysia – 140 thousand barrels less, Azerbaijan – 56 thousand barrels less,
Kazakhstan – 110 thousand barrels, Russia – 30 thousand barrels per day).

According to the OPEC + Technical Committee, the trade reserves of OECD countries in November reached 2.7 billion barrels,
an increase of 221 million barrels, which is lower than it was in 2015-2019.

OPEC experts develop three scenarios for market development

As noted, OPEC experts analyzed three market development scenarios.

According to the underlying scenario, global oil demand in 2021 will increase by 5.65 million barrels per day in 2022 ,
by 4.15 million barrels per day – up to 100.8 million barrels per day. 

Meanwhile, the global oil supply will grow by 7 million barrels per day. – Up to 102.2 million barrels per day,
of which 5.2 million barrels per day will be produced by OPEC + countries – Up to 49 million barrels per day,
and other non-OPEC countries will increase production by 1.7 million barrels per day – up to 48 million barrels per day. 

As a result, by the end of the year, the oil surplus will reach 1.4 million barrels per day.

The excess supply will already be observed in January 2022 at 0.8 million barrels per day,
in February – 1.3 million barrels per day, in March – 2.1 million barrels per day. 

Meanwhile, according to the underlying scenario, OECD countries’ commercial oil reserves at the end of 2021 will be 212 million barrels, below the 2015-2019 level. 

Reserves will continue to rise, but remain below the 2015-2019 level. That’s until December 2022, when they reach 24 million barrels. 

 

In the case of a low scenario

In the case of a low scenario, when oil demand grows by only 3.8 million per day – up to 100.3 million per day,
and non-OPEC countries not participating in the OPEC+ agreement will increase production by only 1.6 million per day what It reaches 47.9 million barrels per day,
the surplus by the end of 2022 will reach 1.8 million barrels per day, and in January – it has already reached 2.1 million barrels per day.

In this case, trade reserves will already exceed the 2015-2019 level in October 2022 and by the end of the year will be 90 million barrels above this index.

Under the high scenario

Under the high scenario, demand for oil in 2022 will rise by 4.4 million barrels per day to 101.1 million barrels,
per day and supply by 7.1 million barrels per day to 102.3 million barrels per day,
while non-OPEC and OPEC + member States will increase production by 1.8 million barrels per day. 

In this case, the surplus will reach 1.2 million barrels per day by the end of 2022, reaching 0.7 million barrels per day in January,
and commercial stocks will rise but will remain below 2015-2019 over the course of the year. By the end of the year, it will be at 13 million barrels below.

For the first time in history Toyota is the bestseller in the United States

In 2021, Toyota Motors ranked first in US auto sales for the first time in history, surpassing its main rival General Motors.

Toyota has boosted sales in the United States by about 10% since 2020, reaching 2.3 million cars. In the meantime,
General Motors sales declined by about 13% to 2.2 million cars.

According to automotive news, General Motors has been a leader in the American auto market since 1931.

Toyota’s success was largely supported by the decision to store car electronics microchips before the start of the cut,
with the Japanese company first betting on restoring demand for cars in the United States, the Wall Street Journal wrote.

In the meantime, Toyota’s management does not expect to maintain its leadership in the American market.

“To be clear, this was not our goal and we do not believe that it will continue in the long term,” said Jack Hollis,
senior vice president of Toyota North America.

In 2021, US auto sales were approximately 15 million, according to research firm J.D. 

Total U.S. car sales in 2021 were approximately 15 million, according to research firm J.D.
This is slightly more than in 2020 but far less than the 17 million cars sold annually and recorded during the previous five years.

Positive oil trading ahead of the OPEC meeting  and the dollar rebounds against the sterling and the yen

Positive oil trading ahead of the OPEC meeting  and the dollar rebounds against the sterling and the yen

Positive oil trading ahead of the OPEC meeting  and the dollar rebounds against the sterling and the yen: Traders are awaiting the upcoming OPEC meeting,
at which the organization will announce whether it will maintain or increase current production levels. 

Evest follows market developments in the following report.

Topics:

Oil rises and investors are waiting for the OPEC meeting

OPEC + Monitoring Committee

Standard & Poor’s completes its record run by setting a new high on the first trading day of 2022

Strong gains for Tesla and Apple 

The dollar is weak against the euro and strong against the sterling and the yen

 

Oil rises and investors are waiting for the OPEC meeting

Oil prices rise Tuesday before the forthcoming OPEC + meeting.

The cost of Brent crude futures for February on the London Stock Exchange ICE Futures on Thursday is $79.42 per barrel,
$0.44 (0.56%) higher than the closing price of the previous session. 

As a result of Monday’s trading, these futures rose by $1.2 (1.5%) to $78.98 per barrel.

The price of West Texas Intermediate crude futures for February in electronic trading on the New York Mercantile Exchange (NYMEX) at this time is $76.42 per barrel,
$0.34 (0.45%) higher than the final value of the previous session.

By the end of Monday’s trading, the value of these futures rose by $0.87 (1.2%) to $76.08 per barrel.

OPEC + Monitoring Committee

Ministers of the OPEC + Monitoring Committee, and then ministers of all OPEC + countries,
will meet on Tuesday to discuss the state of the oil market and to decide whether to change the plan to increase oil production by 400,000 barrels per day in February,

which was approved in July 2021.

Bloomberg’s OPEC + sources stated that the organization intends to maintain the pre-approved plan again.

On Monday, OPEC adjusted its oil market forecast for the first quarter of 2022.

According to new forecasts, the oil supply on the world market from January to March will exceed demand by 1.4 million barrels per day.

Previous projections assumed that the oversupply would be 25% higher.

The change in expectations is due mainly to the outlook for oil supplies that were weaker than previously assumed by non-OPEC members.

The previous day, OPEC ministers had elected a new Secretary-General of OPEC at an extraordinary meeting ,
effective August 1, 2022, Haytham Al-Qays of Kuwait was elected for a three-year term, the organization said.

 

Standard & Poor’s completes its record run by setting a new high on the first trading day of 2022

US stocks rose confidently on Monday, with the Dow Jones Industrial Index and the Standard & Poor’s 500 ending their first session of 2022 at record levels.

At the end of 2021, Standard & Poor’s added 26.9%, the Nasdaq Composite Index – 21.4%, and the Dow Jones Industrial Index – with an average of 18.7%.

The Dow Jones Industrial Index rose 246.76 points (0.68%) at the close of the market on Monday to 36585.06. Standard & Poor’s 500 rose by 30.38 points (0.64%) to 4796.56 points.

The Nasdaq Composite Index rose by 187.83 points (1.2%) to 15832.8 points.

Experts say the start of the year may be less successful for the US stock market.

The emergence of Covid- 19 vaccines, the lifting of quarantine restrictions,
as well as the soft policy of the Federal Reserve System (FRS) and other global central banks,
boosted financial markets last year.

This year, however, economists warn that the Fed plans to tighten monetary policy, which will put pressure on markets.

 

Strong gains for Tesla and Apple

Apple’s stock price rose 2.5 percent on Monday to $182.01. The stock price rose to $182.88 during the session,
increasing the company’s capital by more than $3 trillion,
but it could not remain at this level, for its decline with the closing of the market.

Tesla’s stock rose by 13.5% – up to USD 1199.78. Deutsche Bank analysts raised the company’s stock target to $ 1200 from $ 1000.

Last year, Tesla increased the supply of electric cars by 87%, to 936 thousand units.

The result exceeded both the expectations of experts surveyed by FactSet at 897 and Tesla’s expectations,
which planned to increase shipments by 50%.

Stocks of Ford Motor and General Motors rose by 4.8% and 4.3% respectively.

The dollar is weak against the euro and strong against the sterling and the yen

The United States dollar is falling slightly against the euro while looking strengthened against the yen in trading on Tuesday.

The ICE dollar index, which shows dollar dynamics against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling, Swedish krona) ,
adds 0.01%, and the broader WSJ dollar index also adds 0.01%.

The euro pair traded against the dollar at 1.1304 on Tuesday, up from $1.1299 at the end of the previous session.

While the US currency recorded against the yen 115.79 yen, from 115.32 yen the previous day.

The sterling lost 0.1% against the dollar during the dealings, and the Australian dollar increased 0.3%.

Issues of concern to foreign exchange traders at the end of last year – the situation under the Coronavirus and inflation prospects – also remained dominant in early 2022.

“This year started the same way it ended last year, and it is unlikely that much new information will emerge this week,” Danske analysts said.

The dollar value of the ICE index rose by about 7% at the end of 2021, the best annual dynamic since 2015.

The dollar was backed by predictions that the Federal Reserve System (FRS) would soon begin to raise its prime interest rate,
amid a strong economic recovery in the United States and high inflation.

The consumer price index PCE Core, which excludes food and energy costs, rose by 4.7% in November, the fastest since 1982.

The Fed plans to cut the entire asset buyback program by March 2022,
and most of its executives expect three base price increases in the year that has already begun.

As neither the European Central Bank nor the Bank of Japan plans to tighten policy so far,
the dollar’s strength against the euro and yen is likely to continue, as the Trading Economics website points out.

On Wednesday, the Fed will release the minutes of the December 14-15 meeting of the Federal Open Market Commission (FOMC),
which could help market participants better understand the mood of central bank leaders.

Oil inventories decline by 815.000 barrels as prices are mostly fixed

Oil inventories decline by 815.000 barrels as prices are mostly fixed

Oil inventories decline by 815.000 barrels as prices are mostly fixed: This week, the American Petroleum Institute (API) declared a drop of 815.000 barrels in U.S. crude oil stockpiles,
while analysts predicted a drop of more than 2.60 million barrels.

Evest follows market developments in the following report.

The American Petroleum Institute

Oil prices for the week

OPEC’s vision of the current situation

Latest decisions made by Market’s drivers

The oil sector updates for the week

Exxon Mobil gets the first deal of the reserve loan from the U.S.

China eases restrictions on energy all over the country

Saudi Arabia and Kuwait agree on boosting production

ENI wants to simplify the giant African discovery

Ecuador announces force majeure for oil exports

 

The American Petroleum Institute

In the last week the API proclaimed a decline of 3.089 million barrels,
compared with analysts’ expectations of 2.093 million barrels.

The API stated a rise of 426.000 barrels in gasoline stockpiles by the week ending Dec 10,
after the previous week rise of 3.075 million barrels.

This week, distillate fell by 1.016 million barrels, following last week’s rise of 1.228 million barrels.
Cushing stockpiles rose by 2.275 million barrels, this week

Oil prices for the week

 On Tuesday, oil prices fell more than 1% before data publishing, as concerns of Omicron’s control over the industry were raised.

A new report by the international energy agency noted that it sees ,
that supplies are recovering while demand is declining due to the Omicron variant and in turn inventories will rise.

With the exception of five inventory processes in October, we haven’t witnessed this fixed rise before.

By midday, West Texas Intermediate crude (WTI) fell more than 1% to $70.74 a barrel,
it dropped more than $1.50 per barrel for the same time of the last week.

Brent crude was dealt for $73.51 a barrel, almost $2 below last week’s rates.

Oil production weekly rates

Despite there aren’t any on-going increases in U.S. crude oil stockpiles,
its production of oil is increasing consistently.

For the week ended Dec 3 _ the last week, data was released by the EIA _ U.S. ,
production of crude oil rose by 100.000 barrels per day (bpd) to 11.7 million bpd for the third week in a row.

Yet the production is still below its highest levels ever of 13.1 million barrels per day prior to the pandemic.

 

OPEC’s vision of the current situation

While the international energy agency thinks that Omicron will affect the global oil demand negatively,
OPEC has raised its predictions for the global demand in the first quarter of 2022, this week,
justifying that Omicron will not have great effects on demand and assuring that demand will rebound from its lowest rates during the pandemic.

In its monthly report, OPEC predicts for the average of the global oil demand ,
to reach 99.1 million bpd from January to March 2022,
up to more than 1.000.000 bpd over its expectations a month ago.

As the average of the annual consumption of the next year has risen,
OPEC is expecting for the average of the global crude oil consumption to reach 100.8 million bpd in 2022, approximately equalizing pre- pandemic rates of 2019.

December’s report shows that Saudi Arabia and Iraq are maintaining their top position ,
of OPEC’s production throughout the month, as Nigeria has failed to overpass the cuts of its supplies.

Latest decisions made by Market’s drivers

Norwegian energy group (NYSE:Equinor) intends to sell its 19% share in Martin Lang’s oil field by capacity of 115.000 bpd, news says it sells  8% in Ekofisk’s oil field too.

The giant oil and gas company, Royal Dutch Shell (NYSE:RDS.A) said that it will buy Savion,
the U.S. solar and energy storage company from Macquarie group for environmentally friendly investment,

in another deal to achieve its aspirations of 2050.

 Abu Dhabi national oil company (ADNOC), has declared a light oil  discovery of 1.000.000.000 barrels in the wild block 04, controlled by the Japanese INPEX (TYO:1605),
yet it is the second great discovery in 2021.

The oil sector updates for the week

Saudi Arabia warns of shortage in oil investment Abd Alaziz bin Salman,
Saudi’s oil minister mentioned that in case of the current low investment of “EB” process,
the global oil production will decline by 30 million bpd by 2030,
which would only fortify OPEC’s role as a main oil provider.

Energy Information Administration (EIA) lowers oil production expectations for 2022

 As shale oil workers continue to slow down pumping cash into new wells,
the EIA has lowered its expectations for the oil production,
in the USA in 2022 to the average of 11.85 million bpd in the next year,
with a rise of less than 700.000 barrels per day (bpd) compared with 2021’s average of 11.8 million bpd.

 

Exxon Mobil gets the first deal of the reserve loan from the U.S.

Exxon Mobil (NYSE:XOM), U.S. giant company will get 4.8 million barrels of the first US SPR  batch of 32 million barrels,
which was discussed for a long time,
from three facilities in Texas and Louisiana to be returned at a later time in 2022 or 2023.

China eases restrictions on energy all over the country

According to the released documents after the annual central economic work conference,
China will ease restrictions on energy consumption ,
and will forgive the new added renewable energies ,
and the first crude materials energy of any restrictions without declaring these restrictions.

Saudi Arabia and Kuwait agree on boosting production

Saudi Arabia and Kuwait has agreed on increasing the production of Al Khafji and Al Wafrah fields in the area known as the neutral area, controlled commonly by the two countries, as the current average of production is 200.000 bpd (almost 40% of its capacity)

China criticises “illegal” Teapot refineries

The Chinese officials have discovered a processual crude energy of millions of tonnes in Shandong province, claiming that not less than 60 million tonnes  of the annual refinery (1.2 million bpd, almost the half of the independent Chinese refineries’ capacity ) were built without any governmental approval.

ENI wants to simplify the giant African discovery

ENI (NYSE:E), the giant Italian company, seeks to simplify Baleine,
which is supposed to be the year’s biggest oil discovery,
containing offshore reserves of more than 2 billion barrels
in the Ivory Coast to set eyes on the first oil by 2023.

Ecuador announces force majeure for oil exports

Ecuador’s government imposes force majeure over its oil exports and production contracts,
after the progressive corrosion has threatened the country’s main two pipelines,
in Amazon’s Nabu province to force oil producers to decrease production to its half of only 250.000 bpd.

 

The oil market is waiting for OPEC to respond to Biden’s decision and new indexes in US data

The oil market is waiting for OPEC to respond to Biden’s decision and new indexes in US data

The oil market is waiting for OPEC to respond to Biden’s decision and new indexes in US data :Oil prices stabilized on Thursday, with traders evaluate US stock data ,
and await OPEC+’s retaliation after the US and several other countries decided to sell oil from strategic reserves.

Evest follows market developments in the following report.

Topics:

OPEC is considering suspending oil production increase

Oil rises slightly 

US oil inventories increased by 1.02 million barrels

Asian stock indices are trading in different directions

Low unemployment benefit applications for the first time since 1969

US GDP July September the worst since 2020

New home sales in the United States rose by 0.4%

OPEC is considering suspending oil production increase

 

Earlier this week, US President Joe Biden announced that his country intended to sell 50 million oil barrels from the Strategic Petroleum Reserve (SPR),
in coordination with China, Japan, India, South Korea and the United Kingdom.

ING experts report that the total volume of oil they plan to sell will be at least 71 million barrels,
equivalent to about 74% of the world’s average daily oil consumption in 2021.

The leaders of OPEC + – Saudi Arabia and Russia – should examine the possibility of suspending oil production after the US ,
and other countries decided to sell raw materials from reserves, according to the Wall Street Journal citing its sources. .

According to Bloomberg expert, “I expect the oil market to remain sideways until the OPEC + meeting on December 1 and 2.

A coordinated increase in production plan by the United States and other countries is unlikely to seriously alter the market supply and demand situation.”

Oil rises slightly

The cost of January Brent oil futures on the London Stock Exchange Futures is $82.34 per barrel on Thursday, $0.09 (0.11%) higher the closing price of the previous session. 

As a result of Wednesday’s trading, these futures fell $0.06 (0.1%) – to $82.25 per barrel.

The price of West Texas Intermediate crude futures for October in electronic trading on the New York Mercantile Exchange (NYMEX) is $78.34 per barrel,
$0.05 (0.06%) lower than the final value of the previous session. 

By the end of Wednesday’s trading, the value of these futures fell by $0.11 (0.1%) to $78.39 per barrel.

US oil inventories increased by 1.02 million barrels

The US commercial oil reserve rose by 1.02 million barrels to 434.02 million barrels last week,
according to a weekly report from the country’s Department of Energy. 

Gasoline inventories fell by 603 thousand barrels to 211.39 million barrels,
and distillate stocks decreased by 1.97 million barrels to 121.72 million barrels.

 

Asian stock indices are trading in different directions

Stock indices in the Asia-Pacific region show multi-directional dynamics on thursday.

Japan’s Nikai 225 index rose by 0.76%, Australia’s S & P/ASX 200 index added 0.15%,
China’s CSI 300 fell by 0.3%, and Hong Kong’s Hang Seng lost 0.04%. 

 Low unemployment benefit applications for the first time since 1969

Most US stock indices ended trading higher on Wednesday. Traders were evaluating a new statistical segment.

The number of Americans applying for unemployment benefits fell last week by 71 thousand – to 199 thousand for the first time in more than 50 years. 

On the basis of Wednesday’s trading, the Dow Jones Industrial Index fell by 9.42 points (0.03%) to 35804.38.

Standard & Poor’s 500 rose by 10.76 points (0.23%) to 4701.46 points. The Nasdaq Composite Index rose by 70.09 points (0.44%) to 15845.23.

This is the lowest figure of unemployment benefits since November 1969, with the weekly number of applications set at 197 thousand,
and a week earlier, the number of applications was 270 thousand, with analysts expecting an average decline of 260 thousand applications.

 

US GDP July-September the worst since 2020

Revised data from the US Department of Commerce showed that the US economy expanded by 2.1% in the third quarter on an annual basis.

Earlier, a 2% increase was announced.

Analysts predicted an average revision of 2.2%.

The US GDP dynamics from July to September were the worst since the economic downturn in early 2020 due to the Covid-19 pandemic. 

For comparison: The U.S. economy expanded by 6.7% in the second quarter of this year.

Final data from the University of Michigan showed consumer confidence in the United States,
declined in November to 67.4 points from 71.7 points the previous month.

This is the minimum value of the index over the last 10 years. The initial index was estimated at 66.8 points. Analysts expected 66.9 points to be reviewed.

US population incomes rose by 0.5% in October compared to the previous month,
according to data from the country’s Department of Commerce.

Meanwhile, Americans’ expenditures rose by 1.3%.

Analysts predicted an average increase of 0.2٪ previously and an increase of 1% per second, according to Trading Economics.

New home sales in the United States rose by 0.4%

The United States Department of Commerce said that sales of new homes in the United States rose in October by 0.4%,
compared to the previous month and reached 745 thousand homes at annual rates.

742 thousand homes were sold in September (an increase of 7.1% per month),
while the figure was previously 800 thousand (a 14% jump), according to the revised data.

Analysts did not expect last month’s average sales to change from the September level previously announced at 800000,
according to a survey by Trading Economics and MarketWatch.

Consumer confidence in the United States declined in November to 67.4 points from 71.7 points the previous month,
according to final data calculating this index released by the University of Michigan.
This is the minimum value of the index over the last 10 years.

The initial index was estimated at 66.8 points.

Analysts predicted a review to 66.9 points, according to Trading Economics reports.

MarketWatch participants expected no change from the previously announced level.

 

Chinese foreign trade grew in October and oil keeps moving forward

Chinese foreign trade grew by 24% in October and oil keeps moving forward

Chinese foreign trade grew by 24% in October and oil keeps moving forward:The disappointing Chinese reports of the Evergrande crises pushed Asian indices back on Friday, while the Chinese administration reported positive data this morning, which could mean erasing the losses at tomorrow’s meeting. 

Evest follows all market updates in the following report.

Topics:

Chinese foreign trade volume grew by 24.3% in October

Oil rises given OPEC’s recent decisions

Goldman Sachs: Disagreements between OPEC and the United States Administration

China’s Evergrande sells two aircrafts to solve its financial crisis

China’s real estate sector is driving Asian shares to trade in the red zone

 

 

Chinese foreign trade volume grew by 24.3% in October

Chinese foreign trade volume grew by 24.3% on an annual basis in October 2021,
according to data released by the General Customs Administration of the People’s Republic of China on Sunday.

Meanwhile, Chinese exports grew by 27.1%, and imports – by 20.6%.

Trade growth compared to the same period last year was 31.9%, for 10 months of the year.

Meanwhile, exports rose by 32.3%, and imports – by 31.4%, according to the Ministry.

In October 2021, China imported 37.8 million tons of oil – 8.9 million barrels per day,
the lowest level since September 2018, according to Chinese customs statistics.

According to the General Customs Administration of the People’s Republic of China,
China imported 425 million tons of oil over 10 months this year, which is 7.2% lower on an annual basis.

Some monitors attributed the reduction of imports to rising world oil prices,

amid the global economy’s rejection of the restrictions caused by the Coronavirus pandemic,
which stimulates demand for fuel.

China’s petroleum products’ exports fell 31.8% in October from the same period last year to 3.95 million tons.

Imports of natural gas, including pipelines and liquefied natural gas, reached 9.38 million tons in October,
an increase of 24.6% over October 2020.

 

 

Oil rises given OPEC’s recent decisions”

Oil prices rose on Friday amid concerns that the market is at risk for deficiency ,

due to the reluctance of OPEC + countries to increase production above previously planned levels.

The Ministers of OPEC + countries unanimously decided on Thursday to continue implementing the plan that had been identified earlier.

OPEC + has been rising oil production by 400 thousand barrels per day on a monthly basis since July in
order to offset the 9.7 million barrels per day taken under the peak of the Covid-19 pandemic and meets monthly to assess the market situation.

The cost of Brent oil futures for January on the London Stock Exchange Futures is $81.78 per barrel, $1.24 (1.54%) higher than closing price on Thursday.

US West Texas crude futures for December rose during trading on the New York Mercantile Exchange by $1.53 (1.94%) to $80.34 per barrel.

According to global news agencies, OPEC + participants discussed the potential increase in oil production actively,
but the risks of falling oil demand, especially seasonal ones,
as well as the risks of the spread of the delta strain, became factors “against” such actions.

Goldman Sachs: Disagreements between OPEC and the United States Administration

Analysts at Goldman Sachs note that the oil market is insufficiently supplied, and an increase in its volatility should be expected.

“Our bullish outlook remains unchanged: The oil deficit continues,
and growth in demand will boost prices in the short term,” Goldman said in a review.

For her part, Energy Minister Jennifer Granholm told Bloomberg that U.S.

President Joe Biden, who had previously called for OPEC + to increase production,

is considering selling oil from the Strategic Petroleum Reserve (SPR).

As Goldman analysts have noted, “New, open disagreements between OPEC and the US presidential administration,
the threat of selling oil from the Strategic Petroleum Reserve,
as well as the resumption of negotiations with Iran, will increase the volatility of the oil market in the coming weeks,
especially given the decline in business at the end of the year.

 

 

China’s Evergrande sells two aircrafts to solve its financial crisis

The Wall Street Journal, citing well-informed sources,
reported that Chinese real estate developer Evergrande sold two private aircrafts last month to raise funds to repay bonds in dollars and avoid defaults.

Sources said that the company had received more than $50 million to purchase two Gulf Stream aircraft from American investors.

The deal was closed in October.

Evergrande paid interest on bonds due in 2024 of $ 45 million for a total of $ 951 million on October 29 – on the eve of the end of the 30-day grace period for these securities.

The company was supposed to make interest payments on this debt early on September 29.

A week ago, the company paid interest on other dollar bonds of $83.5 million.

Evergrande’s failure to pay interest on dollar bonds could mean a Chinese development company that could become the largest in Asia defaults.

Evergrande is one of the leading Chinese developers with the largest share of debt among developers worldwide – over $300 billion.

According to Bloomberg data, in total, the company will have to pay interest on the debt in the amount of about $600 million by the end of this year.

Earlier, the agency, citing well – informed sources, reported that the Chinese authorities had asked the company’s founder to send his own money to pay off the company’s debts.

According to Wall Street Journal sources, Evergrande owned 4 business aircrafts until recently and was waiting for another aircraft to be delivered by the manufacturer.

 China’s real estate sector is driving Asian shares to trade in the red zone

Most stock markets in the Asia-Pacific region (APR) declined in Friday’s trading amid renewed concerns about the situation in the Chinese real estate sector.

Japan’s Nikkei index fell 0.7%.  The Hong Kong Hang Seng index fell by 1%, while the Shanghai Composite index fell by 0.4%.

South Korea’s Kospi index fell by 0.6%. The Australian S & P/ASX 200 index rose by 0.4%.

Concerns about the situation in the Chinese real estate sector increased ,after the developer Kaisa Group said,
that trading of its stocks and securities for its three Hong Kong divisions had been suspended due to the fact that the company had failed payments to investors.

US oil inventories suddenly increase for the second week in a row

US oil inventories suddenly increase for the second week in a row

US oil inventories suddenly increase for the second week in a row :On Tuesday 5th October the American Petroleum Institute (API) declared a sudden rise in crude oil stockpiles reaching 951.000 barrels for the week ended on Friday 1st October.

Analysts expected US stockpiles to decline by 300.000 barrels for the week,

yet this is the second week in a row analysts’ expectations failed.

In the last week the API declared a sudden rise in oil stockpiles by 4.127 million barrels,

yet it was a surprise for the oil market especially after analysts  expectations failure as they expected a decline of 2.333 million barrels for the week.

The API declared another rise in gasoline stockpiles for the second week in a row by 3.682 million barrels for the week ending October 1st,

besides last week’s rise by 3.555 million barrels

Distillate stockpiles rose by 345.000 barrels throughout the week, compared with last week’s rise by 2.483 million barrels.

Cushing stockpiles rose another time this week, to add 1.999 million barrels to reserves; while it rose by 0.359 million barrels in the last week.

Topics

Oil prices for the week

Oil production rates for the week

OPEC Decides Oil prices  

Aramco enhances Saudi’s foreign investment

Oil-prices-for-the-week

On Tuesday oil prices rose before data publishing in accordance with the gas crisis and OPEC’s decision to keep production plans,

and suspend increasing production by more than 400.000 barrels per day, which was supposed to be applied from November.

Before midday West Texas Intermediate crude rose 2% till data was published.

After data publishing West Texas Intermediate was for 79.17$ (it rose more than 4$ throughout the week,

and 1.55$ on the day), Brent crude rose 1.87% to 82.78$ a barrel on the day.

In the USA oil stockpiles sold out 72 million barrels this year, according to the API data (less than pre-pandemic levels).

The latest data by the Energy information administration EIA showed that US crude oil reserves

are declining 7% below the average of the five years for the same time of the year at 418.5 million barrels.  

Oil production rates for the week

US oil production recovered slowly after Ida’s hurricane suspensions showing a rise unlike the last three weeks.

For the week ended September 24th US oil production rose by 500.000 barrels per day at 11.1 million barrels per day,

to offset its losses due to the Ida hurricane by 400.000 barrels.

OPEC Decides Oil prices  

OPEC will remain the main controller in moving oil prices in the next few months,

according to Mike Muller’s statement (Asian Vitol’s operations chief),

reported by Bloomberg “To a high extent oil prices are controlled by OPEC.”

The situation changed rather than three years before when the USA was the main factor in oil prices due to the second leap of oil shale,

as the flourishment made the USA the world’s biggest oil producer.

As mentioned before, crude oil exceeded 80$ at the end of last week,

before OPEC’s meeting on Monday to discuss production control steps.

Some analysts didn’t agree that OPEC will respond to demands to increase oil production and reduce prices,

not only because OPEC will benefit from rising prices but simply because some members can’t increase their production capacity as fast as that.

They also don’t have reserves to maintain supplies high to such levels.

Steven Breenock from PVM for oil intercession mentioned to Reuters that

“Oil prices expectations on the short term are still supportive.” 

 “The current price is going to recover.”

Geffery Halley from OANDA sees that oil stocks deals are only for rich adventurers.

Oil market movement will stay the same for a long time if the winter in the northern countries was cold as expected.

As gas reserves are falling below the average of the five years in Europe, and power declining in China which led to closing factories and raising fears of electricity power cuts.

Demand on oil is expected to stay strong for some time despite the negative expectations in the long term.

This means that OPEC will continue making decisions with leadership of the most overabundant countries.

 

Aramco enhances Saudi’s foreign investment

Saudi Arabia recorded the highest quarterly direct foreign investment in the second quarter due to infrastructural deals for pipelines

that were closed by the giant Aramco at that time.

As said Saudi Arabia is getting ready to open big assets for the foreign investment too.

The direct foreign investment numbers in Saudi Arabia were at one billion dollars for each quarter in the last three years,

in the second quarter of 2021 the direct foreign investment number was at 13.8 billion dollars,

according to Saudi’s central bank data, reported by Forbes magazine.

The master drive for the standard foreign investment was a deal of 12.4 billion dollars with participation of Saudi’s Aramco.

In April Aramco struck a deal with a consortium under leadership of the American Energy Partners Global EIG to sell 49% share of Aramco oil pipelines for 12.4 billion dollars.

Aramco oil pipelines is a new commercial entity that was formed to keep or trade rights of 25 years of shifting crude pays through Aramco’s pipelines network.

In June the Saudi giant company finished the deal of selling 49% share to consortium,

which is dominated by many investors from North America, Asia, and the middle east.

After closure Aramco maintained its share of 51% of Aramco oil pipelines and kept complete property and operational control of stabilized crude oil pipelines. 

Amin Nasser Aramco’s chief and the executive manager at the end of the deal said :

“that they were planning to continue in figuring out more opportunities ,

to utilize their leading abilities in the industry and attract the best kind of investment to Saudi Arabia”.

James Swanston, middle east and west Africa economist of capital economics,

headquartered in London when commented on the direct foreign investment in Saudi Arabia said:”

that I think that this deal is the master drive of the direct foreign investment recovery in the second quarter,

as this deal included the sale of more than 10% of voting share to be classified as FDI incoming.