Oil is getting some buyers today because of this:
There will be an OPEC and non-OPEC monitoring committee meeting on July 24, 2017, in Russia.
Nigeria and Libya are expected to attend the meeting. Nigeria and Libya were exempt from the production cut deal at OPEC’s meeting on May 25, 2017, due to internal political unrest. However, there is now speculation that they will be asked to cut production a bit.
Report this morning that Saudi Arabia increased production to slightly more than their quota in June put some pressure on oil prices this morning. Remember that Saudi Arabia consumes a lot more of their own oil in the summer because the have to ramp up power generation. The still burn oil at a lot of power plants.
API will report their oil storage estimates late today. EIA will report their "WAG" tomorrow morning.
Oil Price - July 11
Oil Price - July 11
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - July 11
Investing.com – Crude futures settled higher on Tuesday as oversupply jitters eased somewhat after the Energy information Agency cut its forecast for 2018 U.S. oil production and a report revealed a dip in European crude stockpiles. On the New York Mercantile Exchange crude futures for August delivery rose 1.4% to settle at $45.04 a barrel, while on London's Intercontinental Exchange, Brent rose by to trade at $47.62 a barrel.
The Energy Information Administration lowered its forecast for U.S. production to 9.9 million barrels per day for 2018, from last month’s forecast of about 10 million barrels per day, easing fears that rising U.S. crude production would derail Opec efforts to reduce excess supply. < Maybe they read my newsletter and noticed that U.S. oil production growth stopped in April.
In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.
Adding to the positive sentiment on oil, was a report showing an uptick in demand for crude oil in June amid higher refining refinery activity in the region.
The duo of upbeat economic reports came ahead of weekly data on U.S crude inventories expected to show a draw in crude stockpiles for a second week in a row.
Some analysts, however, warned that without further intervention from OPEC and its allies’ or a drop in both U.S. crude oil stockpiles and drilling rigs, oil prices remained at risk from falling below key price levels.
A failure for these shifts to materialize soon could push prices below $40/bbl as the market tests OPEC's and shale's reaction functions," Goldman analysts wrote in a research note. "Importantly, we wouldn't expect such a move to be volatile, as it is not driven by storage concerns like last year ... but the ongoing search for a new equilibrium."
The Energy Information Administration lowered its forecast for U.S. production to 9.9 million barrels per day for 2018, from last month’s forecast of about 10 million barrels per day, easing fears that rising U.S. crude production would derail Opec efforts to reduce excess supply. < Maybe they read my newsletter and noticed that U.S. oil production growth stopped in April.
In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.
Adding to the positive sentiment on oil, was a report showing an uptick in demand for crude oil in June amid higher refining refinery activity in the region.
The duo of upbeat economic reports came ahead of weekly data on U.S crude inventories expected to show a draw in crude stockpiles for a second week in a row.
Some analysts, however, warned that without further intervention from OPEC and its allies’ or a drop in both U.S. crude oil stockpiles and drilling rigs, oil prices remained at risk from falling below key price levels.
A failure for these shifts to materialize soon could push prices below $40/bbl as the market tests OPEC's and shale's reaction functions," Goldman analysts wrote in a research note. "Importantly, we wouldn't expect such a move to be volatile, as it is not driven by storage concerns like last year ... but the ongoing search for a new equilibrium."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - July 11
OPEC considers production caps for Libya and Nigeria. OPEC is reportedly considering taking the exemption away from Libya and Nigeria, forcing the two OPEC members to limit their production as part of the cartel’s collective reductions. Libya and Nigeria had been given exemptions because both countries have suffered from instability and attacks on oil infrastructure, forcing large volumes of capacity offline. But both have seen a sharp resurgence in output. The restored supply is undermining the efficacy of the cuts from other OPEC members. It is still early, but sources told the WSJ that OPEC officials have been inquiring about production data from Libya and Nigeria, which could be a prelude to production caps, perhaps at the next meeting in November in Vienna. Meanwhile, Russia’s energy minister hinted that the OPEC and non-OPEC countries could theoretically extend and deepen their cuts, comments likely intended to reverse the dramatic bout of pessimism throughout the global market.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group