OPEC

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Ministers from OPEC and other non-OPEC producers will meet in St. Petersburg, Russia to discuss compliance with a pact to cut production. Market experts say the ministers will likely recommend maintaining the policy of holding back output at current levels, but efforts will be made to bring Nigeria and Libya into the framework due to the recent recovery of their production.

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Phil Flynn, July 24

OPEC and non -OPEC leaders are wrapping up their meeting in St. Petersburg Russia and it looks like it has yielded some positive results. Not only did Nigeria agree to cap their oil production output at 1.8 million barrels a day, the Saudi Oil Minister Khalid al Falih, speaking after the meeting broke up, seemed optimistic that the path they were on would eventually get global supply back in balance. That optimism was shared by Russia's energy minister Alexander Novak who stated that the situation in the oil market is 'positive' and while the market remains volatile, the fundamentals are sound.

Full article: https://www.investing.com/analysis/the- ... -200202932

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Saudi Arabia is making good on promises to curtail oil shipments to the U.S. with the likely intention to drain visible inventories and support prices, Reuters reported on 7/21/2017. The U.S. imported an average of 524,000 b/d of crude from Saudi Arabia in the week ending 7/14, the lowest volume for more than seven years. Imports from Saudi Arabia averaged just 810,000 b/d over the last four weeks, according to the EIA, the slowest rate since January 2015. Crude and product stocks in the U.S. are the most transparent and high-profile element of global inventories due to the weekly records published by the EIA.

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On 7/21/2017 Reuters reported Russia's top oil producer Rosneft (ROSN-NC) is negotiating to swap its collateral in Venezuelan-owned, U.S.-based refiner Citgo for oilfield stakes and a fuel supply deal in a move to avoid complications from U.S. sanctions. Rosneft holds a 49.9% stake in Citgo as collateral for a loan last year of about $1.5 billion to Venezuela, which is reeling from low oil prices and a severe recession. The arrangement with Venezuela's state-owned oil firm, PDVSA, has drawn fire from U.S. senators who do not want Russia in a position to own a substantial stake of U.S. based energy assets in potential violation of existing economic sanctions.

In a related item, on 7/21/2017 Reuters informed that the U.S. is considering financial sanctions on Venezuela that would halt dollar payments for the country's oil, according to a senior White House official and an adviser with direct knowledge of the discussions. The move could severely restrict the OPEC nation's crude exports and starve its socialist government of hard currency. Sanctions prohibiting any transaction in U.S. currency by Venezuela's state-run oil firm, PDVSA, are among the toughest of various oil-related measures under discussion at the White House, the two sources told Reuters.

The administration aims to pressure socialist President Nicolas Maduro into aborting plans for a controversial new congress that critics say would cement him as a dictator. The White House declined to comment on the sanctions under consideration. PDVSA and Venezuela's Oil Ministry did not immediately respond to requests for comment. The U.S. measures under discussion are similar to those that were imposed against Iran over its nuclear program, which halved Iran's oil exports and prevented top crude buyers from paying for Iranian oil.