Oil & Gas Prices - June 4
Posted: Thu Jun 04, 2020 9:12 am
Opening Prices:
> WTI is down 56c to $36.73/Bbl, and Brent is down 41c to $39.38/Bbl.
> Natural gas is down 0.5c to $1.816/MMBtu.
All eyes are now on the OPEC+ meeting to decide if they will extend their May&June level of production cuts a month or two. It is in their best interest to do so, but that doesn't mean they will do it. Regardless, global oil supply & demand are continuing to tighten and we will need all of the OPEC+ oil back on the market by early 2021.
Here is the rumor this morning:
Saudi Arabia and Russia, two of the world’s biggest oil producers, have agreed to support an extension into July of the 9.7 million barrels per day (bpd) supply cuts backed in April by the OPEC+ group, comprising the Organization of the Petroleum Exporting Countries and other major producers.
But they failed to agree on holding an OPEC+ meeting on Thursday to discuss the cuts, with OPEC sources saying it would be conditional a deepening of cuts by countries that have not complied with their targets so far.
Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend voluntary additional output cuts of 1.18 million bpd after June, indicating that crude supply could rise next month regardless of any OPEC+ decision.
“Whilst the production group’s laggards were given two more weeks to prove that they are willing to share the burden that comes with lower output levels, the market was given the same amount of time to keep pondering. One thing that is guaranteed for the next few weeks is volatility,” PVM analysts said.
Also weighing on prices, official U.S. data showed that gasoline stocks rose by 2.8 million barrels, nearly triple what analysts had expected. Distillate stocks rose by 9.9 million barrels, nearly four times more than expected. < A lot of U.S. refined distillates (diesel) is exported to South America and their demand has slowed.
In Asia, the volume of oil products traded during S&P Global Platts’ Market-on-Close process plunged 74% in May from a year earlier, data analysed by Reuters showed.
Ringing a bullish note, however, Russia’s Energy Minister said that the oil market in July could face a shortage of 3-5 million bpd, Interfax news agency reported.
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I will be out of the office for the rest of the day today and tomorrow. I should be back on Saturday, June 6 afternoon with my goal of posting the next podcast to the EPG website on Saturday evening. - Dan
> WTI is down 56c to $36.73/Bbl, and Brent is down 41c to $39.38/Bbl.
> Natural gas is down 0.5c to $1.816/MMBtu.
All eyes are now on the OPEC+ meeting to decide if they will extend their May&June level of production cuts a month or two. It is in their best interest to do so, but that doesn't mean they will do it. Regardless, global oil supply & demand are continuing to tighten and we will need all of the OPEC+ oil back on the market by early 2021.
Here is the rumor this morning:
Saudi Arabia and Russia, two of the world’s biggest oil producers, have agreed to support an extension into July of the 9.7 million barrels per day (bpd) supply cuts backed in April by the OPEC+ group, comprising the Organization of the Petroleum Exporting Countries and other major producers.
But they failed to agree on holding an OPEC+ meeting on Thursday to discuss the cuts, with OPEC sources saying it would be conditional a deepening of cuts by countries that have not complied with their targets so far.
Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend voluntary additional output cuts of 1.18 million bpd after June, indicating that crude supply could rise next month regardless of any OPEC+ decision.
“Whilst the production group’s laggards were given two more weeks to prove that they are willing to share the burden that comes with lower output levels, the market was given the same amount of time to keep pondering. One thing that is guaranteed for the next few weeks is volatility,” PVM analysts said.
Also weighing on prices, official U.S. data showed that gasoline stocks rose by 2.8 million barrels, nearly triple what analysts had expected. Distillate stocks rose by 9.9 million barrels, nearly four times more than expected. < A lot of U.S. refined distillates (diesel) is exported to South America and their demand has slowed.
In Asia, the volume of oil products traded during S&P Global Platts’ Market-on-Close process plunged 74% in May from a year earlier, data analysed by Reuters showed.
Ringing a bullish note, however, Russia’s Energy Minister said that the oil market in July could face a shortage of 3-5 million bpd, Interfax news agency reported.
---------------------------
I will be out of the office for the rest of the day today and tomorrow. I should be back on Saturday, June 6 afternoon with my goal of posting the next podcast to the EPG website on Saturday evening. - Dan