# News & Current Events > World News & Affairs >  Saudi Arabia and OPEC are doomed.

## Swordsmyth

Everything they do to save themselves only helps shale to kill them more surely, if more slowly. 

*Russia, Saudi Arabia Release Trial Balloon: Extend Production Cut by a Year*In a joint statement released on Monday,  oil ministers from Russia and Saudi Arabia said the present crude oil  production reduction agreement reached last November should be extended  for another year...

...
The present agreement was supposed to reduce OPEC production by 1.8  million barrels per day (bpd), but it failed miserably. Thanks to  cheating (several members boosted their daily production in advance of  the cuts so they wouldnt feel as much pain when the agreement kicked in  on January 1), and exemptions granted to Iran, Libya, and Nigeria, the  actual net reduction was about 800,000 bpd. That translates to one  percent of the worlds crude oil output. That was enough to push crude  prices slightly higher for a couple of months but not enough to keep  them moving higher. Instead crude oil prices on the world market fell,  touching $45 a barrel in early May.
 Albert Einstein is famous for many things, including his definition  of insanity: doing the same thing over and over again and expecting  different results. Russia and the cartel are reaching out to non-members  in an effort to persuade them to join the production-cut agreement.  Those efforts have recently been focused on Egypt and Turkmenistan,  whose total daily production amounts to just 700,000 bpd. Eleven  non-member states are being targeted by the cartel in what increasingly  appears to be a last-gasp effort to cut world inventories and raise  crude oil prices.
 OPEC itself sees the problem: U.S. oil producers are coming back  online far faster than originally anticipated. In last Thursdays report  it said:
 U.S. oil and gas companies have already  stepped up activities in 2017 as they start to increase their spending  amid a recovery in oil prices. In addition to the growth in the U.S.,  higher oil production is expected in Canada and Brazil.
 Because of those stepped up activities, OPEC said that the U.S.  energy industry is likely to exceed earlier estimates substantially. Its  previous estimate was that U.S. production of crude would increase by  285,000 barrels a day in 2017. Now it looks like U.S. production will  increase by 820,000 barrels a day, neatly wiping out the reduction that  OPECs present agreement was alleged to have accomplished.

More at:  https://www.thenewamerican.com/tech/...-cut-by-a-year

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## Swordsmyth

see also: https://www.thenewamerican.com/tech/...ars-completion

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## Zippyjuan

Production cuts are intended to keep the price of oil down.  Lower prices makes it harder for some fracking producers to be profitable- forcing them to shut down.  That lowers supply and would allow Saudi Arabia and Russia to increase their market share and will raise price in the future for them.   Russia's "cut" isn't much of a cut for them- prior to the latest production allocation they cranked up their facilities to maximum output- a level they would have difficulties sustaining.  The "cut" takes them "down" to their usual output. 




> several members boosted their daily production in advance of the cuts so they wouldn’t feel as much pain when the agreement kicked in on January 1

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## timosman

> Production cuts are intended to keep the price of oil down.


Ziplogic.

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## Danke

Don't worry, "Peak Oil" is just around the corner, and then the prices will skyrocket!

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## Zippyjuan

> Ziplogic.


Oops. Haven't had my coffee yet.

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## oyarde

> Don't worry, "Peak Oil" is just around the corner, and then the prices will skyrocket!


I am hoarding it just in case .

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## oyarde

We have West Texas Light @ 48.85 , Brent @ 51.82 , ( both up about a dollar ) , Heating Oil @ 1.51 , wholesale gasoline @ 1.60 , copper  @ 2.53 , one yr forecast on oil is 56 . All look like bargains except Nat Gas ( 3.35 , down 2 1/4 % ) .

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## Swordsmyth

Update: 
*U.S. Shale Just Won’t Die: Bankrupt Drillers Rise Again*http://oilprice.com/Energy/Energy-General/US-Shale-Just-Wont-Die-Bankrupt-Drillers-Rise-Again.html

*Iraq Agrees With Deal Extension, But Boosts Oil Exports To Record Levels*http://oilprice.com/Energy/Crude-Oil/Iraq-Agrees-With-Deal-Extension-But-Boosts-Oil-Exports-To-Record-Levels.html


*Full Tanks and Tankers: A Stubborn Oil Glut Despite OPEC Cuts*http://www.rigzone.com/news/oil_gas/a/150234/Full_Tanks_and_Tankers_A_Stubborn_Oil_Glut_Despite  _OPEC_Cuts/?all=HG2

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## Swordsmyth

Update:

*The Permian’s Sweet Spot Holds 8 Times More Oil Than Predicted*http://oilprice.com/Energy/Crude-Oil...Predicted.html

*Saudi unconventionals?*
Saudi Arabia may  attempt its own unconventional development, according to Petrie. “The  deputy crown prince, with the charge from the king, has communicated  ‘don’t fight [unconventional development]. Find a way to embrace it.’
_“Back  in 2011 and 2012, the Saudis said ‘if breaking up source rock is the  issue, let’s go do it. We’ve got plenty of source rock, many times  thicker than what the Americans have,’ and so they thought they would  see flowrates that were many times larger as well. What they found  though was that you drilled much more expensive wells because of the  thickness, but when you break up the source rock, if you don’t have the  right brittleness, it’s not going to work.”_
_“I have to  believe, in an oil province as prolific as Saudi Arabia, you can find  rocks with the right kind of brittleness, but they haven’t so far.  Making unconventionals work will be a priority, though. If they can make  it work, shale development in Saudi Arabia could be somewhat  successful, although, it’s not clear to me that it will be as  successful, proportionately, as it has been in North America, especially  the U.S.”_
If the Saudis succeed in making unconventionals  work, the oil dynamic could shift from U.S. unconventionals vs. OPEC  conventional to unconventional vs. unconventional. It remains to be seen  who would win in such a contest, but American shale producers have  already shown a resiliency and innovative spirit that will serve them  well in the future.

http://oilprice.com/Energy/Energy-Ge...hale-Game.html


*BP Starts Oil Production At Redeveloped North Sea Project*Quad 204 is BP’s third out of seven major upstream projects planned for  start-up this year. New projects coming online last year and this year  are expected to raise BP’s production capacity by 500,000 boed net by  the end of 2017. By 2020, BP expects around 800,000 boed production from  new projects.

http://oilprice.com/Latest-Energy-Ne...a-Project.html



*As Breakeven Prices Converge An Oil Price Crash Nears*http://oilprice.com/Energy/Energy-Ge...ash-Nears.html

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## Swordsmyth

More:

*U.S. Shale Is Turning Up The Heat On OPEC**American shale producers are far from done: here’s what’s coming*
  
Companies seem to be very happy at $50/bbl oil, and growth is expected to continue as long as WTI stays in that range.
According  to the EIA, U.S. production will rise in almost every month in the next  two years, as improved technologies and techniques allow companies to  remain economic.
By March 2018, the end of the proposed extension  of cuts, the U.S. is projected to be producing 9,880 MBOPD, up 1,100  MBOPD from December 2016. If the agency’s U.S. production numbers hold,  this would wipe out almost all of OPEC’s cut production, leaving OPEC  members with less market share and little to show for it.

http://oilprice.com/Energy/Crude-Oil...t-On-OPEC.html

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## Swordsmyth

This is how DUMP plans to deal with the Saudis, First take a lot of their money for economically worthless weapons, then crash the price of oil:

*Trump Proposes Selling Off Half U.S. Strategic Oil Reserve*


The White House  plan to trim the national debt includes selling off half of the  nation’s emergency oil stockpile and the entire backup gasoline supply,  part of a broad series of changes proposed by President Donald Trump to the federal government’s role in energy markets.
Trump’s  first complete budget proposal, released Tuesday, would raise $500  million in fiscal year 2018 -- and as much $16.6 billion over the next  decade -- by drawing down the Strategic Petroleum Reserve.
“We  think it’s a responsible thing to do," Mick Mulvaney, head of the White  House Office of Management and Budget, told reporters. The “risk goes  down dramatically when we have increased domestic production like we  have today.”
                  The proposal also seeks to boost government revenues by allowing drilling in the Arctic National Wildlife Refuge...

More at: https://www.bloomberg.com/politics/a...ic-oil-reserve

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## Swordsmyth

Update: 
*OPEC's Worst Cheater Will Get Harder to Ignore as Curbs Falter*Iraq pumped about 80,000 more barrels of oil a day than permitted by  Organization of Petroleum Exporting Countries curbs during the first  quarter. If that deal gets extended to 2018, the nation will have even  less incentive to comply because capacity at key southern fields is  expanding and three years of fighting Islamic State has left it drowning  in debt.

More at: https://www.bloomberg.com/news/artic...s-curbs-falter

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## Swordsmyth

Update:

*Canada And Brazil Could Jeopardize Oil Market Balance*But apart from the U.S., there are two other major oil producers in  the Americas whose production is set to increase this year, and over the  next five years: Canada and Brazil.
Alongside U.S. output growth,  international agencies and OPEC itself expect production in Canada and  Brazil to rise, potentially adding to the U.S. supply increase that  diminishes the impact of the cartel cuts.

http://oilprice.com/Energy/Crude-Oil...t-Balance.html



*OPEC Failure Could Lead To Downgrade Of Entire Oil Sector*If the OPEC meeting in Vienna fails to shock oil prices upwards, Deutsche Bank analysts would “_feel inclined to downgrade_”  the investment attractiveness of oil sector stocks to Neutral,  according to a new note by Mark Roberts, the German bank’s chief of  research and strategy for alternatives.

http://oilprice.com/Latest-Energy-Ne...il-Sector.html


*Libya And Nigeria May Be Asked To Cut Production, Says Iraqi Oil Minister*But Nigeria still expects that its exemption will continue for at least six months, according to oil minister Ibe Kachikwu.
_“The indications that I have so far is that there is a willingness to extending [the exemption],”_ he told reporters in Houston._ “I expect we will get OPEC exemption but one year from now will it be renewed? I am not too sure.”_
Libya also has plans to raise output to 1.32 million bpd by the end of the year, up from an earlier target of 1.1 million bpd.

http://oilprice.com/Latest-Energy-Ne...-Minister.html

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## Swordsmyth

Update :

*Is China’s Oil Demand Growth About To Plummet?*In other words, all those forecasts that China's SPR is almost full  appear to be finally coming true, and at the worst possible time for  OPEC, because if suddenly over 1 million in daily "demand" is pulled  from the market, OPEC will suddenly find themselves with another huge  glut now that Beijing is no longer waving it in. In fact, we contend  that while OPEC's decision on Thursday is fully priced in by the market,  the only thing that matters for the future price of oil is how long  until China halts SPR imports. Here, those who have faster access to  commercial satellite imagery will be a distinct advantage over everybody  else, even the momentum-chasing, headline scanning algos...

http://oilprice.com/Energy/Energy-Ge...o-Plummet.html

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## Swordsmyth

Update: 

*Oil Crashes To $48 Handle As Iran Says It Won’t Cut Output*With oil prices plummeting 4 percent at 12:33pm EDT on Thursday, with WTI breaking below $50, it looks like a nine-month extension at current production levels is not enough to convince the market.

http://oilprice.com/Energy/Oil-Price...ut-Output.html

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## Swordsmyth

Update:  

*Unstoppable: U.S. Adds Oil, Gas Rigs As OPEC Extends Deal*http://oilprice.com/Energy/Energy-Ge...ends-Deal.html


*China Teapot Refiners Overflow, Slow Crude Oil Imports*http://oilprice.com/Latest-Energy-News/World-News/China-Teapot-Refiners-Overflow-Slow-Crude-Oil-Imports.html



*Iraq’s Oil Minister: Kurdistan Exports Not Part Of OPEC Cut Extension*http://oilprice.com/Latest-Energy-Ne...Extension.html

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## Swordsmyth

Update:

*Economists Puzzled By Unexpected Plunge In Saudi Foreign Reserves* 

more at: http://www.zerohedge.com/news/2017-0...ops+to+zero%29

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## Swordsmyth

Update:
*More Bad News For OPEC: Deepwater Oil Becomes Cheaper*http://oilprice.com/Latest-Energy-News/World-News/More-Bad-News-For-OPEC-Deepwater-Oil-Costs-Drop.html

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## Swordsmyth

More:
*WTI Crude Tumbles To $47 Handle As OPEC-Compliance Drops*http://www.zerohedge.com/news/2017-05-31/wti-crude-tumbles-47-handle-opec-compliance-drops

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## Swordsmyth

Update:
*Clash Between Qatar And The Saudis Could Threaten OPEC Deal* The Saudi-UAE vs Qatar confrontation holds another risk. All GCC  countries depend on stability in the oil and gas markets, which is  evident from the recent OPEC deal. A full-fledged confrontation will,  without any doubt, put pressure on the current compliance rate of OPEC  members to production cuts. Doha will be able to sabotage the current  6+3 production cut agreement between OPEC and non-OPEC members. If Doha  decides to join the ranks of Iran and Iraq, OPEC’s future will be in  doubt.


http://oilprice.com/Geopolitics/Inte...OPEC-Deal.html

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## Swordsmyth

Update:
*Oil Prices Fall As U.S. Rig Count Rises For 20th Straight Week*The number of active oil and gas rigs in the United States rose for the twentieth straight week, Baker Hughes reported on Friday—this time by 8, as drillers in the US make do with current barrel prices even below $50.
The  number of oil rigs in operation increased by 11, while gas rigs  decreased by 3. Combined, the total oil and gas rig count in the US now  stands at 916 rigs—more than double the number of rigs in operation a  year ago, when WTI barrel prices were about $49.05—higher than today’s  price per barrel for WTI.
 


 

Say what they will about rebalancing the oil market—even if  they say it again and again—OPEC and its non-OPEC counterparts have been  unable to swing prices (and keep them) near $60 per barrel. Undeterred  and even seemingly satisfied with the current pricing environment, shale  players in the US are showing no signs of stopping, adding 256 oil rigs  since December 2, shortly after OPEC announced its agreement.




http://oilprice.com/Energy/Energy-Ge...ight-Week.html

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## Zippyjuan

> Update:
> *Oil Prices Fall As U.S. Rig Count Rises For 20th Straight Week*The number of active oil and gas rigs in the United States rose for the twentieth straight week, Baker Hughes reported on Friday—this time by 8, as drillers in the US make do with current barrel prices even below $50.
> The  number of oil rigs in operation increased by 11, while gas rigs  decreased by 3. Combined, the total oil and gas rig count in the US now  stands at 916 rigs—more than double the number of rigs in operation a  year ago, when WTI barrel prices were about $49.05—higher than today’s  price per barrel for WTI.
>  
> 
> 
>  
> 
> Say what they will about rebalancing the oil market—even if  they say it again and again—OPEC and its non-OPEC counterparts have been  unable to swing prices (and keep them) near $60 per barrel. Undeterred  and even seemingly satisfied with the current pricing environment, shale  players in the US are showing no signs of stopping, adding 256 oil rigs  since December 2, shortly after OPEC announced its agreement.
> ...


Shale oil / fracking oil wells fade off in terms of production pretty quickly- they can peak in output in just a year or two and decline after that.  This means you need a fairly steady addition of new wells just to maintain current levels of production.

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## Swordsmyth

> Shale oil / fracking oil wells fade off in terms of production pretty quickly- they can peak in output in just a year or two and decline after that.  This means you need a fairly steady addition of new wells just to maintain current levels of production.


And they just keep drilling more, not to mention the huge backlog of drilled but uncompleted wells.

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## Swordsmyth

Update:

*Kazakhstan Boosts Production Despite OPEC Pledge*Kazakhstan’s energy officials are continuing to officially confirm to  the public what is already widely known by now — that they have no  intention to stick by pledges on oil output curbs.
While committed  to seeing cuts across the board among OPEC and non-OPEC members,  Kazakhstan has cited rising productivity at its Kashagan field as cause  for bucking the trend.
 


 

Speaking on May 30, Energy Minister Kanat Bozumbayev said that  its earlier pledge to reduce output by 20,000 barrels per day will be  reviewed in September. But an International Energy Agency report in March showed Kazakhstan had begun breaking their word as soon as they had uttered it.


“_Kazakh crude and condensate production rose by  nearly 40 kb/d in February to average 1.718 mb/d, according to the  latest official data. The increase stemmed mostly from Kashagan, which  produced 170 kb/d last month, only five months after start up,”_ the agency said.
The  IEA noted that Kazakhstan argued that Kashagan and its other huge  fields, Tengiz and Karachaganak, should be exempt from the curb on  production, making a mockery of the pledge in the first place.

http://oilprice.com/Geopolitics/Inte...EC-Pledge.html

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## Swordsmyth

Update:
*EIA Ups Global Oil Production Forecast*http://oilprice.com/Energy/Oil-Prices/EIA-Ups-Global-Oil-Production-Forecast.html

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## Swordsmyth

Update:

Though alternative energies continue to make gains, it’s still more  cost efficient to drill and pump oil than to turn to renewables. But big  oil is looking for ways to make it even cheaper, more efficient and  with a smaller impact to the environment. In order to do this, they’re  turning to tech.
 


 

Stabilizing profitability and margins is a major drive for  big oil, pushing them away from traditional methods and toward  innovation. In the near future, technologies like  IIoT, artificial intelligence and wearables will cut operating costs,  increase production efficiency, and refine asset management.

http://oilprice.com/Energy/Energy-Ge...Tech-Boom.html



*Trump Moves To Allow Drilling On Atlantic Coast*A new proposal by the Trump administration will allow oil companies  to use seismic air guns to search for fossil fuel deposits in the  Atlantic Ocean, according to reports emerging from Washington.
Former  President Barack Obama had blocked this form of testing due to dangers  posed to marine wildlife in the area. The current White House needs  Marine Mammal Protection Act permits from a specialized branch of the Commerce Department to allow five companies to use the technique.
 


 

"_An authorization for incidental takings shall be granted  if [the National Marine Fisheries Service] finds that the taking will  have a negligible impact on the species,"_ a Federal Register  notice, scheduled for publication on Tuesday, read. The agency will  accept public comments through July 7th before deciding whether to grant  the required permits. An approval would allow the seismic gun shots to  fire in the Fall.


Trump’s April executive order, which expanded areas  available for offshore drilling, included certain areas of the East  coast. There are currently no active rigs in coastal waters ranging from  Delaware to Florida.
 
http://oilprice.com/Latest-Energy-Ne...tic-Coast.html


*Zion Oil & Gas Starts Drilling Onshore Israel*Dallas-based Zion Oil & Gas, Inc said on  Monday that it had begun drilling a deep well onshore Israel, expecting  to drill through at least four different geological strata with oil and  gas potential.
Zion Oil & Gas has spud the Megiddo-Jezreel #1  in the Jezreel Valley in Israel, and, depending on results and subject  to cash resources, it would drill multiple wells from the pad site, the  company said.

http://oilprice.com/Latest-Energy-Ne...re-Israel.html

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## Swordsmyth

Update:

*Saudi America – How New Tech Is Creating Another Oil Boom*Just when you thought there couldn’t be any more oil in Texas … new  technology is about to unlock an extremely shallow field that is  brimming with heavy oil that has been impossible to recover--until now.
Many  oil companies have spent many millions of dollars trying to unlock this  gem, but expensive steam injections weren’t efficient enough to make it  competitive or economic, even if they had succeeded.
 


 

While steam injections cost $50 per barrel, the new  technology lifts the oil at under $10 per barrel—an astounding savings,  even if oil prices crashed to lows not seen since the late 90s.


This dramatically reduced cost of extraction should send the Saudis back to the OPEC negotiating table in a panic.


http://oilprice.com/Energy/Energy-Ge...-Oil-Boom.html

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## Swordsmyth

Update: 

*OPEC Production Spikes – Has The Cheating Begun?*OPEC’s crude oil production increased by 270,000 bpd in May over  April, to stand at 32.12 million bpd--the highest level since January  this year--as exempt Libya and Nigeria saw their respective output  sharply recovering, according to an S&P Global Platts survey.
Despite  the high compliance from the cartel’s biggest producer and de facto  leader Saudi Arabia, as well as from Angola, output jumped from exempt  OPEC members Libya and Nigeria, and Iraq continued to under-comply  significantly, increasing its production in May, the survey showed.

http://oilprice.com/Energy/Energy-Ge...ing-Begun.html

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## Swordsmyth

More:

*The World’s Third Largest Oil Consumer Aims To Drastically Reduce Imports*http://oilprice.com/Energy/Crude-Oil...e-Imports.html

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## Swordsmyth

Update: 
*Congo Republic Plans 350,000 BPD Output In 2018*http://oilprice.com/Latest-Energy-News/World-News/Congo-Republic-Plans-350000-BPD-Output-In-2018.html

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## Swordsmyth

Update:
*U.S. Rig Count Continues Its Ascent Unabated*http://oilprice.com/Energy/Energy-General/US-Rig-Count-Continues-Its-Ascent-Unabated.html


*Eni Begins Oil Production In Ghana Three Months Ahead Of Schedule*http://oilprice.com/Latest-Energy-News/World-News/Eni-Begins-Oil-Production-In-Ghana-Three-Months-Ahead-Of-Schedule.html

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## Swordsmyth

Update:

*Nigeria To Return 20% Of OPEC Cuts To The Market*http://oilprice.com/Energy/Energy-General/Nigeria-To-Return-20-Of-OPEC-Cuts-To-The-Market.html

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## Swordsmyth

*Iran Aims To Develop Its Largest Oil Field*OPECs no.3 producer, Iran, which is currently pumping just below 3.8 million bpd of crude oil, wants to increase its production to 5 million bpd by 2021.

http://oilprice.com/Latest-Energy-Ne...Oil-Field.html



*Iraq To Raise Oil Export Terminal Capacity To 1 Million Bpd* Amayas current capacity is 250,000 bpd.

http://oilprice.com/Latest-Energy-Ne...llion-Bpd.html

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## Swordsmyth

*Shale Production Will Hit An All Time High Next Month... And That's Just The Beginning*http://www.zerohedge.com/news/2017-0...just-beginning

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## Swordsmyth

*OPEC Crude Oil Basket Hit Lowest Price Of The Year In May*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Crude-Oil-Basket-Hit-Lowest-Price-Of-The-Year-In-May.html


*Oil Prices Retreat On Rising OPEC Output In May*http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Retreat-On-Rising-OPEC-Output-In-May.html


*Nigeria Oil Minister Warns OPEC Won’t Play Price Regulator Forever*http://oilprice.com/Latest-Energy-News/World-News/Nigeria-Oil-Minister-Warns-OPEC-Wont-Play-Price-Regulator-Forever.html


*Kazakhstan Rejects Report About Further Oil Output Cut*http://oilprice.com/Latest-Energy-News/World-News/Kazakhstan-Rejects-Report-About-Further-Oil-Output-Cut.html


*Refracking Extracts 200,000-250,000 Additional Barrels In Bakken*http://oilprice.com/Latest-Energy-News/World-News/Refracking-Extracts-200000-250000-Additional-Barrels-In-Bakken.html

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## Swordsmyth

*Oil Prices Suffer First 'Death Cross' Since 2014 Collapse*http://www.zerohedge.com/news/2017-06-13/oil-prices-suffer-first-death-cross-2014-collapse

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## Zippyjuan

> *Oil Prices Suffer First 'Death Cross' Since 2014 Collapse*http://www.zerohedge.com/news/2017-06-13/oil-prices-suffer-first-death-cross-2014-collapse


http://www.marketwatch.com/story/oil...oss-2017-05-23




> n other words, oil is on the brink of signaling either a very bullish uptrend or a bearish downtrend, according to chart watchers. The relationship between short- and long-term price patterns are typically watched by market technicians to help determine an asset’s upward or downward momentum.


So this "significant indicator" could mean oil prices go up or go down.  Hmm.

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## Swordsmyth

> http://www.marketwatch.com/story/oil...oss-2017-05-23
> 
> 
> 
> So this "significant indicator" could mean oil prices go up or go down.  Hmm.


Read the rest of this thread.
Oil is not going to go up.

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## Zippyjuan

It isn't crashing either.  http://oilprice.com/Energy/Energy-Ge...ower-Pace.html




> *Oil Flat As OPEC Sees Market Balancing At “Slower Pace”*


Proved reserves falling (note though that "proved reserves" are the amount of resources which can be economically extracted at current prices- at lower prices, some oil sources become not economically feasible, at higher prices more sources may be economically viable so simply changing prices can change proven reserve figures). 




http://www.cnbc.com/2017/06/12/oil-e...pply-cuts.html




> *Oil settles at $46.46, up 38 cents, as traders anticipate drop in US stockpiles*


Saudi Arabia it is believed can still make money on oil even at $20 a barrel.

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## Swordsmyth

> It isn't crashing.  http://oilprice.com/Energy/Energy-Ge...ower-Pace.html
> 
> 
> 
> Proved reserves falling (note though that "proved reserves" are the amount of resources which can be economically extracted at current prices- at lower prices, some oil sources become not economically feasible, at higher prices more sources may be economically viable so simply changing prices can change proven reserve figures).


Consumption is going to fall and history tells us that more oil will be found or become available.
The Saudis and their economic allies are doing their level best to "talk up" oil, they are failing, they can't live with oil at these prices, and oil is set to go lower as prodution keeps rising, soon OPEC will break and it's members will raise their outputs, then the price will really fall.
The longer they keep oil in this range the healthier Shale gets for the long run.

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## Zippyjuan

> Consumption is going to fall and history tells us that more oil will be found or become available.
> The Saudis and their economic allies are doing their level best to "talk up" oil, they are failing, they can't live with oil at these prices, and oil is set to go lower as prodution keeps rising, soon OPEC will break and it's members will raise their outputs, then the price will really fall.
> The longer they keep oil in this range the healthier Shale gets for the long run.


Shale becomes a lot less profitable at sub-$40 a barrel prices (break-even is about $40 right now). OPEC can produce at much lower cost than oil shale can. One reason is the nature of the deposits.  Drilling oil shale is more complicated and the deposits much smaller- an oil shale well can peak in output in as little as a year meaning you constantly need to drill new wells to maintain output. Saudi wells can run for years or even decades prior to peaking.   Canadian tar sands are getting hurt the worst right now (it is our biggest source of imports) because they have the higher costs. India demand expected to rise as China demand drops.

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## Swordsmyth

> Shale becomes a lot less profitable at sub-$50 a barrel prices. OPEC can produce at much lower cost than oil shale can.   Canadian tar sands are getting hurt the worst right now (it is our biggest source of imports) because they have the higher costs. India demand expected to rise as China demand drops.


Shale's break even costs keep falling, and the Saudis can't rely on the simple cost to pump their oil at a profit, they NEED a large enough profit to fund their national budget, they can't survive at these prices.

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## Zippyjuan

> Shale's break even costs keep falling, and the Saudis can't rely on the simple cost to pump their oil at a profit, they NEED a large enough profit to fund their national budget, they can't survive at these prices.


That is an even bigger problem for Russia.

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## Swordsmyth

> That is an even bigger problem for Russia.


Russia says they can live with 40$ a Bbl oil and that their budget is based on it, the Saudis can't.

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## Zippyjuan

http://tass.com/economy/942357




> *Russia’s finance minister says 2018-2020 budget will be based on new budget rule*
> 
> MOSCOW, April 20. /TASS/. Russia’s Finance Ministry will base the budget for 2018-2020 on the new budget rule (mechanism of Russia’s budget formation, determines the maximum level of spending on the basis of oil prices), Minister Anton Siluanov said on Thursday.
> 
> "Now we have a unique chance to get rid of the dependence on oil completely and thoroughly," he said, adding that the Finance Ministry asks to support its "proposals and draw up 2018-2020 draft budget based on new (budget) rules."
> 
> *The oil price required for bringing Russia’s budget into balance in 2017 amounts to $60 per barrel, he said.*


It is currently about $46 a barrel. If it stays there, that means about a 25% budget deficit. 



https://www.forbes.com/sites/johnmau.../#520408bd7367




> *Low Oil Prices Will Make Russia More Aggressive In 2017
> *
> 
> Russia has had a hard time since the collapse of global oil prices which began in August 2014. This will continue in 2017. The Russian people are starting to feel the effects of prolonged low oil prices. This was bound to happen. And this will shape Moscow's foreign policy in the year to come.
> 
> Russia’s money problems start with the economy’s structure. The country’s budget depends on income from oil exports. Low oil prices have had huge effects. And the country hasn’t even recovered from the 2008 decline.
> 
> *Little to no investment was made in industrial alternatives. And almost no money was used to increase efficiency or to add new technology.*
> 
> ...

----------


## Swordsmyth

> http://tass.com/economy/942357
> 
> 
> 
> It is currently about $46 a barrel. If it stays there, that means about a 25% budget deficit. 
> 
> 
> 
> https://www.forbes.com/sites/johnmau.../#520408bd7367


IF this is true then they are doomed as well.

----------


## Swordsmyth

*Oil Prices Plunge After API Reports Surprise Build In Crude Inventories*http://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Plunge-After-API-Reports-Surprise-Build-In-Crude-Inventories.html

----------


## Swordsmyth

*Hedging Rush In U.S. Shale Could Send Prices Tanking*http://oilprice.com/Energy/Crude-Oil/Hedging-Rush-In-US-Shale-Could-Send-Prices-Tanking.html

----------


## Swordsmyth

*Libya’s National Oil Corporation (NOC) said  on Tuesday that it had reached an interim deal with Germany’s  Wintershall to immediately resume production in concession areas and  related fields, which would unblock 160,000 bpd worth of production that  has been shut-in for most of the past two years over a dispute between  the companies.

*
“_Total oil production in Libya as of today is 830,000 b/d, and we  are targeting one million barrels by end of July, 2017 as a result of  the resumption of production from the Wintershall and linked Abouatiffel  fields, as well as from 103 A and Nafoora.”_
Libya reaching 1  million bpd of production by the end of next month would further  complicate OPEC’s efforts to reduce collective output, given the fact  that Libya is exempt from the production cut deal.


http://oilprice.com/Latest-Energy-Ne...pd-Output.html


The International Energy Agency had a nasty surprise for OPEC and its  partners in the oil output cut agreement today. According to the  authority, non-OPEC production in 2018 will increase by 1.5 million barrels daily – a rate that will surpass the growth of global demand.
The  figure is particularly impressive—or frightening, depending on  perspective—compared with the IEA’s estimate of total non-OPEC oil  production growth for this year: 700,000 bpd. Of this, the U.S. will  contribute a daily rise of 430,000 bpd “_and the year will end with production there 920 kb/d higher than at the end of 2016.”_
 


 

And that’s not all. The daily growth rate for U.S. oil  production in 2018 is seen to average 780,000 bpd, but the IEA cautions  that it may grow even faster than that.

http://oilprice.com/Energy/Crude-Oil...re-Needed.html

----------


## Swordsmyth

*195,700 Acres In Nevada For Auctioned Oil Projects*http://oilprice.com/Latest-Energy-News/World-News/195700-Acres-In-Nevada-For-Auctioned-Oil-Projects.html


*Iraq Could Boost Oil Output To 5 Million Bpd This Year*http://oilprice.com/Latest-Energy-News/World-News/Iraq-Could-Boost-Oil-Output-To-5-Million-Bpd-This-Year.html

----------


## devil21

Oil futures hit the dreaded death cross a few days ago.

Slightly off topic but anyone think it's odd that even though SA has been pummeling Yemen and now attempting to starve out Qatar there hasn't been any incidents of terrorism inside their borders?  It's like if an act of muslim terrorism (suicide bombers, eg) doesnt originate from the Kingdom then it simply doesn't happen.

----------


## Swordsmyth

*Russia’s Central Bank Sees Oil Prices Down To $40 In 2018-2019*A week before that, Russia’s Economy Minister Maxim Oreshkin said  that the current underlying key assumption of Russia’s economic  policies—oil prices at US$40—can allow it to live forever at that price or below.
_“We are actually ready to live forever at oil prices $40 or below,”_ Oreshkin said.

http://oilprice.com/Latest-Energy-Ne...2018-2019.html



*No Respite For Oil Prices As U.S. Rig Count Gains, Canada Adds 27 Rigs*http://oilprice.com/Energy/Energy-General/No-Respite-For-Oil-Prices-As-US-Rig-Count-Gains-Canada-Adds-27-Rigs.html



*Medallion Midstream Expands Permian Pipeline Capacity*http://oilprice.com/Latest-Energy-News/World-News/Medallion-Midstream-Expands-Permian-Pipeline-Capacity.html



*Exxon Proceeds With $4.4B Liza Oil Development Offshore Guyana*Production is expected to begin by 2020, less than five years after  discovery of the field. The U.S. major’s development plan has received  regulatory approval from Guyana’s government, Exxon added.
http://oilprice.com/Latest-Energy-Ne...re-Guyana.html

----------


## Swordsmyth

*Floating Storage For Oil Reaches 2017 High As Traders Employ Aging VLCCs*http://oilprice.com/Latest-Energy-News/World-News/Floating-Storage-For-Oil-Reaches-2017-High-As-Traders-Employ-Aging-VLCCs.html

----------


## Swordsmyth

*Oil Sands Output Growth Second Only To Shale*The dirt argument, which concerns the energy intensity of oil sands  production compared to other oil extraction methods, has been partially refuted:  some oil production in California is dirtier than oil sands. The price  argument is also being refuted by the producers themselves: oil sands  extraction is becoming cheaper, and it is rising.Oil sands  production has historically had some of the highest production prices in  the industry due to the complexity of the process that turns bitumen  into fluid crude oil. Like their peers in the shale patch, however, oil  sands miners were motivated to increase their efficiency during the  recent price crash. The results from this boost are now becoming  evident.

http://oilprice.com/Energy/Crude-Oil...-To-Shale.html

----------


## Swordsmyth

WTI Crude



 	43.38
 	-0.13
 	-0.3%


 	 	Brent Crude



 	46.02
 	-0.89
 	-1.9%

----------


## Swordsmyth

*Saudis In A Tight Corner -- The Princes Make Clever Moves & Mistakes, Too*The nub of the Kingdom’s problem centers on the fact that it is a giant socialist enterprise. According to the Saudi Ministry of Labor and Social Development,  a whopping 67% of employed Saudis are on the Kingdom’s payroll. Many of  these state employees do little more than collect a paycheck. Coupled  with this is a tangled maze of juicy subsidies and handouts Saudis  receive for doing nothing. Where do the funds come from? Oil, of course.
 With the collapse of oil prices in 2009, reality set in, and the  Princes became squeezed tightly into an unfamiliar corner. In an attempt  to move out of the corner, Mohammed Bin Salman, the Deputy Crown  Prince, produced a bold plan, Vision 2030. His plan includes a massive  privatization (the sale of a piece of the state-owned oil giant Aramco),  a sharp cut in wages and benefits for civil servants and significant  subsidy cuts. The wage and benefit cuts didn’t go down well. So, the  Kingdom reversed course and cancelled many of the cuts. The Princes  learned quickly that once a government gives away goodies (read: grants  so-called “rights”), it’s hard to take them away.
 One change that was not rolled back was the switch from the  lunar-based, religious Hijri calendar to the western Gregorian calendar.  This occurred on October 1, 2016. The reason for this radical change  was simple economics.
 The Gregorian calendar has 10.9 more days than the Hijri calendar,  meaning that the public sector can cut costs through the dilution of  wages—same pay spread over more working days. In another move that  touches on sensitive religious matters, the Kingdom has announced that  it will increase visa charges for people completing their religious  pilgrimage, the Hajj. Even in the Kingdom of Saudi Arabia, economics has  trumped religion.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

----------


## Swordsmyth

*China Set To Slow Refinery Runs In Q3, Hurting Oil Demand Growth*http://oilprice.com/Latest-Energy-News/World-News/China-Set-To-Slow-Refinery-Runs-In-Q3-Hurting-Oil-Demand-Growth.html


*Exxon’s Guyana Play Could Be As Price Competitive As The Permian*http://oilprice.com/Latest-Energy-News/World-News/Exxons-Guyana-Play-Could-Be-As-Price-Competitive-As-The-Permian.html

----------


## Zippyjuan

> Oil futures hit the dreaded death cross a few days ago.
> 
> Slightly off topic but anyone think it's odd that even though SA has been pummeling Yemen and now attempting to starve out Qatar there hasn't been any incidents of terrorism inside their borders?  It's like if an act of muslim terrorism (suicide bombers, eg) doesnt originate from the Kingdom then it simply doesn't happen.


Did the energy market prices collapse following that "Death Cross"?

----------


## Swordsmyth

> Did the energy market prices collapse following that "Death Cross"?


Did they go up? or Down?
The drop was dramatic, was it a "collapse"? Eye of the beholder.
They may yet fall further, they will not go up.

----------


## Zippyjuan

> Did they go up? or Down?
> T*he drop was dramatic*, was it a "collapse"? Eye of the beholder.
> They may yet fall further, they will not go up.


That was June 13th.  What percent are oil prices down?  How "dramatic" has the decline been?  (According to chart on this page http://www.nasdaq.com/markets/crude-...x?timeframe=1m  oil has gone from $45 to $42- a decline of three dollars or six percent).

----------


## Swordsmyth

http://oilprice.com/commodity-price-charts?1=&page=chart&sym=CL%2A1&domain=advancedmed  ia&sg=true&display_ice=1&enabled_ice_exchanges=&st  udies=Volume%3B&cancelstudy=&a=I%3A90
http://oilprice.com/commodity-price-...tudy=&a=I%3A90

----------


## Zippyjuan

> http://oilprice.com/commodity-price-charts?1=&page=chart&sym=CL%2A1&domain=advancedmed  ia&sg=true&display_ice=1&enabled_ice_exchanges=&st  udies=Volume%3B&cancelstudy=&a=I%3A90
> http://oilprice.com/commodity-price-...tudy=&a=I%3A90


Your charts show similar change to mine. Is three percent in two weeks a  "dramatic" drop?

----------


## Swordsmyth

> Your charts show similar change to mine. Is three percent in two weeks a  "dramatic" drop?


That is what I called it.

----------


## Zippyjuan

> That is what I called it.


As you also said, 




> Eye of the beholder.

----------


## devil21

> Did the energy market prices collapse following that "Death Cross"?


You're really asking that question only days later?  Do you even oil future, bro?  A continuous downturn is what to watch for, not an overnight "collapse".  Whatever your definition of collapse is...

You showing back up on the thread is a good sign that the content is worth watching though so thanks for that Zip.

----------


## Swordsmyth

*Nigerian Crude Exports to Hit 17-Month High in August*Nigerian crude exports will top 2 million barrels per day in August,  reaching a 17-month high, according to new data compiled by Reuters on Thursday.
Attacks  by militants in the Niger Delta had crippled production in 2016, but  the African nation has been rebuilding output steadily through 2017.
 


 

Drops in output last year were so bad that OPEC exempted  Abuja from the bloc’s November deal to cut production by 1.2 million  barrels per day.


The new rise in exports can partially be attributed to delayed shipments from July, Reuters said.
An  estimated 2.02 million bpd of Nigerian crude will leave ports on 67  tankers in August, along with another 97,000 bpd of condensates.
The Forcados crude grade began loading again  earlier this month, when Royal Dutch Shell lifted a force majeure on  facilities related to the grade. A total of 10.3 million barrels of  Forcados crude will be shipped in August.

More at: http://oilprice.com/Latest-Energy-Ne...in-August.html

----------


## Swordsmyth

*Largest East Coast Pipeline Reveals Demand For Gasoline Is Crashing*http://oilprice.com/Energy/Crude-Oil/Largest-East-Coast-Pipeline-Reveals-Demand-For-Gasoline-Is-Crashing.html


*OPEC Oil Basket Falls Below WTI*http://oilprice.com/Energy/Oil-Prices/OPEC-Oil-Basket-Falls-Below-WTI.html

----------


## Swordsmyth

*US Oil Rig Count Rises For 23rd Week In A Row*http://oilprice.com/Energy/Crude-Oil/US-Oil-Rig-Count-Rises-For-23rd-Week-In-A-Row.html

----------


## Swordsmyth

*Iran’s Largest Oil Terminal Boosts Capacity To 8 Million Bpd*http://oilprice.com/Energy/Crude-Oil/Irans-Largest-Oil-Terminal-Boosts-Capacity-To-8-Million-Bpd.html

----------


## Swordsmyth

*First Oil At Kraken Hailed As Landmark North Sea Development*http://oilprice.com/Latest-Energy-News/World-News/First-Oil-At-Kraken-Hailed-As-Landmark-North-Sea-Development.html

----------


## Swordsmyth

*Hedge Funds Abandon OPEC, Near 'Shortest' Since Oil Crisis Began*http://www.zerohedge.com/news/2017-06-26/hedge-funds-abandon-opec-near-shortest-oil-crisis-began

----------


## Swordsmyth

*Kurdistan Targets Saudi Market Share In The U.S.*http://oilprice.com/Energy/Energy-General/Kurdistan-Targets-Saudi-Market-Share-In-The-US.html

----------


## Swordsmyth

*Trump's ANWR Move Could Spawn Epic Oil, Natural Gas Battle**Massive oil, natural gas potential* *There is little doubt of the potential for oil on the ANWR Coastal Plain.*  The region lies between and is geologically analogous with two of the  world’s most prolific oil and gas provinces, Alaska’s North Slope and  Canada’s Mackenzie Delta.
 The US Geological Survey, in a 1998 estimate, reckoned that the  Coastal Plain contains 4.3 billion to 11.8 billion barrels of  technically recoverable oil and as much as 11 Tcf of natural gas, with a  mean estimate of 7.7 billion barrels and 3.5 Tcf.
*Industry contends these are very conservative estimates. As much as 32 billion barrels of oil is in place.*

 One recent study suggested that a commercial find on* the ANWR Coastal Plain could yield more daily oil production than the volume of oil the US imports from Saudi Arabia today.


*More at: http://www.zerohedge.com/news/2017-0...ral-gas-battle

----------


## Swordsmyth

*WTI/RBOB Tumble After Unexpected Inventory Builds*http://www.zerohedge.com/news/2017-06-27/wtirbob-tumble-after-unexpected-inventory-builds

----------


## Swordsmyth

*Bangladesh To Start Replacing Oil Product Imports With LNG*http://oilprice.com/Latest-Energy-News/World-News/Bangladesh-To-Start-Replacing-Oil-Product-Imports-With-LNG.html

----------


## Swordsmyth

*Link And Citizen Form Joint Venture To Develop Oklahoma Shale*The venture will double May 2017 output of 20,000 barrels per day from  the same lands by the end of the year, the companies said in a statement  on Wednesday.

http://oilprice.com/Latest-Energy-Ne...oma-Shale.html

----------


## Swordsmyth

*Niger Delta Militants Call Off Oil War*http://oilprice.com/Latest-Energy-News/World-News/Niger-Delta-Militants-Call-Off-Oil-War.html

----------


## Swordsmyth

*China Banks On Natural Gas*Imports and domestic output of natural gas are outpacing government  projections in China as the country works toward a goal of making the  fuel 10 percent of its energy consumption by 2020.
 


 

Official data for domestic production and imports shows that  the total amount of natural gas available in China in the first five  months of the year was approximately 72.0 million tons, up 5.9 percent  for the same time frame last year.


The increases are more than double the annual rate  needed in order for China to increase natural gas’ share of energy  consumption from its current 5.9 percent to 10 percent by the end of the  decade,
Imports and output of natural gas rose more than twice the expected amount this year in China
Imports  and domestic output of natural gas are outpacing government projections  in China as the country works toward a goal of making the fuel 10  percent of its energy consumption by 2020.

http://oilprice.com/Energy/Natural-G...ion-Tanks.html

----------


## Swordsmyth

*Only $60 Oil Can Save The Aramco IPO*http://oilprice.com/Energy/Oil-Prices/Only-60-Oil-Can-Save-The-Aramco-IPO.html

----------


## Swordsmyth

*Ghana Production To Average 200,000 BPD In 2017*_"ENI has launched production from the integrated oil and gas  development project in the OCTP block, off Ghana's western coast, in  just two and half years, and three months ahead of schedule,_" the  company said in a statement to Reuters. The project will more than  double gas output for the West African nation by adding 1,000 MW worth  of production, the government says.
Ghana had sustained growth  of at least 8 percent until 2013, partly due to the revenues from oil,  but in recent years, Ghana has seen less income due to the plummeting  price of the commodity coupled with a growing fiscal crisis.
On a  potential bid to join the Organization of Petroleum Exporting Countries  (OPEC) to further Ghana’s strategic interests, Adam said: _"Why would  Ghana join OPEC when it is no longer as relevant as it used to be? The  prices are so low and OPEC is not able to impact the market the way it  used to."

http://oilprice.com/Latest-Energy-Ne...D-In-2017.html
_

----------


## Swordsmyth

*Trump urges 'energy dominance' as he promotes exports, jobs*The  Trump administration said Thursday it is taking steps to expand oil  drilling in the Arctic and Atlantic oceans as President Donald Trump  continues to push for U.S. "energy dominance" in the global market.The  Interior Department is rewriting a five-year drilling plan established  by the Obama administration, with an eye toward opening areas in the  Arctic and Atlantic oceans that now are off-limits to drilling. It's one  of six initiatives that the president unveiled Thursday in hopes of  generating more energy exports and jobs.

The president said Thursday that his administration has also approved  construction of a new petroleum pipeline to Mexico. The State Department  said it had issued a permit to NuStar Logistics for the construction  and operation of the New Burgos Pipeline, which would have the capacity  to deliver 108,000 barrels a day and would cross the U.S.-Mexico border  near Peñitas, Texas.

He said that Sempra Energy signed an agreement to negotiate the sale of  natural gas to South Korea and that the Energy Department is approving  two applications to export natural gas from a Louisiana terminal. His  administration will also perform a complete review of nuclear energy  policy and seek to address barriers to financing coal plants overseas,  as well as opening up offshore drilling.

Trump  has also pushed to revive U.S. coal production after years of decline.  Coal mining rose by 19 percent in the first five months of the year as  the price of natural gas edged up, according to Energy Department data.
A  report released in January by the Energy Information Administration  said the country is on track to become a net energy exporter by 2026,  although the White House said Tuesday that net exports could top imports  as soon as 2020.

More at: https://finance.yahoo.com/news/trump...--finance.html

----------


## Swordsmyth

*No OPEC solace in tight medium sour crude oil market, as light sweet glut weighs*https://www.platts.com/latest-news/oil/london/analysis-no-opec-solace-in-tight-medium-sour-26761343

----------


## Swordsmyth

*Saudi Arabia Reports First GDP Contraction Since 2009*http://oilprice.com/Latest-Energy-News/World-News/Saudi-Arabia-Reports-First-GDP-Contraction-Since-2009.html

----------


## Swordsmyth

*Corpus Christi Set To Become The Next Oil Export Hotspot*http://oilprice.com/Energy/Crude-Oil/Corpus-Christi-Set-To-Become-The-Next-Oil-Export-Hotspot.html

----------


## Swordsmyth

*Statoil Strikes Oil At New Barents Sea Field*


Statoil has struck crude oil in the Kolje formation in the Barents Sea, near the Johan Castberg field, the company announced.  Recoverable reserves at the location are estimated at 25 to 50 million  barrels. According to Statoil’s news release, this is the first-time oil  was found in this kind of formation in the Barents Sea, which, said the  company’s senior vice president for exploration in Norway and the UK, _“opens interesting opportunities.”_
At the same time, Statoil announced the start of production at another field, the Gina Krog, in the North Sea. The field contains an estimated 224 million barrels of oil equivalent, with production expected to continue until 2032.          


At the end of last month, Statoil got the go-ahead from the Petroleum Safety Authority of Norway to start drilling at another location in the Barents Sea, part of the Korpfjell prospect. Yet another drilling launch was announced for the Ge***mini Nord prospect, also in the Barents Sea.                                                                     

Norway’s state oil company has so far identified five oil and gas prospects  in the Barents Sea, and the latest reports show it is wasting no time  in moving ahead with exploration in the Arctic part of its continental  shelf. Earlier this year, the Petroleum Directorate revised upwards its  earlier estimates of oil and gas reserves in the area, and  substantially: the authority said undiscovered oil and gas in the Barents Sea is twice as much as previously estimated.

http://oilprice.com/Latest-Energy-Ne...Sea-Field.html

----------


## Swordsmyth

*Is Saudi Arabia Depending Too Much On The Ghawar Field?*The Saudis have a problem, too. It isn’t just that their economy is slowing down;  roughly one third of their 10 mb/d production is used internally, and  much of that is used to make cheap power. They burn it as though it were  worth $6 per barrel so they can enjoy 3-cent kilowatt-hours. (U.S.  average retail is around 12 cents.) You don’t have to win a Nobel Prize  to know they would rather sell it at the market, setting a recent low at  $45, and use something else to make electricity. That something else  might as well be PV power, now available in sunny climates for 3 cents, or less.


The daily cost of burning 3.2 million barrels of $45 oil, at 6, is nearly $125 million.  This adds up to a billion in 8 days; soon, you’re talking real money.  In the course of a year, it amounts to $45 billion, which is a princely  sum. Some Princes are less happy about this than others.

Regardless of oil’s price or the valuation of Aramco, potential  investors should ask themselves an extremely important question: how  sure are you that the mighty Ghawar field, still producing 5 mb/d, equal  to nearly all conventional (non-tight oil) U.S. production, is not  about to have a stroke and go into decline? Only Aramco insiders know  the answer, if anyone. No matter where a well is or when it was first  drilled, at some point, it will go into decline, unless you stop using the product. That is as certain as gravity.

More at: http://oilprice.com/Energy/Crude-Oil...war-Field.html

----------


## Swordsmyth

*Trump Tweet: "Lowest Gas prices in over ten years! I would like to see them go even lower."**Oil Slides As Russia Speaks Out Against Deeper Output Cuts*http://oilprice.com/Energy/Oil-Prices/Oil-Slides-As-Russia-Speaks-Out-Against-Deeper-Output-Cuts.html

----------


## Swordsmyth

*WTI/RBOB Tumble - Erase 'Bullish' Inventory Data Gains*The bulls got pretty much everything they could have hoped for - big inventory draws in all products and record high product demand - however, it appears it took the machines a little longer to read down the report and spot the fact that *production soared to new cycle highs*... and WTI/RBOB prices are tumbling...

http://www.zerohedge.com/news/2017-0...ory-data-gains

----------


## Swordsmyth

*U.S. Crude Oil Exports Up To 1.02 Million Bpd In May*http://oilprice.com/Latest-Energy-News/World-News/US-Crude-Oil-Exports-Up-To-102-Million-Bpd-In-May.html

----------


## Swordsmyth

*Rig Count Climbs Higher After Last Week’s Intermission*http://oilprice.com/Energy/Energy-General/Rig-Count-Climbs-Higher-After-Last-Weeks-Intermission.html


*Oil Prices Tank As OPEC Exports Surge*http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Tank-As-OPEC-Exports-Surge.html

*Russia Now Ready To Consider More Oil Output Cuts If Needed*Just a day after Russia’s Energy Minister Alexander Novak said that the  OPEC/non-OPEC production cut pact was working and that there was no need  to make immediate additional moves, an energy minister official told  Russian reporters on Friday that Moscow was ready to review proposals from partners in the deal, including changes to production cuts.
http://oilprice.com/Energy/Energy-Ge...If-Needed.html

----------


## Seraphim

> Production cuts are intended to keep the price of oil down.  Lower prices makes it harder for some fracking producers to be profitable- forcing them to shut down.  That lowers supply and would allow Saudi Arabia and Russia to increase their market share and will raise price in the future for them.   Russia's "cut" isn't much of a cut for them- prior to the latest production allocation they cranked up their facilities to maximum output- a level they would have difficulties sustaining.  The "cut" takes them "down" to their usual output.


Production cut = less supply = upward price pressure.

Try again.

----------


## Swordsmyth

*OPEC Considers Capping Oil Output Of Exempt Libya, Nigeria*

http://oilprice.com/Latest-Energy-Ne...a-Nigeria.html




What with the Qatar crisis and this, that next OPEC meeting is going to be INTERESTING.

----------


## Swordsmyth

*If the marginal cost of oil for the next 3 or 4 years really  is headed to the mid-$40 range then OPEC’s attempts to push prices to  $60 seem futile.

*http://www.zerohedge.com/news/2017-07-08/when-facts-change-oils-biggest-cheerleader-capitulates-andy-halls-full-bearish-lette

----------


## Swordsmyth

*BofA Stunned By Drop In Gasoline Demand: "Where Is Driving Season?"*http://www.zerohedge.com/news/2017-07-08/bofa-stunned-drop-gasoline-demand-where-driving-season

----------


## Swordsmyth



----------


## Swordsmyth

*What Oil Bulls Don’t Know About Global Inventories*

The problem is that, as has been the case over the past year, stockpiles  aren't coming down because the oil is being used, it's just being moved  overseas. And nowhere is this more visible than in the record amount of  oil exported overseas.

http://oilprice.com/Energy/Oil-Price...ventories.html


*Trump’s First Step To Boost Gulf Of Mexico Drilling*


The US Bureau of Ocean Energy Management (BOEM) announced last week  it is lowering royalties on oil and gas production in the shallow water  Gulf of Mexico. With rates set to drop to 12.5 percent, from a current  18.75 percent.                                                             

The revised rates will apply to wells drilled in less  than 200 meters water depth. With deeper-water wells continuing to  command the 18.75 percent royalty.
Changes in royalties will apply  to all new wells in shallow water going forward — but will not be  applied retroactively to existing projects.

http://oilprice.com/Energy/Energy-Ge...-Drilling.html



*OPEC: Further Cuts Off The Table*

http://oilprice.com/Energy/Energy-Ge...The-Table.html


*World’s Third Largest Oil Importer Secures Deal With U.S.*


Indian Oil Corp. will take delivery of more than a million barrels of  U.S. heavy crude in October—the first U.S. crude oil purchase by an  Indian energy company, IOC’s finance chief told Reuters, and certainly not the last one.
The  deal includes 1.6 million barrels of Mars crude plus 400,000 barrels of  Western Canadian Select, to be shipped to by PetroChina. The price,  IOC’s A.K. Sharma said, was “very competitive” to Iraq’s Basra Light,  and as long as it stays that way, more U.S. oil will ship to India.

http://oilprice.com/Latest-Energy-Ne...l-With-US.html

----------


## Swordsmyth

*Iraq Starts Drilling At Oilfield On Iranian Border*State-producer Maysan Oil Company will oversee the oil and natural  gas development at the critical field, which was launched during a visit  from Oil Minister Jabrane Al-Luaibi.
Another statement from the  oil ministry said the Haifaya oil field, operated by PetroChina, is set  to undergo expansion work that will _double its output to 400,000 barrels  per day by the end of next year.
_
http://oilprice.com/Latest-Energy-Ne...an-Border.html

----------


## Swordsmyth

*Oman Supports Organized Oil Production Cuts Beyond March 2018*http://oilprice.com/Latest-Energy-News/World-News/Oman-Supports-Organized-Oil-Production-Cuts-Beyond-March-2018.html

----------


## Swordsmyth

*U.S. To Be A Top-Ten Oil Exporter In Three Years*

http://oilprice.com/Latest-Energy-Ne...ree-Years.html


*Saudis Not Cutting August Crude Delivery To India, Southeast Asia*

http://oilprice.com/Latest-Energy-Ne...east-Asia.html


*EIA World Oil Demand Prediction Drops By 70,000 Barrels*

http://oilprice.com/Latest-Energy-Ne...0-Barrels.html


*Oil Under Pressure As Saudis Break Key Promise*


Saudi Arabia has told OPEC that it had pumped 10.07 million barrels  per day in June, up by 190,000 bpd from May, and exceeding its  10.058-million-bpd production level quota under the output cut deal, Bloomberg reported on Tuesday, citing a person with knowledge of the data.
OPEC’s Monthly Oil Market Report with data for June is expected to be released on Wednesday, July 12.  According to the latest currently available OPEC report with data for  May, Saudi Arabia directly communicated to OPEC that its crude oil  output in May was 9.880 million bpd. According to secondary sources, which the market is looking at, Saudi Arabia’s oil production in May was 9.940 million bpd.                     
Under the OPEC/non-OPEC deal to cut production, Saudi Arabia  pledged to take 486,000 bpd off its October 2016 level output and keep  production at 10.058 million bpd.                     

The market will be watching closely OPEC’s data on  Wednesday, but it typically gives production numbers, not exports.  According to ClipperData,  OPEC’s exports—including those of Saudi Arabia—jumped in June, and the  cartel exported more crude in June than it did in October, while total  global crude exports are over 10 percent higher than year-ago levels. 

http://oilprice.com/Energy/Crude-Oil...y-Promise.html


*Kazakhstan Bows Out Of OPEC Deal*

http://oilprice.com/Energy/Crude-Oil...OPEC-Deal.html

----------


## Swordsmyth

*Correction:

**Kazakhstan Not Backing Out Of OPEC Production Cut Deal*http://oilprice.com/Latest-Energy-News/World-News/Kazakhstan-Not-Backing-Out-Of-OPEC-Production-Cut-Deal.html

----------


## Swordsmyth

*First Private Offshore Exploration In Mexico Yields 1-Billion-Barrel Find*http://oilprice.com/Latest-Energy-News/World-News/First-Private-Offshore-Exploration-In-Mexico-Yields-1-Billion-Barrel-Find.html


*OPEC Still Overproducing: Scapegoats U.S. Shale*http://oilprice.com/Energy/Crude-Oil/OPEC-Still-Overproducing-Scapegoats-US-Shale.html

----------


## Swordsmyth

*Nigeria Politely Declines OPEC Invitation To Cap Oil Production*http://www.zerohedge.com/news/2017-07-12/nigeria-politely-declines-opec-invitation-cap-production

----------


## Swordsmyth

*OPEC Reports Rising Output, Sees Lower Demand For Its Oil In 2018*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Reports-Rising-Output-Sees-Lower-Demand-For-Its-Oil-In-2018.html

----------


## Swordsmyth

*OPEC Dragging Feet On Capping Libya, Nigeria Oil Production*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Dragging-Feet-On-Capping-Libya-Nigeria-Oil-Production.html


*Oil Prices Hold Steady As U.S. Oil Rig Count Rises*http://oilprice.com/Energy/Crude-Oil/Oil-Prices-Hold-Steady-As-US-Oil-Rig-Count-Rises.html


*Saudi Fuel Oil Demand Jumps While Global Consumption Drops*http://oilprice.com/Latest-Energy-News/World-News/Saudi-Fuel-Oil-Demand-Jumps-While-Global-Consumption-Drops.html


*U.S. To Lease 76M Acres For Oil, Gas In Gulf Of Mexico*http://oilprice.com/Latest-Energy-News/World-News/US-To-Lease-76M-Acres-For-Oil-Gas-In-Gulf-Of-Mexico.html

----------


## Swordsmyth

(Click to enlarge) 
World oil supply, total liquids, was up 660,000 bpd in June. This is huge. Oil prices will continue to drop if this continues.

http://oilprice.com/Energy/Energy-Ge...s-Exports.html

----------


## Swordsmyth

*US Shale Production Just Hit A New All Time High*http://www.zerohedge.com/news/2017-07-17/us-shale-production-just-hit-new-all-time-high?utm_source=feedburner&utm_medium=feed&utm_cam  paign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+fo  r+everyone+drops+to+zero%29

----------


## Swordsmyth

*OPEC Deal Splinters: Ecuador Will No Longer Comply With Production Quota Due To "Difficult Economic Situation"*http://www.zerohedge.com/news/2017-07-17/opec-deal-splinters-ecuador-will-no-longer-comply-production-quota-due-difficult-eco

----------


## Swordsmyth

*Oil Up As Saudis Consider Deeper Output Cuts*http://oilprice.com/Energy/Energy-General/Oil-Up-As-Saudis-Consider-Deeper-Output-Cuts.html


*Kuwait: Oil Market To Balance By March, No Deeper Cuts Needed*http://oilprice.com/Energy/Crude-Oil/Kuwait-Oil-Market-To-Balance-By-March-No-Deeper-Cuts-Needed.html

----------


## Swordsmyth

*WTI Sinks After Surprise Crude Inventory Build*http://www.zerohedge.com/news/2017-07-18/wti-sinks-after-surprise-crude-inventory-build

----------


## Swordsmyth

*The Qatar Blockade Is Threatening The OPEC Deal*http://oilprice.com/Geopolitics/International/The-Qatar-Blockade-Is-Threatening-The-OPEC-Deal.html

----------


## Swordsmyth

*Why Oil Prices Can’t Gain Traction*http://oilprice.com/Energy/Oil-Prices/Why-Oil-Prices-Cant-Gain-Traction.html


*Brazil Seeks To Lure Oil Investors With Lower Royalties*http://oilprice.com/Latest-Energy-News/World-News/Brazil-Seeks-To-Lure-Oil-Investors-With-Lower-Royalties.html

----------


## Swordsmyth

http://www.zerohedge.com/news/2017-0...low-oil-prices

----------


## Swordsmyth

*Oil Prices Slip On Falling OPEC Compliance*http://oilprice.com/Energy/Energy-General/Oil-Prices-Slip-On-Falling-OPEC-Compliance.html


*U.S. Oil Rig Count Falls By 1 As Canada Adds 15 Rigs*http://oilprice.com/Energy/Crude-Oil/US-Oil-Rig-Count-Falls-By-1-As-Canada-Adds-15-Rigs.html

----------


## Swordsmyth

*IMF: Saudi’s Oil GDP To Fall 2% On Back Of OPEC Cuts*http://oilprice.com/Latest-Energy-News/World-News/IMF-Saudis-Oil-GDP-To-Fall-2-On-Back-Of-OPEC-Cuts.html

----------


## Swordsmyth

*IMF Sees 2017 Saudi Growth ‘Close to Zero’ on Oil Prices, Cuts*https://www.bloomberg.com/news/articles/2017-07-21/imf-sees-2017-saudi-growth-close-to-zero-on-oil-prices-cuts?utm_source=yahoo&utm_medium=bd&utm_campaign=h  eadline&cmpId=yhoo.headline&yptr=yahoo

----------


## Swordsmyth

*OPEC and company get desperate:*

*Oil markets need regulator in face of speculators - Eni CEO*


Eni  CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position  to push prices higher by cutting output, adding that geopolitical  tensions, growing U.S. shale oil production and heavy speculation in  crude futures were hurting the sector.
"The  financial speculation is so strong that it has transformed even those  with long term strategies into short term investors," Descalzi was  quoted as saying.
"Perhaps  we should adopt in the oil sector the sort of regulations and market  controls that were imposed on banks. Banks have a central watchdog,  while in the past, our regulator was OPEC, which is no longer playing  the role it once had."
He  said hedge fund speculators no longer believed that the Organization of  the Petroleum Exporting Countries (OPEC) was in a position to introduce  radical output cuts.
Six  OPEC and non-OPEC ministers are due to meet on Monday in St Petersburg  to discuss the market outlook and review a global pact on reducing crude  supplies that was agreed this year.
Asked if he thought further cuts might be decided, Descalzi said: "I am not optimistic."

https://finance.yahoo.com/news/oil-m...151317599.html

----------


## Swordsmyth

*Saudi finance ministry says domestic sukuk program established*Saudi Arabia's ministry of finance said on Sunday  it had established a program to issue local currency Islamic bonds, as  the government covers a large budget deficit caused by low oil prices. The  ministry described the program as "unlimited" and said it would  announce on a case-by-case basis details such as the types of eligible  investors, the size of the issues and the expected profit rate.  
The  program has been submitted to the Capital Market Authority, the  ministry added without specifying when the first sukuk issue would take  place. 
Saudi commercial bankers told Reuters  they expected the first issue as soon as in the next few days and  believed 10 billion riyals ($2.7 billion) would be offered, which the  market could cope with easily since liquidity had improved since last  year and investors had been preparing for the issue. 

More at: http://www.reuters.com/article/us-sa...-idUSKBN1A807A

----------


## Swordsmyth

*OPEC’s No.2 Goes Rogue, Plans To Pump 5 Million Bpd*http://oilprice.com/Energy/Crude-Oil/OPECs-No2-Goes-Rogue-Plans-To-Pump-5-Million-Bpd.html

----------


## Swordsmyth

*Nigeria Ups Oil Output Despite Rampant Oil Theft*http://oilprice.com/Energy/Crude-Oil/Nigeria-Ups-Oil-Output-Despite-Rampant-Oil-Theft.html

----------


## Swordsmyth

*Falling Chinese Demand May Be OPEC’s Biggest Dilemma*http://oilprice.com/Energy/Oil-Prices/Falling-Chinese-Demand-May-Be-OPECs-Biggest-Dilemma.html

----------


## Swordsmyth

*Saudis To Take ‘Significant’ Measures To Bolster Oil Prices*http://oilprice.com/Energy/Oil-Prices/Saudis-To-Take-Significant-Measures-To-Bolster-Oil-Prices.html


If they do get prices up a little it will just bring on more NOPEC production to force them back down.

----------


## Swordsmyth

*Oil Prices Spike In Spite Of Bearish EIA Forecast*http://oilprice.com/Energy/Energy-General/Oil-Prices-Spike-In-Spite-Of-Bearish-EIA-Forecast.html

----------


## Swordsmyth

*Libya: Rival Leaders Agree To Cease-Fire*Meeting in Paris on July 25, two of Libya's key actors – Government of  National Accord Prime Minister Fayez al-Sarraj and Libyan National Army  Field Marshall Khalifa Hifter – have agreed to a cease-fire and to  holding elections in 2018, AFP reported.

https://worldview.stratfor.com/situa...ree-cease-fire

----------


## Swordsmyth

*The Next Big Catalyst In The U.S. Oil Export Boom*http://oilprice.com/Energy/Energy-General/The-Next-Big-Catalyst-In-The-US-Oil-Export-Boom.html

----------


## Swordsmyth

*Saudi Arabia Growing Nervous Over OPEC Compliance*http://oilprice.com/Energy/Oil-Prices/Saudi-Arabia-Growing-Nervous-Over-OPEC-Compliance.html

----------


## Swordsmyth

*Nigeria is now saying that “era of oil booms” may be over—for good.

*
*Its expectations are that oil prices will hover near $45 per barrel “for  the foreseeable future”, necessitating a shift towards diversifying its  economy and develop its own refining and petrochemical sectors.

*
“The most realistic line of action for any nation with oil as the  backbone of its economy is to diversify, because indices strongly point  to the possibility that the era of oil booms may be over for good”, said  the policy.
In  accordance with this 112-page policy document, the other aim of  Africa’s second biggest oil producer is to reduce the cost of extracting  oil, which now stands at $29 per barrel and as such, is “one of the  highest” costs per barrel in the world.

http://www.zerohedge.com/news/2017-0...ology-industry

*


*

----------


## Swordsmyth

*Shell Prepares For ‘Lower Forever’ Oil Prices*http://oilprice.com/Energy/Energy-General/Shell-Posts-700-Rise-In-Earnings-Prepares-For-Lower-Forever-Oil-Prices.html

----------


## Swordsmyth

*JBC Energy: Oil to drop below $40 in 2018*.

Unless OPEC makes deeper production cuts, oil prices are in danger of  falling below $40 per barrel in the first quarter of next year,  according to JBC Energy GmbH. The consultancy sees oil prices trading  between $45 and $47 later this year, but then it gets “very tricky,” as  demand slows. “If OPEC stays the same and we have the same output  restrictions even in the first quarter, we’re looking at a lot of  surplus in the market,” Richard Gorry, managing director at JBC Asia,  told Bloomberg. “To really tighten the market, OPEC will have to cut more, and I don’t know if they want to do that.”
*
The oil industry has given the greenlight to more oil and gas projects in the first half of 2017 than all of last year.* According data from Wood Mackenzie, cited by  the FT.

 Also, average development costs are down 40 percent since 2014,  making now a good time to invest. “The industry took a while to get its  collective mind around the idea of ‘lower for longer’ and now people  are getting used to lower for even longer,” Readul Islam, analyst at  Rystad Energy, told the FT. There were 15 large conventional oil and gas  projects that moved forward in the first six months of 2017,  encompassing 8 billion barrels of oil equivalent, compared to just 12  projects in all of last year, which covered 8.8 billion barrels.

http://oilprice.com/Energy/Oil-Price...stainable.html

----------


## Swordsmyth

*The number of active oil rigs in the United States rose this week by 2 rigs.*

http://oilprice.com/Energy/Energy-Ge...ces-Climb.html

----------


## Swordsmyth

*Gulf Of Mexico Growth Second Only To Permian*http://oilprice.com/Energy/Energy-General/Gulf-Of-Mexico-Growth-Second-Only-To-Permian.html

----------


## Swordsmyth

*Waning OPEC Compliance Threatens Oil Price Rally*Analysts cut yet again—for a sixth consecutive month—their oil price  forecasts for 2017 and 2018, as the slower-than-expected rate of oil  market rebalancing puts an increasing amount of pressure on OPEC’s  resolve to stick with the cuts, according to 33 economists and analysts  surveyed in the July Reuters poll.
According  to the survey, Brent crude prices are seen averaging US$52.45 per  barrel this year, lower than the US$53.96 forecast in the June poll.
For WTI, the experts now expect the price to average US$50.08 in 2017, compared to US$51.92 in the June poll.
Analysts  and economists also cut their 2018 price projections, with Brent seen  averaging US$54.51 next year, down from US$57.37 in the previous poll.  WTI price is expected to average US$51.88 next year, a significant  downward revision from the US$55.20 predicted in June.
Earlier this month, the International Energy Agency (IEA) said that the rebalancing was taking too long,  and that compliance among OPEC members slipped in June to its lowest  level—78 percent—since the start of the deal, as not only exempt Libya  and Nigeria pumped more, but also Saudi Arabia. Although OPEC’s biggest  producer stayed within the limits, according to OPEC’s secondary  sources, it did not overcomply with its share of the cuts as much as it  had done in previous months. 

http://oilprice.com/Energy/Oil-Price...ice-Rally.html

----------


## Swordsmyth

*Europe’s Largest Oil Refinery Shuttered For Weeks*http://oilprice.com/Latest-Energy-News/World-News/Europes-Largest-Oil-Refinery-Shuttered-For-Weeks.html


*Oil Prices Slammed After API Reports Surprise Build In Crude Inventories*http://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Slammed-After-API-Reports-Surprise-Build-In-Crude-Inventories.html


*Oil Prices Slip As OPEC Oil Exports Creep Higher*http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Slip-As-OPEC-Oil-Exports-Creep-Higher.html

----------


## Swordsmyth

*Special Rules Won’t Fly For Aramco IPO*http://oilprice.com/Latest-Energy-News/World-News/Special-Rules-Wont-Fly-For-Aramco-IPO.html

----------


## Swordsmyth

*U.S. Shale Heavyweights To Boost Production This Year*http://oilprice.com/Energy/Crude-Oil/US-Shale-Heavyweights-To-Boost-Production-This-Year.html

----------


## Swordsmyth

*Disappointing Crude Draw & Production Surge*http://www.zerohedge.com/news/2017-08-02/wti-slides-after-disappointing-crude-draw-production-surge

----------


## Swordsmyth

*Shale Producers Hedge At Much Lower Prices*http://oilprice.com/Energy/Energy-General/Shale-Producers-Hedge-At-Much-Lower-Prices.html

----------


## Swordsmyth

*Oil Prices Fall As OPEC Output Hits ‘’Year-To-Date High’’*http://oilprice.com/Energy/Energy-General/Oil-Prices-Fall-As-OPEC-Output-Hits-Year-To-Date-High.html

----------


## Swordsmyth

*Are Strong U.S. Crude Inventory Draws Sustainable?*http://oilprice.com/Energy/Oil-Prices/Are-Strong-US-Crude-Inventory-Draws-Sustainable.html

----------


## Swordsmyth

*UAE Seeks To Raise Oil Output To 3.5 Million Bpd In 2018*http://oilprice.com/Latest-Energy-News/World-News/UAE-Seeks-To-Raise-Oil-Output-To-35-Million-Bpd-In-2018.html

----------


## Swordsmyth

*China’s Crude Imports Drop To 7-Month Low*http://oilprice.com/Energy/Oil-Prices/A-Red-Flag-For-Oil-Chinas-Crude-Imports-Drop-To-7-Month-Low.html

----------


## Swordsmyth

*OPEC Deal In Jeopardy As Exempted Nations Boost Output*http://oilprice.com/Energy/Oil-Prices/OPEC-Deal-In-Jeopardy-As-Exempted-Nations-Boost-Output.html


*Indian Oil Obtains Govt Approval To Import U.S. Oil Every Month*http://oilprice.com/Latest-Energy-News/World-News/Indian-Oil-Obtains-Govt-Approval-To-Import-US-Oil-Every-Month.html

----------


## Swordsmyth

*OPEC/Non-OPEC Overproduce 470,000 Bpd Above Commitment*http://oilprice.com/Latest-Energy-News/World-News/OPECNon-OPEC-Overproduce-470000-Bpd-Above-Commitment.html


*Oil Rig Count Rises Despite Ballooning Shale Debt*http://oilprice.com/Energy/Crude-Oil/Oil-Rig-Count-Rises-Despite-Ballooning-Shale-Debt.html


*Saudi Arabia: Deeper Cuts Are Still On The Table*http://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Deeper-Cuts-Are-Still-On-The-Table.html

----------


## Swordsmyth

*Brazil’s Pre-Salt Extraction Costs Fall To $8 Per Barrel*http://oilprice.com/Energy/Crude-Oil/Brazils-Pre-Salt-Extraction-Costs-Fall-To-8-Per-Barrel.html

----------


## Swordsmyth

*Oil Prices Slip As Chinese Crude Demand Loses Momentum*http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Slip-As-Chinese-Crude-Demand-Loses-Momentum.html


*OPEC Reference Basket Oil Price Drops By $1.33 In One Day*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Reference-Basket-Oil-Price-Drops-By-133-In-One-Day.html

----------


## Swordsmyth

*Aramco IPO Value May Be Much Lower Than Expected*http://oilprice.com/Latest-Energy-News/World-News/Aramco-IPO-Value-May-Be-Much-Lower-Than-Expected.html

----------


## Swordsmyth

*Oil Prices Fall To 3-Week Lows On Flurry Of Bearish News*http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Fall-To-3-Week-Lows-On-Flurry-Of-Bearish-News.html


*EIA Predicts US Shale Output Up By 117,000 BPD In September*http://oilprice.com/Latest-Energy-News/World-News/EIA-Predicts-US-Shale-Output-Up-By-117000-BPD-In-September.html

----------


## Swordsmyth

The latest report from the Paris-based IEA, published on Friday, is a  nasty shock. _It has just found another 230 million barrels of oil in  storage_ that will need to be drained before balance is restored.

https://www.bloomberg.com/gadfly/art...panic-stations

----------


## Swordsmyth

*Libya Boosts Oil Output At Biggest Field*http://oilprice.com/Energy/Crude-Oil/Libya-Boosts-Oil-Output-At-Biggest-Field.html

----------


## Swordsmyth

*WTI/RBOB Slide After Oil Production Surge Offsets Biggest Crude Draw Since Sept*Following last night's mixed mesage from API (crude draw, gasoline  build), WTI prices have gone nowhere as all eyes focus on DOE data this  morning. Confirming API's trend, *crude saw its biggest draw since Sept 2016* but *Gasoline, Distillates, and Cushing (most since March) saw builds* which upset the machines and sent prices lower. *Crude production rose once again to its highest since July 2015.

*More at: http://www.zerohedge.com/news/2017-0...rude-draw-sept

----------


## Swordsmyth

*Russia Claims To Have Invented Alternative To Fracking*Russian scientists and local oil field services companies claim to  have created a technology for thermochemical gas fracturing that could  be an alternative to hydraulic fracturing and could increase oil  production by between 1.7 and 6 times, Russia’s news agency RIA Novosti reports, citing the University of Tyumen’s press service.
In  hydraulic fracturing, rocks are fractured with high-pressure injection  of fluids, while the new breakthrough technology, as claimed by Russian  scientists and media, is creating chemical reactions in the strata that contain oil.
The  chemicals react and emit heat and gas, which makes extraction easier  and lifts well productivity, according to the scientists and  researchers.
The other upside in  the technology, the Russians claim, is that the main component in the  chemical reactions is ammonium nitrate, which is often used as  fertilizer.


http://oilprice.com/Energy/Crude-Oil...-Fracking.html

----------


## acptulsa

> The  chemicals react and emit heat and gas, which makes extraction easier  and lifts well productivity, according to the scientists and  researchers.
> The other upside in  the technology, the Russians claim, is that the main component in the  chemical reactions is ammonium nitrate, which is often used as  fertilizer.


Heat and ammonium nitrate produce nitrous oxide.

Sounds like a painless process.  Not 'green', but painless.

----------


## Swordsmyth

*Citi: U.S. Shale Beats OPEC At $40 Oil*http://oilprice.com/Energy/Energy-General/Citi-US-Shale-Beats-OPEC-At-40-Oil.html

----------


## Swordsmyth

*New Congo Govt Eyes 25% Oil Output Boost By Next Year*http://oilprice.com/Energy/Crude-Oil/New-Congo-Govt-Eyes-25-Oil-Output-Boost-By-Next-Year.html

----------


## Swordsmyth

*Fracking Old Wells Dropping U.S. Breakeven Points Further*Now OPEC is faced with another challenge from the American oil  industry: Using state-of-the-art fracking technology, oil producers are  going back to old wells that have been closed for years either to  restart production or to retap them deeper to gain access to oil never  touched using old technology. And that’s bringing breakeven points down  to $30, $20, and even $10 a barrel.
 As the _Wall Street Journal_ pointed out on Sunday, oil  companies are applying fracking technology in century-old oil fields  with reserves being found and brought to the surface at far less cost.  For instance, rehabbing an old well costs less than $1 million, compared  to $6 to $8 million for a new one. And since the pipelines and storage  facilities are still in place, they can be profitable even if crude oil  prices drop to as low as $10 a barrel. Lynn Cook wrote this for the_ Journal:

_More at: https://www.thenewamerican.com/tech/...points-further

----------


## Anti Federalist

WTI at $47...

Good for America, but it's *killing* me personally.

----------


## Swordsmyth

> WTI at $47...
> 
> Good for America, but it's *killing* me personally.


Sorry to hear that.

It will get worse when OPEC breaks.

It may get better if the oil countries start to collapse or go to war.

----------


## Anti Federalist

> Sorry to hear that.
> 
> It will get worse when OPEC breaks.


Very likely.




> It may get better if the oil countries start to collapse or go to war.


_Unlikely_, unless they go full communist retard like Venezuela and give up producing oil and generating wealth and instead decide to become super-egalitarians and sit around eating zoo animals.

But I suspect that will happen *here* first, when fat tattooed lesbians with iridescent blue buzz cuts and their orbiting manginas try to figure out how the $#@! to run an oil refinery after they "smash the patriarchy".

No, assuming that war doesn't destroy the infrastructure or it is destroyed by the screeching mob of retardation, the collapsed states will pump every drop they can trying to get back on their feet or secure a tactical advantage.

Thus driving prices even lower.

----------


## Swordsmyth

> Very likely.
> 
> 
> 
> _Unlikely_, unless they go full communist retard like Venezuela and give up producing oil and generating wealth and instead decide to become super-egalitarians and sit around eating zoo animals.
> 
> But I suspect that will happen *here* first, when fat tattooed lesbians with iridescent blue buzz cuts and their orbiting manginas try to figure out how the $#@! to run an oil refinery after they "smash the patriarchy".
> 
> No, assuming that war doesn't destroy the infrastructure or it is destroyed by the screeching mob of retardation, the collapsed states will pump every drop they can trying to get back on their feet or secure a tactical advantage.
> ...


If they go to war they will target eachother's oilfields.

----------


## Swordsmyth

*Oil Prices Slip After API Reports Build In Gasoline Inventories*http://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Slip-After-API-Reports-Build-In-Gasoline-Inventories.html

----------


## Swordsmyth

*Oil prices fall on concerns of oversupply as Libyan output recovers*https://ca.finance.yahoo.com/news/oil-prices-fall-concerns-oversupply-low-investment-011226882--finance.html

----------


## Swordsmyth

*Forget OPEC, China Controls Oil Prices*China has been building a strategic crude oil reserve for the last  decade, but the size of that reserve remains undisclosed, with analysts  making estimates based on China-bound cargoes and satellite imaging.
Last year, a Silicone Valley tech company, Orbital Insight, suggested that China may have stored as much as 600 million barrels  of crude by May. This was the highest reserve estimate at the time.  Since then, the reserve has in all likelihood grown, possibly exceeding  the U.S. SPR, which stood at 678.9 million barrels as of August 18th this year.

This year, Chinese crude imports have run at record-breaking rates, with  the average daily on par with what the U.S. imports, at about 8 million  barrels, the Financial Times notes in an analysis.  A lot of these, however, are going into storage tanks, analysts  believe, and they warn that soon the tanks may fill up, wreaking havoc  on prices and--more notably--on OPEC.

More at: http://oilprice.com/Energy/Energy-Ge...il-Prices.html

----------


## Swordsmyth

*US Crude Production Hits 25-Month Highs Despite Stabilization In Rig Count*http://www.zerohedge.com/news/2017-08-25/us-crude-production-hits-25-month-highs-despite-stabilization-rig-count

----------


## goldenequity

Royal Dutch Shell said on Sunday that it was shutting down its Deer Park Refinery, with a capacity of 340,000 barrels per day.
CNBC can also confirm that Exxon Mobil's Baytown, Texas, plant (560,000 b/d) is shut down.
Overall, expect more than 1 million barrels per day offline just from the Houston/Galveston area.
The BSEE says that almost 22 percent of current oil production from the Gulf of Mexico has been shut-in.

----------


## Swordsmyth

*UAE Pledges More Cuts To Meet OPEC Commitment*http://oilprice.com/Latest-Energy-News/World-News/UAE-Pledges-More-Cuts-To-Meet-OPEC-Commitment.html

----------


## Swordsmyth

*The New Thing in Chinese Oil? America*
Expect the U.S. ranking to gain further ground as producers look for  outlets for rising volumes of production, even while the U.S. itself  remains a net importer of crude. That may be sweet music to the ears of  President Donald Trump, with rising oil sales helping to reduce the  trade deficit with China.
But it will not be so comfortable for  OPEC countries, who have long seen China and other emerging Asian  countries as their core markets. Nor is it helping to drain global  stockpiles. While the volume in storage in the U.S. is coming down, the  volume held in China is still rising. Commercial stockpiles of crude and  refined products in China have risen by 16.5 million barrels, or 5  percent, since the beginning of the year. Strategic stockpiles, which  are not reported, have also almost certainly increased too. Not exactly  the rebalancing OPEC is trying to achieve.

More at: https://www.bloomberg.com/gadfly/art...market-america

----------


## Swordsmyth

*Russia And Saudi Arabia Plan To Extend Outputs Cuts Through June*Oil producers in Russia and Saudi Arabia are pushing to extend the  Organization of Petroleum Exporting Countries’ (OPEC) production cuts  until June of next year, according to a new report by The Wall Street Journal.
The deal, which lowers the bloc’s output by 1.2 million barrels per day, is already set to extend until March 2018.
Saudi  Oil Minister Khalid al-Falih and his Russian counterpart Alexander  Novak met to discuss the potential extension last month in St.  Petersburg. No clear decision has been reached since then, but both  parties are rumored to be urging other OPEC members to back extending  the cuts yet again.
According to energy and commodities analysts,  a three-month extension would be a logical step to take in the autumn  when the oil market sentiment would likely sour again. An extension to  June 2018 would also prevent a “severe uptick” in surplus after March  next year, as Michael Cohen, head of energy commodities analysis for  Barclays, told Platts.
According to Joe McMonigle, senior energy  policy analyst at Hedgeye Potomac Research, an extension at the November  meeting would be the minimum action OPEC would take.
“The market will be looking for stronger action, like deeper cuts,” McMonigle noted.

More at: http://oilprice.com/Latest-Energy-Ne...ough-June.html

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## Swordsmyth

*Will This Bring Big Oil Back To The Bakken?*One other thing besides reserves should make North Dakota more appealing  for oil and gas players: the notorious Dakota Access pipeline started operations  in June, replacing the costlier railways, which carried as much as a  quarter of the Bakken output to refineries. Now, three-quarters of North  Dakota oil is carried by pipelines. With its extensive infrastructure  in place, what the state needs may indeed be a little push from the USGS  with new data about its recoverable reserves. As long as the data is  positive.

More at: http://oilprice.com/Energy/Crude-Oil...he-Bakken.html

----------


## Swordsmyth

*Hurricane Harvey Is A Disaster For OPEC*http://oilprice.com/Energy/Crude-Oil/Hurricane-Harvey-Is-A-Disaster-For-OPEC.html

----------


## Swordsmyth

*Oil Prices Slide Despite Falling OPEC Exports*Saudi Arabia stuck to its promise to further cut crude oil exports in  August to 6.6 million bpd, bringing OPEC’s total for the month to  25.897 million barrels daily, energy data provider Kpler reported. All  but five of OPEC’s members cut their daily shipments abroad. The notable  exceptions were Algeria, Angola, Iran, Kuwait, and Nigeria. For Iran  and Nigeria, August marked the highest daily export rate year-to-date.
Despite the decline in OPEC crude oil exports, oil prices continue to falter, with WTI losing 6 percent over the month of August.

http://oilprice.com/Energy/Crude-Oil...C-Exports.html

----------


## Swordsmyth

*The number of active oil and gas rigs in the United States rose this week by 3 rigs
*
http://oilprice.com/Energy/Energy-Ge...ne-Harvey.html

----------


## Swordsmyth

*Offshore Gulf should be close to full capacity by mid-next week, BSEE says*Offshore oil and gas production in the Gulf Mexico should be back and  running at close to full capacity by the middle of next week, Lars  Herbst, regional director for the Bureau of Safety and Environmental  Enforcement said Friday.
 "There's been no substantial damage reported so far," he said in an  interview. "By the middle part of next week we anticipate substantially  all of the production to be back online."

As Hurricane Harvey moved across the Gulf of Mexico last week,  oil companies evacuated crews from offshore platforms in the storm's  path and shut in wells as a precautionary measure.
 In recent days, that production has been steadily coming back online.

More at: http://www.chron.com/business/energy...twitter-tablet

----------


## goldenequity

*De-Dollarization Accelerates: China Readies Yuan-Priced Crude Oil Benchmark Backed By Gold
http://www.zerohedge.com/news/2017-0...mark-backed-go*

The world’s top oil importer, China, is preparing to launch a crude oil futures contract 
denominated in Chinese yuan and convertible into gold, 
potentially creating the most important Asian oil benchmark 
and allowing oil exporters to bypass U.S.-dollar denominated benchmarks 
by trading in yuan, Nikkei Asian Review reports.

The crude oil futures will be the first commodity contract in China open to foreign investment funds, trading houses, and oil firms. 

*The circumvention of U.S. dollar trade could allow oil exporters such as Russia and Iran, for example, 
to bypass U.S. sanctions by trading in yuan, according to Nikkei Asian Review.*

To make the yuan-denominated contract more attractive, 
China plans the yuan to be fully convertible in gold on the Shanghai and Hong Kong exchanges.

*“It is a mechanism which is likely to appeal to oil producers 
that prefer to avoid using dollars, 
but are not ready to accept 
that being paid in yuan for oil sales to China 
is a good idea either,”* 
Alasdair Macleod, head of research at Goldmoney, told Nikkei.

----------


## Swordsmyth

> *De-Dollarization Accelerates: China Readies Yuan-Priced Crude Oil Benchmark Backed By Gold
> http://www.zerohedge.com/news/2017-0...mark-backed-go*
> 
> The world’s top oil importer, China, is preparing to launch a crude oil futures contract 
> denominated in Chinese yuan and convertible into gold, 
> potentially creating the most important Asian oil benchmark 
> and allowing oil exporters to bypass U.S.-dollar denominated benchmarks 
> by trading in yuan, Nikkei Asian Review reports.
> 
> ...


We will see if anything comes of it.

It won't save OPEC and the Saudis in any case.

----------


## Swordsmyth

*OPEC Deal Could Be Extended Beyond March 2018*The crude oil production cut deal that OPEC, Russia, and several  other producers agreed to late last year could get yet another  extension. This extension would push the deal beyond the March 31, 2018  end date that was agreed earlier this year, according to Russia’s Energy  Minister Alexander Novak, speaking to news agency TASS.
Novak  said he had discussed another extension with his Saudi counterpart,  Khalid al-Falih, at a meeting in Saint Petersburg earlier this year,  noting that all options are on the table and no decisions have been made  yet.
The official’s comments helped to boost oil  prices today, especially as they came on the heels of comments from  Iran’s Oil Minister, Bijan Zanganeh, who said Monday that compliance  with the cuts among OPEC members was improving and the market was  returning to balance. Media also quoted Zanganeh as saying discussions  on the future of the deal were ongoing.
Russia’s  Energy Minister has been consistently guarded in his comments regarding  the deal ever since the idea was floated last year. We’re unlikely to  see anything more specific than such guarded comments, suggestions, and  speculation until OPEC’s next meeting, due to take place in November. 

More at: http://oilprice.com/Energy/Oil-Price...arch-2018.html

----------


## Swordsmyth

*Oil Output From UK North Sea Startups Highest In 10 Years*A total of 14 startups with a combined production of 230,000 bpd are  expected to come on stream in the UK section of the North Sea this year,  the highest yearly new oil output in ten years, Bloomberg reported on Monday, citing data by energy consultancy Wood Mackenzie.
The projects are the result of the high investments in this mature basin that were made before the 2014 oil price crash.

More at: http://oilprice.com/Latest-Energy-Ne...-10-Years.html

----------


## Swordsmyth

*OPEC Fails To Cut Oil Exports Below 2016 Levels*http://oilprice.com/Energy/Oil-Prices/OPEC-Fails-To-Cut-Oil-Exports-Below-2016-Levels.html

----------


## Swordsmyth

*Largest Libyan Oilfield Back Online After Armed Assault*http://oilprice.com/Latest-Energy-News/World-News/Largest-Libyan-Oilfield-Back-Online-After-Armed-Assault.html

----------


## Swordsmyth

*Venezuela Calls For Renegotiation Of OPEC Deal*High global oil inventories necessitate a renegotiation of the OPEC  production cut deal from last November, according to Venezuelan oil  minister Eulogio Del Pino.
Del Pino told reporters at an energy conference in Kazakhstan that inventories remained roughly 300 million barrels higher than normal levels.
“Those  300 million barrels are going to impact speculation in the market,” he  said. “It (the level of inventories) is still very high.”
Libya  and Nigeria, two African countries that received exemptions from the  OPEC agreement due to long periods of civil strife, should be put under  quotas as well, the minister said. Meetings with ministers from the  Middle East and Russia are planned for the near future, he added. Moscow  and Riyadh agree that the cuts should continue till June 2018, but the current measures only extend until March.
Low  oil revenues from three years of depressed oil markets have made it  difficult for Caracas to import goods for its citizens, who are facing  mass shortages in food and medical supplies. In the meantime, the United  States is toughening its stance against President Nicolas Maduro’s  regime.

More at: http://oilprice.com/Latest-Energy-Ne...OPEC-Deal.html

----------


## Swordsmyth

*Niger Delta Militants Rescind Threat Against Oil Majors*http://oilprice.com/Latest-Energy-News/World-News/Niger-Delta-Militants-Rescind-Threat-Against-Oil-Majors.html

----------


## Swordsmyth

*Russia’s Rosneft Expects $40 Oil In 2018*http://oilprice.com/Energy/Oil-Prices/Russias-Rosneft-Expects-40-Oil-In-2018.html


*Harvey, Irma Cause 900,000 Bpd Drop In Demand*http://oilprice.com/Energy/Energy-General/Goldman-Harvey-Irma-Cause-900000-Bpd-Drop-In-Demand.html

----------


## Swordsmyth

*Saudi Arabia Says It's Open to Another OPEC Cuts Extension*http://www.rigzone.com/news/oil_gas/a/151691/Saudi_Arabia_Says_Its_Open_to_Another_OPEC_Cuts_Ex  tension?rss=true&yptr=yahoo

----------


## Swordsmyth

*Saudi Aramco Boosts Crude Oil Stockpiles In Japan*http://oilprice.com/Latest-Energy-News/World-News/Saudi-Aramco-Boosts-Crude-Oil-Stockpiles-In-Japan.html

----------


## Swordsmyth

*OPEC members disclosed an 83% compliance rate with the production cuts, down from last month's 86%.

*http://www.zerohedge.com/news/2017-09-12/opec-oil-output-posts-first-drop-4-months-production-cut-compliance-slides

----------


## Swordsmyth

*India Sees Lowest Fuel Demand Growth In 14 Years*http://oilprice.com/Latest-Energy-News/World-News/India-Sees-Lowest-Fuel-Demand-Growth-In-14-Years.html


*Russia Pushing Saudi Arabia Out Of Asia*http://oilprice.com/Energy/Energy-General/Is-Russia-Pushing-Saudi-Arabia-Out-Of-Asia.html

----------


## Swordsmyth

*Saudis Prepare for Possible Aramco IPO Delay to 2019*Saudi Arabia  is preparing contingency plans for a possible delay to the initial  public offering of its state-owned oil company by a few months into  2019, according to people familiar with the matter.While the government is still aiming for a Saudi Aramco  IPO in the second half of next year, that timetable is increasingly  tight for what’s likely to be the biggest share sale in history, the  people said, asking not to be named discussing internal deliberations.
Saudi  Aramco said in statement the IPO "remains on track. The IPO process is  well underway and Saudi Aramco remains focused on ensuring that all IPO  related work is completed to the very highest standards on time.” It  didn’t give a timeframe. The comment was echoed by a Saudi government  source Wednesday. Officials have previously said the most likely  schedule is the second half of next year.
                  Several important decisions on the IPO have yet to be taken,  stretching the ability of the company and its advisers to sell shares  before the end of next year.
For  example, Saudi Arabia has yet to announce where it will sell shares in  Aramco other than the domestic stock exchange in Riyadh. The country may  not to make an announcement until late October, when it’s holding a big  investment conference in Riyadh. The delay in selecting a foreign  exchange, mostly likely London or New York, has had a knock-on effect on  other preparatory work.

More at: https://www.bloomberg.com/news/artic...-delay-to-2019

----------


## Swordsmyth

Alberta Premier Rachel Notley cut the ribbon that marked the official  opening of an oil sands expansion project near Fort McMurray on  Wednesday. The new project is expected to produce 20,000 bpd of oil by  mid-2018, thanks to a US$1.64 billion (2 billion Canadian dollars)  investment.

http://oilprice.com/Energy/Crude-Oil...ands-Boom.html

----------


## Swordsmyth

*Saudi Arabia wants oil exports monitored, not just production*.  While OPEC members have cut some 1.2 million barrels of production over  the past year (plus a little less than 0.6 mb/d from non-OPEC members),  that has not actually translated to the same reduction in exports. In  fact, oil exports from the participating countries remain elevated,  undercutting the efficacy of the agreement. The Wall Street Journal says  that although OPEC agreed to cut output by 1.2 mb/d, exports have only  declined by 213,000 bpd, as countries sell product from storage or  otherwise reduce consumption to leave more oil for export. Saudi Arabia  now wants to change that and its officials are pushing  for OPEC to monitor country-level exports at its upcoming meeting on  September 22. “The level of exports is the only measurement markets care  about,” John Hall, chairman of U.K. consulting firm Alfa Energy, told  the WSJ in an interview. “So cutting them will definitely boost oil  prices.” Still, many OPEC members will probably resist the initiative.  Saudi Arabia has already unilaterally started to reduce exports in an  effort to provide a jolt to the market.

http://oilprice.com/Energy/Energy-Ge...-Recovery.html

----------


## Swordsmyth

Saudi Arabia is said to be studying raising gasoline prices by the  end of 2017 to bring them to parity with international prices—which  would mean a rise of about 80 percent for octane-91 grade gasoline  compared to current prices. A decision is expected this month or next,  Bloomberg quoted the person with knowledge of the issue as saying.According  to Bloomberg’s source, the Saudis are planning a one-time hike of  gasoline and jet fuel by the end of this year, while other fuel prices  would be gradually increased between 2018 and 2021.
The  Saudi authorities could cap increases of diesel and heavy fuel oil  prices to spare the economy, as those fuels are heavily used in industry  and power generation.

According to the International Monetary Fund (IMF), Saudi Arabia’s  non-oil growth is expected to pick up to 1.7 percent in 2017, but  overall real GDP growth is seen close to zero as oil GDP declines in line with Saudi Arabia’s pledge to reduce production as part of the OPEC/non-OPEC output cut deal.

More at: http://oilprice.com/Energy/Gas-Price...Subsidies.html

----------


## Swordsmyth

*Shale producers pumping more oil despite Hurricane Harvey*http://www.chron.com/business/energy/article/Shale-producers-pumping-more-oil-despite-12206692.php

----------


## Swordsmyth

Iran’s crude oil production is expected to grow to 4 million bpd by  the end of the current Iranian year, March 20, 2018, the chief executive  of the National Iranian Oil Company (NIOC), Ali Kardor, told Iran’s  news agency Tasnim on Tuesday.
Iran  is currently pumping over 3.8 million bpd of oil, the manager added.  Exports of crude oil and gas condensates now exceed 2.6 million bpd, but  are further expected to increase as the country plans to raise its  output in the second half this year and in early 2018.
OPEC’s  third-largest producer, Iran, is not reducing production under the OPEC  output cut deal. The country has argued in the talks that it needed to  restore the market share which it had lost to Western sanctions on its  oil exports. Still, under the OPEC agreement,  it is supposed to be keeping a cap on its output at just below 3.8  million bpd. Over the summer months, Iran produced just over 3.8 million  bpd, according to OPEC’s secondary sources.
Earlier this month, NIOC’s Kardor said that Iran planned to increase its crude oil production to 4.5 million bpd by 2022, according to Iran’s oil ministry’s news service, Shana.

Iran’s crude oil exports are seen rising to 2.5 million bpd within five years, the manager noted.

http://oilprice.com/Energy/Crude-Oil...roduction.html

----------


## Swordsmyth

*Iraq Sees No Need For Further OPEC Oil Output Cuts*http://oilprice.com/Energy/Energy-General/Iraq-Sees-No-Need-For-Further-OPEC-Oil-Output-Cuts-Now.html

----------


## Swordsmyth

*Sudan, South Sudan Sign Deal To Boost Oil Output*http://oilprice.com/Latest-Energy-News/World-News/Sudan-South-Sudan-Sign-Deal-To-Boost-Oil-Output.html

----------


## Swordsmyth

*North Sea Oil Sees Investment Rush*The influx of new E&Ps will continue, the OGA believes, estimating  that a third of total North Sea oil production by the end of 2018 will  come from fields where operation started this year.

http://oilprice.com/Energy/Energy-Ge...ment-Rush.html


*Expect A Major Leap In U.S. Oil Exports*The discount for WTI relative to Brent is at its widest point in more  than two years at nearly $6 per barrel, only slightly down from earlier  this month. That makes sense – there is something of a surplus trapped  within the U.S., while supplies are much tighter internationally.

That wide disparity between Brent and WTI probably won’t last because  U.S. crude is now incredibly competitive, and will likely be snatched up  by buyers around the globe. “The export window is wide open,” Michael  Wittner, global head of oil research at Société Générale, told the Wall Street Journal.

The cost of transport has to be factored in, a matter of a couple of  dollars per barrel. But that spread looks wide enough to make U.S. crude  worth the trouble. “Get to a $4 spread and you can take it anywhere in  the world," R.T. Dukes, an oil expert with Wood Mackenzie, said in an  interview with the WSJ. The WSJ said that Occidental Petroleum has seen  an uptick in exports recently, inking new deals with buyers in South  Korea, India and China. 
Exports were interrupted in the immediate aftermath of Harvey, falling from 900,000 bpd  at the end of August to just 153,000 bpd in the first week of  September. But exports have quickly ramped up as facilities have come  back online – exports averaged 928,000 bpd in the week ending on  September 15.


Some analyst see those figures going much higher. The highest weekly  total for U.S. exports was only about 1.3 mb/d, a one-off occurrence  back in May. But the Brent-WTI spread, widening to nearly $6 per barrel,  could result in a temporary surge in exports. Stephen Wolfe, an analyst  at oil trader Trafigura Group, told the WSJ that the U.S.’ max export  capacity is probably around 1.8 mb/d. “We’re going to really test that  number over the next few weeks, because we have excess barrels we need  to move out,” Stephen Wolfe told the WSJ.


http://oilprice.com/Energy/Crude-Oil...l-Exports.html

----------


## Swordsmyth

*OPEC Talks End Without Recommendation On Output Cut Extension*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Talks-End-Without-Recommendation-On-Output-Cut-Extension.html

----------


## Swordsmyth

*Eagle Ford Sees Surge In Production*http://oilprice.com/Energy/Energy-General/Eagle-Ford-Sees-Surge-In-Production.html

----------


## Swordsmyth

*Chevron To Invest $4B In Permian Production*http://oilprice.com/Latest-Energy-News/World-News/Chevron-To-Invest-4B-In-Permian-Production.html


*Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut*http://oilprice.com/Latest-Energy-News/World-News/Iran-Calls-On-OPEC-To-Sway-Libya-Nigeria-To-Join-Cut.html


*Cracks Emerge In OPEC-Russia Oil Output Cut Pact*http://oilprice.com/Latest-Energy-News/World-News/Cracks-Emerge-In-OPEC-Russia-Oil-Output-Cut-Pact.html

----------


## Swordsmyth

*Libya Is Preparing To Ramp Up Oil Production*http://oilprice.com/Latest-Energy-News/World-News/Libya-Is-Preparing-To-Ramp-Up-Oil-Production.html


*Saudis Raise $12.5B To Plug Budget Deficit From Low Oil Prices*Saudi Arabia said  on Thursday that it had issued US$12.5 billion in three tranches of  notes, the second issue under its Global Medium-Term Note program, as  the desert Kingdom desperately tries to offset the budget deficit  incurred by the lower-for-longer oil prices.
The Saudi notes were  one tranche of US$3 billion maturing in 2023, a second tranche worth  US$5 billion due in 2028, and a third tranche of US$4.5 billion maturing  in 2047.
The issue—the largest  government bond sale from an emerging market country this year—drew  interest from international and local investors, with the order book  peaking at US$40 billion.
The debt sale was Saudi Arabia’s third tapping of international bond markets, after the huge US$17.5 billion  bond issue in October last year, which became the largest-ever emerging  market bond sale and attracted orders totaling nearly four times that  amount. In April, the Saudis raised US$9 billion in the first dollar-denominated international sukuk, or Islamic bond, sale, in which orders exceeded US$33 billion.

http://oilprice.com/Latest-Energy-Ne...il-Prices.html

----------


## Swordsmyth

*Oil Price Rally Accelerates Shale Boom In Argentina*http://oilprice.com/Energy/Crude-Oil/Oil-Price-Rally-Accelerates-Shale-Boom-In-Argentina.html

----------


## Swordsmyth

*US Oil Rig Count Rises Most In 3 Months*http://www.zerohedge.com/news/2017-09-29/us-oil-rig-count-rises-most-3-months

----------


## Swordsmyth

*Saudi Arabia threatened to quit OPEC*.
A Reuters  report revealed that Saudi Arabia threatened to quit OPEC last year  unless everyone signed on to production cuts. The aggressive move was  made with Saudi Aramco’s IPO in mind – Riyadh desperately wanted higher  oil prices to boost the valuation of the public offering. 

http://oilprice.com/Energy/Energy-Ge...Oil-Bulls.html

https://www.reuters.com/article/us-s...-idUSKCN1C31H0

----------


## Swordsmyth

*Trouble Is Brewing In The House Of Saud*A Gulf business source with intimate knowledge of the House of Saud,  having held a number of personal meetings with members, told Asia Times  that “the Fahd, Nayef, and Abdullah families, the descendants of King  Abdulaziz al Saud and his wife Hassa bin Ahmed al-Sudairi, are forming  an alliance against the ascendancy to the Kingship of the Crown Prince.” No wonder, considering that the ousted Crown Prince Mohammed bin  Nayef – highly regarded in the Beltway, especially Langley – is under  house arrest. His massive web of agents at the Interior Ministry has  largely been “relieved of their authority”. The new Interior Minister  is Abdulaziz bin Saud bin Nayef, 34, the eldest son of the governor of  the country’s largely Shi’ite Eastern Province, where all the oil is.  Curiously, the father is now reporting to his son. MBS is surrounded by  inexperienced thirty-something princes, and alienating just about  everyone else.
 Former King Abdulaziz set up his Saudi succession based on the  seniority of his sons; in theory, if each one lived to the same age all  would have a shot at the throne, thus avoiding the bloodletting  historically common in Arabian clans over lines of succession.
*Now, says the source, “a bloodbath is predicted to be imminent.”* Especially  because “the CIA is outraged that the compromise worked out in April,  2014 has been abrogated wherein the greatest anti-terrorist factor in  the Middle East, Mohammed bin Nayef, was arrested.” That may prompt  “vigorous action taken against MBS possibly in early October.” And it  might even coincide with the Salman-Trump get together.
*ISIS playing by the (Saudi) book* Asia Times’ Gulf business source stresses how “the Saudi economy is  under extreme strain based on their oil price war against Russia, and  they are behind their bills in paying just about all their contractors.  That could lead to the bankruptcy of some of the major enterprises in  Saudi Arabia. The Saudi Arabia of MBS features the Crown Prince buying a  US$600 million yacht and his father spending US$100 million on his  summer vacation, highlighted on the front pages of the New York Times  while the Kingdom strangles under their leadership.”
 MBS’s pet project, the spun-to-death Vision 2030, in theory aims to  diversify from mere oil profits and dependency on the US to a more  modern economy (and a more independent foreign policy).
That’s  completely misguided, according to the source, because “the problem in  Saudi Arabia is that their companies cannot function with their local  population and [are] reliant on expatriates for about 70% or more of  their staff. Aramco cannot run without expatriates. Therefore, selling  5% of Aramco to diversify does not solve the problem. If he wants a more  productive society, and less handouts and meaningless government jobs,  he has to first train and employ his own people.”
*The similarly lauded Aramco IPO, arguably the largest share  sale in history and originally scheduled for next year, has once again  been postponed – “possibly” to the second half of 2019, according to  officials in Riyadh. And still no one knows where shares will be sold;  the NYSE is far from a done deal.*
 In parallel, MBS’s war on Yemen, and the Saudi drive for regime  change in Syria and to reshape the Greater Middle East, have turned out  to be spectacular disasters. Egypt and Pakistan have refused to send  troops to Yemen, where relentless Saudi air bombing – with US and UK  weapons – has accelerated malnutrition, famine and cholera, and  configured a massive humanitarian crisis.
*The Islamic State project was conceived as the ideal tool to  force Iraq to implode. It’s now public domain that the organization’s  funding came mostly from Saudi Arabia. Even the former imam of Mecca has  publicly admitted ISIS’ leadership “draw their ideas from what is  written in our own books, our own principles.”

*
Which brings us to the ultimate Saudi contradiction.*  Salafi-jihadism is more than alive inside the Kingdom even as MBS tries  to spin a (fake) liberal trend (the “baby you can drive my car” stunt).* The  problem is Riyadh congenitally cannot deliver on any liberal promise;  the only legitimacy for the House of Saud lies in those religious  “books” and “principles.”
 In Syria, besides the fact that an absolute majority of the country’s population does not wish to live in a Takfiristan,  Saudi Arabia supported ISIS while Qatar supported al-Qaeda (Jabhat  al-Nusra). That ended up in a crossfire bloodbath, with all those  non-existent US-supported “moderate rebels” reduced to road kill.
 And then there’s the economic blockade against Qatar – another  brilliant MBS plot. That has only served to improve Doha’s relations  with both Ankara and Tehran. Qatari Emir Tamim bin Hamad Al Thani was  not regime-changed, whether or not Trump really dissuaded Riyadh and Abu  Dhabi from taking “military action.” There was no economic  strangulation: Total, for instance, is about to invest US$2 billion to  expand production of Qatari natural gas. And Qatar, via its sovereign  fund, counterpunched with the ultimate soft power move – it bought  global footballing brand Neymar for PSG, and the “blockade” sank without a trace.
*“Robbing their people blind”* In Enemy of the State, the latest Mitch Rapp thriller written by Kyle  Mills, President Alexander, sitting at the White House, blurts, *“the  Middle East is imploding because those Saudi sons of bitches have been  pumping up religious fundamentalism to hide the fact that they’re  robbing their people blind.” That’s a fair assessment.*
*No dissent whatsoever is allowed in Saudi Arabia.*  Even the economic analyst Isam Az-Zamil, very close to the top, has been  arrested during the current repression campaign. So opposition to MBS  does not come only from the royal family or some top clerics – although  the official spin rules that only those supporting Muslim Brotherhood,  Turkey, Iran and Qatari “terrorism” are being targeted.
*In terms of what Washington wants, the CIA is not fond of MBS, to say the least.* They want “their” man Nayef back. As for the Trump administration, rumors swirl it is “desperate for Saudi money, especially infrastructure investments in the Rust Belt.”
 It will be immensely enlightening to compare what Trump gets from Salman with what Putin gets from Salman: the ailing King will visit Moscow  in late October. Rosneft is interested in buying shares of Aramco when  the IPO takes place. Riyadh and Moscow are considering an OPEC deal  extension as well as an OPEC-non-OPEC cooperation platform incorporating  the Gas Exporting Countries Forum (GECF).
*Riyadh has read the writing on the new wall: Moscow’s rising  political / strategic capital all across the board, from Iran, Syria and  Qatar to Turkey and Yemen. 

*More at: http://www.zerohedge.com/news/2017-0...ing-house-saud

----------


## Swordsmyth

*Saudis See Economy Shrink In Spite Of Higher Oil Prices*http://oilprice.com/Energy/Energy-General/Saudis-See-Economy-Shrink-In-Spite-Of-Higher-Oil-Prices.html


*Survey Shows Spike In OPEC’s September Oil Production*http://oilprice.com/Energy/Crude-Oil/Survey-Shows-Spike-In-OPECs-Oil-Production-In-September.html

----------


## Swordsmyth

*Hardcore Wahhabis in Saudi Arabia have warned for generations  that allowing women to drive would be a very dangerous development for  the ultra-fundamentalist Kingdom, arguing that it would somehow degrade  society by leading to an epidemic of immorality which would clash with  what they believe is the purest way to practice Islam.* 
 That’s not why Riyadh’s recent decree  granting woman this long-overdue right by next summer is so dangerous,  however, as the real reason rests with the unpredictable and possibly  violent reaction of the Saudi clergy.
 Before talking about that, a few words need to be said about the  Kingdom’s much-publicized decision to finally allow women to drive.
*The Vision 2030 Disruption* *This wasn’t about “diverting attention” from the War on Yemen  or the perilous situation of the Shiite minority in the Eastern  Province like some cynics have alleged, though that might end up being a  short-term media-driven consequence which would of course work out to  the government’s temporary favor.* Instead, Crown Prince Mohammad Bin Salman  is actually sincere about reforming the socio-cultural situation in his  country in order to enable it to more effectively carry through with  his Vision 2030  structural reforms that intend to eventually transition Saudi Arabia to  a “normal” non-energy-dependent economy with time. There are still many  other reforms which are necessary to implement if the Kingdom’s women  are to enjoy the same rights as their counterparts elsewhere in most  Muslim-majority countries, to say nothing of the West, but this is still  a very powerful step in the direction of increasing female  participation in the future workforce.
 Understanding this, it’s evident why the most conservative elements of the clergy would be opposed to Vision 2030, as*  they know that its gradual socio-economic reforms (even if not carried  out to their eventual conclusion and still comparatively lagging behind  other Muslim countries and the West) will inevitably lead to  transformational changes in the country that they believe would  contradict their ultra-fundamental interpretation of Islam.* In  other words, although they won’t say so openly for fear of being  detained by the ubiquitous but largely unseen hand of the state security  services, it can be presumed that most of these clerics believe that  the Crown Prince’s initiative is “haram”, or forbidden by Islamic law  (Sharia).

*Undermining The Basis Of Saudi Stability* This pretext – that someone, let alone a professed Muslim, is  encouraging and/or engaging in prohibited behavior – has been used as  the rallying cry for organizing jihadi terrorist wars in “Syraq” and  Yemen, so *it can reasonably be anticipated that something  similar of the sort might be planned against the Saudi monarchy if it  can’t control the reactions of the Wahhabi-Takfiri clergy.* It’s  at this point where it’s relevant to briefly reference Saudi Arabia’s  political structure, which is less of an authoritarian dictatorship than  it is an authoritarian power tandem between the royals and the clerics.  This alliance between the Saud family and the followers of Muhammad ibn  Abd al-Wahhab forms the political basis of the Kingdom, with each side  delineating certain spheres of internal influence for themselves.
 This was a stable enough arrangement (in a relative sense) up until  Crown Prince Mohammad Bin Salman decided to push through the  socio-economic reforms inherent in his Vision 2030 agenda, as*  the clerics have come to see this as a de-facto power grab – even a  “soft coup”, if one will – by the monarchy over the previously agreed  upon domain of the clergy*. It’s in view of this why the issue  of allowing women to drive is so dangerous for Saudi stability – not  because of any misogynist reasons but due to the explosive reaction that  it could provoke from the Wahabbi clerics. That’s probably why the  Kingdom carried out its recent crackdown  against some religious leaders, prudently expecting that the most  extreme among them might seek to rally rioters around their cause of  Takfiri demagoguery in seeking to overthrow the monarchy once it was  announced that women will soon be allowed to drive.
*Multipolar Ramifications* There are inarguably some observers who might feel a touch of _schadenfreude_  at Saudi Arabia’s prospective domestic destabilization because of what  it’s done in the Mideast and even to its own people (Shiites and women),  but the fact remains that any forthcoming monarchy-cleric conflict  would affect more than just the Kingdom. Saudi Arabia is one of the  world’s top oil suppliers and is endowed with a geostrategic location at  the crossroads of Afro-Eurasia.* In the past year, the country  has also grown incredibly close to both Russia and China, so any Saudi  unrest would assuredly harm their long-term multipolar interests as well.*
 Regarding Russia, Riyadh agreed to an unprecedented OPEC output deal with Moscow and even renewed it after its expiration, is coordinating with the Russian Foreign Ministry over unifying the Syrian “opposition”, signed an unspecified $3.5 billion arms agreement with it this summer, is dispatching its King to Russia for the first time in history, and even plans to hold its first-ever military-technical forum with Russia by the end of the year. Concerning China, the People’s Republic is building an armed drone factory in Saudi Arabia, the King just visited Beijing earlier this year, and both sides signed two separate series of agreements totaling over $130 billion in the past six months alone.
*“Balkanizing” The Arabian Peninsula*  *The most immediate geopolitical consequence of pronounced  monarchy-cleric unrest in Saudi Arabia would be the “Balkanization” of  the Arabian Peninsula into a collection of emirates, an outcome which mirrors what would happen if the US were ever successful in turning the manufactured Gulf Cold War into a hot one.*  The UAE, which masterminded the Saudi-Qatari tensions, is unique in the  Mideast because it’s essentially a collection of emirates which  function as a semi-united entity, and this creative governing model  could be replicated all across the territory of a “Balkanized” Kingdom  of Saudi Arabia to extend Abu Dhabi’s reach further inland into the  peninsula and its rich natural resources.
 In addition, the spread of the Emirati system throughout this  strategic corner of the Mideast might also create a structural precedent  for dividing and ruling other parts of this fractured region at large,  particularly in Yemen and “Syraq”.
Therefore,  the unleashing of “calculated-controlled chaos” in Saudi Arabia could  be part of the US’ plans for geopolitically reengineering a so-called  “New Middle East” modelled along the lines of implementing a hybrid  Emirati-“Identity Federalized” system._This can’t happen so long as Saudi Arabia remains  unified, ergo the interest that the US and its regional allies have in  dismembering it, a scenario which they might try to advance by  capitalizing off of the hardcore Wahhabi clerics’ opposition to the  Kingdom’s recent decree allowing women to drive.


_More at: http://www.zerohedge.com/news/2017-1...ous-rest-world

----------


## Swordsmyth

*Oil Prices Under Pressure After API Reports Large Gasoline Build*The American Petroleum Institute (API) reported a draw of 4.079 million barrels in United States crude oil inventories, compared to more modest analyst expectations that inventories would draw only 756,000 barrels for the week ending September 29.

Gasoline  inventories, on the other hand, delivered a blow with a larger than  expected build of 4.19 million barrels for the week ending September 29,  against an expected build of only 1.088 million barrels. Last week,  too, saw a large gasoline build.
Both WTI and Brent benchmarks  fell again on Tuesday after a bad Monday, both down more than a dollar  week on week as reports that OPEC raised production in September by as  much as 120,000 barrels per day, according to a Bloomberg survey.

While  the inventory draws keep piling on the United States, the global  supply/demand situation for crude oil is still not balanced, and fears  are that OPEC’s currently proposed end date of March 2018 for the cuts  will prove to be too soon.

For the US, the total draw for crude  oil in 2017 now stands at just shy of 26.5 million barrels, according to  API data. EIA data show a 15-million-barrel draw for year-to-date 2017,  through last week’s report.

As the United States heads into the fall, the end of driving season  has many analysts forecasting a slower-paced drawdown for crude oil in  the near future.
Distillate inventories fell again this week,  584,000 barrels. Inventories at the Cushing, Oklahoma, site increased by  2.084 million barrels. 

More at: http://oilprice.com/Latest-Energy-Ne...ine-Build.html

----------


## Swordsmyth

*Venezuela To Invite More Countries To Join Output Cuts*http://oilprice.com/Latest-Energy-News/World-News/Venezuela-To-Invite-More-Countries-To-Join-Output-Cuts.html


*IEA Head Sees Oil Prices Subdued On Non-OPEC Supply Growth*http://oilprice.com/Latest-Energy-News/World-News/IEA-Head-Sees-Oil-Prices-Subdued-On-Non-OPEC-Supply-Growth.html

----------


## Swordsmyth

The biggest loser in the market share war for China is undoubtedly  OPEC’s biggest producer and de facto leader, Saudi Arabia, which is  leading the efforts to curtail supply and push oil prices up. The  biggest winners within the production cut deal are Russia and Angola.  The winners that aren’t part of the deal are the U.S. and Brazil, both  of which have significantly raised their crude oil exports to China.
Chinese  customs data offers a glimpse into how many barrels of oil the Saudis  have given up in China in their quest to rebalance the market, Reuters  columnist Clyde Russell writes.
Between  January and August, Russia was the top oil supplier to China, followed  by Angola and Saudi Arabia. Chinese imports from Russia rose by 13.2  percent to 1.16 million bpd in the first eight months of 2017. Imports  from Angola jumped 16.6 percent to 1.05 million bpd, while imports from  Saudi Arabia dropped 1.7 percent at 1.03 million bpd in January-August.   

Russia had already overtaken  Saudi Arabia as the single biggest Chinese oil supplier for 2016, but  the OPEC cuts have made that Russian dominance more pronounced this  year.
While the Saudis are cutting exports to some Asian buyers, Russia has raised its oil exports this year, Bloomberg data  shows. Although Russia is also restricting output (by 300,000 bpd and  from a post-Soviet high level), its global exports have exceeded the  2016 export level in each of the months through August this year.
In the Chinese market, Russia held the top supplier spot in August for a sixth consecutive month.  In second place came Angola. And in third, Saudi Arabia, with sales  down 16.2 percent compared to August last year, to around 861,200 bpd.  Angola, for its part, saw its oil exports to China soar by almost 28  percent to 983,500 bpd, Chinese customs data shows.
China’s  imports from Iran and Iraq also jumped in August. Iranian oil sales in  China increased 5.45 percent to 786,720 bpd—the highest monthly level  since 2006, Reuters Eikon data shows. Chinese August imports from Iraq  surged 30 percent to 736,400 bpd.
The Saudi share of the Chinese market has markedly decreased in the summer months, after the Saudis started to drastically cut oil exports to select markets to speed up the clearing of the glut in the hope of lifting oil prices.
According  to Bloomberg data, the Saudi share of China’s oil imports slumped to an  average 11 percent between June and August this year, compared to a  share of some 15 percent on average in 2015.
While OPEC members  and Russia are battling to lure Chinese buyers, the outsiders to the  deal—Brazil and the U.S.—have increased their sales to China. The lower  supply from OPEC and the favorable price differentials have prompted  Chinese buyers to increase intake of cargoes from North and South  America.
Brazilian oil exports to China in January through August  surged 41.8 percent to 480,000 bpd, while U.S. crude sales in China  averaged 128,000 bpd—that’s more than a 1,000-percent surge, Reuters  data shows.
According to EIA data,  available up until July, China is the second largest buyer of U.S.  crude this year, and in February and April the volume of U.S. exports to  China even exceeded that of Canada.

http://oilprice.com/Energy/Crude-Oil...-In-China.html

----------


## Zippyjuan

Russia won't cut their production- even to support price levels.  They need the income and don't want to lose any market share.  They are much less able to handle low oil prices than Saudi Arabia is. 

http://www.bbc.com/news/business-29643612




> Russia is one of the world's largest oil producers, and its dramatic interest rate hike to 17% in support of its troubled rouble underscores* how heavily its economy depends on energy revenues, with oil and gas accounting for 70% of export incomes*.
> 
> Russia *loses about $2bn in revenues for every dollar fall in the oil price*, and the World Bank has warned that Russia's economy would shrink by at least 0.7% in 2015 if oil prices do not recover.
> 
> Despite this, Russia has confirmed it* will not cut production to shore up oil prices.
> *
> "*If we cut, the importer countries will increase their production and this will mean a loss of our niche market,*" said Energy Minister Alexander Novak.
> 
> Falling oil prices, coupled with western sanctions over Russia's support for separatists in eastern Ukraine have hit the country hard.

----------


## Swordsmyth

> Russia won't cut their production- even to support price levels.  They need the income and don't want to lose any market share.  They are much less able to handle low oil prices than Saudi Arabia is. 
> 
> http://www.bbc.com/news/business-29643612


They claim they can live with $40/Bbl, so they won't cut as long as oil is above that, the Saudis have been shouldering most of the cuts and it is killing them, if they can't get more NOPEC producers on board they have lost and if they do prices will rise and production will go up in the countries not in the agreement, that will put a lid on prices and they will lose more market share for nothing.

----------


## Zippyjuan

https://www.nytimes.com/reuters/2017...ussia-oil.html




> *Russia to Work With Saudi on Implementing Global Oil Cut Deal-Lavrov Quoted*
> 
> DUBAI — Moscow wants to continue working with Riyadh on the implemention of an agreement to cut global oil output, Russia's foreign minister Sergei Lavrov told pan-Arab newspaper Asharq al-Awsat in an interview published on Wednesday.
> 
> Speaking ahead of a visit of Saudi Arabia's King Salman to Russia, Lavrov praised cooperation between the two countries in helping to secure a deal between OPEC and other oil producers to cut output until the end of March 2018.
> 
> "Riyadh and Moscow are taking part in the implementation of the "OPEC-plus" agreements to reduce global oil production. We consider it extremely important to continue to coordinate efforts with partners in Saudi Arabia in this regard," Lavrov said, according to an Arabic transcipt of the interview.
> 
> The leaders of Saudi Arabia and Russia are expected to discuss cooperation on oil production and differences over Syria and Iran on Thursday during the first visit to Moscow by a reigning Saudi monarch.


Russia seeking access to Syrian oil: 

http://oilprice.com/Energy/Energy-Ge...-In-Syria.html




> *As Conflict Rages On, Russia Lands Oil Deals In Syria*
> 
> Russia’s brazen confidence in its victory in propping up Syrian President Bashar Al Assad’s once-failing regime grows day by day, as evidenced by Moscow’s latest oil deals with the Syrian government.
> 
> Sputnik news reports that Russian Deputy Prime Minister Dmitry Rogozin visited Damascus in November to get the ball rolling on the fossil fuel deals.
> 
> "We already started with some of the companies after his visit … *the Syrian market is free now for Russian companies to come* and join and to play an important part in rebuilding Syria and investing in Syria," Assad said, according to a report last week. “The process of signing the contracts, the final, let's say, steps of signing the contracts is underway.”
> 
> This isn’t the first we have heard of Russia’s interest in Syria’s fossil fuel resources. In February, Dmitry Sablin, a lawmaker from the Duma, confirmed that Assad had greenlighted Moscow’s energy projects in the country.
> ...

----------


## Swordsmyth

*Europe’s Largest Refinery To Shutter For Two Months*http://oilprice.com/Latest-Energy-News/World-News/Europes-Largest-Refinery-To-Shutter-For-Two-Months.html

----------


## Swordsmyth

*Putin says oil cuts with OPEC could last to end of 2018*https://finance.yahoo.com/news/opec-looking-deepening-extending-oil-supply-cut-112844833--finance.html

----------


## Swordsmyth

*Russia to raise hard-to-recover oil output by 5.4 percent in 2017*https://www.reuters.com/article/us-russia-oil/russia-to-raise-hard-to-recover-oil-output-by-5-4-percent-in-2017-idUSKCN1C91BN

----------


## Swordsmyth

*Record U.S. Oil Exports Weigh On Oil Prices*http://oilprice.com/Energy/Energy-General/Record-US-Oil-Exports-Weighs-On-Oil-Prices.html

----------


## Swordsmyth

WTI and RBOB are plunging following comments from the *Saudi minister that "he doesn't know" if November meeting will agree on a production cut deal extension*, and Russia's Novak confirmed that there is* "no clarity" on a deal extension*.
Saudi  Arabia will work with Russia to reach a consensus in the next few weeks  before the Nov. 30 OPEC/non-OPEC meeting in Vienna, Saudi Energy  Minister Khalid Al-Falih says at a meeting with Russian counterpart  Alexander Novak in Moscow.

 OPEC and non-OPEC producers will discuss “what to do beyond March” at that meeting: Al-Falih

*Both ministers say it’s too early to say whether or not the  November meeting will yield an agreement to extend the production cuts*Amid higher OPEC production and the prompt return of supplies from Libya, futures prices are under pressure.


More at: http://www.zerohedge.com/news/2017-1...esumes-decline

----------


## Swordsmyth

*Rosneft Looks To Boost Crude Oil Exports To China*http://oilprice.com/Latest-Energy-News/World-News/Rosneft-Looks-To-Boost-Crude-Oil-Exports-To-China.html

----------


## Swordsmyth

*OPEC Chief Suggests ‘’Extraordinary Measures’’*OPEC’s Secretary General, Mohammed Barkindo, said the cartel may have to take some “extraordinary measures” to restore the oil market stability.

_“There is a growing consensus that, number one, the re-balancing  process is underway. Number two, to sustain this into next year, some  extraordinary measures may have to be taken in order to restore this  stability on a sustainable basis going forward__,”_ the top  OPEC man said without elaborating on what these measures might include,  although he mentioned that OPEC would welcome more participants in the  production cut deal. Barkindo was speaking at the India Energy Forum in  New Delhi yesterday.

http://oilprice.com/Energy/Oil-Price...-Measures.html

----------


## Swordsmyth

Saudi Aramco  plans to make “the deepest customer allocation cuts in its history” in  oil supplies in November to help reduce global inventories and balance  the market.State-run  Saudi Arabian Oil Co., known as Aramco, will make an “unprecedented”  cut of 560,000 barrels a day in its allocations to customers next month,  the Saudi energy ministry said in a statement. Aramco plans to supply  7.15 million barrels a day “despite very strong demand” that exceeds 7.7  million barrels a day, it said.

More at: https://www.bloomberg.com/news/artic...-strong-demand

----------


## Swordsmyth

*Saudis Lose Market Share To OPEC Rivals*http://oilprice.com/Geopolitics/International/Saudis-Lose-Market-Share-To-OPEC-Rivals.html


*OPEC Chief Urges U.S. Shale To Curb Oil Output*http://oilprice.com/Energy/Crude-Oil/OPEC-Chief-Urges-US-Shale-To-Curb-Oil-Output.html


*Saudi Arabia Ups November Oil Exports To 7-Million Bpd*http://oilprice.com/Latest-Energy-News/World-News/Saudi-Arabia-Ups-November-Oil-Exports-To-7-Million-Bpd.html


*Record U.S. Crude Exports Squeeze North Sea Oil*http://oilprice.com/Latest-Energy-News/World-News/Record-US-Crude-Exports-Squeeze-North-Sea-Oil.html

----------


## Swordsmyth

After a brief respite in August, OPEC oil production rose once again in September, to 32.75 million bpd,  up 88,500 bpd from the previous month, the cartel reported in its  latest Monthly Oil Market Report. August was the first month in five  when OPEC production declined.
Under the production agreement, OPEC committed to 32.5 million bpd.
Libya led the September increase, with a 53,900-bpd monthly rise in its crude oil production, to 923,000 bpd.
It  was followed by Nigeria, which pumped 50,800 bpd more last month, to an  average daily of 1.855 million bpd. This secondary-source figure is  higher than the 1.8-million-bpd mark Nigeria had set for itself as the  level at which it would stop raising production and join its co-members  in OPEC in their global supply cutting efforts. Nigeria has not yet  provided its own production calculations.
The third largest  contributor to the monthly increase in OPEC’s production was Iraq, which  pumped 31,600 bpd more in September compared to August. Gabon,  Equatorial Guinea, Qatar, and Iran also produced more crude last month,  while Venezuela’s production fell the most, by 51,900 bpd.
The  news of OPEC’s production increase is bad news for those hoping for a  longer oil price recovery, as it confirms several OPEC production  estimates from cargo-tracking service providers, and is in contrast to  OPEC reports heralding its excellent compliance to the November 2016 oil  production cut pact.

http://oilprice.com/Energy/Crude-Oil...il-Prices.html

----------


## Swordsmyth

*WTI/RBOB Slide After Surprise Crude Build*http://www.zerohedge.com/news/2017-10-11/wtirbob-slide-after-surprise-crude-build

----------


## goldenequity

Looks like your thread title is correct.
Everybody needs the $$$... 
nobody's cutting production cept SA & Rus.
Is that about right?

----------


## Swordsmyth

> Looks like your thread title is correct.
> Everybody needs the $$$... 
> nobody's cutting production cept SA & Rus.
> Is that about right?


Yup, and every time they cut they are gifting money to the competition, they cut their throats when they let the price stay over three digits, their only hope was when they tried flooding the market to kill the competition but either their internal calculations told them they couldn't ride it out or they chickened out.




> Everything they do to save themselves only helps shale to kill them more surely, if more slowly.

----------


## Swordsmyth

*Iraq Cannibalizes Saudi Market Share*http://oilprice.com/Energy/Energy-General/Footloose-Iraq-Cannibalizes-Saudi-Market-Share.html

----------


## Swordsmyth

*Saudi Arabia Looks To Shelve Aramco IPO*http://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Looks-To-Shelve-Aramco-IPO.html

----------


## Swordsmyth

*Kuwaiti Minister: OPEC Deal Extension May Be Unnecessary*http://oilprice.com/Energy/Crude-Oil/Kuwaiti-Minister-OPEC-Deal-Extension-May-Be-Unnecessary.html

----------


## Swordsmyth

*Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal*Russia’s oil producer Gazprom Neft is ‘holding its nose’ to the  OPEC/non-OPEC production cut deal because it has made the company cut  its production growth targets, Gazprom Neft’s first deputy CEO Vadim  Yakovlev told Reuters in an interview published on Monday.
“The  companies involved in this deal are paying a different price. The  effect is equal for everyone, but the contribution of the companies to  the deal is different,” Yakovlev said.
“This is related to the  market players’ ability to increase their output - we have such a  possibility and have to ‘hold our noses’. Gazprom Neft makes a big  contribution to the deal. For us, this is a very sensitive issue as it  is holding up the development of our fields,” said the manager who noted  that the company sees the deal as a short-term one.

Gazprom Neft plans to lift its oil production next year, Yakovlev told Reuters in today’s interview.


For the first half of this year, the company reported  a 23.1-percent annual increase in net income, while oil and gas  production, including such from joint ventures, rose 5.3 percent  year-on-year, driven by production ramp-up at the new Novoportovskoye,  Prirazlomnoye, and Messoyakha fields, as well as in Iraq.
Gazprom  Neft’s Middle East operations are of “strategic importance”, Yakovlev  told Reuters, adding that the company plans to increase its presence  there. At the Badra field in Iraq, production is expected at between  85,000 bpd and 90,000 bpd in 2018, to reach 110,000 bpd in the future.  Iraq has not asked Gazprom Neft to cut production in the country,  Yakovlev told Reuters. At the end of March, Gazprom Neft’s production at  Badra was 80,000 bpd, with further developments planned.
In Iran, Gazprom Neft has filed plans to develop two oil fields— Changouleh and Cheshmeh Khosh.  

More at: http://oilprice.com/Latest-Energy-Ne...-Cut-Deal.html

----------


## Swordsmyth

Deputy Finance Minister Vanessa Rubio said Mexico completed its 2018 annual oil hedge,  which will secure an average export price of $46 per barrel of crude,  Bloomberg reported Oct. 17. Every year since 2000, Mexico has bought put  options from investment banks in Wall Street's largest annual oil  hedge.

https://worldview.stratfor.com/situa...hedge-complete

----------


## Swordsmyth

*OPEC Oil Deal Compliance Falls To 86%*http://oilprice.com/Latest-Energy-News/World-News/OPEC-Oil-Deal-Compliance-Falls-To-86.html

----------


## Swordsmyth

*UK portfolio managers with $6.9 trillion resist rule bending by regulator to achieve Aramco London listing*

http://www.zerohedge.com/news/2017-1...udi-aramco-ipo

----------


## Swordsmyth

*OPEC Favors 9-Month Extension Of Production Cut Agreement*http://oilprice.com/Energy/Oil-Prices/OPEC-Favors-9-Month-Extension-Of-Production-Cut-Agreement.html


*US shale producers have hedged a third of 2018’s oil production at  roughly $52 per barrel, according to investment bank Tudor, Pickering,  Holt & Co (TPH).

*http://oilprice.com/Energy/Oil-Prices/The-Worlds-Top-Crude-Trade-Sees-Brent-Crashing-To-45.html

----------


## Swordsmyth

*Russia, Saudis Team Up To Boost Fracking Tech*http://oilprice.com/Latest-Energy-News/World-News/Russia-Saudis-Team-Up-To-Boost-Fracking-Tech.html

----------


## Swordsmyth

*OPEC Looks To Permanently Expand The Cartel*https://oilprice.com/Energy/Crude-Oil/OPEC-Looks-To-Permanently-Expand-The-Cartel.html

----------


## Swordsmyth

*Trump Admin Announces Largest Oil And Gas Lease Sale In U.S. History*https://oilprice.com/Latest-Energy-News/World-News/Trump-Admin-Announces-Largest-Oil-And-Gas-Lease-Sale-In-US-History.html


*Saudi Aramco’s IPO Has Never Been Linked To Oil Prices, CEO Says*https://oilprice.com/Latest-Energy-News/World-News/Saudi-Aramcos-IPO-Has-Never-Been-Linked-To-Oil-Prices-CEO-Says.html

----------


## Swordsmyth

*Russia To Boost Oil Production In 2018 If OPEC Deal Not Extended*https://oilprice.com/Energy/Crude-Oil/Russia-To-Boost-Oil-Production-In-2018-If-OPEC-Deal-Not-Extended.html

----------


## Zippyjuan

Has OPEC collapsed yet?

----------


## Swordsmyth

> Has OPEC collapsed yet?


When they do I will post it.

----------


## Zippyjuan

> When they do I will post it.


What has happened to the price of oil since this thread started?  In May, 2017 it was about $51 a barrel.  Today it is about $52 a barrel.  http://www.nasdaq.com/markets/crude-...x?timeframe=1y

(In July it did get down to $44 but has been rising ever since). 

End of the oil world?

----------


## Swordsmyth

> What has happened to the price of oil since this thread started?  In May, 2017 it was about $51 a barrel.  Today it is about $52 a barrel.  http://www.nasdaq.com/markets/crude-...x?timeframe=1y
> 
> (In July it did get down to $44 but has been rising ever since). 
> 
> End of the oil world?


It will go down again, and it is not high enough for them now.

----------


## devil21

> When they do I will post it.


OPEC is pivoting toward BRICS.  No doom that I can see, just way less exports to the US.

----------


## Swordsmyth

> OPEC is pivoting toward BRICS.


Nothing will save them.

----------


## Zippyjuan

> It will go down again, and it is not high enough for them now.


How high is "high enough"?  (yes, oil goes up and down and OPEC goes on.....)

How low before they "fail"?

----------


## Swordsmyth

> How high is "high enough"?


High enough to sustain the member countries budgets and pay off their people to not revolt.

----------


## Zippyjuan

> High enough to sustain the member countries budgets and pay off their people to not revolt.


So there is quite a bit of "wiggle room". 

https://www.reuters.com/article/us-s...-idUSKCN18G0TD




> *Saudi Arabia says comfortable with 2017 budget deficit*
> 
> RIYADH (Reuters) - The Saudi government is comfortable with this year’s budget deficit, the country’s finance minister said on Saturday, adding that authorities may slow austerity measures slightly in line with recommendations by the International Monetary Fund (IMF).

----------


## devil21

> Nothing will save them.


I don't see BRICS giving up oil consumption any time soon.  Its evident by how the emissions pacts always specify China will scale back emissions starting at some nebulous future date.  I agree that OPEC's, and indeed oil consumption overall, days are numbered but that's a long ways off.  There's still too much oil/gas required for the development still needed in China and India, in particular.  Russia obviously can supply it's own oil.  Brazil gets theirs from Venezuela.  etc.  I enjoy running threads like these for historical reference but if you're waiting for the end of OPEC it's going to be a looooong thread.

----------


## Swordsmyth

> So there is quite a bit of "wiggle room". 
> 
> https://www.reuters.com/article/us-s...-idUSKCN18G0TD


OPEC always puts up a good front, if they admitted they were in trouble the crisis would accelerate.

----------


## Swordsmyth

*Shell: Breakeven For Brazilian Pre-salt Less Than $40*https://oilprice.com/Latest-Energy-News/World-News/Shell-Breakeven-For-Brazilian-Pre-salt-Less-Than-40.html

----------


## Zippyjuan

> I don't see BRICS giving up oil consumption any time soon.  Its evident by how the emissions pacts always specify China will scale back emissions starting at some nebulous future date.  I agree that OPEC's, and indeed oil consumption overall, days are numbered but that's a long ways off.  There's still too much oil/gas required for the development still needed in China and India, in particular.  Russia obviously can supply it's own oil. * Brazil gets theirs from Venezuela.  etc*.  I enjoy running threads like these for historical reference but if you're waiting for the end of OPEC it's going to be a looooong thread.


Brazil produces their own.  They do import some light oil from the Middle East but none from Venezuela (which has heavy, thick, sulfurous oil requiring lots of refining).




> but if you're waiting for the end of OPEC it's going to be a looooong thread


Agree.

----------


## devil21

> Brazil produces their own.  They do import some light oil from the Middle East but none from Venezuela (which has heavy, thick, sulfurous oil requiring lots of refining).


Fair enough.  I meant more forward looking than past or current conditions.  One can assume that as part of BRICS, Brazil will undergo large development projects and would look to closest geographical oil suppliers for additional needed oil.  If they were smart they'd do like we've done and suck up everyone else's oil before using much of our own.  Anyway, IIRC, Venezuelan govt said they would start selling in multiple currencies, including the real.  That whole region has a lot of untapped oil though.

----------


## Swordsmyth

*Iraq Seizes Saudi Share In U.S. Oil Market*https://oilprice.com/Energy/Crude-Oil/Iraq-Seizes-Saudi-Market-Share-In-US-Oil-Market.html

----------


## Swordsmyth

Saudi Crown Prince Mohammed bin Salman supports extending the Organization of the Petroleum Exporting Countries (OPEC) oil production cuts past March 2018, Bloomberg reported Oct. 26.

More at:https://worldview.stratfor.com/situa...opec-cuts-2018

----------


## Swordsmyth

*The Qatar Blockade Could Cause A Regional Recession*https://oilprice.com/Geopolitics/International/The-Qatar-Blockade-Could-Cause-A-Regional-Recession.html

----------


## Swordsmyth

*U.S. Crude Imports Soar Amid Rising Refinery Output*https://oilprice.com/Energy/Crude-Oil/US-Crude-Imports-Soar-Amid-Rising-Refinery-Output.html

----------


## Zippyjuan

Maybe you could just leave a standing link to Oil Price front page.  https://oilprice.com/Latest-Energy-News/World-News/

----------


## Swordsmyth

*Mexico Spends Record $1.25 Billion On 2018 Oil Hedge*https://oilprice.com/Latest-Energy-News/World-News/Mexico-Spends-Record-125-Billion-On-2018-Oil-Hedge.html

----------


## Swordsmyth

*Canadian Oil Drilling To Grow In 2018*https://oilprice.com/Latest-Energy-News/World-News/Canadian-Oil-Drilling-To-Grow-In-2018-Petroleum-Association.html

----------


## Swordsmyth

*Another Gulf Crisis: Dinar Devaluation Looms As Bahrain Begs Neighbors For Bailout*Despite the recent rise in oil prices, *all is not well among the allies in the Gulf.* The 'pegged-to-the-dollar' Bharaini Dinar has tumbled in the last few days as Bloomberg reports the nation has *asked  Gulf Arab allies for financial assistance as it seeks to replenish its  foreign-exchange reserves and avert a currency devaluation* - which could spread contagiously through MidEast markets.

Bloomberg reports, according to people with knowledge of the talks,* Bahrain has asked for a bailout.* The* request was made to Saudi Arabia and the United Arab Emirates*, two of the people said.

 A third person said* Kuwait was also asked.*

 The countries responded by* requesting the island kingdom do more to bring its finances under control in return for the money,* the people said on condition of anonymity because the discussions were private.

*The talks are at an early stage,* one person said.More at: http://www.zerohedge.com/news/2017-1...igbors-bailout

----------


## Swordsmyth

A string of arrests of senior government officials in Saudi Arabia has also struck Aramco  board member Ibrahim al-Assaf, a former Finance Minister in the  Kingdom. The situation apparently remains volatile and the arrest could  spell further trouble for Aramco’s IPO next year.

https://oilprice.com/Energy/Energy-G...Crackdown.html

----------


## Swordsmyth

*OPEC: U.S. Shale To Rise Much Faster Than Expected*Higher oil prices, robust oil demand growth, and higher upstream  activity will lead to faster-than-previously-expected growth in U.S.  shale production until 2022, OPEC said in its World Oil Outlook 2017 published on Tuesday.
Compared  to last year’s annual OPEC outlook, the medium-term outlook for  non-OPEC liquids growth has “changed quite considerably”, the cartel  said, citing the “US tight oil sector’s resilience and ability to bounce  back.”
“Most strikingly, US tight oil production has exceeded  previous growth expectations and is currently forecast to contribute to a  rise in overall US liquids by some 0.6 mb/d in 2017 and then 0.9 mb/d  in 2018. This contrasts with an annual decline in US liquids in 2016,  overall non-OPEC production. In the medium-term, total non-OPEC liquids  are forecast to grow by 4.9 mb/d to 62 mb/d in 2022, of which 3.8 mb/d  is incremental supply from the US alone,” 

More at: https://oilprice.com/Energy/Oil-Pric...-Expected.html


*U.S. shale producers promise both higher output and returns*https://www.reuters.com/article/us-shale-output/u-s-shale-producers-promise-both-higher-output-and-returns-idUSKBN1D401F


*Aramco Oil Reserves Audit Unlikely To Be Completed In 2017*https://oilprice.com/Latest-Energy-News/World-News/Aramco-Oil-Reserves-Audit-Unlikely-To-Be-Completed-In-2017.html

----------


## Swordsmyth

*Bakken Oil Production Rises As Oil Prices Jump*https://oilprice.com/Latest-Energy-News/World-News/Bakken-Oil-Production-Rises-As-Oil-Prices-Jump.html

----------


## PierzStyx

> Ziplogic.


If you're going to quote him, do it in full.




> Zippy: ... Lower prices makes it harder for some fracking producers to be profitable- forcing them to shut down. That lowers supply and would allow Saudi Arabia and Russia to increase their market share and will raise price in the future for them. Russia's "cut" isn't much of a cut for them- prior to the latest production allocation they cranked up their facilities to maximum output- a level they would have difficulties sustaining. The "cut" takes them "down" to their usual output.

----------


## PierzStyx

If Venezuela would turn its back on Socialism it would break OPEC in just a few years and become one of the richest countries on the planet. Or at least have a stable economy.

----------


## Swordsmyth

China’s oil imports fell to just 7.3 million barrels per day in October, a sharp decline from 9 mb/d a month earlier.

https://oilprice.com/Energy/Crude-Oi...tion-Soon.html

----------


## Swordsmyth

*Satellite Images Reveal Saudis May Be Lying How Much Oil They Have In Storage*http://www.zerohedge.com/news/2017-11-08/satellite-images-reveal-saudi-arabia-may-be-lying-about-its-oil-storage

----------


## Swordsmyth

Government data indicates American output hit an all-time high last week, signaling the resilience of North American drilling as oil prices begin another recovery.
The U.S. produced 9.62 million barrels of oil per day through November 3rd, the Energy Information Administration (EIA) said today, overtaking the previous high that occurred back in June 2015.
The agency’s Petroleum Status Report from last week said exports hit an all-time high at two million bpd as well.

https://oilprice.com/Latest-Energy-N...Time-High.html

----------


## Swordsmyth

*Saudis To Cut Oil Exports By 120,000 BPD In December*https://oilprice.com/Latest-Energy-News/World-News/Saudis-To-Cut-Oil-Exports-By-120000-BPD-In-December.html

----------


## Swordsmyth

*U.S. Rig Count Sees Significant Increase*

https://oilprice.com/Energy/Oil-Pric...-Increase.html

----------


## Swordsmyth

*OPEC Chairman: Output Cuts Are The ‘’Only Viable Option’’*https://oilprice.com/Energy/Crude-Oil/OPEC-Chairman-Output-Cuts-Are-The-Only-Viable-Option.html

----------


## Swordsmyth

Iraqi Oil Minister Jabar al-Luaibi said the government plans on  increasing oil production to one million barrels per day from the Bai  Hasan and Avana oil fields in Kirkuk, Reuters reported Nov. 13.

https://worldview.stratfor.com/situa...duction-kirkuk

----------


## Swordsmyth

*Iraq Oil Revenue Not Enough For Sustainable Development*https://oilprice.com/Latest-Energy-News/World-News/Iraq-Oil-Revenues-Not-Enough-For-Sustainable-Development.html

----------


## Swordsmyth

The American Petroleum Institute (API) reported a shocking build of  6.513 million barrels of United States crude oil inventories, against a  Wall Street Journal analyst expectation that inventories would draw down  by 1.4 million barrels  for the week ending November 10.  Three polled analysts expected a  rise, and eight expected them to fall. The spread of the forecasts was  wide, ranging from a draw of 3.5 million barrels to a build of 2.5  million barrels—significantly short of the massive build the API  reported.
Gasoline inventories, according to the API, also saw a  build this week, of 2.399 million barrels for the week ending November  10, against an expectation of a draw of 1.1 million barrels. The range  of analyst expectations is from a 3-million-barrel decline to a  2-million-barrel build.  

https://oilprice.com/Latest-Energy-N...ventories.html

----------


## Swordsmyth

The head of Saudi Arabia's stock exchange has said the Tadawul is pushing to be the "exclusive" venue for the initial public offering of state-owned oil company Saudi Aramco, raising questions about the status of any international listing for what has been billed as the biggest IPO in history.

More at: http://www.afr.com/news/politics/wor...0171026-gz8izu

----------


## Swordsmyth

*Saudi Oil Minister: Markets Will Not Rebalance By March*https://oilprice.com/Latest-Energy-News/World-News/Saudi-Oil-Minister-Markets-Will-Not-Rebalance-By-March.html

----------


## Swordsmyth

*Iraq Steps In To Offset Falling Venezuela Oil Production*Since the start of the year, Iraq has increased its heavy crude exports  to India by some 80,000 bpd, while Venezuelan shipments to India fell by  84,000 bpd. Iraq has also raised its crude oil shipments to the U.S.,  to 201,000 bpd more in the first ten months of the year. In the same  period, Venezuelan cargoes to the U.S. fell by 90,000 bpd.

https://oilprice.com/Latest-Energy-N...roduction.html

----------


## Swordsmyth

*Keystone XL Pipeline Gains Approval After A 9-Year Battle*https://oilprice.com/Energy/Energy-General/Keystone-XL-Pipeline-Gains-Approval-After-A-9-Year-Battle.html




 																		The world's largest oil exporter  could be poised to back out of a widely anticipated extension to global  supply cuts, Chris Weafer, senior partner at Macro-Advisory, said  Friday.
OPEC  members are reportedly forming a consensus with other allied crude  exporters to extend their production deal by nine months. That would  prolong the agreement among OPEC, Russia and other oil-producing nations  to keep 1.8 million barrels a day off the market through the whole of  next year.
 															 																			    														Nonetheless, Weafer said that while at first glance Russia  backing out of a production deal looking to clear a global supply  overhang seemed to be a "crazy position to take," the context of  Russia's changing industrial priorities meant it actually made "perfect  sense."
 															 																						 												    														Weafer said if oil stays in the $60 to  $65 a barrel range, Moscow's support for a deal extension beyond March  next year would be "very unlikely." Weafer said that Russia still makes  money with the oil price in the mid-$50s and any higher would prompt  U.S. shale firms to ramp up production. He also believes that this price  would incentivize the Russian economy to diversify away from oil, a  major long-term benefit for the country.


More at: https://www.cnbc.com/2017/11/17/why-...opec-deal.html

----------


## Swordsmyth

*Gazprom Speaks Out Against OPEC Production Cut Extension*https://oilprice.com/Latest-Energy-News/World-News/Gazprom-Speaks-Out-Against-OPEC-Production-Cut-Extension.html

----------


## Swordsmyth

*Saudi Oil Exports Fall To Six-Year Low In September*https://oilprice.com/Energy/Energy-General/Saudi-Oil-Exports-Fall-To-Six-Year-Low-In-September.html


*U.S. Oil Rig Count Rises Amid Record Breaking Production*https://oilprice.com/Energy/Crude-Oil/US-Oil-Rig-Count-Rises-Amid-Record-Breaking-Production.html

----------


## Swordsmyth

Waha Oil chairman, Ahmed Ammar, said the company is searching for  alternative funding to pay for the replacement of corroded pipelines and  12 oil tanks that were destroyed during the Libyan revolution  and the 2014 Libya Dawn attacks, Libya Herald reported Nov. 21. Ammar  said the company would like to increase its production from 260,000  barrels per day (bpd) to 600,000 bpd

More at: https://worldview.stratfor.com/situa...ase-production

----------


## Swordsmyth

The 20 percent increase in oil prices since September led to a wave  of hedging by U.S. shale drillers eager to lock in future production at  prices not seen in years. The flip side of that hedging wave is that  locking in prices could cut the price rally off at the knees, ensuring  that more supply will be forthcoming in the next few quarters.
Shale  drillers were hesitant for much of the year, but kicked their hedging  programs into high gear after oil prices posted strong gains beginning  in September. “The past three months have seen a significant increase in  oil hedging, with the volume of new positions more than twice the  volume of Q3 hedges that rolled off the books,” Standard Chartered wrote  in a recent research note.
The volume of oil hedged for 2018 increased by 29 percent over the past three months. 

More at: https://oilprice.com/Energy/Oil-Pric...Oil-Rally.html

----------


## Swordsmyth

*Oil Production Cuts Taking A Toll On Russia’s Economy*The OPEC/non-OPEC production cuts hurt  Russia’s economic growth in October, Economy Minister Maxim Oreshkin  said on Thursday in the first negative comment about the pact from a  high-ranking Russian official.  
“Because of the OPEC deal we have  a negative direct impact from oil production, as well as indirect  effects related to low investment activity due to production limits,”  Oreshkin said, just a week before OPEC and its non-OPEC allies led by  Russia meet to decide on the extension of the deal.

More at: https://oilprice.com/Latest-Energy-N...s-Economy.html

----------


## Swordsmyth

*U.S. Boosts Oil Exports To Key Asian Markets*https://oilprice.com/Energy/Crude-Oil/US-To-Ramp-Up-Oil-Exports-To-Asia.html

----------


## goldenequity

Saudis got talent? hahaha

----------


## Swordsmyth

The final OPEC monthly report for this year focused on the 2017  highlights and expectations for 2018. In both overviews, the predominant  theme was the U.S. shale supply growth that was higher than any initial  expectations.
“Non-OPEC oil supply growth 2017 performed well  above initial market expectations to now stand at 0.81 mb/d.  Higher-than-expected supply growth in the US, Canada and Kazakhstan have  been the key contributors to the upward revisions, particularly US  tight oil. As a result, US oil output is now expected to grow at 0.61  mb/d this year,” OPEC said.
The expected non-OPEC oil supply growth for 2017 is an upward revision of 150,000 barrels per day from the previous report.
Improved  well efficiency and increased investment in U.S. tight oil prompted  OPEC to expect the momentum to continue in 2018. Higher production from  sanctioned oil sands projects in Canada will also add to increased  non-OPEC supply next year.

“As a result, non-OPEC supply is expected to grow by 0.99 mb/d in  2018. The forecast is associated with considerable uncertainties,  particularly regarding US tight oil developments,” OPEC said.
For 2018, OPEC revised up its forecast for non-OPEC supply growth by 120,000 barrels per day.
In its World Oil Outlook 2017 published in November, OPEC admitted  that higher oil prices, robust oil demand growth, and higher upstream  activity will lead to faster-than-previously-expected growth in U.S.  shale production until 2022.

https://oilprice.com/Energy/Energy-G...Month-Low.html

----------


## Swordsmyth

*Huge WTI-Brent Spread Boosts U.S. Crude Exports*https://oilprice.com/Energy/Energy-General/Huge-WTI-Brent-Spread-Boosts-US-Crude-Exports.html

----------


## goldenequity

and the first arctic tanker load goes to.... (wait for it)



*Desperate Britain Forced To Import Russian Gas From Sanction-Targeted Project
http://www.zerohedge.com/news/2017-1...rgeted-project*

We said two days ago that it’s been a tough week for anybody who needs to heat their home or put gasoline in their cars in Britain. The litany of negative events and mishaps includes extremely low temperatures, the shutdown of the Forties pipeline due to a hairline crack and an explosion at one of the Europe’s biggest gas hubs in Austria, which further tightened UK supplies.

As we noted, the price of gas futures surged by the most in 8 years. The timing of the gas hub explosion, as we head into Winter, couldn’t have been worse either.

    It takes about two weeks to bring LNG from Qatar, the U.K.’s biggest supplier of the super-chilled fuel. Only one tanker, the Bu Samra, is confirmed as arriving in the U.K. this month. The first tanker from Russia’s Arctic plant Yamal LNG may also head to Britain and would arrive in about five days, according to shipping website sea-distances.

The destination of the LNG carrier was expected to be Asia, but will actually be Britain, even though the British government backed US sanctions against the project.


snicker..

----------


## goldenequity

*TurkStream Pipeline: Greece Out - Bulgaria In (then to Romania/Hungry/Austria)* 

Victor Kuhnovets-
The route of the Turkish Stream gas pipeline will be changed - 
from Turkey the pipeline will not go to Greece, as stated earlier, 
but to Bulgaria and further to Romania, Hungary, Austria. 
This was reported on December 14 by the Turkish newspaper Habertürk.

----------


## Swordsmyth

*Saudi Economy Contracts For First Time In 8 Years, Unveils Record Spending Spree To Boost Growth*http://www.zerohedge.com/news/2017-12-19/saudi-economy-contracts-first-time-8-years-unveils-record-spending-spree-boost-growt

----------


## Swordsmyth

Saudi Arabia on Thursday made the first payment totaling US$533  million (2 billion riyals) as part of its new household allowance program that reaches 10.6 million beneficiaries, before it starts raising food and gasoline prices.
Known as the Citizens Account, the allowance scheme is a national cash transfer program  that was first announced by the Government in December 2016 and opened  for registrations in February 2017, according to the official Saudi  Press Agency (SPA).
The allowance is aimed at easing the direct  and indirect impact of the gasoline and electricity price hikes, and the  VAT increase on food and beverages.
Saudi Arabia made bank transfers on Thursday to around 3 million households,  for a total of 10.6 million beneficiaries, according to Saudi Minister  of Labor and Social Development, Ali al-Ghafees. Some 20 percent of the  applicants did not qualify to get allowances.
Last week, officials  at the Saudi labor ministry said that around 3.7 million households  signed up for the program, representing about 13 million total  beneficiaries, but that not all would be qualified to receive  allowances.

More at: https://oilprice.com/Geopolitics/Mid...rice-Hike.html

----------


## goldenequity

> and the first arctic tanker load goes to.... (wait for it)
> 
> 
> 
> *Desperate Britain Forced To Import Russian Gas From Sanction-Targeted Project
> http://www.zerohedge.com/news/2017-1...rgeted-project*
> 
> We said two days ago that it’s been a tough week for anybody who needs to heat their home or put gasoline in their cars in Britain. The litany of negative events and mishaps includes extremely low temperatures, the shutdown of the Forties pipeline due to a hairline crack and an explosion at one of the Europe’s biggest gas hubs in Austria, which further tightened UK supplies.
> 
> ...


Russian embassy trolls UK...

----------


## timosman

Holy $#@!. We $#@!ed the Saudis.

----------


## devil21

> Holy $#@!. We $#@!ed the Saudis.


Yeah!  I'm sure they will cry themselves to sleep at night.

----------


## timosman

> Yeah!  I'm sure they will cry themselves to sleep at night.


We can give them Hillary. They like her speeches.

----------


## Swordsmyth

> Yeah!  I'm sure they will cry themselves to sleep at night.


They're not happy these days.

----------


## timosman



----------


## devil21

> 


jidiy bani matar alriyad

google translate sucks

----------


## Swordsmyth

OPEC oil output has risen in January from an eight-month low as higher  output from Nigeria and Saudi Arabia offset a further decline in  Venezuela and strong compliance with a supply reduction pact, a Reuters  survey found on Tuesday. 

More at: https://uk.reuters.com/article/uk-op...FK2IC?rpc=401&

----------


## Swordsmyth

*The Oil Rig Count Rises Once Again*The number of oil rigs in the United States rose this week, by 6

U.S. crude oil production rose again, to 9.919 million  bpd, from 9.878 million bpd the week before, setting another new high  and getting dangerously close to that psychologically important 10.0  million bpd mark.
Canada has added hundred of rigs in the last three weeks. This week, Canada added another 14 oil rigs

More at: https://oilprice.com/Energy/Energy-G...nce-Again.html

----------


## Swordsmyth

While Russia is sending its top-quality crude oil to China in its  battle for market share on the prized Asian market, European refiners  are left with lower-quality imports from Russia and are now reviewing  how much Russian crude they would buy and at what price, Reuters reported on Monday, citing traders and sources close to European refiners.
The  quality of Russia’s Urals crude grade has deteriorated so much that  some refiners are considering renegotiation of supplies and prices.
The  Urals grade exported to Europe is a blend of different oils, and that  blending is taking place inside the pipeline system in Russia. According  to data from industry sources obtained by Reuters, the quality of the  Urals blend that is being exported to Europe in February is near the  bottom of the standard range set by the Russian standards agency  Rosstandart.
“We can’t refine this (oil),” a trader at a European  company told Reuters. “There is only one way out, which is to cut Urals  purchases and get supplies of lighter grades for blending,” the trader  added.

More at: https://oilprice.com/Energy/Crude-Oi...ian-Crude.html

----------


## Swordsmyth

The Energy Information Administration rattled oil bulls by reporting  a build of 1.9 million barrels in U.S. crude oil inventories for the  week to February 2. The report comes a day after the release of the  latest Short-Term Energy Outlook  that saw the EIA projecting local oil production will hit the  11-million-bpd mark late this year, with the average for the year seen  at 10.6 million bpd.
Prices felt the blow of these revised  projections and will likely continue to feel it for a few more days. At  the time of writing, West Texas Intermediate traded at US$63.84 per  barrel, with Brent at US$67.55 a barrel.
The inventory report by the EIA is once again in conflict with figures  from the American Petroleum Institute, which surprised analysts with a  1.05-million-barrel decline, versus expectations for 3.19 million  barrels more. Analysts expected the EIA to report a decline of 480,000  barrels. During the first month of the year, the EIA reported a total  draw of 6.1 million barrels, with three weeks of draws since January 1,  and one week of a build.
Gasoline stockpiles continued to increase  last week, the EIA also said. The build was a hefty 3.4 million  barrels, following three weekly builds since the start of 2018 and one  weekly draw, of 2 million barrels, reported last week. 

More at: https://oilprice.com/Energy/Energy-G...ventories.html

----------


## Swordsmyth

*U.S. Oil Production Is Rising Much Faster Than Expected*https://oilprice.com/Energy/Crude-Oil/US-Oil-Production-Is-Rising-Much-Faster-Than-Expected.html

----------


## Swordsmyth

*Iran Could Add 100,000 Bpd In “Five Or Six Days”*https://oilprice.com/Energy/Crude-Oil/Iran-Could-Add-100000-bpd-In-Five-Or-Six-Days.html

----------


## Swordsmyth

*Exxon To Produce All Of Its Oil Despite Peak Demand Fears*https://oilprice.com/Energy/Crude-Oil/Exxon-To-Produce-All-Of-Its-Oil-Despite-Peak-Demand-Fears.html

----------


## Swordsmyth

*U.S. Looks To Sell 15% Of Strategic Petroleum Reserve*https://oilprice.com/Latest-Energy-News/World-News/US-Looks-To-Sell-15-Of-Strategic-Petroleum-Reserve.html

----------


## Swordsmyth

As if the recent nosedive that oil prices have taken in the last few  days wasn’t bad enough—Baker Hughes reported a staggering increase to  the number of rigs. The number of active oil and gas rigs increased by  29 to Baker Hughes data. This brings the total number of oil and gas rigs to 975, which is an addition of 234 rigs year over year.
The  number of oil rigs in the United States rose this week by 26 with the  number of gas rigs increasing by 3. The number of oil rigs now stands at  791 versus 591 a year ago. The number of gas rigs in the US now stands  at 184, up from 149 a year ago.
At 11:24 am EST, the price of a WTI barrel was trading down $1.35 (-2.21 percent) to $59.80—almost a staggering $5.00 under this same time last week. The Brent barrel trading down $1.39 (-2.14 percent) to $63.42, also almost $5 per barrel under last week, and a loss of 9 percent since the highs in late January.
Pressing on prices are robust US production. US crude oil production rose again, to 10.251 million  bpd, from 9.919 million bpd the week before, setting another new high  and surpassing the psychological threshold of 10.0 million bpd.

More at: https://oilprice.com/Energy/Oil-Pric...r-Of-Rigs.html

----------


## Swordsmyth

For yet another month, OPEC has revised up its expectations for  non-OPEC crude oil supply growth this year, expecting—again—U.S. oil  production to increase more than previously thought.
In its closely watched Monthly Oil Market Report,  OPEC said on Monday that it had revised higher its non-OPEC supply  forecast for 2018 by 321,000 bpd from the previous month’s report, to  average 59.26 million bpd. Non-OPEC supply is now expected to grow at a  faster pace, and is expected to increase by 1.4 million bpd in 2018  compared with growth of 860,000 bpd in 2017. The growth has been revised  upward by 250,000 bpd from OPEC’s previous report. Expectations for  higher production in the U.S., the UK, and Brazil, as well as lesser  declines in Mexico and China were the main reasons behind the upward  revision, OPEC said.
The key growth driver will be the United  States, with growth now expected at 1.3 million bpd, revised up by  150,000 bpd compared to the last month’s assessment. Other growth  drivers outside OPEC will be Canada, Brazil, and the UK, according to  the cartel.

More at: https://oilprice.com/Latest-Energy-N...ast-Again.html

----------


## Swordsmyth

> *U.S. Looks To Sell 15% Of Strategic Petroleum Reserve*
> 
> https://oilprice.com/Latest-Energy-N...m-Reserve.html


The budget deal that the U.S. Congress passed and President Donald  Trump signed into law last Friday calls for selling 100 million barrels  of the Strategic Petroleum Reserve (SPR) by 2027 to help fund the  government.
The sale of 100 million barrels of crude oil in the  next decade would represent the largest non-emergency sell-off of  strategic oil reserves and would equate to some 15 percent of the current stockpiles in the SPR.

https://oilprice.com/Energy/Crude-Oi...l-Selloff.html

----------


## Swordsmyth

The *global oil market could slip into deeper oversupply* on the back of non-OPEC production growth led by the United States, the International Energy Agency said in its latest Oil Market Report.

 *“The main factor,” the IEA said, “is US oil production.* In just three months to November, crude output increased by a colossal 846 kb/d, and will soon overtake that of Saudi Arabia. *By the end of this year, it might also overtake Russia to become the global leader.*”
  Commenting on the recent reversal in oil prices, the authority  attributed it to profit-taking and a market correction spanning all  industries, adding that* oil’s fundamentals supported a decline in prices*.

  The situation in the United States suggests that history is repeating itself and *what we are seeing now is indeed a second shale revolution* that could bring petroleum liquids production on par with global demand growth.

More at: https://www.zerohedge.com/news/2018-...s-new-oil-glut

----------


## Swordsmyth

Saudi Arabia will cut additional 100,000 bpd  of its oil production next month and keep its exports below 7 million  bpd in March in a bid to help clear the global oversupply and counteract  the recent oil market volatility.
Saudi Aramco, the state oil  giant, will pump 100,000 bpd less crude oil in March compared to the  February level, the Saudi energy ministry said on Wednesday.
The  Saudi oil exports will continue to be below 7 million bpd in March,  despite the 400,000-bpd SAMREF refinery shutting down for planned  maintenance, the ministry said.

More at: https://oilprice.com/Energy/Crude-Oi...il-Market.html

----------


## Swordsmyth

*Trump backs 25-cent-a-gallon gasoline tax hike: senator*

----------


## Swordsmyth

*Oil Rig Count Rises*https://oilprice.com/Energy/Energy-General/Oil-Rig-Count-Rises-As-Prices-Recover.html

----------


## Swordsmyth

*Russia May Feel Pinch From Oil Cut Deal This Year*https://oilprice.com/Finance/the-Economy/Russia-May-Feel-Pinch-From-Oil-Cut-Deal-This-Year.html

----------


## Swordsmyth

The Louisiana Offshore Oil Port (LOOP) said  on Sunday that it had successfully loaded the first Very Large Crude  Carrier (VLCC) with U.S. oil bound for export in what could be a  game-changer for U.S. crude oil sales overseas.
The U.S. has  already exported crude oil in supertankers, but because all U.S. ports  except for LOOP are too shallow for the very large tankers, smaller  tankers have had to make multiple short voyages to the supertankers to  load them while they dock offshore.
“There could not be a better  time to offer this service as domestic production surpasses 10 million  barrels per day in the ever-dynamic global crude oil market,” Tom Shaw,  LOOP president, said in a statement.
“The  new onloading configuration was accomplished with only minor  modifications to existing facilities and is scalable to meet the  changing needs of the industry,” Shaw added.

More at: https://oilprice.com/Latest-Energy-N...ertankers.html




As OPEC allies push to restrict oil output in an international  attempt to bolster crude prices, Nigerian producers are heading in the  opposite direction, aspiring to increase output by 250,000 more barrels a  day to reach their overall goal of 2.5 million per day by 2020.  Look no further than Shoreline Group, Nigeria’s third-largest  independent oil producer, which intends to double their output by the  end of this year alone.
Ironically, this is all happening at the  same time that the Nigerian government has pledged to participate in a  global pact lead by Saudi Arabia and Russia to restrict oil supply. This  month the government made an official pledge to keep output under 1.8  million barrels a day in 2018. Meanwhile, as Nigerian oil minister  Emmanuel Kachikwu makes his lofty promises to OPEC, the nation’s crude  output is at its highest level in more than two years.
In  January, Nigeria produced an average of 1.93 million barrels per day,  well above the promised 1.8 million. On top of this figure, the nation  is set to start up production in a new large-scale oil field by the end  of the year, their first in half a decade. The new offshore Egina oil field  will has a production capacity of 200,000 bpd. Clearly, Nigerian  producers show no sign of heeding their own oil minister’s calls.

More at: https://oilprice.com/Energy/Energy-G...OPEC16524.html

----------


## Swordsmyth

Oil was found flowing naturally for the first time ever onshore in  Jamaica at two locations in what could be a door opener in the  Caribbean, companies said. Two companies, the Petroleum Corporation of Jamaica and CGG  GeoConsulting, said oil was found flowing at two sites during petroleum  field work.


 "This significant find marks the first documented occurrence of  'live', or flowing, oil from onshore Jamaica and will be of particular  interest to oil explorationists focused on Central America and the  Caribbean," they said in a joint statement.


"The discovery of these seeps indicates the presence of working  petroleum systems on the island that are generating and expelling liquid  hydrocarbons to the surface," CGG GeoConsulting and the Petroleum  Corporation of Jamaica announced.

 To the north in Cuba, authorities there issued the consent  necessary for Australia's Melbana Energy to move forward with plans for  oil drilling onshore. The company's Alameda-1 prospect near the  northern coast of Cuba is targeting a reservoir with more than 2.5  billion barrels of oil in place.

More at: https://www.upi.com/Energy-News/2018...7671519219038/

----------


## Swordsmyth

Shale drillers have squeezed more oil out of a given well over the  past few years by becoming more efficient in their drilling operations.  But the industry is still scaling up, and shale executives are now  throwing around buzzwords such as “cube development” and “supersizing,”  referring to the massive footprint of today’s wellpads.
In the  past, shale companies figured out a way to cut costs while expanding  production: drilling more wells on a single wellpad. In essence, that  lowered the average cost of a shale well, allowing drillers to do more  with less. Other techniques were also scaled up, such as using more frac sand,  more water, and drilling longer laterals. That allowed shale firms to  survive during the downturn, and it has also led to surging production  that is breaking new records with each passing week.
But the  process continues, and shale companies are using that same logic today  to continue to scale up. For instance, as Bloomberg reports,  Encana is pursuing a drilling approach called “cube development,” in  which the company drills about 20 wells from a single wellpad, extending  in every direction, with the aim of extracting oil and gas from the  multiple layers of the Permian, rather than each well targeting an  individual shale layer.
The term refers to the notion that the  driller is accessing the entire three-dimensional “cube” beneath the  surface, rather than just the hydrocarbon resources immediately around  the individual wells. “[T]he Permian is graduating," Gabriel Daoud, a  JPMorgan Chase & Co. analyst told Bloomberg. “Now it’s all about  entering manufacturing mode."
More and more shale companies are  following this approach, supersizing individual projects to pull more  oil and gas out of the ground. 

More at: https://oilprice.com/Energy/Crude-Oi...-Fracking.html

----------


## Swordsmyth

Iraq’s oil production could begin to rise after a tentative deal was  agreed to by the Kurdish Regional Government and the central government  in Baghdad.
The two sides reached an accord that is expected to  lead to the restart of oil flows through a Kurdish pipeline to Turkey,  which has been shut down since last summer. "It was agreed with the  Kurdish side to start exporting oil from Kirkuk," Prime Minister Haider  al-Abadi said on Tuesday.

More at: https://oilprice.com/Energy/Energy-G...roduction.html

----------


## Swordsmyth

*U.S. Gasoline Consumption Falls For The First Time In Five Years*https://oilprice.com/Energy/Energy-General/US-Gasoline-Consumption-Falls-For-The-First-Time-In-Five-Years.html

----------


## devil21

> The *global oil market could slip into deeper oversupply* on the back of non-OPEC production growth led by the United States, the International Energy Agency said in its latest Oil Market Report.
> 
>  *“The main factor,” the IEA said, “is US oil production.* In just three months to November, crude output increased by a colossal 846 kb/d, and will soon overtake that of Saudi Arabia. *By the end of this year, it might also overtake Russia to become the global leader.*”
>   Commenting on the recent reversal in oil prices, the authority  attributed it to profit-taking and a market correction spanning all  industries, adding that* oil’s fundamentals supported a decline in prices*.
> 
>   The situation in the United States suggests that history is repeating itself and *what we are seeing now is indeed a second shale revolution* that could bring petroleum liquids production on par with global demand growth.
> 
> More at: https://www.zerohedge.com/news/2018-...s-new-oil-glut


Won't it be funny when/if the US is the largest oil producer in the world yet we're all here riding around in little autonomous electric Ubers, while all that oil goes to the rest of the world?

----------


## Swordsmyth

> Won't it be funny when/if the US is the largest oil producer in the world yet we're all here riding around in little autonomous electric Ubers, while all that oil goes to the rest of the world?


The Saudis won't be laughing.

----------


## devil21

> The Saudis won't be laughing.


See, the thing that never gets mentioned in these oil discussions (mostly because it's never been widely publicized) is that during the Saudi oil for dollars system, the Saudis were quietly dumping dollar assets for GOLD the whole time.  Who knows how much gold the House of Saud has stashed off the books.  Then there's the coming Aramco IPO that will attract a very large BRICS investment.  The Saudis will start the process all over again with new customers.  I've never really bought the 'peak oil' story as being anything more than long-term conditioning/preparation of Americans for the electric vehicle/reduced consumption life after the petrodollar is dead.

eta:  They're probably gonna have to change that name, Aramco.  The 'am' part may be a problem going forward...

----------


## Swordsmyth

> See, the thing that never gets mentioned in these oil discussions (mostly because it's never been widely publicized) is that during the Saudi oil for dollars system, the Saudis were quietly dumping dollar assets for GOLD the whole time.  Who knows how much gold the House of Saud has stashed off the books.  Then there's the coming Aramco IPO that will attract a very large BRICS investment.  The Saudis will start the process all over again with new customers.  I've never really bought the 'peak oil' story as being anything more than long-term conditioning/preparation of Americans for the electric vehicle/reduced consumption life after the petrodollar is dead.
> 
> eta:  They're probably gonna have to change that name, Aramco.  The 'am' part may be a problem going forward...


They have wasted an awful amount of the money that their oil brought in on conspicuous consumption and foreign meddling, I don't think they are in as good a position as you seem to.

----------


## devil21

> They have wasted an awful amount of the money that their oil brought in on conspicuous consumption and foreign meddling, I don't think they are in as good a position as you seem to.


I don't disagree that they have wasted a lot but they also know that it's not real money they've been spending any way.  You may think they aren't in as good a position but I don't think they're as stupid as you think.  Any group that has essentially usurped the throne of an entire country, sold off the natural resources for 45 years, masquerades as religious icons and, yet after all that, still gets labeled as "royalty" must not be very dumb.

----------


## Swordsmyth

> I don't disagree that they have wasted a lot but they also know that it's not real money they've been spending any way.  You may think they aren't in as good a position but I don't think they're as stupid as you think.  Any group that has essentially usurped the throne of an entire country, sold off the natural resources for 45 years, masquerades as religious icons and, yet after all that, still gets labeled as "royalty" must not be very dumb.


In the land of the blind the one eyed man is king.

They are desperate and their recent actions show it, they wouldn't be desperate unless they feared that they were about to lose everything.

----------


## devil21

> In the land of the blind the one eyed man is king.
> 
> They are desperate and their recent actions show it, they wouldn't be desperate unless they feared that they were about to lose everything.


It's pretty clear to me that the entire Saudi story has been a facade so I don't easily believe that suddenly the truth is laid bare for all to see.  In the mainstream media, no less.  Something about by deception and doing war and all that.

----------


## Swordsmyth

> It's pretty clear to me that the entire Saudi story has been a facade so I don't easily believe that suddenly the truth is laid bare for all to see.  In the mainstream media, no less.  Something about by deception and doing war and all that.


It's true I don't have a crystal ball but they seem to be trying to pretend everything is just fine while events tell a different story, I don't think they will last longer than another 10-20 years, Iran will be the new hegemon in the region, maybe even a world class power.

----------


## Swordsmyth

*U.S. Sets New Monthly Oil Production Record*https://oilprice.com/Energy/Crude-Oil/US-Sets-New-Monthly-Oil-Production-Record.html

----------


## Swordsmyth

*Saudis Hint They Could Delay Aramco IPO Until 2019*https://oilprice.com/Energy/Energy-General/Saudis-Hint-They-Could-Delay-Aramco-IPO-Until-2019.html


LOL

----------


## Swordsmyth

Even as OPEC-member Angola continues to comply to bloc-wide crude  production cuts, its progress on its first offshore oil project remains  unhindered, according to a new report by Reuters.
Total,  the French company heading the 230,000-barrel per day Kaombo project,  said the first vessel that will pump and store oil in the African  nation’s waters is on its way from Singapore right now.
The $16  billion project is slated to cause a 14 percent jump in oil production  compared to the 2017 national average, which stood at 1.632 million  barrels per day.
The floating  production, storage and offloading (FPSO) unit will be able to pump  115,000 bpd, exactly half of the project’s final expected output.  Another duplicate vessel is still docked in Singapore.
The  Organization of Petroleum Exporting Countries (OPEC) agreed to cut  output by 1.2 million barrels per day back in November 2016. The bloc’s  members and a dozen other allies have reduced production by another  600,000 barrels per day to rebalance global oil supply markets.
Angola’s  adherence to its quota under the deal has been high. According to  February figures, the country’s compliance rate recently hit 194  percent. If Koambo comes online in the next couple of weeks, that rate  could plummet quickly. Angola’s production is bound by the production  cuts until December 2018, but the deal is scheduled to be “reviewed” in  June.

More at: https://oilprice.com/Latest-Energy-N...Producing.html

----------


## Swordsmyth

BP reported a surprise increase in oil production from aging fields  that, according to chief executive Robert Dudley, he hadn’t seen in his  close to four-decade career in the industry.
BP reported a 12-percent increase in oil production last year, to the highest level since 2010.
In an interview  with Bloomberg on the sidelines of CERAWeek, Dudley said “I cannot  remember ever in my career having seen a negative decline rate.” And BP  is not alone, either, Bloomberg’s Javier Blas notes. Norwegian oil  companies and Shell have also reported better production results from  their mature fields.
While for the companies operating these  fields should pat themselves on the back, it is a new problem for OPEC,  which is currently focusing on U.S. shale as its main problem in keeping  prices high.
Data from the International Energy Agency reveals  that the phenomenon is not limited to a couple of supermajors, either.  Last year, the agency said, oil production from legacy fields worldwide  declined by a more modest pace, of less than 6 percent, compared with  7.5 percent a year earlier.

More at: https://oilprice.com/Energy/Energy-G...re-Fields.html

----------


## Swordsmyth

We have been fairly vocal about  how we believe that a good deal of OPEC's success in boosting oil  prices has been to do with them directing exports to emerging markets  instead.
Our ClipperData below illustrate this, highlighting how  OPEC loadings bound for Asia have been higher than October 2016's  reference level in 12 out of the last 14 months, averaging over 500,000  bpd more over the period. These flows reached their highest differential  last month, being higher by 1.4 million bpd.  
In absolute  contrast, OPEC loadings bound for North America have been lower in 12  out of the last 14 months, down by just over 300,000 bpd over the same  period. This differential has been consistently wider in the last 5  months. The more things change, the more they stay the same.



More at: https://oilprice.com/Energy/Energy-G...o-Decline.html

----------


## Swordsmyth

Saudi Arabia's  state-owned oil behemoth is increasingly looking to just float locally,  as plans to list on an international exchange hang in the balance, Reuters reported, citing sources close to the matter.
 															 																													 					 			 	 												    														Saudi Aramco had planned to begin  trading on the country's domestic stock market — the Tadawul — and one  or more foreign exchanges in the second half of 2018. London, New York  and Hong Kong are among the foreign bourses currently competing for the  share sale.

However, a Reuters report on Tuesday morning  suggested Riyadh is now banking on being awarded emerging market status  in the influential MSCI benchmark equity index in June, according to its  sources. Significantly more money tracks emerging markets which should  allow Aramco to attract Western funds, in addition to other flagship  investors from China, Japan and South Korea.
 															 																										    														"I would guess it is  about evens that there will be no international IPO," said a high-level  source familiar with the preparations, according to Reuters. The source  added that the preparations were proving to be a disappointment. CNBC  has not been able to independently verify these sources. 

Saudi Aramco was not immediately available for comment when contacted by CNBC.

More at: https://www.cnbc.com/2018/03/13/saud...hoo&yptr=yahoo

----------


## Swordsmyth

Oil hedges have become popular amongst U.S. shale drillers, who have used the financial trick to lock-in higher prices for their raw goods as barrel prices edge higher.
The  prices of half of all shale production this year have been locked in  using futures contracts. After the fourth quarter, U.S. oil companies  increased their hedges to 48 percent, compared to just 30 percent after  the third quarter, according to a note by Goldman Sachs.
Protected  prices on future production make it easier for drilling to boost output  and lower spending, attracting investors to the oil and gas sector.

More at: https://oilprice.com/Energy/Energy-G...tion-Boom.html

----------


## Swordsmyth

*OPEC Admits Rival Oil Supply Will Outpace Global Demand Growth*https://oilprice.com/Latest-Energy-News/World-News/OPEC-Admits-Rival-Oil-Supply-Will-Outpace-Global-Demand-Growth.html



*EIA Stuns Oil Market With Huge Inventory Build*https://oilprice.com/Energy/Crude-Oil/EIA-Stuns-Oil-Market-With-Huge-Inventory-Build.html

----------


## Swordsmyth

Saudi Arabia will keep its crude exports below 7 million bpd  in April as it stays committed to draw down excess global inventories  and boost oil prices, according to the Saudi energy ministry.
The  Saudis plan to continue pumping below 10 million bpd next month, again  overcomplying with their pledge to not exceed the ceiling of 10.058 million bpd, according to a statement by the energy ministry, as carried by Reuters.
“Despite  nominations coming in at 100,000 barrels a day, higher than the  previous month, allocations were maintained on par with their March  levels,” the ministry said.
For March, Saudi Arabia had pledged to cut additional 100,000 bpd  of its oil production and keep its exports below 7 million bpd in a bid  to help clear the global oversupply and counteract the oil market  volatility in February. The Saudi energy ministry said back in February  that oil exports would continue to be below 7 million bpd in March,  despite the 400,000-bpd SAMREF refinery shutting down for planned  maintenance.

More at: https://oilprice.com/Latest-Energy-N...llion-Bpd.html

----------


## Swordsmyth

*Iran Strikes Second Oilfield Development Deal Since Nuclear Pact*https://oilprice.com/Latest-Energy-News/World-News/Iran-Strikes-Second-Oilfield-Development-Deal-Since-Nuclear-Pact.html

----------


## Swordsmyth

Libya has managed to sustain its oil production at around 1 million bpd over the past couple of months and is boosting its oil exports to Europe and the United States, the International Energy Agency (IEA) said Thursday.
“In  Libya, we saw another modest supply gain in February to 1.02 mb/d and,  although stability cannot be taken for granted, it appears that the  frequency and severity of production interruptions is declining and  higher rates of output are being maintained,” the IEA said in its  monthly Oil Market Report today.
Libya  is closing in on Saudi Arabia, which is currently Europe’s  third-biggest seaborne oil supplier after Iraq and Russia, the IEA said  in its report, as carried by Bloomberg. In the fourth quarter of 2017,  Libya also managed to increase its oil shipments to the U.S. compared to  a year earlier, while the oil exports of its fellow OPEC members Saudi  Arabia, Venezuela, and Iraq to America decreased, according to the IEA.  Libya also managed to increase exports to China, the report showed.

https://oilprice.com/Latest-Energy-N...nd-The-US.html

----------


## goldenequity

Yakutian “Black Diamonds” Are About to Hit Asian Markets: Premium Quality Coal for Steel Manufacture

----------


## Swordsmyth

Saudi Arabian diesel and gasoline exports reached record heights in  January as the world’s largest oil exporter continues its compliance to  the Organization of Petroleum Exporting Countries’ (OPEC) output cut deal.
Crude  output remained under the nation’s assigned quota, but the Kingdom  increased diesel and gasoline and other fuel shipments by 27 percent to  1.912 million barrels per day in January, the Joint Organizations Data  Initiative in Riyadh said. The figure demonstrates Saudi’s aggressive  export agenda, which outpaces fuel export rates from October 2016—the  month which served as the reference month for determining crude output  quotas.
The KSA has spent the last few years expanding domestic  refining capacity to keep revenues strong during market downturns. Total  Saudi exports of crude and refined fuels stood at 9.082 million barrels  per day in January, which is the most since December 2016.

More at: https://oilprice.com/Latest-Energy-N...e-Exports.html

----------


## Swordsmyth

The last few days have seen CDS rise across the middle-east, as *Saudi  Arabia’s domestic crises which prompted the reform drive will continue  to stifle Riyadh’s progress in the Vision 2030 project* launched by Crown Prince Mohamed Bin Salman, according to the Financial Times.
  For the first time since July 2017, Saudi credit risk is higher than Qatar credit risk...


More at: https://www.zerohedge.com/news/2018-...-continue-loom

----------


## Swordsmyth

Iran has drastically cut its gasoline imports in recent weeks as it  started the second phase of an oil refinery, moving closer to reaching  gasoline independence, Reuters reported on Wednesday, citing trading sources.
Iran—OPEC’s  third-largest oil producer—has been reliant on gasoline imports for  years because of lack of refining capacity and the Western sanctions  that had limited the choices for funding and spare parts for refinery  maintenance.
Now Iran has started the second phase of the Persian  Gulf Star Refinery in Bandar Abbas, which will double the refining  capacity of the facility to 240,000 bpd. According to trading sources  who spoke to Reuters, production has yet to be ramped up and has yet to  meet the highest gasoline quality standards.
“Iran  does seem to have significantly reduced its reliance on imports,”  Robert Campbell, head of oil products at consultancy Energy Aspects,  told Reuters.

More at: https://oilprice.com/Latest-Energy-N...ependence.html

----------


## Swordsmyth

U.S. refiners are receiving smaller shipments of oil from members of  the Organization of Petroleum Exporting Countries (OPEC) due to the  bloc’s production cut agreement, according to a new report by Bloomberg.
Weekly  crude imports from seven bloc nations dropped by 14 percent last week,  the Energy Information Administration said. The fall brings import  levels down to the lowest since 2010, when the agency first started  collecting weekly data.
Ecuador cut shipments to the United States by 86 percent and Kuwait cut exports by 58 percent, week-over-week.

More at: https://oilprice.com/Energy/Crude-Oi...-Refiners.html

----------


## Swordsmyth

The number of oil rigs in the United States increased by 4 this week,  for a total of 804 active oil wells in the U.S.—a figure that is 152  more rigs than this time last year.

https://oilprice.com/Energy/Energy-G...t-Plunges.html



*Saudi Oil Minister Expects Oil Cuts To Extend Into 2019*https://oilprice.com/Energy/Oil-Prices/Saudi-Oil-Minister-Expects-Oil-Cuts-To-Extend-Into-2019.html

----------


## Swordsmyth

If U.S. oil production continues to boom at the current pace, OPEC and Russia should extend  their production cut pact into 2020, Leonid Fedun, the vice president  of Russia’s second-largest oil producer Lukoil, said on Friday.

More at: https://oilprice.com/Latest-Energy-N...s-To-Soar.html

----------


## Swordsmyth

*$70 Oil Could Spark An Offshore Oil Boom*https://oilprice.com/Energy/Oil-Prices/70-Oil-Could-Spark-An-Offshore-Oil-Boom.html

----------


## Swordsmyth

Surging U.S. oil production on the one hand, and the exploration and  production companies’ focus on keeping costs in check on the other, have  prompted drilling rig makers to shift their technology offering to  solutions for increased productivity.
The largest U.S. rig fleet owners and operators are looking to secure contracts as the U.S. oil rig count continues to increase,  which, as of last week, stood at 804 active oil rigs—up by 152 rigs  compared to this time last year. So far in 2018, the oil and gas rig  count in the United States has increased by 71 rigs.
National Oilwell Varco (NOV), for example, is offering  upgrade kits for some of its rigs that are already in the field. The  upgrade kit extends lifecycle and utilization of existing iron roughneck  and increases torque magnitude to meet the emerging rig application  demands associated with longer lateral wells, according to NOV. And it’s  this very kind of efficiency improvement that may separate the winners  from the losers.
If the downturn taught drillers nothing else, it  taught them to tighten their belts—to squeeze every last drop from what  they already have. Gone are the loosey-goosey days of $100 oil. Drilling  longer laterals is one of those ways that U.S. companies use to squeeze more oil from the rocks, by supersizing fracking, alongside with using more frac sand. 

A  15-percent increase in the length of laterals last year was a  significant driver for super-spec rig demand, Helmerich & Payne said in January, noting that it expects this trend to continue.


The rig providers are increasingly using and offering digital  solutions, data analytics, and advanced computing to win more customers  as U.S. drilling activity and production is expected to continue to  grow, at least in the next few years.
Oilfield rigs and services provider Patterson-UTI Energy, for example, said  last month that it had bought directional drilling analytics company  Superior QC—a provider of software used to improve the accuracy of  horizontal wellbore placement.

Nabors Industries reported  an increased rig fleet in U.S. land drilling for 2017 with increasing  margins, and expects the rig market to continue to improve in the coming  quarters. Nabors bought last year Norway-based Robotic Drilling Systems AS, a provider of automated tubular and tool handling equipment.
“The  robotics and rotary steerable operations are still in the product  development stages but are expected to see improving results in 2018 as  they enter the commercialization phase of their principal products,”  Nabors said at the end of February.

More at: https://oilprice.com/Energy/Energy-G...mian-Boom.html

----------


## Swordsmyth

Offshore crude oil extraction, including deepwater, is closing in on  shale in terms of cost thanks to new production technologies, a senior  Chevron executive said at an industry event, as quoted by Bloomberg.
The  company is laying pump networks on the ocean floor, connecting new  wells with already installed platforms, cutting its costs considerably  and bringing deepwater oil closer to competing with shale on an equal  footing, vice president for upstream, Jay Johnson, said during a  presentation at the Scotia Howard Weil Conference in Louisiana.
The  upbeat attitude is not limited to Chevron executives, either.  Transocean’s chief executive, Jeremy Thigpen, said that at the moment,  most of the 29 deepwater oil projects in the Gulf of Mexico have a  breakeven level of between US$40 and US$45 a barrel.

More at: https://oilprice.com/Energy/Crude-Oi...-On-Shale.html

----------


## Swordsmyth

OPEC is looking to forge a “very long-term” cooperation with non-OPEC  producers, the cartel’s Secretary General Mohammad Barkindo said  on Wednesday, lending further credence to the news that Saudi Arabia is  working on an oil cooperation deal with Russia-led non-OPEC producers  that could span two decades.
“We are looking for a very long-term  cooperation between OPEC and non-OPEC producing countries,” OPEC’s  Barkindo said at an energy conference in Baghdad today.
Earlier this week, Saudi Crown Prince Mohammed bin Salman said that OPEC and Russia were looking to solidify their cooperation on crude oil production for another decade or two.
Barkindo’s  words of “very long-term cooperation” suggest that OPEC would welcome  such a deal that would be unprecedented in the oil market.

More at: https://oilprice.com/Latest-Energy-N...-Oil-Deal.html

----------


## Swordsmyth

*Iraq Says Some OPEC, Allied Producers Seek Oil Cuts Into 2019*https://www.bloomberg.com/news/articles/2018-03-28/iraq-says-some-opec-allied-producers-seek-oil-cuts-into-2019?utm_source=yahoo&utm_medium=bd&utm_campaign=h  eadline&cmpId=yhoo.headline&yptr=yahoo

----------


## Swordsmyth

*Bahrain discovers largest oil field in country since 1932*http://www.foxnews.com/world/2018/04/01/bahrain-discovers-largest-oil-field-in-country-since-1932.html?utm_source=feedburner&utm_medium=feed&ut  m_campaign=Feed%253A+foxnews%252Fworld+(Internal+-+World+Latest+-+Text)

----------


## Swordsmyth

> ==========
> 
> Campbell Training
> *BREAKING: Reports that a large Saudi Arabian oil tanker has been hit by ballistic missiles fired from Yemen and that the tanker may be sinking*
> 
> *UPDATE*
> The Houthis movement hit a Saudi oil tanker in the Red Sea near Yemen's main port city of Hodeidah Al-Arabiya TV, *citing the Saudi-led coalition statement*. 
> *According to the broadcaster*, the oil tanker sustained slight damage from the attack and maintained its course.
> https://sputniknews.com/middleeast/2...arrier-saudis/
> ...


...

----------


## Swordsmyth

Crude oil production across OPEC slumped by 170,000 bpd last month to 32.04 million bpd, a Bloomberg survey  among energy analysts. This is the lowest daily production rate in the  cartel since April 2017, when it pumped 31.9 million bpd.
Yet once  again the drop was not the result of a conscious effort. Venezuela’s  production continued to fall, shedding another 100,000 bpd in March,  which made the struggling South American economy the main—if  unwilling—contributor to the OPEC production decline. Venezuela pumped  1.51 million bpd last month, versus its OPEC quota of 1.97 million bpd. The country’s cumulative cut as of March stood at 557,000 bpd, versus a pledge cut of just 95,000 bpd.
Algeria  was another contributor to the production decline, with output there  falling by 40,000 bpd to 1 million bpd as field maintenance season  kicked in. Libya was also an unwilling participant in the overall  decline, with production there slipping below 1 million bpd on field  outages.

Saudi Arabia also continued to pump less than it had pledged to, with  the daily average falling by another 10,000 bpd last month to 9.87  million bpd. In comparison, Russia’s production hit the highest in 11  months in March, at 10.97 million bpd,  still almost in line with its pledge to OPEC, which was for a cut of  300,000 bpd from its November 2016 average daily of 11.247 million bpd.

More at: https://oilprice.com/Energy/Energy-G...Month-Low.html

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## Swordsmyth

Bahrain announced on Wednesday the size of the oil reserves in the  giant discovery that it had made, and figures dwarf the proved reserves  that the island kingdom in the Persian Gulf had prior to the latest oil  find.

The huge discovery in west Bahrain, named Khalij Al-Bahrain Basin, is estimated to hold more than 80 billion barrels of oil,  Oil Minister Sheikh Mohammed bin Khalifa Al-Khalifa said at a press  conference today. The volume of natural gas at the field is estimated to  be between 10 trillion and 20 trillion cubic feet, AFP quoted the  minister as saying on Wednesday.
Bahrain announced a few days ago the biggest crude oil discovery  in its history that will “dwarf” its current reserves, and details on  the size of the reserves were expected to be released later this week.
Before the latest oil discovery, Bahrain was estimated to have proved reserves of just 125 million barrels of crude.
International  oil companies are currently helping Bahrain to carry out appraisal  studies at the new discovery, and to quantify how much of the oil and  gas in place can be extracted, Al-Khalifa said.

More at: https://oilprice.com/Energy/Crude-Oi...ls-Of-Oil.html

----------


## Swordsmyth

This week, the heir to the Saudi throne met with billionaire Richard Branson, chairman of Virgin Hyperloop One, at the Mojave Air and Space Port in California to unveil the “Vision 2030 Hyperloop Pod,” a project that would bring a high-speed Hyperloop transportation system to Saudi Arabia. 
The  commitment is part of the Crown Prince’s grand “Vision 2030” plan to  modernize the economy of the Middle Eastern oil kingdom by 2030. 
A  Hyperloop system would help position Saudi Arabia as a “gateway to  three continents” by dramatically speeding up transportation in the  region, Virgin Hyperloop One said in a statement. 
The  tube-based system, two to three times faster than high-speed rail, will  reduce the travel time between Saudi’s capital Riyadh to the country’s  commercial hub Jeddah from 10 hours (by train) to 76 minutes. Currently,  a direct flight between the two cities takes about 95 minutes.

“Hyperloop is the catalyst to  enable all fourth generation technologies to flourish in the Kingdom,  while creating a vibrant society and thriving economy through visionary  cities and high-tech clusters,” Prince Mohammed said in a statement  through Virgin Hyperloop One.

More at: http://observer.com/2018/04/saudi-cr...erloop-system/

----------


## Swordsmyth

*Sinopec To Slash Crude Imports From Saudi Arabia By 40%*https://oilprice.com/Latest-Energy-News/World-News/Sinopec-To-Slash-Crude-Imports-From-Saudi-Arabia-By-40.html

----------


## Swordsmyth

A fifth of U.S. crude oil producers are planning to use their cash flow from operations to fund new production expansion, a survey  from Haynes & Boone has found. Besides cash from operations,  producers will be using bank debt and private equity financing this  year, the survey revealed, signaling continued improvement in the  industry.
In further good news for the industry, more than 80  percent of respondents in the survey said they expected borrowing bases  this year to rise, which means the value of borrowers’ assets used as  collateral when taking out loans will be higher. Still, the increase  will not be major, at between 10 and 20 percent, Haynes & Boone  noted.
This is the most optimistic sentiment among oil producers  since Haynes & Boone began making the bi-annual surveys in 2015.  Interestingly enough, the focus of this optimism is not the Permian. In  fact, survey respondents believed the next hot spots in U.S. oil will be  Eagle Ford and the Austin Chalk in Louisiana, as well as Niobrara and  the Powder River Basin in Wyoming.
Meanwhile,  E&Ps are locking in higher oil prices. The law firm estimates that  between 50 and 60 percent of their 2018 oil production has already been  hedged. This means producers have insulated themselves—at least to a  certain degree—from any sharp downward price moves that might come later  this year.

More at: https://oilprice.com/Latest-Energy-N...f-Finance.html

----------


## goldenequity



----------


## Swordsmyth

> 


It will go down again.

----------


## Swordsmyth

> 


For months, Saudi Arabia has been said to aim for oil at $70 a barrel, but now new hints and reports suggest that Riyadh is likely shooting for oil at $80—to  help finance increasingly ambitious domestic policy plans and to boost  the valuation of its oil giant Aramco ahead of its much-hyped IPO.
If  this unofficial oil price target were reached, however, it could  backfire spectacularly on both sides of the oil-market-balance  equation—supply and demand.
$80 oil would trigger an even bigger  U.S. crude oil production surge that could unravel OPEC’s efforts at  eliminating the glut. Oil at $80 could also slow down global oil demand  growth, undermining one of the cartel and friends’ key assumptions: that  robust demand growth will absorb the non-OPEC supply and that demand  growth will continue to be strong going forward. Last year, oil demand  growth surprised a bit on the upside, helping bloated inventories to  draw down significantly. 

Yet, targeting $80 oil—if we assume that Saudi Arabia is doing that—has  its economic reasons. According to RBC Capital Markets, OPEC’s producers  need oil even higher—at an average of $88 a barrel—to balance their  public spending this year, Bloomberg Gadfly’s Liam Denning writes. 

For Saudi Arabia, the price of oil needed to balance the 2018 public  spending is $83 a barrel. The OPEC member that needs the ‘lowest’ price  of oil to balance this year’s expenditure is Iran, at $52 a barrel,  according to data by RBC Capital Markets.
It comes as little surprise then that Saudi Arabia and Iran—apart from the tense regional archrivalry—are reportedly at odds over  where to go next with the OPEC deal, and how high an oil price the  cartel should target. Iran is reportedly suggesting that $60 oil is  about right so as not to encourage U.S. shale (even more), while Saudi  Arabia is in need of higher-than-$60 oil to balance budget spending and  lift Aramco’s valuation to anywhere close to the US$2 trillion that  officials have been targeting.  

At Brent above $60 and WTI at a $3-4 a barrel discount, U.S. crude oil  production has exceeded 10 million bpd in each of the weeks in February  and March, EIA data  shows. The Permian continues to boom, and even in case of takeaway  capacity constraints—which have led to around $11 a barrel discount of  Midland, Texas, oil to Brent—Permian producers would pump at profit if  Brent were to rise (and stay) at $80, Bloomberg’s Denning argues.


Then, higher oil prices could also spur more production from areas outside the hottest U.S. shale play. According to the Dallas Fed Energy Survey from  March 2018, the average WTI breakeven price to profitably drill a new  well in the U.S. ranges from $47 to $55 per barrel. All the main areas,  including the Permian, Bakken, and SCOOP/STACK, have average breakevens  at less than $54 WTI, according to executives from 65 E&P firms.
The  higher the oil price the Saudis (or OPEC) target and possibly reach,  the more areas in the U.S. would be profitable to drill and add to the  global oil supply, potentially wiping out the effect of the cuts and  depressing oil prices again.  
On the demand side, oil at $80  could hurt global oil demand growth, which was the tailwind last year to  help OPEC significantly reduce the oversupply. Demand growth could also  slacken should the current U.S.-China trade spat hurt global trade and  impact global economic growth. While the effects of a possible trade war  are still just in the realm of possibilities and analysts are waiting  for all the rhetoric dust to settle, if trade and economic growth were  to weaken, they could affect the pace of oil demand growth. This could  undermine the assumptions of OPEC and allies that strong demand growth  in the short term would help the cartel to achieve its mission to bring  inventories down to normal levels.

More at: https://oilprice.com/Energy/Oil-Pric...-Backfire.html

----------


## Swordsmyth

OPEC and allies will keep the oil production cuts through the end of 2018, and will discuss at their June meeting whether to extend those cuts further, Kuwait’s Oil Minister Bakheet al-Rashidi said on Monday.

More at: https://oilprice.com/Latest-Energy-N...l-In-June.html

----------


## Swordsmyth

Most headlines with "Saudi Arabia" in them seem to feature a hefty sum of money. A US$500-billion smart city here, a US$200-billion  solar project there--it's beginning to look like Saudi Arabia wouldn't  even look at a project if it costs less than a billion dollars.
One  also gets the distinct feeling that Saudi Arabia is still an extremely  rich nation that can afford all these projects, even without the listing  of its state oil giant Aramco.
The truth, however, may be that it  can't afford them even with the Aramco listing. Here's a simple  calculation. The Neom city project and the SoftBank deal alone come in  at US$700 billion. Add to this a US$10-billion deal with Egypt for another smart city, the US$44-billion refinery deal with three Indian companies, and a couple of smaller projects: a US$7-billion refinery in Malaysia and a US$5-billion petrochemicals complex in Saudi Arabia. The bottom line of this selection: US$766 billion.
Of  course, the Kingdom won't finance all these projects on its own, but it  will need to finance a certain portion of them—in some of the projects,  even half of the total. Also, these are not all the large-scale  projects that Saudi Arabia has signed up for. Let's make a crude  assumption that Riyadh's participation in the megaprojects is half, at  US$383 billion. Can it afford it?
Saudi Arabia's sovereign wealth fund, the government's investment vehicle, has US$250 billion  in assets under management. Plans are to expand this to US$400 billion  by 2020 through local and international investments, but right now  US$250 billion is what the Kingdom has in the fund, and oil is still  below its target price of US$80 a barrel. Meanwhile, the 2018 Saudi  budget features a deficit of US$52 billion and some observers believe  the Kingdom is stretching itself too thin with all its ambitious reform  plans. 

So far so good, but won't Aramco's listing be enough to cover all  expenses related to the megaprojects and then some? That's a tough one  to answer. The Saudis themselves insist that the world's largest oil  company by reserves is worth US$2 trillion. Independent experts,  however, doubt that. As Bloomberg's Liam Denning recently wrote, the only way to come up with the US$2 trillion valuation is to make "some heroic assumptions."
Let's  be heroic, then, and assume that Aramco is really this valuable. At a  total value of $2 trillion, the 5 percent that the government in Riyadh  plans to float will bring in proceeds of US$100 billion—in a best-case  scenario, of course. Add this to the US$250 billion currently available  in the sovereign wealth fund, and you end up with US$350 billion, which  is US$33 billion short of the first assumption about the six  abovementioned investments that Saudi Arabia has committed to make.

More at: https://oilprice.com/Energy/Energy-G...aprojects.html

----------


## Swordsmyth

One new challenge for MENA oil producers will be the fact that Asian  consumers are starting to work against the so-called “Asian Premium”.
Indian  minister of petroleum Dharmendra Pradhan already stated to the press  that India, in close cooperation with China and other Japanese  consumers, will be pushing for changes to the “Asian Premium” contracts  of OPEC. Sanjiv Singh, chairman of Indian Oil Corporation, and Wan  Yalin, chairman of China’s oil giant CNPC, will be setting up a strategy  to force OPEC to set a new and fairer price for Asian customers. This  could be a major blow to Arab and Iranian oil producers, as it could  lower overall revenues dramatically.

From an Asian standpoint, the call for change is fair, especially as  China, Indian, Japan and South Korea are the main consumers of Middle  East oil & gas. The historic approach of an “Asian Premium” was  partly based on more costly transportation and high demand for crude and  LNG/natural gas in European and U.S. markets. The removal of real  competition between East and West of Suez has led to an almost exclusive  oil and gas trade strategy between MENA producers and Asian consumers.
Asia’s  overall position has increased due to economic growth and soaring  energy consumption. When looking at the Asian consumers, it no longer  seems fair to pay more for the same product. A possible coordinated  price change demand by the Asian Tigers, including India, could put Arab  and Iranian oil volumes under increased price pressure.

More at: https://oilprice.com/Energy/Crude-Oi...OPEC-Deal.html

----------


## goldenequity

Russia & Iran drop dollar trade by extending* oil-for-goods* supply agreement
https://www.rt.com/business/424541-r...-oil-supplies/

The first delivery of Iranian crude oil to Russia under the oil-for-goods program has been completed and the sides aim to extend the deal for five years, according to Russian Energy Ministry Aleksandr Novak.

The agreement is effective; it has been extended for the year, but in general, we think it should be extended for five years, he said.

The oil-for-goods deal was initially reached in 2014 when Iran was under Western sanctions over its nuclear program. Last year, Moscow and Tehran ratified the agreement, under which Russia would initially buy 100,000 barrels a day from Iran and sell the country $45 billion worth of goods.

----------


## Swordsmyth

U.S. President Donald Trump tweeted  that oil prices are “artificially very high” and “will not be  accepted”, the day after the price of oil reached its highest level  since the end of 2014.

President Trump tweeted early on Friday:
“Looks like OPEC is at  it again. With record amounts of Oil all over the place, including the  fully loaded ships at sea, Oil prices are artificially Very High! No  good and will not be accepted!”
The tweet came a day after oil prices reached end-2014 highs,  with WTI Crude nearing $70 a barrel early on Thursday, following  another drop in U.S. inventories and talk of Saudi Arabia reportedly  pushing for oil prices as high as $100 a barrel.

More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

----------


## Swordsmyth

The number of oil rigs in the United States increased by 5 this week,  for a total of 820 active oil wells in the U.S.—a figure that is 132  more rigs than this time last year. 

More at: https://oilprice.com/Energy/Energy-G...mbs-Again.html

----------


## Swordsmyth

OPEC and non-OPEC producers could reconsider the size of the  production cuts they agreed in December 2016 and “ease the cuts,”  Russia’s Energy Minister Alexander Novak told TASS during today’s meeting of the partners in Jeddah.
“We  will monitor the market situation over the next two months,” Novak  said, “and we will assess it when we meet again in June. The deal will  continue until the end of the year but in June we might discuss the  question of reducing the cut quotas over that period.”
Once again,  the Russian Energy Minister is providing some counter-pressure to its  partner Saudi Arabia’s upbeat attitude about the future of the cut deal  by hinting that not everything is set in stone, and that the cuts might  not continue indefinitely regardless of how much Riyadh wants higher oil  prices.

More at: https://oilprice.com/Energy/Energy-G...tion-Cuts.html

----------


## Swordsmyth

Over the next five years, it is projected  that ConocoPhillips will be adding 100,000 barrels a day to the  trans-Alaska pipeline for a total 650,000 barrels a day, an 18 percent  increase. This is great news after years of dwindling volumes--to put  today’s 550,000 barrels per day in perspective, when the pipeline peaked  in 1988 it was funneling  2.1 million barrels of oil per day through  Alaska, an economy that relies heavily on oil revenues but has been  seeing volatile returns in the past years.

The newfound interest in Alaskan oil is not limited to  ConocoPhillips, however. Investors and developers from as far-flung  places as Papua New Guinea (PNG) have moved in to get a piece of the  action. Last month a PNG-based company called Oil Search took over operations with a $400 million stake in the Nanushuk field. The field is part of the massive Pikka unit, reportedly the state’s third largest with an estimated volume of 1.2 billion barrels of oil (some sources  have even reported up to 3 billion barrels). Oil Search bought a large  stake in the field from Denver-based Armstrong Oil and Gas, while  Spanish-based Repsol owns another significant portion.
Alaska’s State Department of Natural Resources Commissioner Andy Mack told the Associated Press  saying that Pikka alone could reverse the extended decline in the  trans-Alaska pipeline. Oil Search is equally bullish about the  prospects, saying that the first planned development could account for  an investment in the range of $4 billion to $6 billion, with a goal to  have their oil flowing through the trans-Alaska pipeline by 2023.

More at: https://oilprice.com/Energy/Crude-Oi...-Oil-Rush.html

----------


## Swordsmyth

*U.S. oil floods Europe, hurting OPEC and Russia*https://finance.yahoo.com/news/trumps-revenge-u-oil-floods-europe-hurting-opec-131846913--finance.html

----------


## Swordsmyth

Extending the OPEC cuts beyond their current expiry date at the end  of 2018 would seem unnecessary if oil prices keep rising, Iran’s Oil  Minister Bijan Zangeneh told the Iranian oil ministry’s news service Shana on Monday.
“High  oil prices, even in the mid-term, would destabilize the prices and put  pressure on them against OPEC’s interests,” the official outlet of the  Iranian oil ministry quoted Zangeneh as saying.
When asked about Iran’s position regarding an extension of the OPEC production cuts beyond 2018, Zangeneh told Shana:
“No  decision will be made regarding this issue in the upcoming OPEC meeting  because the matter is unlikely to be included in the meeting’s agenda.”
Commenting  on oil prices, the Iranian oil minister said, “I think that the  balanced, non-fluctuating price of oil would be favorable for OPEC and  other producers.”

More at: https://oilprice.com/Energy/Energy-G...OPEC-Deal.html

----------


## Swordsmyth

Having slashed Saudi crude imports for May by 40 percent, China’s  Sinopec—the largest oil refiner in Asia—will continue to cut imports of  the flagship Saudi crude grade in June and July, as the prices for other  Middle Eastern grades are more favorable, two executives at Sinopec’s  trading arm Unipec told Reuters on Tuesday.

More at: https://oilprice.com/Latest-Energy-N...l-Imports.html

----------


## Swordsmyth

US drillers added 8-rigs to the total number of oil and gas rigs this week, according to Baker Hughes, adding 5 oil rigs and 3 gas rigs.

US oil production rose again in the week ending April 20, reaching 10.586 million bpd—the nineth build in as many weeks—less than a half million bpd off the 11.0 million bpd forecast that many predict for 2018.

More at: https://oilprice.com/Energy/Energy-G...Rig-Count.html

----------


## Swordsmyth

While oil exporting nations are benefiting from higher oil prices,  oil importers face growing crude import bills that affect government  finances.
India—the world’s third-largest oil importer—is one of  the biggest losers of the higher oil prices in recent months, as the  increased price of oil widens its trade deficit, puts more upside  pressure on inflation that threatens to exceed government targets, and  risks reducing current projections for robust economic growth. All this  is happening while Indian politicians and consumers (voters) face a  series of elections this year and next, with a general election expected  to be held in the spring of 2019.
In March 2018, India paid a  nearly 14-percent higher crude oil import bill than in March 2017. The  value in U.S. dollars of India’s oil imports—accounting for more than 80 percent  of its oil consumption—in the fiscal year April 2017-March 2018 rose by  25.47 percent compared to the previous fiscal year, government trade data shows.
In early April, India’s Oil Minister Dharmendra Pradhan told Bloomberg that oil prices at $70 a barrel are ‘too high’ for India’s economy, which is a very price-sensitive market.
“I’d  be more than happy if the prices are around $50 plus,” the minister  said, adding that if the Saudis were targeting $80 a barrel oil price,  it would “pinch India in a big way.”

More at: https://oilprice.com/Finance/the-Eco...s-Economy.html

----------


## Swordsmyth

Iran’s crude oil exports reached a record 2.617 million bpd  in April, according to its oil ministry’s news service Shana—the  highest level since Iran signed the nuclear deal with global powers that  now hangs in the balance as U.S. President Donald Trump threatens to  pull out of the agreement.
Iran exported record-high volumes of  crude oil and condensate of 2.877 million bpd to Asian and European  markets, Shana reported. 

Iran’s crude oil exports last month beat the previous record of 2.44 million bpd from October 2016.
Ship  tracking data compiled by Bloomberg showed that Iran last month  exported 2.83 million bpd of crude and condensate, up from 2.48 million  bpd in March. Crude oil exports alone increased to 2.48 million bpd in  April from 2.06 million bpd in March, Bloomberg data showed.

More at: https://oilprice.com/Energy/Energy-G...ions-Loom.html

----------


## Swordsmyth

Saudi Arabia needs oil to trade at US$85 a barrel to fill its budget gap, IMF’s head for the Middle East and Asia said today.
“The  improvement in the overall economic conditions with growth recovering  this year - it is expected to be at 1.8 percent - will help them to  maintain the pace of fiscal adjustment and at the same time will allow  the economy to grow again,” Jihad Azour said, as quoted  by Reuters.
The  Kingdom presently plans to have a balanced budget by 2023, but this  will only happen if oil prices are high enough, it seems. For this year,  Saudi Arabia has stipulated a budget deficit of around US$52 billion,  which represents 7.3 percent of GDP.
The  bad news is that the oil price that the Kingdom needs to make ends meet  is rising. Last year, Azour said, it was US$83 a barrel. This year, it  will be between US$85 and US$87 a barrel.

More at: https://oilprice.com/Latest-Energy-N...il-Prices.html

----------


## Swordsmyth

New shale oil well productivity drove U.S. production higher in the  last few years, with the average daily rate for the first month of  operation rising from less than 100 barrels for most shale plays to  between 200 and more than 600 barrels, the Energy Information  Administration said in a new report.

Image courtesy: EIA
Last  year, the energy authority said, shale oil production came to account  for 54 percent of the United States’ overall oil production, in part  thanks to this higher new-well productivity. The EIA said this higher  productivity was the result of a combination of factors including the  wider use of hydraulic fracturing and the drilling of more—and  longer—horizontal wells, but most notably the increase in the amounts of  frac sand used in new wells.
This combination of factors helped  shale drillers to stay afloat and keep production going even during the  downturn. In 2015 and 2016 there were fewer new wells drilled, but those  that did get drilled were located in more productive areas and were  drilled more quickly. Now that the worst is over, they are focusing on  the Permian, the EIA noted, which holds more untapped reserves than the  rest of the oil patch.

Average full-cycle breakeven costs in the Permian are US$42 per barrel, according  to Rystad Energy. This accounts for the costs of the whole process—from  drilling a well to starting production from it. If you add to its  exploration costs for new locations, the cost comes in at US$48 per  barrel—still significantly less than, say, offshore fields, and a lot  below current oil prices.

More at: https://oilprice.com/Latest-Energy-N...tion-Jump.html

----------


## Zippyjuan

Almost a year now.  Have the Russian and Saudi economies collapsed yet?

----------


## pcosmar

War on who??

none of that explain why the price at the pump keeps rising while the cost of crude is at record lows.

----------


## Swordsmyth

> Almost a year now.  Have the Russian and Saudi economies collapsed yet?


Did I ever say it would happen in 1 year?

----------


## Swordsmyth

The current tailwind in the oil market is likely to propel 100 new  offshore projects to be sanctioned in 2018, according to Rystad Energy.  This compares to only 60 projects in 2017 and below 40 in 2016, as shown  in the latest Oilfield Service Report by Rystad Energy. These projects  represent a collective $100 billion worth of capital investment, giving  an average of about $1 billion per project. In contrast, the average  projected capex for offshore projects approved in 2013 was $1.8 billion.
“The  offshore suppliers have created their own comeback,” says Audun  Martinsen, VP of Oilfield Service Research at Rystad Energy. “Their  constant search for cost reductions and streamlining of operations has  enabled them to cut offshore project costs by almost 50% compared to the  heights of the last cycle.”
According to Rystad Energy, the  prices charged by offshore suppliers have fallen more than onshore, and  it depicts an average reduction of close to 30% in 2018 compared to  2014. The main driver for this is the large drop in day rates by  offshore drilling contractors, which is down 50-70%. EPCI costs for  surface platforms and subsea infrastructure are down by 20-30%.
“Not  only are the suppliers charging less for their services, they have also  improved the efficiencies of their operations, thus shortening lead  times from project sanctioning to first oil. As an example, the time  required to drill and complete a well has fallen by 30% in the North  Sea, the Gulf of Mexico and Brazil over the past four years,” Martinsen  adds.

The average breakeven price for deepwater developments currently stands  at about $45 per barrel, and for shallow water it is close to $30 per  barrel. Meanwhile payback times have fallen by three years for deepwater  projects and by 1.5 years for shallow water schemes since 2014.  “Offshore projects can now compete with some of the best acreages in the  Permian basin in terms of breakeven prices. With rising inflation in  the US shale, offshore appears geared to out-compete shale this year and  next,” Martinsen says.

More at: https://oilprice.com/Latest-Energy-N...d-In-2018.html

----------


## Swordsmyth

Russia’s oil production held onto an 11-month high  in April, flat compared to March and above its quota under the  OPEC/non-OPEC deal for a second consecutive month, according to data by  Russia’s Energy Ministry.
Russia pumped a total of 10.97 million  bpd of oil in April, unchanged from March, and slightly above its quota  under the production cut deal, according to energy ministry data, as  carried by Reuters.
Russia’s pledge in the OPEC/non-OPEC deal is  to shave off 300,000 bpd from its October 2016 level, which was the  country’s highest monthly production in almost 30 years—11.247 million  bpd.
Last month, production at  the larger Russian companies increased, while a decline at the smaller  firms offset that growth. Production at Rosneft, the largest Russian oil  company, inched up by 0.1 percent in April over March, while Gazprom  Neft—which has an ambitious production growth plan—saw its oil  production increase by 0.9 percent month on month. The combined  production of the smaller oil companies decreased by 0.9 percent last  month, offsetting the production gains at the bigger producers.
After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies— Rosneft and Lukoil—boosted their production.

More at: https://oilprice.com/Latest-Energy-N...Complying.html

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## Swordsmyth

China’s Sinopec will cut its June imports of crude from Saudi Arabia by  40 percent for the second month in a row because of unjustified high  prices, an official from the top Asian refiner, Unipec, told Reuters.

More at: https://oilprice.com/Energy/Crude-Oi...e-Imports.html

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## Swordsmyth

Bahrain’s gross government debt could reach 102 percent in 2019 from  94.9 percent this year as the smallest oil producer in the Gulf  struggles with one of the highest breakeven crude oil price levels  globally, the International Monetary Fund said in the May edition of its Regional Economic Outlook for the Middle East and North Africa.
Bahrain  will need oil to trade at US$113 a barrel this year if it wants to  break even, second only to Libya, which needs oil at US$132 a barrel to  make ends meet. In 2019, the breakeven price for the tiny kingdom will  be US$110.6, according to International Monetary Fund calculations.

More at: https://oilprice.com/Energy/Energy-G...s-113-Oil.html

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## Swordsmyth

Saudi Arabia’s private non-oil sector grew at its slowest pace in at  least nine years, as it continues to feel the pinch of the government’s  austerity measures in response to the low oil prices and low oil  revenues for the state, a survey of businesses showed on Thursday.
The Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) dropped to just 51.4 in April, down from 52.8 in March, and the lowest reading  of the index since the series began in August 2009. A reading below  50.0 means contraction, while the index above 50.0 means expansion of  economic activity.
According to the firms surveyed, the slow  growth in the private non-oil sector was due to subdued market demand,  competitive pressures, and “unpredictable economic conditions”.
The April index marked a new low for the Saudi non-oil growth, following a previous  record-low reading of the index for March. Non-oil private economic  growth has been slowing over the past few months, especially after the  introduction of a 5-percent value added tax (VAT) in January. Many firms  cited VAT as dampening consumer demand in March.

More at: https://oilprice.com/Latest-Energy-N...n-9-Years.html

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## Solodun

Fracking oil and shale oil wells fade off in terms of production very quickly- they can peak in output in just a year or two and decline after that. This means you need a fairly steady addition of new wells just to maintain current levels of production...

----------


## Swordsmyth

The Houthi rebels in Yemen, officially known as Ansurallah, have *vowed to intensify rocket attacks* on Saudi Arabia’s critical oil infrastructure, *warning that they are now manufacturing their own ballistic missiles* to achieve those aims, the Financial Times reports.

*The threat comes at a time when Houthi attacks on Saudi Arabia have begun to increase.*   Just this Saturday, Saudi Arabia’s air defense system intercepted four   ballistic missiles over the southwestern region of Jizan. The debris  of  those missiles reportedly killed one person. Just a week prior, two   other missiles were launched at the Saudi Arabian Oil Company (Aramco)   facilities on the Red Sea.
  At the beginning of April, the London-based IHS Jane’s Terrorism and Insurgency Center noted that *the   Houthis claimed to have carried out three separate rocket attacks on   Aramco facilities in ten days, including an attack on a Saudi oil   tanker, which suffered some damage and led to the intervention of a   coalition naval vessel, which in turn repelled the attack.*
  The Houthis also unveiled their new Badr-1 surface-to-surface weapon   system (a heavy artillery rocket system) approximately a week prior,   which the rebels claimed they had used to attack Aramco facilities.
  Mohammed al-Boukhaiti, a member of the Houthi political council, also   told the Financial Times that these attacks were “only the beginning of   the response” to the death of Houthi leader Saleh al-Samad, who was   killed by Saudi air strikes in April.
 _“Yemenis will not pass on the death of Samad easily and they will do their best to take revenge for him,”_ Mr. Boukhaiti said.Boukhaiti  also dismissed allegations that Iran has supplied the  Houthis with  sophisticated missiles, claiming instead that the rebels  have been  developing and manufacturing their own rockets and drones.
 _“The Yemenis have added new  systems for manufacturing  missiles, so more missiles are targeting  Saudi Arabia as a part of an  escalation,”_ Mr. Boukhaiti also said.The  claim that Iran is responsible for the Houthis’ supply of arms is  one  that continues to skim the surface of mainstream discourse without being bolstered by any hard, credible evidence.
  Despite this, these recent developments are raising fears that the   war in Yemen may begin to spiral out of control even more so than it has   already in the last three years. *As even the Financial Times   admits, so far into the conflict Saudi Arabia has struggled to make any   decent advancement against the rebels.* It is also worth noting   that in recent times, the Houthis’ confidence only appears to be   strengthening, and these recent attacks targeting vital Saudi   infrastructure may only improve their standing in the conflict.

More at: https://www.zerohedge.com/news/2018-...now-what-means

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## Swordsmyth

Two senior Iranian government officials have said oil prices  shouldn’t be too high, with the comments indicating the divide between  Riyadh and Tehran on oil pries is deepening.
First, Oil Minister Bijan Zanganeh said  over the weekend that Iran was all for a “reasonable” oil price,  suggesting the current price level is unreasonable and the result of  “manufactured tensions.” A reasonable oil price, on the other hand,  would be positive for producers, encouraging them to continue pumping  while at the same time reducing the risk of excessive market volatility,  state news agency Shana reported.
Then, Zanganeh’s deputy for international and commercial affairs, Amir Hossein Zamaninia, elaborated  on what a reasonable price is for Tehran: between US$60 and US$65 a  barrel. That’s US$10-15 lower than the current level, at which Brent and  WTI are trading as the market awaits President Trump’s decision on  whether to reimpose economic sanctions on Iran.

More at: https://oilprice.com/Latest-Energy-N...il-Prices.html

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## Swordsmyth

Iraq has signed an agreement with supermajor BP that would triple the  oil production from the Kirkuk oil fields in northern Iraq to more than 1  million bpd, Iraq’s Oil Minister Jabbar al-Luiebi said at the signing  on Monday.

More at: https://oilprice.com/Latest-Energy-N...llion-Bpd.html

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## Swordsmyth

Trump’s decision to kill the Iran deal could put an end to the OPEC agreement.
As  has been widely discussed in the aftermath of President Trump’s  decision to withdraw from the Iran nuclear deal, the return of sanctions  on Iran could disrupt oil shipments, with estimates ranging from  essentially nothing to as much as 1 million barrels per day of Iranian  supply going offline.
But the decision also could put an end to the OPEC agreement.


Wednesday afternoon, Saudi oil minister Khalid al-Falih went further,  tweeting that OPEC and Russia would “ensure market stability.”
I am in close contact with #OPEC ’s Presidency, #Russia and the #US , and will be connecting with other producers and major consumers over the next few days to ensure market stability.
— ???? ??????|Khalid Al Falih (@Khalid_AlFalih) May 9, 2018And  as John Kemp of Reuters points out, this arrangement clears up the  tweet from President Trump in April in which he blasted OPEC for high  prices. “In retrospect, the president’s tweet on April 20 blaming OPEC  for high oil prices can be seen as part of the negotiating process to  reach an understanding with Saudi Arabia,” Kemp wrote for Reuters.
The  implication is that the U.S. will work to isolate Iran, potentially  curbing supply by hundreds of thousands of barrels per day. Saudi Arabia  would resolve any price spike by adding barrels back onto the market.
But  if Saudi Arabia ramps up output, it would essentially have to back out  of the OPEC agreement. Any unilateral increase in supply would violate  the spirit of the pact, and would likely lead to less restraint from  other members. Recognizing the risk here, a source told the FT  on Wednesday that Saudi Arabia would not increase supply on its own,  and would instead work with OPEC and Russia to coordinate their action.

To avoid the entire group returning to full production, there would need  to be some sort of adjustment to the production limits for all of the  participating countries. But it isn’t as simple as merely adjusting the  output limits higher – it was incredibly difficult to get all OPEC  members on board for the original agreement. Any changes will be  problematic. The other possibility is that OPEC members simply start to  cheat, even if the deal remains unchanged.

More at: https://oilprice.com/Energy/Energy-G...OPEC-Deal.html

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## Swordsmyth

Energy Transfer Partners plans to build  a 600,000-bpd oil pipeline from the Permian to the Houston Ship Channel  and Nederland, Texas, as midstream operators race to add takeaway  capacity in the fastest-growing U.S. shale play.
The planned ETP  pipeline could be “easily expandable” to 1 million bpd, company  executives said on the conference call for the Q1 results on Thursday,  adding that the new pipeline would likely come into service in 2020.

Booming  Permian oil production has started to constrain takeaway capacity from  the region, putting downward pressure on Midland crude oil prices  compared to the prices in Houston.
“The  almost historical widening of that basis will certainly help our  margins in the coming quarters,” Reuters quoted senior ETP executive  Marshall McCrea as saying.
Crude oil volumes on ETP’s Permian  Express 3 averaged “a couple of hundred thousand” barrels of oil per day  in Q1, and the company continues to assess possible further expansion  of that pipeline, ETP said on the conference call.
Other operators are also announcing plans or commit to projects to move the growing Permian oil production out of West Texas to the ports.
Enterprise  Products Partners announced plans in December to convert one of its  natural gas liquids (NGL) pipelines from the Permian to the Texas Gulf  Coast to crude oil service. The conversion, expected to be completed in  the first half of 2020, would provide the partnership with total crude  oil pipeline capacity of over 650,000 bpd from the Permian to  Enterprise’s crude oil hub in the Houston area.

Magellan Midstream Partners and Plains All American Pipeline plan to further expand  the BridgeTex pipeline to a capacity of 440,000 bpd to deliver Permian  oil from Midland and Colorado City, Texas, to the Houston Gulf Coast  area.
Plains All American said  in February that the planned Cactus II pipeline capacity is fully  committed with long-term third-party shipper contracts totaling 525,000  bpd. The pipeline is targeted to be operational in the third quarter of  2019.
Phillips 66 Partners has received  sufficient binding commitments on an initial open season to proceed  with construction of the Gray Oak Pipeline system that could transport  up to 700,000 bpd from West Texas to destinations in the Corpus Christi  and Sweeny/Freeport markets.

More at: https://oilprice.com/Latest-Energy-N...-Pipeline.html

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## Swordsmyth

Russia’s second-biggest oil producer, Lukoil, has signed a  development plan for the West Qurna-2 oil field in Iraq with local Basra  Oil Company, targeting to double oil production from the field to  800,000 bpd by 2025, the Russian firm said on Friday.
Lukoil holds a 75 percent  interest in West Qurna-2, Iraq’s state-run North Oil Company has 25  percent, while state Basra Oil Company helps manage the distribution of  the compensation and revenues.
First commercial oil at West  Qurna-2 was pumped at the end of March 2014. Current production at the  field is 400,000 bpd, or 9 percent of Iraq’s total oil production,  according to Lukoil.
The boost  in production will come in stages, according to the project partners’  plan. In 2020, oil production at West Qurna-2 is expected to reach  480,000 bpd. The production plateau of 800,000 bpd is planned to be  achieved in 2025.
“These indicators will be achieved as a result  of drilling and commissioning of new production and injection wells,  construction and launching of oil treatment, storage and transportation  facilities and facilities for gas treatment and power generation,”  Lukoil said in a statement.

More at: https://oilprice.com/Latest-Energy-N...00000-Bpd.html

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## Swordsmyth

US drillers added 13 rigs to the number of oil and gas rigs this week, according to Baker Hughes, adding 10 active oil rigs and 3 active gas rigs. The oil and gas rig count now stands at 1,045—up 160 from this time last year.

US oil production rose again in the week ending May 04, reaching 10.703 million bpd—the  eleventh build in as many weeks—about 300,000 bpd shy the 11.0 million  bpd forecast that many are predicting for 2018. Earlier this week, the  EIA raised its US production forecast for 2018 and 2019, anticipating  that the full-year production for the United States will be 10.7 million  bpd, with 11.9 million bpd forecast for 2019—a 400,000 bpd increase  over its forecast last month.

More at: https://oilprice.com/Energy/Energy-G...de-Output.html

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## Swordsmyth

Shale oil production in the United States will rise by a  record-breaking 144,000 bpd from May to June, hitting 7.178 million bpd,  the Energy Information administration estimated in its latest Drilling Productivity Report.
Hardly  surprisingly, the Permian will lead the way with a 78,000-bpd increase  in production, from 3.199 million bpd this month to 3.277 million bpd in  June. The Permian will be followed by Eagle Ford, where average daily  oil production will rise by 33,000 bpd from 1.354 million bpd to 1.387  million bpd.

More at: https://oilprice.com/Energy/Crude-Oi...king-Rate.html

----------


## Swordsmyth

The Permian basin has garnered much of the media attention when it  comes to U.S. shale growth, but higher oil prices are putting more shale  regions into profitable territory.
In years past, shale companies  trumpeted their diversified holdings, noting their foothold in multiple  shale basins in disparate parts of the country.
However, that  started to change when oil prices cratered to as low as $30 per barrel.  During the depths of the oil market downturn, U.S. shale production  dipped but quickly rebounded, aided by soaring output from the Permian.  While places like the Bakken and Eagle Ford struggled with oil prices  below $50 per barrel, drillers could still make it work in the Permian.  Shale companies large and small began shedding assets in undesirable  locations in order to focus on the Permian.
But with WTI  consolidating gains at $70 per barrel and looking to move higher, some  of those castoff drilling locales are now back in the money. Since the  beginning of 2017, the rig count  in the Permian has skyrocketed by nearly 75 percent to 463 as of May  11. Even as the number of rigs in West Texas has soared, there have been  smaller but a non-trivial uptick in the number of rigs in other  locations, particularly in the last few months as oil prices surged to three-year highs. 

The Williston basin (which includes the Bakken) saw its rig count hit  a recent low point at 45 at the start of this year, but the region has  added 12 rigs since then. The Eagle Ford also saw the number of rigs  dwindle over the course of 2017, before rebounding in February, adding  12 rigs in the past three months.



More importantly, higher levels of drilling are helping to revive  flagging output in these areas. The Bakken was thought to have peaked at  1.26 mb/d at the end of 2014, but it is now close to surpassing that  high point – production in the Bakken is expected to rise to 1.238 mb/d  next month after bottoming out at 0.956 mb/d in December 2016.
The  best days for the Eagle Ford were also thought to be in the past,  hitting 1.7 mb/d in 2015 and declining since then. However, after  bottoming out at 1.048 mb/d in August 2017, the South Texas shale field  has rebounded to 1.353 mb/d.



More at: https://oilprice.com/Energy/Crude-Oi...-Comeback.html

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## Swordsmyth

More at: https://www.zerohedge.com/news/2018-...ing-oil-prices

----------


## Swordsmyth

India is seeking assurances from Saudi Arabia, OPEC's biggest producer,  that oil prices will remain "stable and moderate," its government said  in a statement on Friday.                    

Energy minister Dharmendra Pradhan spoke with Saudi oil minister Khalid  Al-Falih late on Thursday to "express his concern about rising prices  and its negative impact on consumers and the Indian economy," it said.                       

"We're not saying oil should be $25 a barrel, it should be at a price  that is reasonable," Sanjay Sudhir, joint secretary for international  cooperation at India's energy ministry, told CNNMoney. "$80 is way above  a reasonable price, this is not a market-driven price."                      

Indian concerns about oil price rises are understandable. Low oil  prices played a big role in making it the world's fastest growing major  economy in the recent years.                       
Every $10 increase in the price of a barrel  knocks 0.2% to 0.3% off India's growth rate, according to the country's  latest economic survey.                       

More at: https://www.local10.com/automotive/i...ing-oil-prices

----------


## Swordsmyth

The airline industry is heading for rising fuel costs as crude oil  prices surge, and the weakest of the European airlines may not make it  through the winter, Michael O’Leary, chief executive at Europe’s largest  budget carrier Ryanair, said on Monday.
“Spot prices close to $80  a barrel are going to lead to a significant shakeout in the industry as  early as this winter,” O’Leary told Bloomberg Television, after Ryanair reported earlier today a 10-percent increase in its FY 2017/2018 profit.
“Some  of those loss-making airlines who couldn’t make money when oil was at  $40 a barrel certainly can’t survive,” O’Leary told Bloomberg.
Ryanair said in its FY 2018 release on Monday that “fuel will be a major cost headwind for the next 24 months.”
Ryanair is currently 90-percent hedged for FY19 at around US$58 per barrel compared to the spot price of nearly US$80 a barrel.

More at: https://oilprice.com/Energy/Energy-G...-Airlines.html

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## Swordsmyth

With the national average gas price continuing its trudge toward $3 a barrel, pushed by rising crude oil prices, GasBuddy  is reporting that more Americans are planning stay-cations instead of  traveling this summer as worries about rising gas prices intensify.
  According to the annual survey, *only 58% of respondents said they would take a trip this summer, a 24% decrease from last year.* That's the lowest number since the summer of 2014, when crude oil prices were above $100 a barrel.

  Asked about their reasons for delaying their plans, 39% blamed rising gas prices, compared with 19% in 2017.


More at: https://www.zerohedge.com/news/2018-...ing-gas-prices

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## Swordsmyth

Saudi Arabia, Russia and the rest of OPEC “are likely this week to  discuss a controlled relaxation of over-compliance with the Opec and  non-Opec production-cut target,” according to Argus Media.  A Gulf source familiar with Saudi thinking told Argus that a  “relaxation” is a “big possibility” at the upcoming meeting in Vienna on  June 22.To be clear, it would not amount to an “unwinding” or a  “removal” or a “phase out” of the production limits. Such a proposal is  reportedly not under consideration. Instead, OPEC has a more modest  proposal in mind – simply bringing production levels back up to the  stated ceiling.
The discrepancy largely comes down to the  catastrophic production losses in Venezuela. Output in the South  American nation fell to just 1.43 million barrels per day in April, down  nearly 700,000 bpd from 2016 levels. Crucially, Venezuela’s April  production is 500,000 bpd below the level that it is allowed to produce  (1.972 mb/d) as part of the OPEC agreement – and falling on an ongoing  basis.
Because of those declines, the compliance rate for OPEC on the whole shot up to 181 percent in April, according to Argus Media.

The proposal under consideration for the Vienna meeting would be to  allow slightly higher levels of production. Because most of the  participating nations are already producing close to their maximum,  additional supply would have to come from a relatively short list of  nations, namely, Saudi Arabia, Russia, the UAE and Kuwait.
OPEC  could still keep its production limits in place, but allow spare  capacity nations to add supply back to the market, but only a little bit  so the collective ceiling is not breached.
As Argus points out,  allowing for higher levels of production from Gulf countries at the  expense of Iran and Venezuela could potentially undercut cohesion among  the group. Already fierce regional rivals, Iran might perceive the  “relaxing” of production limits as a way for Gulf nations to take its  market share. OPEC’s influence is only as powerful as the group’s  willingness to work together, so future coordination could be undermined  if a decision in Vienna stokes animosity between some of the cartel’s  top producers.
Still, with oil passing $80 per barrel and pricing  risk skewed to the upside, OPEC might be compelled to add more barrels  back onto the market.

More at: https://oilprice.com/Energy/Crude-Oi...tion-Cuts.html

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## Swordsmyth

Shell has made a large deepwater exploration discovery in the U.S.  Gulf of Mexico, just 13 miles from its Appomattox project that is  expected to start production by the end of 2019, the oil major said on Thursday.
The  Dover discovery is Shell’s sixth in the Norphlet geologic play in the  U.S. Gulf of Mexico, and is considered an attractive potential tieback  due to its proximity to Appomattox.
“Dover showcases our expertise  in discovering new, commercial resources in a heartland helping deliver  our deep water growth priority,” said Andy Brown, Upstream Director for  Royal Dutch Shell. “By focusing on near-field exploration opportunities  in the Norphlet, we are adding to our resource base in a prolific basin  that will be anchored by the Appomattox development,” Brown added.
The  Appomattox project, in which the operator Shell holds 79 percent and  Nexen Petroleum Offshore USA owns the other 21 percent, is planned to  have peak annual production of 175,000 barrels of oil equivalent per day (boe/d).
Shell expects its global deepwater production from already discovered and established areas to exceed 900,000 boe/d by 2020.
In the U.S. Gulf of Mexico, Shell announced  last month the final investment decision for the Vito deepwater  development, with a forward-looking, break-even price estimated to be  less than $35 per barrel. Vito, which will be Shell’s 11th deepwater  host in the Gulf of Mexico, is currently scheduled to start producing  oil in 2021, with peak production of around 100,000 boe/d.

More at: https://oilprice.com/Energy/Energy-G...Of-Mexico.html

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## Swordsmyth

US drillers added 13 rigs  to the number of oil and gas rigs this week, according to Baker Hughes,  with oil rigs increasing by 15 and gas rigs dipping by 2. The oil and  gas rig count now stands at 1,059—up 151 from this time last year. The  Permian basin saw the biggest increase in the number of rigs, at 11.

More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

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## Swordsmyth

OPEC’s largest producer Saudi Arabia and its key non-OPEC partner in the  production cut deal, Russia, are discussing lifting the combined oil  production of the countries from the pact by some 1 million bpd,  potentially easing the cuts in response to supply concerns amid rising  oil prices, Reuters reported on Friday, citing sources familiar with the talks.

More at: https://oilprice.com/Energy/Oil-Pric...put-Boost.html

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## Swordsmyth

Saudi Aramco’s much-hyped initial public offering is “most likely” to take place in 2019, Saudi Energy Minister Khalid Al-Falih said on Friday, likely confirming that plans for the IPO have been pushed from this year to next.
“We’re  simply waiting for a market readiness for the IPO,” al-Falih said at  the St. Petersburg International Economic Forum in Russia.
Since  the Saudis initially floated the idea to list 5 percent in their state  oil giant, officials had been insisting that the IPO will take place in  the second half of 2018, until in March al-Falih himself hinted that there might be a delay and the share sale could slip to 2019.

More at: https://oilprice.com/Latest-Energy-N...y-In-2019.html

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## Swordsmyth

When Saudi Arabia and Russia announced a new policy to revive oil  production last week, one thing was missing: most of the other partners  in their grand coalition.
With  oil supplies tightening and prices soaring, the two countries agreed to  restore some of the output they halted as part of an accord with 22  other producers, drawn from the Organization of Petroleum Exporting  Countries and beyond. The trouble is, officials from several producers,  both inside OPEC and outside, said they disapproved of the proposal to  raise output and saw difficulties in reaching a consensus when they meet  in Vienna next month.
“It might be a contentious meeting,” said Ed Morse, head of commodities research at Citigroup Inc. in New York.
                  The matter is particularly sensitive because Russia and the  Saudis are proposing raising production to make up for losses from other  members, notably a worsening slump in Venezuelan supply and a potential  drop in Iran as renewed U.S. sanctions kick in. Those countries have  nothing to gain from looser output caps, and plenty to lose if oil  prices extend Friday’s steep decline.

Most producers weren’t consulted about the Saudi-Russia policy to  revive output. Suhail Al Mazrouei, United Arab Emirates energy minister  and current holder of OPEC’s rotating presidency, said the group as a  whole will decide whether to adjust output.
                  “No decisions made by two countries or three countries are  going to be taken,” he said in an interview in St. Petersburg, Russia,  on Friday after meeting with his Saudi and Russian counterparts. “We  respect all the member countries.”
                  Saudi Arabia and Russia could simply go ahead with their plan  without the blessing of their cohorts. Because they’re the only  countries capable of increasing production significantly, the impact on  the market would be almost as great if they chose to go it alone.
“If  the rest are not on board, Saudi will do it alone, so it’s not much of a  choice,” said Roger Diwan, an analyst at consultant IHS Markit Ltd. in  Washington.
Yet the success of the 24-nation alliance that agreed  to the supply cuts seems to be valuable to the kingdom, and so they may  prefer a more diplomatic route by seeking consensus. If so, it would be a  tough sell.


More at: https://www.bloomberg.com/news/artic...e-opec-meeting

----------


## goldenequity

*French energy major Total joins $25 billion Russian Arctic LNG project
https://twitter.com/RT_com/status/1001032776156663809*

----------


## Swordsmyth

Increased U.S. crude oil exports to Asia, supported by a wide  WTI-Brent spread, are eating into Asian market shares of OPEC and  Russia, the cartel’s ally in the production cut pact.
The United  States is expected to export 2.3 million bpd of crude oil in June,  including 1.3 million bpd bound for Asia, according to estimates by a  senior executive at a U.S. oil exporter who spoke to Reuters.
U.S. crude exports hit a record high 2.566 million bpd in the second week of May, EIA data shows.
The record-high U.S. oil production and the emerging constraints in the takeaway capacity has pushed WTI Crude to the widest discount to Brent Crude  in three years—at around $9 a barrel, while Brent prices have been  supported by geopolitical concerns of possible supply disruptions from  the Middle East and plunging production in Venezuela.
Asian  refiners have seized the opportunity to boost the cheaper U.S. crude oil  imports and are cutting some pricier imports from the Middle East,  particularly after Saudi Arabia’s recent pricing policies that raised  prices for the Asian markets.

“We’re diversifying a lot to other regions. If Saudi Aramco still  doesn’t reduce prices next month and ADNOC [Abu Dhabi National Oil  Company] follows, we will increase our U.S. crude purchases,” a  Southeast Asian oil buyer told Reuters. 

More at: https://oilprice.com/Energy/Crude-Oi...e-In-Asia.html

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## devil21

I don't have time to find it atm but I read an article a few days ago that stated that oil emissions related environmental regulations will kick in by 2020 that makes the sulfur-heavy oil from the Gulf States (SA was named specifically but all oil from the region is similar) much more difficult to use.  Probably relevant to this thread, if you want to find it @Swordsmyth .

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## Swordsmyth

> I don't have time to find it atm but I read an article a few days ago that stated that oil emissions related environmental regulations will kick in by 2020 that makes the sulfur-heavy oil from the Gulf States (SA was named specifically but all oil from the region is similar) much more difficult to use.  Probably relevant to this thread, if you want to find it @Swordsmyth .


The bunker fuel supply and availability landscape is set to change when IMO’s global 0.5% fuel sulphur content 
cap regulation is enforced from 2020. Shipowners have a few options to choose from for them to comply with the 
regulation, while refiners are expected make changes to refinery configuration and production in response to market 
demand. Thus far, there is no silver bullet solution ahead of 2020 and the involved parties will have to decide on the 
most appropriate approach to take so as to suit their operations and remain commercially sustainable in the long run

The International Maritime Organization (IMO) will enforce a new 0.5% global sulphur 
cap on fuel content from 1 January 2020, lowering from the present 3.5% limit. The 
global fuel sulphur cap is part of the IMO’s response to heightening environmental 
concerns, contributed in part by harmful emissions from ships

More at: http://www.seatrade-maritime.com/ima...Sulphur-p2.pdf

----------


## Swordsmyth

Norway’s oil industry is putting more money into exploration than expected, the country’s industry regulator told  Reuters. What’s more, investments are seen to continue rising next year  and in 2020, the chief of the Norwegian Petroleum Directorate, Bente  Nyland said.
This year, state major Equinor and other oil  companies plan to drill 45 exploration and appraisal wells, versus an  expected number of 35 and up from 34 drilled last year.
In early May, the Norwegian statistics authority SSB released the results of a survey that revealed  oil companies plan higher spending on new exploration but lower  investments in mature fields. For 2019, the Norwegian oil industry  planned to spend US$4.01 billion (33.3 billion kroner) on new  exploration activities, up from US$3.07 billion (25.5 billion kroner)
Earlier this month, Norway announced  the latest oil licensing round in mature areas on the Norwegian  Continental Shelf, expanding this year’s predefined area by 103 blocks  in the Norwegian Sea and the Barents Sea. Companies have until September  4, 2018, to bid, and the government aims to award the new production  licenses in early 2019, the Norwegian Ministry of Petroleum said in a  statement.

More at: https://oilprice.com/Latest-Energy-N...-Expected.html

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## Swordsmyth

The huge discount of WTI Crude to Brent Crude has been supporting  cheaper U.S. crude barrels bound for Asia, while West African cargoes,  priced off dated Brent, have grown difficult to sell to Asian customers.
The  wide WTI-Brent spread—$9 a barrel on Wednesday compared to $3-$4 a  barrel just three months ago—is putting pressure on the arbitrage  opportunity for West African grades, including crude varieties from OPEC  members Angola and Nigeria, trading and market sources told Platts today. A recent increase in freight costs on the West Africa-Asian routes is also adding to the pressure.
Last  week, Asian refiners took just a handful of Angolan crude oil cargoes  in the first round of trading for the July tenders, while many Asian  customers opted for large volumes of U.S. crude oil instead, market  sources told Platts.
For  example, Taiwan’s refiner CPC, which usually buys West African crude  grades, purchased 8 million barrels of WTI Midland instead of any crude  varieties from West Africa for delivery in July, according to trading  sources.
“The whole West African market is changing a lot because of the growth in US oil,” a trader told Platts.
“Plus,  you have Brazilian production going up, and a lot of those medium  cargoes like Lula are getting shipped to China at very cheap levels,  which will really curb the WAF flow to Asia,” the trader noted.

More at: https://oilprice.com/Latest-Energy-N...s-To-Asia.html

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## Swordsmyth

Shell said  on Thursday that it had started early production at a deepwater subsea  development in the U.S. Gulf of Mexico a year ahead of schedule and at a  forward-looking, break-even price of less than $30 per barrel of oil.
Shell  began early production at the Kaikias development that has an estimated  peak production of 40,000 barrels of oil equivalent per day (boe/d),  adding more production in its key deepwater focus area, the Gulf of  Mexico.

More at: https://oilprice.com/Latest-Energy-N...-Schedule.html

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## Swordsmyth

Saudi Arabia may raise again its official selling prices (OSPs) for  oil bound for Asia in July, and the price of its flagship Arab Light  crude could reach its highest since February 2014, a Reuters survey of  five refiners and traders showed on Friday.
The possible increase  could come as Asian demand for Middle Eastern crude oil is growing ahead  of the peak summer oil consumption period, and as the Dubai oil  benchmark has gone deeper into backwardation—the market situation in  which front-month prices are higher than prices further out in time—a  sign of rising demand for prompt deliveries.
According to the Reuters survey, Saudi Aramco may raise the OSP for Arab Light to Asia by as much as US$0.40 per barrel to a premium of US$2.30 a barrel to the Oman/Dubai  Middle East benchmark. This would be the highest OSP for Arab Light in  Asia in more than four years—since February 2014 when the OSP was set at  a US$2.45 premium to Oman/Dubai.
Although  they expect such a rise, most of the survey respondents hope that the  increase for Arab Light would be smaller, due to weaker jet fuel margins  and to potential Saudi concern that a big price hike would make its  Arab Light grade uncompetitive compared to other Middle Eastern crudes  and Russian grades of similar quality.
Moreover, with rising U.S. oil exports to Asia and the wide WTI Crude discount to Brent Crude,  Asian refiners have seized the opportunity to boost the cheaper U.S.  crude oil imports and are cutting some pricier imports from the Middle  East, particularly after Saudi Arabia’s recent pricing policies that  raised prices for the Asian markets.

More at: https://oilprice.com/Latest-Energy-N...Year-High.html

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## Swordsmyth

Rosneft increased its crude oil production by 70,000 bpd over the  last two days, the company told investors, in preparation for an OPEC+  decision to start easing production quotas, Bloomberg reports, citing Russian asset manager Renaissance Capital.
The company has a spare production capacity of between 120,000 and 150,000 bpd, and its average daily production during the first quarter was 4.57 million bpd.
According  to Rosneft’s press service, the company is still producing with the  quota assigned it under the OPEC+ deal but the fast ramp-up is a clear  indication Russia’s largest oil producer is eager to return to higher  daily rates, especially after the sevenfold increase  in attributable net profit in the first quarter thanks to improving  prices. At the release of the Q1 figures, Rosneft said it could quickly  bring back production of 100,000 bpd.

More at: https://oilprice.com/Energy/Crude-Oi...70000-Bpd.html

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## Swordsmyth

US drillers added 1 rig  to the number of oil and gas rigs this week, according to Baker Hughes,  with oil rigs increasing by 2 and gas rigs dipping by 1. The oil and  gas rig count now stands at 1,060up 144 from this time last year. The  Cana Woodford basin saw the biggest increase in the number of rigs, at  3; The Permian lost one.
Meanwhile, neighboring Canada gained 18 oil and gas rigs for the week.

US oil production is also pressing down on oil prices, and for the week ending May 25, reaching 10.769 million bpdthe  fourteenth build in as many weeks. US production continues to climb at a  time when OPEC is beholden to a supply cut deal that looks to remove  1.8 million bpd from the once-saturated market. At the time the deal was  announced, the United States was producing 8.6 million bpd. Today, the  US is producing more than 2.0 million bpd over that figure, while  OPEC/NOPEC continues to curb supply on its end.

More at: https://oilprice.com/Energy/Energy-G...roduction.html

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## Swordsmyth

American  Airlines <AAL.O> warned airline passengers may eventually face  higher ticket prices if oil prices remain high, prompting carriers to  remove seats from the market.Oil prices have risen around 50 percent compared to the levels seen last year and that is putting pressure on airline profits.
"If  it becomes clear this is the new normal you would see over time less  capacity and growth in the industry and therefore higher prices, but I  don't think that's going to happen in the near term," CEO Doug Parker  told reporters on the sidelines of the annual IATA meeting of airline  executives in Sydney.
IATA,  which represents about 280 airlines comprising 83 percent of global air  traffic, has said that on Monday it will revise down its forecast for  industry profitability this year due to higher oil, infrastructure and  labor costs.

More at: https://ca.news.yahoo.com/american-a...--finance.html

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## Swordsmyth

Iran’s crude oil and condensate exports hit 2.7 million bpd  in May, higher than its average volumes over the past year, while the  U.S. withdrew last month from the Iran nuclear deal and re-imposed  sanctions that would kick in later this year.
Last month, Iran’s  crude oil exports stood at 2.4 million bpd, while condensate—ultra light  oil—volumes hit 300,000 bpd, the Iranian oil ministry’s news service  Shana reported over the weekend.

More at: https://oilprice.com/Energy/Crude-Oi...Sanctions.html

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## Swordsmyth

The oil price run over the past year will result in higher ticket  fares, even if many air carriers have hedged fuel at lower prices,  according to industry executives and analysts.
This year airlines  around the world will spend a combined US$188 billion on fuel, up by  26.1 percent compared to the US$149 billion spent on fuel for last year,  the International Air Transport Association (IATA) said in its 2018  Mid-year report on Monday. 

This  year’s projected fuel spend is expected to account for 24.2 percent of  total average operating costs, compared to 21.4 percent of total costs  in 2017, IATA said.
“Jet fuel prices have continued to rise with  oil prices and we base our forecast on an average price of $84/b this  year, and $70/b for the Brent crude oil price,” the association said,  noting that the impact on the industry’s fuel bill was dampened last  year—and to some extent this year—by the impacts of fuel hedging in one  or two regions.
Commenting on  the higher oil prices, American Airlines chief executive Doug Parker  said on the sidelines of IATA’s annual meeting in Sydney on Monday, as  carried by Reuters:
“If  it becomes clear this is the new normal you would see over time less  capacity and growth in the industry and therefore higher prices, but I  don’t think that’s going to happen in the near term.”
Hedging may  help in the short term, but what it essentially does is buying airlines  time to address the oil price volatility, industry executives said today.
“We  take a simple view that hedging is about buying time; it gives you time  to address volatility,” according to Willie Walsh, the chief executive  of British Airways parent IAG.

More at: https://oilprice.com/Latest-Energy-N...el-Hedges.html

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## Swordsmyth

Some newly elected Iraqi lawmakers, linked with populist Shiite  cleric Moqtada al-Sadr whose alliance won the elections last month, are  not sure that Baghdad’s participation in the OPEC production cut deal is  good for the country.

Some new members-elect of Iraq’s parliament  think that Iraq should be able to export as much crude oil as it wants,  newly elected lawmakers and politicians allied to al-Sadr’s political  bloc have told S&P Global Platts in interviews.


One of the new Iraqi lawmakers-elect, Qusay al-Yassiri of al-Sadr’s Saeroon coalition, told Platts:
“For  sure Iraq’s share of exports should be unlimited so it can compensate  for the low oil prices which have increased taxes on the people and  workers.”
Other new MPs are aiming at Iraq’s oil contracts with  international companies—and this adds further uncertainty to the current  investment climate in Iraq’s oil industry.
“We intend to correct  the uncorrected contracts or cancel them, and to only keep what is  useful, whether they were license round contracts or those the oil  minister has signed recently,” Rami al-Sukaini, who was elected on the  Saeroon list representing the southern Basra province, told Platts.

More at: https://oilprice.com/Energy/Energy-G...OPEC-Deal.html

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## Swordsmyth

Aramco has raised the prices of its most popular crude oil grades for  sale in Asia amid growing worry about supplies from Venezuela and Iran.  Bloomberg reports the flagship grade, Arab Light, will sell for US$0.20 more, at US$2.10 per barrel more than the Dubai benchmark, which traded above US$74 a barrel at the start of this week.
This  is the third price increase for Arab Light in a row, and it has brought  prices to the highest since July 2014. It is, however, lower than the  increase six analysts polled by Bloomberg expected, which was US$0.34.
The prices of the other Saudi grades, including Extra Light, Medium, and Heavy,  will also sell at multi-year highs, Bloomberg data has revealed, with  the Heavy grade selling for the highest prices since 2012.
The  signal Saudi Arabia is sending with the price increase is clear enough:  demand for its crude should be rising as competing supply from  Venezuela dwindles amid the worst crisis the country has seen in its  history and as the market anticipates a slump in Iranian exports after  the return of U.S. sanctions.

More at: https://oilprice.com/Latest-Energy-N...an-Buyers.html

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## Swordsmyth

A day after American Petroleum Institute estimated a solid build  in gasoline inventories that pressured West Texas Intermediate, the  Energy Information Administration added to the bearish mood by reporting  a build in both crude oil and gasoline inventories for the week ending  June 1.
Crude oil stockpiles, the authority said, rose by 2.1 million barrels in the week to June 1, versus a decline of 4.2 million barrels  a week earlier. Gasoline stockpiles moved higher by 4.6 million  barrels, compared with a 500,000-barrel build in the prior week.  Distillate inventories added 2.2 million barrels, after a 600,000-barrel  increase in the week before.

More at: https://oilprice.com/Energy/Crude-Oi...The-Board.html

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## Swordsmyth

The OPEC meeting on June 22nd could become a major showdown of  internal conflicts. The media has been focusing on the possible split  between the Arab producers and Iran, and the growing tendency of Russian  companies to lower production cut compliance.
However, the simmering inter-Arab conflict around Qatar could become a major issue that could blow up OPEC’s deal.

A possible strategic alliance between Qatar and Iran could become a main breaking point at the end of June.
If  Iran, Qatar and Venezuela, possibly even supported by Iraq and Oman,  would opt for a reassessment of the current production cut deal between  OPEC and Russia, the oil market would become extremely volatile.
Russian  oil companies already are already reflecting a falling compliance, and a  possible deal between Russian operators and the Qatar-Iran axis could  prove to be a disaster and destabilize markets. 

A showdown is on the horizon. The stakes have been raised the last  couple of days, leaving little room for maneuvering. Again, an internal  GCC rift, supported by an outsider (Iran) could put a bomb under a  hard-fought and functioning Russia/OPEC strategy.
Moscow might  convince Iran to keep compliance high, but history has shown that OPEC’s  future is sometimes not built on market fundamentals, but on the  political views of Iran and Saudi Arabia. The 2007 OPEC Heads of State  meeting in Riyadh could be revisited, analysts should go back in their  archives and reread what happened there.
On the sidelines, a  non-OPEC and non-oil producing Arab country could also be playing a  pivotal role. The ongoing instability and threats inside of the  Hashemite Kingdom of Jordan could undermine the Vienna meeting even  further. The economic and political crisis in Jordan, mostly seen as an  internal conflict between the Jordanian government parties, could add to  the divide in the Arab world. A destabilized Jordan, always one of the  leading political and strategic leaders of the Middle East, could  further destabilize the region.

More at: https://oilprice.com/Energy/Energy-G...C-Meeting.html

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## Swordsmyth

Oil prices fell on Monday, pulled down by rising Russian production and  U.S. drilling activity creeping to its highest in more than three years.

Prices  were weighed down by another rise in the number of rigs drilling for  new oil production in the United States. The rig count inched up by one  to its highest since March, 2015 at 862, according to energy services  firm Baker Hughes on Friday.
To view a graphic on U.S. oil rig count, click: https://reut.rs/2JAMsXg
That implies U.S. crude output, already at a record high of 10.8 million barrels per day (bpd), will climb further.

Meanwhile, Russian news agency Interfax reported on Saturday that  Russia's oil production, the world's biggest, had risen to 11.1 million  bpd in early June, up from slightly below 11 million bpd for most of  May, and well above its target output of under 11 million bpd as part of  the deal.

More at: https://finance.yahoo.com/news/oil-p...--finance.html

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## Swordsmyth

Saudi Arabia pumped over 100,000 bpd of crude oil more in May, with  daily production reaching 10 million bpd, officials from the country’s  oil industry said, as quoted by the Oil and Gas Journal, adding that plans are to add a further 100,000 bpd this month.
The  news comes on the heels of Russian media reports that the country’s oil  production recovered to 11.1 million barrels. This is 143,000  bpd above the country’s quota under the OPEC+ production cut deal, and  only about 100,000 bpd below the record-breaking production rate in  November 2016, which Russia took as basis for its cuts.
In other  words, while some analysts still wonder if the reports about Russia and  Saudi Arabia discussing a production increase of 1 million bpd are just  speculation or an action plan, the increase is already happening and it  is making at least one other OPEC member unhappy.
Yesterday, Iraq’s Oil Minister Jabbar al-Luiebi said  Baghdad “rejects unilateral decisions by some oil producers without  consulting the rest of the members” of OPEC, clearly signaling that  Saudi Arabia, leader of the OPEC pack as it may be, is not free to raise  production without telling anyone about it. 

More at: https://oilprice.com/Energy/Crude-Oi...llion-Bpd.html

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## Swordsmyth

While many analysts and agencies have already called the end of the  global oil glut, oil held in floating storage in Europe is at an at  least 18-month-high, also due to the booming U.S. oil exports that have  displaced some of the traditional crude oil routes in the world.
Oil  in ships around European shores was 12.9 million barrels on average in  May, accounting for 26 percent of all global floating storage, and more  than Asia-Pacific’s 9.7 million barrels of oil stored, according to  estimates by oil analytics company Vortexa, as carried by Reuters.
In  the two preceding months, March and April, the share of oil in floating  storage in Europe accounted for 10 percent of the global storage,  compared to 40 percent stored in the Asia-Pacific region. But in May,  the volumes of oil held in Europe—including in the  Mediterranean—exceeded the oil held off the Asia Pacific coasts for the  first time since at least early 2015, according to Vortexa.
Consultant  Kpler has estimated that there are some 17 million barrels of oil  stored on ships in northwest Europe—the highest since at least the  beginning of 2016.

More at: https://oilprice.com/Energy/Crude-Oi...-On-Ships.html

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## Swordsmyth

India and China have discussed creating an ‘oil buyers’ club’ to be  able to negotiate better prices with oil exporting countries and will be  looking to import more U.S. crude oil in order to reduce OPEC’s sway,  both over the global oil market and over prices, India’s Petroleum  Ministry said on Wednesday.

“With oil producers' cartel OPEC  playing havoc with prices, India discussed with China the possibility of  forming an 'oil buyers club' that can negotiate better terms with  sellers as well as getting more US crude oil to cut dominance of the oil  block,” a tweet from the Petroleum Ministry’s Twitter account reads.

On Thursday, Pradhan met with ambassadors of OPEC countries to India and  “discussed India’s growing position in the world energy demand &  the need for responsible pricing which balances the interests of both  the producer & consumer countries,” the Indian minister tweeted today, adding that he had also suggested creating transparent and flexible markets for both oil and gas. 


“Further also raised the issue of discriminatory pricing in global  oil & gas trade through measures such as Asian Premium. Urged the  OPEC Ambassadors to reconsider these discriminatory measures in the  overall interest of all the countries & work together for a  sustainable future,” Pradhan added.

The  Indian oil minister plans to visit Vienna next week to take part in the  7th OPEC International Seminar to further discuss the oil market and  pricing issues with OPEC’s Secretary General Mohammad Barkindo and with  ministers from OPEC countries, the Indian government said in a statement today.

More at: https://oilprice.com/Energy/Crude-Oi...yers-Club.html

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## Swordsmyth

The Permian has been getting most of the headlines on U.S. shale, but  there is another play in the vicinity that has been attracting more  industry attention than media attention. Pretty much forgotten since the  ‘90s, when shale oil and gas moved to the forefront of the U.S. oil  industry, the Austin Chalk has now gotten a new lease on life, it seems.
Over the last six months, oil majors including ConocoPhillips, Marathon Oil, and EOG Resources have purchased some 600,000 acres  in the chalk formation that runs from the Mexico-Texas border through  central Louisiana and into Mississippi. Drilling is set to begin in late  2018. And that’s not all, because drillers are also returning to old  fields in the Chalk.
Reuters recently reported  that an independent player, Wildhorse Resource Development, has started  drilling in an old field in the Chalk using technology developed for  the shale plays. Though the Chalk is not a shale formation—it is, as the  name suggests, made up of limestone and chalk, soaked with oil and  gas—and fracking tech could increase resource recovery.
Drillings  rigs in the Austin Chalk rose twofold in the past six months, Reuters  said, quoting DrillingInfo data, to 14, and production grew to 57,000  bpd in 2017 from just 3,000 bpd five years ago. Technically recoverable  oil reserves stand at around 4.1 billion barrels and gas reserves are estimated at 18 trillion cu ft, according to the Energy Information Administration. 

More at: https://oilprice.com/Energy/Crude-Oi...-Oil-Play.html

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## Swordsmyth

Iran says Venezuela and Iraq will join it in blocking a proposal to  increase oil production that’s backed by Saudi Arabia and Russia when  OPEC and its allies meet in Vienna this week.
“Three  OPEC founders are going to stop it,” Iran’s representative to the bloc  Hossein Kazempour Ardebili said in comments to Bloomberg on Sunday. “If  the Kingdom of Saudi Arabia and Russia want to increase production, this  requires unanimity. If the two want to act alone, that’s a breach of  the cooperation agreement.”

More at: https://www.bloomberg.com/news/artic...ine&yptr=yahoo

----------


## Swordsmyth

Russia and Saudi Arabia will ask OPEC to hike production by 1.5 million  barrels a day in the third quarter of 2018, Russian Energy Minister  Alexander Novak said on Saturday.

Novak  said Moscow and Riyadh "propose increasing production in the third  quarter by 1.5 (million bpd)," according to RIA Novosti news agency.
"We  are only proposing this for the third quarter. In September we will  review the situation in the market and decide the future course."

More at: https://www.yahoo.com/news/russia-sa...214024209.html

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## Swordsmyth

Egypt is hiking gasoline prices by up to 50 percent,  as it is seeking to meet reform requirements for funds extended by the  International Monetary Fund (IMF), but the gradual removal of the fuel  subsidies makes ordinary Egyptians angry with austerity measures.

More at: https://oilprice.com/Latest-Energy-N...-Up-To-50.html

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## Swordsmyth

Iran plans to increase the production capacity of its oil fields by 400,000 bpd, state news agency Irna reports, quoting National Iranian Oil Company’s deputy head Gholamreza Manouchehri.
Russia’s  Gazprom will take part in this plan by developing two fields, Azar and  Changuleh, Manouchehri also said, as quoted by Reuters, adding that NIOC  was currently in talks with the Russian firm.

More at: https://oilprice.com/Latest-Energy-N...-Capacity.html

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## Swordsmyth

Although OPEC and its Russia-led non-OPEC allies have not yet decided  if and how much oil they will restore to the market, Russia’s plans for  exports and refinery runs in the coming months point to Moscow  preparing to increase its oil production, as early as in July.
Russia’s  July-September crude oil exports and transit schedules and refinery run  plans for the third quarter suggest that an increase in Russian oil  production could start as early as in July, Reuters reports.
According  to export schedules and oil transit plans, Russia’s crude oil exports  and transit are set to rise to 63.34 million tons in the third quarter  this year, from 62.45 million tons expected for the second quarter. This  increase translates into a 20,000 bpd boost in exports, according to  Reuters calculations—not a significant number in itself, especially  compared to Russia’s 11 million bpd production, but it would add to  plans to boost Q3 refinery runs by 2.2 million tons, according to energy  ministry forecasts.
Russia is proposing a production boost in the  third quarter by 1.5 million bpd, and then the partners in the OPEC+  deal will see how the oil market fares at the end of Q3, Russia’s Energy  Minister Alexander Novak said in Saudi Arabia on Saturday after a meeting with Saudi Energy Minister Khalid al-Falih.
Russia’s  oil companies are eager to turn the taps on and benefit from newly  developed fields, and some of the biggest oil companies are said to have  started to increase, little by little, their production. 

More at: https://oilprice.com/Energy/Crude-Oi...n-In-July.html

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## Swordsmyth

Iran has suggested it could be open to a compromise on a small rise  in OPEC oil output after earlier rejecting a plan by Russia and Saudi  Arabia to increase production in response to consumer concerns over  rising prices.
Iranian Oil Minister Bijan Zanganeh on June 20 said  cartel members that had cut more than required in recent months could  increase output back to higher agreed quotas.
Experts said that  would effectively mean a slight increase from top producers such as  Saudi Arabia, which has been cutting more deeply than required under  previous policies designed to raise once-slumping prices.
A day  earlier, Zanganeh had told reporters upon arrival at Organization of the  Petroleum Exporting Countries (OPEC) headquarters in Vienna that "I  don't believe at this meeting we can reach agreement."
Moscow and  Riyadh have proposed reversing most of a 1.8 million-barrels-a-day cut  in production that OPEC and other major producers agreed to in 2016 amid  recent calls by the United States, China, and other major oil-consuming  countries for relief from rising pump prices.

More at: https://oilprice.com/Energy/Crude-Oi...il-Output.html

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## Swordsmyth

The initial public offering of Saudi oil giant Aramco—which has  already been likely pushed to 2019 from the second half of 2018—could be  postponed even further, for after 2019, comments by Saudi Energy  Minister Khalid al-Falih suggested on Thursday.
“It would be nice if we can do it in 2019,” al-Falih said at an OPEC conference in Vienna today, Bloomberg reports.

More at: https://oilprice.com/Latest-Energy-N...yond-2019.html

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## Swordsmyth

As discussed on CNBC Asia last night,  Core OPEC has been ramping up exports this month ahead of tomorrow's  OPEC meeting in Vienna. Historically, production typically rises ahead  of an OPEC quota hike, and this time looks no different.
Saudi  Arabia, Kuwait and UAE - the key proponents of the OPEC production cut  deal - are all showing significantly higher crude exports so far this  month, as spigots are opened once again. Our ClipperData below  illustrate this stark turnaround.
The blue line shows Saudi's  exports versus the October 2016 reference level. They have been below it  for every month in the last year and a half, except for March  2017.....and now. June exports have ramped up - over 500,000 bpd higher  than last month.
In terms of the red area, it shows flows bound  for Asia versus the October 2016 level. Flows have been higher in every  month except April and May 2017, as Saudi has favored sending its crude  to Asia, at the expense of the United States. Flows bound for Asia so  far this month are the highest on our records:


While Saudi is the leading crude exporter in the Middle East by a  long shot, it is also the leading exporter of middle distillates  (particularly gasoil and jet A-1).
As lower crude exports from the  likes of Saudi and Kuwait (UAE, sit down) have crimped revenues amid  the OPEC production cut deal, exports of middle distillates have ramped  up.
Some suggest this is less to do with side-stepping the  production cut deal, and more to do with refining capacity expansion in  the region. Either way, materially higher middle distillate exports are  helping to offset crude revenues to bolster coffers. Exports from the  region so far this year are outpacing year-ago levels by 240,000 bpd, a  hefty chunk.


More at: https://oilprice.com/Energy/Crude-Oi...f-Meeting.html

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## Swordsmyth

After a hectic week of unofficial meetings between OPEC members in  Vienna, largely in and around the Hofburg, the former residency of the  Austrian Emperor Franz Jozef and his wife Sisi, an official production  increase agreement has finally been reached.
In the official OPEC  communique, the oil cartel stated that overall production will be  increased by 1 million bpd. In reality, this will mean that around  600,000 bpd will be added to the market. Still, the communique is rather  vague. No real timelines have been stated while specific production  levels of countries also remain a mystery. Taking into account the  diplomatic frenzy witnessed in the last hours of the Vienna meeting  which was preceded by immense controversies the days before, the current  OPEC agreement should not be taken at face value.
One question  remains: OPEC will still need to discuss with Russia on Saturday if they  can reach a ROPEC agreement, keeping the OPEC – non-OPEC agreement in  place. Without a positive result, the market is still looking at  increased levels of instability.
Ahead of the meeting, overall  optimism was low as key players such as Iran, Venezuela and Iraq have  been venting their opposition to any possible production increase.  Internal OPEC pressure on the Iran-led block seems to have worked. On  Wednesday and Thursday, a full confrontation between Iran and Saudi  Arabia seemed the only solution, especially when looking at the faces of  Iran’s minister of oil Zanganeh or Iran’s OPEC governor Ardebili.  Though OPEC enjoyed a moment of relief, dark clouds are still on the  horizon. An internal crisis is becoming increasingly more plausable as  the Iran and Saudi Arabia dispute intensifies. 

More at: https://oilprice.com/Geopolitics/Int...terialize.html

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## Swordsmyth

*Trump’s open and repeated criticism of OPEC and its influence on oil prices provides  credibility to the belief that he would sign into law the NOPEC  legislation that is currently making its way through Congress.*


*The bill would allow America to pursue litigation against OPEC on anti trust grounds.*
  NOPEC isn’t a totally new concept, as it has been drafted and voted through Congress some *16 times over the past 18 years, but never made it past the President’s desk*,  whether it was Bush or Obama. But Trump could give NOPEC a different  sort of ending, one which could see it taking up the status of US law.
  Anadolu agency reports:
 A legislation being debated in Congress could put pressure on OPEC if  it is signed into law by President Donald Trump who has long been  critical of the cartel’s practices.
  If the No Oil Producing and Exporting Cartels Act, or NOPEC, is  signed into law, it would allow the U.S. to sue the cartel for  manipulating crude prices and global oil market that caused enormous  damage for the American economy and consumers.
  In November 2014, led by then-Saudi Oil Minister Ali Al-Naimi, the  Kingdom had refused to listen to other cartel countries’ appeal to cut  output in order to rid oversupply in the global market to boost lower  oil prices.
  Spearheaded by Saudi Arabia, OPEC had agreed to keep its oil  production unchanged — a strategy that is seen by many analysts as an  attempt to keep global oil supply high, lower crude prices even further  and kick high-cost U.S. shale oil producers out of the market.
  With oil prices diving below $30 per barrel in January 2016 to their  lowest level in 13 years, OPEC’s strategy was disastrous for the  American oil industry.
  “Around $250 billion investment in U.S. oil market disappeared,  250,000 jobs were lost, more than 300 oil companies in the U.S. declared  for bankruptcy. And, countless billions of dollars were lost in tax  revenue,” Ed Hirs, an energy economist at the University of Houston,  told Anadolu Agency.
*“It [the Act] should have been brought up in 2014, or  certainly in 2015, when OPEC set out and launched an attack against the  U.S. I think, the president and the Congress would have responded very  differently,”* he added.
  The NOPEC Act was first introduced in 2000 to allow the cartel to be  sued by the U.S. in violation of anti-trust laws. It has been introduced  around 16 times since then, but former presidents George W. Bush and  Barack Obama were openly against it.
*“In the energy industry our players get hurt, because some  actions by OPEC — flooding the market with oil at a time where normally  they wouldn’t have in the past — ended up prices going too low during  the production war, knocking out a lot of investment that we probably  are going to need in future,”* senior market analyst Phil Flynn from Chicago-based futures brokerage firm, Price Futures Group, told Anadolu Agency.
*“I would argue that OPEC conspired to knock a lot of energy  producers out of business so that they could maintain the market share.  And I think they succeeded in doing that in a large degree,”* he said.
  NOPEC was sent for discussion to the House floor last week by the  House Judiciary Committee. And, this time, if it passes, it could be  signed into law by Trump.
*The president has recently upped his criticism against OPEC*.  “Oil prices are too high, OPEC is at it again. Not good!”, Trump wrote  last week. And in April: “Looks like OPEC is at it again. With record  amounts of Oil all over the place, including the fully loaded ships at  sea, Oil prices are artificially Very High! No good and will not be  accepted!”
  Trump’s criticism of the cartel dates back decades. In his 2011 book,  Time to Get Tough: Making America #1 Again, he wrote: “We can start by  suing OPEC for violating antitrust laws.” In his 1987 book, Trump: The  Art of the Deal, he wrote, “There was just one problem: OPEC. Almost  immediately, oil prices started going through the roof, which devastated  the airlines.”
  During an interview with CNN’s Larry King in 2009 in the middle of the financial crisis, Trump said: *“When  the economy starts getting better, you will have an OPEC problem.  They’ll just start raising the price of oil again and destroy the  economy … as soon as the world comes back, OPEC will raise its ugly head  and destroy it again.”*
  OPEC, however, along with the world’s major crude producer, Russia,  agreed at the end of 2016 to lower their oil production by 1.8 million  barrels per day (bpd) from the beginning of 2017 to boost prices. The  agreement was later extended until the end of 2018. Last month oil  prices rose to $80 per barrel.
  Although Trump is still critical for high crude prices and rising  gasoline prices that hurt American people at pumping stations, higher  crude prices has helped the U.S. shale and oil industry in general.
  America’s crude oil output has recently hit an all-time of 10.9  million bpd. It surpassed Saudi Arabia in February and the U.S. became  the world’s second-biggest crude producer.

*“Higher oil prices help U.S. shale producers,” Hirs said,  adding “Yet again, OPEC sells the U.S. oil for less than the U.S. can  produce it today.*

*“The fact is they produce oil for a whole lot less than it would cost the U.S. to be self-sufficient,”* he said.
  Flynn said even if NOPEC passes Congress and signed into law, the major problem would be to enforce it.
  “I mean you’re going to have to bring a lot of lawsuits against OPEC  as a cartel and try to fight it in our courts. Whether or not some of  these countries in the cartel will actually react to it remains to be  seen. So it’s going be kind of crazy,” he said.
  Whether the U.S. could impose sanctions on OPEC countries and officials, Flynn said it could be a possibility.
  He said, however, if the U.S. places tariffs on OPEC’s oil, it would cost the U.S. more to import oil.
*“I think it’s going to be very difficult thing to enforce,”* he concluded.But with Trump’s determination to do things differently, and his  willingness to rip up international agreements, OPEC should be getting  scared. _One thing OPEC member nations ought to fear is  attracting too much attention from Trump, as he is quick to lay blame,  and is not afraid of shaking things up, even if that means disrupting  the status quo._


https://www.zerohedge.com/news/2018-...n-against-opec

----------


## Swordsmyth

Just 24 hours after OPEC appeared on the edge of splintering,  Iran seemed to cave and in a deal that was described as a victory for  everyone, OPEC member states and Russia provided a vague assurance they  would boost output by striving to return to full compliance of the  original production quotas as set in the 2016 Vienna production cut  agreement.

  As Goldman summarized in its post-mortem, "*no further details  were provided, including no country level allocation, no guidance for  non-OPEC participants or timeline for the increase*." Furthermore, during the press conference following Friday's deal, the one question which never got an explicit answer is *how much output would be boosted by*, with little clarity shed beyond “targeting full compliance at the group level”.
 This suggests that there is room for countries with spare capacity to  increase production above the individual quotas but also that such  adjustments could not be resolved.As a result, Goldman's energy analyst Damien Courvalin said that he views today’s agreement *"as masking disagreements within the group and a potential start to the unraveling of the deal*, with core-OPEC and Russia looking to increase production but Iran opposing such an increase."
  Bloomberg's Javier Blas confirmed as much, noting that Friday’s agreement was a "fudge in the time-honored tradition of OPEC, *committing to boost output without saying which countries would increase or by how much"* a  fudge which gave every member - especially Iran which by endorsing a  production boost would have been seen as effectively approving of  Trump's sanctions and allowing other states to take its market share -  an "out" to save face, by sufficiently masking up the details so no  explicit accusations of backtracking can be made.
  Importantly, "it gives Saudi Arabia the flexibility to respond to  disruptions at a time when U.S. sanctions on Iran and Venezuela threaten  to throw the oil market into turmoil."
 “It is very clear that Saudi Arabia, worried about prices running  higher going forward, is trying to put in place a near-term cap on  prices,” said Yasser Elguindi of Energy Aspects Ltd., a consultant. “*Having secured its floor, Riyadh would like to see a near-term ceiling of $75*.”Which, incidentally, is also the price above which Trump tends to  take to twitter in bashing OPEC. And not only Trump: oil prices have  recently gotten so high, they have led to political fallout among mostly  Developing Nations such as India, whose petroleum minister rang  Al-Falih last month and expressed “concern about rising prices.” A week  later, it was the head of China’s National Energy Administration on the  phone with the Saudi oil minister, asking Riyadh to guarantee adequate  supplies.
  * * *

So in conclusion, what will happens next? Here we offer two takes, a  long-term one from Goldman, which is confident that the OPEC deal was  much ado about nothing:
 Even if today’s agreement marked the beginning of the end of the  production cooperation, we believe that core OPEC and Russia would  likely have settled on a similar outcome, if not smaller, to achieve  both higher output, stable inventories and not a sharp fall in prices.  In the case of Saudi, supporting prices helps fund its economic  diversification and maximize the value of the assets it is selling while  higher production prevents high prices that would hurt consuming  nations that either provide it with security or will be important in its  economic transition (US, China, India). *President Trump's tweet after today's announcement further reinforces this view.*  In the case of Russia, collaboration with Saudi increases its sphere of  influence although the country no longer benefits from rising prices:  the state saves excess oil revenues in foreign assets leaving for little  impact on current activity while rising domestic fuel prices are  keeping the CBR more hawkish.Incidentally, on Saturday morning the big news was that OPEC had  invited Russia to join OPEC as an observer, a move that could portend a  dramatic shift in the balance of power as OPEC+Russia now openly take on  the marginal price setter, shale. That said, for now Russia is not in a  hurry, with its energy minister Novak saying he has no plans to join  OPEC as a full member, yet. 
  As for the market's short-term reaction, one which matters far more  for traders, we present the take from Swiss energy consultant Olivier  Jakob who had what may be the most accurate take:
 crude oil markets closed Friday on  the Iranian oil minister interpretation of the deal, will open Sunday on  the Saudi energy minister materialization of the deal.
 — petromatrix (@petromatrix) June 23, 2018More at: https://www.zerohedge.com/news/2018-...eal-unraveling

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## Swordsmyth

While the U.S. shale production in the Permian has been grabbing most  of the market and media attention over the past two years, the Gulf of  Mexico has been quietly staging a comeback.  
Big Oil firms, the  main operators in the Gulf of Mexico, have been cutting costs and  simplifying designs to make offshore projects viable in the  lower-for-longer oil price world.
Chevron, Shell, and BP continue  with their deepwater developments offshore Louisiana and Texas and have  brought down breakeven costs to $40 a barrel or less—comparable with the  breakevens at some shale formations onshore. Now operators are vying  for new exploration acreage close to existing production platforms that  would bring development and production costs down even further.  
While  the market and media have focused on the record Permian production, the  Gulf of Mexico’s production is also expected to hit a record high this  year.  
But there’s one huge difference between onshore and  offshore in terms of resource development—for shale wells, production  peaks in several months, while vast deepwater resources can pump oil for  decades.


Chevron says that offshore crude oil extraction, including deepwater, is closing in on shale in terms of cost thanks to new production technologies.
“In  the past, a lot of the cost of development has been new technology,”  Jeff Shellebarger, president of Chevron’s North American division, told  Bloomberg. “With the types of reservoirs we’re drilling today, most of  that learning curve is behind us. Now we can keep those costs pretty  competitive.”
According to Wood Mackenzie, oil and gas production in deepwater Gulf of Mexico is expected to reach an all-time record high  this year at 1.935 million boepd, of which 80 percent is oil—beating  the previous record from 2009 by nearly 10 percent and representing  13-percent growth year over year.
U.S. crude oil production in the  Federal Gulf of Mexico increased slightly in 2017 to reach 1.65 million  bpd, the highest annual level on record, the EIA said  in April, adding that production is expected to continue growing this  year and next, accounting for 16 percent of total U.S. crude oil  production. According to the EIA, a total of 10 deepwater Gulf of Mexico  field starts are expected in 2018 and 2019.

More at: https://oilprice.com/Energy/Crude-Oi...cord-High.html

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## Swordsmyth

Higher oil prices and increased efficiency have made companies more  optimistic that they could spend more on exploration on the Norwegian  Continental Shelf (NCS) this year than they did in the previous two  years of stubbornly low oil prices.
Oil firms have boosted exploration spending more than expected, and so far in 2018 they have had more success in discoveries than in the years of the oil price slump.
Actually, according to Bloomberg  calculations based on data by the Norwegian Petroleum Directorate  (NPD), companies are on track to find nearly 1 billion barrels of oil  equivalents this year. These calculations show that the resources found  per well could reach their highest since 2010—the year in which the  giant Johan Sverdrup  oil field was discovered in the North Sea with resources estimated at  between 2.1 billion and 3.1 billion barrels of oil equivalents. Johan  Sverdrup—with production start planned for late 2019—will be one of the  most important industrial projects in Norway in the next 50 years and  will be the main contributor to Norway’s rising oil production until  2023.

More at: https://oilprice.com/Energy/Crude-Oi...ince-2010.html

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## Swordsmyth

Higher oil prices, lower offshore development costs, and improved gas  demand outlook have made the oil and gas industry more confident in  approving investment in new projects whose total worth has exceeded  US$110 billion since the beginning of 2017, research and consulting firm  Rystad Energy said in a new analysis this week.
After  oil and gas projects worth just US$50 billion were approved in 2016,  the industry “has vastly accelerated the pace of approving investments  for new projects over the past 18 months,” Rystad Energy said.
“Deepwater  projects on either side of the Atlantic Ocean – from Norway to the US  and from Angola to Brazil – are leading the charge towards new  approvals. Higher oil prices, an improved outlook for gas demand and  lower offshore development costs are driving this rebound in the  industry,” Rystad Energy senior research analyst Readul Islam noted.
Over  the past 18 months, a total of 17 deepwater projects have been  approved. Of those approvals, as many as 16 projects were in the queue  for final investment decision, but were placed on hold during the oil  price crash.
“These same projects can now pass operators’  investment criteria down to $30 per barrel,” Rystad said, noting that  the halved breakeven prices were achieved through a combination of  standardized and leaner designs and significantly lower service prices.

Last month, Rystad Energy said that the current tailwind in the oil market is likely to propel 100 new offshore projects to be sanctioned in 2018.

More at: https://oilprice.com/Latest-Energy-N...ices-Rise.html

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## Swordsmyth

The Minnesota Public Utilities Commission has approved  the proposed replacement of Enbridge’s Line 3 pipeline despite the  vocal environmentalist opposition. The decision should provide some  relief to Canadian oil producers as the new pipeline will allow them to  send more crude to U.S. refineries.
The 1,031-mile pipeline  was built about six decades ago and runs from Edmonton, Alberta, to  Superior, Wisconsin, where Enbridge operates an oil terminal. Because of  its age, the pipeline is corroding and cracking, which makes oil  transportation riskier—a fact that has forced Enbridge to reduce the  flow of oil by about half of the pipeline’s capacity of 760,000 bpd.
One  might wonder why replacing a corroded pipeline with a new—hence  safer—would cause one would become the object of such strong opposition,  but it seems that these days the very word “pipeline” sounds dangerous  to certain groups of people.
The  Minnesota Utilities Commission’s deciding panel, however, is not among  them. It approved the environmental assessment for the project that  Enbridge presented earlier this year, and now it has approved the final  route of the pipeline.

More at: https://oilprice.com/Latest-Energy-N...ht-Battle.html

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## Swordsmyth

Two and a half years after the U.S. removed export restrictions on its crude oil, its exports hit 3 million bpd —the latest all-time high set in recent months.
The  volume of U.S. exports last week was higher than the individual country  exports of 12 out of 14 OPEC members. Only Saudi Arabia and Iraq export  more than 3 million bpd of crude oil to international markets.
The U.S. exports were also higher than the crude oil production of all but three OPEC members—Saudi Arabia, Iraq, and Iran.

More at: https://oilprice.com/Energy/Crude-Oi...-Number-3.html

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## Swordsmyth

Saudi Arabia has increased its oil production this month by 700,000  bpd to 10.70 million bpd, very close to its highest-ever production of  10.72 million bpd from November 2016, a Reuters survey showed on Friday in a clear sign that OPEC’s largest producer is making up for supply drops elsewhere within the cartel.
Saudi  Arabia’s previous production record of 10.72 million bpd was set in  November 2016, just before the original OPEC and allies’ deal to curb  production entered into force in January 2017.
According to OPEC’s secondary sources, Saudi Arabia pumped 9.987 million bpd last month, up by 85,500 bpd from April, but still below its 10.058-million-bpd quota.
“The Saudi number for June will be very, very high,” an industry source tracking Saudi Arabia’s oil production told Reuters on Friday. “Surprisingly high.”
Although  Saudi production typically rises in the summer due to higher domestic  crude oil demand for power plants, OPEC’s leader has also been boosting  exports this month, according to the Reuters survey. Saudi Arabia’s  crude oil exports rose to around 8 million bpd in June, according to a  Reuters industry source. This export volume compares to 7.3 million bpd  for April, the latest month for which official figures are available.
For  July, the Saudis plan to pump around 11 million bpd of crude oil, an  industry source familiar with the Kingdom’s production plans told  Reuters earlier this week.

While Saudi Arabia and Russia managed to get OPEC and allies to agree  to a vague statement that they would ease compliance to 100 percent  from record-breaking more-than-100-percent compliance, the archrivals  within OPEC—Saudis and Iran—have been in dispute over the meaning of  that statement. Saudi Arabia says that it implies an indirect  reallocation of production quotas, while Iran has been insisting that  the latest agreement doesn’t mandate any producer to pump above their  quota.
Saudi Energy Minister Khalid al-Falih said  on Saturday that “Some of the countries ... are not going to be able to  produce, so the others will. And that implies there will be indirectly a  reallocation.”
But Iran’s OPEC governor Hossein Kazempour Ardebili strongly disagrees and told Reuters  that “In the last meeting of OPEC, our resolution does not allow any  member to produce more than their quota, but to try to reach 100 percent  compliance.”
“The State Department says it is short and Saudi  Arabia says they will produce 11 million bpd in July. I regret to say  they both are ridiculing our organization,” Kazempour told Reuters.

https://oilprice.com/Latest-Energy-N...Time-High.html

----------


## Swordsmyth

Four BP-chartered supertankers containing a total of 8 million  barrels of oil have been held up off China’s east coast over the past  two months, in a sign that slower demand from independent refiners may  have caught traders off guard, Reuters reported on Friday, citing shipping data and trading and shipping sources.
BP  was one of the first Western oil firms to start selling crude oil to  China’s independent refiners—the so-called teapots—after the small  refiners first obtained government-endorsed oil import quotas in 2015.  BP regularly ships oil from West Africa to the Shandong province—the  home of most of China’s independent refiners.
But now demand from the teapots has started to wane due to the higher oil prices and new tax rules  that China introduced on March 1. Before that, teapots were known to  have used various loopholes in China’s tax regime to underpay,  underreport, and even evade taxes. But as of March 1, China introduced  new tax regulations and reporting mechanisms in a crackdown on the tax  evasion practices of independent refiners.
Those new tax  regulations have started to stifle the teapots’ profit margins and could  limit their purchases of crude oil, potentially affecting demand growth  in the world’s largest crude oil importer. 

More at: https://oilprice.com/Energy/Energy-G...il-Demand.html

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## Swordsmyth

Just spoke to King Salman of Saudi  Arabia and explained to him that, because of the turmoil &  disfunction in Iran and Venezuela, I am asking that Saudi Arabia  increase oil production, maybe up to 2,000,000 barrels, to make up the  difference...Prices to high! He has agreed!
 — Donald J. Trump (@realDonaldTrump) June 30, 2018While it wasn’t clear whether Trump was saying the king agreed that  prices were too high or to increase output, clearly the Saudi monarch  wanted to placate Trump and get him off the line as soon as possible.  The WSJ said that a representative of the Saudi government wasn’t  immediately available to comment early Saturday.
  Saudi Arabia is already boosting production, having agreed after last  weekend's OPEC summit to scale back compliance with output cuts that  have been in place since the end of 2016. *According to Saudi Energy Minister Khalid Al-Falih indicated, OPEC would add nearly 1 million barrels a day to the market* (although other OPEC states disagreed over the "real" boost, with Iran claiming it would be no more than 500kb/d).
  As Bloomberg adds, if Saudi Arabia were to concede to Trump’s  request, while it would likely send the price of oil sliding - if only  briefly - it would also stretch the world’s spare production capacity to  the limit, meaning that any supply outage could have an outsized effect  on oil prices.
  A Saudi concession would also further aggravate other OPEC members,  such as Iran and Venezuela, which had sought to prevent any increase as  OPEC and Russia: Venezuela is fighting hyperinflation and is scrambling  to keep the price of oil as high as possible, and while Iran is not  quite there, it is fast approaching an economic crisis as well, and is  therefore in dire need of both higher prices and not losing market share  to Saudi Arabia.


_Update_: as expected, it did not take  long for Iran - which has the most to lose from any Saudi output hike  which would not only send the price of oil lower but also allow Riyadh  to capture Iran's sanctioned market  share - to respond, and moments ago  Bloomberg reported that in an interview with Hossein Kazempour  Ardebili, Iran’s OPEC governor, he said that "*if Saudi Arabia  accepts U.S. President Donald Trump’s request to boost output, that  means he is calling on them to walk out from OPEC.*"
 "We are 15 countries in an agreement. Set aside that they do not have  the capacity, there is no way one country could go 2 million b/d above  their production allocation unless they are walking out of OPEC."Well, if they don't have the capacity (which they do), there is no  reason to be concerned. And yet Iran is precisely that, and considering  that Trump said *Saudi Arabia has "agreed" to his demand,* we may have just witnessed the end of OPEC.

  * * *

More at: https://www.zerohedge.com/news/2018-...oduction-boost

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## Swordsmyth

"The kingdom is prepared to utilise its spare production capacity  when necessary to deal with any future changes in the levels of supply  and demand," a cabinet statement said, following a meeting chaired by  King Salman.
  Some more details from the Al Jazeera report:
 US President Donald Trump on Saturday said Saudi Arabia's King Salman  had agreed to his request to increase oil output "maybe up to" two  million barrels. Trump said the agreement was reached after a phone call  with the Saudi King about oil production but mentioned no specifics.
  Both leaders also discussed "efforts by the oil-producing countries  to compensate for any potential shortage in supplies," SPA reported.
  Trump's claim comes after the Organization of the Petroleum Exporting  Countries (OPEC), a grouping of oil-producing states that includes  Saudi Arabia, already agreed to ramp up production by a million barrels a  day at a meeting earlier this month.In addition to pressing Saudi Arabia to pump as much as 2mmb/d more  to an unprecedented 12mmb/d, an amount many doubt the Saudi can maintain  for an extended period of time - think Tesla making Model 3s - the  Trump administration has also been pushing countries to cut all imports  of Iranian oil from November when the US re-imposes sanctions against  Tehran, after Trump withdrew from a 2015 nuclear deal agreed between  Iran and six major powers.
  If the Saudis are indeed prepared to cave to Trump*, it  creates an existential threat to OPEC which may see Iran and other  members quit immediately, if Riyadh has made a unilateral decision to  pump more*. Iran's OPEC governor, Hossein Kazempour Ardebili,  accused the United States and Saudi Arabia of trying to push up oil  prices and said both countries are acting against the foundation of  OPEC.
  As this point it is looking increasingly more likely that an emergency OPEC meeting is coming in the not too distant future.

More at: https://www.zerohedge.com/news/2018-...-pump-more-oil

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## Swordsmyth

Recent data suggests that Saudi Arabia already began ramping up  production way more than it said it would under the OPEC+ agreement even  before the meeting. The agreement called for a return to 100 percent  compliance, which would translate into an increase of 600,000 bpd to 1  mb/d. Saudi officials suggested the upper end of that range was almost a  formality, and the lower figure would end up being what was likely.
But  even as Saudi Arabia worked hard to maintain the cohesion of the OPEC+  group, it quietly ramped up output in June. Estimates vary, but here are  a few numbers that we have to go by. Bloomberg estimates Saudi output jumped by 330,000 bpd in June to 10.3 mb/d. Reuters says  production surged by much more, rising by 700,000 bpd to 10.7 mb/d. If  the latter is true, production would stand at close to the all-time high  of around 10.7 mb/d. 

Looking forward, Bloomberg and Reuters both report that Saudi Arabia  won’t stop there, and instead will ramp up to 10.8 or 11 mb/d in July.

The numbers are significant because they would suggest that even as  Saudi Arabia cobbled together a reasonable deal in Vienna, it had plans  to blow through the ceiling that it was committing to. In other words,  OPEC+ agreed to add 1 mb/d, but Saudi Arabia alone is poised to increase  by that amount.
Many OPEC members are already crying foul,  accusing Saudi Arabia of doing Trump’s bidding. It isn’t clear that  Saudi Arabia will go as far as increasing by 2 mb/d, as Trump wants, but  the promise to plug any supply gap is a not-so-subtle acknowledgement  that Riyadh is ready backstop Washington’s plan to shut in Iranian  supply.

Iran is firing back, arguing that if Saudi Arabia produces above its  10.06 mb/d quota it would breach the OPEC+ agreement. Iran also issued a  veiled threat to disrupt Saudi shipments in the Strait of Hormuz. 

Leaving aside the wisdom of burning through the entirety of global spare  capacity, or whether Saudi Arabia will actually go that far, the  seeming willingness to comply with Trump’s request for more oil, which  will come at the direct expense of an OPEC member, could fracture the  cartel. OPEC could continue to exist on paper, and it will continue to  meet, but Saudi Arabia and Russia (and to a lesser extent, a few Gulf  States) are the only ones coordinating oil market policy. This dynamic  has been underway for the better part of two years now, but President  Trump is accelerating these changes.

More at: https://oilprice.com/Energy/Crude-Oi...ring-OPEC.html

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## Swordsmyth

Last we heard from inside the kingdom, the Aramco IPO had been put on hold, with inside sources telling the FT that plans for the IPO had been temporarily shelved,  and that the process for selecting a venue for listing the shares had  been put off until at least 2019. Then there were rumors about a private  sale directly to some of the world's sovereign wealth funds - which  would cutting out the investment banker middlemen who've been salivating  at *the prospect of winning a piece of the world's largest IPO.* 
**
  But six months into 2018, with oil prices at their highest level in  three-and-a-half years and President Trump pushing Saudi Arabia and the  rest of OPEC to ramp up production to help quell rising crude prices, the Wall Street Journal has dropped what looks like a bombshell on the oil market.
_The Aramco IPO, which would've likely been the biggest  offering in history given the company's valuation, is almost certainly  not going to happen._ According to the paper's inside sources, the death of the IPO has been all but officially announced.
  Furthermore, WSJ reported that the IPO would bring "unprecedented scrutiny" to the Kingdom's "Crown Jewel", according to Saudi officials.
 *"Everyone is almost certain it is not going to happen,"* said a senior executive at Aramco, speaking of the IPO.Oil prices are sliding as expectations surrounding the offering had been one of the factors supporting crude prices.

More at: https://www.zerohedge.com/news/2018-...ly-wont-happen

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## Swordsmyth

Baker Hughes reported an increase in the number of active oil rigs in  the United States today. The overall rig count increased by 5 rigs, according to the report, with all of that increase coming from oil rigs, the number of gas rigs stayed the same.
The oil and gas rig count now stands at 1,052—up 100 from this time last year.
Canada, for its part, gained 10 oil rigs for the week—after last week’s gain of 12 oil and gas rigs. After multiple weeks of significant gains, Canada’s oil and gas rig count is now up 7 year over year.

More at: https://oilprice.com/Energy/Energy-G...-WTI-Pops.html

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## Swordsmyth

In line with its agreement with OPEC to reverse part of the cuts, Russia  is boosting its crude oil production, pumping as much as 11.193 million  bpd in the first four days of July, up from 11.06 million bpd in June,  Reuters reported on Thursday, quoting a source familiar with the data.

Before the decision to reverse some of the cuts—or as OPEC and allies  put it, to stick to 100-percent compliance rates—Russia’s pledge in the  pact was to cut 300,000 bpd of its oil production from the October 2016  level, which was the country’s highest monthly production in almost 30  years—11.247 million bpd.
Even before the OPEC and friends meeting, Russia had already started boosting  its oil production, and had pumped as much as 11.09 million bpd in the  first week of June—143,000 bpd above the country’s then-quota under the  OPEC+ production cut deal.

More at: https://oilprice.com/Energy/Crude-Oi...llion-Bpd.html

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## Swordsmyth

“Heavy Oil” is basically a dirty word in the energy world.
 But that’s all about to change.
 Technology company Petroteq Inc. is using a new proprietary Enhanced  Oil Recovery (EOR) system that could completely revolutionize oil sands  extraction. This technology just might be the key to unlocking the next  wave of the energy boom leading to domestic energy independence.
 Through a closed-loop system, Petroteq’s EOR can extract 99 percent of all hydrocarbons without releasing ANY greenhouse gases.
 At their Asphalt Ridge property in Utah, Petroteq (TSX:PQE.V;OTC:PQEFF) is sitting on a contingent deposit of 86 million barrels…and their extraction facility is now fully operational.
 The grand opening, according to CEO David Sealock, “was the culmination of two years of hard work by
our entire team…as well as the harbinger of value creation to come.”
 The company can produce oil for as little as $28 per barrel, they’re  already set to produce 1,000 bpd by the end of this year and 5,000 bpd  by the end of 2020.

More at: https://www.nextbigfuture.com/2018/0...ls-of-oil.html

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## Swordsmyth

The  U.S. government sees oil production further climbing next year even  amid transportation logjams in the country’s most prolific shale play.                                                                          The Energy Information Administration sees U.S. crude output  averaging 11.8 million barrels a day in 2019, up from its 11.76 million  barrel a day estimate in the June outlook.



                                                            “In 2019, EIA forecasts that the United States will average  nearly 12 million barrels of crude oil production per day,” said Linda  Capuano, Administrator of the EIA. “If the forecast holds, that would  make the U.S. the world’s leading producer of crude.”




More at: https://www.bloombergquint.com/marke...overnment-says

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## Swordsmyth

Satellite surveillance shows that production has fully resumed at the  Bai Hassan field in Iraq. The field is part of a complex of oilfields  in Northern Iraq that were shut down mid-October 2017 after the  Kurdistan Regional Government (KRG) unilaterally voted for independence  from Baghdad, causing Iraqi troops to move in on the oil-rich Kirkuk  area under its control. While there were reports of the field resuming  production at the end of June, Kayrros satellite surveillance shows it  did not achieve normal operations until 1 July 2018.
The  disruptions at the Bai Hassan field accounted for most of the lost  barrels in Iraq’s Kirkuk producing region as monitored by Kayrros. Now  that the fields are returning to normal operation, that loss, which had  already been offset by higher output from the south of Iraq, should drop  drastically. The recovery will likely enable Baghdad to participate in  the supply hike agreed by OPEC in June, offsetting any lost Iranian  barrels as may result from Washington’s recent move to leave the nuclear  deal between Iran and the so-called P5+1 and reimpose oil sanctions on  Tehran.
Production at the field under KRG management averaged 115  kb/d in 2016, a time when tensions in the region ran particularly high.  The Kurdish Peshmerga forces had to stop the ISIS insurgency from taking  control of the field or setting it ablaze again, which hampered  production. Fighting around the field restricted the flow of oil, making  it difficult for the KRG to maintain pipeline access.
Bai Hassan  previously produced at a maximum historical value around 198 kb/d in  2013, before the conflict with ISIS engulfed the region. The latter’s  occupation of neighboring Syria and parts of Northwest Iraq created a  constant source of struggle for the KRG, leading to disruptions and  reduced productivity. When militants attacked the field in 2014,  production dropped to only 28 kb/d that year.

More at: https://oilprice.com/Energy/Crude-Oi...n-Restart.html

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## Swordsmyth

To capitalize on the growing U.S. exports to Asia and Europe, Houston-based Enterprise Products Partners plans to develop  an offshore crude oil export terminal off the Texas Gulf Coast that  would be able to fully load the biggest oil tankers in the world capable  of carrying 2 million barrels of oil each.

Currently, the Louisiana Offshore Oil Port (LOOP) is the only oil port in the United States capable of fully loading the so-called Very Large Crude Carriers (VLCC).

While  U.S. production is growing and Permian production is booming, there  isn’t a port along the Texas Gulf Coast that is able to load 2 million  barrels of oil in one tanker because of the shallow waters close to the  coast. So Enterprise Products Partners is planning to put its oil  terminal offshore, some 80 miles off the coast to accommodate the huge  VLCCs and thus “provide the most efficient and cost-effective solution  to export crude oil to the largest international markets in Asia and  Europe,” the company said in a statement.
Enterprise  Products has already started front-end engineering and design (FEED)  and is preparing applications for regulatory permitting. The initial  design involves some 80 miles of pipeline to the offshore terminal  capable of loading and exporting crude oil at approximately 85,000  barrels per hour.

More at: https://oilprice.com/Latest-Energy-N...ore-Texas.html

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## devil21

Won't it be hilarious when the onshore TX oil workers have to take electric Ubers to work in the top oil exporting country in the world?

----------


## Swordsmyth

Houthi rebels in Yemen say that they targeted Saudi Aramco’s refinery  in the Saudi capital Riyadh with a long-range drone on Wednesday,  Houthi-run media outlet Almasirah reported.Early on Thursday local time, the same outlet quoted  a spokesman of the Houthis as saying that the “new long range Drone,  Sammad 2, that targeted Aramco in Riyadh is a successful and qualitative  experience.”

Saudi Aramco said on Twitter  on Wednesday that “Saudi Aramco fire protection crews and Civil Defense  have successfully controlled a minor fire due to an operational  incident at the Riyadh Refinery today. No personnel are injured and no  impact on operations.”
On Thursday, the Houthi-affiliated outlet Almasirah reported that the Yemeni movement fired a ballistic missile at the Jizan airport in Saudi Arabia.

More at: https://oilprice.com/Latest-Energy-N...ith-Drone.html

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## Swordsmyth

> zerohedge
> SAUDI ENERGY MINISTER SAYS SAUDI ARABIA IS TEMPORARILY HALTING ALL OIL SHIPMENTS THROUGH BAB-EL-MANDEB STRAIT IMMEDIATELY
> 
> 
> zerohedge
> SAUDI ENERGY MINISTER SAYS THIS COMES AFTER TWO SAUDI VLCCS TRANSITING  THROUGH BAB-EL-MANDEB STRAIT WERE ATTACKED ON WEDNESDAY IN THE RED SEA  BY HOUTHI MILITIA
> 
> 
> 
> ...


...

----------


## Swordsmyth

Baker Hughes reported an increase to the number of active oil and gas  rigs in the United States on Friday. Oil and gas rigs increased by 2 rigs,  according to the report, with the number of active oil rigs increasing  by 3 to 861 this week, while the number of gas rigs dipped by 1, hitting  186.
The oil and gas rig count now stands at 1,048—up 90 from  this time last year, with the number of oil rigs accounting for all of  that increase.
Canada gained 12 oil and gas rigs for the week, all  of which were oil rigs. Canada’s oil and gas rig count is now up just 3  year over year. Oil rigs are up by 12 year over year in Canada, while  the number of gas rigs were flat.

More at: https://oilprice.com/Energy/Energy-G...es-Higher.html

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## Swordsmyth

Global discoveries of conventional oil and natural gas are seeing an  exciting recovery with discovered resources already surpassing 4.5  billion boe in H1 2018, Rystad Energy analysis shows.
The average  monthly discovered volumes YTD are estimated at 826 million boe, up  approximately 30% compared to 625 million boe in 2017.


More at: https://oilprice.com/Energy/Energy-G...y-In-2018.html

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## Swordsmyth

The shale industry is on the verge of becoming profitable…for the first time.
“Higher  prices and operational improvements are putting the US shale sector on  track to achieve positive free cash flow in 2018 for the first time  ever,” the International Energy Agency (IEA) wrote in a recent report on energy investment.


The spike in oil prices this year is a huge gift to the industry.  With breakeven prices on shale wells much lower, the surge in prices  could push companies into profitable territory. “Since its inception,  the industry has been characterised by negative free cash flow as  expectations of rising production and cost improvements led to  continuous overspending in the sector,” the IEA said. “Over the last few  months, the industry as a whole has seen a notable improvement in  financial conditions, though the picture varies markedly by company, and  the overall health of the industry remains fragile.”
The  conditions are lining up in a favorable way for the shale industry.  Production is rising, prices are up, and so far cost inflation has not  eaten away too much at the efficiency gains. Also, the industry is much  more consolidated than it was in the past, which brings economies of  scale. Improvements in drilling technology and the spread of  digitalization is also yielding benefits. “[W]e estimate that the shale  sector as a whole is on track to achieve, for the first time in its  history, positive free cash flow in 2018.”

More at: https://oilprice.com/Energy/Crude-Oi...-US-Shale.html

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## Swordsmyth

Mexico’s national oil company is about to receive an injection of cash.

Incoming  President-elect Andres Manuel Lopez Obrador, or AMLO, has promised to  invest around 175 billion pesos ($9.4 billion) into the state-owned  energy companies. One of the goals is to reverse the decade and a half  of declining oil production.
“Fourteen years ago, oil production was 3.4 million barrels a day. Now it’s 1.9 million barrels a day,” AMLO said  at a news conference. “In 14 years, we’ve lost 1.5 million barrels a  day in production, a downward trend because the oil industry was  abandoned.”

More at: https://oilprice.com/Energy/Energy-G...-Into-Oil.html

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## Swordsmyth

India’s cabinet approved  on Wednesday a policy to allow companies to explore and exploit  unconventional oil and gas resources such as shale oil and gas and  coalbed methane under the existing production sharing contracts, as it  aims to reduce its dependency on energy imports.
The uniform oil  and gas exploration policy will encourage the current contractors in the  licensed and/or leased areas to unlock the potential of unconventional  hydrocarbons in the existing acreages, the government said in a  statement today.
The policy is expected to bring in new investment  in exploration and production (E&P) and raise the chances for new  oil and gas discoveries that could potentially increase India’s domestic  production. 

Unconventional oil and gas exploration under  existing production sharing contracts (PSCs) “will provide a major boost  towards ensuring energy security for India,” India’s Petroleum Minister  Dharmendra Pradhan said  on Twitter. The new policy is a complete shift from the ‘one  hydrocarbon resource type’ to ‘uniform licensing policy’ for  simultaneous exploration and exploitation of oil and gas in an area of  72,027 square kilometers (27,810 square miles) under PSCs.

More at: https://oilprice.com/Latest-Energy-N...Contracts.html

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## Swordsmyth

South Korea’s imports of U.S. crude oil are expected to hit all-time  highs in September and October, as the world’s fifth-largest oil  importer cuts off Iranian oil imports and looks for cheaper alternatives  for other Middle Eastern crude grades, Reuters reported on Thursday, citing trade flow data and four sources familiar with the matter.
Since  last month, U.S. crude oil loadings en route to South Korea have been  rising, and are expected to hit a record-high of 6 million barrels in  each of the months of September and October, according to Reuters’  sources and Thomson Reuters Eikon trade flow data.
In the first  half of 2018, South Korea’s oil imports from the United States jumped by  more than four times from the same period last year, to a total of 14.1  million barrels from January to June 2018, data from Korea National Oil  Corp shows. This translates into an average monthly oil import rate of  2.35 million barrels of U.S. crude oil to South Korea, according to  Reuters estimates.
South Korea has been a regular customer  of U.S. crude since the U.S. restrictions on oil exports were lifted in  2015. During the last two months for which EIA data is available, U.S.  exports to South Korea stood at 102,000 bpd in April, and rose to  113,000 bpd in May.
The two key reasons for rising South Korean  imports this summer are the U.S. sanctions on Iran and the cheaper U.S.  oil compared to Middle Eastern grades.

More at: https://oilprice.com/Latest-Energy-N...r-October.html

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## Swordsmyth

Saudi Arabia is cutting  the September official selling prices (OSPs) for all its grades and to  all markets except for to the United States, as it aims to entice more  buyers as it increases oil supply to offset production and export  disruptions elsewhere.
Saudi Arabia’s state-held oil giant Saudi  Aramco reduced the prices for next month for all the oil grades it sells  to its biggest market, Asia. The pricing for the Saudi flagship grade,  Arab Light, was reduced by US$0.70 to US$1.20 a barrel premium over the  Dubai/Oman benchmark, used for pricing oil to Asia. The reduction of  US$0.70 was deeper by US$0.10 than the median estimate of five traders  surveyed by Bloomberg.
The cut in Arab Light prices for September was the second consecutive monthly reduction of the OSP to Asia.
In July, while it was opening the taps, Saudi Arabia also cut its  official OSPs for most of its grades to the Asian markets for August,  in a sign that it wants to attract more customers now that it has raised  production. The OSP for Arab Light for Asia was reduced by US$0.20 to a  premium of US$1.90 above the Dubai/Oman benchmark. This was the first  cut in Arab Light pricing for Asia in four months and a drop from the  highest OSP since July 2014.
Last month, Saudi Arabia was also  said to be offering extra oil on top of its contractual volumes to some  buyers in Asia, as OPEC’s largest producer boosted oil production to  keep markets well-supplied amid disruptions from Venezuela and Libya and  the expected reduction of Iranian oil exports.
The Saudis and  other Middle Eastern oil exporters compete with North Africa, Russia,  Latin America and, in recent months, the United States, for market share  in the prized Asian market.
For September, Saudi Arabia also  reduced the pricing for all its grades to the Mediterranean and  Northwest Europe but raised all prices to the U.S. market.

https://oilprice.com/Latest-Energy-N...ew-Buyers.html

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## Swordsmyth

OPEC’s crude oil production jumped by 340,000 bpd in July from June,  as the cartel’s leader Saudi Arabia pumped near-record volumes and the  close Saudi allies in the Gulf boosted production to their largest in a  year and a half, the latest monthly S&P Global Platts survey showed on Friday.
Last  month, OPEC produced an average of 32.66 million bpd of crude oil,  including production from its newest member the Republic of Congo, the  survey of shipping data, industry officials, and analysts found.
The  biggest OPEC producer, Saudi Arabia, pumped 10.63 million bpd in July,  up by 240,000 bpd from June and its highest level since its record of  10.66 million bpd from August 2016, according to Platts survey archives.
The  Saudi allies Kuwait and the United Arab Emirates (UAE) boosted their  production as well, to the highest since December 2016, just before the  OPEC+ production pact entered into force. Kuwait pumped 2.78 million bpd  and the UAE produced 2.97 million bpd in July. Iraq and Algeria also  raised their oil production. The rising production in those countries  offset declines in Iran, Venezuela, and Libya.
Iran’s production  dropped to 3.72 million bpd in July—its lowest level since January  2017—as buyers from Europe started to wind down purchases ahead of the  returning U.S. sanctions in November.

Crisis-stricken Venezuela saw its production plummet for yet another  month, by 60,000 bpd to 1.24 million bpd in July. This level is 670,000  bpd lower compared to a year earlier and *Venezuela’s lowest production in the 30-year history of the Platts OPEC survey,* except when a worker strike in late 2002 and early 2003 temporarily stymied Venezuelan production.
Libya’s  production declined 30,000 bpd to 670,000 bpd—its lowest since April  2017, after a militia blockade at its eastern ports that had blocked  production and exports was resolved on July 11, when the country reopened the oil ports in its Oil Crescent.
Earlier  this week, a Reuters survey showed that OPEC’s crude oil production  rose by 70,000 bpd from June to stand at 32.64 million bpd in July—the highest production level so far this year.  

https://oilprice.com/Energy/Crude-Oi...ar-Record.html

----------


## Swordsmyth

As if oil market participants haven’t had enough conflicting market  forces to digest over the past week, reports that Saudi Arabia’s crude  oil production surprisingly dropped in July by around 200,000 bpd from June further confounded the market and sent oil prices rising on Monday.
Last  week, several surveys of OPEC’s crude oil production in July showed  that the cartel is pumping at high rates, and Saudi Arabia is nearing  its production record. But on Friday, Saudi sources and OPEC sources  told news agencies that the Saudi oil production was not even close to  record figures—and it actually dropped last month compared to June.
The  Saudis pumped 10.29 million bpd in July, Saudi sources told S&P  Global Platts on Friday. On the same day, two OPEC sources told Reuters that Saudi Arabia’s crude oil production in July was 10.29 million bpd.
According  to OPEC’s secondary sources, the ones the cartel uses to calculate  quotas and compliance, Saudi Arabia’s oil production had jumped in June by 405,400 bpd compared to May, to reach 10.420 million bpd.
According to a Reuters survey from last week, Saudi Arabia’s production in July was 10.65 million bpd,  but exports were close to June’s levels because the Saudis increased  domestic use at power plants and refineries. OPEC’s crude oil production  jumped by 340,000 bpd in July from June, as Saudi Arabia pumped near-record volumes, the S&P Global Platts survey showed on Friday.

The numbers leaked by Saudi and OPEC sources on Friday are in stark contrast with many of the surveys.
Some  of the Platts survey participants think that Saudi Arabia may have  trouble placing its barrels on the market, and demand for Saudi crude  may not have been as robust as the Kingdom had expected.

More at: https://oilprice.com/Energy/Crude-Oi...y-Dropped.html

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## Swordsmyth

Baker Hughes reported an increase to the number of active oil and gas  rigs in the United States on Friday. Oil and gas rigs increased by 13 rigs,  according to the report, with the number of active oil rigs increasing  by 10 to 869 this week, while the number of gas rigs increased by 3,  hitting 186.
The oil and gas rig count now stands at 1,057—up 108 from this time last year.

More at: https://oilprice.com/Energy/Energy-G...-Gas-Rigs.html

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## Swordsmyth

ExxonMobil is close to discovering huge oil reserves in Pakistan near   the border with Iran, and those reserves could even be larger than the   oil reserves of Kuwait, the Pakistani Minister for Maritime Affairs and   Foreign Affairs, Abdullah Hussain Haroon, said over the weekend.
Addressing  business leaders at the Federation of Pakistan Chambers of  Commerce and  Industry (FPCCI), Haroon said that Exxon had drilled for  oil close to  the Iranian border and that the U.S. supermajor was  optimistic about the  oil find.
“Foreign investors are interested in coming to  Pakistan, provided we  manage to meet their standards and attract them to  make investment,”  the Pakistani minister said in a press release  published by the FPCCI.
According to Arab News, if the oil  discovery in Pakistan turns out to  be as large as expected, the country  would rank among the world’s top  ten oil producing countries, ahead of  Kuwait.

More at: https://oilprice.com/Energy/Crude-Oi...Discovery.html

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## Swordsmyth

OPEC revised slightly down on Monday its estimates for global oil  demand growth in 2018 and 2019, while it revised up—for yet another  month—its forecast for non-OPEC supply growth.
In its Monthly Oil Market Report  published on Monday, OPEC revised down its oil demand growth forecast  for 2018 by 20,000 bpd from the previous month’s projection and now sees  the world demand for oil increasing by 1.64 million bpd, due to  weaker-than-anticipated demand in Latin America and the Middle East in  the second quarter. Total global oil demand is expected to reach 98.83  million bpd this year, OPEC’s latest estimates show. For 2019, global  oil demand growth is expected to slow down from 2018, with growth  forecast at 1.43 million bpd, some 20,000 bpd lower than OPEC’s  prediction last month. Next year, total world oil consumption is  anticipated to cross the 100-million-bpd mark and reach 100.26 million  bpd.
In 2019, the Americas will be the key OECD demand growth  driver, while China and India will see the highest oil demand growth  levels among non-OECD countries, according to OPEC.
Referring  to non-OPEC oil supply, OPEC revised up its forecast for 2018 by 73,000  bpd from the previous MOMR to 59.62 million bpd this year, an increase  of 2.08 million bpd year-on-year, mostly due to higher-than-forecast  Chinese supply. For 2019, the United States, Brazil, Canada, the United  Kingdom, Kazakhstan, Australia, and Malaysia will be the main growth  drivers, while Mexico and Norway are expected to see the largest  declines, OPEC said, but noted that “the 2019 forecast is subject to  many uncertainties.”

More at: https://oilprice.com/Latest-Energy-N...-Estimate.html

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## Swordsmyth

French supermajor Total will increase Nigeria’s oil production by  200,000 bpd by the end of the year, a senior official from the local  unit of the company said at an industry event, adding the increase will come from the development of the Egina Deep project.
“Our  plan is to maintain aggressive exploration and appraisal wells-drilling  to play a part in increasing the hydrocarbon resource base of the  nation,” Ahmadu-Kida Musa said at the National Association of Energy  Correspondents’ Conference.
Total currently accounts for 15  percent of Nigeria’s total oil production, Musa also said, and despite  the challenging environment in the West African nation, the French  company remains committed to its projects there.
The Egina field,  which will be responsible for the production boost, was discovered in  2003 by Total, which partnered with Chinese CNOOC and Brazil’s  Petrobras. Its development will have an estimated cost of US$16 billion  and will feature a floating production, storage, and offloading vessel  that arrived at the location earlier this year. Egina is the largest  deepwater offshore development in Nigeria to date.

More at: https://oilprice.com/Latest-Energy-N...00000-Bpd.html

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## Swordsmyth

Iraq’s oil exports from its southern ports are heading for a new  record this month if they continue the pace set so far in August, which  would be the second consecutive month of setting records in southern oil  exports, Reuters reported on Tuesday, citing industry sources who have been tracking shipment data.
Between  August 1 and 19, Iraq’s southern oil exports averaged 3.7 million bpd,  an increase of 160,000 bpd from the previous record of 3.54 million bpd  set in July, an industry source who has compiled ship-tracking data told  Reuters.
According to a second source, the oil exports from Iraq’s south have been at least 3.6 million bpd on average so far in August.
In July, Iraq’s exports from the south averaged 3.543 million bpd, slightly up from the June exports of 3.521 million bpd.
If  the pace of exports continues this month, Iraq will set a new record in  its exports from the south in August—a sign that the OPEC’s  second-largest producer is following through the cartel’s decision to  ease compliance rates, or in other words, to boost oil supply and offset  production losses.  

More at: https://oilprice.com/Latest-Energy-N...ew-Record.html

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## Swordsmyth

Reuters' sources confirmed  that *Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco.* 
  The financial advisors working on the proposed listing have also been  disbanded, as Saudi Arabia shifts its attention to a proposed  acquisition of a “strategic stake” in local petrochemicals maker Saudi  Basic Industries as we reported one month ago.
 *“The decision to call off the IPO was taken some time ago,  but no-one can disclose this, so statements are gradually going that way  - first delay then calling off,”* a Saudi source familiar with IPO plans.

More at: https://www.zerohedge.com/news/2018-...bands-advisors

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## Swordsmyth

Saudi  Arabia says it "remains committed" to an initial public offering of the  state-run oil behemoth Saudi Aramco despite delays and growing  speculation it may never be listed.Saudi  Energy Minister Khalid al-Falih issued a statement early Thursday  saying "timing will depend on multiple factors, including favorable  market conditions, and a downstream acquisition which the company will  pursue in the next few months, as directed by its board of directors."

More at: https://finance.yahoo.com/news/saudi...--finance.html

----------


## Swordsmyth

The sovereign wealth fund of Saudi Arabia is set to pick a number of  international banks to lend it as much as US$12 billion, after the  listing of oil giant Aramco has been delayed several times, and possibly  even called off, the Financial Times reported on Thursday, quoting bankers, advisors, and other people with knowledge of the process.
As  many as 16 banks may be involved in what could be the first loan to the  Public Investment Fund (PIF)—the sovereign wealth fund of Saudi Arabia,  as the Kingdom is possibly trying to fill the gap that the delays in  the listing of Aramco has created for Riyadh’s ambitions to rake in huge  proceeds from the IPO to invest in diversification of its economy and  mega infrastructure projects.

More at: https://oilprice.com/Latest-Energy-N...PO-Delays.html

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## Swordsmyth

The impending oil renaissance in Alaska’s North Slope is going to be  even more massive than previously projected. The oil lurking under the  surface of the historically oil rich region is enough to turn the  state’s economy around and reinstate it as a major player in the oil  industry, according to new research from IHS Markit, a London-based  global information and analytics provider. The study shows that the  North Slope’s crude output could increase by as much as a whopping 40 percent in the next eight years, more than regaining its place as one of the major powerhouses of the United States.
The  North Slope region, previously considered as a mature basin, is now  being touted in the media as the once and future “super-basin” thanks to  an estimated 38 billion barrels of oil equivalent (BOE) in remaining  recoverable resources. The report _IHS Markit Plays and Basins: Alaska North Slope (ANS) Basin; Resurgence in an Arrested, Late-emerging Super Basin analysis_ cites  that 50 trillion cubic feet (TCF) of gas, and 28 billion barrels of oil  remain untapped. IHA Markit has predicted that the estimated total  ultimate recovery (EUR), the sum of the remaining resources and the 16.8  billion barrels extracted up to this point, for the North Slope Basin  is a staggering 54.8 billion BOE.
The North Slope attraction does  not end with these stunning figures--the region now has fewer  bureaucratic barriers to begin exploration for operators, making it more  competitive, and recent advancement in drilling technologies will make  extraction more efficient and cost-effective than ever.

More at: https://oilprice.com/Energy/Energy-G...naissance.html

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## Swordsmyth

In what could be a power struggle between Saudi Aramco and the Saudi  government, the Kingdom has altered the concession contract with the oil  giant to 40 years with an option for renewal from a previous deal for  oil and gas rights ‘in perpetuity’, the Financial Times reported on Monday, quoting three people briefed on the issue.
The  changes were reportedly made as Saudi Arabia was making procedural,  tax, and governance changes in preparation of the initial public  offering (IPO) of Saudi Aramco, which now, it seems, is indefinitely  postponed, or even called off.


According to FT’s sources, cutting the concession period from  ‘forever’ to 40 years—but still well over the typical 20-year concession  contracts that international oil companies have with other countries—is  now pointless with the IPO stalled, and has only served to exert  control over the oil giant that has tried to keep its ‘in perpetuity’  concession.
The government has sought to have a shorter concession  period, closer to the 20-year concessions that Big Oil have, but this  would have meant changes in what Aramco could count as oil reserves, and  would have had impact on its valuation, according to FT.

More at: https://oilprice.com/Energy/Crude-Oi...Resources.html

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## Swordsmyth

The committee—consisting of representatives from the two leaders of  the OPEC and non-OPEC groups, Saudi Arabia and Russia, respectively, as  well as from Kuwait, the UAE, Algeria, Venezuela, and Oman—found on  Monday that total production was just 9 percent above the agreed upon  compliance of 100 percent, and compares with a compliance rate of 120  percent in June and an overzealous 147 percent in May, so the parties to  the pact have been raising production, according to Reuters.
In June, OPEC and its non-OPEC partners agreed  to work toward an overall conformity level of 100 percent as of July 1,  2018, compared to the 147-percent compliance rate in May.
OPEC-only  production in July rose by 40,700 bpd from June, to 32.323 million bpd,  according to secondary sources in the cartel’s Monthly Oil Market Report. While falling production in Libya and Iran was not so surprising, Saudi Arabia’s production dropped  in July by 52,800 bpd from June to average 10.387 million bpd last  month, according to OPEC’s secondary sources. Some analysts attributed  the lower Saudi production to a lower than previously expected demand  for Saudi crude.

More at: https://oilprice.com/Latest-Energy-N...s-In-July.html

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## Swordsmyth

Saudi Arabia will report to OPEC that its crude oil production in  August averaged 10.424 million bpd, up from the July levels, S&P  Global Platts reported on Friday, quoting an OPEC source.
Saudi  Arabia supplied 10.467 million bpd to the market in August, the source  said, which points to the Saudis drawing on stored oil to supply more  crude to the market than it pumped.
The Saudi production number  for August would be 136,000 bpd higher than Saudi Arabia’s self-reported  figure for July—10.288 million bpd, and according to Platts’ source,  the August production reflected customer demand for Saudi crude.

More at: https://oilprice.com/Energy/Crude-Oi...&utm_content=1

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## Swordsmyth

OPEC’s oil production for the month of March[August] was 220,000 barrels per day higher than July volumes, a Reuters survey showed on Friday.

Oil  prices bristled at the news, and started to slip off August highs. At  11:44am, WTI was trading down 0.46% ($-0.32) to $69.93, with Brent  falling 0.26% ($-0.20) to $77.82. Both benchmarks are still up on the  month.
The prices fell despite the fact that OPEC announced it  would lift production at its meeting in June 22, saying it would reduce  compliance to the production cuts to 100% after months and months of  overcompliance and under-production which tightened the market.
Iraq  is the largest overproducer, and Saudi Arabia increased production from  10.40 million bpd in July to 10.48 million bpd in August.

More at: https://oilprice.com/Energy/Crude-Oi...ion-Rises.html

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## Swordsmyth

Iraq set a new record for oil shipments from its southern ports in August, sending out 3.583 million bpd of oil last month and beating the July record of 3.543 million bpd, data by Iraq’s oil ministry showed over the weekend.
Iraq,  OPEC’s second-largest oil producer after Saudi Arabia, has been  boosting its oil exports since June, after OPEC and its Russia-led  non-OPEC partners in the deal agreed to reverse some of their production  cuts—or as they frame it, to ease compliance rates to 100 percent.
Iraq’s  federal government exported 3.583 million bpd in August, or a total of  111,061,618 barrels from central and south Iraq, reaping a total of  US$7.73 billion in revenues at the price of its oil averaging US$69.593,  the oil ministry quoted the Iraqi State Oil Marketing Organization  (SOMO) as saying this weekend.
Iraq’s exports from the south were set on a record pace  in August, judging from the high levels of exports in the first 19  days—around 3.7 million bpd, an industry source who compiled  ship-tracking data told Reuters earlier this month.

KRG saw its August oil exports from the Turkish Mediterranean port of  Ceyhan surge by 40 percent compared to July’s 320,000 bpd exports,  sources in the Kurdistan region to S&P Global Platts.
Kurdistan  exported a total of 445,000 bpd from Ceyhan in August, of which 370,000  bpd was by way of the KRG’s independent pipeline through Turkey. The  remainder was drawn from storage at Ceyhan, according to Platts’  sources.



More at: https://oilprice.com/Latest-Energy-N...In-August.html

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## Swordsmyth

As the crude powerhouse that is Texas’ Permian Basin becomes old  news, oil explorers are looking for the next big thing--and they have  found it in the more-than 4000 feet of stacked pay in Wyoming’s Powder  River Basin. In Powder River, Big Oil has found less-congested  pipelines, cheaper land, and more importantly, a whole lot of oil.
It’s  not the first time that the Powder River Basin has garnered industry  attention. In 2014, when oil prices were soaring, many industry players  were already eyeing the basin as the next big thing, but when oil prices  waned in the following years many drilling plans in Powder River were  abandoned for established operations. Now, as United States crude prices  ballooned by nearly 50 percent over the last year, there has been a  renewed rush for land deals  in oil rich areas, and the Powder River Basin is no exception. Although  the deals are largely undisclosed, we know that there have been a  number of deals in Wyoming, bringing industry-wide interest to the  conventional and shale formations found there.

More at: https://oilprice.com/Energy/Energy-G...boy-State.html

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## Swordsmyth

The United Arab Emirates (UAE) is ramping up production at a newly  operational offshore field, aiming to boost its total output to around 3  million bpd, S&P Global Platts reported on Wednesday, citing sources close to the issue.
The  Abu Dhabi National Oil Company (ADNOC), the producer of nearly all of  the oil in the UAE, has started to raise production at the Umm Lulu  offshore oil field, which was pumping around 30,000 bpd in August.  Production at that field could rise to as high as 75,000 bpd, a UAE oil  observer told Platts.
The increased volumes at the newly operational Umm Lulu oil field would raise the total UAE oil production to 3 million bpd.
According to OPEC’s latest Monthly Oil Market Report  with data for July, the UAE boosted its production by 69,200 bpd from  June to 2.959 million bpd in July, as per OPEC’s secondary sources. The  UAE’s self-reported figures to OPEC showed that oil production jumped by  85,000 bpd from June to 2.975 million in July.

ADNOC’s long-term goal is to raise the combined oil production at Umm Lulu and SARB to 215,000 bpd.

More at: https://oilprice.com/Latest-Energy-N...llion-Bpd.html

----------


## Swordsmyth

A joint panel of OPEC and non-OPEC representatives will discuss next  Tuesday how the group could distribute among them the 1 million bpd  production increase that was agreed in June Reuters reported on Friday, citing sources familiar with the plans.

At the meeting of the so-called Joint Technical Committee next  Tuesday, the panel will debate four proposals on how to share the  production increase, one of Reuters’ sources said. Those proposals will  come from Iran, Algeria, Venezuela, and Russia, the source added. One of  the proposals is to share the production increase pro-rata among the  countries. But this idea is unlikely to pass through the two leaders of  the OPEC and non-OPEC groups—Saudi Arabia and Russia,  respectively—because they would get a smaller production boost than they  want: Saudi Arabia wants 400,000 bpd and Russia wants another 300,000  bpd, according to the source.
Earlier this month, Iran—faced with a decline in production and exports from the U.S. sanctions—warned  OPEC that “no country can overtake the production and export quotas of  other member states under any circumstances,” while Iran’s Oil Minister  Bijan Zanganeh was quoted as saying  that “Some members are interpreting the latest OPEC decision on oil  output differently ... and are acting in accordance with the policies of  the U.S.” 

More at: https://oilprice.com/Energy/Energy-G...Next-Week.html

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## Swordsmyth

The United States this year became the largest crude oil producer, surpassing Russia and Saudi Arabia, according to preliminary estimates from the Energy Information Administration.
Although  following the June 22 agreement between OPEC and Russia to up  production to rein in prices Russia increased its output by more than  200,000 bpd, the average since the start of the year is higher for the  United States, where drillers have evidently taken full advantage of  higher prices and relatively low costs.
Earlier this week, in its  Short-Term Energy Outlook, the EIA estimated that U.S. crude oil  production at 10.9 million bpd in August, an increase of 120,000 bpd  from June. Although this was lower than Russia’s 11.21 million bpd for the same month, on average, the U.S. production rate for 2018 so far has been higher, the EIA estimates.
What’s  more, the authority said production growth will continue: it has  estimated the average for full-2018 will be 10.7 million. That’s a  substantial increase on last year’s average of 9.4 million bpd, and  production will continue to grow in 2019 as well to 11.5 million bpd.

More at: https://oilprice.com/Energy/Energy-G...-Globally.html

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## Swordsmyth

Russia and Saudi Arabia are eating into Iran’s oil market share, Tehran’s OPEC governor, Hossein Kazempour Ardebili, said in an interview with state oil agency Shana.
The  official did not reserve his criticism for these two, however. He also  slammed other OPEC members for welcoming the U.S. sanctions against  Tehran and taking advantage of the situation to boost their production.
“On  the one hand” Ardebili said, “Russia and Saudi Arabia, under the  pretext of balancing the supply and demand of the world, are seeking a  part of Iran's market share; on the other hand, some OPEC members are  hands in hands with the United States to strike some OPEC founding  members.”


The interview comes a few days after Iran’s Supreme Leader Ayatollah Ali Khamenei approached Russia’s Vladimir Putin for support in trying to “restrain” Washington.
At  the same time, Ardebili accused Russia of trying to cozy up to  Washington through Riyadh to make the most of the oil market situation.  Although he admitted it is more or less natural for every oil producer  to take advantage of higher prices and seek to maximize its gains, the  official said that Russia and Saudi Arabia were pursuing “hostage-taking  policies in the market.”

More at: https://oilprice.com/Energy/Energy-G...ket-Share.html

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## Swordsmyth

Saudi Arabia's Public Investment Fund (PIF) has confirmed that it raised  $11 billion in loans from international banks, The Wall Street Journal  reported Sept. 17.

Saudi Arabia's government has borrowed nearly $50  billion over the last three years as Crown Prince Mohammed bin Salman  spearheads efforts to diversify the country's economy away from  hydrocarbons.

More at: https://worldview.stratfor.com/situa...-billion-loans

----------


## Swordsmyth

OPEC and the Russia-led non-OPEC partners in the production cut deal could discuss all kinds  of production scenarios at their meeting in Algeria at the end of this  week, Russian Energy Minister Alexander Novak said on Monday.
“I  think we have the possibility to discuss any possible scenarios,”  Reuters quoted Novak, who was responding to a question as to whether the  OPEC and non-OPEC groups were planning to discuss lifting production  levels from what they agreed in June this year.
In June, OPEC and  allies agreed that they would aim for 100 percent compliance, down from  the very high compliance rates of 150 percent in the months prior to the  June meeting, to ease consumer concerns about the high oil prices and  to ensure stable oil supply amid plunging production in Venezuela and  returning sanctions on Iran.

More at: https://oilprice.com/Latest-Energy-N...Scenarios.html

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## Swordsmyth

Crude oil production in the U.S. shale patch will hit 7.59 million  bpd next month, the Energy Information Administration said in its latest  Drilling Productivity Report. This is 79,000 bpd more than this month’s estimated production.
The  biggest increase, once again, will come from the Permian, where  producers will add 31,000 bpd to overall daily production from the  current 3.427 million bpd to 3.458 million bpd.
The second-largest  contributor to the monthly increase will be the Eagle Ford, where the  EIA estimates production will rise by 16,000 bpd to 1.449 million bpd in  October.
Earlier this month, in its Short-Term Energy Outlook,  the EIA reported preliminary production estimates suggest the United  States had overtaken Russia as the world’s top crude oil producer,  pumping 10.9 million bpd on average in August. Next year, the EIA  estimated, daily production will hit an average of 11.5 million bpd, up  from this year’s estimated 10.7 million bpd.

More at: https://oilprice.com/Energy/Energy-G...tes-Again.html

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## Swordsmyth

There are no clear solutions for OPEC+ that leave the oil market satisfied while also maintaining group cohesion.
The  obvious course of action is to allow for higher production levels. But  there is no way to do this while also getting all parties on board.  Iran’s oil minister said that any change to Tehran’s allotment would be  blocked. “I will definitely veto any decision that threatens our  national interest,” Bijan Zanganeh said in an interview with reporters  from S&P Global Platts  and Bloomberg News. “Anyone who says they will compensate for the  shortfall in the market is speaking against Iran. This is a 100%  political statement, not economic.” Because any OPEC agreement requires  unanimous consent, Iran could block any changes to the formal oil  production cut deal.
Iran still holds a little bit of leverage  because the specifics of the June agreement, which called for increased  production on the order of 1 million barrels per day (mb/d), were not  hammered out. In all likelihood, Saudi Arabia and Russia would  realistically take on a greater share of output, mostly because they are  the only ones that have the ability to choose to produce substantially  more.
But formalizing those increases is politically tricky. After  all, Iran is taking tangible losses because of U.S. sanctions. Those  missing barrels have to be made up elsewhere. Saudi Arabia, Russia and a  few Gulf States are the only countries that can increase output on a  large scale. But even if Riyadh can physically replace the gap left over  by Iran, Iran would never vote in favor of such a scenario. “No  consensus on this issue is likely,” Commerzbank wrote in a note.

Nevertheless, a de facto increase in Saudi production in lieu of supply  losses from Iran is the only realistic outcome. The end result could be  no formal agreement on specific allotments that take into account  falling production from Iran and Venezuela. But the shift in market  share may happen anyway, whether or not OPEC+ approves it. 

It amounts to a sort of co-presidency between Riyadh and Moscow, the  two largest producers within the OPEC+ group, but it certainly will  diminish group cohesion. “They are sacrificing OPEC, they are destroying  OPEC and slowly, slowly, without directly saying so, they want to  gather some names together to create a forum to replace OPEC and manage  the market,” Zanganeh said.
He also said that Saudi officials  should fess up to their real motivations. “If they want to produce  excessively, we cannot stop them,” Zanganeh said. “There is no forcible  instrument in OPEC. But they shouldn't do it in the name of OPEC. They  should come out and say, 'The U.S. has phoned and told me to increase  output. And I have no other way but to do so.'”
Not only are Saudi  Arabia and Russia taking on a greater role in the current moment to  ensure market stability, but they are also looking to institutionalize  the arrangement for the long-term. 

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

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## Swordsmyth

Crude oil exports from southern Iraq are close to a record-high so  far in September, averaging 3.6 million bpd as of yesterday, Reuters reports,  citing sources in the know who had tracked shipping data to come up  with the number. If the rate stays unchanged or rises, it will beat  Iraq’s previous record of 3.58 million bpd hit last month.
It’s  safe to say that Iraq, OPEC’s second-largest producer, was only too  happy to boost oil production after the June 22 meeting of the cartel  when members decided to start reversing their production cuts agreed in  late 2016. Iraq never really managed to reduce production to its  assigned quota anyway, and it was vocal against the quotas because of  its heavy dependence on oil revenues as its economy is still in ruins  after the war and the fight with Islamic State.
What’s more, the  export rate data suggests that civil unrest, which has been rife since  the summer, has not affected oil production. Indeed, any intentions on  the part of protesters to try and cause production outages at oil fields  have been quickly thwarted.

More at: https://oilprice.com/Latest-Energy-N...cord-High.html

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## Swordsmyth

> Russia and Saudi Arabia are eating into Iran’s oil market share, Tehran’s OPEC governor, Hossein Kazempour Ardebili, said in an interview with state oil agency Shana.
> The  official did not reserve his criticism for these two, however. He also  slammed other OPEC members for welcoming the U.S. sanctions against  Tehran and taking advantage of the situation to boost their production.
> “On  the one hand” Ardebili said, “Russia and Saudi Arabia, under the  pretext of balancing the supply and demand of the world, are seeking a  part of Iran's market share; on the other hand, some OPEC members are  hands in hands with the United States to strike some OPEC founding  members.”
> 
> 
> The interview comes a few days after Iran’s Supreme Leader Ayatollah Ali Khamenei approached Russia’s Vladimir Putin for support in trying to “restrain” Washington.
> At  the same time, Ardebili accused Russia of trying to cozy up to  Washington through Riyadh to make the most of the oil market situation.  Although he admitted it is more or less natural for every oil producer  to take advantage of higher prices and seek to maximize its gains, the  official said that Russia and Saudi Arabia were pursuing “hostage-taking  policies in the market.”
> 
> More at: https://oilprice.com/Energy/Energy-G...ket-Share.html


One day after the US president issued an implicit warning to remove  military support for "middle eastern" nations, tweeting that "they would  not be safe for very long without us, and yet they continue to push for  higher and higher oil prices! We will remember. The OPEC monopoly must  get prices down now!"...


  ... Reuters reports that during tomorrow's meeting of oil producing  states, OPEC and Non-OPEC states may boost production by half a million  barrels per day:
 OPEC AND NON-OPEC COUNTRIES DISCUSSING POSSIBLE PRODUCTION INCREASE BY ANOTHER 500,000 BPD - SOURCE FAMILIAR WITH DISCUSSIONSIn kneejerk response, Brent pared all of its intraday gains and  dropped as low as $78.64, while WTI last traded higher by 23c at  $70.55/bbl, also sliding sharply from its $71.80/bbl high.



More at: https://www.zerohedge.com/news/2018-...500000-barrels

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## Swordsmyth

While there has been no love-loss between the U.S. and Russia in  recent years, news coming out of Moscow yesterday was sure to cheer the  most ardent Russian naysayers in both Washington and especially the U.S.  energy patch.
A Russian government official, according to a Bloomberg report,  asking to not be named since the information hasn’t been made public  yet, said on Thursday that the country’s oil production increased to a  new post-Soviet high and is fluctuating between 1.54 million and 1.55  million tons a day, driven mostly by state-run energy firm Rosneft.
Those  numbers equal between 11.29 million and 11.36 million barrels per day  (bpd) of output, bypassing a previous record set in October 2016, just a  few months before Russian agreed to participate with a Saudi-led OPEC  to reign in an over supplied global oil market and prop prices back up  from multi-year lows.

More at: https://oilprice.com/Energy/Energy-G...et-Record.html

----------


## goldenequity

*Oil Prices Feared to Spike as Saudi Arabia Runs Low on Popular Crude
https://sputniknews.com/business/201...ke-saudi-iran/*

Aramco is warning its potential buyers that they are running low on the most popular crude in October 2018, 
a month before the US is to impose sanctions on the sale of Iranian oil..

“We are heading to a price spike, likely $90 to $100. It’s not just Iran that will suffer. It’s going to have a boomerang effect with rising gasoline prices,”

----------


## Swordsmyth

> *Oil Prices Feared to Spike as Saudi Arabia Runs Low on Popular Crude
> https://sputniknews.com/business/201...ke-saudi-iran/*
> 
> Aramco is warning its potential buyers that they are running low on the most popular crude in October 2018, 
> a month before the US is to impose sanctions on the sale of Iranian oil..
> 
> “We are heading to a price spike, likely $90 to $100. It’s not just Iran that will suffer. It’s going to have a boomerang effect with rising gasoline prices,”


They may be running out of oil, many people have speculated that they would.

----------


## goldenequity

@Swordsmyth
after reading several OPEC and non-OPEC articles...
these are my takeaways..
►the oil markets in the coming months *MAY* be headed for disruption/price rise/supply deficit
►Non-OPEC members can't make up the oil supply deficit despite 'best efforts' and 120% over production
►*OPEC* (Iran is 3rd largest member) must have UNANIMOUS vote to raise production (to cover Iranian sanction supply loss)
►Iran will vote against raising OPEC production 
►Iran WANTS disruption/supply deficit/price rise to happen: Trump will (rightfully) get the blame

-------------------
*Japanese refiners stop buying Iran oil ahead of sanctions 
https://on.rt.com/9eup*

----------


## Swordsmyth

> @Swordsmyth
> after reading several OPEC and non-OPEC articles...
> these are my takeaways..
> ►the oil markets in the coming months *MAY* be headed for disruption/price rise/supply deficit
> ►Non-OPEC members can't make up the oil supply deficit despite 'best efforts' and 120% over production
> ►*OPEC* (Iran is 3rd largest member) must have UNANIMOUS vote to raise production (to cover Iranian sanction supply loss)
> ►Iran will vote against raising OPEC production 
> ►Iran WANTS disruption/supply deficit/price rise to happen: Trump will (rightfully) get the blame
> 
> ...


The Saudis and the Russians have said they intend to increase production in spite of Iranian objections, if they do we may see the end of OPEC now, if that happens Iraq and any other members who can will rush to increase their production.
On the other hand your post about the Saudis saying they are running low one one grade of crude may indicate that they are actually running out of oil and not only won't be able to increase production but may be forced to reduce it, if that is the case the end of Saudi Barbaria may happen soon.

Interesting times.

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## goldenequity

the 'article' is in french and doesn't really 'get' the politics/forces in play...
but it declares Russia/OPEC have agreed on 'no changes' for now as far as $/bbl.

----------


## Swordsmyth

US consumers may be cursing rising gasoline prices which  are rapidly approaching an average of $3.00 across the nation as Brent  hits a new 4 year high above $84, but that is nothing compared to the  horror that motorists across most emerging markets are facing. 
  With currencies across the developing world tumbling as a result of a  toxic mix of global trade tensions, the strong dollar and rising U.S.  interest rates, *dollar-denominated crude has become all the more expensive.* And  while the price of Brent crude, the international oil price gauge, has  risen by 22% this year in dollar terms, its cost has doubled if you’re  buying in Turkish lira. It is up 39% in Indian rupees and 34% in  Indonesian rupiah. And don't even mention Argentina.

  The soaring prices are forcing emerging-market countries and central banks to act. According to the WSJ, India,  the world’s third-biggest oil importer, is weighing temporarily  limiting oil imports, while Brazil and Malaysia have introduced fuel  subsidies. On Thursday, central banks in Indonesia and the Philippines  both raised interest rates to tame rising inflation.
  In South Africa, where fuel prices are at a record high, the central  bank said in a statement last week that “the impact of elevated oil  prices and a weaker exchange rate on domestic fuel costs is increasingly  evident.”
 “Emerging markets already have a lot of problems as it is, and when  you throw an oil price spike to the mix, that creates another big risk  factor,” said Jon Harrison, managing director for emerging markets  strategy at TS Lombard.The sharp spike in oil - and gasoline prices - assures a double  whammy to the economy as local infrastructure is forced to, literally,  slow down. And absent a major change, such as a sharp drop in the dollar  or oil prices, *the large developing nations like Turkey, India,  the Philippines and South Africa are out of luck as they import all or  most of their oil.* 
  This creates a feedback loop where rising prices are spurring higher  inflation and expanding already large current-account deficits, further  exacerbating the economic hit. An increasing import bill further widens  the deficit, which puts further pressure on their currencies.
 “Oil is definitely a risk for those pressured by current account  funding issues,” said Sacha Tihanyi, deputy head of emerging-markets  strategy at TD Securities in New York. “If we see oil continuing higher,  we’ll have to see further monetary and nonmonetary measures in order to  help stabilize the external deficit strain.”The only option these countries have to normalize the surging import  prices is to push up their currencies by raising rates. And that's what  they are doing: last Thursday, Bank Indonesia, the country’s central  bank, raised rates for the fifth time since May. In a statement, the  bank pointed to a “surge” in crude imports bringing the country’s trade  deficit to over $1 billion in August.
  Also on Thursday, the Philippine central bank raised its key interest  rate, citing rising inflation. Speaking to Reuters, the country’s  finance minister said that the *recent rise in oil prices is his main concern now*.
  Unable to wait for monetary policy to funnel through to the broader  economy, some companies are taking matters into their own hands.  According to the WSJ, in August India’s Jet Airways reported a rise in  fuel costs of more than 50% year-over-year in the three months to June.  CEO Vinay Dube had already talked of “a tough phase” for the industry,  singling out the depreciating rupee and high fuel prices. Meanwhile,  Indonesian state-owned oil company Pertamina is facing a squeeze as the  bill for importing foreign crude soars.
  * * *

More at: https://www.zerohedge.com/news/2018-...ing-oil-prices

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## Swordsmyth

A $200-billion solar power project that was planned to be the largest  solar farm in the world might never happen, government sources from  Riyadh told the Wall Street Journal.
The Kingdom earlier this year  announced the funding and a partnership with Japanese SoftBank as part  of its Vision 2030 economic reform plan that also involves a  US$500-billion smart city project.
The solar project  would have had installed capacity of 200 GW by 2030 and could have  created as many as 100,000 jobs. However, the WSJ sources said, nobody  is working on the project and the government is planning another set of  renewable energy initiatives, to be made public later this month. Those  new initiatives, the sources added, would be more practical.

More at: https://oilprice.com/Alternative-Ene...er-Happen.html

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## Swordsmyth

After having shelved indefinitely plans to go public, Saudi Aramco is  looking to buy a majority stake in Saudi chemicals giant Sabic from the  government’s sovereign wealth fund, and may borrow US$50 billion from  international banks to finance that deal, Reuters reported on Monday, citing banking sources familiar with the talks.
Saudi Aramco—whose initial public offering (IPO) is now all but scrapped—plans  to buy the 70 percent in Sabic currently in the hands of the Public  Investment Fund (PIF) of Saudi Arabia in a deal expected to be worth  US$70 billion.
Aramco’s acquisition of a majority stake in Sabic  would be key to the oil giant’s strategy to expand in the downstream  segment and curb emissions, Aramco’s chief executive Amin Nasser told  the Financial Times last month, noting that talks about the Sabic acquisition were still at an early stage.
According  to Reuters’ banking sources, bankers have been meeting with Aramco over  the past few weeks to talk about ways to raise money for the Sabic  deal, with various options discussed, including bond issues and bank  loans.
Currently, the most likely scenario would be Aramco tapping  its own cash for around $20 billion of the US$70-billion acquisition  price tag, while the remaining $50 billion would come from a combination  of various large long-term loans and smaller short-term bridge loans.  The shorter-term loans could be replaced with bond issues after a year-a  year and a half, several sources told Reuters.

More at: https://oilprice.com/Latest-Energy-N...quisition.html

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## Swordsmyth

Saudi Arabia will pump 10.7 million bpd of oil in October and will  slightly raise this level in November, Saudi Energy Minister Khalid  al-Falih said at an energy forum in Moscow on Wednesday.
The comments by the key oilman in OPEC’s largest producer and exporter come just a few days after Brent Crude  prices hit earlier this week $85 a barrel—a four-year high—amid  concerns that OPEC and allies are not doing enough to offset declining  Iranian oil exports and plunging Venezuelan production.
Saudi  Arabia is currently pumping 10.7 million bpd, al-Falih said today. This  is just shy of the Kingdom’s all-time high production of 10.72 million  bpd, set in November 2016, just before OPEC and its Russia-led non-OPEC  allies started the production cut deal in January 2017.
Asked  about the Saudi plans for November production, when the U.S. sanctions  on Iran’s oil return, al-Falih said that the November output would be  “slightly higher” from the October level, which he expects to average  10.7 million bpd.

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

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## Swordsmyth

Are Saudi Arabia and Russia helping Trump out by agreeing to increase oil production?
A new report from Reuters says  that Russia and Saudi Arabia “struck a private deal” in September to  increase production in order to suppress oil prices. Intriguingly, the  pair apparently phoned the U.S. before the Algiers meeting in late  September to relay the details of their plan.
The report is an  indication that Saudi Arabia was trying to respond to pressure from  President Trump to lower oil prices. If the White House was informed  about the secret private deal, it didn’t seem to resolve Trump’s  concerns.
Just a few days after the Algiers meeting, Trump blamed OPEC for high oil prices at the UN General Assembly in New York.
Also,  the secrecy behind the private deal is interesting. It demonstrates  that the Saudis do not want to be perceived as doing Trump’s bidding.  “The Russians and the Saudis agreed to add barrels to the market quietly  with a view not to look like they are acting on Trump’s order to pump  more,” one source told Reuters.
However, the downside of keeping  the strategy secret is that if the oil market doesn’t know about it, or  the fact that Saudi Arabia and Russia decided to ramp up production,  then the effect on prices is muted. After all, Brent surged to $85 per  barrel in recent days, evidence that oil traders are not convinced about  OPEC’s strategy.
It may not be surprising then that the Reuters  report came out when it did. Was that a deliberate strategy by the  Saudis to leak the details to the press in order to inform the market?  Who knows, but it came shortly after Brent rose its highest level in  four years, which seems unlikely to be a coincidence. 

More at: https://oilprice.com/Energy/Crude-Oi...-Oil-Deal.html

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## Swordsmyth

India gave the green light to businesses hurt by the rising costs of  crude oil to start borrowing up to $10 billion in foreign money that  will offset the heavy weight of rising oil prices and the falling rupee,  Reuters reported on Wednesday.
India’s current commercial borrowing rules prevent businesses from borrowing more than $750 million in foreign money—the previous limit as outlined in April by the Reserve Bank of India (RBI) as cited by Lexology.
Rising  oil prices spurred by increasing fears that Iran’s crude oil exports  will take out more oil from the market than previously thought—up to as  much as 2 million barrels per day—has weighed heavily in recent months  on the country, which is well on its way to overtaking China in terms of  oil demand growth—a marker expected to be reached in 2024 according to  an August news release from Wood Mackenzie.
But equally as worrisome for the Asian nation is the falling rupee, which today has reached a record low of 73.38, according to Business Today.


More at: https://oilprice.com/Latest-Energy-N...ts-Of-Oil.html

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## Swordsmyth

India’s government has introduced a fuel relief as prices at the pump  rise inexorably, following soaring international benchmarks, Indian  media report, citing the official statement by Finance Minister Arun Jaitley.
The  move was made after consultation with local oil companies, which agreed  to reduce prices by US$0.034 (2.5 rupees) per liter of gasoline and  diesel, of which they will absorb US$0.014 (1 rupee) per liter of fuel,  and the government will shoulder the rest by cutting excise duties on  fuels.

More at: https://oilprice.com/Latest-Energy-N...-The-Pump.html

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## Swordsmyth

Rising oil prices are hurting consumers, Fatih Birol, the Executive  Director of the International Energy Agency (IEA), says, calling on  major all producers to do the best they can to further boost production  and ease persistent supply concerns that pushed Brent Crude to above $86 a barrel on Wednesday.
“Some  countries have been making efforts to increase production but this is  far from comforting the markets right now,” Birol told the Financial Times on Thursday, adding that his “hope is that all the producers are aware of the sensitive situation and make their best efforts.”
Although  higher energy prices may look like a boon for oil exporting countries  today, tomorrow the economies of oil exporters will also suffer because  of the lower demand growth stemming from high oil prices, Birol told FT.
In an interview with Reuters, also today, Birol said that:
“It  is now high time for all the players, especially those key producers  and oil exporters, to consider the situation and take the right steps to  comfort the market, otherwise I don’t see anybody benefiting.”

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

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## Swordsmyth

The on-again, off-again, never-in-doubt, will-never-happen* IPO of Saudi Arabia's state-owned oil company Aramco is back on... for 2021*, according to prince Mohammad bin Salman.

  In a broad-based interview with a number of Bloomberg reporters  on Wednesday night at a royal compound in Riyadh, Saudi Arabia’s Crown  Prince Mohammed bin Salman Al Saud spoke about his relationship with  Donald Trump, his commitment to IPO Aramco, plans to invest a further  $45 billion in Softbank, energy markets and the recent arrests in the  kingdom.
  As Bloomberg reports, Prince Mohammed, surrounded by a handful of advisers, said *the IPO was "100 percent" in the nation’s interest.*
 *"Everyone heard about the rumors of Saudi Arabia canceling  the IPO of Aramco, delaying that, and that this is delaying Vision  2030,"* he said.* "This is not right."*Prince Mohammed said the IPO’s delay had its origin in mid-2017, when  it became clear that Aramco needed a push into petrochemicals. He said  it would had been unfair to go ahead with the listing only to surprise  investors soon after with a big deal in chemicals.
  The most recent statements on when the IPO would happen provided  considerable room for maneuver. Energy Minister Khalid Al-Falih said in  August that Saudi Arabia would *go ahead with the project "at a time of its own choosing when conditions are optimum."*
**
  Prince *Mohammed has now given the company and its advisers a new deadline,*  requiring the completion of the Sabic and acquisition and a giant  international share sale in less than three years. Management and  bankers will take some solace from the fact they’ve already made many of  the preparations needed for an IPO, but it remains a daunting agenda.

More at: https://www.zerohedge.com/news/2018-...ramco-ipo-back

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## Swordsmyth

*Ibn Khaldun, a member of an upper-class Spanish-Muslim family  that fled to North Africa after the fall of Seville in 1248, was one of  the most remarkable personalities of the late Middle Ages on either  side of the Christian-Muslim divide.* He wrote The Muqaddimah, a book-length prologue to his six-volume world history, which British historian Arnold Toynbee praised “as  undoubtedly the greatest work of its kind that has ever yet been  created by any mind in any time or place.” The anthropologist Ernest  Gellner described Khaldun as a forerunner of modern sociology.  The Muqaddimah, a strange blend of faith, fatalism, and science, is  best known for its musings on the subject of the urban-nomadic conflict  and the process by which dynasties rise and decay.
  As Ibn Khaldun put it:
 [T]he life of a dynasty does not as a rule extend beyond three  generations. The first generation retains the desert qualities, desert  toughness, and desert strategy. … They are sharp and greatly feared.   People submit to them. … [T]he second generation changes from the  desert attitude to sedentary culture, from privation to luxury and  plenty, from a state in which everybody shared in the glory to one in  which one man claims all the glory for himself while the others are too  lazy to strive for glory. …  The third generation … has completely  forgotten the period of desert life and toughness, as if it never  existed…. Luxury reaches its peak among them, because they are so much  given to a life of prosperity and ease.Decadence leads to collapse as fierce nomadic fundamentalists gather  in the desert and prepare to mete out punishment to the city dwellers  for their religious laxity. *“[A] new purge of the faith is required,”* summed up Friedrich  Engels, who evidently read Ibn Khaldun, “a new Mahdi [i.e., redeemer]  arises, and the game starts again from the beginning.”
*It’s a recurrent cycle that has held true for a remarkable number of Muslim dynasties from the seventh century on.*
*Evidence of Instability* *The big question now is whether the pattern will hold true for the Saudis. * 
  The answer so far is that it will. Events are proceeding on course.  Ibn Saud, the founder of the modern Saudi state, by allying himself with  Wahhabism, the local version of Islamic ultra-fundamentalism, embodied  Ibn Khaldun’s concept of a ruthless desert warrior who uses religion to  mobilize his fellow tribesman and battle his way to the throne in 1932.  Once Saud took power, he proved to be a tough and cagey politician who  put down rebellion and expertly played Britain and America off against  one another to solidify his throne.
*But the half-dozen sons who followed were different.* The  first, Saud, was a heavy spender who brought the kingdom to the brink  of bankruptcy. The second, Faisal was an autocrat who was so out of his depth that  he believed Zionism somehow begat communism. Khalid, who took power in  1975, was an absentee monarch who was gripped by paralysis when hundreds  of rebels took over Mecca’s Grand Mosque in November 1979 and had to be  rescued by French commandos flown  in specially for the occasion. Fahd, who succeeded to the throne in  1982, was obese, diabetic, and a heavy smoker who ultimately fell victim  to a massive stroke.  Abdullah, his successor, also was sickly and  obese, *while Salman, who assumed the throne in 2015 at age 79, has suffered at least one stroke and is said to exhibit “mild dementia.”* 



*The upshot is a group study in decrepitude.* MBS, who  all but took over the throne in 2015, meanwhile personifies all the  foolishness and decadence that Ibn Khaldun attributed to the third  generation. He’s more energetic than his father. But as one would expect  of someone who has spent his entire life cosseted amid fantastic  wealth, he’s headstrong, impractical, and immature. Appointed minister  of defense by his father at the ripe old age of 29, he declared war on  Yemen, Saudi Arabia’s neighbor to the south, two months later and then  disappeared on a luxury vacation in the Maldives where a frantic Ashton  Carter, Barack Obama’s secretary of defense, was unable to reach him for days.
  A year later, MBS unveiled Vision 2030 a grandiose development plan  aimed at bringing Saudi Arabia into the 21st century by diversifying the  economy, loosening the grip of the ultra-intolerant Wahhabiyya,and  putting an end to the country’s dual addiction to oil revenue and cheap  foreign labor. In a country in which young men routinely wait years for a  comfortable government sinecure to open up, the goal was to rejigger  the incentives to encourage them to take private-sector jobs instead.  
  It hasn’t worked. *In a rare moment of candor, a pro-government newspaper recently reported that thousands of employers are evading government hiring quotas by paying Saudi workers not to show up.* “Employers  say young Saudi men and women are lazy and are not interested in  working,” it said, “and accuse Saudi youth of preferring to stay at home  rather than to take a low-paying job that does not befit the social  status of a Saudi job seeker.”


Some 800,000 foreign workers have left the country while capital is fleeing in  the wake of last November’s mass roundup in which hundreds of princes  and businessmen were herded into the Riyadh Ritz-Carlton and forced to  turn over billions in assets. Foreign direct investment has plummeted from $7.5 billion to $1.4 billion since 2016 while a series of super-splashy development projects are in jeopardy now that Saudi Aramco privatization, which MBS was counting on as a revenue source, is on hold.  
*While granting women permission to drive, MBS has imprisoned  women’s rights advocates, threatened a dissident cleric and five Shiite  activists with the death penalty, and cracked down on satirical postings on social media.*  He preaches austerity and hard work, yet plunked down $500 million for his yacht, $450 million for a painting by Leonardo da Vinci, and $300 million for a French chateau. The hypocrisy is so thick that it’s almost as if he wants to be overthrown.  
*Fundamental Enemies* *As for the lean and hungry fundamentalists whom Ibn Khaldun  said would administer the final blow, there’s no doubt who fits that  bill: ISIS and al- Qaida.* Both are fierce, warlike, and pious,  both inveigh against a Saudi regime drowning in corruption, and both  would like nothing more than to parade about with the crown prince’s  head on a pike.  
  In May, al-Qaida denounced Saudi religious reforms as “heretical” and urged clerics to rise up against a “moderate, open Islam, which all onlookers know is American Islam.”
  In July, Islamic State took credit for an attack on a Saudi security  checkpoint that claimed the life of a security officer and a foreign  resident.

More at: https://www.zerohedge.com/news/2018-...t-failed-state

----------


## Swordsmyth

OPEC has revised down its oil demand growth estimates for this year  and next—a third downward revision in as many months—citing potential  headwinds to global economic growth ranging from trade disputes to  weakening finances in emerging markets and geopolitical challenges.
In its closely watched Monthly Oil Market Report  published on Thursday, OPEC revised down its global oil demand growth  to 1.54 million bpd this year, down by 80,000 bpd from the estimate in  the September report.
In last month’s report, the downward revisions from August were much smaller—by 20,000 bpd for global oil demand growth in both 2018 and 2019.
In  its latest estimate, OPEC now sees global oil demand growth next year  at 1.36 million bpd, down by around 50,000 bpd from last month’s  assessment, to reflect expectations for lower economic growth for  Turkey, Brazil, and Argentina. As a result, total world oil demand in  2019 is now expected to reach 100.15 million bpd. Oil demand growth will  be mainly driven by India, followed by China and OECD America, OPEC  said.

More at: https://oilprice.com/Latest-Energy-N...Forecasts.html

----------


## homahr

> *Ibn Khaldun, a member of an upper-class Spanish-Muslim family that fled to North Africa after the fall of Seville in 1248, was one of the most remarkable personalities of the late Middle Ages on either side of the Christian-Muslim divide. He wrote The Muqaddimah, a book-length prologue to his six-volume world history, which British historian Arnold Toynbee praised “as undoubtedly the greatest work of its kind that has ever yet been created by any mind in any time or place.” The anthropologist Ernest Gellner described Khaldun as a forerunner of modern sociology. The Muqaddimah, a strange blend of faith, fatalism, and science, is best known for its musings on the subject of the urban-nomadic conflict and the process by which dynasties rise and decay.*


Muqadimmah is a fascinating read.

----------


## Swordsmyth

Baker Hughes reported an 11-rig increase for oil and gas in the  United States this week, bringing the total number of active oil and gas  rigs to 1,063 according to the report, with the number of active oil  rigs increasing by 8 to reach 869 and the number of gas rigs increasing  by 4 to reach 193. Miscellaneous rigs fell by 1.
The oil and gas rig count is now 135 up from this time last year.

More at: https://oilprice.com/Energy/Crude-Oi...orrection.html

----------


## Swordsmyth

*Turkish security forces surround Saudi Arabian consulate in Istanbul*

----------


## latty_b

Einstein is absolutely right!

----------


## Swordsmyth

The offshore drilling segment of the energy industry was among the  hardest hit by the 2014 downturn. Many went under, and those that did  survive were on their last legs when prices began to climb back up. Now,  things are looking up and the sector could see a full recovery by 2020.
Reuters recalls  in a recent story how offshore drilling rigs fetched around US$180,000  per day during the worst of the downturn, from as much as half a million  dollars before. Now, according to offshore drilling giant Transocean,  it is raking in US$300,000 per day for its specialized vessels deployed  in the North Sea.

In the second quarter of last year, offshore drillers retired the most rigs over a three-month period, Bloomberg reported  at the time, citing an energy advisory firm. Now, IHS Markit has  forecast that in 2020, global drilling rig demand will hit 521 on  average, versus its estimate for this year, which is for 453 rigs. 

More at: https://oilprice.com/Energy/Crude-Oi...il-Sector.html

----------


## Swordsmyth

U.S. oil production may rise to as much as 14 million barrels of oil  per day (bpd) by 2020, Secretary of the Interior Ryan Zinke told Fox Business on Wednesday.
“Today  we are the largest oil and gas producer on the face of the planet,  rolling through 11.2 million bpd, on our way to 14,” Secretary Zinke  said.
There are some hurdles, we have to get the infrastructure,  but the production side of it is well within the capability of going to  14 million bpd, he added.
In its October Short-Term Energy Outlook (STEO), the Energy Information Administration (EIA) said  that U.S. crude oil production averaged 11.1 million bpd in September,  up slightly from the oil production in August. The EIA expects U.S.  crude oil production to average 10.7 million bpd this year, rising from  9.4 million bpd in 2017. U.S. oil production will average 11.8 million  bpd in 2019, EIA’s latest estimate shows.

For exports, U.S. crude oil exports could increase to 3.9 million bpd by 2020, up from just above 2 million bpd now, mostly driven by rising production in the Permian, the Houston Chronicle reported earlier this month, citing a report by S&P Global Platts.

More at: https://oilprice.com/Energy/Crude-Oi...d-By-2020.html

----------


## Swordsmyth

Due to operational divergences and geopolitical divisions, Saudi  Arabia and Kuwait haven’t made any progress in talks about the potential  restart of jointly operated oil fields that analysts were hoping could  soon add 500,000 bpd of oil production in the Middle East, Reuters reported on Wednesday, quoting sources familiar with the talks.
The so-called Partitioned Neutral Zone (PNZ) was established  between Saudi Arabia and Kuwait in 1922 to settle a territorial dispute  between the two countries. As of 2015, the oil production capacity in  the neutral zone stood at 600,000 bpd, equally divided between Kuwait  and Saudi Arabia, according to the EIA. Production from the zone  averaged around 500,000 bpd just before the shutdown of the two oil  fields, Khafji and Wafra, in 2014-2015.
At the end of last month, Saudi Arabia’s Crown Prince Mohammed discussed  the restart of crude oil production in the neutral zone during a  meeting with Kuwait’s Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah. The  Saudi Crown Prince’s visit to Kuwait, however, was cut short, according  to Reuters sources, while big divergences between the two sides  remained.


After talks broke down, the prospects for the fields coming back  online is “dead as a doornail,” a source close to the projects told Platts on Tuesday. The only hope for the fields to restart could be through international arbitration, the source added.
According  to Reuters’ sources, maintenance on the inactive fields is expensive  and the more the restart is postponed, the more difficult it will be to  resume production quickly.

More at: https://oilprice.com/Latest-Energy-N...s-Restart.html

----------


## Swordsmyth

The U.S. Gulf of Mexico is making a comeback and its total production has been rising over the past year.
Total  U.S. crude oil production in the Federal Gulf of Mexico increased  slightly in 2017 to reach 1.65 million bpd, the highest annual level on  record, the EIA said  in April, adding that production is expected to continue growing this  year and next, accounting for 16 percent of total U.S. crude oil  production. According to the EIA, a total of 10 deepwater Gulf of Mexico  field starts are expected in 2018 and 2019.

More at: https://oilprice.com/Latest-Energy-N...n-Planned.html

----------


## Swordsmyth

Baker Hughes reported a 4-rig increase for oil and gas in the United  States this week, bringing the total number of active oil and gas rigs  to 1,067 according to the report, with the number of active oil rigs  increasing by 4 to reach 873 and the number of gas rigs increasing by 1  to reach 194. Miscellaneous rigs fell by 1.
The oil and gas rig count is now 154 up from this time last year.

More at: https://oilprice.com/Energy/Crude-Oi...-Recovery.html

----------


## Swordsmyth

OPEC’s biggest producer and de facto leader Saudi Arabia hopes that  the cartel and its Russia-led non-OPEC partners in the production cut  deal will sign an ‘open-ended’ cooperation deal when they meet in Vienna  in December, Saudi Arabia’s Energy Minister Khalid al-Falih told  Russian news agency TASS in an interview published on Monday.
Asked  to elaborate on the OPEC/non-OPEC plans about the future of the  production cut deal, which expires at the end of this year, al-Falih  said that the OPEC+ alliance has been working for nearly two years, and  “we want to sign a new cooperation agreement that is open-ended.”
“That  does not expire after 2020 or 2021. We will leave it open. And what we  would like to do is continue for OPEC and non-OPEC to work together. And  the difference is that there will be no fixed term for the agreement,  which allows us to bring production up or down. It should not have fixed  production target,” al-Falih told TASS.
Such open-ended deal  would allow the participants to regularly coordinate and share  information and views about the oil market, supply and demand, and what  kind of intervention the alliance needs to make, if any, al-Falih said,  pointing to an alliance that could be coordinating a large part of the  world’s oil supply for years, and maybe decades, to come.
Many countries have expressed a willingness for closer cooperation with OPEC without joining OPEC, the Saudi minister added.

More at: https://oilprice.com/Geopolitics/Int...Agreement.html

----------


## Swordsmyth

Libya’s oil production could rise by several hundred thousand barrels  daily when BP and Eni resume production at a shared field, the head of  the country’s state oil company told Bloomberg.
Mustafa  Sanalla said Libya’s current oil production was more than 1 million bpd  “despite local security challenges” adding that BP and Eni planned to  restart their exploratory drilling operations at a field near the Libyan  border with Tunisia in the first quarter of next year. They could then  fast-track production, Sanalla said.
The two majors’ decision  about Libya is an indication of a relative confidence in the ability of  the local authorities to keep disruptions under control, it seems. After  all, just last month armed gunmen attacked  the headquarters of the National Oil Corporation, killing two and  injuring 25 people. Later, Islamic State claimed responsibility for the  attack. 

NOC is holding talks with international oil companies that could result  in increased investment and production in Libya’s oil industry, if  security across the country improves, Sanalla recently told S&P Global Platts.  The country still has plans to raise its oil production to 2 million  bpd and more by 2022, the official said. That would be higher than the  production rate from before the civil war that resulted in the ousting  of Muammar Gadaffi. Prior to the 2011 conflict, the Northern African  country pumped some 1.6 million bpd.

More at: https://oilprice.com/Energy/Crude-Oi...jor-Boost.html

----------


## Swordsmyth

As the global rebound in oil prices has helped to close a hole in Saudi Arabia's budget, *the kingdom on Monday ordered the resumption of annual bonus payments to all state employees starting in January 2019,* according to Civil Service Minister Sulaiman Al-Hamdan, who told the state-run Al Arabiya TV  during an interview on Monday. Riyadh removed the perk in September  2016 as oil was trading under $50 a barrel after bottoming below $30  earlier that year. The drop in oil prices blew a hole in the Saudi  budget and forced the kingdom to explore an IPO for 5% of Saudi Aramco -  a deal that has stalled in recent months as investment bankers haggled  with the kingdom over Aramco's valuation.

  Saudi restored the payment to some civil servants in April 2017.

  While some might be tempted to see this decision as a distraction  from the burgeoning scandal over the murder of journalist Jamal  Khashoggi, several analysts chimed in to point out that Saudi Arabia  probably would have reinstated the bonuses anyway.
 "Saudi resumes annual bonuses" - probably would have done this even without Khashoggi https://t.co/5YsOU69H9s
 — Ryan Bohl (@Ryan_Bohl) October 22, 2018During the worst months of the oil rout, Saudi Arabia projected a  budget hole equal to some 20% of GDP as two proxy wars combined with the  necessity of maintaining the status quo for ordinary Saudis heavily  taxed the country's reserves. And while the climb in oil prices has  definitely relieved much of the pressure on the kingdom's finances, the  oil price is still shy of where it would need to be to completely plug  the Saudis' budget hole.
  So how high, you might ask, do oil prices need to climb in order for  Saudi to plug the gap? Here’s Deutsche Bank with the answer.

  The bigger question is - why now? Is the Saudi monarchy concerned once against social upheaval following the Khashoggi chaos?

https://www.zerohedge.com/news/2018-...l-prices-climb

----------


## goldenequity

SouthFront
*Germany Approves Construction Of Port Terminal To Buy LNG From US 
https://southfront.org/germany-appro...uy-lng-from-us*

►Germany appears to be on the way to building its *first liquefied natural gas (LNG) terminal*. 
►may partly alleviate US President Donald Trump’s pressure to cut reliance on Russian gas.
►*Terminal sites:* 
cities of Stade and Brunsbuettel are battling for federal approval and hundreds of millions of euros in investment. 
They are *located on opposite banks of the Elber River*, just downstream of Hamburg.
Other sites, such as Wilhelmshaven in the northeast are also under consideration
►Nord Stream 2 pipeline project is still underway, and Germany fully supports it.


*Bloomberg:* 
►supplies of gas to Germany from the rest of Europe are drying up
►Russia accounts for about 45% of Germany’s imports in 2017, an increase of almost 4% from the previous year
►German consortium *LNG Stade GmbH* plans a terminal to handle 15 percent of Germany’s gas imports costing as much as $575 million.
►alternate *Brunsbuettel’* (NV Nederlandse Gasunie, Vopak LNG Holding BV and Oiltanking GmbH) is bundled together as “German LNG Terminal.”
►An option (to  not buy US LNG): improve the country’s pipeline links with Belgium and Netherlands
(downside is pipeline links require the approval of all 14 German gas distribution companies. Which is unlikely to happen.)

►October 17th Poland signed 20-year contract to import up to 2M tonnes/yr of US LNG to take full effect in 2022

----------


## goldenequity

*What sanctions? US, Japan & India join new Russian LNG project 
https://www.rt.com/business/442121-r...new-lng-plant/*

Russia’s energy major Rosneft will build a new liquefied natural gas (LNG) plant 
in partnership with US ExxonMobil, Japan's SODECO and India's ONGC Videsh, Reuters reports. 
The estimated $15 billion cost would be spread among the four firms, according to the news agency’s information. 
Rosneft, Exxon, SODECO and ONGC Videsh are all partners in the Sakhalin-1 LNG project. 
The new plant was intended to be built by Rosneft and Exxon, but the project was later joined by Indian and Japanese firms.

Sakhalin-1 is led by Exxon with a 30 percent stake. 
Another 30 percent belongs to SODECO, 
while Rosneft, ONGC Videsh own 20 percent each. 
LNG is not a subject of the anti-Russian sanctions, but Russian companies are facing problems with getting loans abroad.

Russia has an ambitious plan doubling its global LNG market share to 20 percent in the next decade. 
The country has two other LNG plants – Novatek's Yamal LNG and Gazprom's Sakhalin-2.

*On Tuesday, the Russian Direct Investment Fund (RDIF) announced Saudi Arabia is ready to invest $5 billion in the Arctic LNG 2 project.* 
Novatek is planning to sell up to 40 percent of the project to foreign partners.

In December, Russia opened the Yamal LNG project. Costing $27 billion, 
the plant will have three production lines and a total capacity of 16.5 million tons of LNG per year. 
Almost 96 percent of the Yamal LNG plant’s production has already been contracted.

======


*Saudi Arabia to invest $5bn in Russia’s future LNG project in Arctic 
https://www.rt.com/business/442038-s...ia-arctic-lng/*

 Riyadh is ready to invest $5 billion in the LNG 2 (liquefied natural gas) project in the Russian Arctic, 
the head of Russian Direct Investment Fund (RDIF), Kirill Dmitriev, said at the Saudi Arabian investment forum on Tuesday.

Earlier, Saudi Minister of Energy Khalid al-Falih 
said the kingdom was considering the possibility of becoming the second biggest investor in the project led by Novatek, Russia’s biggest independent gas producer. 
The minister didn’t provide details on Saudi Arabia’s potential share in the project.

In May, French energy giant Total, which holds a 19-percent stake in Novatek and participates in developing the company’s first LNG project in Yamal, 
announced plans to buy a 10-percent stake in Arctic LNG 2 enterprise, which could reportedly be worth around $25.5 billion. 
The reported volume of investments by the French company amounts to $2.55 billion.

The project also attracted a lot of interest from international partners, 
including Chinese national oil and gas major CNPC, 
energy giant Saudi Aramco, 
South Korean public natural gas company KOGAS, 
as well as from Japanese investors, according to Novatek’s CEO, Leonid Mikhelson.

The company is planning to sell up to 40 percent of the Arctic LNG 2 project to the foreign partners. 
The final investment decision may reportedly be made in the second half of next year with the first train expected to start up by the end 2023.

Arctic LNG 2 is a giant liquefied natural gas project on the Gydan Peninsula in Northern Siberia. 
With a production capacity of approximately 19.8 million tons per year, 
the project is set to unlock over seven billion barrels of oil equivalent of hydrocarbon resources in Russia’s onshore Utrenneye gas and condensate field.

Arctic LNG 2 production will be delivered to international markets in the same way as the Yamal LNG project. 
A fleet of ice-class LNG carriers, which will be able to use Russia’s Northern Sea Route, will deliver LNG cargoes destined for Asia.

----------


## goldenequity

*Germany Admits It Needs More From Russia Than Nordstream 2
https://www.zerohedge.com/news/2018-...a-nordstream-2*

Merkel just announced a long-delayed LNG terminal will be built by Germany with state assistance.  
You see, LNG or liquefied natural gas, isn’t really that profitable for European customers, 
otherwise this import terminal would have found enough backers in the private sector.

*So, Merkel announced a small concession to Trump by throwing some money at some LNG import terminals which any supplier can and will use.*

*This announcement was immediately spun as a win for President Trump* by Oilprice.com’s Tim Daiss because, well, reasons.




> "Now, it looks as if Trump’s recent tirade against America’s European allies over its geopolitically troubling reliance on Russian gas supply may also be bearing fruit. 
> On Tuesday, The Wall Street Journal reported that earlier this month German Chancellor Angela Merkel offered government support to efforts to open up Germany to U.S. gas, 
> in what the report called “a key concession to President Trump as he tries to loosen Russia’s grip on Europe’s largest energy market.”


The rest of the article is boiler-plate Russia-baiting and bad economics, but that’s to be expected from American writers at Oilprice.  
It’s similar to the Russian writers there who overstate Russia’s advantages.

That said, there are always nuggets of truth buried in the manure.

Despite Daiss’ bias what he fails to mention in his MAGA-enthusiam is that 
Germany making this announcement is far more significant than Merkel’s perceived kowtowing to Washington.

Politically, this cost Merkel nothing.

*What this admits is what Gazprom deputy chairman Alexander Medvedev said back in May.  
"Everyone should forget about fighting Nordstream 2 because Germany will need Nordstream 3."* 




> "Output is falling in Norway and Scotland, too. 
> According to a recent report by the Oxford Institute of Energy Studies, absent the discovery of new fields, Europe’s gas production is set to decline 
> from 256 billion cubic meters per year today to 212 billion cubic meters per year by 2020, and 146 billion cubic meters per year by 2030.
> 
>     Amid falling domestic production, demand for gas is set to go up, as European countries close down old thermal coal power plants, 
> and Germany prepares to shutter its nuclear power plants by 2022. German NPPs, it’s worth noting, once accounted for nearly a quarter of the economic giant’s power consumption.
> 
>     “And no, *no American, Qatari or even Russian LNG supplies will be able to replace these volumes*,” Lekuh stressed. 
> “Such supplies are simply a triviality when compared to the price of pipeline gas, and there are currently no technical solutions to this disparity. 
> ...




So, yes, Germany building LNG import terminals is an opportunity for U.S. companies to sell Germans some gas.  
But, it also means that Novatek can sell LNG to Germany from its massive Yamal project on the Baltic Sea and still undercut U.S. deliveries.

*Trump got a small win here.  The U.S. will sell Germany some gas after these terminals are built.* 
Merkel gets to pay her ‘fair share’ on NATO by overpaying for some gas while keeping her defense spending acceptable to the rising hard-left in Germany.

*But,* 
the big winner ultimately is the Russian/Iranian axis that called Trump’s bluff on sanctions, tariffs and protectionism will flip Germany’s political incentives to their side of the ledger.

====


Russia’s energy major Rosneft will build a new liquefied natural gas (LNG) plant.
What sanctions? US, Japan & India join new Russian LNG project
https://www.rt.com/business/442121-r...new-lng-plant/
*Sakhalin-1 LNG project a $15B venture*
►US Exxon: 30%
►Japan SODECO: 30%
►Rosneft, India ONGC&Videsh: 20% each
►Russia intends doubling global LNG market share to 20% / decade.

In December, Russia opened the Yamal LNG project costing $27B
►will have three production lines / total capacity of 16.5M tons LNG / year.
Almost 96 percent of the Yamal LNG plant’s production has already been contracted.
►LNG is not a subject of the anti-Russian sanctions, but Russian companies are facing problems with getting loans abroad.

======

Riyadh is ready to invest $5 billion in the Arctic LNG 2 project.
Saudi Arabia to invest $5bn in Russia’s future LNG project in Arctic
https://www.rt.com/business/442038-s...ia-arctic-lng/
*Arctic LNG 2 a $25.5 billion project by Novatek* (Russia’s biggest independent gas producer.)
►KSA considering becoming second biggest investor
►Total holds 19% of Novatek and participated in Yamal LNG project announced plans for 10% of Arctic LNG 2 enterprise
►40% of Arctic LNG 2 project to foreign partners:[/b] China CNPC, Saudi Aramco, South Korean KOGAS, Japanese investors
The Arctic LNG 2 is a giant liquefied natural gas project on the Gydan Peninsula in Northern Siberia expected to start up by the end 2023.
►production capacity of approximately 19.8M tons / year
(set to unlock the equivalent of over 7B barrels of oil from the onshore Utrenneye gas and condensate field.)
►Arctic LNG 2 production will be delivered by a fleet of ice-class LNG carriers same way as the Yamal LNG project using Russia’s Northern Sea Route to Asia.

----------


## Swordsmyth

More than 160,000 drivers in Australia have launched a boycott of  fuel stations after a sharp rise in prices at the pump to more than  US$1.20 (A41.70) per liter, the daily Mail reports.  Dubbed the National Fuel Strike, the initiative began today, with  drivers refusing to fuel up and sharing pictures of empty fuel stations.
The  number of people who committed to not fuel for two days is the number  of drivers who made that pledge on a Facebook event page titled National Fuel Strike.  Its creator, Sabrina Lamont, has also started a petition to the  government to cancel the general sales tax on fuels and probe fuel  prices and price gouging, News.com.au, reports.

And that’s not all. Some drivers have become so frustrated with the  rising prices for fuel they are calling for road blocks and  shop-closing, the Daily Mail reports. “What needs to happen is people  abandon their cars in the street, lock them and walk away until  something is done. Stop the entire country. No one goes to work, no  shops open, nothing,” one such driver said on social media.

More at: https://oilprice.com/Latest-Energy-N...rice-Hike.html

----------


## Swordsmyth

Baker Hughes reported a 1-rig increase for oil and gas in the United  States this week, bringing the total number of active oil and gas  drilling rigs to 1,068 according to the report, with the number of  active oil rigs increasing by 2 to reach 875 and the number of gas rigs  decreasing by 1 to reach 193.
The oil and gas rig count is now 159 up from this time last year.

More at: https://oilprice.com/Energy/Crude-Oi...Stagnates.html

----------


## Swordsmyth

Crude oil production from onshore federal lands reached a record high  over the first seven months of this year, New York Times’ Eric Lipton  said in a tweet responding to a claim that oil production in Wyoming had peaked three years ago.
Lipton  quoted data from the Department of the Interior, which has not been  made public yet, as part of an investigation he and climate reporter  Hiroko Tabuchi recently published about a second shale oil boom.
The  investigation cites calculations based in Interior Department data made  by Taxpayers for Common Sense, which suggests over 12.8 million acres  of federal land were offered for leasing to oil and gas companies in FY  2018, which ended last month. This, Lipton and Tabuchi note, is three  times more than the average acreage offered for leasing during the  second Obama administration.
Take-up has also been higher: leases  in the same 12 months were the highest since 2012, the peak of the first  shale revolution, as the Trump administration pursues its energy  dominance agenda.
The figures from the first seven months of this year follow another record set last year. Reuters reported  in June that crude oil production from federal lands and waters rose 7  percent in 2017 to the highest since at least 2007 if not longer. The  average daily stood at 2.22 million barrels, compared with 2.07 million  barrels daily a year earlier. 

More at: https://oilprice.com/Energy/Energy-G...ew-Record.html

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## Swordsmyth

Former Iraqi Prime Minister Haider al-Abadi struck a deal in October  with the Kurdistan Regional Government (KRG) to resume oil exports  through the KRG to the Turkish port of Ceyhan, Reuters reported Oct. 26,  citing anonymous sources.

More at: https://worldview.stratfor.com/situa...rdistan-region

----------


## Swordsmyth

In what must seem like a nightmare scenario for Iran, not only is  another U.S. president leveling sanctions against its economy, and  particularly that economy’s lifeblood, its oil sector, but the current  U.S. president has admittedly made it his mission to drive Tehran to its  knees over what he sees as non-compliance over the 2015 nuclear accord  between western powers and Tehran.


*As recently as the start of this month, the oil markets  narrative was that perhaps President Donald Trump had pushed a bit too  hard by reimposing sanctions against Iran.* Oil markets, for  their part, were jittery while both global oil benchmark Brent and U.S.  Benchmark West Texas Intermediate (WTI) futures hit four-year highs  largely on supply concerns. Some predicted that $100 per barrel oil by  the end of the year was imminent, while Tehran maintained a defiant  tone, stating that neither Saudi Arabia nor OPEC would be able to pump  enough oil to compensate for the loss of Iranian barrels, estimated  between 500,000 bpd and 1 million bpd.
*Now, what a different just a few weeks can make. Oil prices are now trending downward,* falling  for a third consecutive week as global stock markets tumbled and oil  markets focused on a weaker demand outlook for crude going forward.  Brent crude fell 2.7 percent last week and is down 10.5 percent from its  October 3 high of $86.74. WTI ended the week down some 2.2 percent and  has now dropped around 12 percent from its recent high of on October 3.  Moreover, in a sign of things to come, hedge-fund and money managers are  trimming their bets that crude oil prices will rise.
*Oil market headwinds, perhaps even storm clouds are brewing  over a slowdown in economic growth due to trade war tensions between  Washington and Beijing, and a stronger dollar weighing on emerging  market economies*, with those countries seeing an exodus of  currency for higher yielding, safer havens like the US Dollar and  Japanese Yen. A stronger dollar also increases the price for oil import  dependent countries, with India, the Philippines, Indonesia and others  particularly vulnerable.
  Tim Ghriskey, chief investment strategist at Inverness Counsel in New York said on Friday that*  “We’ve seen oil prices sell off here throughout the correction we’ve  had in the broad market. The concern in the sell-off is clearly global  growth, and that’s immediately reflected in oil prices.”*  UBS analysts, for their part, expect oil demand to grow more slowly in  2019, on higher oil prices and weaker economic growth.  Barclays  currently sees the oil market flipping into oversupply in the first  quarter of next year.


How all of this plays out remains to be seen, but with a general  downturn in economic growth and a slowdown in oil growth demand going  forward,* the loss of Iranian barrels now looks easily manageable - a scenario sure to cause consternation for Tehran.*

  Even *Saudi Arabia is bracing for a possible return of oil supply overhang,*  a recent nightmarish situation for Riyadh as recently as 2015 and 2016  when it was forced to turn to Russia and form the so-called OPEC+ to  trim oil production and return OECD oil inventories to five-year average  while giving support to beleaguered prices that had dipped below $30 at  the start of 2016.
  Saudi Arabia’s OPEC governor said on Thursday the market could face  oversupply in the current quarter, and after a slump in global equities  clouded the outlook for demand. “The market in the fourth quarter could  be shifting towards an oversupply situation as evidenced by rising  inventories over the past few weeks,” Adeeb al-Aama told Reuters. Saudi  Arabian energy minister Khalid al-Falih said there could be a need for  intervention to reduce oil stockpiles after increases in recent months.
*Amid these developments, Tehran has toned down then  eliminated its defiant insistence that oil markets were headed for  trouble with the loss of Iranian barrels.* Now, the country  needs a new narrative. Moreover, the fallout for Iran remains clear.  With most major importers of Iranian crude, including India and even  China, already falling into compliance with U.S sanctions, the Iranian  government will have to move quickly to not only make up the shortfall  in oil revenue needed for state coffers but to also appease already  festering public angst over the fall of the country’s currency (the  rial), high inflation, unemployment and ongoing economic problems in the  Islamic Republic.

More at: https://www.zerohedge.com/news/2018-...re-coming-true

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## Swordsmyth

Saudi Arabia has scaled back the targets of its  five-year National Transformation Plan, Bloomberg reported Nov. 1. The  new plan, for example, only aims to increase the contribution of small  and medium-sized enterprises to the country's gross domestic product  from the current 21.9 percent to 23 percent. 

More at: https://worldview.stratfor.com/situa...formation-plan

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## Swordsmyth

Russia’s oil production increased to 11.41 million bpd  in October from 11.36 million bpd in September, setting a new  post-Soviet record high as the largest oil companies, Rosneft and  Lukoil, raised their output according to data from Russia’s Energy  Ministry.
Russia’s oil production in October jumped to 48.262 million tons, the data showed on Friday, or 11.41 million bpd as per Reuters calculations.
Rosneft  increased oil production by 0.5 percent month on month in October to 4  million bpd, while Lukoil’s production rose by 0.3 percent from  September to 1.68 million bpd in October.
Russia  has been raising its production since OPEC and its Russia-led non-OPEC  allies agreed in June to relax compliance rates with the cuts to 100  percent from the previous over-compliance. The respective leaders of the  OPEC and non-OPEC nations part of the deal—Saudi Arabia and Russia—have  been interpreting the eased compliance as adding a total of 1 million  bpd to the market.
Russia has already reversed its entire  300,000-bpd cut that was pledged as part of the initial deal and has  been adding production in recent months.

More at: https://oilprice.com/Latest-Energy-N...n-October.html

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## Swordsmyth

The Reserve Bank of India (RBI), that country’s central bank, has  been operating a relatively constant monetary policy. Up until recently,  however, that caused no disturbance nor disagreement. In other words,  something has really changed.  *India’s Finance Ministry has threatened just this week to  invoke banking law if RBI doesn’t give in to demands from the Modi  government.* Unlike Western central banks, India’s is  independent only by tradition. In statute, the RBI operates at the  pleasure of the government. Section 7 of the central bank act hands  authorities broad powers should central bankers act outside of  established policy agreements.
  These had been mostly informal up until the last two months. Again,  the central bank was largely left alone because neither the Modi  government nor Manmohan Singh’s regime before saw anything wrong with  it. Any disagreements were minor and kept inhouse.
  Not so any longer. *There were media reports RBI Governor Urjit Patel had offered to resign earlier this week.*
**
*Modi’s complaints about “his” central bank run both to the familiar as well as the far more devastating.*  The Prime Minister has, like US President Trump, taken to criticizing  “high” interest rates – even though RBI has raised its benchmark policy  rate only twice in recent months and refrained from doing so at its most  recent meeting. This comes after the central bank had been *reducing* them for two and a half years.
  RBI’s rate which had been 8% was trimmed to 6% by the end of 2017. On  October 5, the central bank abstained on a third rate hike which would  have pushed it back up to 6.75%. *It remains at 6.5% instead, hardly a serious measure for disruption and political turmoil.*
*This is scapegoating, pure and simple.* Rate hikes are not what has changed the landscape in India. *This* is (thanks T. Tatteo):
 The government wants the RBI to provide more liquidity to the shadow  banking sector, which has been hurt by the defaults of major financing  company, Infrastructure Leasing & Financial Services (IL&FS).  Those defaults triggered sell-off in bonds and stocks of non-banking  financial companies. The government has been asking the RBI for a  dedicated liquidity window for these lenders similar to one allowed  during the 2008-2009 global financial crisis.*Modi wants the RBI to repeat its 2008 measures. It sounds  sort of serious, right? Enough to trigger a government/central bank  crisis.* 
  These shadow troubles aren’t starting from rupee markets, a key distinction (like in 2008). I wrote on October 2, the day before the WTI curve shipped off toward contango:
 For one, IL&FS is being characterized as a shadow bank and that’s  the right way to think about them. As is the company’s very heavy  dependence upon, you guessed it, Eurobond financing. Things started to  go south even before India’s currency plunged along with all the rest.  The rupee’s descent is merely the wrong side of “dollar” tightening.The mechanics of oil are  related to the eurodollar conditions for India and beyond. If India has  gotten itself into a world of hurt, where is oil demand going to come  from? That country was one of the last remaining places on earth, EM or  not, where fast growth wasn’t just fairy tale talk. India has been,  hands down, the best performing of the EM group.
*Textbook deflationary disruption.*
  In other words, if the world economy loses India, too, placing that  place alongside China in the eurodollar destructive column, WTI contango  makes perfect sense having nothing to do with a supply glut. Eurodollar  consistency in each market, foreign and domestic.

More at: https://www.zerohedge.com/news/2018-...-getting-along

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## Swordsmyth

The UAE’s flagship oil and gas company Adnoc has made a gas discovery  of 15 trillion cu ft and a crude oil discovery of 1 billion barrels,  Abu Dhabi’s Supreme Petroleum Council said Sunday at the presentation of the company’s five-year business plan until 2023.
The  discoveries come at a time when the whole region is seeking to increase  its production capacity in both oil and gas. For the UAE, more gas  production is particularly important because despite its loyalty to  Saudi Arabia, the country needs Qatari gas to satisfy its energy demand.
The  discoveries, Adnoc reported, were made in six untapped blocks that were  open for exploration earlier this year. According to the company, they  might contain several billion barrels of oil on top of the 1 billion  barrels already estimated. However, these estimates have been made  before exploratory drilling begins, which is scheduled for the first  quarter of 2019 when the first exploration and production licenses will  be awarded by Adnoc.

In oil, Adnoc said it planned to boost its oil production capacity to 4  million bpd by 2020 and further to 5 million bpd by 2030. To date, Adnoc  produces around 3 million bpd of crude, but by December this year it has ambitions to boost this to 3.5 million bpd.

More at: https://oilprice.com/Energy/Energy-G...scoveries.html

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## Swordsmyth

China’s biggest energy producers are tapping more tight oil and gas  wells, aiming to increase domestic oil and natural gas production at the  world’s largest crude oil importer and what will soon be the world’s  top natural gas importer.
As part of a government push to boost  domestic energy supply, China National Petroleum Corporation (CNPC) and  Sinopec are raising investments to increase local oil and gas production  and are accelerating drilling at tight oil and gas formations in western China, the companies have recently announced.

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

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## Swordsmyth

Iran is calling on OPEC to have its two committees set up to monitor  compliance with the OPEC+ deal and review the state of the oil market  stop working immediately, Iranian Oil Minister Bijan Zangeneh wrote in a letter to OPEC Secretary General Mohammad Barkindo.
The  Joint Ministerial Monitoring Committee (JMMC) and the Joint Technical  Committee (JTC) are regularly reviewing the state of the oil market and  are tracking the production and compliance levels of the deal.
To  offset reduced supply from Venezuela and Iran, OPEC and its non-OPEC  allies agreed in June to relax compliance rates with the cuts to 100  percent from the previous over-compliance. The respective leaders of the  OPEC and non-OPEC nations part of the deal—Saudi Arabia and Russia—have  been interpreting the eased compliance as adding a total of 1 million  bpd to the market. Iran, however, has insisted that the easing of the  compliance doesn’t mean a production boost, which is the interpretation  of almost all other members of the pact, including Tehran’s arch-rival  Saudi Arabia. 
In his letter to OPEC’s Secretary General, Iranian minister Zangeneh wrote, as carried by the oil ministry’s news service Shana,  “Given the performance of the JMMC and JTC over recent months, we have  regrettably noticed that these two committees have deviated from their  initial objectives for which they were established, and some OPEC  members of these two committees have clearly taken side with the US in  imposing its unilateral and unlawful sanctions against I.R.Iran, and are  turning these two committees into political tools in support of the US  policies against I.R.Iran.”
“In my view, continuation of the  activity of these two committees does not secure the collective  interests of the OPEC, and as long as the mandate and missions of these  two committees are not thoroughly defined and approved by the OPEC  Conference, their activities are not justifiable, and therefore, they  should immediately stop their work,” Zangeneh wrote in the letter to  Barkindo.
“Undoubtedly, any reports and/or recommendations provided by these two committees are not acceptable,” the letter also says.


https://oilprice.com/Latest-Energy-N...-Scrapped.html

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## Swordsmyth

OPEC could consider potential oil production cuts in 2019 at its next  meeting to respond to expected spikes in U.S. production in the second  half of 2019, U.S. sanctions waivers, falling oil prices and potentially  slower global growth, internal OPEC sources have said, according to a  Nov. 7 Reuters report.

More at: https://worldview.stratfor.com/situa...tion-cuts-2019

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## Swordsmyth

Rising shale production is putting the United States on track to hit  the 12 million bpd oil production mark sooner than previously forecast,  the Energy Information Administration (EIA) said in its November Short-Term Energy Outlook (STEO).
Next  year’s U.S. crude oil output is now expected to average 12.1 million  bpd, up from a forecast of 11.8 million bpd just a month ago in the  October STEO.
U.S. crude oil production reached a new monthly  record of 11.3 million bpd in August 2018, exceeding 11 million bpd for  the first time. Production in August was 290,000 bpd higher than  expected in the October STEO, and it was this higher level that raised  the baseline for the EIA’s forecast for production in 2019.
Comparing the forecasts in the latest STEO with the October estimates, the EIA now sees U.S. crude oil production hitting the 12-million-bpd mark in the second quarter of 2019 rather than the fourth quarter.
The  EIA raised its 2018 production forecast by 1.5 percent compared to the  October STEO, to 10.9 million bpd, and the 2019 forecast by 2.6 percent  from 11.76 million bpd to 12.06 million bpd.

More at: https://oilprice.com/Energy/Crude-Oi...llion-Bpd.html

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## Swordsmyth

In potentially groundbreaking news - which failed to generate a  market response as it hit at the same time as the FOMC statement - Saudi  Arabia’s top government-funded think tank *is said to be studying the possible effects on oil markets of a breakup of OPEC,* a research effort which the WSJ called "remarkable" for a country that has dominated the oil cartel for nearly 60 years.
  The OPEC study aims to “assess the short/medium-term consequences of a  dissolution of OPEC,” according to an overview reviewed by The Wall  Street Journal. It is intended to determine how the global oil market,  and Saudi finances, would look “if coordination between oil producing  countries disappear,” according to the overview.
  The overview describes two scenarios to investigate, if OPEC isn’t in the picture:

All big oil producers, including Saudi Arabia, act competitively—fighting each other for market share;Saudi Arabia, instead, attempts to leverage its massive oil output  alone to help balance global supply and demand in an attempt to keep oil  prices steady—similar to the role that members say OPEC plays today.
The timing of the report, which is hardly a arbitrary, coincides  with rising pressures on the Saudi government, including from the U.S.,  where President Trump has accused the cartel of pushing up oil prices,  and from investors who distanced themselves from the kingdom after the  brutal killing of a U.S.-based Saudi journalist.
  Just as remarkably, while the think tank’s president, Adam Sieminski  told the WSJ that the study "hadn’t been triggered by Mr. Trump’s  statements", a senior adviser familiar with the project said *it provided an opportunity to take into account the criticism from Washington*.
  Depending on the findings, the study could offer a defense of the  cartel and the Saudi role in it; alternatively it could potentially  advocate for a repeat of November 2014, when the cartel was effectively  dissolved for a period of time.
 The research project doesn’t reflect an active debate inside the  government over whether to leave the Organization of the Petroleum  Exporting Countries in the near term, according to people familiar with  the matter.Careful not to further aggravate political relations with the US, and  other nations, senior Saudi officials said the study - which was seen  as a high priority economic-policy inquiry, was ordered by Sieminski and  "that the analysis isn’t unusual and explores topics his researchers  normally delve into."
  The concern is that the optics of Saudi Arabia contemplating exiting  OPEC at a time when the US crackdown on Iran may remove over 1 million  b/d from the market - once the waivers to 8 nations expire - will hardly  go unnoticed.

More at: https://www.zerohedge.com/news/2018-...ing-break-opec

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## Swordsmyth

Baker Hughes reported a large 14-rig increase for oil and gas in the  United States this week, bringing the total number of active oil and gas  drilling rigs to 1,081 according to the report, with the number of  active oil rigs increasing by 12 to reach 886 and the number of gas rigs  climbing by 2 to reach 195.
The oil and gas rig count is now 174 up from this time last year.

More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

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## Swordsmyth

The Iraqi government is close to reaching an agreement with the  Kurdistan Regional Government (KRG) to resume oil exports from the  Kirkuk area through a KRG-owned pipeline to Turkey and onward to the  Turkish port of Ceyhan for export, the Financial Times reported Nov. 9.

The Iraqi government is planning to increase its oil production to more  than 5 million barrels per day in 2019. Resuming oil exports from Kirkuk  could unlock an additional 200,000 to 400,000 barrels per day. More  Iraqi oil production could raise pressure on Saudi Arabia and its allies  to reverse their production increases. At OPEC's Joint Ministerial  Monitoring Committee meeting in December, Saudi Arabia could voluntarily  decide to reduce production to the levels of early 2018.

More at: https://worldview.stratfor.com/situa...il-export-deal

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## Swordsmyth

Saudi  Arabia plans to reduce oil supply to world markets by 0.5 million  barrels per day in December, its energy minister said on Sunday, as the  OPEC power faces uncertain prospects in its attempts to persuade other  producers to agree a coordinated output cut.Khalid  al-Falih told reporters that Saudi Aramco’s customer crude oil  nominations would fall by 500,000 bpd in December versus November due to  seasonal lower demand. The cut represents a reduction in global oil  supply of about 0.5 percent.
Saudi  Arabia has increased output by just about 1 million bpd this year under  pressure from U.S. President Donald Trump and other consuming countries  to help balance the market to compensate for lower supplies from Iran  due to U.S. sanctions.
But  since Iran's customers were given generous waivers to continue buying  crude, concerns grew about market oversupply and oil prices fell to  below $70 per barrel on Friday from $85 a barrel in October.
"We  have been increasing production in response to demand," Falih told  reporters in Abu Dhabi ahead of a joint OPEC, non-OPEC market monitoring  committee meeting.
"I'll  tell you a piece of news which is (that) December nominations are  500,000 barrels less than November. So we are seeing a tapering off part  of it is year end, part of it is maintenance.... so we will be shipping  less in December than we are in November.”
Saudi  Arabia is discussing a proposal that could see OPEC and non-OPEC oil  producers cut output by up to 1 million bpd, two sources told Reuters  earlier on Sunday, as the world's top oil exporter grapples with a drop  in crude prices.
The  sources said any such deal would depend on factors including the level  of Iranian exports after the United States imposed sanctions on Tehran  but granted Iran's top oil buyers waivers to continue buying oil.
Russian  participation was key to helping OPEC rebalance the market during  2017-18. But Russian Energy Minister Alexander Novak said on Sunday he  wasn’t certain the market would be oversupplied next year.
He  said the oversupply for the next few months would be seasonally driven  while by mid 2019 the market could be balanced again and demand could  even exceed supply.

More at: https://finance.yahoo.com/news/saudi...060848532.html

A  majority of OPEC and allied oil exporters support a cut in the global  supply of crude, Oman Oil Minister Mohammed bin Hamad al-Rumhi said on  Sunday.
“Many  of us share this view,” the minister said when asked about the need for  a cut. Asked if it could amount to 500,000 or one million barrels per  day, he replied: “I think it is unfair for me to throw numbers now.”

"We need a consensus," he said, indicating that non-OPEC Russia would  need to approve any decision. Oman is also not a member of the  Organization of the Petroleum Exporting Countries.

More at: https://finance.yahoo.com/news/oman-...081902313.html

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## Swordsmyth

It was meant to be a short, sharp shock. Instead, OPEC members are facing a long, slow grind with no end in sight.The  deal reached with several non-OPEC countries in 2016 to cut oil supply  and drain excess inventories was meant to last just six months. But  after last week’s ugly slide into a bear market for prices, the  agreement looks likely to drag into a third year as the group faces  having to make further cuts in 2019.
Taking  1.8 million barrels a day of oil off the market from January 2017 was  meant to drain excess inventories by the middle of that year,  restore prices to an undefined “acceptable” level and balance supply and  demand. Instead, the glut persisted. Although better than expected,  compliance with the agreement was not complete and it was not until the  deal was extended and Saudi Arabia started cutting shipments to the U.S.  in the middle of 2017 that prices really began to pick up.
A  further extension to the deal helped to push prices up to $80 a barrel  by mid-2018, earning tweeted rebukes from President Donald Trump that  prompted a relaxation of the cuts and a surge in supply from those with  the capacity to do so — principally Saudi Arabia and Russia. Total OPEC  output is now the highest since before the cuts were introduced, even  after allowing for changes in membership, while Russia’s hit a  post-Soviet high of 11.4 million barrels a day last month.
But  the recovery in oil prices has been a double-edged sword for OPEC and  friends. Sure, it has boosted revenues for most — Venezuela and  soon Iran being the exceptions — but it has also lit a fire under U.S.  shale oil production. 
The  latest weekly and monthly data both show American oil output up by 2  million barrels a day year on year. That’s equivalent to adding the  combined production of OPEC members Nigeria and Gabon in the space of 12  months. And it comes at a time when shale growth is being hampered by a  lack of pipeline capacity to move crude from the Permian Basin in Texas  to the refining and export facilities on the Gulf of Mexico. Those  bottlenecks should ease next year, allowing supply to rise by another  million barrels a day by the end of 2019, according to the Energy  Information Administration. On past performance, that forecast could  increase significantly.

OPEC’s own analysis shows the need to prolong, or even deepen, the cuts.  If the group doesn’t alter its current track, global oil stockpiles are  set to rise by around 1.8 million barrels a day in the first quarter of  2019 and to continue building throughout the year.








More at: https://www.yahoo.com/news/opec-thou...060020764.html

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## Swordsmyth

Having surged higher at last night's futures open on the heels of  headlines about Saudi's about-face on production, President Trump has  reversed those gains as he tweeted: _“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!,”_ 
 Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!
 — Donald J. Trump (@realDonaldTrump) November 12, 2018Sending WTI back to unchanged...



More at: https://www.zerohedge.com/news/2018-...cut-production

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## Swordsmyth

But the biggest surprise from the recent data, and the biggest threat  for OPEC is something different, the same thing that according to Bank  of America could make the next OPEC price war a lot more costly to the  cartel just as the US has continued to isolate itself from global oil  price swings.
  The reason: *as of October, the US is now energy independent for the first time,* which is a seismic change considering that *just 10 years ago, America was spending 3% of GDP buying foreign energy in 2008,* *but its energy trade balance is now positive.* 

  And, as BofA calculates, "*whether measured in in BTU/oil  barrels equivalent or in US dollars, we estimate that the reversal in  energy balances from a deficit into a surplus happened in October 2018*."



Consider that in just 10 years, America flipped from being a huge  energy importer to becoming the largest exporter of petroleum products  in the world (Chart 13). On average, US petroleum product exports  averaged 5.1 mn b/d in the past quarter mostly on a combination of  gasoline, diesel and residual fuel. In addition, the US is on track to  become the largest NGL exporter too (Chart 14). Currently, America runs  the world's largest NGL exports, followed by Saudi and Qatar, thanks to  surging ethane, propane and butane export volumes.

  The good news, is that as of this moment, the US oil independence has  led to soaring US energy trade. According to Bank of America, America  has been exporting increasingly larger volumes of crude oil to many  countries, *with levels recently topping out at around 2.4 mn b/d in the past few weeks* (Chart  15). In fact, US crude barrels have recently reached places as far as  South Africa, Indonesia and Oman, highlighting the increasing appetite  for US light sweet barrels.
  It's not just crude: LNG exports are also finally picking up steam as  trains come on line (Chart 16). Total export levels now average 2.95  bcf/d or 0.45 mn b/d of oil equivalent and are poised to keep growing  over the next 18 months.


More at: https://www.zerohedge.com/news/2018-...gy-independent

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## Swordsmyth

Najib Razak, the former prime minister of Malaysia, warned that* the country is headed for an economic collision of massive proportions should ICE Brent Crude contracts trade below $70*. As  of Friday, Brent Crude contracts settled at 70.18, which he also warned  that Moody's decision to downgrade the country's credit rating to  negative could be imminent.

  The former prime minister, who was previously arrested in July for involvement in the 1MDB scandal, explained in a Facebook post  that the recent bear market in oil would see the country's deficit  explode and the Malaysian ringgit continue to depreciate as the Federal  Reserve signals further rate hikes.
 _“The pressure on the government’s fiscal position will double,”_ Razak warned.This, Razak said, the country would have to issue a higher dividend  to cushion the shortfall in revenue for Petronas, the country's national  petroleum company.
  In doing so, he said that could severely impact Malaysia’s credit rating for 2019.

More at: https://www.zerohedge.com/news/2018-...rades-below-70

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## Swordsmyth

Nigeria will raise its crude oil production to 1.8 million bpd in  2019 from around 1.6 million bpd currently, the head of the Nigerian  National Petroleum Corporation (NNPC) told Reuters on Tuesday.
The  African OPEC member also aims to increase its production of  condensate—a type of ultra light oil—to 500,000 bpd next year from  400,000 bpd now, NNPC Group Managing Director Maikanti Baru said.
The  Nigerian state-controlled oil company also expects to sign this month  agreements with various consortia to help it overhaul the old and  inefficient oil refineries in the country, Baru told Reuters.

More at: https://oilprice.com/Latest-Energy-N...d-In-2019.html

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## Swordsmyth

OPEC expects global oil demand to grow at a daily rate of 1.5 million  bpd this year, further slowing down to 1.29 million bpd in 2019, the  organization said in the latest issue  of its Monthly Oil Market Report. This is 40,000 bpd and 70,000 bpd  lower in demand growth projections for 2018 and 2019, respectively, from  last month’s report.
This is the fourth  downward oil demand growth revision from the Organization of Petroleum  Exporting Countries in as many months, suggesting that the worry about  demand has caught up with the cartel that supplies most of the world’s  oil.
What’s more, the downward revisions are getting larger: in  the October Monthly Oil Market Report, OPEC revised down its global oil  demand growth projection by 80,000 bpd from the September estimate,  which, in turn, was 20,000 bpd lower than the August figure.

More at: https://oilprice.com/Latest-Energy-N...40000-Bpd.html

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## Swordsmyth

For the first time since the Vienna OPEC deal in 2016, *Saudi Arabia is no longer complying with the quota* as Bloomberg calculates that in October, *the Kingdom boosted crude production above its starting point for oil cuts*. According to secondary data, Saudi output in October was 10.63m b/d, higher than the 10.502m b/d in September.

  The spike, which not significant in volume terms was meant as a signal: as a reminder, as part of OPEC+ supply cuts, *Saudi Arabia agreed to curb production by 486k b/d below the starting point of 10.544m b/d, which was its October 2016 output.*
  And while Saudi Arabia had fully complied with OPEC+ agreement in  every month through May, since then it had continued to cut supply, but  by less than it pledged to curb. Then, *in October, the data showed the first time Riyadh had increased output above the starting point.*


More at: https://www.zerohedge.com/news/2018-...oduction-curbs

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## Swordsmyth

OPEC and the non-OPEC partners in the deal are discussing potentially  cutting oil production by as much as 1.4 million bpd to try to lift oil  prices out of the current rout, Reuters reported on Wednesday, citing three sources familiar with the talks.
A  proposal to reduce oil supply by 1.4 million was one of the options  that the OPEC/non-OPEC joint committee discussed at their meeting in Abu  Dhabi on Sunday, according to Reuters’s sources, who added that OPEC’s  Iran and the leader of the non-OPEC group Russia have yet to be  convinced to back such a proposal.
“I believe a cut of 1.4 million bpd is more reasonable than above it or below it,” one source told Reuters.
After the OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) meeting on Sunday, OPEC said  that the Joint Technical Committee (JTC) that reviews the state of the  oil market is tasked to come up with “options on new 2019 production  adjustments, which may require new strategies to balance the market.”
This was OPEC’s admission that an oversupply may be coming next year.

Russia’s official position is ‘wait and see’ and not to rush into  hasty decisions. After the Abu Dhabi meeting, Russian Energy Minister  Alexander Novak said  that the partners need to continue monitoring the market situation and  that they discussed continuing their cooperation into 2019.
“We  need to look at the situation very carefully to see how it will develop  so that we don’t end up changing our course by 180 degrees every month,”  Novak told CNBC on Sunday.
“We are not excluding cuts,” Novak told Bloomberg on Monday, but noted that he wouldn’t want to put an accent only on this measure.

More at: https://oilprice.com/Energy/Crude-Oi...ction-Cut.html

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## Swordsmyth

Russia prefers to stay out of any fresh oil production cuts led by OPEC’s leader Saudi Arabia, Reuters reported on Thursday, quoting two high-ranking Russian sources.
Russia—which  together with Saudi Arabia and some Arab Gulf producers has been  raising production since June to offset Iranian losses—saw its oil  production set a new post-Soviet record high of 11.41 million bpd in October, up from 11.36 million bpd in September.
However,  Russia’s key partner in the production cut deal, Saudi Arabia, has  expressed concern over the oil price slump in the past month. Saudi  Energy Minister Khalid al-Falih said  on Monday that based on the OPEC+ group technical analysis, “there will  need to be a reduction of supply from October levels approaching a  million barrels.”
While al-Falih  reiterated that “we need to do whatever it takes to balance the  market,” Russia’s official position is ‘wait and see’ and not to rush  into hasty decisions. There is no need to take any action to halt the decline of oil prices that started a month ago, Russia’s Energy Minister Alexander Novak said earlier this week.
Speaking to Russian reporters about the OPEC+ deal during a visit to Singapore, Russia’s President Vladimir Putin said, as provided by the Kremlin:
“As  for the need to limit production or not, I will not say anything about  this for the time being. We must be very careful in this respect because  every word is important and affects the federal budget revenues.  However, it is obvious that we should cooperate and we will cooperate.”

“About $70 per barrel suits us perfectly well considering that the  expenditure side of our budget is based on $40 per barrel,” Putin said.
A  senior Russian government source told Reuters that production in Russia  shouldn’t be reduced, as Moscow has been growing its output and will  continue to do so in the future.

More at: https://oilprice.com/Latest-Energy-N...tput-Cuts.html

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## Swordsmyth

South Sudan’s government and rebels signed a power-sharing agreement  in August 2018, hoping to put an end to the civil war. Oil production at  some oil fields that were shut in at the start of the conflict has  resumed. At the end of August, South Sudan resumed production from the Toma South oilfield at a rate of 20,000 bpd, adding to South Sudan’s total daily average of 130,000 bpd.
South Sudan hopes to significantly boost its production in the near term, but according to energy consultancy Wood Mackenzie,  the extent of damage to infrastructure is unknown, as is the  performance of wells that have been shut-in since 2013. The biggest  challenge to South Sudan’s rising oil production, however, would be  whether the peace deal would hold long enough to allow for a sustained  increase in oil production, WoodMac said.
According to the World Bank,  South Sudan is the world’s most oil-dependent country as oil represents  almost all its exports and around 60 percent of GDP. South Sudan  expects to resume full oil production of 350,000 bpd by the middle of  next year. 

More at: https://oilprice.com/Latest-Energy-N...-Reserves.html

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## Swordsmyth

Iraq resumed on Friday oil exports from the Kirkuk province, a year  after it had stopped oil flows from the area due to a dispute with the  semi-autonomous Kurdistan region, industry sources told Reuters on Friday.
Around  300,000 bpd of crude oil previously pumped and exported in the Kirkuk  province to the Turkish port of Ceyhan were shut in when the Iraqi  federal government moved in October last year to take control over the  oil fields in Kirkuk from Kurdish forces after the semi-autonomous  region held a referendum that Baghdad didn’t recognize. However, the  only export outlet of the Kirkuk oil is the oil pipeline of the  Kurdistan Regional Government (KRG).  
The Iraqi federal  government and the KRG have been in talks for months to try to reach an  agreement on resuming Iraqi exports from Kirkuk. Last week, three people  close to the talks told the Financial Times that a deal is close and could be reached as early as this month.
Industry  sources told Reuters that oil exports from Kirkuk resumed on Friday,  with flows at 50,000 bpd-60,000 bpd. It was not immediately clear when  oil flows could be boosted and by how much, according to the sources.
The KRG said earlier this month that it had recently upgraded its oil export pipeline, boosting its capacity to 1 million bpd from 700,000 bpd, to accommodate future production growth from the region.
“This  extra capacity will accommodate future production growth from KRG  producing fields, and can also be used by the federal government to  export the currently stranded oil in Kirkuk and surrounding areas,”  KRG’s ministry of natural resources said in early November—a sign that a  deal with the federal government may be coming soon.

More at: https://oilprice.com/Latest-Energy-N...fter-Halt.html

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## Swordsmyth

Saudi Arabia has been slashing  oil exports to the United States over the past two months, in what  looks like a move to force a reduction in the world’s most transparently  reported inventories that could put the Saudis on a collision course  with U.S. President Donald Trump, who has repeatedly said that oil  prices should be much lower.
The Saudis started to reduce  shipments to the United States in September, and this month they are  loading around 600,000 bpd on cargoes en route to the United States,  down from more than 1 million bpd in July and August for example, CNBC  reports, quoting figures from ClipperData.
According to ClipperData estimates, Saudi oil exports to the United States could soon reach their lowest levels on record.

More at: https://oilprice.com/Energy/Crude-Oi...de-Prices.html

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## Swordsmyth

Baker Hughes reported a 1-rig increase for oil and gas in the United  States this week—a far more tempered figure after last week’s 14-rig  increase. The total number of active oil and gas drilling rigs to 1,082  according to the report, with the number of active oil rigs increasing  by 2 to reach 888 and the number of gas rigs falling by 1 to reach 194.
The oil and gas rig count is now 167 up from this time last year.

The EIA’s estimates for US production for the week ending November 9 were for an average of 11.7 million bpd*—a brand new record high that has contributed in part to the lower prices.

More at: https://oilprice.com/Energy/Energy-G...ice-Slide.html

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## Swordsmyth

At the end of July, not long after Saudi Arabia confirmed that the  IPO of Aramco has been postponed indefinitely, we reported that the  32-year-old Crown Prince Mohammed bin Salman, had come up with a "novel"  scheme to raise tens of billions for the government. According to the  WSJ, the de facto Saudi leader was "urging" Aramco, also known as the  Saudi Arabian Oil Company, to raise $40 billion in debt to buy a  controlling stake in a petrochemical company from the country’s  sovereign-wealth fund. The money would then go to the government - whose  latest fund raising strategy, we remind readers, was to round up the  country's oligarchs and hold them in a "hotel" until they paid up - to  be spent as MbS sees fit.
  Should the deal have gone through, and we explained why there are  many reasons why it won't, it would have given the Public Investment  Fund between $50 billion and $70 billion for all or part of its stake in  Saudi Basic Industries, or Sabic. Controlled by the state, Sabic is  also the country’s largest publicly listed company, with a market cap of  about $100 billion.
  Simplifying the money flow: *the cash goes from international yield chasers, to a consortium of banks, to Aramco, to Sabic, to the Saudi government*.
  Needless to say, many were perplexed by this idea: raising debt from  international banks instead of equity from foreign investors adds  greater risk to Saudi Arabia’s strategy to use the PIF to diversify the  economy, said Ali Shihabi, the founder of Washington-based think tank  Arabia Foundation.
  “Aramco is going to have to borrow this money to fund PIF,” said  Shihabi, who previously worked in Riyadh as a banker. “I don’t see the  logic behind it.”
  Well, less than four months later, it appears that nobody else did  either, because as the WSJ reported this morning, Saudi Aramco no longer  plans to launch what would have been one of the world’s largest-ever  corporate-bond sales to fund a roughly $70 billion stake in the  kingdom’s national petrochemical firm.
  The sticking point? The same as the reason behind the pulling of Aramco's IPO: *fears about what public disclosure as part of the deal would, well, disclose.*
 Saudi Arabian Oil Co., as the company is officially known, had  considered issuing up to $40 billion in bonds to help buy 70% of Saudi  Basic Industries Corp., The Wall Street Journal has reported.
  But people familiar with Aramco’s financing discussions say the oil firm is *now  worried about the level of disclosure required for a bond issue and  whether the uncertain outlook for the oil market might damp demand for  debt or increase the cost of borrowing.*Although not as detailed as an IPO, a corporate bond sale on  international markets would typically require a company to publicly  disclose three years of audited financial statements and highlight key  risks to operations. This level of disclosure requirements has been a  problem for Aramco, *which doesn’t disclose income statements, and its balance sheet is a black hole for analysts.*
  Meanwhile, there are also the "recent development": Aramco also  raised concerns that the recent diplomatic fallout from the murder of  Saudi dissident journalist Jamal Khashoggi might affect investors’  appetite for Saudi debt.
  So now instead of a bond - which would have ultimately been used to  fund PIF - Aramco is now looking at a combination of other potential  financing options.
  One option is to take advantage of the ongoing euphoria in the  leveraged loan market. WSJ sources said that Saudi Arabia could organize  a syndicated loan with banks and use Sabic’s balance sheet to raise  debt - which unlike a bond, would be secured by assets - to pay for some  of the roughly $70 billion cost. The oil firm also could reduce the  amount of cash it pays in royalties to the Saudi finance ministry for  public spending and instead transfer money to PIF, or stagger payments  from its cash flow to the fund over time.
  Naturally, in addition to a disappointed Saudi royal family, the end  of the potential bond sale will lead to a few frowns on Wall Street: the  record bond sale had excited bankers hoping to win a place arranging  the capital raising.
 JPMorgan and Morgan Stanley are already acting as advisers for Aramco  on the Sabic purchase and Goldman Sachs and Bank of America Merrill  Lynch are working with PIF, according people familiar with the matter.Banks can also blame the drop in oil prices, because as the WSJ adds,  Aramco executives are also concerned that market conditions aren’t  ideal for bond sales.
 Oil prices have fallen more than 20% over the past month and a half,  dropping most dramatically since the U.S. government exempted hundreds  of thousands of barrels a day of Iranian crude from new American  sanctions. Saudi Arabia is moving to prop up prices with a production  cut, but uncertainty over how much it will cut and whether it will boost  prices has clouded the outlook for oil traders and producers.Meanwhile, internal divisions have also emerged as Aramco executives  have been tussling with PIF over the price of Sabic, further  complicating the deal. Any agreement below Sabic’s listed market price  would inject less capital into the sovereign-wealth fund and likely  force down Sabic’s listed shares, hurting minority shareholders. Sabic  lists 25% of its shares on the Saudi Stock Exchange and has a market  capitalization of roughly $100 billion.
  Separately, another big loser if no deal emerges is Silicon Valley:  after all Saudi Arabia has emerged as one of the biggest investors in US  venture capital by way of its SoftBank relationship.

More at: https://www.zerohedge.com/news/2018-...orporate-bonds

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## Swordsmyth

Libya’s  top oil chief expects OPEC and allied producers to exempt the  strife-torn North African country from any future cuts in crude output.“The  OPEC community has understood the difficulties we face –- Libya has  withheld more than any other country from the global market,” National  Oil Corp. Chairman Mustafa Sanalla wrote in a phone message. “This  should be factored in.”
OPEC  and its allies are considering cutting oil output in 2019 as the group  is increasingly concerned about the potential for oversupply. Libya,  along with Nigeria, has been exempt from cuts since January 2017 due to  domestic conflict. Libya has been rebuilding its energy industry from  damage inflicted since a 2011 revolt and collapse in central authority.  The nation’s production rose from 660,000 barrels a day in July to  almost double that volume currently.
Saudi  Arabia’s state-run news agency reported last week that it’s important  Libya participate in decisions to re-balance the market through  production cuts. Also last week, OPEC Secretary-General Mohammad  Barkindo said the group was in talks with Libya and Nigeria about an  oil-cuts deal.

More at: https://www.yahoo.com/news/libya-oil...124633520.html

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## Swordsmyth

Iraq’s oil exports from the Kirkuk oil province could reach up to  400,000 bpd, higher than the 300,000-bpd exported before the halt last  year, a Kurdish politician told Sputnik  on Tuesday after exports resumed last week—a move that adds more oil to  the market at a time when participants fear an oversupply and OPEC  considers new production cuts.
On Friday, Iraq resumed  oil exports from Kirkuk, a year after it had stopped oil flows from the  area due to a dispute with the semi-autonomous Kurdistan region.  Initial flows were 50,000 bpd-60,000 bpd, industry sources told Reuters.
“The  export of oil from Kirkuk through the Iraqi Kurdistan oil pipeline,  which transports oil to international markets through the Turkish port  of Ceyhan, began on November 16,” Hoshawi Babakr, the Kurdistan  Democratic Party’s (KDP) representative in Russia, told Sputnik.
“The  increase in the volume of this export will take place in several  stages: from 50,000 —100,000 barrels per day at the moment to 400,000  barrels upon reaching full capacity. I would like to note that prior to  the suspension of the export of Kirkuk oil through the Kurdish oil  pipeline in 2017, its volume was 300,000 barrels per day,” Babakr said.

More at: https://oilprice.com/Latest-Energy-N...00000-Bpd.html

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## Swordsmyth

Saudi Arabia’s crude oil exports hit their highest in 20 months in  September, while the Kingdom’s production in early November appears to  have hit the highest on record, on the back of high customer requests  made in early October when the market feared a hefty loss of Iranian  supply this month.
According to data  by the Joint Organisations Data Initiative (JODI) database, which  collects self-reported oil figures from 114 countries, Saudi Arabia’s  crude oil exports in September rose by 219,000 bpd from August to a  20-month high of 7.43 million bpd. This was the highest export level  since the OPEC/non-OPEC production cut deal began in January 2017.
Saudi oil production stood at 10.5 million bpd  in September, and Saudi Arabia also drew 93,000 bpd from its crude  inventories to supply the market, run its refineries, and feed power  generation plants.
The JODI data  has a two-month lag, but more recent reports say that Saudi Arabia has  pumped record volumes of oil in early November. Saudi Arabia’s crude  production was between 10.8 million bpd and 10.9 million bpd earlier  this month, industry executives tracking Saudi output told Bloomberg on Wednesday.

More at: https://oilprice.com/Latest-Energy-N...-November.html

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## goldenequity

Wildly Lucky Drilling Operation Uncovers New Sakhalin Underwater Oil Field Dubbed “Neptune”

----------


## Swordsmyth

*Update:*

U.S. CRUDE EXTENDS LOSSES, TRADES DOWN MORE THAN $4 A BARREL TO SESSION LOW OF $50.63 A BARRELBRENT FALLS BELOW $60/BBL FOR FIRST TIME SINCE OCT. 2017

* * *
  The first time oil tumbled two weeks ago when it crashed by 7%,  Goldman - which has been telling its clients to keep buying crude all  the way down from $80 - blamed it on "negative convexity" and other  arcane reasons because the far simpler explanation, *more supply, less demand,* would be just too obvious for its brilliant strategists not to notice.
  There was no "negative convexity" - Wall Street's catch phrase to  explain anything that can not be otherwise explained -overnight, when  oil resumed its plunge, sliding to the lowest in a year and dropping  below $51 after Saudi Arabia signaled its output reached a record high,  while growing U.S. inventories stoked fresh concerns over a global  supply glut.

  WTI futures dropped as much as 5.4% from the Wednesday settlement  (there was no Thanksgiving settlement price) and were set for a seventh  weekly decline, dropping as low as $51.62/barrel the lowest price in one  year.

  Oil prices are tracing out a very similar trajectory to 2014...

  Brent dropped below $60/barrel for the first time since October 2017.

  And with Iranian export restrictions lifted after Trump provided most  of its clients oil import waivers, traders are now focused on growing  risks of a new glut of crude: Saudi Arabia’s oil minister said Thursday  production from the world’s largest exporter climbed further this month  after a surge in October, and U.S. stockpiles have risen for nine  straight weeks.
  Saudi Arabia is producing oil in excess of 10.7 million barrels a  day, more than in recent years, Energy Minister Khalid Al-Falih said, *giving the strongest indication yet that the kingdom has boosted output to record levels.* 
 “*We were at 10.7-something in October, and we are above that*.  We will know exactly when the month is over,” Al-Falih said. “We will  not flood the market. We will not send oil that customers don’t need.  And we’ve started doing that in December,and I expect  we’ll continue  doing that into the new year.”At the same time, the world’s biggest exporter said it would respond  to demand for oil and won’t oversupply the market, he told reporters on  Thursday at the mining complex of Wa’ad Al Shamal in northwestern Saudi  Arabia. Why the hedge? *Because demand for Saudi crude may be lower in January than in December, he said.*
*Saudi Arabia set an oil production record of 10.72 million barrels a day in November 2016,* just  before the kingdom led a group of OPEC and non-OPEC countries in  cutting output. The surge in output this month will come into the  spotlight when  producers meet on Dec. 6 in Vienna to discuss their 2019  output strategy. Riyadh has already indicated it supports a deep   production cut and as a first step will reduce its shipments by 500,000  barrels a day in December from November levels. “As the year comes to an  end, customers tend to cut their liftings,” Al-Falih said. *“And  of course we’ve seen the waivers on the Iranian sanctions. So, for all  we know, January demand from Saudi Arabia will be even lower.”*
  And speaking of Iran, overnight Bloomberg reported that Chinese oil  refiners have resumed their purchases of Iranian crude scheduled to be  shipped in November; Saudi Arabia will be eager to retain this market  and the resulting price war with Iran will lead to even lower prices.
  Furthermore, as of this moment the Saudis are no longer complying  with the terms of the 2016 Vienna output curbs, as the nation seeks to  grab market share at the lower price points. While Riyadh has signaled  it would throttle back production in December, unless OPEC and Russia  can reach a new deal to constrain supply at their meeting next month,  analysts see the prospect of sustained oversupply in 2019 in a repeat of  what happened after the Thanksgiving massacre of 2014, undoing the  group’s success over the last two years to drain global inventories.


More at: https://www.zerohedge.com/news/2018-...p-record-crude

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## Swordsmyth

After tumbling all day, oil finally caught a bid with 20 minutes left  into the holiday-shortened trading day, when the WSJ reported that  Saudi Arabia and OPEC are inching toward a "compromise" between pleasing  Trump - who has repeatedly warned OPEC in general and Saudi Arabia in  particular not to cut output - with policies that won’t lead to price  spikes and "throttling back the flow of its oil to rebalance  oversupplied global markets."
  According to the WSJ, the "clandestine" solution sought by the cartel: *a production cut that doesn’t look like a production cut.*
  Under such a scenario, the OPEC would announce plans to retain the  current output targets, first set during the 2016 Vienna summit. And  since Saudi Arabia is currently overproducing by nearly 1 million  barrels a day, a reversion to the quotas from 2 years ago would imply a  production pullback.
  “It will be still a big cut but less pronounced,” a senior Saudi oil advisor said.
  Still, it is unclear why Saudi Arabia - which would be the marginal  output reducer - would agree to such a deal if, as the WSJ reports, the  price of oil won't rise yet the only difference would be a reduction in  Saudi output.

More at: https://www.zerohedge.com/news/2018-...production-cut

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## Swordsmyth

BP’s Clair Ridge project in the North Sea has begun commercial production, the BBC reports,  noting that the project is expected to continue producing crude over  the next four decades, with the recoverable reserves at the deposit,  part of the Clair field, estimated at 640 million barrels.
BP has  been reducing its presence in the North Sea in the last few years, but  it has kept the Clair Ridge project, which highlights the importance of  the development for the long-term sustainability of the North Sea oil  industry amid looming platform decommissioning that will cost field  operators billions.
The company said the Clair Ridge project  required investments of US$5.8 billion (4.5 billion pounds). It is part  of the second phase of development of the larger Clair field, which was  discovered in 1977 and contains an estimated 7 billion barrels of oil  equivalent. Peak production from the Clair Ridge development is seen at  120,000 bpd.

More at: https://oilprice.com/Latest-Energy-N...roduction.html

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## Swordsmyth

Here’s something to be thankful for this Thanksgiving — U.S. oil  production broke another milestone, according to the latest federal  statistics.
 The latest U.S. Energy Information Administration (EIA) data shows  oil production hit 11.7 million barrels a day during the week ending  Nov. 16. That’s unchanged from the previous week, but up significantly  from the week ending Nov. 9.
  Oil  companies are pulling more than 2 million barrels more out of the  ground now than during the same time period in 2017, EIA reported.  That’s a 21-percent increase in oil production in the past year. 

More at: https://dailycaller.com/2018/11/22/u...il-production/

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## Swordsmyth

Saudi Arabia raised oil production to an all-time high in November, an  industry source said on Monday, as U.S. President Donald Trump piled  pressure on the kingdom to refrain from production cuts at an OPEC  meeting next week.

The  industry source, who is familiar with the matter, said Saudi crude oil  production hit 11.1-11.3 million barrels per day (bpd) in November,  although it will not be clear what the exact average November output is  until the month is over.
Those  levels are up around 0.5 million bpd - equal to 0.5 percent of global  demand - from October and more than 1 million bpd higher than in early  2018, when Riyadh was curtailing production together with other OPEC  members.
Non-OPEC  Russia, which teamed up with Saudi Arabia in the first OPEC joint  production cuts since 2016, has also raised production steeply in recent  months to a post-Soviet high of 11.4 million bpd.

More at: https://www.yahoo.com/news/saudi-ara...120613965.html

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## Swordsmyth

Mexico’s Pemex has reevaluated the reserves contained at its Ixachi  discovery and now estimates its 2P (proven and probable) reserves at 750  million barrels of oil equivalent, S&P Global Platts reports,  quoting Pemex’s deputy director for exploration, Juan Antonio Escalera.  The discovery’s P3 reserves (proven, possible and probable) are  estimated at 1.3 billion barrels of oil equivalent. The discovery is  therefore the fourth-largest onshore one globally for the last ten  years, Escalera noted.
Currently, there are three wells operating  at Ixachi, with two of them drilled in the last few months as Pemex  seeks to stem a decline in the national oil total resulting from natural  depletion and lack of investment in new exploration.
Plans for  the onshore field in the state of Veracruz are ambitious: Pemex plans to  drill more than 40 production wells, which will require an investment  of US$1.5 billion. Yet this pales in comparison to the expected value of  the oil to be extracted from the field.
"The  expected value of the total production of Ixachi is worth $40 billion,"  the company’s general director said at an industry event this week.  "Based on these numbers, you can see how profitable this project will  be."
Peak production at Ixachi is seen to occur about 2022 at  daily rates of 80,000 bpd of crude and 720 million cu ft of natural gas.  

More at: https://oilprice.com/Latest-Energy-N...est-Finds.html

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## Swordsmyth

Saudi Arabia is going to do whatever it takes to stabilize the oil market, but it can’t and won’t do it alone  without a collective decision from the OPEC and non-OPEC deal  participants, Saudi Energy Minister Khalid al-Falih said on Wednesday.
“We  are going to ... do whatever is necessary, but only if we act together  as a group of 25,” Reuters quoted al-Falih as telling reporters in  Nigeria’s capital Abuja, referring to the 25 Saudi-led OPEC nations and  Russia-led non-OPEC producers that have been tweaking oil production to  stabilize the market for nearly two years.

“As Saudi Arabia we cannot do it alone, we will not do it alone,”  al-Falih said on Wednesday, referring to a production cut, adding that  “I think people know that leaving the market to its own devices with no  clarity and no collective decision to balance the market is not  helping.”

While Saudi Arabia is airing the idea of a new production cut, its key  non-OPEC ally in the deal, Russia, is less convinced that it could take  part in another reduction, or at least so it lets the market to believe.

More at: https://oilprice.com/Energy/Energy-G...Their-Own.html

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## Swordsmyth

Russia  is happy with the current oil price level of around $60 dollars per  barrel, President Vladimir Putin said on Wednesday, despite a recent  dramatic oil price slump on global oversupply worries.The  oil price "fell and then rose again but in my opinion, a level around  $60 is quite acceptable, we are completely satisfied," he told an  investment forum.
Russia's latest budget had been built on the assumption of oil at $40, he said.

More at: https://www.yahoo.com/news/putin-say...160334009.html

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## Swordsmyth

The Saudi unit of Joannou & Paraskevaides Group, a major  construction contractor, has defaulted on a bond payment worth 7 billion  riyals ($1.9 billion) due to payment problems for the Saudi Interior  Ministry, Bloomberg reported Nov. 29. The company has been involved in  housing units for the Interior Ministry and parts of the expensive King  Abdullah Financial District in Riyadh.

More at: https://worldview.stratfor.com/situa...s-bond-payment

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## Swordsmyth

“In my view, the current price range of oil is comfortable for both  producers and consumers,” said Russia’s Energy Minister Alexander Novak  in an interview with news agency TASS.
The  official added that the US$80+ Brent crude prices we saw earlier this  year were a temporary thing that had to do mostly with the uncertainty  surrounding Iran, which prompted a lot of speculative oil buying. Now  the price has corrected, although uncertainty around Iran remains.
Novak’s interview comes on the heels of a Reuters report  citing sources from the oil industry speaking on condition of anonymity  that said the Kremlin had accepted the need to reduce production again  at a meeting between government officials and representatives of local  oil companies.
“The idea at the meeting was that Russia needs to  reduce. The key question is how quickly and by how much,” one of the  Reuters sources said, adding “Most people agreed that we cannot reduce  immediately, it needs to be a gradual process like last time.”

More at: https://oilprice.com/Energy/Oil-Pric...-They-Are.html

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## Swordsmyth

Looming over the Saudi-Russia talks are suspicions that Saudi Arabia  has been accelerating production of oil beyond the cuts adopted by OPEC+  in November 2016 to placate President Trump - *a conspiracy  "theory" first highlighted by Zero Hedge weeks ago, which has finally  won acknowledgment in the pages of the Wall Street Journal and other  mainstream press.* 
  But while Saudi and Russia are equipped to weather lower-for-longer  oil prices (Putin has said he's "absolutely fine" with oil at $60 a  barrel), especially if it means they don't cede market share to the  booming US shale industry, other OPEC members have been frustrated by  the bilateral agreement to raise output through the end of the year.

  And during a meeting of OPEC producers and their non-member allies  next week, it appears these other members might present their de facto  leader with an ultimatum: Cut production - now - or risk a mutiny. At  least that's what a report published in the Wall Street Journal Friday morning would suggest.
  Two days after Saudi Energy Minister Khalid al-Falih insisted that Saudi Arabia wouldn't cut production  if it meant going it alone, the WSJ reported that Iran and other oil  producers are preparing to confront Saudi Arabia next week and demand  that it bear the brunt of oil production cuts. Since the Saudis have  ramped up production by 1 million barrels a day since the summer, OPEC  reasons that they should bear the brunt of the expected 1.4 million  barrels a day that they're hoping to trim from the cartel's collective  production.* "The Saudis made this mess - they need to clean it up,"* one anonymous OPEC official reportedly told WSJ.

  Even as the Saudis and Russia helped boost crude prices  by raising the possibility of a tandem production cut, other OPEC  members worry that the Kingdom won't be able to undo the pain of its  production ramp so easily. Given that it's now pumping more than 11  million barrels a day, analysts are skeptical about whether a 500,000  bbl/day cut would make a difference.
*But questions of supply and demand, while important, distract from a bigger issue:* That  other OPEC members are deeply uncomfortable with the perceived US  influence over the cartel's de facto leader. Cartel members described  Saudi Arabia's perceived deference to the US as "problematic."
 OPEC officials say the Saudis’ decision to keep pumping at full tilt  is the result of pressure from the U.S., which has threatened to  retaliate over the killing of dissident Jamal Khashoggi by Saudi  operatives.
  While President Trump said this week he wanted to keep a strategic  alliance with the kingdom, the U.S. government and Congress have been  looking at possible sanctions against Saudi Arabia, including  legislation that would make membership of OPEC an antitrust violation.
*An African OPEC delegate said the Saudis’ role as the  cartel’s kingpin is problematic "because they follow instructions from  the U.S."* An Iranian oil official said “whether they cut or not, the decision should be made in OPEC, not in the White House.”Over the past few years, OPEC members have set aside their individual  differences and worked with outsiders like Russia to rescue crude  prices from their 2014-2015 collapse. But with this accomplishment  fading from view, the notion that resentments about perceived US  influence could lead to the dissolution of the cartel are ironic. After  all, the breakup of OPEC would only cede more influence to the US.

More at: https://www.zerohedge.com/news/2018-...c-us-influence

----------


## Swordsmyth

But perhaps the most important aspect of Putin's comments - related to markets - was his statement on crude production cuts.
  Russian news service RIA noted earlier that Putin and Saudi Arabian Crown Prince Mohammed bin Salman (MbS) discussed oil, *haven’t taken concrete decisions yet, including production cuts,* Kremlin’s foreign police aide Yuri Ushakov said.

  And Putin just confirmed that there are* no additional cuts over and above the OPEC+ Vienna Accord levels currently in place*:

 	*PUTIN SAYS THEY AGREED TO EXTEND OPEC+ AGREEMENT **PUTIN SAYS RUSSIA, SAUDI AGREES TO CONTINUE AGREEMENT* **PUTIN: EXACT VOLUME TO BE AGREED W SAUDI ARABIA BASED ON MARKET*
Confirming Lavrov's comments earlier in the week that there was no need for additional deals or cuts.* The two producers will monitor market to adjust policy accordingly.* 


More at: https://www.zerohedge.com/news/2018-...-us-uk-detente

----------


## Swordsmyth

While just a few hundred miles south, WTI is flirting with the one  year low price of $50/barrel, Canada's oil-producing hub, Alberta, would  be ecstatic to have its oil trade at anything even remotely close to  this level.
  As we reported recently,  Canadian oil producers are in an increasingly tough predicament. With  high and increasing oil demand around the globe over the last year,  Canadian oil production has increased accordingly. All of this is simple  and predictable economics, but in the process Canadian oil hit a  massive roadblock. Producers have the supply, and they have more than  enough demand, but they don’t have the means to make the connection. *Canadian export pipelines simply don’t have the capacity to keep up with either the supply or the demand.*
  Canadian oil producers have now maxed out their storage capacity, and  the Canadian glut continues to grow while they wait for a solution to  the pipeline problem to materialize. As pipeline space is at a premium  and storage has hit maximum capacity, oil prices have fallen  dramatically, and the differentials that had previously been hitting  heavy oil hard in Canada (now at below $14 a barrel for the first time  since 2016) have now spread to light oil and upgraded synthetic oil  sands crude as well, leaving overall Canadian oil prices at record lows.

  So in a long-awaited and according to local energy traders, overdue  response, Canada’s largest oil producing province ordered what Bloomberg  called "an unprecedented output cut", an effort to ease a worsening  crisis in the nation’s energy industry and adding to global actions to  combat a recent price crash ahead of this week's OPEC+ summit where oil  exporters will similarly seek to slash output (something which all OPEC+  nations agree upon, but nobody wants to be the first to cut its own  production).
  Alberta Premier Rachel Notley followed the advice of local producers  like Cenovus Energy and Canadian Natural Resources, which have been  hammered by record low prices for heavy Canadian crude. The crisis has  caused some producers to reduce production on their own, slash dividends  and delay next year’s drilling plans, while the Alberta economy has -  by local accounts - slumped into a recession.
  “Every Albertan owns the energy resources in the ground, and we have a  duty to defend those resources,” Notley said in a statement. “But right  now, they’re being sold for pennies on the dollar. We must act  immediately, and we must do it together.”
  The plan, which was announced late on Sunday, will reduce production  of raw crude and bitumen from Alberta by 325,000 barrels a day, or 8.7%  from January until excess oil in storage is drawn down. The reduction  would then drop to 95,000 barrels a day until the end of next year at  the latest.

  The cut by Canada, the world’s fifth-biggest producer, follows fresh  promises over the weekend by Saudi Arabia and Russia to extend their  deal to manage the oil market. Global prices crashed last month by the  most in a decade, a plunge that particularly battered producers in  Alberta amid the abovementioned surging oil-sands output, a shortage of  pipeline space, as well as heavy U.S. refinery maintenance.
  The news out of Canada, together with this weekend's temporary trade  war truce between the US and Canada, helped lift U.S. benchmark prices  as Canada's output cuts will likely slash the volume of oil flowing into  Canada's southern neighbor and the world’s biggest consumer; as a  result WTI rose as much as 5% Monday morning in Asia.
  To many, the production cut was not only long overdue, it was also  inevitable in light of the record production coupled with record low  price, a disastrous combination which would otherwise culminate with  mass defaults.

  That said, one wonders just how much of an impact this initial step  to rationalize the Canadian oil market will have: the amount being cut  is more than the total production of each of OPEC’s three smallest  members: Equatorial Guinea, Gabon and the Republic of Congo. It is still  relatively modest in the grand scheme of things.
  Notley said that the curtailment plan, which will apply to both  oil-sands and conventional producers, should narrow the discount between  Western Canada Select and U.S. benchmark oil by at least $4 a barrel  and add an estimated C$1.1 billion ($830 million) in government revenue  in the fiscal year starting April 2019.
*Alberta expects the 325,000-barrel-a-day reduction to be in  place for the first three months, while storage is drawn down to  historical levels.* After that, the government will work to  match capacity with production. Further reductions in the curtailment  are expected in the fall and winter as additional rail capacity comes  online. The measure could be removed earlier than the end of 2019, based  on market conditions, the government said.
  The output cut also seeks to stabilize the local economy: the action  is designed to prevent job cuts by letting companies keep people on  because they can “see a light at the end of the tunnel,” Notley said at a  news conference.


More at: https://www.zerohedge.com/news/2018-...rashing-prices

----------


## Swordsmyth

The first domino falls:



Within OPEC, Qatar said on Monday it would leave the producer club in January.
Qatar's oil production is only around 600,000 bpd, while it is the world's biggest exporter of liquefied natural gas (LNG).
The small Middle East country has also been at loggerheads with its much bigger neighbour and de facto OPEC leader Saudi Arabia.

More at: https://www.yahoo.com/news/oil-price...025302436.html

----------


## Swordsmyth

Qatar’s withdrawal from OPEC is a surprise for Oman’s oil minister Mohammed bin Hamad Al Rumhi, who said in an interview  with S&P Global Platts on Monday that Qatar might face retaliation  from other members that could pull out of a similar organization of gas  exporting countries.  

Earlier on Monday, Qatar announced that it  was withdrawing from OPEC effective January 1, 2019, and had informed  OPEC of this decision, Qatar Petroleum said.


Oman, whose oil minister spoke to Platts in Vienna on Monday, is not a  member of OPEC but is part of the Russia-led group of non-OPEC  producers part of the production cut deal, which has been in place for  nearly two years now. Oman is also a member of the six-member Gulf Cooperation Council (GCC) alongside Qatar, Saudi Arabia, Kuwait, the UAE, and Bahrain.
Oman’s  Al Rumhi warned that Qatar could face retaliation for its withdrawal  from OPEC from countries that could withdraw from the Doha-based Gas  Exporting Countries Forum (GECF).
“A number of countries could  pull out because of Qatar’s position,” Al Rumhi told Platts. “I can tell  you for sure the UAE will pull out of that organization, I don’t think  they will continue, and who knows other countries like Algeria that are  members of OPEC,” Oman’s oil minister noted.

More at: https://oilprice.com/Latest-Energy-N...taliation.html

----------


## Swordsmyth

Qatar's  decision to quit OPEC shows the frustration of small producers at the  dominant role of a Saudi and Russia-led panel, a top Iranian official  said, adding that any supply cuts should come only from countries that  had increased output.The  comments underline tensions within the Organisation of the Petroleum  Exporting Countries ahead of this week's meeting to discuss curbing  output and prolonging a supply-limiting pact with Russia and other  non-members into 2019.
Iran  has been angered by higher production from Saudi Arabia and Russia,  which chair a panel called the Joint Ministerial Monitoring Committee  (JMMC), after calls from U.S. President Donald Trump to pump more oil to  offset a drop in Iranian exports hit by U.S. sanctions.
"This  is very regrettable and we understand their frustration," Iran's OPEC  governor, Hossein Kazempour Ardebili, told Reuters, referring to Doha's  announcement on Monday.
"There  are many other OPEC members frustrated that the JMMC is deciding on  production unilaterally and without the required prior consensus of  OPEC."


"Since  May, they have inflicted a $30 loss on all members," Kazempour said in  reference to the JMMC, "flooded the market and created a huge glut,  which is building stocks.
"With this behaviour, for small producers there is no merit to stay in OPEC."
Iran  believes that any supply reduction should come from those who pumped  more - Saudi Arabia and Russia have provided the largest increases -  rather than all 25 OPEC and non-OPEC countries involved in the current  accord.
"Now  they are asking others to share in the cut. Whoever increased, they  should cut," Kazempour said. "The pilot and co-pilot crashed the plane  and all 25 passengers are now in critical condition.
"With this record of failure, I doubt that the declaration of cooperation will be extended."

More at: https://www.yahoo.com/news/iran-says...151511644.html

----------


## specsaregood

> Everything they do to save themselves only helps shale to kill them more surely, if more slowly.


It is certainly looking like you called it early on.
https://www.worldoil.com/news/2018/1...ump-a-lot-more




> *OPEC's worst nightmare: Permian is about to pump a lot more
> *
> 
> HOUSTON (Bloomberg) -- I*n less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30/bbl.
> OPECs bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 MMbpd.
> *The Permian will continue to grow and OPEC needs to learn to live with it, said Mike Loya, the top executive in the Americas for Vitol Group, the worlds largest independent oil-trading house.
> 
> The U.S. energy surge presents OPEC with one of the biggest challenges of its 60-year history. *If Saudi Arabia and its allies cut production when they gather Dec. 6 in Vienna, higher prices would allow shale to steal market share.* *But because the Saudis need higher crude prices to make money than U.S. producers, OPEC cant afford to let prices fall.*
> 
> ...

----------


## Swordsmyth

Russia  and Saudi Arabia are yet to agree on the details of any new agreement  to curb oil production even after President Vladimir Putin endorsed  continued cooperation between the world’s two largest exporters.Officials  from both energy ministries met in Moscow this weekend, but differed on  how to share the burden of any new cuts, according to people familiar  with the talks, who asked not to be named because discussions are  private. OPEC and allies outside the group meet in Vienna later this  week to set policy for 2019.


In  the talks in Moscow, officials differed on how much each side should  reduce production, the people said. Saudi Arabia argued Russian  proposals, which implied Moscow would cut by a maximum of 150,000  barrels day, would leave the kingdom shouldering too much of the burden,  insisting there should be a more equal partnership.
If  negotiations between the energy ministers fail to break the impasse, a  final deal may need to be brokered directly by the Russian president and  Saudi crown prince. In any case, the final deal will need Putin’s  approval, one of the people said.

More at: https://finance.yahoo.com/news/russi...181045154.html

----------


## Swordsmyth

Russia’s oil output dipped in November, preliminary data  from Russia’s federal state budgetary organization CDU TEK over the  weekend, days before the OPEC summit scheduled for December 6 that will  serve as a forum for discuss another oil production cut.
The  November data showed Russia’s oil production had fallen to 11.369  million barrels per day, including condensates, an almost half a  percentage decline from the record highs Russia kicked out in October of  11.41 million bpd. Production had previously been steadily increasing  for months as Saudi Arabia and Russia attempted to lift production to  make up for Iranian losses that most expected from the U.S. Sanctions.
The  cuts come after Russia’s energy ministry was reported as discussing  potential oil production cuts with local producers to come up with a  position on the oil production cuts before the December meeting  scheduled for this weekend.
However,  the slip in production for November is seen by analysts, according to  Bloomberg, not as a deliberate attempt to curb production to balance the  market, but more as the natural consequence of issues with specific  oilfields, and possibly from seasonality.

More at: https://oilprice.com/Latest-Energy-N...Cuts-Near.html

----------


## Swordsmyth

A fractured OPEC is meeting later this week to discuss a deal to cut  oil production—yet again—to rebalance the market and lift oil prices  that have recently slipped to below most of the cartel members’  budget-balance points.
OPEC needs a unanimous vote to pass  decisions such as curtailing production. Yet, Iran—one of OPEC’s biggest  producers but also one of the most sidelined members in recent months—warns  that the group is unlikely to reach an agreement on a sizeable cut of  around 1.4 million bpd as some are suggesting. Such a failure to act  decisively would send oil prices plunging to $40 a barrel, Iran’s OPEC  Governor Hossein Kazempour Ardebili told Bloomberg in an interview.
The  cartel and its Russia-led non-OPEC allies may not extend their  cooperation pact either, according to Iran’s representative at OPEC—a  position typically held by the second most powerful oilman in a cartel  member after the oil minister.

“I doubt, with the failure they had in the last three months, that the  declaration of cooperation gets extended,” Kazempour told Bloomberg,  referring to the Saudi-Russia alliance. 


“Why institutionalize a failure? And it needs unanimity to be extended,” he noted.
Iran,  for one, will not take part in any cuts while there are U.S. sanctions  on its oil, Kazempour said, adding that those who increased production  should be the ones to cut, that is the Saudis and Russians and few Arab  Gulf states like the UAE and Kuwait.
“Now they are asking others to share in the cut. Whoever increased, they should cut,” Kazempour told Reuters on Monday.

“The pilot and co-pilot crashed the plane and all 25 passengers are now in critical condition,” said Iran’s OPEC governor.
The ‘pilot and co-pilot’, however, agreed this weekend to extend the deal, Russia’s President Vladimir Putin said, although he admitted there isn’t an agreement on specific cuts, yet.
“But  we, together with Saudi Arabia, will do this, and whatever final figure  we will decide upon, we agreed that we will monitor the market  situation and promptly respond to it,” Putin said.
While the  general framework between OPEC and non-OPEC may be in place, Saudi  Arabia will have to appease growing frustration at smaller members  within OPEC and convince them to fall in line, in order to get a  unanimous vote on some sort of production cuts, which may not even be  worded as ‘reduced output’. 

Days before the December 6-7 meeting in Vienna, Qatar surprisingly announced on Monday that it would be quitting OPEC as of January 1, as it focuses on natural gas.
According  to Iran’s Kazempour, Qatar is not the only one frustrated with OPEC’s  recent decisions, especially the ones taken by the Saudi-Russia  co-chaired Joint Ministerial Monitoring Committee (JMMC).
“There  are many other OPEC members frustrated that the JMMC is deciding on  production unilaterally and without the required prior consensus of  OPEC,” Kazempour told Reuters.

More at: https://oilprice.com/Energy/Crude-Oi...each-Deal.html

----------


## Swordsmyth

*Trump Administration to Auction Off 900,000 Acres for Fracking in Nevada*

----------


## Swordsmyth

*ExxonMobil* (NYSE: XOM) and its partners *Hess* (NYSE: HES) and China's *CNOOC* have  found a treasure trove of oil off the shore of Guyana over the past  four years. The companies recently unveiled the 10th discovery on their  jointly held acreage position, which they now believe contains more than  5 billion barrels of recoverable oil. That reinforces Exxon's belief  that the partnership can produce more than 750,000 barrels of oil per  day (BPD) from the region by 2025.
*It just keeps getting bigger*Exxon's latest discovery at the Pluma-1 well, when combined with further evaluation of previous finds,  led the company to boost its resource estimate from more than 4 billion  barrels of oil equivalent (BOE) up to over 5 billion BOE. That's enough  resources to support at least five floating storage, production, and  offloading (FSPO) vessels capable of producing more than 750,000 BPD.


The  company and its partners started the first phase of development last  year, which they anticipate should start producing 120,000 BPD by early  2020. The companies are currently in the planning stages on two more  projects, to which they hope to give the green light in 2019. That puts  them on track to start up phase 2 -- which should produce 220,000 BPD --  by the middle of 2022, followed by a third one in early 2023. The  companies hope to complete two more phases by 2025 to achieve their  target.
What's  worth noting about this oil is that it should have low production  costs. Exxon estimates that the cost of supply is around $35 per barrel,  which makes it quite profitable at current oil prices. 
Meanwhile,  with a total of 6.6 million acres to explore in the region, Exxon and  its partners have the potential to find billions of additional barrels  of low-cost oil, which could enable them to sanction more phases in the  future.

More at: https://finance.yahoo.com/news/exxon...134300324.html

----------


## Swordsmyth

Three  days after Russian President Vladimir Putin and Saudi Crown Prince  Mohammed bin Salman sent crude prices surging with an agreement to  extend cooperation on oil, the kingdom’s top energy official made clear  that the terms of a deal remain unresolved.In  an interview with Bloomberg, Saudi Energy Minister Khalid Al-Falih said  he saw an oversupplied market, but cautioned that all the members of  the OPEC+ group, which includes allies such as Russia and Kazakhstan,  needed to come together for a cut to go ahead.
Moscow  backs output curbs “in principle,” but it’s “premature” to say what  they will agree in Vienna this week, Al-Falih said. He also walked back  previous statements about the size of any supply reduction, saying the  group is likely to cut but still needs to “figure out what needs to be  done and by how much.”
Oil  prices pared gains after his comments, which were less bullish than  previous statements and signaled that divisions with Russia remain  unresolved. Crude was trading 1.8 percent higher at $53.88 a barrel in  New York at 8:02 a.m local time, compared with an earlier increase of as  much as 3 percent.
“We  need to get together and listen to our colleagues, hear about their  views on supply and demand and their projections of their own countries’  production,” Al Falih said in an interview while attending United  Nations climate talks in Katowice, Poland. “The next road to cross is  whether all countries are willing to come on board and contribute to  that cut.”
Saudi Arabia is currently producing between 11 million and 11.2 million barrels of oil a day, Al-Falih said.

More at: https://finance.yahoo.com/news/saudi...114143735.html

----------


## Swordsmyth

OPEC is trying to persuade Libya and Nigeria to join cuts if the cartel agrees to reduce production, delegates told S&P Global Platts,  while the OPEC and non-OPEC leaders of the deal, Saudi Arabia and  Russia, are still discussing how much to cut and how to share these cuts  out.
Libya and Nigeria, exempted from the deal forged in November  2016 because of violence that had severely disrupted their respective  production, have recovered their output and have been raising production  in recent months. The two countries are seen reluctant to cut because  of a still fragile security situation, but this time around, the other  OPEC members may not listen to any excuses and are urging the two  African members to join a possible cut.
Following severe  production and export disruptions in the early summer, Libya’s oil  production has been steadily rising over the past three months.
As of two weeks ago, Libya was pumping close to 1.3 million bpd, and NOC’s chairman Mustafa Sanalla said that he hoped Libya would be exempted, again, from any new OPEC-wide production cuts.
Nigeria is also boosting oil production, which is set to further rise with the imminent start-up of the Total-operated Egina oil field.


Saudi Arabia is looking to persuade Moscow to make a hefty cut in the  region of 250,000 bpd-300,000 bpd, while Russia has reportedly  indicated that it wasn’t okay with cutting this much, and could agree to  half that proposed amount, Reuters reports, citing OPEC and non-OPEC sources.
Meanwhile, Iran will not be negotiating its production quota. Oil Minister Bijan Zanganeh said on Wednesday, as quoted by state news agency IRNA:
“As long as Iran is under sanctions, the Islamic Republic’s OPEC quota will not be discussed with anyone.” 

More at: https://oilprice.com/Latest-Energy-N...ran-Balks.html

----------


## Swordsmyth

OPEC’s meeting this Thursday in Vienna may not lead to an agreement to start reducing production, Iran’s OPEC governor said, as quoted  by S&P Global Platts. Hossein Kazempour Ardebili said there were  tensions between members of the cartel, with some unhappy about others’  large production increases in recent months.
"The cooperation  agreement is unlikely to be renewed," Ardebili said. “At least some  member states will not join it, in which case any renewal will be out of  the question."
Increasing the heat further, the official said  some OPEC members might even decide to follow in Qatar’s footsteps and  leave OPEC altogether.
The reason, according to Ardebili, is their  limited production capacity, especially spare capacity. "Some producers  have limited production capacity. Therefore, they may be faced with  lower demand for production, while on the other hand, they lack any  spare capacity for increased production, if need be," he said, adding  "That strengthens the possibility of exit by minor member states. That  is not impossible."

More at: https://oilprice.com/Energy/Crude-Oi...OPEC-Deal.html

----------


## Swordsmyth

Even more cracks may be forming within OPEC, even as market pundits continue to analyze Qatar’s decision two days ago to withdraw from the oil producing cartel. Michael Cohen, head of energy markets research at Barclays bank, told CNBC on Tuesday that Iraq, OPEC’s second largest producer, could be the next member to withdraw from OPEC.
“I  think in terms of all the OPEC countries, to me the one that stands out  over the last six to eight months is Iraq,” he said. “Iraq has been out  of line with its target frequently... so if restrictions to cut were  too stringent, Iraq might feel it in its best interest to no longer be a  member of the organization.”


There has been a history of disagreement between OPEC and Iraq dating back to  the at least the end of the Second Gulf War in 2003 as the country’s  post war oil production remained crippled. Iraq saw its oil production  drop from a pre-war level of 3.5 million bpd to only around 900,000 bpd  by the end of the war.
Since then, Iraq has maintained an on again  and off again willingness to comply with OPEC, particularly over oil  production cuts. The last time a Saudi-led OPEC needed to trim  production amid plunging oil prices and an oil supply glut in late 2016,  Iraq waffled, stalled, bluffed then finally conceded and complied.  Iraq's oil minister, Jabar Ali al-Luaibi, at the same time OPEC was considering cuts actually urged oil and natural gas producers operating in the country to continue increasing output for the rest of the year and in 2017. 

Last month, as global oil prices were plunging amid over fresh supply concerns, Iraqi oil minister Thamer Ghadhban said  Iraq planned to increase its oil output and export capacity in 2019,  with a focus on its southern oilfields, and is close to reaching a deal  with international companies.
Moreover, five days ago Bloomberg  reported that the biggest snag in OPEC’s push for a consensus on cutting  oil output could come from relentless growth in supply from its  second-biggest producer, Iraq.
Iraq is targeting production  capacity of 5 million bpd in 2019, with average exports expected to  reach around 3.8 million bpd. According to a report from energy  consultancy Wood Mackenzie, Iraqi oil production has increased by around  6 percent this year, while its output could reach as much as 6 million  bpd by 2025.

More at: https://oilprice.com/Energy/Energy-G...r-To-Exit.html

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## Danke



----------


## Danke



----------


## Swordsmyth

> 





> 


Can you provide a summary of the key points?

----------


## Swordsmyth

US  President Donald Trump on Wednesday urged OPEC members not to slash  production at their upcoming meeting, saying global oil prices should  remain low.Trump's  comment came as members of the Organization of Petroleum Exporting  Countries and other oil-producing nations prepared to meet Thursday and  Friday in Vienna to discuss lowering their output.
"Hopefully  OPEC will be keeping oil flows as is, not restricted. The World does  not want to see, or need, higher oil prices!" Trump said on Twitter.

More at: https://www.yahoo.com/news/trump-ask...151252467.html

----------


## Swordsmyth

Saudi Arabia’s Energy Minister Khalid al-Falih met with the U.S.  Special Representative for Iran, Brian Hook, on Wednesday, a day before  OPEC is meeting to discuss new production cuts to rebalance the market,  Reuters reported, quoting sources familiar with the meeting.
While  the topic of the Saudi-U.S. meeting was not immediately clear, it’s  probably safe to assume that the energy minister of OPEC’s de facto  leader and the U.S. official for Iran discussed the current and future  impact of the U.S. sanctions on Iran on the global oil market.
According to S&P Global Platts,  the meeting between al-Falih and Hook, which neither side confirmed or  agreed to comment, may have been held to exchange views on Saudi  Arabia’s position at Thursday’s OPEC meeting and what level of  production the cartel and allies might need to keep in order to factor  in more losses of Iranian oil supply.

More at: https://oilprice.com/Latest-Energy-N...EC-Summit.html

----------


## Swordsmyth

After six hours of discussions, OPEC didn’t agree on Thursday on any  specific oil production cut agreement as members are quarrelling on how  to divvy up the production cuts and who will be exempt from reducing  output, while all signs point to the cartel waiting to see how much  Russia will agree to cut before announcing a possible deal.
OPEC canceled its scheduled after-meeting press conference on Thursday and Saudi Arabia’s Energy Minister Khalid al-Falih said  the cartel was still “deliberating” an agreement, after the meeting  ended. The main proposal that was discussed was a cut of around 1  million bpd.
“I am not confident of an agreement,” al-Falih said, adding that “Russia is not ready for a substantial cut.”
Russia’s  Energy Minister Alexander Novak will be joining the talks with non-OPEC  on Friday, after having received instructions from President Vladimir  Putin on Russia’s position on joining the cuts.
Even without  having to wait for Russia’s consent, the OPEC meeting was more  contentious than usual, with the main “sticking point” being getting  agreement from all producers, according to the Saudi minister.
Another sticking point was who could be exempt from the cuts.


Apart from counting barrels and looking at demand forecasts, OPEC was  dealing today with discontent from some members who blame Saudi Arabia  for creating the oversupply by pumping at records, and for giving  non-OPEC Russia a very big say in the cartel’s oil production policy.
The deal-or-no-deal saga continues on Friday, while the oil market was left hanging, with prices down 3% at 1:16 p.m. EDT.  

More at: https://oilprice.com/Latest-Energy-N...The-Table.html

----------


## Swordsmyth

*Update*: It would appear OPEC+ talks are over... *Russian Energy Minister Alexander Novak won’t make it back to Vienna*  Thursday to discuss cutting oil output with the OPEC+ group of crude  producing countries, RIA Novosti reports, citing the ministry.

More at: https://www.zerohedge.com/news/2018-...ement-tomorrow

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## AZJoe

Qatar quits OPEC

----------


## Swordsmyth

The U.S.’s fastest growing oil field may have even more to give.The  Permian’s Delaware Basin, the less drilled part of the giant West Texas  and New Mexico oil field, holds more than twice the amount of crude as  its sister, the Midland Basin, the U.S. Geological Service said  Thursday.
The  Wolfcamp Shale and Bone Spring rock formations in the Delaware hold an  estimated 46.3 billion barrels, the scientists said in their first  assessment of the area. In addition, it holds about 281 trillion cubic  feet of natural gas, about 18 times the amount in the Midland Basin,  which is more heavily drilled and better known.
The  Midland and Delaware estimates are the USGS’s “largest continuous oil  and gas assessments ever released,” Dr. Jim Reilly, the organization’s  director, said in a statement. The amount consists of “undiscovered,  technically recoverable resources,” the USGS said.
The  study only looked at the two rock formations, which are both well known  to operators including Exxon Mobil Corp., Royal Dutch Shell Plc, EOG  Resources Inc. and Occidental Petroleum Corp. Industry experts say there  are as many as a dozen so-called ‘pay zones’ in the area.


https://finance.yahoo.com/news/meet-...100000276.html

----------


## Swordsmyth

OPEC  and its Russia-led allies agreed on Friday to slash oil production by  more than the market had expected despite pressure from U.S. President  Donald Trump to reduce the price of crude.The  producer club will curb output from January by 0.8 million barrels per  day versus October levels while non-OPEC allies contribute an additional  0.4 million bpd of cuts, in a move to be reviewed at a meeting in  April.
Oil  prices jumped about 5 percent to more than $63 a barrel as the combined  cut of 1.2 million bpd was larger than the minimum 1 million bpd that  the market had expected.


The  OPEC deal had hung in the balance for two days - first on fears that  Russia would cut too little, and later on concerns that Iran, whose  crude exports have been depleted by U.S. sanctions, would receive no  exemption and block the agreement.
But after hours of talks, Iran gave OPEC the green light and Russia said it was ready to cut more.
Russia  gave a commitment to reduce output by 228,000 bpd from October levels  of 11.4 million bpd, though it said the cuts would be gradual and take  place over several months.
The  country's energy minister, Alexander Novak, said Russian President  Vladimir Putin had discussed an output decrease with Saudi Prince  Mohammed.
Iraq,  OPEC's second-largest producer, pledged to cut 140,000 bpd. Falih said  Saudi production had dropped to 10.7 million bpd in December from 11.1  million in November and was set to decline to 10.2 million bpd in  January.
Iran,  Libya and Venezuela were effectively given exemptions. Nigeria, which  has been exempt since the previous round of cuts from January 2017,  agreed to participate.

Bob  McNally, president of U.S.-based Rapidan Energy Group, said the details  of the cut were "fuzzy" and would likely result in a lesser reduction  than the headline figure.
"President  Trump will not be happy to see today’s headlines, but how strongly he  reacts depends mainly on whether crude prices rise strongly as a result  in coming days and weeks."

More at: https://finance.yahoo.com/news/opec-...--finance.html

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## Swordsmyth

After Russia agreed on Friday to cut its oil production as part of  the non-OPEC group tasked with cutting 400,000 bpd of oil production,  Energy Minister Alexander Novak said it would take Russia “months” to  get down to its requested level.
While there were no specific  figures or targets released to the public for each individual member of  the OPEC and non-OPEC groups to hit, non-OPEC was saddled with a 400,000  bpd burden, while OPEC itself agreed to cut 800,000 bpd. Unofficial  sources, according to Tass, has Russia’s portion of the cuts pegged at 228,000 bpd, which is 2% of its October levels.
Shortly  after the meeting concluded on Friday, Alexander Novak dampened high  spirits among the oil bulls. “The oil production will be reduced, just  as two years ago, as quickly as possible in terms of technology. I think  it will take several months,” Novak said at the after-meeting press  conference.

More at: https://oilprice.com/Latest-Energy-N...Implement.html

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## Swordsmyth

Saudi Arabia could reduce its daily crude oil shipments abroad by as much as 1 million barrels next month, Reuters reports,  quoting unnamed sources close to Riyadh. According to them, the move  would be motivated by weaker demand due to seasonal patterns in  consumption and Saudi Arabia’s commitment to the new production cut  agreed last week in Vienna.
In total, the sources said, Riyadh  will likely export an average 7.3 million bpd in January. This compares  with less than 8 million bpd this month, also a decline from November,  when the Kingdom exported 8.3 million bpd.
Saudi Arabia will once  again shoulder the greatest burden of the OPEC-wide cuts, cutting  500,000 bpd from its December production levels, which stand at an  average 10.7 million bpd, the same  as in October. The cartel and its partners agreed to cut production  from October levels, by 2.5 percent for every OPEC member besides Libya,  Iran, and Venezuela.

More at: https://oilprice.com/Energy/Crude-Oi...ext-Month.html

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## Swordsmyth

OPEC and its non-OPEC partners are set to officially sign a cooperation agreement in March of next year, the UAE’s energy minister Suhail al-Mazrouei said, according to Reuters.
The  agreement will be officially signed in March in Saudi Arabia, the oil  minister said, and will seek to align OPEC with non-OPEC oil producers,  most importantly Russia, on matters likely to include achieving market  balance—specifically production quotas. The term “market balance” is the  new phrase OPEC is using instead of referencing specific oil prices,  after OPEC in October steered its members away from any words that may put it at odds with proposed U.S. legislation called the NOPEC Act.
OPEC  and a group of non-OPEC members reached an agreement on Friday to cut  production starting in January 2019. OPEC’s portion of the production  cuts was 800,000 bpd, with Saudi Arabia’s accounting for 500,000 bpd of  that. The non-OPEC countries agreed to 400,000 bpd of the production  cut, with Russia accounting for approximately 230,000 bpd of the  400,000.
Russia, for its part, said it would take “months” for  that level of cut to be achieved. Likewise, OPEC’s production cuts are  unlikely to shrink by 800,000 bpd immediately on January 1st, and will  more than likely take months as well.

More at: https://oilprice.com/Energy/Crude-Oi...-In-March.html

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## Swordsmyth

The commissioning of a mega refinery and petrochemical complex worth  US$44 billion and involving Saudi Aramco and ADNOC has been pushed out  by two years to 2025, a top executive at the Indian consortium part of  the project told Reuters on Tuesday.
Ratnagiri  Refinery & Petrochemicals Ltd (RPPL), the joint venture company  responsible for the huge 1.2 million bpd complex construction and  development, had initially scheduled the commissioning for 2023.  According to the website of the joint venture, the refinery is expected  to be commissioned by the year 2025, and is planned to produce high-quality automotive and aviation fuels, plus a wide range of petrochemical products.
“The  project will be completed in 2024 and commissioning will be in 2025,”  B. Ashok, the chief executive of RPPL, told Reuters on Tuesday.
The  joint venture company now has more detailed information on the refinery  configuration and the availability of people to build it, according to  Ashok.
In June this year, Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC) signed  a framework agreement and a memorandum of understanding with a  consortium of Indian national oil companies to join the mega project at  Ratnagiri in the Maharashtra state on India’s west coast.

By investing in the giant Indian refinery, the national oil companies  of leading OPEC producers Saudi Arabia and the UAE would secure  off-take for their crude in a strategic fast-growing oil market in  Asia. 
However, the process of land acquisition for the new giant  complex has been put on hold due to strong opposition from local  farmers, many of whom depend on their land for their income and  livelihoods, the chief minister of Maharashtra, Devendra Fadnavis, said  in November. According to Reuters, thousands of farmers are not eager to  give up their land. 

More at: https://oilprice.com/Latest-Energy-N...y-Delayed.html

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## Swordsmyth

Russia is planning to reduce its oil production by 50,000 bpd to  60,000 bpd in January as part of the new OPEC+ deal, and will not be  cutting its 228,000-bpd share outright at the start of the agreement,  Russia’s Energy Minister Alexander Novak said on Tuesday.  
Russia  has already drafted a timetable for how much oil production it would  reduce each month until it reaches its share of the OPEC/non-OPEC  production cut, Novak said, reaffirming Moscow’s position that its  reduction would be gradual, just like in the previous agreement between  OPEC and the Russia-led non-OPEC partners.
While Russia will be making the lion’s share of the non-OPEC 400,000-bpd cut, it would take months to reach the 228,000-bpd production reduction, Novak said on Friday, after OPEC and its allies sealed the deal.
The  agreement calls for 2.5 percent cuts from the October production  levels, which for Russia was a post-Soviet record high of 11.4 million  bpd.

More at: https://oilprice.com/Latest-Energy-N...n-January.html

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## Swordsmyth

A variant of the Shamoon malware that hit Saudi Aramco’s servers six years ago is back, Axios reports,  citing a release from the cybersecurity unit of Alphabet, Chronicle.  According to the Chronicle release, the company had detected a file  infected with Shamoon in its database VirusTotal.
The malware,  Chronicle said, was uploaded from Italy and is different from the  previous two variants. Those moved through networks via pre-programmed  credentials while this one stays on the computer it is installed on  first. There is no command and control infrastructure that would allow  the attackers to communicate with the virus, and what the virus does  this time is encrypt all files irreversibley rather than replacing them  with politically significant images, Axios reports.
While the  cybersecurity experts at Chronicle figure out what the malware is all  about this time, they do note it comes on the heels of a report from  Italy’s oilfield services major Saipem that it had become the target of a  cyberattack, with the most severe blow suffered by its network in the  Middle East.
Reuters quoted  Saipem’s head of digital and innovation operations, Mauro Piasere, as  saying the company’s servers in the UAE, Saudi Arabia, and Kuwait had  been affected by malware, with the origin of the attack Chennai, India.

“The servers involved have been shut down for the time being to assess the scale of the attack,” Piasere said.

More at: https://oilprice.com/Latest-Energy-N...2-Is-Back.html

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## Swordsmyth

OPEC+ will need to stay 700,000 bpd below its agreed targets of 31.8  million bpd through 2019 in order to bring a recovery in Brent prices to  the $70 level, Rystad Energy says.
The OPEC countries and Russia  agreed on December 7 to cut oil production by 1.2 million bpd in 2019 –  slightly larger than the 1.0 million bpd cut expected by many observers.
“The  OPEC+ agreement predictably came up short of what Rystad Energy argued  would be required to fully balance the market in 2019. The agreed  production cuts will not be enough to ensure sustained and immediate  recovery in oil prices. The muted market reaction seen thus far comes as  no surprise to us”, Rystad Energy head of oil market research Bjornar  Tonhaugen says.

More at: https://oilprice.com/Energy/Crude-Oi...Should-Do.html

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## Swordsmyth

Saudi Arabia decided in 2016 to impose taxes on expat dependents as  part of Crown Prince MbS drive of Saudisation of the economy. Bloomberg writes;  _Announced in 2016 as part of a drive to increase non-oil government revenue —_ *a  key goal of Crown Prince Mohammed bin Salman’s economic transformation  plan — the fees have been unpopular with business owners in a country  accustomed to cheaper foreign labor.*_ Partly as a result,  hundreds of thousands of foreigners have left the kingdom, hitting the  already-struggling economy but failing to make much of a dent in Saudi  unemployment._
  As of earlier this year over 800,000 expats had left the country. Now  the country contemplates of removing or reducing the “fee/tax” as the  economy falters. Bloomberg continues;
_While it’s unlikely the fees will be canceled altogether, a  ministerial committee is looking at modifying or restructuring them, one  of the people said. A decision is expected within weeks, two of the  people said._
  All this comes back of the fact Saudisation is not working. The  working age population in Saudi Arabia have in essence no desire to with  work jobs equivalent to their skill levels. Business Insider reports;    
_Many companies are reported to be circumventing the policy’s local  employee quota requirement by hiring Saudis and paying them small  salaries for what are in effect bogus jobs — a process termed “fake  Saudisation._
_“Employers say young Saudi men and women are lazy and are not  interested in working and accuse Saudi youth of preferring to stay at  home rather than to take a low-paying job that does not befit the social  status of a Saudi job seeker,” Bassnawi said,_ *adding that  fake Saudisation “could create a generation of young men and women who  are not interested in finding a job and who prefer to get paid for doing  nothing.”*
  Saudi Arabia is in a difficult situation. Their disastrous war in  Yemen costs about $200m/daily.  Recent oil declines hit the Saudi  economy harder than any other country. *With its total dependence on  foreigners on every facet of its society there is risk continues low oil  prices and a lack of economic development in the country will lead to  disaster. Maybe the only way Saudis might get some leeway is that there  is a* *War in the Middle East**.*


More at: https://www.zerohedge.com/news/2018-...y-and-military

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## Swordsmyth

It’s the time of the year when oil companies start announcing their  budgets for next year and besides a steady albeit guarded optimism, one  thing stands out: oil majors are doubling down on their shale endeavors.
Chevron,  ConocoPhillips, and Hess Corp all announced their capex plans for next  year in the last few days and all three have big plans for U.S. shale.  In fact, Conoco said it would allocate half of its budget on onshore operations in the United States, while Hess Corp said the bulk of its US$1.89 billion production growth budget, or US$1.425 billion, would be poured into the Bakken play.
Chevron has  earmarked  US$3.6 billion for expanding its production in the Permian and another  US$1.6 billion will be invested in other shale plays in the United  States. That makes a total of US$5.2 billion for U.S. shale, which is  substantially higher than this year’s budget of US$4.3 billion.
Anadarko, which made its 2019 spending plans public last month, said  it planned to allocate more than two-thirds of its 2019 budget to shale  operations, with a particular focus on the Delaware Basin in the  Permian and the DJ basin in Colorado.
According to Bloomberg,  shale has become “a safe haven” for Big Oil amid the recent increased  volatility in prices. The argument is that shale production costs are  much lower than a few years ago and combine with the opportunity for a  steady production increase and quicker returns than conventional  projects.


More at: https://oilprice.com/Energy/Energy-G...rice-Drop.html

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## Swordsmyth

Now nearly a week removed from the OPEC+ agreement, confidence in the efficacy of the deal is becoming shaky.
Immediately after OPEC+ announced cuts of 1.2 million barrels per day (mb/d), a flurry of reports  from oil analysts and investment banks congratulated the group on a job  well done. After all, the 1.2 mb/d figure was larger than the market  had anticipated.
However, reality is beginning to set in. First,  the cuts might not be realized in January, despite the promise. Russia  indicated that it was going to slow walk the cuts,  phasing in an initial 50,000 to 60,000 bpd in reductions in January.  This is significant because Russia is the main actor in the non-OPEC  cohort. The non-OPEC group is expected to slash output by 400,000 bpd,  but if Russia is only going to do its part gradually over the next few  months, the non-OPEC cuts might not reach the promised levels anytime  soon. Moreover, because there are no country-specific allotments, it  will be hard to hold any producer accountable.
That undermines  confidence in the deal. “Compared to early last week, the outcome was  rather disappointing, the whole process wasn’t convincing, and it’s  still uncertain whether they will actually cut,” ABN Amro senior energy  economist Hans van Cleef told Bloomberg.
While  oil traders are suddenly doubting the integrity of the deal, even if  OPEC+ were to adhere to its promised cuts, it still might not be enough.  That’s because there are other factors that could leave the market  oversupplied. Cracks in the global economy are growing, demand is  showing signs of strain, and supply continues to rise.
The EIA just issued its latest Short-Term Energy Outlook,  and the agency still expects significant production growth from U.S.  shale despite the downturn in prices. The EIA lowered its forecasted  2019 WTI prices by $10 per barrel from its previous report, yet it kept  its supply forecast unchanged – it still thinks that U.S. oil production  will rise from 10.9 mb/d in 2018 to 12.1 mb/d in 2019, despite the  significant downward revision in prices. 

More at: https://oilprice.com/Energy/Crude-Oi...nt-Cut-It.html

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## Swordsmyth

WTI prices briefly popped above $52 before fading quickly after Bloomberg reported that *after flooding the US market in recent months, Saudi Arabia plans to slash exports starting in January* in an effort to dampen visible build-ups in crude inventories.

  Bloomberg reports that, according to people briefed on the plans of state oil company Saudi Aramco, *American-based oil refiners have been told to expect much lower shipments from the kingdom in January* than in recent months following the OPEC agreement to reduce production


More at: https://www.zerohedge.com/news/2018-...ng-oil-exports

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## Swordsmyth

*The Wall Street Journal has exposed Saudi Arabia's stock market rescue squad*...  
The Journal pulls no punches in turning the conspiracy theory into conspiracy fact, noting that *the government of Crown Prince Mohammed bin Salman has spent billions to counter selloffs in recent months.*
  According to a Wall Street Journal analysis of trading data and interviews with multiple people with direct knowledge of government intervention efforts, *the Saudi government has placed huge buy orders, often in the closing minutes of negative trading days, to boost the market*.
  Most notably, while the Saudi stock exchange normally discloses how much stock the government buys, *the recent purchases after political crises have been concealed from public view.*  That is because the government, rather than buying stock directly, has  routed its money through asset managers at Saudi financial institutions  who run funds that don’t need to reveal their clients, those people say.

  Through the upheaval, MbS' government has been keen to show the world that Saudi Arabia remains safe for foreign investors.
 _“We need to highlight to the world that Saudi investment is good,”_ said a Saudi government official.To prop up the market, *the government has bought stocks via its sovereign Public Investment Fund,* or PIF, say people familiar with the matter.
  While the PIF’s recent stock purchases aren’t publicly disclosed, they’re openly discussed by Saudi traders.
 _“In the bad days of Saudi Arabia, when there are troubles related to government, you see these flows coming in,”_ said Abdullah al Marshad, a trader at Saudi Arabia’s Samba Financial Group.
*“It tells people: Don’t worry.”*But, as Antoine van Agtmael, who coined the term "emerging market" almost 40 years ago, warns:
 _...government intervention makes the Saudi stock exchange  “more of a fake market, and that kind of undermines the trust of  investors in the long run.”_But in the short-term, all that matters is a bull market and the  financial projection of economic strength, and as details of Jamal  Khashoggi's murder in a Saudi consulate building emerged, the Tadawul  All Shares Index (TASI) experienced 10 volatile days of trading. The  Tadawul entered its steepest decline of 2018: Share prices sank 5%  between Oct. 10 and 11. People familiar with the matter say most of the  buying came from the PIF.

  Zoomed in the moves are all the more impressive and sudden. A selloff  sent the market down about 2% on Oct. 22. In the 40 or so minutes  before the market closed that day, heavy buying boosted it by more than  3%.

*How is it done?* Very simple - When local  share prices falter, one of these people says, PIF chief Yasir al  Rumayyan tells deputies to start buying. *They use the messaging program WhatsApp to contact managers* at institutions including state-controlled NCB Capital Co. who manage PIF funds, this person says.

The Journal concludes that data and interviews show the *government bolstered the market by buying about $2 billion in stock that week,* but of course, local (and state-sponsored) *media credited the crown prince's remarks for saving the world.*


More at: https://www.zerohedge.com/news/2018-...n-team-exposed

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## Swordsmyth

2018 stands already as the best year for global oil and gas  exploration since 2015. Guyana, Russia and the United States top the  list with major discoveries.
Discovered resources have already  surpassed 8.8 billion barrels of oil equivalent (boe) for 2018. Rystad  Energy, the independent energy research and consulting firm  headquartered in Norway with offices around the world, expects the  number to grow to 9.4 billion boe by year-end.




“We at Rystad expect this discovery trend to continue into 2019 with  many promising high-impact wells targeting vast potential,” says Palzor  Shenga, senior analyst on Rystad Energy’s Upstream team.
Offshore  discoveries represent around 82% of total volumes. 2018 has also seen a  significant uptick in the reserve replacement ratio to around 15% from  11% in 2017.
“Global exploration activity and discoveries have  halted their year-after-year decline and look set to rise in the next  year. This as an exciting recovery which runs contrary to a decline in  global exploration spending from 2014 to 2017,” Shenga adds. 

Exploration spending decreased by nearly 61% from 2014 to 2018.  Exploration investments halted their fall in 2018 and are expected to  rise in 2019.
“This not only proves that E&P companies are  once again willing to invest in exploration, but also highlights their  idea of ’smart investments’ to de-risk expenditures as much as  possible”, Shenga adds.
The decrease in overall exploration costs  combined with an improved success ratio have led to tremendous  improvement in the discovery cost per boe.

More at: https://oilprice.com/Energy/Crude-Oi...l-In-2018.html

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## Swordsmyth

Saudi Arabia's Finance Ministry has released its 2019 budget, which  includes a 7 percent spending increase to 1.106 trillion Saudi riyals  (roughly $295 billion), Arab News reported Dec. 18.

More at: https://worldview.stratfor.com/situa...nding-increase

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## Swordsmyth

During the unveiling of the budget, Saudi King Salman said his  country will continue paying public sector cost-of-living allowances for  citizens and will boost spending to stimulate growth even as Saudi  Arabia toils to close its deficit, which it won't do yet again as the  kingdom forecasts a 6th consecutive budget deficit in a row, estimated  to hit $35 billion in 2019.
*"We are determined to go ahead with economic reform,  achieving fiscal discipline, improving transparency and empowering  private sector,"* the King said.
  While state-funded Saudi "generosity" to keep its citizens happy -  and not, say, thinking radical, revolutionary thoughts - is well known,  analysts believe the continued cost-of-living allowances, first  established in January 2018 and estimated by officials to cost more than  $13 billion, are intended to stimulate sluggish growth but mostly shore  up support for the royal family and Crown Prince Mohammed bin Salman  after a controversy-ridden few months.
  The royal allowances of 1,000 riyals a month ($266) are paid to civil  servants and military personnel, and other allowances will continue for  pensioners and those living on social security. Riyadh will also  increase student benefits by 10 percent for the next fiscal year, the  king announced.
  There is just one problem: *for Saudi Arabia to be able to  meet its projected revenue and fund these generous payments it will need  oil prices to rise higher. Much higher.* 
  Looking at the details of the budget, a few troubling details emerge: revenue is forecast to hit 975 billion riyals *while total spending will rise 7% to 1.106 trillion riyals, resulting in a 131 budget deficit, or 4.2% of GDP* (nearly  double the size of Italy's projected deficit, if still quite smaller  than the US deficit) as GDP is expected to grow from 2.3% in 2018 to  2.6% in 2019.
  And while the government expects non-oil revenue to increase from 287  billion riyals in 2018 to 313 billion in 2019, the big question mark is  what happens with oil revenue. According to the budget, Saudi Arabia  expects oil revenues to grow nearly 10% from 607 billion riyals in 2018  to 662 billion in 2019, it is the assumptions embedded in this revenue  forecast that are, well, concerning.
  To hit 662 billion riyals in oil revenue, or $177 billion, up from  $162 billion in 2018, Saudi Arabia expects near record oil output of  10.2 mmb/d sold *at a price of $80/barrel,* while Saudi Aramco won’t increase its allocations to the government. For reference, Brent settled just above $56 today, *which means that oil has to rise at least 40% for the Saudi budget revenue assumption to be hit*. Brent would have to rise an additional $15 to $95 a barrel for the kingdom to balance its budget deficit according to Bloomberg chief Middle East economist Ziad Daoud.

  As a reference, analysts expect Brent in 2019 to trade around $73 a  barrel, a number which may be rather aggressive considering the recent  plunge in the commodity, largely the result of continued excess output  coupled with declining demand from China and other key markets.
  Even with these aggressive assumptions, which see Saudi Arabia oil revenue rising to a five-year high, the Kingdom *will still post its sixth-straight budget deficit*.
  Last year, Saudi Arabia based its 2018 budget on crude averaging $63 a  barrel, $17 below the latest forecast even as its OPEC-defecting  neighbor, *Qatar, assumed $55 per barrel in its budget forecast released last week*.
  So what happens if oil refuses to levitate to the desired price? As  Bloomberg's Javier Blas notes, "Saudi Arabia will need to take on  further debt, spend its petro-dollar reserves or, at some point,  introduce again austerity (as it was forced to do in 2015-2016)."


More at: https://www.zerohedge.com/news/2018-...-latest-budget

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## Swordsmyth

Contrary to initial reports that OPEC will not make public the  country quotas in the new production cut deal, the cartel now plans to  publish a table of each OPEC and non-OPEC individual quotas in an  attempt to inject some positive sentiment in a crashing oil market,  OPEC’s Secretary General Mohammad Barkindo wrote in a letter seen by Reuters.
“In  the interests of openness and transparency, and to support market  sentiment and confidence, it is vital to make these production  adjustments publicly available,” Barkindo wrote to the members in the  letter.
“I would urge Your Excellencies to kindly make positive  announcements reinstating your countries’ commitment to implementing the  agreed decisions. This is also vital to underpin trust in our decisions  and to buttress ourselves from any naysayers who may doubt our  commitment,” the letter says.


In his letter seen by Reuters, OPEC’s Barkindo says that the  effective reduction needs to be 3.02 percent for member countries in  order to reach the 1.2-million-barrel total cut. Iran, Venezuela, and  Libya were exempted from cuts, so other OPEC members had to tweak some  quotas to accommodate those three ‘special consideration’ countries.
The detailed table with country quotas is expected to be published by the end of this week.
According to that table, Saudi Arabia’s share of the cuts is 322,000 bpd,  but in his letter Barkindo praises the Kingdom for committing to cut  more and reduce production to 10.2 million bpd, a deeper cut than quotas  show. The leader of the non-OPEC nations Russia has been handed a  230,000-bpd cut. OPEC’s total cut is 812,000 bpd, while non-OPEC’s  reduction is 383,000 bpd, according to CNBC.    

More at: https://oilprice.com/Latest-Energy-N...ut-Quotas.html

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## Swordsmyth

Coming off a rather abysmal week for oil prices, Baker Hughes  reported a 9-rig increase for oil and gas in the United States this  week—a turnaround from three losses in a row in the three weeks prior.
The  total number of active oil and gas drilling rigs now stands at 1,080  according to the report, with the number of active oil rigs increasing  by 10 to reach 883 and the number of gas rigs decreasing by 1 to 197.
The oil and gas rig count is now 149 up from this time last year, 136 of which is in oil rigs.

More at: https://oilprice.com/Energy/Energy-G...On-Prices.html

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## Swordsmyth

Total U.S. oil production around 2025 will almost equal the combined production  of Russia and Saudi Arabia, Fatih Birol, the Executive Director of the  International Energy Agency (IEA), told Turkish state-run Anadolu Agency  on Friday.
The huge growth in U.S. shale production will completely change the balance of oil markets, Birol told the news agency.
The IEA’s Oil 2018 report from earlier this year sees the United States dominating the global oil supply growth over the next five years.
OPEC  capacity will grow only modestly by 2023, while most of the growth will  come from non-OPEC countries, led by the United States, “which is  becoming ever more dominant in the global oil market,” the IEA said.

Driven by light tight oil, U.S. production is seen growing by 3.7  million bpd by 2023, more than half of the total global production  capacity growth of 6.4 million bpd expected by then. Total liquids  production in the United States—including conventional oil, shale, and  natural gas liquids—will reach nearly 17 million bpd by 2023, “easily  making it the top global producer, and nearly matching the level of its  domestic products demand,” the IEA said in March this year.  

More at: https://oilprice.com/Energy/Crude-Oi...n-By-2025.html

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## Swordsmyth

If the goal of the OPEC+ cuts was to boost oil prices, then the deal is clearly failing.
OPEC+  is scrambling to figure out a way to rescue oil prices from another  deep downturn. WTI is now down into the mid-$40s and Brent into the  mid-$50s, both a 15-month low. U.S. shale continues to soar, even if  shale producers themselves are now facing financial trouble with prices so low. Oil traders are clearly skeptical that OPEC+ is either willing or capable of balancing the oil market.
OPEC+  thought they secured a strong deal in Vienna in early December, but  more needs to be done, it seems. OPEC’s Secretary-General Mohammad  Barkindo wrote a letter to the cartel’s members, arguing that they need  to increase the cuts. Initially, the OPEC+ coalition suggested that  producers should lower output by 2.5 percent, but Barkindo said that the  cuts need to be more like 3 percent in order to reach the overall 1.2  million-barrel-per-day reduction.
More importantly, the group  needs to detail how much each country should be producing. “In the  interests of openness and transparency, and to support market sentiment  and confidence, it is vital to make these production adjustments  publicly available,” Barkindo told members in the letter, according to Reuters.  By specifying exactly how much each country will reduce, the thinking  seems to be, it will go a long way to assuaging market anxiety about the  group’s seriousness.
Still, the plunge in oil prices this month  is evidence that traders are not convinced. The view is “that the U.S.  will continue to grow like gangbusters regardless of price and overwhelm  any OPEC action,” Helima Croft, the chief commodities strategist at  Canadian broker RBC, told the Wall Street Journal. “Unless there is a real geopolitical blowup, it could take time for these cuts to really shift sentiment.” 

While cuts from producers like Saudi Arabia will help take supply off  of the market, OPEC might help erase the surplus in another unintended  way. Bloomberg raises the possibility  that low oil prices could increase turmoil in some OPEC member states.  The price meltdown between 2014 and 2016 led to, or at least  exacerbated, outages in Libya, Venezuela and Nigeria. The same could  happen again.
Just about all OPEC members need much higher oil prices in order to balance their books. Saudi Arabia needs  roughly $88 per barrel for its budget to breakeven. Libya needs $114.  Nigeria needs $127. Venezuela needs a whopping $216. Only Kuwait – at  $48 per barrel – can balance its books at prevailing prices. Brent is  trading in the mid-$50s right now.

There haven’t yet been any dramatic revisions to 2019 oil demand from  leading energy forecasters, such as the EIA or IEA. But, then again, the  financial instability and the souring oil market have only cropped up  recently. The IEA has maintained a 1.4-mb/d growth rate for demand next  year, but take that with a grain of salt. Demand revisions could be  forthcoming. OPEC+ may have to keep its supply curbs in place for the  full year in 2019, but it’s unclear if even that can push prices back up  to where they were two months ago.

More at: https://oilprice.com/Energy/Crude-Oi...il-Market.html

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## Swordsmyth

Iraq  is willing to extend the OPEC and non-OPEC oil production cut agreement  in April, oil minister Thamir Ghadhban said on Sunday.Ghadhban  said he agreed with the Saudi oil minister's expectation that the  decision would be renewed, adding that Iraq would be watching oil prices  and how they react over time.

https://news.yahoo.com/iraq-oil-mini...114639271.html

----------


## Swordsmyth

Just a couple of weeks after OPEC and its partners agreed to  implement another round of production cuts, the cartel is ready to  extend these cuts as international prices continue to fall.
Reuters reports,  citing the oil minister of the UAE, that OPEC is prepared to call an  extraordinary meeting as it enters “whatever it takes” mode yet again.


Speaking at a news conference in Kuwait, UAE’s Suhail al-Mazrouei  said it would not be a problem for the cartel to extend the period of  the cuts, initially set at four months, beginning in January.
“What  if the 1.2 million barrels of cuts are not enough? I am telling you  that if it is not, we will meet and see what is enough and we will do  it,” Mazrouei said, adding “The plan (to cut oil production) is well  studied but if it does not work, we always have the power in OPEC to  call for an extraordinary meeting. If we are required to extend for  (another) six months, we will do it... I can assure you an extension  will not be a problem.”

More at: https://oilprice.com/Latest-Energy-N...Oil-Falls.html

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## Swordsmyth

Coming off a rather abysmal week for oil prices, Baker Hughes  reported a 3-rig increase for oil and gas in the United States this  week.
The total number of active oil and gas drilling rigs now  stands at 1,083 according to the report, with the number of active oil  rigs increasing by 2 to reach 885 and the number of gas rigs increasing  by 1 to 198.
The oil and gas rig count is now 154 up from this time last year, 138 of which is in oil rigs.

More at: https://oilprice.com/Energy/Energy-G...or-Winter.html

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## Swordsmyth

Energy companies in the Arab countries in the Persian Gulf may resume issuing more debt  and borrowing more money for expansion plans after oil prices plunged  by 40 percent from the four-year highs that hit just three months ago.
The  oil and gas firms in the Gulf Cooperation Council (GCC) had issued  record debt in 2017 to finance expansion plans, but the rise in oil  prices in 2018 eased the gaps in the Gulf Arab countries’ budgets, and  total energy company bond issues and loans in the region declined this  year compared to 2017.
Yet, as oil prices crumbled in the past two  months of 2018, energy firms in the Gulf may have to rely on more debt  in 2019 to fund plans to boost production and maintain reserves,  according to analysts who spoke to Bloomberg.
“Companies  will look to issue more debt,” Ashley Kelty, an oil and gas research  analyst at Cantor Fitzgerald Europe, told Bloomberg.
“They won’t  be going back to the ‘care and maintenance’ of a few years ago. They  will use debt because it’s still relatively cheap,” according to Kelty.


More at: https://oilprice.com/Latest-Energy-N...s-Crashed.html

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## Swordsmyth

Thanks to the booming shale production, U.S. light oil exports have  increased, taking market shares out of the lighter grades that Saudi  Arabia and its fellow OPEC members are exporting to Asia.
Moreover,  increased crude oil production in the U.S. has also resulted in higher  oil product exports which, combined with higher Chinese refined product  exports, have created an oversupply of products in Asia, crashing  refining margins earlier in December.

U.S. light crude oil exports to Asia have also grown and even with China shunning  American crude, U.S. sales to OPEC’s key market Asia have held  relatively steady since August this year, according to data from Kpler  compiled by Bloomberg. 


As OPEC is getting ready for another round of production cuts  beginning January, Saudi Arabia for example is hell-bent on keeping its  market share in Asia and has recently slashed  the January prices of all its grades going to Asia, while it raised the  prices for all grades bound for the U.S., Northwest Europe, and the  Mediterranean. Saudi Aramco’s deepest cuts in Asian pricing were for the  Super Light and Extra Light grades, slashed by US$2 and $1.50 a barrel  from December’s prices, respectively. The official selling prices (OSPs)  of Arab Light, Medium, and Heavy were also cut, by between $0.40 and  $1.00 a barrel.
The deepest cuts in the lighter grades reflect  Saudi Arabia’s effort to keep its market share in Asia as competition  from U.S. light oil intensifies, according to analysts.

In early December, the gasoline refining margin at the Singapore hub, viewed as a benchmark for Asia, slumped to a loss  and to the lowest level against Brent prices since November 2011.  Loss-making gasoline margins weighed on Asia’s overall refining profits,  which hit in early December their lowest since August 2016, despite  crumbling crude oil prices, according to data from Refinitiv Eikon, as  carried by Reuters.
China is reportedly raising its fuel export quota for 2019 by 13 percent, which could additionally weigh on product oversupply.
According  to data compiled by Bloomberg, this year average monthly U.S. exports  to Asia of light distillates—including gasoline and naphtha—have been  nearly triple the export levels over the past two years. 

More at: https://oilprice.com/Energy/Crude-Oi...e-In-Asia.html

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## Swordsmyth

Days before OPEC’s production cuts started on January 1, France’s  Total had started up oil production from Nigeria’s ultra-deepwater oil  field Egina, which is expected to produce 200,000 bpd at peak output.
The French supermajor began production at the Egina oil field on December 29, Total said  on Wednesday. The Floating Production Storage and Offloading (FPSO)  unit that was used to develop the ultra-deep Egina oil field is the  largest such unit that Total has ever built, according to the French  group. Total noted that the plateau production at the ultra-deepwater  field would be 200,000 barrels of oil per day, which would account for  some 10 percent of Nigeria’s oil production.
Nigeria, which wasn’t  spared from the new OPEC/non-OPEC production cuts this time around, is  expected to contribute with up to 40,000 bpd to the 800,000 bpd OPEC had  pledged to cut from January, Nigerian Oil Minister Emmanuel Kachikwu  told local news outlet THISDAY  last month. The 40,000-bpd figure is some 2.5 percent of Nigeria’s  current crude oil production of 1.7 million bpd, the minister said in  the first half of December.

Total is set to begin exports from the new ultra-deep Egina oil field  offshore Nigeria as early as in February 2019, at an initial rate of  just over 100,000 bpd, Bloomberg reported two weeks ago, quoting a copy of a loading program for the new grade it had seen.

More at: https://oilprice.com/Energy/Crude-Oi...uts-Begin.html

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## Swordsmyth

Iraq’s oil exports jumped in December  compared to November, as exports from the southern ports at Basra hit a  record high and exports from the northern Kirkuk fields increased after  a slow tentative resumption in November following a year-long hiatus.
In December 2018, Iraq’s oil exports averaged 3.726 million bpd, compared to 3.372 million bpd of exports in November, when exports had reached a seven-month low due to bad weather at the southern ports.
Iraq’s  oil exports from the Basra terminals averaged 3.63 million bpd in  December—a record high and up from the average exports of 3.363 million  bpd in the previous month, Reuters quoted Iraq’s oil ministry as saying  in a statement on Wednesday.
Exports  of the federal government from the oil fields in Kirkuk to the Turkish  port of Ceyhan on the Mediterranean surged to 99,000 bpd in December  from an average 8,716 bpd in November, according to the Iraqi oil  ministry.

More at: https://oilprice.com/Latest-Energy-N...-December.html

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## Swordsmyth

OPEC’s January production is likely to come in lower than anticipated, a former Saudi Aramco executive said in a statement to CNBC on Thursday.
The  oil cartel agreed last month to shave 800,000 barrels per day off its  October production levels, with its non-OPEC allies agreeing to cut  400,000 barrels per day, for a combined 1.2 million barrels per day. But  Sadad al Husseini, former executive vice president of Saudi Aramco,  told CNBC that OPEC is likely to cut in January about 1 million barrels  per day off its October production levels, adding that it is possible  that the cartel could cut as much as 1.2 million bpd—that’s in addition  to its allies who promised to cut 400,000 bpd.

More at: https://oilprice.com/Latest-Energy-N...Expected.html#

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## Swordsmyth

The United States received in December the lowest volume of  OPEC-derived crude oil in five years, according to market intelligence  firm Kpler and data from Refinitive Eikon, cited by Reuters on Thursday.
1.63  million bpd of oil from OPEC member countries made its way to US shores  in December, down from 1.80 million bpd in November and 1.78 million  bpd in October. Saudi Arabia shipped 534,000 barrels per day to the  United States in December, a near 100,000 bpd drop from November.  Algeria’s shipments were also down almost 100,000 bpd, and Nigeria’s  shipments to the US dipped by almost 50,000 bpd.
Iraq, on the  other hand, increased crude oil shipments to the United States by  140,000 bpd, and for somewhat of a shock, Venezuela shipped 22,738  barrels per day more to the US in December, although the long-term trend  here shows a steady decline in Venezuela’s oil exports to the US, which  were around 912,000 bpd in 2012, falling to 618,000 bpd by 2017, according to the Energy Information Administration.
Saudi  Arabia’s crude oil exports to the US have also been falling steadily in  recent years, from 1.361 million bpd in 2012 to 1.052 million bpd in  2015, and then to 949,000 bpd by 2017.

More at: https://oilprice.com/Energy/Crude-Oi...-Year-Low.html

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## Swordsmyth

Iraq vowed on Thursday to adhere to the production cuts agreed to by  OPEC and its allies that went into effect at the start of the year.
OPEC’s number-two oil producer will hold its production at 4.513 million barrels per day  for the next six months, according to the Iraqi Oil Ministry, as cited  by S&P Global Platts. If achieved, Iraq would produce 140,000 fewer  barrels per day for the next six months than it did in October 2018—the  date from which the cuts were calculated.
The news comes after  Kpler and Refinitive Eikon data on Thursday showed that Iraq increased  its oil exports to the United States in December by 140,000 barrels per day.


More at: https://oilprice.com/Latest-Energy-N...tion-Cuts.html

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## Swordsmyth

A fledgling U.S. company set up last year will help Venezuela turn  around its falling oil production that has led to the country’s oil  exports falling to the lowest in almost 30 years, Bloomberg reports, citing contractual documents.
According  to the documents, Erepla Services LLC will provide the drilling rigs  and crews necessary to increase crude oil production at the Tia Juana,  Rosa Mediano, and Ayacucho 5 fields over a period of 25 years. In  exchange, the U.S. company will buy all the oil produced at these fields  and resell it, giving Venezuela’s PDVSA 50.1 percent of the proceeds  and keeping 49.9 percent.
"The agreement gives U.S.-based Erepla  enhanced managerial participation and an innovative payment structure  designed to avoid the shortfalls that have plagued previous projects,"  an Erepla principal said in a statement, adding that without any U.S.  companies taking aprt in Venezuela’s exploitation of crude oil resource  would "create an opportunity for Russian and Chinese interests to access  the Venezuelan oil reserve – an outcome that would be detrimental to  U.S. interests."
Harry Sargeant  III also said the contract has been drafted in accordance with U.S.  sanctions against Caracas and that all work under its terms will also be  in compliance with the sanctions.

More at: https://oilprice.com/Latest-Energy-N...tion-Drop.html

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## Swordsmyth

Libya plans to pump 2.1 million bpd of crude oil by 2021 if the  security situation improves, the chairman of the National Oil  Corporation, Mustafa Sanalla, said as quoted by Reuters this weekend.
The  ambitious plan would represent a doubling of the current rate of  production in the North African country: according to Sanalla, Libya’s  output currently stands at 953,000 bpd. That’s less than what the  country produced earlier this year, prior to the latest blockade of the  largest field, Sharara, which removed more than 300,000 bpd from the  total daily average. However, it’s more than what Libya pumped in the  summer when violent clashes at its oil terminals crushed oil production  by almost half from the 1 million bpd earlier in the year.

More at: https://oilprice.com/Energy/Crude-Oi...n-2-Years.html

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## Swordsmyth

Hoping to drive oil prices back up to $80 per barrel, Saudi Arabia is preparing deeper production cuts this month.
Saudi Arabia plans on lowering oil exports to 7.1 million barrels per day by the end of the month, according to the Wall Street Journal.  The Saudi budget does not breakeven unless Brent crude prices average  in the mid-$80s per barrel, vastly higher than today’s spot price. The  WSJ reports that Saudi Arabia plans on cutting exports 800,000 bpd below  November levels, which appears to be a larger reduction than required  as part of the OPEC+ agreement.

More at: https://oilprice.com/Energy/Energy-G...On-80-Oil.html

----------


## Swordsmyth

The news  that the U.S. Army Corps of Engineers has placed a US$93-million order  with Great Lakes Dredge & Dock Company for the deepening and  widening of its ship channel at the Port of Corpus Christi (PortCC)  broke last week in what was still a sluggish news environment. But it is  significant news: this is the first step the federal U.S. government  has made to support efforts to boost crude oil exports and it is also  the first step in a competition dance between the Port of Corpus Christi  and commodity major Trafigura.
Energy analyst David Blackmon noted  the significance of the contract in a recent story for Forbes, adding  it was part of a bigger port expansion project that would require US$360  million in funding. The port authority’s determination to see this  project through despite the bulky price tag was made evident by its  willingness to tap the debt market for the first time in its history and  cough up US$130 million for the expansion. The rest would have to come  from the federal government.
Why expand? Because U.S. crude oil exports are on the rise and will continue to be on the rise for some time, potentially reaching  4 to 5 million barrels daily. For context, this compares with last  year’s all-time high of 2 million bpd, touched briefly in the first half  of the year.
As exports rise it would make sense to cut loading  costs by using larger tankers. However, there is only one port in the  United States at the moment that can load Very large Crude Carriers, the  monsters that can carry up to 2 million barrels of crude. This is the  Louisiana offshore oil port and it mostly handles imports, hence the  urgent need for more export terminals.
Corpus Christi can  also—partially—handle VLCCs: part of the load can be pumped into them at  the port but once it reaches a certain level the VLCC needs to move  into the deeper waters of the Gulf of Mexico and have the rest of the  cargo loaded by barges. The U.S. Army Corps’ channel dredging will make  it possible for VLCC to use it and load crude at a terminal yet to be  built by PortCC. 

More at: https://oilprice.com/Energy/Crude-Oi...l-Exports.html

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## Swordsmyth

While even the most likely new pipeline to ship more of Alberta’s  crude oil to refining and export markets—Enbridge’s Line 3  replacement—is nearly a year away at the earliest, the province hosting  most of Canada’s oil production has been desperately seeking other ways  to get more value for its natural resources.
Alberta is looking to boost the crude-by-rail  capacity to transport an additional 120,000 bpd of its oil over the  next three years. In the most drastic measure yet, the province mandated  an oil production cut of 325,000 bpd for three months starting January 2019, to clear the current glut and lift record-low Canadian heavy oil prices.
Alberta  is also looking to another solution to alleviate the crude oil  glut—having a new oil refinery built in the province that would absorb  part of the crude and unlock some space on congested pipelines shipping  oil out of the province.

More at: https://oilprice.com/Energy/Crude-Oi...il-Crisis.html

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## Swordsmyth

OPEC  kingpin Saudi Arabia said Wednesday that its huge oil reserves, already  the second largest in the world behind only Venezuela, are even bigger  than previously thought.The  energy ministry said proven oil reserves stood at 263.2 billion barrels  at the end of last year, up from the figure of 261 billion barrels that  has been used for almost three decades.
The  kingdom has another 2.9 billion barrels of crude in a border zone  shared with neighbouring Kuwait, bringing total oil reserves to 266.1  billion barrels, the ministry said.
Natural  gas reserves also grew from 302.3 trillion cubic feet (8.56 trillion  cubic metres) to 324.4 trillion cubic feet (9.2 trillion cubic metres),  the ministry said.
It  said the new figures have been backed by an independent third-party  certification by leading consultants DeGolyer and MacNaughton (D&M).

More at: https://news.yahoo.com/saudi-arabia-...152036588.html


Sure, I believe it.

----------


## Swordsmyth

A combination of lower shipping costs and lower domestic demand will boost U.S. crude oil exports to Asia, Reuters reports, citing sources from the commodity trading and shipping industries.
Freight  costs for shipments scheduled to arrive in Asia in late March and April  this year are US$0.50 lower per barrel of oil than they were for  shipments scheduled to arrive at refineries in December as buyers were  in a rush to secure crude ahead of the Iran sanctions that went into  effect in early November.
Since the end of October last year,  chartering a Very large Crude Carrier from the Louisiana Offshore Oil  Port has fallen by some 40 percent to US$5 million, Reuters Eikon data  suggests.
U.S. exports of crude will also enjoy the support of a  still sizeable discount of West Texas Intermediate to Brent crude, which  is close to US$10 a barrel. WTI is among the most popular U.S. light  crude grades with Asian buyers. Other attractive grades include Midland  and Eagle Ford in the light crude segment, and Mars and Southern Green  Canyon in the heavier segment. “There is  the potential for Q2 U.S. crude exports to Asia to be higher  year-on-year if the WTI/Brent spread remains in the range it has in  recent months and with the lower freight rates,” Reuters quoted a  Genscape oil analyst, David Arno, as saying.

More at: https://oilprice.com/Energy/Crude-Oi...Rise-Soon.html

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## Swordsmyth

Earlier this decade, BP and the Gulf of Mexico was an awkward and  uneasy collocation for the UK oil supermajor after the 2010 Deepwater  Horizon disaster.
Nearly a decade and more than US$60 billion in  damages paid later, BP has now turned the corner in its U.S. Gulf of  Mexico operations and plans for significant production and project  expansion into the next decade.
BP’s two key pillars of growth are  raising production from fields close to existing hubs, and using  advanced seismic technology and analytics to better identify the  resources at its oil fields in the Gulf of Mexico.
In the past few  years, BP, like many other major oil companies, has been increasingly  using advanced new technologies to search for more oil while cutting  costs and time for seismic image analysis.
BP has created Wolfspar,  a seismic source technology that can ‘see’ beneath the salt in the Gulf  of Mexico to enable better planning for where to drill for oil. The  tech acquires low-frequency seismic signals and could help BP to  estimate how much oil there is still left in the Atlantis, Thunder  Horse, and Mad Dog developments, BP executives say.
Thanks to  advanced proprietary seismic imaging and reservoir characteristics  analysis, BP has now identified an additional 1 billion barrels of oil  in place at its Thunder Horse field, and an additional 400 million  barrels of oil in place at the Atlantis field, the UK supermajor said this week.
BP’s  proprietary algorithms to enhance seismic imaging allow seismic data  that would have previously taken a year to analyze to be processed in  only a few weeks, the company says.   

It’s not only BP that is actively pursuing additional oil developments in the Gulf of Mexico. According to Wood Mackenzie,  2019 could be a historic year for the region as exploration activity is  expected to increase by 30 percent, ending four consecutive years of  steady declines. While Shell and Chevron will lead to way in exploration  drilling, the actual growth is expected to come from new  entrants--Kosmos Energy, Equinor, Total, Murphy, and Fieldwood,  according to the energy consultancy.
This year could also be the  year of a major world-first project to reach a final investment decision  (FID), while a Gulf-first project is expected to start up production.  If Chevron moves forward with its Anchor project in Green Canyon Block  807, it would be the first ultra-high-pressure project in the world to  reach FID, WoodMac said, noting that if the project reaches final  approval, it could lead to more than US$10 billion of investment into  the region.
The industry will also be closely watching Shell’s  Appomattox development, scheduled to come online this year, marking the  first production ever from a Jurassic reservoir in the Gulf of Mexico.
“If  the Jurassic roars to life in 2019, it could give operators greater  confidence in the play’s potential,” said William Turner, senior  research analyst at Wood Mackenzie.

More at: https://oilprice.com/Energy/Energy-G...-New-Tech.html

----------


## Swordsmyth

OPEC  kingpin Saudi Arabia will slash its oil exports in January by 10  percent compared to November, its energy minister said Wednesday as  producers move to shore up tumbling prices.Khalid  al-Falih said the kingdom, the world's top crude supplier, would cut  its exports to 7.2 million barrels per day in January, down from 8.0  million bpd in November.
He also announced a further 100,000 bpd cut in February.


Falih  said Saudi production had fallen to 10.2 million bpd, down from the  roughly 11 million bpd it was pumping when oil producers decided to end a  production cut deal in May.
"We  are serious about restoring balance to the market," Falih told a press  conference in Riyadh held to announce that the kingdom's vast oil  reserves are even bigger than previously thought.
"We  are concerned about volatility in the oil market," he said. "We have  seen peaks and drops in prices (that are) completely unjustified by the  fundamentals."

More at: https://news.yahoo.com/saudi-slash-o...162701772.html

----------


## Swordsmyth

Saudi Aramco is getting ready to issue a bond  in the second quarter of 2019 to help it finance the acquisition of a  majority stake in petrochemical giant Sabic, and this debt issue would  force Saudi Arabia’s state oil firm to disclose its financials and oil  reserves for the first time in decades, Bloomberg reports.
Aramco’s  bond sale will probably be in U.S. dollars, Bloomberg quoted Saudi  Energy Minister Khalid al-Falih as saying at a presentation of the plan  in Riyadh.
“We will work with our advisers and find the right time  to go to market and part of that would be a prospectus that would have  appropriate financial statements and disclosures,” al-Falih said,  commenting on the plans for the bond sale.

More at: https://oilprice.com/Latest-Energy-N...Bond-Sale.html

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## Swordsmyth

Amid a fuel crisis  that is spiraling out of control, the notorious Mexico oil hedge this  year is worth US$1.23 billion with the average export price of Mexican  crude seen at US$55 a barrel, Reuters reports, citing the country’s Finance Ministry. The ministry did not specify exactly how many barrels the hedge covered.
Last year, Mexico locked in an average export price of US$46 per barrel of  crude oil in its annual oil hedge, which is closely watched as the  biggest in the world. During the year, the Mexican basket of crude  grades hit a high of US$77 a barrel and a low of US$45.18 per barrel,  but for most of the year stayed firmly above US$50 a barrel.
The hedge, or the Hacienda Hedge,  is considered the biggest hedging bet on Wall Street as well as perhaps  the most secretive. It has also earned Mexico—and a few large  investment banks—billions since it was first made in the 1990s.
“With  these actions we protect that budget ... against drops in prices of oil  below this level,” the Finance Ministry said in a statement. “As a  result of these complementary strategies, a price of $55 per barrel was  assured for the Mexican export blend in 2019.” 

More at: https://oilprice.com/Energy/Crude-Oi...-A-Barrel.html

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## Swordsmyth

Saudi Aramco will issue bonds which will probably be in the 10 billion range, Saudi Arabia's energy minister said on Sunday.Khalid  al-Falih, speaking at a conference in Abu Dhabi, did not specify the  currency of the planned debt issuance but last week he said at an event  in Riyadh that the bonds - which would be Aramco's debut in the  international debt markets - are likely to be denominated in U.S.  dollars.
The Saudi oil giant will issue the bonds in the second quarter of this year, he said last week.

https://news.yahoo.com/saudi-aramcos...064554120.html

----------


## Swordsmyth

Saudi Aramco is on track to become a public company in 2021, Energy  Minister Khalid al-Falih said during an oil conference in Abu Dhabi.
Gulf News quoted  the official as saying Aramco was the world’s most important and most  valuable oil company. “This bodes well for the company’s bond plans,  which will be launched in a few months, ahead of the acquisition of  Sabic shares from PIF [Public Investment Fund] and of course the IPO  [which is] not too distant in the future.”
Al-Falih said  earlier that Aramco was planning to issue its first international bond,  probably worth around US$10 billion, to fund part of the acquisition of  a majority stake in petrochemical giant Sabic from the Saudi sovereign  wealth fund. The 70-percent stake was calculated at between US$50 and  US$70 billion.
Last year, media  reported that Aramco was planning a US$40-billion bond sale to fund the  acquisition that would expand its presence in petrochemicals, but it  dropped this plan. The Wall Street Journal reported in November  that the oil major had been concerned about requirements for disclosure  as well as the volatility and uncertain outlook for oil prices,  according to unnamed sources familiar with the developments.
The  smaller bond Al-Falih talked about in Abu Dhabi, likely to take place in  the second quarter of the year, would also require the company to make  its accounts public for the first time since its nationalization back in  the 1970s. It will also have to divulge details about its reserves and  operations.

More at: https://oilprice.com/Latest-Energy-N...c-In-2021.html

I predict it will still be 2 years away 2 years from now.

----------


## Swordsmyth

It's a common conundrum for all petrostates worried about the rapid approach of peak oil demand:  How does one end such a profound dependence on hydrocarbons? Kuwait,  for one, has followed a well-trodden path in its attempts to do so by  implementing taxes, introducing new fees and trying to kick-start the  private sector. Naturally, most of the plans are bankrolled by the  coastal emirate's abundant wealth, which gives it significant margins to  play with as it attempts economic reforms on its road to  diversification.

But Kuwait's economy suffers from a high deficit, inefficient workforce  and overreliance on public, rather than private, spending for growth.  One of the country's biggest problems is the amount it spends on  Kuwaitis, a relic from when the comparatively weak royal family sought  to buy the acquiescence of its citizens, particularly the area's  powerful merchants and political stakeholders, during the transition to  an oil-based economy. Kuwait's uniquely vocal parliament — it's the only  legislature in the Gulf Cooperation Council (GCC) that has the power to  unseat ministers — is another holdover from this transition period.  This relative degree of democracy slows attempts at reform,  however, as lawmakers more beholden to the public have resisted  austerity measures in a fashion that would not be possible in  neighboring states that have weak or non-existent parliaments. As a  result, the Kuwaiti government has had little choice but to place the  burden of economic reform on its many foreign workers.

Kuwait's  biggest problem is perhaps its ratio of public spending to gross  domestic product. At present, the figure is the highest in the GCC  because of high public wages, soaring bills for subsidies and transfers,  and elevated levels of support for state-owned enterprises. This  spending, coupled with the country's economic losses stemming from its  wage payments to nationals who produce little as part of a largely  inefficient workforce, creates a massive hole in the country's budget.
Ultimately,  this contributes to Kuwait's significant deficit, which the  International Monetary Fund estimates will generate financing needs of  up to $100 billion over the next five years, excluding Kuwait's income  from investments. Although Kuwait boasts significant resources,  including its sovereign wealth fund — the oldest in the Arab world and  one of the biggest anywhere — it must repay a large amount of debt in  the coming years. And wary of dipping into its rainy day fund, Kuwait is  seeking an alternate way of funding its structural reform efforts — a  quest that compels it to try and figure out how to spur growth in its  private sector.


In pursuing this goal, the government has rolled up its sleeves on  one of its most important reforms, labor nationalization. Colloquially  known as "Kuwaitization," the program aims to increase the percentage of  Kuwaitis working in the private and the public sectors over an initial  five-year period. The government achieved some success during the first  year (2017-2018) of the program by terminating the employment of 3,000  foreigners in public sector jobs to ultimately make way for native  Kuwaitis. And more measures are on the horizon: The Education Ministry  plans to lay off up to 1,000 foreign employees next year, while the  government also passed a recent edict that stipulates that only Kuwaitis  may drive airport taxis. Parliament has also discussed other proposals  such as a new tax on expatriates' salaries before they send home  remittances, as well as granting the Public Authority of Manpower more  scrutiny over the skill levels of foreign workers, with an eye to  terminating the employment of those deemed inadequate. This year, the  Kuwaiti government also tightened age restrictions on foreign professors  as part of its goal of balancing the need for top-quality professors in  higher education with the desire to open lower-level positions for  native citizens.
Given that the goals of Kuwaitization are to  employ more nationals in desirable positions, there is little surprise  that the program has proven popular with the country's citizens. The  government has also pursued the program — or at least its initial phases  — with gusto, especially as it is politically far more palatable than  imposing austerity measures. On one hand, the government faces few  hurdles in attracting more Kuwaitis to the public sector thanks to the  positive societal attitude toward working in such jobs. After all, many  nationals view government employment as appealing, resulting in large  numbers of young Kuwaitis waiting for an opportunity to work for higher  wages in the public sector rather than opt for a lower-paying job at a  private firm that provides no guarantees of long-term employment.

But just as in Saudi Arabia, Kuwait's government has often erred on the  side of penalizing and forcing the private sector to offer Kuwaitis more  opportunities rather than create work itself. In this, Kuwait is  letting the burden of its labor market reforms fall on expatriates,  rather than on Kuwaitis, who can demand much more from the government.  In fact, the downsides to the program have prompted the government to  backtrack on some of its targets. For one, Kuwaitis largely lack the  skills required for many of the jobs that expatriates hold in the  health, education and technical sectors. Kuwait's government is also  aware that, in the long term, it is still engaged in a GCC-wide competition  to attract the best and brightest foreign workers — which is part of  the reason why, in the midst of the move to terminate the employment of  outsiders, the government has also moved to provide some perks for  expatriates, such as increasing visa durations for the families of  non-Kuwaiti workers.

With just 13,523 citizens currently unemployed, the Kuwaiti government  ultimately has some time to figure Kuwaitization out. Nevertheless, the  pressure to diversify will continue to deepen. At present, Kuwait's  government is taking the path of least resistance, offering Kuwaitis  something they want by removing the foreign workers ostensibly standing  in their way. An influx of more Kuwaitis into the public sector,  however, will eventually put the government on the hook for an even  higher public wage bill.

More at: https://worldview.stratfor.com/artic...ms-expatriates

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## Swordsmyth

Saudi Arabia is planning to generate $11 billion by 2020 by selling key  stakes in state-owned assets such as utilities, hospitals and airports,  Bloomberg reported Jan. 13.

More at: https://worldview.stratfor.com/situa...set-sales-2020

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## Swordsmyth

Due to weather and geological conditions in the cold Russian winter,  Russia cannot cut its oil production too quickly, Energy Minister  Alexander Novak said on Thursday, reiterating Moscow's commitment to stick to the new OPEC+ deal and to gradually reduce production. 
Russia will try to cut its oil production faster, Novak noted.

More at: https://oilprice.com/Latest-Energy-N...n-Quickly.html

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## Swordsmyth

OPEC has decided to hold an extraordinary full ministerial meeting on  April 17 in Vienna to discuss the state of the oil market and the  production cut deal, while the cartel’s non-OPEC partners will join for a  full OPEC+ meeting on the following day, April 18, an OPEC official  told S&P Global Platts on Thursday.  
OPEC  could still hold its regular full ministerial meeting in June, as it  usually does, the official with the organization told Platts.

Announcing the new OPEC+ production deal, the cartel said  in early December that the next OPEC/non-OPEC ministerial meeting would  be held in April in Vienna, but no details about the date were  revealed.


It would make sense for OPEC and allies to hold a full meeting in  mid-April, considering that they could decide whether or not to extend  the production cuts which currently expire in June. The other reason for  a mid-April meeting would be that the U.S. waivers for eight Iranian  oil customers expire in early May, and the U.S. Administration has not yet given a clear signal whether it would be extending some waivers or push for zero Iranian oil exports.
Meanwhile,  in its latest Monthly Oil Market Report published today, OPEC’s  secondary sources—the ones the cartel uses to calculate compliance  levels—showed that OPEC’s production declined by 751,000 bpd  in December from November. The cartel’s total crude oil production  dropped to 31.578 million bpd last month, from 32.328 million bpd in  November. 

More at: https://oilprice.com/Latest-Energy-N...In-Vienna.html

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## Swordsmyth

OPEC published on Friday the long-awaited list  of oil production quotas for each country in the OPEC+ deal, as it  seeks to shore up market confidence that the cartel and allies will do  whatever it takes to rebalance the market.

According to OPEC’s list, OPEC and non-OPEC will withhold 1.195  million bpd from the market and keep their combined production at 43.874  million bpd between January and June. The reference production level  from which the partners will reduce their respective production is  October 2018, except for Kuwait, Azerbaijan, and Kazakhstan, whose  reference months are September 2018, September 2018, and November 2018,  respectively.
OPEC is cutting a total of 812,000 bpd to a ceiling  of 25.937 million bpd, while non-OPEC partners will be reducing  production by a combined 383,000 bpd to 17.937 million bpd. OPEC’s de  facto leader and biggest producer Saudi Arabia will cut 322,000 bpd from  its October baseline of 10.633 million bpd and keep output at 10.311  million bpd. Russia will be taking the lion’s share of the non-OPEC cuts  and will reduce production by 230,000 bpd from October’s 11.421 million  bpd, to 11.191 million bpd.

More at: https://oilprice.com/Energy/Crude-Oi...ds-To-Cut.html

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## Swordsmyth

Saudi Arabia plans to build an oil refinery that would use Saudi  crude, as well as a petrochemical plant in South Africa, as part of  US$10 billion investments, Saudi Energy Minister Khalid al-Falih said on Friday while on a visit to South Africa.
Saudi oil giant Saudi Aramco will lead the construction of the oil refinery in South Africa, al-Falih noted.
“There  have been exchanges of talks by Saudi Aramco teams and they have been  supported by the South African energy ministry,” Reuters quoted the  Saudi minister as saying after a meeting with South Africa’s Energy  Minister Jeff Radebe.
“The  Republic of South Africa and the Kingdom of Saudi Arabia concluded &  signed a declaration of intent to cooperate comprehensively in the  field of oil & gas,” Radebe tweeted on Friday.
According  to the South African minister, the two countries will finalize in the  next few weeks details about the exact locations of the oil refinery and  petrochemical plant.
Al-Falih, for his part, noted that Saudi  Arabia was interested in using the African country’s major oil storage  facilities. In addition, Saudi Arabia’s utility developer ACWA Power is  looking to invest in South Africa’s new renewable energy program.
In the summer of 2018, during the state visit of South Africa’s President Cyril Ramaphosa to Saudi Arabia, the Saudis pledged to invest US$10 billion in South Africa, predominantly in the energy sector.
While Ramaphosa was on a visit to Saudi Arabia in July, the outlet Middle East Eye raised questions about the potential involvement of South Africa-made weapons in the conflict in Yemen.
According  to annual reports from South African National Conventional Arms Control  Committee (NCACC), quoted by Middle East Eye, South Africa supplied  arms, ammunition, armored vehicles, and surveillance and military  technology to both Saudi Arabia and the United Arab Emirates (UAE) in  2016 and 2017. In 2015, the pro-Houthi Al Masirah news channel showed  footage of a shot-down drone. The footage clearly indicated a plate  worded ‘Made in South Africa Carl Zeiss Optronics Pty Ltd’ on the  crashed drone, Zeenat Adam at Middle East Eye wrote in July 2018. 

https://oilprice.com/Latest-Energy-N...th-Africa.html


Investing in the next Zimbabwe is a good idea?

----------


## Swordsmyth

The number of drilled but uncompleted wells (DUCs) in the U.S. shale  patch has skyrocketed by roughly 60 percent over the past two years.  That leaves a rather large backlog that could add a wave of new supply,  even if the pace of drilling begins to slow.
The backlog of DUCs  has continued to swell, essentially uninterrupted, for more than two  years. The total number of DUCs hit 8,723 in November 2018, up 287 from a  month earlier. That figure is also up sharply from the 5,271 from the  same month in 2016, a 60 percent increase. The EIA will release new monthly DUC data on January 22, which will detail figures for December.
Some  level of DUCs is normal, but the ballooning number of uncompleted wells  has repeatedly fueled speculation that a sudden rush of new supply  might come if companies shift those wells into production. The latest  crash in oil prices once again raises this prospect.
The calculus  on completing wells can cut two ways. On the one hand, lower oil prices –  despite the recent rebound, prices are still down sharply from a few  months ago – can cause some E&Ps to want to hold off on drilling new  wells. That may lead them to decide to complete wells they already  drilled as a way of keeping production aloft while husbanding scarce  resources. Companies that are posting losses may be desperate for  revenues, so they may accelerate the rate of completions from their DUC  backlog.
On the flip side, producers don’t exactly want to bring  production online in a market that is subdued. “The lower oil price  raises some questions about whether you go ahead with completing these  wells,” Tom Petrie, head of oil and gas investment bank Petrie Partners,  told S&P Global Platts.  “Some companies want to get them in a producing mode; others say they  won't get an adequate return right now, so they'll wait.” 

More at: https://oilprice.com/Energy/Crude-Oi...Shale-Oil.html

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## Swordsmyth

Iran has struck oil in a hitherto untapped region, Oil Minister Bijan Zanganeh told local media as quoted by Reuters.
“This  is the first time we’ve reached oil in the Abadan region,” Zanganeh  said, adding that the grade was very light and sweet, but giving no  details regarding the amount of reserves contained in the reservoir.

More at: https://oilprice.com/Latest-Energy-N...ed-Region.html

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## Swordsmyth

In a major shift, the United States is set to produce more oil and liquids than Russia and Saudi Arabia _combined_ by 2025.
In  Rystad Energy’s base case oil price scenario, US liquids production is  forecast to surpass 24 million barrels per day over the next six years,  thereby outpacing the combined output from Russia and Saudi Arabia.



More at: https://oilprice.com/Energy/Crude-Oi...-Combined.html

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## Swordsmyth

Baker Hughes reported modest rise in the number of active oil and gas rigs in the United States this week.
The  total number of active oil and gas drilling rigs rose by 9 rigs,  according to the report, with the number of active oil rigs increasing  by 10 to reach 862 and the number of gas rigs decreasing by 1 to reach  197.
The oil and gas rig count is now 112 up from this time last year, 103 of which is in oil rigs.

More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

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## Swordsmyth

Excess supply of gasoline coupled with slow demand has pressured refiners margins, Reuters reports, noting refining margins for the fuel in the United States sank to US$45.70 a barrel yesterday.
The  drop follows the fourth weekly increase in gasoline inventories in the  U.S., all of them quite hefty, leading to an all-time high of gasoline  supplies, at 259.6 million barrels as of January 18.
Over the last  four weeks, the Energy Information Administration reported gasoline  inventory builds reaching a combined 26.6 million barrels.
However,  the United States is not the only large gasoline hub where inventories  are rising as demand remains sluggish. According to the Reuters report,  inventories in the Netherlands, Japan, and Singapore are also at  multi-year highs, with the annual increase in their combined level at 21  million barrels, data from consultants FGE has shown.

More at: https://oilprice.com/Energy/Energy-G...e-Margins.html

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## Swordsmyth

Digital technology adoption in all stages of upstream operations in  the oil and gas industry has seen a steep rise recently. While a lot has  been written about the benefits of digitizing various aspects of the  well-drilling, extraction, and field maintenance processes, there is  also another major field where digital tech is changing the game: before  the well-drilling even begins.
In Alaska, for instance, new  technology in oil and gas exploration has led to the discovery of more  than 1.5 billion barrels of crude oil in the North Slope in just two  years, S&P Global Platts recently reported.  These are deposits that were known to be there but the resources they  held could not be mapped or measured, so the deposits were considered  unproductive before digital tech, in the form of advanced 3D seismic  surveys and new data processing techniques, came along.
So,  established exploration methods are one area where there is a surge of  improvements but there are also alternative exploration techniques  emerging, such as soil analysis. A Dutch company, Biodentify,  collects thousands of soil samples to analyze the DNA of thousands of  microorganisms for traces of hydrocarbons in their environment. The  company utilizes machine learning for the task and to calculate the  potential reserves of a deposit with, according to the company, more  than 70 percent accuracy. What’s more, the whole procedure takes between  6 and 10 weeks, which is a relatively short time, especially in light  of the fact that it reduces the risk of drilling unproductive wells.

New drilling tech is also helping lower costs and improve results.  S&P Global Platts’ Tim Bradner notes coiled tubing drilling as an  alternative to the multilaterals in horizontal drilling. Coiled tubing  involves drilling horizontal wells with a flexible tubing bit, which is  cheaper than drilling with rotary rigs. It could be so cheap, in fact,  that drilling costs per barrel of new oil in already producing fields  could be as little as US$30.Shell, on the other hand, is focusing  on developing artificial intelligence to use in drilling, among other  things. Business and tech expert Bernard Marr wrote  recently in a story about his work on data strategy with the supermajor  that Shell is using reinforcement learning, a form of machine learning,  to improve drilling results and also reduce wear and tear on the  equipment, which ultimately, once again, saves costs.

The list of  examples can continue and it will only become longer in the future. The  oil and gas industry has been remarkably fast in adopting what digital  technology has to offer and spurring innovation aimed specifically at  the industry.

More at: https://oilprice.com/Energy/Crude-Oi...In-Alaska.html

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## Swordsmyth

South Korea has been buying increasing amounts of U.S. crude oil and will continue to do so this year, Reuters reports,  citing data from its service Eikon. This will help narrow the Asian  economy’s trade surplus with the United States, improving moods in  Washington and strengthening bilateral ties.
Over this month and  next, for example, imports of U.S. crude oil and liquefied natural gas  into South Korea are seen at 18 million barrels and 900,000 tons,  respectively.
“At the moment, the trend (of importing U.S. crude)  will stay ... The economics for U.S. crude is a little bit better than  Middle East and North Sea oil,” Reuters quoted a source from the South  Korean refining industry as saying.

More at: https://oilprice.com/Latest-Energy-N...This-Year.html

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## Swordsmyth

Basra Oil Co,. the state-owned operator of the huge Majnoon field in  Iraq, plans to boost production from it to 450,000 bpd by 2021 by  drilling 40 new wells, Reuters reports, citing the Iraqi Oil Ministry.
This  would be more than double Majnoon’s current rate of production, which  averages 240,000 bpd. The 40 new wells will be in addition to another  40, already contracted to Schlumberger last month.


Iraq had oil reserves of 153 billion barrels  as of 2017, and in 2018 Oil Minister Jabar al-Luaibi said the actual  reserves could be twice as large. If the higher estimate proves true, it  would make Iraq the largest oil-rich country in the world, ahead of  Venezuela, which claims its reserves are just above 300 billion barrels,  and also ahead of Saudi Arabia.
Basra Oil Co. pumps most of  Iraq’s oil, accounting for 75 percent of the total. Last year, a company  executive said Basra Oil Co. planned to increase its output to 5  million barrels daily by 2025. Most of the additional production, the  executive said, will come from fields that are operated by international  oil companies, but some will come from BOC-operated projects.

More at: https://oilprice.com/Latest-Energy-N...50000-Bpd.html

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## Swordsmyth

Rachel Notley, Alberta’s Premier, said prices of Canadian crude are  high enough for producers to start gradually ramping up production  again, the Canadian Press reports.
Notley ordered a production cut  of 325,000 bpd, starting this month, to clear excess supply and support  prices, which last year plunged to the deepest discount to West Texas  Intermediate in years, at one point exceeding US$50 per barrel.
The  cuts were to be in place for several months until the inventory  overhang cleared, and then they were to be reduced to 95,000 bpd.  However, Western Canadian Select reacted to the premier’s announcement  even before producers began reducing their output. Prices, in fact, rose  so fast, that some industry observers noted Canadian crude is becoming  less competitive because of the small discount.
Now  that the primary goal of the cuts has been achieved, Notley said  producers could reverse the cuts, boosting their production by a  combined 75,000 bpd in February and March.

More at: https://oilprice.com/Latest-Energy-N...tion-Cuts.html

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## Swordsmyth

India’s top refiner, Indian Oil Corporation, is exploring opportunities  to sign an annual term deal to buy U.S. crude oil, Indian Oil’s chairman  Sanjiv Singh said  on Wednesday, as Indian refiners look to diversify their crude supplies  amid uncertainties over whether they will continue to be allowed to  purchase Iranian oil once the current U.S. sanction waivers expire.

More at: https://oilprice.com/Latest-Energy-N...uy-US-Oil.html

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## Swordsmyth

Global deepwater liquid production is set to jump by 700,000 bpd from  2018 to reach a record-high of 10.3 million bpd in 2019, thanks to new  fields coming on stream in Brazil and the U.S. Gulf of Mexico, research  firm Rystad Energy said on Friday.
In  addition to Brazil and the United States, the other biggest deepwater  producers will be Angola, Norway, and Nigeria, according to Rystad.
For the U.S. Gulf of Mexico, energy consultancy Wood Mackenzie expects  “a historic year” in 2019, with Shell’s Appomattox marking the first  production ever from a Jurassic reservoir in the Gulf of Mexico.  Drilling in the area is also set to post the first increase in four  years and new projects are expected to be sanctioned, according to  WoodMac.
Operators have driven down the cost of developing new deepwater barrels by more than 50 percent since 2013, Wood Mackenzie said in November.
According  to the consultancy’s data and analysis, the most competitive region for  deepwater is the Americas, and in particular Brazil, Guyana, and the  Gulf of Mexico. In those areas, more than 50 billion boe of pre- and  post-sanction deepwater developments are now profitable below an oil  price of US$60 a barrel, based on break-even costs.

The industry has started to increase investments in deepwater after  the downturn, encouraged by the cost cuts and realizing that offshore  resources would be important for meeting demand growth, WoodMac said.
The  consultancy sees global annual capital expenditure (capex) on deepwater  rising to around US$60 billion by 2022 from some US$50 billion  currently, driven by big projects in Guyana, Brazil, and Mozambique.

More at: https://oilprice.com/Energy/Crude-Oi...d-In-2019.html

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## Swordsmyth

OPEC’s crude oil production in January dropped by a massive 890,000  bpd compared to December—the largest monthly decline in the cartel’s  production since January 2017 when the initial production cut deal  began, the monthly Reuters survey found on Thursday.
The  largest production drop in two years came after OPEC’s largest producer  and de facto leader Saudi Arabia, as well as its Gulf Arab allies, cut  deeper than pledged in the new production cut deal effective January 1,  2019. Production declines in the three countries that won exemption from the cuts—Libya,  Iran, and Venezuela—also contributed to the steepest monthly production  drop at OPEC in two years, according to the Reuters survey.
Among  the three exempted producers, Libya’s production and exports have been  disrupted since early December due to port closures courtesy of bad weather as well as security incidents and issues at its largest oil field Sharara, which remains shut-in.  With Venezuela’s crisis deepening, production continues to fall, while  Iran’s oil output also drops as its exports are limited due to the U.S.  sanctions.
According to the survey tracking supply to the market  and based on shipping data and information provided by sources at oil  companies, OPEC’s crude oil production in January was 30.98 million bpd,  down by 890,000 bpd from December 2018.

More at: https://oilprice.com/Energy/Energy-G...Two-Years.html

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## Swordsmyth

EIA’s weekly report showed that U.S. imports from Saudi Arabia fell by  more than half from the previous week to 442,000 barrels per day (bpd).  This is the second lowest level in weekly data going back to 2010.”

More at: https://oilprice.com/Energy/Energy-G...To-The-US.html

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## Swordsmyth

The  flow of foreign labor into the United Arab Emirates is drying up,  leaving the country's leaders to grapple with a tricky balancing act:  How to attract and retain enough workers from abroad to keep its economy  humming without alienating its own citizens.
As it looks to  bolster its labor market, Abu Dhabi has instituted a range of stimulus  plans, visa reforms and business law changes over the past year. But  those solutions risk upsetting Emirati natives, who see extended-stay  expatriates as a threat to their way of life and elevated social status.  Their discomfort opens the door for a historic shift in the country's  generally stable political system.


For decades, foreign expatriates have constituted about 80 percent of  the Emirati population. This is due both to the country's small native  population and its robust economy (relative to those of many of its Arab  Gulf peers), which requires a labor pool that's both much larger and more specialized than what the minority Emirati population can provide.
For  a time, expatriates who met these demands — which include  English-speaking skills and prestigious university credentials — flocked  to the United Arab Emirates on their own accord. This was especially  true during the global financial crisis of 2008-2009 when highly skilled  workers seeking refuge from countries with weakened economies flocked  to Dubai (where about half of the country's jobs reside). But the  factors that once pushed and pulled many expatriates to the country have  largely dried up, causing a drop in its appeal to foreign labor.


The global recovery, for one, means that most workers can find good  jobs and strong economies at home. Recent political events have also  tainted the United Arab Emirates' once placid and safe reputation.  Several high-profile arrests of expatriates and locals have taken place  in the wake of the Arab Spring, the blockade of Qatar and rising strife  between Gulf Arab states and Iran.
But shifts in the Emirati  economy are perhaps most responsible for driving expatriates away. This  includes the recent introduction in January 2019 of value-added taxes  (VAT), plus increased fees for services, a rising cost of living, and  lower or stagnant salaries — all of which have eaten into the paychecks  of foreign workers once lured by the country's promise of low prices and  high incomes.


As its once-reliable supply of expatriates dries up, the labor market  has shown signs of slowing, with stagnating or dropping retail market  prices, a contracting employer index, and dips in both private sector  growth and consumer spending. But Abu Dhabi has fewer tools with which  it can address the economic problems keeping foreign workers away. Not  only does it not want to roll back the revenue-generating VAT taxes and  fees, but it also cannot stop the rise of prices of everyday consumer  goods as the economy develops.
As a result, the government has  instead focused on tackling the logistical barriers to employment that  are more within reach by introducing several labor market reforms over  the past year. Most recently, this included 10-year visas — the longest  in Emirati history — which the government began issuing in January 2019.
In  2018, the government changed its rules to allow retirees with enough  assets to stay in the country past 55 (whereas previously older  expatriates needed special exemptions) and extended the time that  students graduating from its schools and universities could find work to  a year. In addition, the country is now allowing foreign workers to  switch jobs without having to first leave the United Arab Emirates — a  boon to expatriates who found the process of job switching cumbersome.


In theory, foreign workers who once cycled out after only a few years  will now have a greater opportunity to "put down roots" in the United  Arab Emirates — especially those from poorer countries like India,  Pakistan, other parts of the Arab world and the Philippines, who already  make up the majority of country's longest-standing residents. However,  this risks breaking the government's social contract with its native  Emirati community, which has in part long been predicated on expatriates  staying in the country only for a short period.
Native Emiratis —  who have enjoyed generous social welfare packages paid for by the  country's traditionally strong economy since the United Arab Emirates'  independence in 1971 — will see the reforms as a potential demographic  and economic threat to their elevated social status. Those in the less  wealthy northern Emirates, in particular, regularly voice concern about  how the current system allows foreign workers to "take away" their jobs.  This means that the more that visa reforms make expatriates appear like  permanent residents, the more Emirati citizens will pressure their  government to respond.


In the short term, this backlash will likely cause the UAE government  to consider rolling back or amending visa reforms, creating uncertainty  over which changes will remain and which will not. It could also  pressure the government to increase economic subsidies and cultural  privileges, such as cash handouts or the nationalization of certain job  categories, to assure the preservation of Emirati natives' social  status. Neighboring Saudi Arabia has implemented similar measures as part of its own Vision 2030 economic restructuring reforms.
Abu  Dhabi could start implementing measures that formally repress the  expression of foreign cultures as well, like scaling back tolerance for  expatriate holidays such as Christmas, stricter policing of clothing and  behavior in public spaces, and more stringent standards for Emirati  language and culture in private schools.

However, these short-term compromises will likely not go far enough to  fully defuse the growing strains between expatriates and Emirati locals,  opening the potential for more widespread and longer-term political  repercussions. Regardless of whether expatriates actually end up staying  longer, the mere threat of a more permanent foreign population will  continue to deepen divisions between the wealthy emirates of Abu Dhabi  and Dubai in the south and the five poorer emirates in the north.

This could, in turn, affect the functions of the Federal National  Council (FNC), the country's partially elected but otherwise largely  toothless legislative body — and the only federal institution where the  views of the five northern emirates are guaranteed representation.  Pressured by native populations within their emirates, FNC members could  start demanding greater oversight on not only visa rules or processes,  but also other rules and issues unrelated to labor market reform. This  would move the FNC closer to a true federal authority, posing a more  permanent challenge to the country's current political system that for  so long has given generous leeway to Dubai and Abu Dhabi's rulers on  national decisions.

More at: https://worldview.stratfor.com/artic...-term-problems

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## CaptUSA

So, is this the SS Boromir masturbation thread?  No one else has posted in this thread since Pearl Harbor day.  

How much are you getting paid to keep this one afloat??

----------


## Swordsmyth

Even as the US brought sanctions against Venezuela's state-run oil  company, oil prices have slumped over the past week, erasing some of a  January rebound that saw crude prices rebound alongside equities. But  oil bulls who worried that Saudi Arabia and Russia's tandem production  cuts wouldn't be enough to finally wedge a floor under crude prices can  relax: Because if a plan reported Tuesday by the Wall Street Journal pans out, OPEC might recover the price-setting power it is in fear of ceding to the US as the shale boom continues to...well...boom. 

  With the US having cemented its new position as the biggest oil  producer in the world thanks to shale, and President Trump exerting  pressure on Saudi Arabia to drive oil prices lower, WSJ reports that  Saudi Arabia and its Gulf allies in OPEC have proposed a formal alliance  with a 10-nation group of petroleum producers led by Russia - and  alliance that would "transform the cartel" (which has recently suffered  speculation that it has lost its relevance after Qatar announced its plans to leave the bloc).

  However, Iran and some of its allies within the cartel have opposed  the tighter partnership, fearing it could lead to Saudi Arabia and  Russia dominating the organization.
 *The proposal would formalize the loose union between members  of the Organization of the Petroleum Exporting Countries and the group  led by Moscow, which includes some former Soviet republics and other  countries.* The two groups have increasingly worked together in  recent years, including in December when they agreed on a deal to curb  production.
  Iran and other producers have opposed a tighter partnership, fearing  it could be dominated by Saudi Arabia and Russia, according to officials  in the cartel. Riyadh and Moscow are the world’s top two oil exporters.  A Russian energy ministry spokeswoman didn’t respond to a request for  comment.Given that Saudi needs oil back at $80 a barrel to balance its national budget, *the  alliance would likely be geared toward Saudi and Russia achieving the  goal of higher prices. To achieve higher prices, they need more leverage  against the US.*
  To be sure, it's not like this level of collusion between OPEC and  non-OPEC producers would be unprecedented. The two groups have been  increasingly working together in recent years. As recently as December,  the 14-member OPEC and the 10-member bloc led by Russia struck a deal to  cut production in a bid to lift prices after global oil prices shed  more than one-third of their value during the month of October.
  According to a proposal detailed by WSJ, once formalized,* the  deal - which would function like a non-legally-binding, informal  arrangement, wouldn't be all that different than the process that led to  the December agreement.* 
 *In December, the 14-strong OPEC and 10 allies led by Russia  reached a new agreement to tackle an oversupplied global crude market  by cutting production by a combined 1.2 million barrels a day.*
  At the time, the groups put off a final decision on the nature of  their future cooperation. The groups first collaborated in late 2016 to  help oil prices to rebound after a two-year crash. It was Russia’s first  solid alliance with the cartel in decades.
  Under the proposal, *OPEC would continue regular meetings to agree on production and monitor implementation with the Russia-led group,*  according to OPEC officials. Under the current draft document, the  alliance could last up to three years and wouldn’t be legally binding,  one of the OPEC officials said.
  Participants still need to iron out differences, said another OPEC  official. The first cartel official said all sides were likely to end up  agreeing on some arrangement as oil prices could crash without a deal.Still, a more formalized - but still not legally binding - pact faces  some hurdles from wary members of OPEC, because some members of the new  pact would need to run the issue by their Parliaments. And Iran wants  any relationship with producers outside of OPEC to remain as loose as  possible. Ideally, Tehran would want the expanded group to meet as  infrequently as possible - only when a market crisis requires it - and  it would also like all OPEC and non-OPEC members to attend the same  meeting. Oman, meanwhile, would like to limit the number of meetings  with the non-OPEC members.
  Suhail Al Mazrouei, the UAE energy minister, reportedly said that a  long-term pact still faces hurdles (though the current plan would call  for the alliance to last three years).
  Notably, the plan is a compromise between the status quo and a Saudi  and Russia-led proposal that called for the creation of an entirely new  bloc which would have been de facto controlled by the Kingdom and  Russia, which would have been granted full membership. 


More at: https://www.zerohedge.com/news/2019-...lliance-russia

----------


## Swordsmyth

OPEC’s crude oil production plummeted by nearly 1 million bpd from  December to 30.86 million bpd in January, marking the lowest production  for the cartel since March 2015, as Saudi Arabia over-delivered and  members exempted from the reduction pact saw their output further drop,  according to the S&P Global Platts survey.
OPEC’s  production fell by 970,000 bpd from December to January—the month in  which the new production cuts took effect, with Libya, Venezuela, and  Iran exempted. The monthly drop in the cartel’s crude output was the  steepest since December 2016—the month just before the previous round of  cuts began, the Platts survey of shipping data, industry officials, and  analysts showed.
Saudi Arabia’s oil production in January stood at 10.21 million bpd, or 100,000 bpd below its pledged ceiling of 10.311 million bpd, and the lowest Saudi production since May 2018, according to the Platts survey.
The  crude oil exports of OPEC’s largest producer and de facto leader fell  by 500,000 bpd to 7.20 million bpd in January, Platts trade flow data  showed.
Among the members exempted from the cuts, Libya’s  production plunged by 120,000 bpd to 850,000 bpd as its largest oil  field Sharara has been shut in since early December due to security  risks and concerns. Iran, under U.S. sanctions, saw its production drop  by another 80,000 bpd to 2.72 million bpd, while Venezuela’s output fell  10,000 bpd to 1.16 million bpd. Sources at PDVSA have told Platts that  as of this month Venezuela’s production is expected to plunge because  under the new U.S. sanctions, Venezuela will not be able to import U.S.  naphtha to dilute its heavy crude grades. 

More at: https://oilprice.com/Energy/Crude-Oi...arch-2015.html

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## Swordsmyth

Baker Hughes reported an increase in the number of active oil and gas rigs in the United States this week.
The  total number of active oil and gas drilling rigs rose by 4 rigs,  according to the report, with the number of active oil rigs increasing  by 7 to reach 854 and the number of gas rigs decreasing by 3 to reach  195.
The oil and gas rig count is now 74 up from this time last year, 63 of which is in oil rigs.


The EIA’s estimates for US production for the week ending February 1 shows an increase at an average rate of 11.9 million bpd*—a record for the US—for the fourth week in a row.

More at: https://oilprice.com/Energy/Energy-G...Stabilize.html

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## Swordsmyth

Legislation targeting OPEC is suddenly gaining steam in the U.S. Congress, raising alarm bells for the cartel.
On  Thursday, the House Judiciary Committee passed a bill that would allow  the U.S. Justice Department to sue members of OPEC for manipulating the  oil market. The so-called “NOPEC” bill would remove sovereign immunity,  exposing member countries to antitrust regulation.
The bill has  appeared in the past under prior administrations. But previous  presidents from both political parties have opposed taking punitive  action, fearing damage to the U.S.-Saudi relationship.
Times have  changed. President Trump has repeatedly posted angry tweets about OPEC,  blaming it for high gasoline prices. That led to a revived push for the  NOPEC legislation. The murder of Saudi journalist Jamal Khashoggi may  have also been a turning point, erasing a lot of goodwill for Saudi  Arabia in Washington.
In theory, OPEC members could face  confiscation of their assets in the United States. Saudi Aramco, for  instance, controls Motiva Enterprises, which owns the largest oil  refinery in the country in Port Arthur, Texas.
According to the Financial Times,  the prospect of the NOPEC bill becoming law has raised alarm bells not  just for OPEC, but also for international oil companies who fear  reprisals abroad. Companies like ExxonMobil and BP have major stakes in  projects in places like Nigeria and Iraq. These OPEC-member countries  could retaliate if they face punitive action from the U.S. government.  The FT reports that the oil majors, along with the American Petroleum  Institute and the U.S. Chamber of Commerce, are lobbying against the  NOPEC legislation.
Analysts speculate that Qatar exited OPEC in  2018 not just because of its rivalry with Saudi Arabia, but also because  it has major interests in the U.S., and does not want to face antitrust  action. Qatar Petroleum, along with ExxonMobil, just gave the final investment decision for the $10 billion Golden Pass LNG project in Texas. 

Senator Chuck Grassley, a Republican, has proposed a companion bill  in the Senate. “The oil cartel and its member countries need to know  that we are committed to stopping their anti-competitive behaviour,”  Grassley said. Across the aisle, Sen. Amy Klobuchar of Minnesota, also  representing a state with significant ethanol interests, came out in  support of the bill.“Given President Trump’s known hostile stance  towards OPEC it now looks like a very good chance that the bill will be  voted through,” Bjarne Schieldrop, chief commodities analyst at SEB,  said in a statement. “The prospect of a passage of NOPEC legislation has  added bearish pressure to Brent crude.”
It is still too early to  say with any certainty, but if the NOPEC legislation were to become law,  it could theoretically make it much more difficult for OPEC to set  production limits with the aim of achieving certain price targets. It  could also put in jeopardy  the formalization of the OPEC/non-OPEC alliance with Russia, the  so-called OPEC+ arrangement. OPEC and the non-OPEC group led by Moscow  are currently negotiating such an entity. 

More at: https://oilprice.com/Energy/Energy-G...n-On-OPEC.html

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## Swordsmyth

Saudi Arabia’s King Salman has approved a plan to ease levies businesses pay on foreign workers to help revive economic growth.Authorities  will exempt some companies from paying the 2018 fees or reimburse those  that have already paid, according to the official-Saudi Press Agency.  To qualify for the aid, businesses need to have made strides in hiring  more Saudi nationals.
The  fees were introduced in 2018 as part of a drive to increase non-oil  government revenue -- a key goal of Crown Prince Mohammed bin Salman’s  economic transformation plan -- but have drawn fire from business owners  in a country accustomed to cheap foreign labor. They’ve contributed to  the exodus of hundreds of thousands of expatriate workers, hitting the  already-struggling economy without making much of a dent in Saudi  unemployment.
The  government has allocated 11.5 billion riyals ($3.1 billion) for the  plan, according to SPA. It aims to encourage companies that haven’t done  enough to expanded their Saudi work force enough.
About 350,000 companies would benefit from the decision, Al Eqtisadiah newspaper reported, citing people it didn’t identify.

https://finance.yahoo.com/news/saudi...075236821.html

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## Swordsmyth

South Sudan is looking to pump more than 350,000 bpd of oil by the  middle of next year, compared to current production of 140,000 bpd,  South Sudan’s Oil Minister Ezekiel Lul Gatkuoth told Reuters on the sidelines of a conference in India.

By the end of this year, South Sudan expects its oil production to  nearly double from the current 140,000 bpd to 270,000 bpd, minister  Ezekiel Lul Gatkuoth told Reuters. By the middle of 2020, the country  aims to restore production to the pre-civil war levels, he noted.

“We used to produce 350,000 to 400,000 bpd. We expect to go back to  those levels by the middle of next year,” Gatkuoth told Reuters.

More at: https://oilprice.com/Latest-Energy-N...-Mid-2020.html

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## Swordsmyth

Rosneft’s chief executive Igor Sechin wants Russia to quit its production control deal with OPEC, Reuters reported  last week, citing sources that have seen a letter Sechin wrote to  President Putin. According to the sources, Sechin sees the OPEC deal as a  threat to Russia that benefits the United States, but the likelihood of  his opinion leading to a pullout from the deal is limited.
Sechin  is one of the closest allies of Putin and one of the most powerful  figures in Russian politics. As Forbes’ Kenneth Rapoza wrote  last year, many politicians and big business executives seem willing to  face Putin on a bad day. Less so are those willing to face Rosneft’s  chief. What’s more, Sechin is not the only one unhappy with the OPEC  deal.
“The letter is a threat to the deal extension. But anyway,  Putin is the ultimate decision maker,” one of the Reuters sources said.  The perspectives of Russia’s President and the biggest players in its  oil industry may differ here. For Putin, the OPEC deal is really a  geopolitical tool rather than a tool for raising oil prices. Russia does  not need prices higher. In fact, if they go too high, they will hurt  the Russian economy. For the oil industry, however, it’s about the oil  and the markets more than it is about geopolitics.

More at: https://oilprice.com/Energy/Energy-G...OPEC-Deal.html

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## Swordsmyth

In an interview with the Financial Times  published on Tuesday, Saudi Arabia’s Energy Minister Khalid al-Falih  said that the Saudis would cut production to around 9.8 million bpd in  March, some 500,000 bpd below the commitment in the OPEC+ deal that  began in January.
Under the  OPEC/non-OPEC deal for a total of 1.2 million bpd cuts between January  and June, Saudi Arabia’s share is a cut of 322,000 bpd from the October  level of 10.633 million, to reduce output to 10.311 million bpd.
At the end of January, al-Falih said that Saudi Arabia’s February crude oil production would likely be close to 10.1 million bpd,  down from around 10.2 million bpd for January. Since December, Saudi  Arabia has cut close to 1 million bpd in production and exports, and  this “will trickle down the markets over the next few weeks,” al-Falih  told Bloomberg Television in an interview at the end of last month.
In  his most recent interview, with the FT, the energy minister of OPEC’s  largest producer and top global oil exporter also said that Saudi Arabia  would be cutting its crude oil exports to near 6.9 million bpd next  month, slashed from 8.2 million bpd just three months ago.

More at: https://oilprice.com/Latest-Energy-N...roduction.html

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## Swordsmyth

OPEC’s biggest producer Saudi Arabia would need oil prices at  US$80-85 per barrel in order to balance its 2019 budget, Jihad Azour,  Director of the Middle East and Central Asia Department at the  International Monetary Fund (IMF), has told Reuters.  
Saudi  Arabia’s officials, including Energy Minister Khalid al-Falih, don’t  discuss publicly ‘targeted oil prices’ or a desired level of oil prices  that would be comfortable to the Kingdom’s finances, but analysts and  the IMF have estimates what oil price level would be enough to cover  Saudi Arabia’s budget spending.  
For this year, “if you take the  (2019) budget as presented with everything remaining equal, a breakeven  point would be around $80-$85 dollars,” the IMF’s Azour told Reuters.
The  oil price slump in the fourth quarter of 2018 has certainly affected  the public finances of the biggest oil exporting nations, including  OPEC’s biggest, Saudi Arabia.  
Although Azour doesn’t see the  price slump affecting the Kingdom’s ability to finance itself, he  expects that those lower prices would weigh on the fiscal position of  Saudi Arabia.
For this year, the Kingdom announced its highest-ever budget,  of around US$295 billion (1.1 trillion Saudi riyals). This breaks the  previous record set in 2018, with budget spending at US$261 billion and  it might spark concerns about the economy’s sustainability as the  increase for 2019 includes a hefty bill for cost-of-living allowances  introduced last year.
Last month, the IMF slashed its forecast  for Saudi Arabia’s economic growth this year to 1.8 percent, down by  0.6 percentage point from the previous economic outlook in October, due  to lower oil prices and lower oil production growth.
The IMF sees  growth in Saudi Arabia for 2019 at 1.8 percent, compared to 2.4 percent  expected last October, while it lifted its 2020 economic growth forecast  by 0.2 percentage point from October to 2.1 percent.

https://oilprice.com/Latest-Energy-N...19-Budget.html

----------


## Swordsmyth

Undeterred by the prospect of peak oil demand, Saudi Arabia is betting its long-term future on oil.
Not  only is Saudi Arabia pouring investment into lifting oil production  capacity at home, but it may even, for the first time, venture abroad in  order to grow its oil business. “We are no longer going to be  inward-looking and focused only on monetising the kingdom’s resources,”  Saudi oil minister Khalid al-Falih told the Financial Times in an interview. “Going forward the world is going to be Saudi Aramco’s playground.”
Saudi  Arabia’s oil reserves are so vast that Aramco has not really needed to  look abroad for oil. At over 260 billion barrels, Saudi reserves are  second only to Venezuela, although much cheaper to produce.
In  recent years, Saudi Arabia has had two somewhat contradictory  strategies. On the one hand, Aramco has stepped up investment in both  oil and gas, hoping to increase capacity in the years ahead. The  projects were intended not only to offset depletion at aging fields, but  also to increase spare capacity. Heavy investment would ensure Aramco’s  – and the country’s – dominance in the oil market for years to come.
At  the same time, crown prince Mohammed bin Salman laid out an ambitious  economic transformation agenda to diversify the Saudi economy away from  oil. That involved growing the private sector, and using proceeds from  the Aramco IPO to make a down payment on a new economy. 

MbS’ vision has largely stalled out, and his so-called domestic  reforms have papered over a tightening dictatorial grip. Meanwhile, his  adventures abroad – the war in Yemen, the blockade of Qatar, and the  slaying of Saudi journalist Jamal Khashoggi – have tarnished his  once-glittery image. The darling of the west until only recently, MbS squandered his (arguably unjustified) goodwill.
Now  MbS’ much-hyped “Vision 2030” is in tatters. The Aramco IPO was  delayed, in part because top Saudi officials fear it would open up the  company to too much scrutiny. The Wall Street Journal reported earlier this month that it might never happen.
Instead,  Saudi Arabia is going right back to its pre-MbS roots. Rather than  diversifying, Saudi Arabia is going to look abroad for more oil. When  asked by the FT if Saudi Aramco is looking to become an international  player like ExxonMobil or Shell, al-Falih responded: “Correct.”

The first item of business will be to create a “global gas” business.  The FT noted that Aramco has discussed major investments in Russian and  American LNG projects, while al-Falih mentioned Australia as a  possibility.
Aramco is also making a major bet on petrochemicals.  Aramco is expected to turn to the bond markets to help pay for a $70  billion stake in Sabic, the Saudi petrochemical company.
In other  words, the economic transformation plan for the Saudi economy,  envisioned by MbS, is starting to look not all that transformational.  Saudi Arabia is hitching its wagon to oil and gas for decades to come.  To be sure, the slight pivot into gas and petrochemicals is a strategy  that not just Aramco is pushing. The oil majors, too, see gas and  petrochemicals as a safer long-term bet than simply crude oil as peak  demand nears. 

Nevertheless, doubling-down on oil and gas is ultimately an existential  bet on the world not moving on from fossil fuels. The Saudi budget  breaks even with crude oil north of $80 per barrel. Brent has traded  below that threshold for most of the last five years. Oil prices could  certainty rebound above that level, but only the most bullish  forecasters believe Brent will consistently trade above $80 in the years  ahead.

More at: https://oilprice.com/Energy/Energy-G...et-On-Oil.html

----------


## Swordsmyth

Baker Hughes reported an increase in the number of active oil and gas rigs in the United States this week.
The  total number of active oil and gas drilling rigs rose by 2 rigs,  according to the report, with the number of active oil rigs increasing  by 3 to reach 857 and the number of gas rigs decreasing by 1 to reach  194.
The oil and gas rig count is now 76 up from this time last year, 59 of which is in oil rigs.

The EIA’s estimates for US production for the week ending February 8  shows that US producers are holding their production rates fast at an  average rate of 11.9 million bpd*—a record for the US—for the fifth week in a row.

More at: https://oilprice.com/Energy/Energy-G...ices-Hold.html

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## goldenequity



----------


## Swordsmyth

OPEC will likely wait until June to decide how to proceed with the  production cuts as the initially set date for review, April, could be  too soon to assess how the cuts and the supply from exempted and  sanctioned Iran and Venezuela would affect the oil market, Reuters reported on Monday, citing three OPEC sources.  

The key factors that OPEC will be watching in the next two months are  how tight supply from Iran and Venezuela would be, considering that the  current U.S. waivers expire in early May, while Venezuela’s production  and exports are likely to further drop in the coming months as the  political crisis there continues.
As things stand now, OPEC is  likely to defer the decision from April to June and the likely scenario  is to extend the agreement, the OPEC sources tell Reuters.
“So far  the likely decision is to extend the agreement in June. Nothing much is  planned for April, just to discuss the OPEC and non-OPEC (cooperation  pact),” one OPEC source told Reuters.

More at: https://oilprice.com/Latest-Energy-N...l-To-June.html

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## goldenequity

> ....to assess how the cuts and the supply from exempted and  sanctioned Iran and Venezuela would affect the oil market.


Russian oil imports surge in the U.S.

https://twitter.com/c_sesin/status/1103006274852212736

----------


## Swordsmyth

Libya’s largest oil field, Sharara, is back in operation after almost three months of suspension, the Wall Street Journal reports, citing unnamed sources familiar with the situation.
The  field was originally closed for production in December, when clashes  between militant groups forced the National Oil Corporation of Libya to  institute a force majeure, which was only lifted yesterday.
The groups that occupied Sharara in early December with demands for better economic conditions and power supply security. The occupation  lasted until early February, when the Libyan National Army, a group  affiliated with the eastern Libyan government, took control of the  field. The force majeure remained in place as the NOC refused to yield  to demands for payments, arguing this would set a dangerous precedent.
Then,  however, the LNA faced the Petroleum Facilities Guard, an old adversary  and a group loyal to the UN-recognized Libyan government. The situation  was resolved only last week with mediation from the United Arab  Emirates.
According to NOC’s chairman, Mustafa Sanalla, the  three-month blockade of the field had cost it US$1.8 million and 20,000  bpd in lost production capacity as a result of vandalism and looting.


More at: https://oilprice.com/Latest-Energy-N...uspension.html

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## Swordsmyth

Companies in the United Arab Emirates have hit a 10-year high for job  cuts as the country's struggling economy continues to negatively affect  the non-oil private sector, Bloomberg reported March 5.

More at: https://worldview.stratfor.com/situa...h-10-year-high

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## Swordsmyth

https://twitter.com/asghamdi/status/1103596164811759619

----------


## Swordsmyth

U.S. Congress should debate whether to reduce the emergency crude oil  stored in the Strategic Petroleum Reserve (SPR), because America’s oil  production boom has diminished its reliance on imports, U.S. Secretary  of Energy Rick Perry said at a Senate hearing on Tuesday.
“Do  we need that big of a reserve, particularly with the growth of the  pipeline infrastructure we have and the growth in that infrastructure  that’s going to occur over the next decade?” Reuters quoted Secretary  Perry as saying at a hearing before the U.S. Senate Committee on Energy  and Natural Resources.


As of March 29, 2019, the SPR held a total of 649.1 million barrels of crude oil, including 254.6 million barrels of sweet crude and 394.5 million barrels of sour crude oil.
The current storage capacity of the SPR is 713.5 million barrels.
The SPR was set up in the 1970s when the Arab oil embargo created a fuel crisis in the United States.
According  to Secretary Perry, the world has changed a lot since the emergency  reserve was created, with the U.S. now the world’s top oil producer.  Therefore, Congress should consider what the proper size of the reserve  should be and whether the administration should rent part of the storage  capacity to private companies, Secretary Perry said.  
In February, the U.S. Department of Energy said that it planned to sell up to 6 million barrels of crude oil from the SPR, with deliveries taking place in April and May.

More at: https://oilprice.com/Latest-Energy-N...m-Reserve.html

----------


## Swordsmyth

Over-delivering Saudi Arabia and blackouts in Venezuela helped push  OPEC’s crude oil production down by 570,000 bpd from February to 30.23  million bpd in March—the lowest production from the cartel in more than  four years, according to the monthly S&P Global Platts survey published on Friday.
OPEC’s  de facto leader and biggest producer, Saudi Arabia, saw its production  drop in March to the lowest level since February 2017. The Saudis  delivered on their promise to cut more than pledged in the pact and  slashed output by another 280,000 bpd last month, with March production  at 9.87 million bpd, according to the S&P Global Platts survey.
Venezuela,  for its part, saw its production drop to a 16-year-low, at 740,000 bpd,  due to the massive blackouts that crippled oil production and exports  in March, the Platts survey found.
OPEC’s second-biggest producer  Iraq cut its production by 100,000 bpd from February to 4.57 million bpd  in March, according to the survey. This, however, was still slightly  above Iraq’s 4.512 million bpd production cap under the deal.
After  an initial plunge following the U.S. sanctions on its industry, Iran’s  production has been holding relatively steady over the past couple of  months, and the Islamic Republic pumped 2.69 million bpd in March, the  Platts survey showed.

The resumption of operations at Libya’s biggest oil field, Sharara,  pushed Libya’s production up to 1.06 million bpd in March, according to  the survey.

More at: https://oilprice.com/Energy/Crude-Oi...-Year-Low.html

----------


## Swordsmyth

The the number of active oil and gas rigs rose by 19 after two weeks  of big losses in the United States this week according to Baker Hughes,  in a sign that US production is still set for increases.
The total  number of active oil and gas drilling rigs rose by 20 rigs* according  to the report with the number of active oil rigs gaining 15 to reach 831  and the number of gas rigs gaining 4 to reach 194.
The oil and  gas rig count is now just 22 up from this time last year, with oil  seeing just a 23-rig increase year on year, gas rigs holding flat, and  miscellaneous rigs seeing a 1-rig decrease for the year.

Despite the drop off in the number of active rigs, US crude oil production for week ending March 29 was 12.2 million barrels—another new all-time high.

More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

----------


## Swordsmyth

Saudi Aramco, the national oil company of Saudi Arabia, is by far the  largest oil company in the world. The company produces around 13  percent of the world’s oil, but its business operations have been  notoriously opaque for decades. It has often been stated that the  company has plenty of low-cost legacy wells that drop its overall  production costs to $10 per barrel, or even lower.
Because there  was no way to audit this information, the world was left to guess at the  actual breakeven costs for the world’s largest oil company. This week  Saudi Aramco lifted the veil on its financial condition in a bond  offering for the company. (PDF link here).
There  are many important financial details in the filing. The company is  indeed the world’s most profitable, earning $111 billion on $356 billion  in revenue in 2018. This is nearly double the $59.4 billion made by  Apple, the world’s second-most profitable company, in 2018. It’s also  over five times the $20.8 billion made by ExxonMobil last year.
Bloomberg  points out that Aramco’s “funds flow from operations” was $26 per  barrel last year, which they note was worse than Shell or Total which  reported $38 and $31, respectively.
However, I found the most  significant item in the prospectus to be that Saudi Aramco struggled to  break even in 2016 when Brent crude averaged about $45 per barrel. Net  income in 2016 was only $13 billion, and free cash flow a mere $2  billion. Contrast that with the $111 billion in income and $86 billion  in free cash flow the company made in 2018 (when Brent crude averaged  $71.34/bbl), and it looks like Aramco’s breakeven price is just about  $40/bbl. 

No wonder OPEC threw in the towel in 2016 and decided to abandon its  price war with U.S. shale. OPEC’s largest member saw its income dry up  and was on the verge of posting a loss if oil prices didn’t turn around.

More at: https://oilprice.com/Energy/Energy-G...ven-Price.html



And it has to be MUCH higher to support the Saudi regime's hold on power.

----------


## Swordsmyth

A senior Russian official has suggested Russia will press for an end  of the OPEC+ production cuts after the end of June when the original  agreement expires, Reuters reports.
Kiril  Dmitriev, head of the country’s direct investment fund, has been a  staunch supporter of the OPEC+ cooperation since the beginning, which  makes his latest remarks all the more significant.
“It is quite  possible that given the improving market situation and falling stocks,  (OPEC and its allies) could decide in June this year to abandon supply  cuts and subsequently increase output,” Reuters quoted Dmitriev as  saying.
“This decision will not  mean the end of the deal but a confirmation that participants continue  their coordinating efforts when it is important not only to cut but to  increase output depending on market conditions,” the official added in  keeping with his original stance on the partnership between the cartel  and Russia.
Meanwhile, Saudi Arabia’s Energy Minister also had comments to make about the agreement: Khalid al-Falih told  media it was too early to say whether the agreement would be extended  beyond the end of June, adding that next month would be crucial for  where OPEC+ would go in the second half of the year.
“JMMC will be  a key decision point because we will certainly by then know where the  consensus view is and, more importantly, before we ask for consensus, we  will know where the fundamentals are pointing,” he said.

More at: https://oilprice.com/Latest-Energy-N...fter-June.html

----------


## Swordsmyth

OPEC’s crude oil production dropped by more than 500,000 bpd month on  month in March, to the lowest since February 2015, as Saudi Arabia  followed through its commitment to cut deeper than pledged and  Venezuela’s crisis, sanctions, and blackouts hit its supply harder than  in previous months.
In its closely-watched Monthly Oil Market Report,  OPEC said on Wednesday that its secondary sources’ estimates point to  total OPEC-14 crude oil production averaging 30.02 million bpd in March,  down by 534,000 bpd from February, and the lowest since the February 2015 production of below 30 million bpd.   
OPEC’s  de facto leader and largest producer Saudi Arabia followed through its  commitment from February to cut deeper and pump well below 10 million  bpd. Saudi Arabia’s crude oil production dropped by a massive 324,000  bpd from February to stand at 9.794 million bpd in March—just as Saudi  Energy Minister Khalid al-Falih had said the Kingdom would do and pump  around 9.8 million bpd in March, some 500,000 bpd below the 10.311-million-bpd commitment in the OPEC+ deal.
An  OPEC member exempt from these production cuts, Venezuela, contributed  inadvertently to the cartel’s mission to reduce global oil supply.  Venezuela’s crude oil production plunged by 289,000 bpd to below 1  million bpd—to 732,000 bpd in March, according to OPEC’s secondary  sources.


Elsewhere, the cartel’s second-largest producer Iraq also slashed  production considerably, by 126,000 bpd to 4.522 million bpd according  to OPEC’s secondary sources—nearly falling in line with its OPEC+ quota  of 4.512 million bpd.
Production in Iran, under U.S. sanctions and  exempted from OPEC’s cuts, dropped by 28,000 bpd to 2.698 million bpd,  while the third member exempted from the deal, Libya, saw its production  rise by 196,000 bpd to 1.098 million bpd in March after its biggest oil  field, Sharara, returned to operations last month.
Projecting  global oil demand in this month’s report, OPEC revised down its oil  demand growth estimate to around 1.21 million bpd from 1.24 million bpd  in last month’s report, saying that “this is due to slower-than-expected  economic activity compared with the expectations of a month earlier.”  

More at: https://oilprice.com/Energy/Crude-Oi...ns-Market.html

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## Swordsmyth

OPEC and its allies in the production cut deal are committed to rebalancing the market and will not repeat  last year’s preemptive production increase to offset expectations of  oil supply losses, Suhail Al Mazrouei, the energy minister of the United  Arab Emirates (UAE), said on Wednesday.
“I think we have learned  the lesson. We will do what is required to balance the market. We are  not going to jump the gun, pre-produce the volumes that are not required  yet,” the UAE’s The National quoted Al Mazrouei as saying at the  Bloomberg Invest Abu Dhabi conference today.

More at: https://oilprice.com/Latest-Energy-N...-Mistakes.html

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## goldenequity



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## Swordsmyth

Saudi Arabia has increased its official selling prices for all crude oil grades  for Asian buyers with delivery in June as a supply crunch resulting  from U.S. sanctions on Iran and Venezuela opens an opportunity to boost  revenues.
Bloomberg reports the price for Arab Light  with a June delivery date is now the highest in almost a year, with  Arab Medium selling at the highest price since the end of 2013, and Arab  Heavy at a six-year high. Heavy grades are in particularly great demand  among Asian refiners and supply is falling because of Venezuela’s  continued production decline and political woes that are aggravating the  situation.


According to a Reuters update,  Saudi Arabia’s Arab Light for June delivery sells at a premium of  US$2.10 per barrel to the Oman/Dubai average, up by US$0.70 per barrel  from cargoes for May delivery. Riyadh also raised the price of this most  popular among its grades for Europe, by US$0.80 a barrel from the price  of shipments for May delivery. The price for oil exports to the United  States, however, was reduced.

More at: https://oilprice.com/Energy/Oil-Pric...unch-Hits.html

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## Swordsmyth

*Shale production in West Texas continues to boom* -  so much so that shale oil and gas producers in the Permian Basin have  more than they know what to do with. As production continues to outpace  the expansion of sorely needed pipeline infrastructure,* local operators in the Permian are letting approximately 104 billion cubic feet of natural gas go to waste each year by flaring*, what is essentially just burning the gas away, instead of putting it on market.

*For many producers in the Permian, this has led to diminishing profits.* One  such company is Houston-based oilfield service company Baker Hughes.  The company’s first quarter profit also took a nosedive, clocking in at  $32 million--less than half of its profits for the same period a year  earlier, when Baker Hughes reported a profit of $70 million. On top of  this major decline in profits, last month the company “ reported  negative free cash flow for the first quarter at a time energy investors  have been pushing companies to aggressively shore up capital for  dividends and buybacks, sending its shares down as much as 8.5 percent”  according to Reuters.
*However, despite these dismal numbers, things are looking up for Baker Hughes.* CEO  Lorenzo Simonelli told investors in a call on Tuesday that he sees all  of the burned off natural gas wasted by his company and so many others  as a byproduct of their oil drilling as a major business opportunity. *The  company is debuting a new, cutting-edge technology that will harness  this otherwise wasted gas to power their hydraulic fracturing equipment  in the Permian Basin in West Texas.*

  Simonelli announced to investors this week that his company will be *forging  a new path in fracking by introducing a revolutionary fleet of  “electric frack” turbines that will “use excess natural gas from a  drilling site to power hydraulic fracturing equipment — reducing  flaring, carbon dioxide emissions, people and equipment in remote  locations”* according to reporting by the Houston Chronicle.  During a Tuesday call with investors Simonelli characterized the new  strategy as an across-the-board win for their customer base, saying,  “We’re solving some of our customers’ toughest challenges such as  logistics, power and reducing flare gas emissions with products from our  portfolio.”
  One of these logistical sticking points concerns the high volumes of diesel required to power hydraulic fracking rigs.
 _“Electric frack enables the switch from diesel-driven to  electrical-driven pumps powered by modular gas turbine generating  units,”_ Simonelli told investors on this week’s call.
  “This alleviates several limiting factors for the operator and the  pressure pumping company such as diesel truck logistics, excess gas  handling, carbon emissions and the reliability of the pressure pumping  operation.”According to the Baker Hughes’ research as reported by the Houston Chronicle, *most standard hydraulic fracturing fleets are powered with diesel engines mounted on trailers.*  Each of these fleets--an estimated 500 approximately, spread across  shale basins in the United States and Canada--use up over 7 million  gallons of diesel each year, supplied by 700,000 tanker truck loads  which have to be transported to the often-remote shale basins, resulting  in an average 70,000 metric tons of carbon dioxide emissions. This  poses a major problem, not just environmentally, but all for Baker  Hughes specifically, seeing as the company has pledged to  halve their carbon dioxide emissions by 2030 and achieve the even  loftier goal net-zero carbon dioxide emissions by the year 2050.
*These new “electric frack” turbines are a good start.* The  approximately 500 traditional diesel-powered hydraulic fracking fleets  scattered across the U.S. and Canada consume about 20 million horsepower  of energy altogether according to calculations by Baker Hughes. This  means that there is a massive market--about 15 gigawatts--for  electricity generated by using the new gas-fired turbines. Instead of  adding new carbon emissions these turbines will be powered with gas that  is currently being burned off anyway instead of adding diesel emissions  on top of the carbon dioxide from those flares.
*To date, eight of these groundbreaking “electric frack”  fleets have been deployed in the Permian Basin, but if they are as  successful as Baker Hughes seems to think they will be, we can expect a  lot more in a hurry.*


https://www.zerohedge.com/news/2019-...e-over-permian

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## Swordsmyth

BP, the biggest oil producer in the U.S. Gulf of Mexico, has just  announced that it is expanding the development at one of its fields,  unlocking additional production from its offshore U.S. platforms, while  the American supermajors look to significantly boost their output from  the hottest shale play, the Permian.
Nearly a decade after the  2010 Deepwater Horizon disaster, BP bets big on the Gulf of Mexico to  grow its global production of ‘high-margin oil’, as its executives say.


To be sure, BP has recently secured shale assets in the  United States after buying last year oil and gas assets in the Permian,  the Eagle Ford, and Haynesville from BHP in what the UK supermajor  described as a “transformational acquisition” and one of its biggest deals in the past two decades.  
But  BP is not putting all its eggs in one (shale) basket. It continues to  expand its Gulf of Mexico deepwater production, which requires a lot of  upfront investment but which—once operational—can produce a steady  stream of oil for years and decades to come, unlike shale production  where well productivity declines over time.
So BP believes that it  is worth it to pay the hefty upfront cost for future deepwater  production in the ‘high-margin’ Gulf of Mexico.
On Monday, the company announced  that it had sanctioned development of the Thunder Horse South Expansion  Phase 2 project in the deepwater Gulf of Mexico. BP will add two new  subsea production units two miles to the south of the existing Thunder  Horse platform with two new production wells in the near term. The  project is expected to add an estimated 50,000 gross barrels of oil  equivalent per day (boe/d) of production at its peak at the existing  Thunder Horse platform, with first oil expected in 2021, BP said. 

BP expects its Gulf of Mexico production to reach some 400,000 boe/d  by the mid-2020s. Since 2013, BP’s production in the region has risen  from 200,000 boe/d to more than 300,000 boe/d at present.
BP didn’t reveal how much the latest expansion would cost, but according to The Times, the Thunder Horse investment is likely to be somewhere around the US$1.3 billion Atlantis Phase 3 development in the Gulf of Mexico, expected to add 38,000 boe/d at its peak and to come online in 2020.

At the time when BP announced the Atlantis Phase 3 development in  January this year, it also said that thanks to advanced proprietary  seismic imaging and reservoir characteristics analysis, BP has now  identified an additional 1 billion barrels of oil in place at its Thunder Horse field, and an additional 400 million barrels of oil in place at the Atlantis field.

Although it can’t compare with the Permian in terms of growth, total  oil production in the U.S. Gulf of Mexico rose to a record last year.
In  the federal Gulf of Mexico, crude oil production increased by 61,000  bpd in 2018 to a record annual average of 1.74 million bpd, the EIA said  last month. Producers brought online 11 projects last year, while  another eight are expected to come on stream this year. The Federal Gulf  of Mexico was the second-largest producing region in the U.S. in 2018,  after Texas.  

More at: https://oilprice.com/Energy/Crude-Oi...ase-Shale.html

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## Swordsmyth

Iraq will soon finalize a large-scale, long-term deal for the  development of oil fields in the South with Exxon and PetroChina. The  30-year contract will involve investments of US$53 billion and potential  returns for Baghdad of as much as US$400 billion over its lifetime,  Prime Minister Adel Abdul Mahdi told media this week.
The  deal has been in the making for four years and will involve the  development of two oil fields in southern Iraq—Nahr Bin Umar and  Artawi—and the construction of water supply infrastructure to southern  fields in order to keep their production steady. As a result of the  project, the combined production of Nahr Bin Umar and Artawi should hit  half a million barrels of oil daily, from 125,000 bpd today.

As part of the deal, besides boosting production at Nahr Bin Umar and  Artawi, Exxon and PetroChina will build several new export pipelines  from southern fields to the coast, and develop a water injection project  for the southern fields. Another part of the deal is the production and  processing of up to 100 million cu ft of natural gas from the two  fields.

More at: https://oilprice.com/Energy/Energy-G...-Oil-Deal.html

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## ATruepatriot

> Iraq will soon finalize a large-scale, long-term deal for the  development of oil fields in the South with Exxon and PetroChina. The  30-year contract will involve investments of US$53 billion and potential  returns for Baghdad of as much as US$400 billion over its lifetime,  Prime Minister Adel Abdul Mahdi told media this week.
> The  deal has been in the making for four years and will involve the  development of two oil fields in southern IraqNahr Bin Umar and  Artawiand the construction of water supply infrastructure to southern  fields in order to keep their production steady. As a result of the  project, the combined production of Nahr Bin Umar and Artawi should hit  half a million barrels of oil daily, from 125,000 bpd today.
> 
> As part of the deal, besides boosting production at Nahr Bin Umar and  Artawi, Exxon and PetroChina will build several new export pipelines  from southern fields to the coast, and develop a water injection project  for the southern fields. Another part of the deal is the production and  processing of up to 100 million cu ft of natural gas from the two  fields.
> 
> More at: https://oilprice.com/Energy/Energy-G...-Oil-Deal.html


Goes to show that when it comes to big oil money there are no National loyalties. Never was throughout history.

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## Swordsmyth

Saudi officials have signaled the kingdom *plans to meet all orders from former buyers of Iranian oil* *for the month of June*. US Energy Secretary Rick Perry confirmed in statements made Tuesday  that OPEC's de facto leader Saudi Arabia would increase its oil  production to make up for choked supply resulting from US sanctions  efforts that aim to bring Iran's crude exports "down to zero".
  However, Azerbaijan’s oil minister said the Saudis informed him that  no firm decisions would be made on production levels for the whole year  in unilateral fashion; instead, Riyadh plans to seek backing for any  extreme measures during OPEC's June meeting at the oil cartel's  headquarters in Vienna, Austria - where future production policy will be  hashed out. 
  This has left many asking the obvious question: *will Iran soon pull out of OPEC altogether?* It appears we'll soon find out after OPEC's June meeting.


According to the details from Bloomberg:
 Saudi Arabia plans to meet all the requests for oil purchases it has  received for June, notably from countries that had to stop buying  Iranian crude because of the recent U.S. sanctions.
  The world’s biggest oil exporter has *received moderate requests from customers for shipments next month, including from former buyers of Iran’s oil*,  according to a Persian Gulf person familiar with Saudi plans, who asked  not to be identified because the matter is confidential.And further, based on an official familiar with Saudi plans:
 Saudi oil production for June is expected to remain below the quota  set for the kingdom under an agreement by OPEC and allies limiting  output until the end of next month, the person said. Saudi Arabia, which  pumped about 9.8 million barrels a day in March and April, has an OPEC  quota of 10.311 million barrels.
  The kingdom will continue to export less than 7 million barrels a day in June, the person said.


More at: https://www.zerohedge.com/news/2019-...llapse-lingers

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## Swordsmyth

Russia’s crude oil production averaged 11.16 million bpd in the first twelve days of May, Reuters reported  on Monday, citing two industry sources, which means that Moscow is  finally within its cap under the OPEC+ deal, although the decline in  production may have been the result of restricted exports via the  Druzhba oil pipeline due to a contamination issue.
As part of the  OPEC+ production cuts between January and June, Russia is taking the  lion’s share of the non-OPEC cuts and pledged to reduce production by 230,000 bpd from October’s post-Soviet record level of 11.421 million bpd, to 11.191 million bpd.
Russia’s  crude oil production stood at around 11.24 million bpd in the first  half of April, meaning that the leader of the non-OPEC group part of the  OPEC+ deal had yet to fall in line with the pledged production cuts.
For the full month of April, Russian crude oil production averaged 11.23 million bpd,  down from 11.3 million bpd in March, but still above the quota that  Russia had pledged under the deal with OPEC to curb oil supply.

Last month, Russia halted supplies via the Druzhba oil pipeline to  several European countries due to a contamination issue, which the  Russians say was deliberate. Russian production has been curtailed because of the restricted exports via the Druzhba pipeline.

According to Russia’s energy ministry, normal deliveries via the pipeline are expected to resume in the second half of May.  

More at: https://oilprice.com/Latest-Energy-N...PEC-Quota.html

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## Swordsmyth

US oil production from the top seven major shale plays is set to  reach new record heights in June, according to the US Energy Information  Administration’s latest edition of its Drilling Productivity Report. 
*Oil production*
Production  from the top seven plays will increase by 83,000 barrels per day in  June from May 2019 levels, with the largest increase seen in the Permian  Basin, which is set to increase from 4.117 million barrels of oil per  day to 4.173 million barrels per day (+56,000). The second largest  increasing region according to the report is the Bakken.


More at: https://oilprice.com/Latest-Energy-N...-And-Away.html

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## Swordsmyth

Crude oil production in the Organisation of Petroleum Exporting  Countries fell by just 45,000 bpd in April, according to the cartel’s  latest Monthly Oil Market Report, despite continued deep cuts by the largest producer, Saudi Arabia and continued decline in Venezuela and Iran.
According  to secondary sources, Iran registered the deepest decline in production  in April, by 154,000 bpd to 2.554 million bpd. Interestingly, Iraq  booked the second-largest decline, at 113,000 bpd to 4.63 million bpd.  Saudi Arabia produced 45,000 bpd less crude oil in April than in march,  at 9.742 million bpd.


At the same time, Venezuela’s oil production decline was  reversed last month, with output rising by a daily average of  28,000  bpd to 768,000 bpd. Still, this daily average production rate is a lot  below what Venezuela produced last year: that average was 1.3354 million  bpd.


More at: https://oilprice.com/Energy/Energy-G...Deep-Cuts.html

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## Swordsmyth

On the back of one better than expected soft survey PMI print, the  world became convinced that as green shoots emerged, China was about to  be reborn into magnificent credit-fuelled expansion and would save the  world.
  Tonight, that narrative died - everything missed expectations:

 *Retail sales rose just 7.2% (against +8.7% in March) - lowest since May 2003*  (the 7.2% year-on-year rise in retail sales is actually weaker than all  the estimates. The lowest was 7.5%, and the median was 8.6%) *Industrial Production growth slumped* from a hope-filled +6.5% YTD YoY in March to 6.2%. *Fixed Asset Investment slowed* to just 6.1% YoY.
Not green shoot-y!

  Bloomberg's Wes Goodman sums things up:
 "*The China data miss suggests the U.S. tariffs already in place are biting, putting the stocks gain Wednesday at risk.* For now China shares are up strongly, even if gains have been pared, while the Aussie dollar is holding above earlier lows."Don't worry though - there's more stimulus to come everyone:
 _China's NBS says it will implement counter-cyclical adjustments to maintain steady, healthy economic development._Raymond Yeung of ANZ Bank makes the point that China needs to maintain growth above 6.3% or above.
 *"Today's numbers are not supportive.* We believe the  State Council will launch more measures to shore up the market  sentiment. More tax cuts and consumer subsidies are in the pipeline."Because all the stimulus so far has been working so well until now!
  Blooomberg's Enda Curran notes that* numbers these bad will heighten scrutiny of the yuan's moves.* Will Beijing allow it to soften materially from here or will they keep a floor under it? It's a double-edged sword for them.

*The weaker the yuan, the greater the risk of financial market instability and the need for intervention.* At the same time though, with exporters facing rising tariffs and slowing growth, the currency will remain center stage.


More at: https://www.zerohedge.com/news/2019-...tion-fai-slump

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## Swordsmyth

A panel of OPEC and non-OPEC partners is meeting in Jeddah, Saudi  Arabia, this weekend, to discuss the state of the oil market. No one  expects any decision to be taken at this meeting, which is a kind of a  preparatory meet-up before the full OPEC and non-OPEC line-up gathers in  Vienna on June 25 and 26.
But at this weekend’s meeting,  discussion is expected to revolve around a possible production increase  after the end of the U.S. sanction waivers to all Iranian oil buyers.  Talk of raising—instead of cutting—production would be in line with  Russia’s ambition to resume pumping more as its companies benefit from  higher production as much as from higher oil prices and have seen their  new field production plans stalled by Russia’s commitments to the OPEC+  deals.
Russia is likely to tell the panel meeting in Jeddah that  it could increase its production by 300,000 bpd in a short period of  time, Maksim Nechaev, Russia director for IHS Markit, told Bloomberg this week. 

More at: https://oilprice.com/Energy/Energy-G...Deal-Exit.html

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## Swordsmyth

Given the U.S.’s deployment earlier  this month of an aircraft carrier battle group to the Persian Gulf and  comments that it may send up to 120,000 troops to the Middle East to  deal with any untoward action by Iran, Tehran has been busy trying to  build safety buffers through its allies. Having put in place a strategy  to try to exploit existing divisions between the U.S. and Europe, Iran  has now reached an agreement with the Federal Government of Iraq in  Baghdad to expand co-operation between the two countries in the  economically vital oil sector, including, critically, the sale of  Iranian oil under the guise of Iraqi oil. This trick was first used when  the last full-scale international sanctions were ramped up in 2012 but  the scope of the new deal far outstrips that arrangement. On  the face of it, the most obvious signal of this is the plan announced  by National Iranian Oil Company (NIOC) director, Ramin Gholampour  Dezfouli, last week for the state oil giant to open a representative  office in Baghdad. The official line from Iraq’s Oil Ministry is that:  “The role of [the representative] office will be limited to technical  and engineering services, such as establishing pipelines and engineering  equipment, which Iraq favours given their very low prices...It will not  involve oil trade.” Oil Ministry spokesman, Hamza Jawahiri, however,  did say that the office would also allow for joint organisational work  to be done on the 12 fields that Iran shares with Iraq – some of the  world’s largest oil reservoirs – and that this type of co-operation is  not strictly prohibited under the sanctions that the U.S. re-imposed on  Iran late last year.  

The  reality of the deal agreed between Iran and Iraq, though, runs much  deeper. The immediate focus of the co-operation on shared fields will be  the huge reservoirs of Azadegan (Iran side)/Majnoon (Iraq side),  Azar/Badra, Yadavaran/Sinbad, and Dehloran/Abu Ghurab – a senior oil  industry source who works closely with Iran’s Petroleum Ministry  exclusively told _OilPrice.com_  last week. The first of these will be South Azadegan, across which the  National Iranian Drilling Company announced earlier this month it will  drill another 23 wells by the end of the 2020 Iranian calendar year  (ending on 20 March). This will add to the 19 wells that it has already  completed that are being readied for oil production by Iran’s Petroleum  Engineering and Development Company.


There are three reasons  why South Azadegan has been chosen as the first focus of the new  turbo-charged co-operation deal between Iran and Iraq. From the Iraqi  side, more work needs to be done to bolster its side of the reservoir,  the supergiant Majnoon field, which narrowly avoided catastrophic damage  due to floods in March. The second reason is that for Iran the field  has symbolic value in that an understanding had been reached with Total  that the French oil giant would develop the field after it had made  significant progress on Phase 11 of the supergiant South Pars natural  gas field (SP11). Total’s withdrawal from SP11 and from the corollary  gentlemen’s agreement that it would develop South Azadegan was the first  tangible sign that the Joint Comprehensive Plan of Action (JCPOA) would  be undermined by the U.S.

The final reason is that it is a key  field in the West Karoun group of oilfields, the economic importance of  which to Iran – especially in current circumstances – can barely be  overstated. The West Karoun fields - also comprising North Azadegan,  North Yaran, South Yaran, and Yadavaran – are conservatively estimated  to contain at least 67 billion barrels of oil in place and, even more  propitiously, have an average recovery rate of just 5-6%. This compares  to average recovery rate across Saudi Arabia of at least 50%. “For every  one percent increase in the average rate of recovery across West  Karoun, the recoverable reserves figure would increase by 670 million  barrels, or around US$34 billion in revenues with oil even at US$50 a  barrel,” the oil source told OilPrice.com. “With the right joint  development, an increase in recovery rate across the site to at least  25% over a 20 year contract period could be expected to add US$838  billion in revenues for Iran, he added. Currently, West Karoun’s oil  output averages 355,000 to 360,000 barrels per day (bpd), with spikes to  380,000 bpd, compared to 120,000 bpd in 2017, according to the Iran  source. Of this, South Azadegan is currently producing around 100,000  bpd.
For Iraq as well, the  economic benefit is clear. For a long time, there has been growing  concern on the Iraq side that Iran has been pursuing a zero-sum game  policy in exploiting its part of the shared fields as fears of  re-imposed U.S. sanctions mounted, including extensive slant drilling.  In addition, Iraq in part blamed the recent flooding around Majnoon on  the structural damage done to the area by the erosion of subsoil across  over one million hectares of forest and brushland by Iran’s Islamic  Revolutionary Guard Corps (IRGC) as a result of its building programmes.  Iraq also believes that it was made worse by the redirection of many of  the natural water flows through the building of dams and by Iran’s  irrigation systems that have been sending clean and wastewater into Iraq  for decades.
The key  corollary part of the co-operation agreement – which relates to joint  pricing and marketing – is also going to be of huge monetary benefit for  Iran, whilst bolstering Iraq’s burgeoning status as a top five global  oil player. At the most basic level, from Iran’s side, the increased  co-operation on shared fields means that it will be impossible for U.S.  monitoring organisations to distinguish – and thus sanction - Iranian  oil flows from Iraqi oil flows when both originate from the same field.  This then will allow Iranian oil – rebranded as Iraqi oil – to make its  way unfettered through Iraq’s extensive export channels. This includes  China, previously one of Iran’s biggest customers and a customer that is  desperate to continue importing its oil.


“Previously, the trick involved  Iranian oil arriving at various points along the Iraq border in unmarked  trucks, which were then loaded into Iraqi trucks, and sold unhindered  as Iraqi oil, but this tactic is much more effective, as the volumes can  be exponentially higher,” a senior legal source in Geneva told  OilPrice.com. “Even if you knew what was going on – which everyone  senior in the oil industry did, including the U.S. – it was impossible  to prove,” he added. “Effectively, this means that a vast proportion of  all Iran’s oil can be shipped to wherever Iraq oil is welcome, which is  every major export destination in the world,” he underlined. 
The  benefits of joint pricing mechanisms are also enormous. Currently, Iran  has no choice because of the sanctions but to sell its oil – including  from the shared fields – at massively reduced pricing that is comprised  of its official selling price (OSP) minus the sanctions discount minus  the incremental risk discount. This has resulted in Iran offering ‘cost,  insurance, and freight’ cargoes for ‘free on board’ pricing, with the  difference between the two covered by Iran. “Under this new agreement,  Iranian oil from these shared fields will be sold based on Iraq’s much  higher three month moving average OSP pricing for cargoes, with no  discounts at all, and the three month moving average for the effective  spot market that Iraq has created and now controls,” said the oil  source. 
“In sum, this  agreement means that Iran will be able to generate twenty to thirty  percent more in U.S. dollar terms for the oil from these shared fields  than it can from the oil it has to sell sourced from non-shared fields  that it can’t redirect to the shared field flows,” he underlined. At the  same time, he concluded, Iraq will be able to bolster its presence in  the oil trading markets by effectively controlling the price of more oil  flowing into the markets and to safeguard its own oil flows from the  shared fields. This will give it more chance of achieving the oil  ministry’s production targets – 6.2 million bpd by 2021 and 9 million  bpd by 2023 – closer to the target dates.  

More at: https://oilprice.com/Energy/Crude-Oi...0-Premium.html

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## Swordsmyth

Iraq will raise the oil production from its giant West Qurna 1 field  by as much as 50,000 bpd in the next few days, a senior industry  official told Reuters  on Wednesday, days after the oil field developer ExxonMobil evacuated  all its foreign staff from the field amid security concerns.
Currently,  the West Qurna 1 oil field pumps around 440,000 bpd, while Iraq’s  intention is to increase that production to 490,000 bpd within days,  Basra Oil Company chief Ihsan Abdul Jabbar told Reuters.


Earlier this month, Iraq was close to signing a mega US$53-billion  deal with Exxon and PetroChina to develop oil fields in the south. The  deal was “very close” but has been slowed by Exxon’s departure from  Iraq, Ghadhban said this weekend.  

More at: https://oilprice.com/Latest-Energy-N...tes-Staff.html

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## Swordsmyth

Royal Dutch Shell said  on Thursday that it had started oil production at its Appomattox  floating production system months ahead of schedule, opening a new  frontier in the deepwater U.S. Gulf of Mexico and starting first  production ever from a Jurassic reservoir in the region.
Appomattox—operated  by Shell with 79 percent with a unit of China’s CNOOC holding 21  percent—is currently expected to produce 175,000 barrels of oil  equivalent per day (boe/d). Appomattox is the first commercial discovery  brought into production in the deepwater Gulf of Mexico Norphlet  formation. The Appomattox development and production will be closely  followed by industry analysts because it could give indications about  other potential reservoirs in the Norphlet formation.
In May last year, Shell said that it had made a large deepwater exploration discovery  in the U.S. Gulf of Mexico, just 13 miles from Appomattox. The Dover  discovery was Shell’s sixth in the Norphlet geologic play in the U.S.  Gulf of Mexico, and is considered an attractive potential tieback due to  its proximity to Appomattox.
“Appomattox  creates a core long-term hub for Shell in the Norphlet through which we  can tie back several already discovered fields as well as future  discoveries,” Andy Brown, Upstream Director at Shell, said in today’s  statement announcing the start-up of oil production at Appomattox.
The  Appomattox development has cut costs by more than 40 percent since  taking final investment decision in 2015, Shell said, without specifying  how much it had spent.
“The start of production at Appomattox is  only just the beginning of further maximising the flow of resources in  the prolific Norphlet surrounding Appomattox,” Shell said.

More at: https://oilprice.com/Latest-Energy-N...Of-Mexico.html

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## goldenequity



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## Swordsmyth

Two  companies are proposing a $1.6 billion pipeline to move North Dakota  crude oil, making it the biggest such project to move oil out of the  state since the Dakota Access pipeline that sparked violent clashes  between protesters and law enforcement in 2016 and 2017.Houston-based  Phillips 66 and Casper, Wyoming-based Bridger Pipeline announced the  joint venture called Liberty Pipeline on Monday. It's designed to move  350,000 barrels of oil daily — the bulk of which from western North  Dakota's oil patch — to the nation's biggest storage terminal in  Cushing, Oklahoma. From there, the companies said shippers can access  multiple Gulf Coast destinations.
The  exact route of the 24-inch (60-centimeter) pipeline has not been  disclosed, though the companies said in a statement the project "will  utilize existing pipeline and utility corridors and advanced  construction techniques to limit environmental and community impact."
The pipeline would start in Guernsey, Wyoming, and end in Cushing, Oklahoma, Bridger Pipeline spokesman Bill Salvin said.
A  separate 55-mile (88.5 kilometer), 16-inch (40-centimeter) North Dakota  line would run through the west-central part of the state, travel south  though Montana and connect with the Liberty Pipeline at Guernsey,  Salvin said.
Forty-four miles of the North Dakota portion would parallel an existing pipeline corridor, he said.
As  described, the pipeline would be west of the Dakota Access pipeline and  far from the most productive portion of North Dakota's oil patch in the  northwestern part of the state.
"Pipelines  are a matter of great concern to folks," Salvin said. "We are acutely  aware of pipeline routing in North Dakota and we are doing everything in  our power to use existing pipeline rights of way and corridors."
"Importantly, the new line will not cross any tribal lands," he said.
Phillips  66 spokesman Dennis Nuss gave little detail about the pipeline other  than to say it would not "originate in North Dakota."
"The  project hasn't been finalized — there are still some things being  worked on," he said. "We will leverage existing pipelines and  infrastructure facilities where possible."
North  Dakota's Public Service Commission must approve the pipeline's route in  the state. Spokeswoman Stacy Eberl said the agency has not seen any  plans from the companies, which said in their statement they hope to  have the pipeline operational in the first quarter of 2021.

More at: https://news.yahoo.com/1-6b-pipeline...162435031.html

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## Swordsmyth

Just a week before OPEC and allies were set to meet in Vienna to  discuss the fate of the production cut deal expiring in less than two  weeks, participants are still debating when to hold the crucial talks,  with OPEC discussing a proposal to delay the meeting to July 11 and 12,  S&P Global Platts reported on Tuesday, citing two sources.  
While  OPEC and Russia have been busy trying to assure the markets that they  would be working toward a solution to rebalance the oil market, reports  started to emerge in the past few weeks that the parties can’t even agree on whether to hold the meeting as scheduled on June 25-26 or to push it into July.
Reports  have it that Russia has requested a delay of the June meeting into  early July so that it would be held after the G20 summit in late June,  while Iran, which is at odds with the Gulf Arab members of OPEC, has  reportedly told the cartel that it wouldn’t agree to a postponement of  the key meeting.
Khalid  al-Falih, the energy minister of OPEC’s largest producer and de facto  leader, Saudi Arabia, reiterated on Sunday his hope that the cartel  would reach a deal to extend the cuts into the second half of the year  at a meeting that will probably be held in the first week of July.

The latest rumored meeting slot—July 11 and 12—would be a week later  than what the Saudis hinted two days ago, but it would be okay for Iran,  whose Oil Minister Bijan Zangeneh said  on Monday that the Islamic Republic “would confirm rescheduling of the  upcoming OPEC meeting only if it was to be held on July 10, 11 or 12  from originally June 25.”
Zangeneh doesn’t want the date changed  to July 3-4, as Russia had reportedly originally requested, because of  scheduling conflicts.
According to an OPEC delegate who spoke to Bloomberg, the cartel proposed the July 10-12 dates to its members and would wait for their replies.
Judging  from the comments of various OPEC and non-OPEC officials and ministers  and from reports from sources, the OPEC+ group won’t make a decision  about the production cuts by the time those cuts expire at the end of  June.

https://oilprice.com/Latest-Energy-N...uly-11-12.html

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## Swordsmyth

After weeks of disagreements, conflicting reports, and discussions  about scheduling conflicts, OPEC has finally decided when it will hold  its key meeting to decide whether to extend the oil production cuts  beyond June—it is postponing the originally scheduled June 25-26 meeting  with a week, to July 1 and 2.
According  to the changed timeline of the upcoming events on OPEC’s website, the  Joint Ministerial Monitoring Committee (JMMC)—which reviews market  fundamentals and makes recommendations to the whole group—will meet on  the morning on July 1. A full OPEC meeting will be held on the afternoon  on the same day, while OPEC’s non-OPEC partners led by Russia will join  the talks on the next day, on July 2.

More at: https://oilprice.com/Energy/Energy-G...-July-1-2.html

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## Swordsmyth

Despite OPEC oil production cuts and Venezuela and Iran sanctions,  the world seems to be oversupplied with crude oil, with the excess  amounting to some 90 million barrels above the average 2018 level,  according to energy data provider Kayrros.
The company said global  oil inventories rose by as much as 40 million barrels in May alone on  the back of weaker demand from refiners and end consumers as well as the  steady and strong growth  in U.S. light crude production. What’s more, total OPEC exports are not  falling as much as previously expected as Iran continues to ship oil  abroad.

More at: https://oilprice.com/Energy/Energy-G...rsupplied.html

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## Swordsmyth

> Three Permian oil pipelines coming soon.  First expected online in  September (partial capacity and ramp over 4 months).  The other two to  follow.  Approx 2.5 to 3 mm bbls/d capacity. 
> 
>    	As others have posted the bottleneck will then be export terminals.  
>    	Eight applications for oil export terminals filed.  Offshore terminals  will dominate.  New terminals must accommodate VLCC Tankers, (2 mm bbls) 
> 
>    	One existing and three new will move on. (1) LOOP, Louisiana will  switch to 100% export (2) Carlyle, Corpus Christi (3) Trafigura, Corpus  Christi (4) Enterprise Products, Houston. 
>    	All new have applied for Trump new "Fast Track" Status. Estimated  timeframe for new terminals Q1 2021.   In meantime might be able to  export 5 mm bbls/day if one pushes it.  
>    	All indications grace fleets are ramping for strong second half to attack DUC backlog in anticipation of new pipes. 
>    	Saudi Arabia should just make the supply cuts permanent for the next 15 years.





> West Texas' booming Permian Basin is churning out more oil than  believed and pushing U.S. crude output even higher than the federal  government estimates, according to a new report Thursday. 
> 
>    	U.S. oil production likely hit a record of 12.5 million barrels per day  in May and should even grow to 13.4 million barrels daily by the end of  this year, the Norwegian research firm Rystad Energy projects. Next  year should see oil supplies hit 14.3 million barrels a day. 
>    	 		 			 				Rystad sees Permian output already above 4.5 million barrels daily  in May with Texas' total crude volumes exceeding 5 million barrels per  day in June. 			
> 
> 
> 
>    	"U.S. oil production is already higher than many in the market  believe," says Bjørnar Tonhaugen, Rystad's head of oil market research. 
>    	"Strong growth persists in the Permian Basin on both the New Mexico and  the Texas sides," he said. "Updated production estimates suggest that  the Permian Basin surpassed 4.5 million barrels per day in May." 
> ...


More at: https://community.oilprice.com/topic...s-starting-q3/

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## Swordsmyth

OPEC’s oil producers from the Persian Gulf are not in a rush to  increase production in July despite the fact that the current agreement  expires at the end of June and the cartel and allies will discuss their  future oil policy in the first days of July.  
The Gulf oil  producers—Saudi Arabia, Kuwait, and the United Arab Emirates (UAE)—will  keep their July production within the limits set by the current deal  expiring in June, OPEC sources told Reuters on Thursday.
The  Saudis are pumping in June at around the same rate as in May, while  their production in July will continue to comply with the current  production cut deal, Reuters’ sources said.


Earlier this week, The Wall Street Journal  reported that Saudi Arabia is cutting its oil production even deeper  this month as concerns over oil demand growth have intensified. The  Saudis are also asking other producers to follow and restrain  production, OPEC officials told The Journal.  
While the Gulf producers Kuwait and the UAE will follow the Saudi’s lead, the biggest unknown at the OPEC+ meetings rescheduled for July 1-2 is whether non-OPEC Russia will continue to play ball and agree to roll over the cuts.
“Russia is the only country that is yet to decide,” an OPEC source told Reuters today, confirming comments  from Saudi Energy Minister Khalid al-Falih from earlier this month that  “a rollover is almost in the bag” for OPEC, but the cartel has yet to  discuss the pact with the non-OPEC producers led by Russia.

More at: https://oilprice.com/Latest-Energy-N...rent-Deal.html

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## Swordsmyth

> amin dada
> @kambrone64
> *Russia To Lend Iran A Hand For Exporting Oil
> http://OilPrice.com https://oilprice.com/Latest-Energy-N...rting-Oil.html*


The Saudis will not be pleased.

----------


## Swordsmyth

India more than quadrupled its imports of U.S. crude oil between  November last year and May this year as the U.S. sanctions on Iran  significantly reduced Iranian crude purchases at refiners in India,  which was Iran’s second-largest oil customer until last month.

According to tanker arrival data that Reuters  has obtained from industry and shipping sources, the growth in U.S. oil  supplies to India was significantly higher than the increase of Indian  purchases of oil from its traditional Middle Eastern sources of supply.
Between  November 2018 and May 2019—the period in which the U.S. slapped  sanctions on Iran’s oil exports allowing six-month exemptions for the  largest buyers, including India, and the end of those waivers in  May—Indian refiners bought around 184,000 bpd of U.S. crude oil, up from  just 40,000 bpd in the same period the previous year.
Between  the start of the U.S. sanctions and the end of all waivers for Iranian  buyers, India’s intake of Iranian crude oil slumped to 275,000 bpd, down  by 48 percent on the year, according to the tanker data cited by  Reuters.
During the November-May period, India’s purchases of  Saudi crude oil increased by 11 percent to 804,000 bpd and imports from  the United Arab Emirates (UAE) surged by 37 percent to 360,000 bpd,  while purchases from Iraq went down 3.3 percent to 1.01 million bpd.

Although the volumes from the U.S. were low compared to those of India’s  traditional Middle Eastern suppliers, the growth in U.S. imports  obliterated the rise in Middle East shipments, also because the official selling prices (OSPs) of Saudi Aramco and other Middle East oil producers have been higher, enabling the U.S. to sell its oil to India.   

More at: https://oilprice.com/Latest-Energy-N...an-Supply.html

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## Swordsmyth

Talks  between OPEC and its allies next month about whether to extend their  pact on cutting oil supplies "won't be easy" and may be complicated by  the situation facing Iran and Venezuela, Kazakh Energy Minister Kanat  Bozumbayev said.The  Organization of the Petroleum Exporting Countries and other large oil  producers, including Russia and Kazakhstan, meet in Vienna on July 1-2  to discuss whether the oil output deal, which expires after June 30,  should be continued.
"I  think it won't be easy," Bozumbayev told reporters about the talks, in  comments cleared for publication on Monday, citing "different positions"  among parties to the deal.
He said Iran and Venezuela both faced U.S. sanctions. "Will they want to (extend) or not? It's hard (to say)," he said.
Kazakhstan  wanted the deal extended into the second half of the year, he said,  describing the oil price in a range of $60-$70 per barrel as "suitable".
Benchmark Brent oil is now trading at about $65.
He  said there was no need for higher oil prices, adding: "No one needs it  as production in one big country will increase. (A country) which does  not enter any agreements," referring to the United States, which is not  party to the production deal.
The United States is now producing about 12 million bpd.
Bozumbayev  said this month that Central Asia's biggest oil exporter had cut more  production than required by the pact so far this year, reducing output  to 1.76 million barrels per day (bpd), well below its 1.86 million bpd  quota.
Asked  about the issue of contaminated oil in Russia's Druzhba pipeline to  Europe, Bozumbayev said Kazakh oil producers and its pipeline operator  KazTransOil were still assessing what damages they considered should be  paid by Russia's oil pipeline monopoly, Transneft, which operates  Druzhba.
He said about 630,000 tonnes of Kazakh oil was contaminated on Russian territory as it was transported via Russian pipelines.
Bozumbayev  also said Kazakhstan planned to raise production at its giant offshore  Kashagan oilfield to reach up to 420,000 bpd by the end of the year from  400,000 bpd now.

https://news.yahoo.com/1-iran-venezu...072928262.html

----------


## Swordsmyth

It’s too early to say if OPEC and its Russia-led non-OPEC allies will  extend next week their pact to cut oil production through the end of  the year, Russia’s Energy Minister Alexander Novak said on Monday, once again leaving the market guessing if Russia is willing to continue cutting its oil production.
According  to Khalid al-Falih, the energy minister of OPEC’s largest producer and  de facto leader, Saudi Arabia, the cartel is close to reaching an agreement to extend the production cut deal beyond its current expiry date at the end of June.


Yet, the big unknown is the leader of the non-OPEC group  of producers, Russia, which has yet to express its position and which  has always kept the oil market guessing if it will play ball in every  discussion of the pact since OPEC and its allies began to manage their  oil producing policies at the beginning of 2017.
Last week, OPEC rescheduled its meeting from the end of June to July 1-2, reportedly because Russia had requested that the meeting be held after the G20 summit on June 28-29 in Japan.
According  to Novak’s comments from today, Russia’s energy ministry is discussing  with the Russian oil companies how to proceed with the deal and it’s too  early to say if the production cuts will be rolled over into the second  half of the year. 

“We need to wait for, among other things, the G20 heads of state  meeting,” Reuters quoted Novak as saying on the sidelines of an energy  forum in St Petersburg, Russia.


“Let’s see what questions they discuss there, how the economy develops, the situation on the market,” the Russian minister said.

More at: https://oilprice.com/Energy/Crude-Oi...-New-Deal.html

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## Swordsmyth

The most prolific oil-producing basin in the United States is set to  get a pipeline capacity boost by the end of the third quarter, a source with direct knowledge of the matter told Reuters on Thursday.
Plains  All American Pipeline’s Cactus II line is on track to be filled within a  week—a necessary step prior to sending commercial quantities of crude  oil through the pipeline. Oil will begin flowing on a regular basis by  the end of the third quarter, the Reuters source showed.
The  Cactus II system of pipelines moves oil from Wink, Texas to Corpus  Christi, with a total capacity of 670,000 barrels per day at its full  completion, according to Plains All American.
The Cactus II project will go a long way in relieving some of the capacity constraints in the region that have pressed down Midland crude prices in relation to WTI.
There  has been a mad dash to increase takeaway capacity in the Permian region  as production has outstripped its ability to move the oil, and Plains  All American has already committed fully its entire available capacity,  according to Kallanish Energy,  much of which is committed to Trafigura. Trafigura signed last year a  long-term agreement to move 300,000 bpd of crude and condensate through  Plains’ Cactus II.

More at: https://oilprice.com/Latest-Energy-N...Cactus-II.html

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## Swordsmyth

There was no change to the overall number of active oil and gas rigs in the United States this  week according to Baker Hughes, but the 4-rig decrease in the number of  gas rigs was completely offset by an equal increase to the number of  oil rigs.  



The  total number of active oil rigs in the United States rose by 4  according to the report, reaching 793. The number of active gas rigs  decreased by 4 to reach 173.

The combined oil and gas rig count  is still 967 for the week, with oil seeing a 65-rig decrease year on  year and gas rigs down 14 since this time last year. The combined oil  and gas rig count is down 80 year on year.
Year-to-date, the oil rig count has fallen from 858 active rigs since the beginning of the year to 793, while gas rigs have fallen from 187 to 173 during that same time. 


Despite  the rig decline year on year, US production is almost 1.2 million  barrels per day higher year on year—the equivalent of OPEC’s production  cut agreement. 

More at: https://oilprice.com/Energy/Energy-G...C-Meeting.html

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## Swordsmyth

President Gurbanguly Berdimuhamedov took part in the ceremonial  launch of a new industrial complex for production of synthetic gasoline  from natural gas in Akhal province of Turkmenistan.
 The new industrial complex was built by  Turkmengas State Concern and the consortium of companies comprised of  Kawasaki Heavy Industries Ltd. (Japan) and Rönesans Endüstri Tesisleri  Inşaat Sanaýi ve Ticaret A.Ş. (Turkey). An agreement to this effect was  signed during the official visit by the President of Turkmenistan to  Japan in September 2013, and the groundbreaking ceremony for the new  plant took place in August 2014.
 The GTG (gas to gasoline) project is  based on TIGAS technology developed by Danish company Haldor Topsоe for  production of high-quality gasoline with minimum energy consumption and  environmental impact. The plant will annually produce 600 thousand tons  of ECO-93 synthetic gasoline of EURO-5 standard, as well as 115 thousand  tons of liquefied gas and 12 thousand tons of refined diesel fuel.

More at: http://www.turkmenistan.ru/en/articles/18583.html

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## Swordsmyth

Russia has agreed with Saudi Arabia to extend by six to nine months a  deal with OPEC on reducing oil output, Russian President Vladimir Putin  said, as oil prices come under renewed pressure from rising U.S.  supplies and a slowing global economy.Saudi Energy Minister  Khalid al-Falih said on Sunday that the deal would most likely be  extended by nine months and no deeper reductions were needed.
Putin,  speaking after talks with Saudi Crown Prince Mohammed bin Salman, told a  news conference the deal - which is due to expire on Sunday - would be  extended in its current form and with the same volumes.
The  Organization of the Petroleum Exporting Countries, Russia and other  producers, an alliance known as OPEC+, meet on July 1-2 to discuss the  deal, which involves curbing oil output by 1.2 million barrels per day  (bpd).


That Russia and Saudi Arabia effectively announced the deal before  the OPEC gatherings will likely anger smaller members of the  organisation, who feel sidelined.
"Who needs an OPEC meeting?,"  one delegate said after learning about the headlines from the  Russia-Saudi talks. Some delegates said Iran might still put up a fight  on Monday.

More at: https://news.yahoo.com/1-russia-agre...145744539.html

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## Swordsmyth

OPEC has agreed to extend cuts to crude oil production by another nine months in an effort to boost prices, NPR reported July 1.

More at: https://worldview.stratfor.com/situa...-cuts-9-months

----------


## Swordsmyth

In a surprise remark to the press, Iran's oil minister Bijan Zanganeh  said that he will veto OPEC's long-mooted charter intended to formalize  its oil market coordination with Russia and nine other non-OPEC  partners. The latter means not only a blockade of Saudi-UAE dreams to  incorporate Russia officially, but it also is a slap in the face of  Russian president Vladimir Putin and Russia’s Energy Minister Novak. The  two Russians have been eager to formalize the OPEC+ deal, supported on  the Saudi side by Crown Prince Mohammed bin Salman. The formalization  seems to have been one of the discussion points between Putin and MBS at  the G20 in Osaka, Japan. The Iranian threat also will complicate the  OPEC+ meeting, which is set for Tuesday, after the official OPEC  meeting.

By supporting an OPEC production agreement, but blocking a formal  participation of Russia, Tehran keeps its position in balance. If the  Saudi-Russian cooperation would be formalized and included under the  OPEC umbrella, Tehran fears to be pushed out of the power centers.  Officially Iran wants to block the OPEC+ formalization due to Saudi-UAE  support for US Iran sanctions, but Tehran wants to be in power when  deals are made between OPEC and Russia. With a formalization of the  OPEC+ situation, the Riyadh-Moscow-Abu Dhabi trilateral becomes the  decision making center without interference of others.  Tehran fears a  so-called unilateralism by OPEC+ (Moscow/Riyadh). Iranian Oil Minister  Zanganeh reiterated that he fears that OPEC+ could mean the end of the  current Middle East led oil producers group. With the incorporation of  Russia the power center would clearly move to Riyadh-Moscow.

More at: https://oilprice.com/Energy/Crude-Oi...ends-Deal.html

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## Swordsmyth

Saudi Arabia may reduce its official selling price for oil for Asian buyers in August, unnamed sources told Reuters, adding the move was prompted by a decline in Middle Eastern benchmarks last month.
A Reuters survey among five refiners revealed the official selling price for the Kingdom’s flagship Arab Light  hit a five-year high for deliveries this month, but as benchmarks  weaken OSPs have to come down, too. The cut could be of between  US$0.30-0.50 per barrel.
“The (official selling) prices need to  come down because (spot) prices could drop further next month,” one  refiner told Reuters, adding the Dubai benchmark used in pricing cargoes  for September loading had fallen since that five-year peak last month.
Saudi Arabia earlier this year increased  its OSPs for Asian clients after the U.S. ended the sanction waivers  granted to eight Iranian oil importers. Out of options, many refiners in  the region were forced to place additional orders for Saudi crude to  fill the gap.
However, it was quickly clear this can’t be a  long-term strategy as Asian buyers, and particularly China and India,  would soon begin to look for cheaper alternatives if Saudi prices remain  high. What’s more, benchmarks have proved stubborn in their reluctance  to continue climbing up: after a brief spike by about US$2 per barrel on  the largely expected news OPEC+ will extend its production cuts, Brent and WTI both retreated.


More at: https://oilprice.com/Latest-Energy-N...n-Markets.html

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## Swordsmyth

Early on Tuesday, following their meeting in Vienna, the Organization of Petroleum Exporting Countries (OPEC) announced  a nine-month extension to the existing agreement to limit oil  production. The initial deal was reached in 2017 and this will extend  the current limits until March of 2020. On its face, this seems like a  win for the cartel, especially as agreement was reached at a time of  massive divisions and rancor within the group, particularly the Middle  Eastern countries that form its core. Look a little deeper into the  leadup to the announcement and the overall situation with oil, however,  and there is evidence of fundamental changes that could well result in the death of OPEC, at least as an effective cartel.
That  is a call that has been made many times and by many people in the past,  but so far, to paraphrase Mark Twain, reports of OPEC’s death have been  greatly exaggerated. It should be noted, however, that while that was  true at the time he said it, Twain did eventually die. Death, whether of  a person or an organization, is rarely sudden and unexpected. It  usually comes following a series of small events that weaken and  diminish the body, and it could be argued that the negotiations that led  to today’s announcement, the circumstances surrounding it, and the  market reaction to it all fit that description.


First and foremost, one of the most important parties to  the negotiations is not even an OPEC member. The deal was based on a  pre-meeting agreement between Saudi Arabia, always the de facto leader  of the cartel due to its position as the biggest oil producer, and  Russia, which is part of the group known as OPEC+ that came up with the  original plan. They are not, however, an OPEC member. The fact that the  Saudis felt it necessary to reach agreement with a non-member before  taking the proposal to the meeting speaks volumes about where the power  now lies. 

I am, as I’m sure many readers are, old enough to remember a time  when mention of OPEC struck fear into the hearts of every trader,  investor and politician in the developed world. During the 1970s and  80s, as the group flexed the political muscle that comes with economic  power, every word that came out of an OPEC meeting had weight and  violent, sustained swings in oil, and even in the stock market,  inevitably followed any announcement. This, however, was different.

The news has been greeted by the biggest drop in oil for a month or so.  Normally that could be put down to a “buy the rumor, sell the fact”  kind of pattern, but a couple of weak days coming in will have dampened that effect  in this case. It is therefore hard to conclude anything other than that  traders are singularly unimpressed with OPEC’s attempt at price  support.
That, the need to get buy-in from a non-member before  acting at all, and the diminishing returns from burying the hatchet in  pursuit of economic advantage all point to one thing. OPEC is still  alive, but as it approaches sixty years of age, things are starting to  go wrong, and we may now be witnessing the beginning of the end of its  natural life.


More at: https://oilprice.com/Energy/Energy-G...-For-OPEC.html

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## Swordsmyth

The oil-sands recovery technique patented by folks connected with  Petroteq, incorporated in California, having Canadian engineers, and a  backstop financier an oil dealer in Ukraine, now is starting to move  into the big-time.  Petroteq has inked a licensing agreement that  requires a total $2 million license payment plus requires the licencee  to commit to sourcing $30 million as capital to get started on a mining  and extraction plant.  When this kind of money is cast about, it would  seem that there is movement in this technology.  

More at: https://community.oilprice.com/topic...million-plant/

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## Swordsmyth

OPEC’s crude oil exports last month gained 761,000 bpd from May to  hit an average of 23.7 million bpd, energy data provider Kpler reports.  In May, the cartel’s exports sank below 22 million bpd.
The  increase came thanks to stronger exports from Saudi Arabia, the UAE, and  Iraq, with Saudi Arabia raising daily loadings by some 135,000 bpd in  June. Iraq’s loadings rose by more than 100,000 bpd last month, but the  UAE marked the strongest increase at over 400,000 bpd.


Iran suffered another huge decline in exports—by 469,000  bpd to just 515,000 bpd in June with Kpler noting that most of this was  loaded and then left to float in the Persian Gulf.
Interestingly  enough, Venezuela and Libya both booked increases in their June loadings  despite their political and security problems. Venezuela’s loadings  rose from 883,000 bpd in May to 968,000 bpd in June, and Libya exported  1.1 million bpd in June, up from 974,000 bpd in May.
The cartel’s  grand total was 3.577 million bpd lower than the loadings for June last  year thanks to the twin effect of the OPEC+ production cuts and  involuntary production declines in Venezuela and Iran because of  sanctions.


More at: https://oilprice.com/Energy/Energy-G...une-Kpler.html

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## Swordsmyth

Today's oil market:

Opec Basket •
63.95
-1.76
-2.68%

----------


## Swordsmyth

OPEC’s crude oil production dropped to below 30 million bpd in June,  down by 170,000 bpd from May and the lowest monthly output since April  2014, as higher Saudi oil supply was insufficient to compensate for  declines in the cartel members subject to U.S. sanctions, Iran and  Venezuela, the monthly Reuters survey showed on Friday.
OPEC  pumped 29.60 million bpd in June, according to the Reuters survey that  tracks supply to the market from shipping data and sources at OPEC, oil  companies, and consulting firms. 


Saudi Arabia, OPEC’s largest producer, boosted supply by 100,000 bpd in June over May, to 9.8 million bpd, the survey showed.
Despite the increase, Saudi Arabia was comfortably below its 10.311-million-bpd cap under the OPEC+ deal as it had been overachieving in its share of the cuts by 500,000 bpd in the previous months.
The  Saudi production rise, however, was not enough to offset declines in  Iran and Venezuela, which are exempt from the production cut pact but  which continue to see their output drop because of the U.S. sanctions on  their respective oil industries.
Production in Angola, Iraq, and  Kuwait was also lower in June compared to May, while Nigeria raised its  output, according to the Reuters survey. 

Meanwhile, OPEC’s crude oil exports in June gained 761,000 bpd  from May to hit an average of 23.7 million bpd, figures from energy  data provider Kpler showed this week. In May, the cartel’s exports sank  below 22 million bpd.
The increase came thanks to stronger exports  from Saudi Arabia, the UAE, and Iraq, with Saudi Arabia raising daily  loadings by some 135,000 bpd in June. Iraq’s loadings rose by more than  100,000 bpd last month, but the UAE marked the strongest increase at  over 400,000 bpd, according to Kpler. 

More at: https://oilprice.com/Energy/Energy-G...-2014-Low.html

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## Swordsmyth

China set a fresh monthly crude oil import record in April and  continues to import growing volumes of crude oil this year, accounting  for an estimated two-thirds of global oil demand growth in 2019.  

Yet,  a rough estimate of actual Chinese oil consumption patterns lately  suggest that the U.S.-China trade war has hit China’s industries and  that nearly half of the rise in crude imports have gone into storage so  far this year, according to Reuters columnist Clyde Russell,  who offers an interesting perspective on whether China’s soaring crude  oil imports adequately reflect what’s going on with the Chinese economy.


Signs are pointing to a slowdown in China’s economic  growth, while stockpiling—at high levels so far this year—could  decelerate later in 2019 if oil prices rise to a level Beijing considers  too high to build inventories at the current pace.
China hit a new monthly record  of 10.64 million bpd in crude oil imports in April this year, as  refiners rushed to stock up with Iranian oil before the U.S. removed the  sanction waivers. Then, China’s crude oil imports dropped in May  from the monthly record in April, as Chinese refiners drastically  reduced Iranian oil imports after the end of the U.S. waivers and as  some state refineries were offline for planned maintenance.
The  headline number of China’s crude oil imports suggests that first-half  imports jumped by 8.8 percent from the same period last year, or by  around 800,000 bpd, according to estimates from Reuters’ Russell.
This  growth accounts for most of the world’s estimated oil demand growth for  this year, which is currently pegged at 1.1 million bpd-1.2 million bpd  by OPEC, the EIA, and the International Energy Agency (IEA). 

China set a fresh monthly crude oil import record in April and  continues to import growing volumes of crude oil this year, accounting  for an estimated two-thirds of global oil demand growth in 2019.  
Yet,  a rough estimate of actual Chinese oil consumption patterns lately  suggest that the U.S.-China trade war has hit China’s industries and  that nearly half of the rise in crude imports have gone into storage so  far this year, according to Reuters columnist Clyde Russell,  who offers an interesting perspective on whether China’s soaring crude  oil imports adequately reflect what’s going on with the Chinese economy.


Signs are pointing to a slowdown in China’s economic  growth, while stockpiling—at high levels so far this year—could  decelerate later in 2019 if oil prices rise to a level Beijing considers  too high to build inventories at the current pace.
China hit a new monthly record  of 10.64 million bpd in crude oil imports in April this year, as  refiners rushed to stock up with Iranian oil before the U.S. removed the  sanction waivers. Then, China’s crude oil imports dropped in May  from the monthly record in April, as Chinese refiners drastically  reduced Iranian oil imports after the end of the U.S. waivers and as  some state refineries were offline for planned maintenance.
The  headline number of China’s crude oil imports suggests that first-half  imports jumped by 8.8 percent from the same period last year, or by  around 800,000 bpd, according to estimates from Reuters’ Russell.
This  growth accounts for most of the world’s estimated oil demand growth for  this year, which is currently pegged at 1.1 million bpd-1.2 million bpd  by OPEC, the EIA, and the International Energy Agency (IEA). 

Apart from wobbling economy, China’s crude oil demand, and possibly imports, could be dragged down in the short term by refiners curtailing refinery runs  in the third quarter as massive refinery start-ups and slowing domestic  fuel demand have created a fuel glut in the country, hurting refining  margins.
According to JLC International,  Sinopec ZRC will cut daily crude consumption by 2.17 percent, while  Tianjin Petrochemical is set to reduce its daily crude runs by 5.12  percent in July.

More at: https://oilprice.com/Energy/Energy-G...Faltering.html

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## Swordsmyth

Insurance rates for tankers going through the Strait of Hormuz have  skyrocketed tenfold in the two months since the first attacks on tankers  off the coast of the UAE, CNBC reports, quoting the chief executive of a  shipping company. The news could reinforce anticipation of higher oil  prices, not because of fundamental factors but because of insurance  rates.

More at: https://oilprice.com/Energy/Energy-G...r-10-Fold.html

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## Swordsmyth

Tankers are offloading millions of barrels of Iranian oil into  storage tanks at Chinese ports, creating a hoard of crude sitting on the  doorstep of the world’s biggest buyer.Two and a half months  after the White House banned the purchase of Iran’s oil, the nation’s  crude is continuing to be sent to China where it’s being put into what’s  known as “bonded storage,” say people familiar with operations at  several Chinese ports. This oil doesn’t cross local customs or show up  in the nation’s import data and is not necessarily in breach of  sanctions. And while it remains out of circulation for now, its presence  is looming over the market.
The store of oil has the potential to  push down global prices if Chinese refiners decide to draw on it, even  as Organization of Petroleum Exporting Countries and allies curb  production amid slowing growth in major economies. It also allows Iran  to keep pumping and move its oil nearer to potential buyers.
“Iranian  oil shipments have been flowing into Chinese bonded storage for some  months now, and continue to do so despite increased scrutiny,” said  Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can  see why the producer would want to do so, as a build-up of supplies near  key buyers is clearly beneficial for a seller, especially if sanctions  are eased at some point.”

More at: https://news.yahoo.com/millions-barr...011258083.html

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## Swordsmyth

Libya's National Oil Corporation confirmed on Saturday that  production at its 290,000 barrels per day El Sharara oilfield was  currently offline.NOC said it was conducting a full-scale investigation into suspected closed valves in the Hamada area.

More at: https://news.yahoo.com/libyas-noc-co...074403374.html

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## Swordsmyth

Libya has lifted its force majeure on Monday after it stopped loading  crude oil for the weekend from the Zawiya terminal following the  suspension of production from the country’s largest field, Sharara, on  Friday.
"This is the result of an unlawful Sharara pipeline valve  closure by an unidentified group between Hamada and the Zawiya port (on  Friday evening), resulting in production being suspended," a statement  by the National Oil Corporation, as quoted by AFP, read.
Sharara was shut down Friday, according to a Reuters report,  because of a suspected valve closure on the pipeline carrying crude  from the field to Zawiya. Before the closure, the field was pumping  about 290,000 bpd. The closure, a NOC official told Reuters, would  reduce Libya’s total production to a little over 1 million bpd. This is  quite an improvement over production rates from December last year, when  the country’s total production was about 1 million bpd including  Sharara’s contribution.
The  field is a favourite target for militants due to its size: it has a  production capacity of as much as 340,000 bpd. The latest prolonged shutdown  began in December when NOC declared a force majeure on Sharara  following the occupation of the field by local groups demanding better  living conditions and power supply security.

More at: https://oilprice.com/Latest-Energy-N...ing-Again.html

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## Swordsmyth

The Russian government’s generous tax break to its largest oil  company, Rosneft, for work on its largest oilfield, the Priobskoye, is  being called into question by President Vladimir Putin, according to a  document published on the Kremlin website seen by Reuters.
Putin  also ordered a moratorium on any new state support for developing  domestic oilfields, country wide. The moratorium will remain in effect  until the end of the calendar year. Rosneft had put its hand out just a  couple of weeks ago for another tax break as well—this time for a  large-scale Arctic venture—of $41 billion.  President Putin had previously offered tax incentives to Rosneft for  developing the costly Arctic area. It is unclear how the moratorium will  affect the call for additional money for Arctic drilling.
The  government extended the tax break for to Rosneft in May for the purposes  of developing Rosneft’s largest oilfield, Priobskoye, months after  Rosneft had asked in February for the break to offset the extra expense  of pumping oil from an aging field that is experiencing depletion. The  Finance Ministry opposed the idea, but the break was granted despite the  pushback.
The tax breaks are expected to set the government back more than $7 billion over the next ten years.
President  Putin has asked the energy and finance ministries to reveal their  economic justification for granting Rosneft its wishes.

More at: https://oilprice.com/Latest-Energy-N...ax-Breaks.html

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## Swordsmyth

The International Energy Agency (IEA) said that global oil demand  only grew by 0.45 mb/d in the second quarter. That contributed to a  surprise 0.5 mb/d supply/demand surplus in the second quarter. As  recently as June the IEA anticipated the oil market would see a 0.5 mb/d  deficit.
  The agency said that there were many reasons for tepid demand in recent months.
 _“European demand is sluggish; growth in India vanished in  April and May due to a slowdown in LPG deliveries and weakness in the  aviation sector; and in the US demand for both gasoline and diesel in  the first half of 2019 is lower year-on-year,”_ the IEA wrote in its July Oil Market Report.Nevertheless, the IEA stuck with its full-year forecast for demand  growth at 1.2 mb/d, arguing that economic growth would rebound in the  second half of 2019. Some of that optimism hinges on a resolution to the  U.S.-China trade war, which seems a bit speculative. Reports suggest  that trade negotiations are “stalled” while the Trump administration  wrestles with how to handle Chinese tech giant Huawei. The Trump-Xi meeting on  the sidelines of the G20 conference in June was supposed to lead to a  restart in trade talks, but as the Wall Street Journal reports,  no meetings have been scheduled as of yet. The WSJ also said that the  Trump administration “appears to have resigned itself to a drawn-out  battle.”
*That certainly calls into question the optimism surrounding the IEA’s demand growth figures.*  “Both IEA and EIA remain optimistic in assuming an economic rebound in  2H19 and see global demand growth nearly tripling from ~0.6 mb/d y/y in  1H19 to ~1.5-1.8 mb/d y/y in 2H19,” said Allyson Cutright, Senior  Analyst at Rapidan Energy Group. “While we do see some pickup in 2H19,  in particular in China due to macroeconomic stimulus and eased  restrictions on gasoline-cars, the overall trend in agency revisions is  still probably headed down.”
*Weak demand and rising supply are creating a perfect storm heading into 2020.* The  IEA said that the “call on OPEC” could fall by 0.8 mb/d next year, and  even that is based on the agency’s rather optimistic demand growth  figures.
*As a result, OPEC+ has a serious problem on its hands.*  On the one hand, it can continue to cut production in order to prevent  oil prices from collapsing. But that would require mustering up  consensus and taking on deeper sacrifice. The alternative is not much  better. OPEC+ can keep the current production cuts in place (or abandon  them altogether) and let prices crash.
 *“Our balances have long assumed OPEC+ would have to extend  and deepen cuts next year and project Saudi Arabia will be the brunt of  the additional cuts,”* Allyson Cutright of Rapidan Energy Group said.
  “Our most recent update sees Saudi Arabia need to cut production  toward the low-9 mb/d range next year, and that's assuming decent  economic growth.”Rapidan is betting that OPEC+ will opt for cutting, which might be  just enough to head off a price slide. “However, if a recession develops  or US sanctions on Iran are removed, then the deluge of new oil would  more likely prove too large for OPEC+ to manage and oil prices would  bust,” Cutright said.

More at: https://www.zerohedge.com/news/2019-...recession-hits

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## Swordsmyth

Saudi Arabia’s minister of state for energy affairs met with Kuwaiti  officials, according to KUNA, and discussed oil production in the  southern neutral zone, to commence after technical issues are put to bed  on both sides.
The shared oil fields can produce a half a million barrels of oil per day.
Talks  between Kuwait and Saudi Arabia on the joint fields began last month in  hopes of putting the old territorial dispute behind them in order to  exploit the oil riches in the shared field. Production has been shut in  in the field since the end of 2014.
Kuwait has set its sights on  increasing its oil production by 4 million barrels per day by 2020,  despite the OPEC+ agreement that is currently restricting production. To  achieve this higher level of production, Kuwait would need to pump oil  from the neutral zone. But that’s not all it will need.
Kuwait is  also looking to come to a similar understanding with its other neighbor,  Iraq. Those countries share a nuetral zone as well. In June, Kuwait’s  oil minister announced that an agreement with Iraq is in the works,  according to KUNA.

More at: https://oilprice.com/Latest-Energy-N...ion-Talks.html

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## Swordsmyth

In northwest Saudi Arabia, where most people see a barren wasteland,  Saudi crown prince Mohammed bin Salman has envisioned the future, and  according to the Wall Street Journal, it is something straight out of an Elon Musk wet dream, complete with *flying taxis, robot maids, robot dinosaurs, robot martial arts, endless booze and glow-in-the-dark sand, among other things.*
  Perhaps MbS has been following Elon Musk's Twitter account a _little too closely._ Or perhaps he has joined him in a microdosing regimen. Regardless,MbS  has hatched a $500 billion plan to cover 10,000 square miles of this  desert to attract the "world's greatest minds and best talents" to the  world's best paying jobs in the world’s most livable city.
  A true modern day, pardon, _future_ Shangri-La.
  The ideas have been laid out in 2300 pages of confidential documents  at Boston Consulting Group, McKinsey and Company and Oliver Wyman that  the Wall Street Journal was able to review. The project is called _"Neom",_ which  - it will come as no surprise - is a mash up of the Greek word for  "new" and the Arabic word for "future". The documents were dated  September 2018.


The consultants employed an expansive (and expensive) mix of science  fiction and corporate buzzwords to turn the Prince's imaginary city into  a reality. Local tribes would have to be forcibly relocated and a court  system developed by law firm Latham & Watkins would have judges  reporting directly to the king and operating under Sharia law.
  Neom’s MbS-led founding board said: “This should be an automated city  where we can watch everything. A city where a computer can notify  crimes without having to report them or where all citizens can be  tracked.”
  Perhaps the inspiration was not the _Jetsons_, but rather _1984_.  Also, it sounds like what the US is desperately trying to become. The  board has adopted the recommendations of its consultants and people  familiar with the project say they don’t know how much the plan will  become a reality due to both funding issues and potential technological  limitations.
  Neom Chief Executive Nadhmi al Nasr said: “Neom is all about things  that are necessarily future-oriented and visionary. So we are talking  about technology that is cutting edge and beyond—and in some cases still  in development and maybe theoretical.”


To ensure that his vision of _Future World_ is truly unique, MbS plans to roll out the following :
 
 *1. Flying Taxis:* Scientists might take a flying  taxi to work. “Driving is just for fun, no longer for transportation  (e.g. driving Ferrari next to the coast with a nice view),” planning  documents show. *2. Cloud Seeding:* The desert won’t always feel like the desert. “Cloud seeding” could make it rain. *3. Robot Maids:* Don’t worry about household chores. While scientists are at work, their homes would be cleaned by robot maids. *4. State-of-the-Art Medical Facilities:* Scientists would work on a project to modify the human genome to make people stronger. *5. World Class Restaurants:* There would be fine dining galore in a city with the “highest rate of Michelin-starred restaurants per inhabitant.” *6. Dinosaur Robots:* Residents could visit a Jurassic Park-style island of robot reptiles. *7. Glow-in-the-Dark Sand:* The crown prince wants a beach that glows in the dark, like the face of a watch. *8. Alcohol:* Alcohol is banned in the rest of Saudi Arabia. But it likely won’t be here, say people familiar with the plan. *9. Robot Martial Arts:* Robots would do more than  just clean your house. They also could spar head to head in a “robo-cage  fight,” one of many sports on offer. *10. Security:* Cameras, drones and facial-recognition technology are planned to track everyone at all times. *11. Moon:* A giant artificial moon would light up  each night. One proposal suggests it could live-stream images from outer  space, acting as an iconic landmark.
  For those concerned about their safety there, fear not - the Saudi state _will have everything under control. C_ameras,  drones and facial-recognition technology will allow state intelligence  to track every single person there. "Everything can be recorded," the  founders' Board stated. Neom has already engaged IBM for potential  facial recognition software. 
  The Board even thought of offering Tesla billions in subsidies to move to Neom, while giving the kingdom a stake.
  Clearly, since it is deep in the realm of science fiction, MbS also  considered partnering with unicorn-specialist SoftBank on its "Apollo"  project, which seeks to create “a new way of life from birth to death  reaching genetic mutations to increase human strength and IQ.” 

More at: https://www.zerohedge.com/news/2019-...obot-maids-and

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## Swordsmyth

Saudi Arabia is struggling in its key economic and geopolitical  ambition to position itself as the key substitute in Asia in general and  China in particular for lost Iranian barrels due to re-imposed  sanctions by the U.S. The opportunity is huge as, a senior source who  works closely with Iran’s Petroleum Ministry exclusively told _OilPrice.com_  last week, Iran as of last week was exporting just 266,000 barrels per  day (bpd) of crude oil compared to the 2.5 million bpd exported just  before the U.S. withdrew from the nuclear deal last May. Although some  of the headline figures appear to offer some scope for Saudi optimism, a  look beneath the surface shows the situation is far from rosy, with  threats from both U.S. and Russian supplies. Indeed, with the recent  scare over contaminated barrels now apparently behind it, Russia is also  ramping up its threat against increased U.S. supplies as well,  signalling a broader burgeoning relationship with the Asian powerhouse  of China.
Specifically, over the January to May period, Saudi  state-owned behemoth, Aramco, seemed to hold its own in China, Asia’s  biggest oil consumer. According to the latest figures from China’s  General Administration of Customs, the country imported 223.858 million  barrels of crude oil from Saudi Arabia, up 9.8% from the 203.811 million  barrels of a year earlier. It is crucial to note, however, that this  positive position was due to the addition of two new independent  refinery customers – Zhejiang Petrochemical Co., and Hengli  Petrochemical (Dalian). Hengli, with a total capacity of 400,000 barrels  per day (bpd), signed a term contract with Aramco in late 2018 to buy  130,000 bpd from it, whilst Zhejiang Petrochemical, also with a 400,000  bpd total capacity, agreed to take 116,000 bpd from Aramco on a term  basis. This latter deal coincided with Aramco offering to take a 9%  stake in Zhejiang Petrochemical.


Without these two deals, Saudi would again have lost its  top crude supplier position for China to Russia, which supplied 220.201  million barrels and held a 14.6% market share in China for the January  to May period. A similar – but worse – theme was evident with the other  big Asian customers of South Korea and Japan. South Korea bought in  126.648 million barrels of crude oil from Saudi Arabia over the January  to May period, a 1.2% drop compared to 128.229 million barrels received  in the same period a year ago. Japan, meanwhile, imported around 5.5%  less crude from Saudi over the period, a total of 1.169 million bpd. 

More at: https://oilprice.com/Energy/Crude-Oi...hare-Race.html

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## Swordsmyth

EPIC Midstream Holdings, the company set up to build and operate  crude oil and natural gas liquids pipelines from the Permian to the U.S.  Gulf Coast, will start actual exports of crude from its terminal in  Corpus Christi by the end of 2019, EPIC Midstream’s President Brian  Freed told Reuters in an interview.
On Monday, EPIC Midstream said  that it appointed Freed president. Freed —who has two decades of senior  management experience at Apache Corporation, Crestwood Equity Partners,  Inergy Midstream, Energy Solutions International, and Entessa—said in a  statement that “EPIC has a bright future, and I look forward to helping  the company meet its goal of addressing surging crude oil and natural  gas liquids takeaway needs from the Permian and Eagle Ford Basins.”
The EPIC Crude Oil Pipeline  from Orla to the Port of Corpus Christi is one of several crude oil  pipelines that are set to alleviate the bottlenecks in the  fastest-growing U.S. oil basin, and is set to be in service in the  second half of 2019, according to EPIC Midstream.
Production outpaced pipeline takeaway capacity in the Permian in early 2018, which weighed heavily on the Midland oil prices compared to other U.S. benchmarks. Companies are currently rushing to complete and place into service more pipelines to relieve the bottlenecks, and some are converting pipelines from shipping natural gas liquids (NGL) to crude oil to further ease the takeaway capacity congestion.  

More at: https://oilprice.com/Latest-Energy-N...-End-2019.html

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## Swordsmyth

Saudi Arabia's oil revenue dropped by 5 percent year over year in the  second quarter, resulting in a 33.5 billion-rial ($8.9 billion) budget  deficit for the period, compared with a 7.4 billion-rial gap in the  second quarter of 2018, Bloomberg reported July 30. Meanwhile, the  country's non-oil revenue fell by 4 percent year over year.

More at: https://worldview.stratfor.com/situa...second-quarter

----------


## Swordsmyth

Kenya has just completed a deal to export 200,000 barrels of crude  oil, in its first-ever export of the commodity, the African country’s  President Uhuru Kenyatta said.
“We are now an oil exporter. Our  first deal was concluded this afternoon with 200,000 barrels at a decent  price of US$12 million,” President Uhuru Kenyatta said on Thursday.


In June this year, Kenya’s government signed  a heads of agreement with France’s major Total, Tullow Oil, and Africa  Oil to develop an oil processing facility with capacity of 60,000  bpd-80,000 bpd, as part of the East African country’s plan to begin  commercial oil production within a few years.
In the release of  its first-half results last week, Tullow Oil had said that it expected  the first export cargo of oil of the Early Oil Pilot Scheme (EOPS) to be  sold and lifted in the third quarter of 2019.
Regarding the full  field development, Tullow Oil said that Kenya’s government has gazetted  the land required for the upstream development in Turkana, and pipeline  land surveys by the National Lands Commission began in the first week of  July.
“An Upstream Water Framework agreement has been drafted by  Tullow and submitted to the Government of Kenya for their review. Given  this significant progress, the FID of the Development is now targeted  for the second half of 2020,” the oil company said last week. 

More at: https://oilprice.com/Latest-Energy-N...-Of-Crude.html

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## Swordsmyth

An ugly day in the energy complex saw WTI tumble to a $53 handle as  US-China trade tensions were anything but calmed (despite the equity  market's exuberance).
 *“We shouldn’t underestimate the potential impact of a full-blown trade war between the world’s two biggest economies,”* said Bart Melek, head of global commodity strategy at TD Securities.
  “This could very well mean we as a market* significantly overestimated demand growth for oil* and we could easily be in a surplus situation in 2020.”*API*

 	Crude -3.43mm (-2.8mm exp) 	Cushing -1.6mm 	Gasoline -1.1mm (-1.2mm exp) 	Distillates +1.2mm (+200k exp)
*Crude stocks fell for the 8th week in a row,* with a bigger than expected draw of 3.43mm barrels last week.


  WTI accelerated its losses into the NYMEX close and hovered around  $53.80 ahead of the API print and started to drift lower after the data  hit...



More at: https://www.zerohedge.com/news/2019-...crude-draw-row

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## Swordsmyth

Plains All American’s Cactus II pipeline that will carry crude oil  from the Permian to Corpus Christi in Texas will begin partial  commercial operation next week, the company’s chief executive during its  second-quarter financial results, as quoted by Reuters.
Cactus  II has a nameplate capacity of 670,000 barrels daily and is one of  three pipelines the oil industry in Texas and New Mexico has been  eagerly awaiting for a while now. While production from the Permian  shale play rises, pipeline capacity has lagged behind, pressuring  prices.


There’s more: a JV between Phillips 66 and Andeavor could make its Gray Oak pipeline ship  up to 1 million bpd of crude if it gets sufficient commitments from  producers. The pipeline should be operational by the end of the year.
The EPIC pipeline,  capable of shipping 500,000 bpd should also be operational by the end  of 2019. Two large Permian players—Apache Corp. and Noble Energy—have  already committed future flows taking up 30 percent of the pipeline.

More at: https://oilprice.com/Latest-Energy-N...Next-Week.html

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## Swordsmyth

In a poorly timed move for the oil markets, Libya announced today  that it has resumed oil production from the country’s largest oilfield,  Sharara.
The oil production will gradually increase, according to  two field engineers, cited by Reuters. NOC has not officially confirmed  the restart.
The field had stopped producing on July 19 after an  unidentified group had shutdown a pipeline valve, according to a  statement from Libya’s NOC at the time. Production was resumed and the  force majeure lifted on July 22, but yet another pipeline valve was closed on July 31, triggering another force majeure.
 The field closures and reopenings in rapid succession highlight the tumultuous state of Libya’s oil industry.
Sharara  has a capacity of 340,000 barrels per day, but prior to the most recent  force majeure, the field had been pumping at a rate of 290,000 barrels  per day.

Saudi Arabia approached OPEC today in an effort to stop the oil price  slide, intimating to its OPEC colleagues that it was open to all  options, according to an unnamed Saudi official quoted by Bloomberg.  Saudi Arabia also announced on Thursday that it would keep its oil  exports below the 7-million-bpd mark at least through September to drain  global oil supplies.

More at: https://oilprice.com/Latest-Energy-N...-Oilfield.html

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## Swordsmyth

Several major oil pipelines connecting West Texas to the Gulf Coast  are set to come online in the next few weeks and months, allowing more  Permian oil to hit the global market.
One result of the onset of  new midstream capacity is to erase part of the price difference between  Brent and West Texas Intermediate (WTI). The discount that WTI trades at  relative to the more internationally-focused Brent benchmark has  widened and narrowed depending on a variety of factors over the years,  but the two markers are now converging.  


The perennial problem of U.S. shale production in the  Permian outpacing the ability of the midstream sector to move oil has  been the main driver of the WTI discount in recent years. Oil trapped in  West Texas led to painful discounts for oil producers, who at times had  to sell their oil $10-$20 per barrel below what oil fetched at the Gulf  Coast.

But  those large discounts could be a thing of the past. On Monday, Brent  was trading only about $4 per barrel more than WTI, the smallest  difference in nearly a year.
Why the sudden change? Part of the  reason is that more Permian crude will reach the global market,  smoothing out the differences between WTI conditions and those for  Brent. U.S. exports have steadily ratcheted higher, and more midstream  connections will allow for another step up in exports.


The Cactus II pipeline began operations this week, and could see flows reach 300,000 bpd in August. The pipeline will ramp up to about 670,000 bpd.
In  total, three pipelines are set to come online by the end of the year,  leading to a massive 2.5-mb/d jump in midstream capacity. While that  will help WTI, more pipelines create a new set of challenges. The  Permian is about to go from a multi-year midstream bottleneck, to one of  surplus pipeline space. “There’s no way another 2.5 million bpd are  waiting to get sent to Corpus Christi (Texas),” Sandy Fielden, an  analyst at Morningstar, told Reuters.  “Clearly, there’s going to be too much capacity ... There will be  buying up of barrels in Midland like it’s going out of style.” 

More at: https://oilprice.com/Energy/Oil-Pric...er-Prices.html

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## Swordsmyth

Egypt is looking to boost its crude oil and condensate production to  690,000 bpd by the end of the year from the current 630,000 bpd,  Egyptian Petroleum Minister Tarek al-Mulla said this week.
Egypt—neither  a member of OPEC nor a part of the non-OPEC group of producers in the  OPEC+ coalition that restricts output to drain the glut and boost oil  prices—has introduced new economic incentives to encourage more  international investment in its oil exploration activities, Egypt  Independent quoted minister al-Mulla as saying.  
Egypt has  launched a bid round for oil and gas exploration in the Red Sea area,  with application date deadline on September 15, the minister said.
The country has also formed a task force to draft proposals on how to quickly raise oil production, he added.  

More at: https://oilprice.com/Latest-Energy-N...-Year-End.html

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## Swordsmyth

The US oil and gas rig count increase by 1 this week, according to  Baker Hughes—a small gain that ends a string of significant losses for  the United States. The total oil and gas rig count now stands at 935, or  122 down from this time last year. US production, however, is still  significantly up year on year.
The total number of active oil rigs  in the United States increased by 6 according to the report, reaching  770. The number of active gas rigs decreased by 4 to reach 165.  Miscellaneous rigs fell by 1, to zero.

US production held fast at an average of 12.3 million bpd for week ending August 9, which is just 100,000 bpd off the all-time high.
Canada’s  overall rig count saw a yet another increase this week, although small.  Oil and gas rigs climbed by 2, adding to last week’s 3-rig increase.  Oil and gas rigs in Canada are still down 70 year on year. Canada’s oil  rigs are down 40 year on year, with gas rigs down 30 year on year.

More at: https://oilprice.com/Energy/Energy-G...-Increase.html

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## Swordsmyth

OPEC’s crude oil production fell by another 246,000 bpd in July  compared to June, as Saudi Arabia deepened its cuts, as U.S. sanctions  further trimmed output in Iran and Venezuela, and as an outage  restricted production in Libya.  
According to secondary sources in OPEC’s closely watched Monthly Oil Market Report  published on Friday, total OPEC crude oil production averaged 29.61  million bpd in July, down by nearly 250,000 bpd from June, and driven by  lower output in Saudi Arabia, Iran, Libya, Venezuela, and Nigeria. Iraq  and Algeria recorded the largest production increases, OPEC’s secondary  sources estimates showed. 


The July crude production of the cartel members is a  multi-year low, and close to the 29.42 million bpd production estimate  in the monthly Reuters survey, which noted that OPEC’s production was at  an eight-year low last month.  
Saudi  Arabia, keen to restrain oil price slides amid a markedly bearish  market sentiment, deepened its already deep cuts, slashing another  134,000 bpd to have its July production average 9.698 million bpd,  OPEC’s report showed. The Saudis have vowed to keep production well  below 10 million bpd—although their quota is 10.3 million bpd—and exports at below 7 million bpd, aiming to tighten the market as demand growth weakens with gloomy macroeconomic prospects.
Iran  and Venezuela, both under U.S. sanctions, also saw their production  down. Iranian production declined by 47,000 bpd from June to 2.213  million bpd in July, and Venezuela’s output dropped by 32,000 bpd to  742,000 bpd. 

Crude oil production in Libya, one of the wildest cards in OPEC in  terms of production consistency amid security concerns, fell by 42,000  bpd to 1.078 million bpd last month, after its largest oil field  experienced two outages in two weeks. In the last week of July, Libya’s  production dropped to a five-month low below 1 million bpd, after a fresh outage at the Sharara oil field.  


Even with OPEC’s falling oil production, the cartel sees  demand for OPEC crude next year even lower than the July production—at  29.4 million bpd, or 1.3 million bpd lower than the 2018 level.

More at: https://oilprice.com/Energy/Crude-Oi...ut-Deeper.html

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## Swordsmyth

OPEC sees a “somewhat bearish” outlook for the rest of 2019, even as supplies remain tight in the short run.
In  its latest report, OPEC only slightly downgraded its forecast for  global oil demand, lowering it to 1.10 million barrels per day (mb/d)  for 2019, down only a minor 0.04 mb/d from a month earlier. That  estimate could end up being too optimistic, and OPEC itself said the  forecast is “subject to downside risks stemming from uncertainties with  regard to global economic development.”

Notably, OPEC said that global supply could grow by 1.97 mb/d this  year, significantly outpacing demand growth. Still, that figure is down  by 72,000 bpd from a previous estimate, due to lower-than-expected  production growth in the U.S., Brazil, Thailand and Norway.
In  another worrying sign of a brewing supply surplus, OPEC said that oil  inventories in OECD countries rose by 31.8 million barrels in June from a  month earlier, rising to 67 million barrels above the five-year  average. In other words, just as OPEC+ was meeting to extend the  production cuts for another 9 months, inventories were rising, an  indication of an oversupplied market.

Based on those numbers, OPEC+ is staring down a serious supply glut next  year absent further action. The group can either stick with current  production levels and risk another market downturn, or it can swallow  further production cuts. 

More at: https://oilprice.com/Energy/Energy-G...sh-On-Oil.html

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## Swordsmyth

Alberta has announced an extension of the obligatory oil production  cuts approved by the previous government on the grounds that it is  uncertain when new pipeline capacity would come on stream.
Reuters reports the cuts would be extended by another 12 months until the end of 2020.

More at: https://oilprice.com/Energy/Crude-Oi...tion-Cuts.html

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## Swordsmyth

If anything, the consolidation in the Permian and other shale basins,  increasingly led by the oil majors, ensures that drilling will continue  at a steady pace for years to come.It isn’t as if the rest of  the world is slowing down either. The global oil industry is set to  greenlight $123 billion worth of new offshore oil projects this year,  nearly double the $69 billion that moved forward last year, according to  Rystad Energy.  In fact, while shale drilling has slowed a bit over the past year amid  investor skepticism and poor financial returns, offshore projects have  begun to pick up pace.

More at: https://oilprice.com/Energy/Crude-Oi...ld-In-Oil.html

----------


## Swordsmyth

The US will sell another 10 million barrels of sour crude oil, the Department of Energy said on Wednesday in a Notice of Sale, according to S&P Global Platts.
The  Department of Energy will be accepting offers to purchase the crude  through August 28, and  delivery must be taken between October 1 and  November 30.
The 10-million-barrel offering is the latest in a  series of SPR sales under a mandatory sales program that seeks to sale  260 million barrels through 2027, and is not part of conscious act to  influence the markets.
The SPR holds 645 million barrels of crude oil, 395 million of which is of the sour variety.
The US has periodically sold off  part of the SPR, the last of which was in March. Marathon Petroleum,  Motiva, and Phillips 66 together purchased 4.32 million barrels for  $285.7 million.

More at: https://oilprice.com/Latest-Energy-N...Next-Week.html

----------


## Swordsmyth

Dow Inc said on Thursday that it is partnering with the Netherlands-based Fuenix Ecogy Group to turn recycled plastic waste into oil.
Dow  will use the feedstock, pyrolysis oil, to produce new polymers at its  production facilities at Terneuzen in the Netherlands, the U.S.  chemicals giant said.
“This agreement marks an important step  forward to increase feedstock recycling – the process of breaking down  mixed waste plastics into their original form to manufacture new virgin  polymers,” Dow said.
Sirt Mellema, chief executive at Fuenix, said:
“This  partnership offers us the opportunity to scale up our technology. Our  ambition is to ensure the value of plastic waste is fully used to create  new, circular plastic while significantly reducing the global use of  virgin raw materials and CO2 emissions.”
The new polymers produced  from the pyrolysis oil will be identical to those made from traditional  feedstocks such as hydrocarbons, and being identical, they can be used  in the same applications, the U.S. firm said.
“The plastics that  we make from the pyrolysis oil and the crude oil are the same,” Carsten  Larsen, Dow’s director of recycling in Asia and Europe, told Bloomberg  in an interview published today.
The  deal is also a step for Dow to meet its pledge to have at least 100,000  tons of recycled plastics in its product offerings sold in the European  Union (EU) by 2025, the company said.

More at: https://oilprice.com/Latest-Energy-N...tic-Waste.html

----------


## Swordsmyth

The giant Johan Sverdrup oil field in Norway’s North Sea could start  shipping oil in October, a month before the currently expected field  production start-up in November, Reuters reported on Friday, citing a spokesman for the field’s operator Equinor.
“We’ve issued an early loading schedule that includes Sverdrup cargoes for October,” Equinor spokesman Morten Eek told Reuters.
“Nothing  would please us more than to see production before November, although a  November start-up remains our primary expectation,” Eek noted.  
Equinor expects to start production from the Johan Sverdrup—the  North Sea giant as it calls it—in November 2019. With expected  resources of 2.7 billion barrels of oil equivalent, Johan Sverdrup is  one of the largest discoveries on the Norwegian Continental Shelf (NCS)  ever made and one of the largest industrial projects in Norway in the  next fifty years, according to Equinor.
Daily production during  the first phase of the Johan Sverdrup development is estimated at  440,000 barrels of oil per day, while peak production is expected to  reach 660,000 bpd. At peak production, Johan Sverdrup will account for  25 percent of Norway’s total petroleum production. The first phase of  the giant Johan Sverdrup field development is nearing completion, and the second phase is already underway, Equinor said.
Production start for phase two of the project is expected in the fourth quarter of 2022.

More at: https://oilprice.com/Latest-Energy-N...n-Planned.html

----------


## Swordsmyth

OPEC’s production increased in August thanks to Iraq and Nigeria a Reuters survey found on Friday.
OPEC’s August production has been estimated at 29.61 million barrels per day, which is 80,000 barrels per day over July’s production level.


The production increase is surprising, given that Iran and  Venezuela are producing less not by choice, and continue to face uphill  battles when it comes to maintaining their oil production. Saudi  Arabia, too, over complied with the production cut deal again as  expected, but it raised production for August slightly over July.  Overall, the group is still over complying with the production quotas.
This  brings OPEC’s compliance for August is now estimated at 136%, no thanks  to Iraq and Nigeria, who lifted production by 80,000 barrels per day  and 60,000 barrels per day, respectively. And even though Saudi Arabia  is still over complying, it lifted production in August to produce 9.63  million barrels per day.
While Iraq, Nigeria, and Saudi Arabia  increased production in August, Iran’s production fell  further—experiencing a 50,000 barrels per day loss for the month. US  Secretary of State Mike Pompeo last week said it had successfully  removed 2.7 million barrels of oil per day off the oil market since it first sanctioned the country.
Iran’s  July oil and condensates exports for July fell to 120,000 barrels per  day, Reuters said last week.  Iran’s production for July was 2.21  million bpd. This compares to an average daily production rate of 3.55  million barrels for all of 2018.

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

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## Swordsmyth

New data from U.A.E.-based property firm Cavendish Maxwell shows Dubai house *prices fell to their lowest levels in June, not seen since the 2008 financial meltdown.*
  Cavendish Maxwell's Dubai House Price Index via Property Monitor shows *single-family house prices dropped 15.3% YoY this June*, compared to a 9.2% annual decline recorded in January 2019.

  According to the House Price Index,* the average  house/townhouse price decreased to $1,197,944.00, and the average  apartment price remained steady at $462,842.00 in June*. House prices in the three months leading up to June were 4.5% lower, compared to the previous quarter.

  As of June 2019, apartment and house/townhouse prices plummeted 21.4%  and 22.4% respectively, compared to their prices of $571,735 and  $1,524,628 in September 2015.

*The rapid decline in Dubai home prices began last May,*  just when the trade war between the US and China started to intensify.  Then in late 3Q18 through 4Q18, crude oil collapsed by almost 40%,  further weighing on Dubai's local economy.


More at: https://www.zerohedge.com/economics/...le-2008-levels

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## Swordsmyth

Just a few short days after Saudi Arabia’s Energy Minister lost half  of his purview, Saudi Energy Minister Khalid Al Falih has lost his role  as chairman of the board for Saudi Aramco, Al Falih announced on Twitter Monday.
Al  Falih will step down from his role as chairman in Aramco’s attempt to  avoid a conflict of interest in the runup to its much-hyped,  much-anticipated IPO. Now Aramco will be officially separated from the  Ministry of Energy.
But the real reason could have more to do with  Al Falih’s policies, specifically in how those policies conflict with  Crown Prince Mohammed Bin Salman.  Al Falih has long been leery of New  York as a possible listing venue for the oil giant, but MBS still has  his eye on this IPO host.
Al  Falih’s replacement as chairman of the board is Yasser Bin Osman  Al-Rumayan, current head of the Saudi Wealth Fund, the body that will be  the recipient of any incoming funds from the IPO.  
“ I  congratulate my brother, Mr. Yasser Bin Osman Al-Rumayan, Governor of  the Public Investment Fund, on his appointment as Chairman of Saudi  Aramco's Board of Directors, which comes as an important step to prepare  the company for the IPO, and we hope him with all the best and  success,” Al Falih said on Twitter.
Just days ago, Al Falih issued  a similar congratulations to Bandar Al-Kharif, his replacement as the  Minister of Industry and Mineral Resources, which Saudi Arabia split off from the Minister of Energy on Friday. Al Falih will still head the Minister of Energy, but with half of the responsibility.

More at: https://oilprice.com/Latest-Energy-N...In-Aramco.html

----------


## Swordsmyth

Russia plans to bring its crude oil production to full compliance  with the OPEC+ production cuts agreed last December, Energy Minister  Alexander Novak said, as quoted by Reuters.
Novak  also said the country’s production in August was 143,000 bpd below its  October 2018 level. The October 2018 production level made the baseline  for the OPEC+ cuts. However, earlier Novak had admitted that the August  production level was higher, albeit slightly, than the production level  Russia had agreed to maintain as part of its commitment to the OPEC+  cuts.


Russia pumped an average of 11.29 million bpd in August,  which was not just higher than the cap it had agreed with OPEC but also  the highest daily average since March. However, it’s worth noting here  that the country was forced to cut more production than its quota  earlier, after an oil contamination suspended the flow of oil via the  Druzhba pipeline.
Yet Russia was not the only member of the pact that increased its oil production in August. A Bloomberg survey  revealed OPEC also pumped more than it did in July, with the  200,000-bpd rise led by Nigeria and Saudi Arabia. The Kingdom had been  cutting more than it had to almost since the start but, apparently,  August marked a departure from this tactic.

Meanwhile, OPEC’s share of the global oil market fell to the lowest in several years in August, to 30 percent, not least because of the production drops in sanction-bound Venezuela and Iran, but also because of the cartel-wide cuts.

More at: https://oilprice.com/Energy/Energy-G...his-Month.html

----------


## Swordsmyth

OPEC’s oil exports rose to a four-month high, tanker tracking data compiled by Bloomberg showed on Tuesday.
OPEC’s  largest producers Iran, Iraq, Kuwait, Saudi Arabia, and the United Arab  Emirates—which account for three-quarters of the cartel’s total  production—shipped 15.73 million barrels of crude oil per day on average  in August—an increase of 736,000 barrels per day over July levels,  marking a four-month high, even as the group tries to live up to its  promise to do “whatever it takes” to balance the oil market.
The  volume of crude oil and condensate from Saudi Arabia and the UAE each  increased their exports by 300,000 barrels per day. Iraq’s exports  increased by 150,000 bpd, while Iran’s were up 65,000.

More at: https://oilprice.com/Latest-Energy-N...-More-Too.html

----------


## Swordsmyth



----------


## Swordsmyth

Contrary to its official mission to stabilize the oil market, OPEC’s strategy is doing the contrary—the oil production cuts are destabilizing the oil market, Emirates NBD’s Commodity Analyst Edward Bell says.
The  production cuts have thrown in a new variable of uncertainty in the  market—how long these cuts would last, and how long the economies of  OPEC members can afford the cuts to impact their production levels and  revenues, considering that oil prices haven’t risen as high as the  budget breakevens of many Gulf economies, Arabian Business quoted Bell  as saying.


“So when we look at the track record certainly seems like  OPEC is engaged is the act of market management in the last two years,  but I’d say their actions have been rather destabilising towards the  crude oil market,” Bell said.
The production cuts of the OPEC+  coalition have been partly, but not entirely successful, Bell says, as  carried by Arabian Business.
OPEC and its Russia-led non-OPEC partners aim to rebalance the market and say that they are and will be working toward “market stability” every chance they get to speak to the media.
Even if they have managed to put a floor under oil prices, the current levels  are way below the reported breakeven price for OPEC’s de facto leader  and largest producer, Saudi Arabia of around US$80 a barrel.

More at: https://oilprice.com/Energy/Crude-Oi...il-Market.html

----------


## Swordsmyth

OPEC kingpin Saudi Arabia named King Salman's son as energy minister  after sacking veteran oil official Khalid al-Falih, state media said  early Sunday."Khalid al-Falih has been removed from his position," the official Saudi Press Agency said, citing a royal decree.
"His royal highness Prince Abdulaziz bin Salman is appointed minister of energy."
Prince Salman is the king's son and the brother of powerful Crown Prince Mohammed bin Salman.
Falih's  dismissal comes just days after he was removed as chairman of  state-owned oil giant Aramco as the company prepares for a  much-anticipated initial public offering (IPO).
He was replaced in that post by Yasir al-Rumayyan, governor of the kingdom's vast Public Investment Fund.
Falih also saw his portfolio shrink as the kingdom reels from low oil prices.
Last  month the world's top oil exporter announced the creation of a new  ministry of industry and mineral resources, separating it from his  energy ministry.

More at: https://news.yahoo.com/opec-kingpin-...223754226.html

----------


## Swordsmyth

The U.S. topped Saudi Arabia in oil exports in June as Riyadh complied  with OPEC's production cut deal and shale production surged, according  to an industry report Wednesday. Crude oil prices fell.

Already the No. 1 producer of oil, the U.S. exported nearly 9 million  barrels per day of crude and oil products in June, beating Saudi Arabia  and Russia, the International Energy Agency said in its monthly oil  market report.
 Saudi Arabia then retook the U.S. as top producer in July and August  as hurricanes forced halts to production and shipments. But the U.S.  could reclaim the title of top oil exporter later this year. The IEA  said crude exports alone could rise 33% from June levels to as much as 4  million barrels a day as new export infrastructure comes online in Q4.
 "Booming shale production has allowed the US to close in on, and  briefly overtake, Saudi Arabia as the world's top oil exporter," the IEA  said in its report. "The installation of the necessary pipelines and  terminals is continuing apace, which will ensure that the trend  continues."

More at: https://www.investors.com/news/crude...abia-exporter/

----------


## Swordsmyth

Iraq and Nigeria—the two rogue members of OPEC that haven’t been  complying with their share of the production cuts in recent months—pledged on Thursday to fall within their respective caps while the cartel and its allies are trying to rebalance the oil market.
Iraq,  the second-biggest producer in OPEC behind Saudi Arabia, has said that  it would cut its current production by 175,000 bpd by October, Reuters  reported on Thursday after a monitoring panel of OPEC and its allies met  in Abu Dhabi.
OPEC’s second-largest producer that has always had issues with keeping within its cap, lifted its oil production by 43,000 bpd to 4.779 million bpd in August—well above its 4.512-million-bpd quota.
Nigeria, for its part, has promised to reduce its oil production by 57,000 bpd.
In  August, Nigeria pumped 1.866 million bpd, up by 86,000 bpd from July,  according to OPEC’s secondary sources that the cartel uses to calculate  official production and compliance rates. Nigeria’s cap as part of the  deal is 1.685 million bpd.
Improved compliance could translate into a total cut of more than 400,000 bpd, two sources from the OPEC+ alliance told Reuters.

More at: https://oilprice.com/Latest-Energy-N...il-Quotas.html

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## Swordsmyth

*Saudi Arabia oil production reduced by drone strikes*

----------


## tommyrp12

https://twitter.com/IntelCrab/status...08528350613504




> Senior military analyst for @AJENews predicts imminent Saudi retaliation on Iranian targets for earlier oil strikes.𝙏𝙝𝙚 𝙄𝙣𝙩𝙚𝙡 𝘾𝙧𝙖𝙗 added,
> SAMA Strategy Analytics
> 
> @samastrategy
> محللين عسكريين لقناة الجزيرة
> رد عسكري سعودي على إيران بدعم أمريكي متوقع بنسبة عالية
> 4:00 PM - 14 Sep 2019

----------


## Warlord

A good old fashioned war.

----------


## Swordsmyth

*Saudi Officials Say Oil Production to Return to Normal Levels by Monday*

----------


## Swordsmyth

And there it is, moments before oil markets open: upon the US release  of declassified satellite images showing precision strikes on critical  spheroids at the world's largest oil processing facility at Abqaiq one  market analyst alarmingly writes,

 *"We think this is a months fix, not days/weeks. Oil going up even higher."*
  This after reports just before the satellite photos were released  commonly said a minimum of "weeks" would pass before full Saudi Aramco  production capacity comes back online. 
  They appear to show approximately* 17 points of impact on key infrastructure* at the site after Yemeni Houthis claimed a successful drone strike of up to ten unmanned aerial vehicles with explosives. 

  However, US and Saudi officials, still amid an ongoing investigation, have told reporters they are *"certain" the attack actually originated from Iraq*, especially as the debris and precision targeting show a level of "sophistication" which would link it to Iran's elite IRGC.
  Dan Tsubouchi, chief market strategist at Calgary-based SAF Group, is  predicting a fix that will take months based on the extent of the  damage revealed in the new images, driving up oil to prices beyond the  initial possibly short-sighted predictions this weekend.

  According to Fox News:
 The Washington-based Center for Strategic and International Studies  in August had identified that region as the plant's stabilization area.  That zone included *"storage tanks and processing and compressor  trains — which greatly increases the likelihood of a strike successfully  disrupting or destroying its operations,"* the center wrote at the time.Niether Riyadh officials nor the state-run oil giant Saudi Aramco  have yet to confirm the extent of the damage, but have only made  assurances they will tap its global reserves network.

  Aramco's president and CEO Amin Nasser announced Sunday, “Work is underway to restore production and a progress update will be provided in around 48 hours.” 


https://www.zerohedge.com/energy/dec...i-oil-facility

----------


## Swordsmyth

Looks  to me like the cost to produce oil in KSA is going to be quite a bit  higher as they pay for fixing this mess. The bigger hidden cost will be  more security.

We  have heard the claims that it's only $2-10/bbl to produce oil over  there. Well if you look at the infrastructure being used, that's very  expensive stuff and if much of it is destroyed, the replacement cost  will be quite a bit higher. The low prices they have been getting for  oil lately aren't allowing them to build a surplus capital buffer and  their inventory is the lowest since 2008. If they have delivery  contracts at fixed prices, they are screwed.

I personally think this stuff is going to cost them double or triple what it cost to originally build because they will want it in short order. However, most of the stuff they use in these GOSPs is custom made, i.e. long lead times. If that is the case, look for a loss of 3mmbbl/day for 6 months to a year.

More at: https://community.oilprice.com/topic...ontrol/?page=2

----------


## Swordsmyth

Saudi Arabia has shut down its 230,000 bpd pipeline carrying Arab  Light crude to Bahrain, after this weekend’s attacks took 5.7 million  bpd of Saudi oil production—mostly light grades—offline, Reuters reported on Monday, quoting two trade sources.

The  pipeline with a capacity to ship between 220,000 bpd and 230,000 bpd of  Arab Light crude oil from Aramco to Bahrain’s oil company Bapco was  closed after the attacks crippled the production of mostly light grades  in Saudi Arabia, one of Reuters’ sources said.


On Saturday, the Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks,  which resulted in the suspension of more than half of Saudi Arabia’s  oil production. The onshore Khurais oil field has the capacity to  produce 1.2 million bpd of Arab Light, according to EIA estimates.  The Abqaiq facility, for its part, is considered to be the most  important oil processing plant in the world. The facility processes  crude oil from the major Saudi oil fields Ghawar, Shaybah, and Khurais.
All those three fields produce Arab Light or Arab Extra Light.  Ghawar has the capacity to pump 5.8 million bpd of Arab Light, while  Shaybah has a capacity of 1 million bpd of Arab Extra Light, according  to EIA estimates based on data from Saudi Aramco, Arab Oil and Gas  Journal, and IHS Markit.
While the Saudis closed the oil pipeline  to Bahrain, the Bahraini company Bapco is scrambling to secure tankers  to ship some 2 million barrels of crude oil from Saudi Arabia, the trade  sources told Reuters.
Bapco has shut down a crude distillation  unit at the Sitrah refinery, while another crude distillation unit, a  vacuum distillation unit, and a visbreaker unit have reduced their run  rates to 45 percent, Reuters reported, citing an alert to clients sent  by research company IIR.

https://oilprice.com/Latest-Energy-N...r-Attacks.html

----------


## Swordsmyth

Saudi Arabia’s disrupted oil production may last longer than  originally thought, Amrita Sen, chief oil analyst at Energy Aspects  Ltd., told Bloomberg on Monday, with full resumption of oil production perhaps not returning for weeks—or even months.

Saudi  Arabia, too, is holding a more reserved position that initially  thought, believing now that less than half the capacity at the Abqaiq  processing plant can be restored quickly, according to Bloomberg sources  that spoke on condition of anonymity. One of the longer lead-time items  of the restoration are Abqaiq’s stabilization towers that separates out  the dissolved gas from the crude oil—a distillation process that  sweetens sour crude, if you will.


Just the specialized parts to repair those towers could  take months to get. Five out of the 18 stabilization towards were hit,  indicating a “very specific, accurate targeting of those particular  infrastructures,” Phillip Cornell, former senior corporate planning  adviser to Aramco, cited by Bloomberg.
Abqaiq has a capacity of 5.7 million barrels per day of light crude.
To  compensate, Aramco is bringing back online previously shuttered  oilfields, and it is drawing on its oil reserves to cushion the blow.  What can’t be compensated for by cranking up idled fields and siphoning  off crude reserves is being satisfied by substituting a heavier grade  oil—but all these emergency measures have limits.
Saudi Arabia’s  stockpiles are only sufficient enough to last 26 days, according to  Rystad Energy, so if the outage were to last “months” rather than days  or weeks, customers may actually feel the supply crunch.

More at: https://oilprice.com/Energy/Crude-Oi...s-Analyst.html

----------


## Swordsmyth

OPEC has sufficient spare capacity  to respond to supply shortages after this weekend’s attacks on oil  infrastructure that took more than half of Saudi Arabia’s oil production  offline, Suhail Al Mazrouei, the energy minister of the United Arab  Emirates (UAE), said on Monday. 

“We have spare capacity, there are volumes that we can deal with as  an instant reaction but we need to analyse the full impact, and the  assessment of the incident is under way in Saudi Arabia,” Al Mazrouei  said, as carried by The National.  
The UAE will support Saudi Arabia, if needed, he added.
“We  as the UAE, as a member of OPEC, stood fast and ready to support KSA in  any shape or form. The technical side, from supply, if there is a  shortage. We have certain capacity that we can put in the market,” Al  Mazrouei said.   
Still, the UAE energy minister, as well as  OPEC’s Secretary General Mohammad Barkindo, said it was too early to  rush into emergency meetings and put extra supply on the market, at  least until Saudi Aramco provides the first updates about how long it  would take to restore production.


The Saudis haven’t declared any force majeure, the  situation is under control, and Saudi Arabia has ample supply, OPEC  Secretary General Mohammad Barkindo told “Bloomberg Markets: European Open” in an interview on Monday.


In case of prolonged outage in Saudi Arabia, OPEC’s UAE, Kuwait, and  Iraq, plus non-OPEC’s Russia could bring in 800,000 bpd-900,000 bpd of  production online, which is significantly less than the outage in Saudi  Arabia, Warren Patterson, Head of Commodities Strategy at ING, said on Sunday.

“The issue for the market is that more than 70% of OPEC spare capacity sits in Saudi Arabia,” Patterson noted.

More at: https://oilprice.com/Energy/Crude-Oi...Necessary.html

----------


## Swordsmyth

U.S. shale drillers saw their share prices surge on Monday, lifted by  the nearly 15 percent jump in crude oil prices following the attacks on  Saudi oil infrastructure.
As of Monday, Saudi Aramco indicated  that it would take weeks or months to fully restore operations at the  Abqaiq facility, the largest oil processing complex in the world. Saudi  production immediately plunged by 5.7 million barrels per day (mb/d),  and while some was only sidelined for precautionary reasons, the latest assessments are that less than half of the disrupted capacity can come back online in the short run.


The attack has rattled the oil market and once again  raised the prospect of regional war. Oil prices spiked on Monday, and  could remain elevated for some time. The longer the outage, the more  significant the price increase. 
“Should the current level of  outage be announced to last for more than six weeks, we expect Brent  prices to quickly rally above $75/bbl, a level at which we believe an  SPR release would likely be implemented, large enough to balance such a  deficit for several months and cap prices at such levels,” Goldman Sachs  analysts wrote in a note on September 15. “An extreme net outage of a 4  mb/d for more than three months would likely bring prices above $75/bbl  to trigger both large shale supply and demand responses.”


U.S. shale drillers were the beneficiaries of turmoil in the Middle  East. Chesapeake Energy was up nearly 18 percent on Monday. SM Energy  surged nearly 28 percent. EOG Resources rose by 7 percent. And so on.


U.S. shale cannot help in the short-term. Despite  wrong-headed descriptions in years past describing shale as a swing  producer, it takes time to adjust drilling plans and to bring supply  online.
But if WTI remains in the mid-$60s rather than the  mid-$50s, supply growth could reach 2 mb/d next year instead of just 1  mb/d, Bernadette Johnson, vice president of market intelligence at  consultants Enverus, told Reuters. 
More at: https://oilprice.com/Energy/Energy-G...il-Prices.html

----------


## Swordsmyth

*U.S. crude export demand surges after attack on Saudi facilities*

----------


## Swordsmyth

ExxonMobil has made another oil discovery  offshore Guyana, adding to a previously estimated recoverable resource  of more than 6 billion oil-equivalent barrels on the Stabroek Block,  just a few months before it begins oil production from the Liza Phase 1  development.
Exxon encountered a high-quality oil-bearing  sandstone reservoir in the Tripletail-1 well in the Turbot area on the  Stabroek Block, the U.S. supermajor said in a statement.
“Together  with our partners, ExxonMobil is deploying industry-leading  capabilities to identify projects that can be developed efficiently and  in a cost-effective way,” said Mike Cousins, senior vice president of  exploration and new ventures at ExxonMobil.
ExxonMobil has made more than a dozen oil discoveries  offshore Guyana, which is the supermajor’s key development priority in  the coming years together with significantly boosting shale production  in the Permian basin.


While Exxon has been the undisputed leader in exploration success in the newest offshore hot spot, other oil companies have also had exploration success recently.Tullow Oil announced last month an oil discovery on the Orinduik license, and said this week that it had made another oil discovery on the same license.
“I  am very pleased that we have made back-to-back discoveries in Guyana  and successfully opened a new, shallower play in the Upper Tertiary age  of the Guyana basin with our second well,” Angus McCoss, Exploration  Director at Tullow Oil, said in a statement on Monday.
“The Joe-1  discovery and its surrounding prospects represent another area of  significant potential in the Orinduik Block and we are greatly looking  forward to the next phase of the programme as we continue to unlock the  multi-billion barrel potential of this acreage,” McCoss said. 

More at: https://oilprice.com/Latest-Energy-N...re-Guyana.html

----------


## Swordsmyth

Chevron could restart oil production from the so-called partitioned  zone between Saudi Arabia and Kuwait “relatively quickly”, chief  executive Michael Wirth told CNBC in an interview.

Chevron has an agreement  with Saudi Arabia to produce oil from the fields in the partitioned  zone on its behalf. However, a territorial dispute between the Kingdom  and Kuwait put production of oil there on hold four years ago.
Previously, two fields in the partitioned zone—Khafji and Wafra—pumped  half a million barrels daily. Operational differences and a worsening  in bilateral relations led to the suspension of production in 2015. Last  year, there was talk about restarting joint production after the United  States called on its Gulf allies to increase production to keep rising  oil prices from going too high.

At  the time, sources told Reuters Saudi Arabia had wanted more control  over the joint oil production operations in the zone and the Kuwaitis  had been unwilling to accept that.
Now, following the Saturday attacks  on a Saudi oil field and a processing plant with a capacity of 5  million bpd, talk about joint production in the PZ is once again on the  table.

More at: https://oilprice.com/Latest-Energy-N...y-Quickly.html

----------


## Swordsmyth

If you think they can be believed:


Saudi Arabia’s energy minister held a highly-anticipated press  conference on Tuesday, updating the world on the damage at Abqaiq. He  struck a confident tone, stating that half of the disrupted output is  already back online and that repair work would be completed by the end  of the month. In the meantime, the country would use inventories to keep  export flows continuing as usual.

More at: https://oilprice.com/Energy/Crude-Oi...Predicted.html

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## Swordsmyth

The weekend attacks  on vital oil infrastructure in OPEC’s largest producer and the world’s  top oil exporter Saudi Arabia could be a boon to Brazil, a non-OPEC  producer which is not part of the OPEC+ production cut deal and which is  set to boost its oil production and access to some of its prized oil  exploration areas.  
With security risks in the Middle East now  higher than many—if not all—analysts thought possible just a week ago,  investors and oil buyers could turn to oil producing nations far from  the tensions in the Persian Gulf, analysts and emerging markets  investors say.


“I think people are beginning to think well maybe we  should be looking to Brazil, for example, for their oil supply, to  Mexico, to other countries in terms of where oil can come from,” veteran  investor Mark Mobius of Mobius Capital Partners told CNBC on Monday, the first trading day after the attacks in Saudi Arabia left 5.7 million bpd of its production offline.
“If you look at the reserves that Brazil has, you’ll see that they can produce quite a lot of oil,” Mobius told CNBC.
After  some delays in projects and heavy maintenance at the start of the  summer, Brazil has boosted its oil and liquids production in the past  two months and is set to be the second-largest contributor to non-OPEC  oil supply growth this year and next, after the number-one growth  driver, the United States. 

Brazil’s oil production is set to grow in the near term, organizations and analysts say.
According to OPEC’s Monthly Oil Market Report for September, Brazil will see an 180,000-bpd annual rise in production this year, and another
290,000 bpd annual supply growth in 2020.
Crude  oil output is expected to increase by between 320,000 bpd and 360,000  bpd in the second half this year compared to the first half of 2019,  when delays and maintenance led to production declines.
More than  80 percent of the estimated additional production from new projects in  2020 is expected to come from the Búzios (x-Franco), Lara, and Lula  fields, OPEC said.  
Regardless of the developments in the Middle  East, Brazil has a chance to significantly boost its oil production if  its own regulatory and investment climate is attractive enough for major  investments.  

More at: https://oilprice.com/Energy/Energy-G...ly-Crisis.html

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## Swordsmyth

Saudi  Aramco has offered Indian Oil Corp Arab Heavy crude oil instead of Arab  Light following an attack on its oil facilities over the weekend, an  industry source told Reuters on Tuesday.IOC  will receive full allocated volumes from Saudi Aramco in September and  October, the source said, declining to be named as he was not authorised  to speak with the media.

However  Aramco has said they would give some volumes of Arab heavy instead of  Arab mix oil, the source added. This indicates that Saudi is offering  heavy grade instead of light as Arab Mix is a combination of Arab light  and heavy.
No immediate comment was available from IOC.

https://finance.yahoo.com/news/saudi...074828569.html

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## UWDude

> If you think they can be believed:
> 
> 
> Saudi Arabias energy minister held a highly-anticipated press  conference on Tuesday, updating the world on the damage at Abqaiq. He  struck a confident tone, stating that half of the disrupted output is  already back online and that repair work would be completed by the end  of the month. In the meantime, the country would use inventories to keep  export flows continuing as usual.
> 
> More at: https://oilprice.com/Energy/Crude-Oi...Predicted.html



How many more missiles can the Houthi make in a month?

XD

----------


## Swordsmyth

> How many more missiles can the Houthi make in a month?
> 
> XD


The oil industry forum I lurk at says they can't possibly restore production that fast.

----------


## Swordsmyth

Saudi Arabia has approached Baghdad with a request to buy crude oil  from OPEC’s number-two to compensate for its production outage caused by  the Saturday attacks, sources who declined to be named told S&P Global Platts.
According  to one of the sources, Aramco had asked Iraq’s State Oil Marketing  Organization, or SOMO, for some 10 million barrels of Basra Light, to  load in October and November.


Saudi Arabia’s crude oil in storage was about 180 million barrels in  July, which would have been enough to cover exports at the rate of 6.88  million bpd for a period of almost a month.
Now, the S&P  Global Platts sources say Riyadh is also planning to use some of the oil  it had allocated for domestic consumption to fulfill its export  obligations. Iraq, in the meantime, has yet to respond to the request as  it has its own export orders to fill.

More at: https://oilprice.com/Latest-Energy-N...q-For-Oil.html

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## Swordsmyth

Kuwait raised the security alert level at all of its ports, affecting  both commercial ports and oil facilities, according to the state-run Kuwait News Agency, quoting a statement from Kuwait's minister of commerce and industry on Friday. 

The  decision reflected heightened tensions in the region, particularly over  oil infrastructure and seaport facilities, and follows Wednesday's  announcement from Kuwait's army that it was raising its readiness levels  and carry out military exercises amid current regional tensions. 
Kuwait's  move comes after two important oil production facilities in Saudi  Arabia were hit by drones and missiles last Saturday, taking offline  more than 5 million barrels of oil production per day. 

More at: https://oilprice.com/Latest-Energy-N...acilities.html

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## Swordsmyth

Much of the attention concerning the crippling damage to Saudi Aramco  facilities struck in last week's aerial attack ultimately blamed on  "Iranian sponsorship" by US and Saudi officials has focused on Abqaiq  processing plant, but on Friday the first on the ground images from the  kingdom's giant Khurais oil field _—_ the country's second largest _—_ have been revealed, showing *scorched infrastructure, ruptured pipelines, and "a mess of oil melted to asphalt, twisted and charred metal grates"* according to an on site _Bloomberg report_.


And yet Aramco has remained insistent that the field will *return to pre-attack output levels this month*,  after the company reported losing half its daily output in the  aftermath of the early Saturday attacks, impacting a whopping 5% of  total global supply. 

  Per Bloomberg, Khurais has a *capacity of 1.45 million barrels a day*, processing all oil on site; however the attack took out four 300-foot towers essential to the production process. 

Like at the Abqaiq processing plant nearer the coast, the strikes _—_ whether by drones or ballistic missiles (debris showed by the Saudi Defense Ministry this week featured both) _—_ appeared *remarkably precise*. 
  The Saudis have counted a total of *twenty-five drones and missiles* used in the twin attacks, after statements by Yemen's Houthi rebels claimed ten drones were used. 
 CNBC: RT @CNBCi: Abqaiq, the world’s largest oil facility, was attacked in 18 different locations on Saturday, CNBC's @_HadleyGamble is on the ground at Saudi Aramco's facilities. https://t.co/vcgOhkE03m pic.twitter.com/qEJd6QZOtz
 — Paul M Smith BA Hons (@paulmsmith1975) September 20, 2019Bloomberg reports of the recovery progress at Khurais:
 The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and *will produce 1.2 million barrels a day by the end of September*,  Fahad Al Abdulkareem, general manager for Aramco’s southern area oil  operations, said at a briefing on Friday. Workers are at the site *24 hours a day to speed the repairs*, according to the company.The precision nature of the strikes, which Washington has claimed can  only point to Iranian involvement given the level of sophistication  needed to conduct such an operation, is even more evident at the Abqaiq  facility. 
 Images released via the #Saudi Press Agency from the Defense Ministry briefing earlier show the first images of up close damage from the #Abqaiq #Aramco attack. pic.twitter.com/CLFQ7Pfh1A
 — Aurora Intel (@AuroraIntel) September 18, 2019Given the sheer distance the drones would have to travel, whether  from Yemen or possibly Iran, combined with 18 precision strikes on the  70-year old but state of the art Abqaiq facility, a number of analysts  are questioning *whether the operation had inside the kingdom help*. 

Bill Blain of Shard Capital is one of them, who notes "a number of my  sources suggest things look increasingly questionable in the desert  kingdom."
  Blain comments:
 Looking at the photos of the Houthi drone strikes, the damage and the holes made in the gas tanks look *suspiciously regular and well placed*.  MBS’s shakedown of his royal cousins and the nation’s business leaders  stands alongside rising revulsion at his own spending. As defacto  absolute ruler he feels above question, but domestic tensions are  rising.* More than a few analysts suspect the Houthis may have had inside assistance for a growing Saudi domestic insurgency.* "Trump and Kushner are going to struggle with that one.." he concluded. 

Indeed, considering the kingdom's historically restive Shia community in  the eastern part of the country would also avail itself to help any  operation intent on striking sensitive state facilities, the  possibilities are endless. 

https://www.zerohedge.com/energy/fir...field-revealed

----------


## Swordsmyth

Saudi state oil firm Aramco has told Japanese refiner JXTG Nippon Oil  & Energy about a possible change in shipment, raising concern about  the kingdom's ability to supply crude oil a week after attacks on its  refineries, the Nikkei Asian Review reported.Aramco did not  specify a reason for the change in oil grade supplied to Japan's biggest  refiner from light to heavy and medium starting October, Nikkei said  https://s.nikkei.com/2kVAbFR, citing JXTG officials.
JXTG  officials suspect that Aramco is taking more time than expected to fix  its desulfurization facility, which is necessary to produce light-grade  crude used in the production of gasoline and light gas oil, the  newspaper said.
At least three supertankers that loaded crude in  Saudi Arabia this week for China and India had their crude grades  switched from light to heavy oil while more buyers in Asia have been  asked to delay shipments and switch grades in September and October,  Reuters reported, citing sources and data from Refinitiv and Kpler.

More at: https://news.yahoo.com/saudi-arabia-...031202120.html

----------


## UWDude

> The oil industry forum I lurk at says they can't possibly restore production that fast.


Oil forums are experts on cruise missile production levels of Yemen?

XD

----------


## Swordsmyth

> Oil forums are experts on cruise missile production levels of Yemen?
> 
> XD


Oil production in Saudi Arabia.

The other popular opinion is that production will be restored soon because it was an inside job to boost oil prices.

If the Houthis really did it then the Saudis will have to take them up on their offer or be destroyed:




> The attacks on Saudi soil with drones and  ballistic missiles will  stop, the Houthis have vowed, if Saudi Arabia  will stop its airstrikes  over Yemen, according to Bloomberg, who quoted Yemen Shiite Houthi rebel leader Mahdi al-Mashat, who spoke on Al Masirah TV.
> 
> The  Iran-backed Houthis have claimed ownership of the devastating  attacks  that crippled Saudi Arabia’s oil infrastructure over the  weekend that  took offline 5.7 million barrels per day—which is half of  Saudi Arabia’s  total oil production--sending oil prices sharply upward.
> 
> More  at:  https://oilprice.com/Latest-Energy-N...n-In-Yeme.html





> Yemen's Houthi rebels say they are halting all  drone and ballistic  missile attacks on Saudi Arabia and are waiting  for a "positive  response."
> 
> More at: https://news.yahoo.com/latest-saudi-...125200613.html

----------


## Swordsmyth

While S&P futures may spike at the open following Saturday's news from the NYT that  the "the delegation of Chinese agriculture officials that had planned  to travel to Montana and Nebraska in the coming week didn’t cancel the  trip because of any new difficulty in the trade talks" but "instead, the  trip was canceled out of concern that it would turn into a media circus  and give the misimpression that China was trying to meddle in American  domestic politics", oil too is likely to catch a bid after the WSJ  reported that *it may take "up to eight month", rather than 10 weeks company executives had previously promised*,  to fully restore operations at Aramco damaged Abqaiq facility,  suggesting the crude oil shortfall will last far longer than originally  expected.

 Saudi officials say there is little  sense of calm at the highest levels of the company and the Saudi  government, however. It could take some contractors up to a year to  manufacture, deliver and install made-to-measure parts and equipment,  the Saudi officials said. #OOTT https://t.co/dtUzWlem9c
 — Summer Said (@summer_said) September 22, 2019The official reason for the delay: the supply-chain is unable to  respond to the Saudi needs. Specifically, Aramco is" in emergency talks  with equipment makers and service providers, offering to pay premium  rates for parts and repair work as it attempts a speedy recovery from  missile attacks on its largest oil-processing facilities." 

 Following a devastating attack on its largest oil-processing facility  more than a week ago, Aramco is asking contractors to name their price  for patch-ups and restorations. In recent days, company executives have  bombarded contractors, including General Electric , with phone calls,  faxes and emails seeking emergency assistance, according to Saudi  officials and oil-services suppliers in the kingdom."One Saudi official said costs could run in the hundreds of millions of dollars", the WSJ reported.


The bottom line: the extent of the damage means a return to normal operations at Abqaiq *could take up to eight months, said some Saudi officials.* Most technical experts who have seen the destruction firsthand said they share that view.
 “Repairing the damaged units will take time, anywhere from two to  nine months depending on the damage, even if Aramco had contingencies in  place and spare tailor-made equipment,” said IHS Markit in a note.So what does it mean for the oil price if millions of barrels of oil  in daily output will be delayed from coming back to market?  Covneniently, SocGen had a report discussing just that scenario on  Friday, in which it said that "if production recovery is delayed (or we  have any other supply disruptions), prices do not decline, they rise  toward $70/bbl on average. This is a very conservative view based on the  simple linear regression shown below on the right. Typically, when time  spreads are at the levels we would forecast, the observed flat price  does not sit on the regression line. *The cluster is above the line and corresponds with prices approaching something more like $75/bbl (red circle)."*

  In other words, at least $10/barrel upside from here from a mere production delay, is quite likely.
  * * *
  But that's only in the short to medium term: here SocGen warns that in the longer-term *"the higher the price goes, the harder it will fall"* and explains:
 Energy and oil use per unit of real GDP in the West has been in a  steady decline of course. However, the risk remains that a price spike  may contribute to both softening GDP and oil demand in the new demand  centres (East), and to politicians’ renewed determination to speed up  the energy transition away from fossil fuels. The oil majors will not  suddenly abandon capital discipline, though they will benefit from the  temporary margin and free cash flow expansion of a spike. *But the higher the price goes, the harder it will fall.* There  are many precedents of previous supply shocks reviewed in brief on the  next page. Historically, sharp disruptions and oil price spikes drive  subsequent oil demand and GDP weakness. It is then just a question of  the degree of a country’s GDP sensitivity to oil prices (manufacturing  versus service economies) as to how serious that economic impact is. The  US is more balanced nowadays between its large consuming sector and a  large shale liquids producing sector. But the main drivers of global oil  demand growth in the East (China, Japan et al.) will suffer negative  effects from higher oil price.The only question for Saudi Arabia is whether it can pull of the  Aramco IPO in time, while Brent prices are still high, and before the  "longer-run" arrives.

More at: https://www.zerohedge.com/commoditie...e-eight-months

----------


## Swordsmyth

Saudi Arabia’s comments about its hydrocarbons industry have long  been regarded by industry experts as being as believable as China’s  comments about its economic growth: that is, not at all. Saudi Arabia’s  skill in lying is definitely improving, though, from the outright  transparent lies about its level of oil reserves, spare capacity, and  why the omni-toxic Aramco should nonetheless be valued at US$2 trillion.
Its  latest lies - along the lines of ‘everything is fine after the attacks  and we will be back to full production really quickly’ – are relatively  nuanced. “The Saudi statements may not contain any direct falsehoods as  such but nor are they entirely being fulsome with the truth,” Richard  Mallinson, senior energy analyst for Energy Aspects, in London, told _OilPrice.com_ last week.


The stage was set for the Saudis’ latest lying  extravaganza with the aerial attacks on its massive Abqaiq oil  processing facility and Khurais oil field launched, according to various  sources, by Houthi ‘rebels’ in Yemen or by Iranian operatives in Yemen  or in Iran. The effect of the combined attack on Abqaiq and Khurais  caused the temporary suspension of 5.7 million barrels per day (bpd).  This equates to well over half of Saudi Arabia’s actual crude oil  production capacity, not the capacity figure that Saudi has plucked out  of nowhere for geopolitical power purposes in recent years, and resulted  in the biggest rise in oil prices in a single day ever.
Once the  hedge funds, who had handily positioned themselves long some days before  the attacks, had taken their profits, and younger traders remembered  that the U.S. can release vast amounts of oil at the drop of a hat from  its Strategic Petroleum Reserve to keep the price of oil – and,  crucially ahead of an election year, the highly correlated and  politically enormously sensitive gasoline pump price in the U.S. down –  oil prices came down again, obviously.
A number of interesting  things happened from the Saudi Arabian side as the prices went up and  then went back down again. The first of these, as OilPrice.com was  informed repeatedly by senior oil traders throughout the day, was the  lack of real understanding that senior Saudi officials seem to have on  how the oil market works or any details of Saudi’s own oil industry.
“I  used to think the Saudis thought all of us [oil traders] were idiots,  with all the rubbish they used to come out with and thought we’d  believe, but recently it’s occurred to me that they genuinely don’t know  anything about the oil industry, so they don’t understand that other  people actually do know what they’re talking about and this has also  been one of the reasons for the constant delaying of the Aramco sale, by  the way,” one senior oil trader based in Asia told OilPrice.com. 

The Aramco sale to one side for another time (although OilPrice.com has exclusively previously highlighted  all of the lies pertaining to it), one particularly striking comment  came from Saudi Arabia’s new oil minister, Prince Abdulaziz bin Salman,  just after the attacks. He stated that the Kingdom plans to restore its  production capacity to 11 million bpd by the end of September and  recover its full capacity of 12 million bpd two months later.
“It  was extremely telling that he spoke of ‘capacity’ and later of ‘supply  to the market’, as these are terms that Saudi tends to use in order to  avoid talking about actual production, as capacity and supply are not  the same thing at all as actual production at the wellheads,” said  Energy Aspects’ Mallinson. “What Saudi is trying to do by not revealing  the true picture is to protect its reputation as a reliable oil  supplier, especially to its target clientele in Asia, so we have to take  all of these comments with a hefty pinch of salt,” he added.
So  hefty a pinch of salt as to be mountainous in the case of its capacity  and corollary spare capacity figures. The country has stated for decades  that it has a spare capacity of between 2.0-2.5 million bpd, implying –  given actual production during virtually all of this time averaging  less than 10 million bpd - total production capacity of 12.0-12.5  million bpd. This level, though, or anywhere near it, has never been  even remotely tested, with the highest production ever recorded being  just over 11 million bpd in November last year.
This is despite  the all-out oil price war that Saudi started in 2014 against U.S. shale  producers to try to destroy the industry through low prices caused by  flooding the markets with oil. “If the Saudis had anything near 12  million barrels per day capacity, that would have been the time to pump  it but all it managed was just under 10 [million bpd] with 10.5 [million  bpd] managed for just one month over that two-year period [2014-2016  before Saudi reversed it strategy],”
Additionally, the EIA defines  spare capacity specifically as production that can be brought online  within 30 days and sustained for at least 90 days, whilst even Saudi  Arabia has said that it would need at least 90 days to move rigs to  drill new wells and raise production to the mythical 12 million bpd or  12.5 million bpd level. Many serious oil market players now do not  believe that the Saudis have anywhere near 2 million bpd of spare  capacity, as it would imply production of 12 million bpd plus. Instead,  many now believe that the Saudis have sustainable spare capacity of no  more than around 0.5-1.0 million bpd.
Whatever Saudi’s actual  capacity, there is absolutely no way that it can have made any accurate  assessment of how long it would take to get back to any particular  capacity level either – another lie. “Engineers we have spoken to have  said that following an incident like this it would take several weeks  just to assess the damage, never mind to begin doing anything about it,  rather than the few days that the Saudis have taken and then announced  the actual timeline – and a very short timeline at that – to bring back  various stages of capacity,” said Energy Aspects’ Mallinson. 
“Instead,  what the Saudis will do to keep exports up is draw down supplies to its  domestic industry and reduce the amounts it is sending to domestic  refineries – one big refinery, SASREF, is conveniently bringing forward  its planned maintenance for later in the year to now - and we hear very  mixed reports which of the other refineries are operating at regular  rates,” he added. “But some buyers are already being warned of delays,  some are being offered swaps with other grades and so on,” he  underlined. 

Specifically, a number of customers of Saudi’s Arab Light and Arab Extra Light grades – the grades most affected by the recent attacks – have been offered Saudi’s Arab Medium  or Arab Heavy as substitute grades.OilPrice.com understands from oil  trading sources. This even applies to Saudi’s number one target country,  China. A number of refineries have been told by Aramco that their  rolling orders for Arab Extra Light crude cannot be supplied for the  time being but can be switched for either Arab Medium or Arab Heavy,  depending on the set-up of the refinery. Others, looking for their usual  monthly supply of Arab Light have been told that this will be switched  to Arab Heavy as a substitute for September loading at least.
The other measure that Saudi is taking - which it has vehemently denied  but OilPrice.com can confirm from various oil trading sources and from  sources in the Iraq Oil Ministry – is looking to buy Iraq oil grades,  which are close to the key export grades that Saudi ships to various  destinations, including Asia. “Aramco Trading Company has been  aggressively checking prices and lot sizes for Iraqi crude with various  [oil] trading houses since the attacks and are looking are shorter-term  potentially rolling contracts,” one trading source told OilPrice.com  last week.
“A number of the Iraqi grades are close in  specifications to their Saudi counterparts, and part of this activity by  Saudi to fill customer supply quotas for these grades is to make sure  that the demand we are still seeing for such Iranian grades from Asia,  but mainly China, is not boosted to make up for the shortfall from  Saudi.,” a senior source who works closely with Iraq’s Oil Ministry told  OilPrice.com.

More at: https://oilprice.com/Energy/Crude-Oi...roduction.html

----------


## Swordsmyth

The attacks on vital Saudi oil infrastructure that took offline more  than half of Aramco’s oil production would likely mean that the Kingdom  will not list its oil giant this year, two sources with direct knowledge  of Aramco’s thinking told Reuters.
The attacks on the Abqaiq facility and the Khurais oil field in Saudi Arabia on September 14 had investors anxious  as the Kingdom had just accelerated plans to list Saudi Aramco in what  would be the world’s largest initial public offering (IPO) ever. The  heightened security risks following the attacks and Aramco’s actual  ability to restore production could undermine the valuation of the  company at this time, analysts believe.


Saudi Aramco now needs to build up confidence among  potential investors, on top of fully restoring production, one of the  sources told Reuters.

More at: https://oilprice.com/Energy/Energy-G...ramco-IPO.html

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## Swordsmyth

IF this is true the odds of an inside job go WAY up:



Saudi Aramco has restored Saudi Arabia’s oil production capacity to  11.3 million bpd—the level before the attacks on oil facilities ten days  ago, Reuters reported on Wednesday, citing three sources with knowledge of the Kingdom’s oil company’s operations.
Separately, people familiar with the situation at Aramco told Bloomberg  on Wednesday that Saudi Arabia is recovering from the September 14  attacks faster than expected—about a week faster than Saudi officials  have given as a date to recover the full capacity, the end of September.

Despite continued reports that the Saudis would struggle  to restore oil supply by the end of this month as they had promised and  that repairs would likely take months rather than weeks, a source told  Reuters on Monday that the Kingdom would fully restore by early next week the oil production lost in the attacks.
As  of Monday, Saudi Arabia was said to have restored 75 percent of the  production lost in the attacks. Output at the Khurais oil field was more  than 1.3 million bpd as of Monday, while production from Abqaiq stood  at around 3 million bpd.

According Reuters’ sources today, production at the Abqaiq plant is around 4.9 million bpd now.

More at: https://oilprice.com/Energy/Crude-Oi...ck-Levels.html

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## Swordsmyth

Saudi Arabia is considering doubling the size of the initial public  offering for the Saudi Arabian Oil Co. from a 5 percent stake in the  state-owned oil company to 10 percent, The Wall Street Journal reported  Sept. 24. The company's plan to begin the IPO by selling a 1 percent  stake on the Saudi Tadawul exchange before opening it to international  investors remains in place.

More at: https://worldview.stratfor.com/situa...ach-10-percent

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## Swordsmyth

The spike in security risks in and around the Persian Gulf and the  Strait of Hormuz in recent months has pushed up the cost of getting  crude oil out of the Middle East, Lois Zabrocky, chief executive of  tanker owner International Seaways, told CNBC in an interview on Thursday.  
Several  high-profile incidents in recent months have increased the tension in  the Middle East and in the most important oil shipping corridor in the  world, the Strait of Hormuz, which is in close proximity to Iranian coasts.
Since May, incidents, tanker seizures, and attacks on oil tankers at sea in the Gulf, and most recently, the attacks  on vital oil infrastructure in the world’s top oil exporter Saudi  Arabia, have added more costs to the insurance premiums because the area  is now perceived at its highest risk level since at least 2005.
International  Seaways is now performing security assessment every time its oil  tankers enter the Strait of Hormuz, and the company has tightened  security on board the vessels with additional staff, Zabrocky told  CNBC. 
“We hesitate to enter until we have orders from our  customers that they are ready for us to load and then we go ahead and go  into the Strait of Hormuz,” Zabrocky said.
International Seaways  is putting additional security advisors with infrared ‘eyes and ears’ on  its tankers, “but we are not arming our vessels,” the manager told  CNBC.
Asked about whether the costs have gone up in recent months, Zabrocky said:
“It  does indeed cost more for a war risk premium to enter the Strait of  Hormuz at these times, so all of these heightened concerns add cost to  getting the oil out of the Middle East.”
After the attacks on oil tankers in the Gulf in May, the Joint War Committee of Lloyd’s Market Association raised the security-risk status of  several areas in the Persian Gulf and surrounding waterways to the  highest security risk in the region since the Iraq war in 2005. The  second apparent attack in June pushed tanker insurance premiums higher.

https://oilprice.com/Latest-Energy-N...ts-Higher.html

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## Swordsmyth

Rating  agency Fitch downgraded Saudi Arabia's credit rating to A from A+ on  Monday, citing rising geopolitical and military tensions in the Gulf  following an attack on its oil facilities and a deterioration of the  kingdom’s fiscal position.The  Saudi finance ministry said it was disappointed by the "swift"  downgrade and urged Fitch to reconsider it, arguing the move did not  reflect the kingdom's response to the Sept. 14 attack or its capacity to  handle adversity.
The  move – which places Saudi Arabia one notch above the assessment of peer  rating agency S&P Global – is a blow to the largest Arab economy as  it seeks investment to diversify away from oil and prepares a potential  international sale of U.S. dollar denominated Islamic bonds.

More at: https://finance.yahoo.com/news/1-fit...111723156.html

----------


## Swordsmyth

Increased cooperation is the best recipe for overcoming intensified  uncertainties and heightened volatility on the global oil market, OPEC  Secretary General Mohammad Barkindo said  this week, inviting all 97 oil producing countries in the world to join  the OPEC/non-OPEC alliance that has been managing oil supply in the  market over the past nearly three years.
Speaking at an event in  Sochi, Russia, Barkindo said that the OPEC+ alliance of OPEC and 10  non-OPEC producers led by Russia “has served the interests of producers,  consumers and the global economy” over the past three years. The  so-called ‘Charter of Cooperation’ of the 24 oil-producing countries  could help the global oil market get through external shocks in the  future, such as geopolitics, trade tensions, monetary policies, and  natural disasters, according to OPEC’s head.


“Therefore, further and more intensified cooperation is  the best prescription to treat volatility. For this reason,  participation in the ‘Charter’ is voluntary and open to all producing  countries. I would like to extend the hand of friendship to all 97 oil  producing countries and invite them to join the ‘Charter of Cooperation’  as we seek to build a better world,” Barkindo said in his speech.

More at: https://oilprice.com/Energy/Energy-G...Coalition.html

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## Swordsmyth

Ecuador also announced this week that it would quit OPEC  effective January 1, 2020, because of its fiscal problems as it seeks  to raise government income and cut spending.According to OPEC’s latest  available figures, Ecuador pumped 537,000 bpd of crude oil in August.
Ecuador  leaving OPEC will not have a major impact on the organization,  analysts  say, while Ecuador said that it would continue to support  OPEC’s  efforts to stabilize the oil market. 

More at: https://oilprice.com/Latest-Energy-N...-Protests.html

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## Swordsmyth

The Trump administration on Friday announced it would open up over  720,000 acres of federal land in California for oil and gas development,  ending a five-year moratorium on leases in the state.The U.S.  Department of the Interior's Bureau of Land Management approved a  resource management plan for the oil-rich Central California coastal  region, which would issue 14 previously litigated leases in Monterey and  San Benito counties, which were suspended amid a legal challenge by two  conservation groups six years ago, and open up new acres for leasing.

Overall, BLM will make 680,000 acres of federal mineral estate available  for leasing with controlled surface use stipulations and another  roughly 42,000 acres available with no surface occupancy requirements.

More at: https://news.yahoo.com/trump-adminis...211656992.html

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## Swordsmyth

A company now has the construction permit to build a  "state-of-the-art" coal-to-liquids facility in Mason County, creating  more than 250 jobs. 																								According to a news release from Domestic  Synthetic Fuels, the company received a permit from the West Virginia  Department of Environmental Protection to build the facility near Point  Pleasant.
 																														DSF officials said it will take  thousands of workers to build the facility. After construction, the  plant will create 130 jobs on-site and 130 coal- mining jobs to supply  the raw materials.
 																														"This will have a tremendous economic  impact on our county," said John Musgrave, executive director of the  Mason County Economic Development Authority. "This will bring jobs and  growth to Mason County and the surrounding region."
 																														The facility will turn West Virginia  coal and natural gas into ultra-low sulfur diesel fuel, aviation fuel,  gasoline, and other products.
 																														DSF is a West Virginia-based company. The plant will be the first of its kind in the United States.

More at: https://www.wtap.com/content/news/Co...560244701.html

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## Swordsmyth

Waterborne crude exports from Corpus Christi, TX, reached a record high  of 11.379mn bbls, or 1.626mn bpd, in week ending September 27, buoyed by  increased flows into the port from new pipelines coming online,  according to our North American Waterborne report.  The high exports from Corpus Christi partially drained crude  inventories that grew 2.7mn bbls between mid-August and late September,  following the start-up of Plains All American's 585,000 bpd  Permian-to-Ingleside, TX, Cactus II pipeline and EPIC'S 400,000 bpd  Permian-to-Corpus Christi EPIC NGL pipeline, currently in interim crude  service, according to our Texas Gulf Coast Storage report.

Our data showed waterborne exports from Corpus Christi ports,  including the offshore Corpus Christi Lightering Area, surged 5.394mn  bbls, or 771,000 bpd, week-on-week to the new record high in the week  ending September 27. Volumes surpassed the previous record high of  7.392mn bbls, or 1.056mn bpd, set two weeks before and marked the third  record high in four weeks. The second-highest export total from Corpus  Christi, at 10.25mn bbls, or 1.464mn bpd, followed shortly after in the  week ending October 4.
The 2019 year-to-date export average from  Corpus Christi prior to September was 502,000 bpd. By comparison,  volumes averaged 395,000 bpd overall in 2018.
Record-high exports  from Corpus Christi contributed to the highest exports ever from the  U.S. overall in the week ending September 27, as they jumped to 29.612mn  bbls, or 4.23mn bpd. Export volumes passed the previous high mark of  28.659mn bbls, or 4.094mn bpd, set in week ending July 5, our data shows.


The recently higher exports from Corpus Christi led to a record  monthly high in September at 1.07mn bpd, up 491,000 bpd from August. The  largest portion of the shipments in September headed to Northwest  Europe at 343,000 bpd, a 129,000 bpd month-on-month increase, while  181,000 bpd left for East Asia, a month after posting only 37,000 bpd.
The  second-highest amount in September from Corpus Christi departed for  Eastern Canada at 291,000 bpd, an increase of 76,000 bpd from the month  before. Meanwhile, refineries in the Mediterranean received about  116,000 bpd of crude from the U.S. on the month, up 52,000 bpd from  August. 

Moda Midstream’s Ingleside terminal had the most export loadings of  any Corpus Christi terminal at 346,000 bpd in September, up 28,000 bpd  from August. However, the biggest month-on-month increase came from  NuStar’s terminal, which posted 127,000 bpd more in September than  August at 200,000 bpd, after averaging 52,000 bpd on the year until  September.
Flint Hills exported 125,000 bpd in September from its  Ingleside facility, a monthly increase of 99,000 bpd to 125,000 bpd.  Buckeye’s Texas Hub posted 75,000 bpd more than August at 210,000 bpd.

Record Corpus Christi exports in September appear to be just the  beginning of large-scale growth from the South Texas hub. Several  construction projects are underway that will bolster storage, pipeline,  and export dock capacity. Broader infrastructure will facilitate higher  supply from West Texas and strengthen Corpus Christi’s role in  international markets. Crude exports from the port are set to continue  reaching new heights in the months and years to come. We will continue  monitoring waterborne, pipeline, and storage activity to provide  real-time updates as the Corpus Christi supply chain continues to  develop.

More at: https://oilprice.com/Energy/Energy-G...Texas-Oil.html

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## Swordsmyth

*Aramco Again Delays Long-Awaited IPO*

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## Swordsmyth

Kuwait and Saudi Arabia have agreed to restart oil production in  disputed oil fields in the neutral zone between both countries,  according to the speaker of Kuwait's National Assembly, Asharq Al-Awsat  reported Oct. 21. Both countries are reportedly seeking to finalize the  deal in the next 45 days.

More at: https://worldview.stratfor.com/situa...n-disputed-oil

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## Swordsmyth

The world’s top oil exporter, Saudi Arabia, is issuing US$2.5 billion  worth of Islamic bonds, or sukuk, on Tuesday, returning to the bond  market to take advantage of the low borrowing costs in hopes of  replenishing its government coffers as persistently low oil prices  depress revenues.        
Saudi Arabia has set the guidance for  the ten-year bond at 145 to 150 basis points over the benchmark  midswaps, according to a document from one the banks leading the  issuance seen by Reuters.
Saudi Arabia has hired JP Morgan, Standard Chartered, and other banks to be lead managers of the sukuk issue, Reuters reported.
In  recent years, the Kingdom has borrowed a lot of money on the  international bond markets to offset the lower government oil revenues  thanks to low oil prices.
In July this year, the Saudis issued a debut Eurobond  of US$3.3 billion (3 billion euro). Since its first foray into  international bond markets at the end of 2016, the Kingdom has raised as  much as US$60 billion in international bond issues, according to  Reuters estimates.


More at: https://oilprice.com/Latest-Energy-N...-Of-Bonds.html

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## Swordsmyth

OPEC will consider at its December meeting instituting even deeper production cuts, OPEC sources told Reuters today, even though not everyone in the group is complying to the existing production cuts.
The  “everyone” refers to Iraq and Nigeria, which are notorious over  producers compared to what has been assigned to them under the current  production cut pact. Still, OPEC has managed to overcomply  month after month, but Iraq and Nigeria have repeatedly failed to  adhere to the agreement—a likely sore spot within the cartel as other  members have done their fair share, or as in Saudi Arabia’s case, more  than their fair share.


Other OPEC members, according to the source, and in  particular Saudi Arabia, would be loath to implement even more cuts  unless Iraq and Nigeria step up their compliance.
“In December we  will consider whether we need more cuts for next year. But it is early  now, things will be clearer in November,” the source told Reuters.

More at: https://oilprice.com/Energy/Crude-Oi...re-Mounts.html

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## Swordsmyth

Lukoil’s chief executive Vagit Alekperov has joined Rosneft’s Igor  Sechin in voicing his opposition to another extension of the OPEC+ oil  production cut agreement, Reuters reports, citing Russian news agency RIA Novosti.
“I  am a supporter of keeping everything stable until April, when the  agreement expires, and only after that... to make decisions,” Alekperov  said.
This report follows an earlier one,  from Tuesday, in which Reuters quoted unnamed source as saying OPEC  would discuss deepening the cuts, which are supposed to expire at the  end of March next year.
“In  December we will consider whether we need more cuts for next year. But  it is early now, things will be clearer in November,” one source said.
OPEC and Russia agreed  on the extension in June despite Russian oil companies’ unwillingness  to continue capping their production. Not that they have been  particularly strict about it. Last month, Energy Minister Alexander  Novak said the country had still not reached its quota for the cuts, assuring interested parties it would do so this month.

More at: https://oilprice.com/Latest-Energy-N...OPEC-Cuts.html

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## Swordsmyth

*Crown Prince Mohamad bin Salman is once again making the rounds and unceremoniously shaking down his country's elite - this time by asking them to commit to anchor investments in the Aramco IPO, one of the largest offerings ever.* Aramco  is the world's largest and most profitable company, and the heart of  KSA's oil-dominated economy. For years, bankers in London, Hong Kong and  NYC vied for the right to host the IPO.
  But with the IPO apparently about to move forward next week, the  prospectus is expected any minute now. That will shed some light on the  trading venue and whether KSA is standing by its demands that Aramco  debut at a valuation close to $2 trillion.
  Whatever happens, the Saudi people will definitely benefit from the  billions of dollars flooding into the oil firm's coffers. But exactly  which form these benefits will take remains unclear.

  That is, until Thursday, when Bloomberg  reported that, in a gesture that would likely help reduce economic  inequality in a country where most ordinary people rely on generous  state economic benefit system, *Saudi Arabia is eliminating  borrowing caps on what banks are allowed to lend to local investors to  allow more of them to invest in the IPO.*
  The IPO market has been notoriously soft this year as a spate of  young, untested and unprofitable companies debuted, only to be met by a  punishing wave of skepticism. The trend culminated with WeWork, heavily  backed by KSA via SoftBank's Vision Fund, deciding to shelve its debut  after a painfully public scandal.
*But as the country looks for new sources of money to keep the  IPO afloat the worst come to pass, several lenders are seriously  pushing the envelop, and asking the central bank for a much larger sum  of money than the bank would normally be comfortable lending for such a  speculative investment.* Though the final amount will depend on  the bank's final decision, they're expected to be more conservative the  higher the valuation goes.

  Many Saudis are expected to buy into the offering, as are many of the  powerful movers and shakers currently attending MbS's "Davos in the  Desert. But by allowing retail investors to leverage up just before a  period of driving economic uncertainty (when a downturn could create a  debt default chain reaction with serious repercussions).


More at: https://www.zerohedge.com/energy/sau...-go-all-aramco

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## Swordsmyth

Saudi Arabia will decide in the coming days whether to formally announce  an initial public offering for Saudi Arabian Oil Co. (Saudi Aramco) on  Nov. 3, Bloomberg reported Nov. 1. According to the report, Saudi Crown  Prince Mohammed bin Salman will decide on the IPO announcement after  hearing from bankers that have participated in the process.

More at: https://worldview.stratfor.com/situa...et-report-says

----------


## Swordsmyth

*What’s held up this IPO has been MbS’s insistence on a $2  trillion valuation while playing very coy about the company’s actual  assets and reserves.* It took a couple of rounds of failed  book-runner commitments to finally get the Saudis to offer some glimpse  at Aramco’s finances.
  From Irina Slav at Oilprice.com in March 2019:
 Aramco has never published financial reports. Although there were  assurances that it will start doing so ahead of the IPO, to date the  latest entry on Aramco’s Corporate Reports page is from July 20 last year, and includes production figures for 2016. Last year, sources had told Reuters the company was planning to start publishing financial reports early this year, but this has not happened yet.By April, Aramco finally produced financial numbers that were  reasonably current and even Bloomberg was skeptical of this $2 trillion  valuation. It certainly wasn’t true when oil prices were in the gutter  below $40 a barrel in 2016.
*The Aramco IPO is the lynchpin to MbS’s Vision 2030 plan to  remake and upgrade the Kingdom’s economy away from just being a Gas  Station in the Desert that buys U.S. weapons and wages regional wars  through proxies.*
  But now that the paperwork has been filed and the IPO likely to  happen we now have a bevy of financial research reports coming out with  their assessments of it.
*And the numbers are all over the place.* Here they are via Zerohedge:
 The source said BofA’s low valuation of the company is at $1.22  trillion with a high estimate of $2.27 trillion, the gap is enormous and  has spooked some investors. 
  Goldman Sachs values Aramco between $1.6 trillion and $2.3 trillion. 
  “Note that our suggested valuation framework is based on a long-term  analysis, and it is not linked to a near-term assessment of the likely  performance of the company’s shares,” Goldman’s pre-IPO report said. 
  Much of Goldman Sach’s valuation of the oil company is derived from  an average oil price of $64.50 for 2019, and $60 per barrel from 2020  through 2023.
  EFG Hermes has a valuation of $1.55 trillion to $2.1 trillion, several fund managers told Reuters.
  Bernstein’s research deck valued Aramco around $1.2 trillion to $1.5 trillion.
  HSBC, one of the lead underwriters of the IPO, values the oil company between $1.59 trillion to $2.1 trillion.
  BNP Paribas, another bank playing a critical role in the IPO, values Aramco around $1.42 trillion. 
  “These ranges are always wide as research analysts want to cover both  low end and high end, so you want to show the sensitivity of  assumptions,” one banker told Reuters._But let’s back up here for a second and remember what MbS was originally selling, 20% of the company for $400 billion._ Now it’s 5% of the company for likely between $65 and $75 billion at a $1.3 to $1.5 trillion valuation.
*It’s not the company’s performance MbS is worried about. It  is how much this IPO will bring the government in the form of dividends  to pay for its operations.*
  Remember, the Kingdom is currently running a budget deficit of 6.5% in 2020, up from 4.7% for this year officially. That’s $50 billion next year alone.
  Debt to GDP, which was just 1.4% in 2014 will rise to 28% in 2020.
*Aramco needs to either raise production or get higher prices  to stem this bleeding. Neither of these things are on the table in the  near future.*
  The reality is that for the past few months the Saudis have bailed  themselves out with a war premium on the price of oil through their own  machinations, getting the U.S. to apply embargoes and sanctions on all  of their competitor and picking fights with Iran and inviting attacks on  their tankers and infrastructure to keep prices from collapsing amidst a  global economic slowdown and oil glut.
*Note in the valuation for Aramco above Goldman Sachs makes the case for $60 oil in 2020, that’s rich from where I’m sitting.*  Right now we’ve seen a temporary sell off in the U.S. dollar thanks to  Brexit which has both the British pound and euro bouncing off recent  lows.
*That will not last and the U.S. dollar is still in a very  bullish medium/long term posture. And a bullish dollar only happens here  over Donald Trump’s dead body (and Twitter feed) or a collapse in  global liquidity.*

*But, that’s not on the horizon right? Of course not. It’s not  like the ECB and the FED haven’t gone full dove in the past nine months  to get ahead of a dollar liquidity crisis that threatens to engulf the  entire Western world or anything.*
  Right?
  In the end whatever money Aramco raises from investors will be used  to fund the Saudi government’s operational deficit over the next  eighteen months to two years, maximum.
*That’s not enough to save the country and remake the economy through reinvestment in its people.*  It doesn’t matter if, officially, the budget deficit is financed  through debt and drawing down reserves while Aramco uses the money to  invest globally in diversifying its portfolio.


More at: https://www.zerohedge.com/geopolitic...t-save-kingdom

----------


## Swordsmyth

Saudi Arabia is hitting up its wealthy citizens to buy stock in the Saudi Aramco IPO, Bloomberg sources with knowledge of the matter said on Thursday.
The  citizens Saudi Arabia is asking include the wealthy Olayan family—which  has existing Aramco ties--as well as Prince Alwaleed Bin Talal who in  2017 ranked as the 45th richest person on the planet, with a net worth of $18.7 billion, according to Forbes. 


The Olayans are considering an investment in the realm of  hundreds of millions of dollars’ worth of shares in Aramco. Other  investors being courted include the Almajdouie family and the Al-Turki  clan—both of which have sizable financial resources. These big names are  pretty much expected to invest.
Even smaller investors are  expected to invest, even if it means borrowing from banks on the cheap  to do so—and rumor has it that the banks are willing to do just that.
But  through all the listing promises and investment gathering and bank  courting, the date of the IPO is far from a done deal, and details are  still lacking.
Aramco’s prospectus for its long-delayed, much-hyped, mega IPO is set to be released on November 9, with the actual listing on the Tadawul expected to take place in December. The unknowns?  The valuation, the number of shares to be sold, the share price, and  the percentage of shares to be sold are all expected to be divulged  then.

More at: https://oilprice.com/Energy/Energy-G...mco-Stock.html

----------


## Swordsmyth

Russia expects to increase its crude oil exports by around 400,000  bpd-500,000 bpd to more than 5.6 million bpd within five years, Energy  Minister Alexander Novak said in an article in Russian-language magazine Energy Policy.   
Russia  will not only keep its position on the global energy markets, but it  expects to be able to boost its crude oil exports by up to 500,000 bpd,  the equivalent of 25 million tons as the minister wrote. Russia’s total  crude oil exports in five years could grow to 280 million tons, or 5.62  million barrels per day, according to Novak.  
Russia’s crude oil exports rose by 2.9 percent on the year in 2018, to 260 million tons, or 5.22 million bpd, according to the TASS news agency.


Russia’s plans to boost oil exports puts it, again, in direct  competition in the most coveted oil demand market with Saudi  Arabia—Moscow’s key ally in the OPEC+ production pact, which is cutting  production, hoping to erase the global oversupply and boost oil prices.
The  OPEC+ partners—led by Saudi Arabia and Russia for OPEC and non-OPEC,  respectively—are set to discuss the fate of the production cuts and the  future of their cooperation at a meeting in early December.
Going into the meeting, the Saudis are reportedly pressuring non-compliant cartel members to fall in line  with their quotas, instead of pushing aggressively for a deeper overall  cut. Russia is still non-committal, as it has been ahead of all  previous such meetings, before agreeing to rollover of the deal.  

More at: https://oilprice.com/Latest-Energy-N...l-Exports.html

----------


## Swordsmyth

International oil majors and Brazil’s state oil firm Petrobras have  just announced first oil from a deepwater field in Brazil’s pre-salt  Santos basin, which will add 150,000 barrels of oil per day to the  production of the second-biggest contributor to non-OPEC oil supply  growth.  
France’s Total said  on Friday that the Iara license in the Santos basin began production at  a floating production, storage, and offloading unit (FPSO), with  capacity of 150,000 bpd of oil and 6 million cubic meters of natural gas  daily. A second FPSO, also with 150,000 bpd capacity, is expected to  start operations next year.

According to OPEC’s latest Monthly Oil Market Report (MOMR), Brazil’s  oil production will grow by 190,000 bpd this year and by 290,000 bpd  next year.  

More at: https://oilprice.com/Latest-Energy-N...ter-Field.html

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## Swordsmyth

Saudi Aramco is worth no more than US$1.5 trillion, a Bloomberg News poll  of money managers showed on Friday, two days before the Saudi oil giant  is set to announce a price range for the world’s biggest initial public  offering (IPO) ever.  
According to 40 percent of 24 investors surveyed by Bloomberg, Aramco’s value is between US$1.2 trillion and US$1.5 trillion.
The  high end of this estimate is still US$500 billion below the coveted  US$2 trillion valuation, on which Saudi Crown Prince Mohammed bin Salman  has insisted since he announced plans for Aramco to go public more than  three years ago.
In recent  weeks, the Saudis have been reportedly signaling they could be willing  to compromise on the valuation and banks now look to hit a valuation of US$1.6 trillion-US$1.8 trillion.
Saudi  Aramco’s prospectus of 658 pages published this past weekend was very  scarce on details. The number of shares, the price and date of the  listing remain shrouded in mystery, even after Aramco released its long-awaited IPO prospectus.  
The  book-building process is set to start this coming Sunday, and 11 out of  the 24 investors polled by Bloomberg will wait to see the official  price range announcement before deciding if they will invest in the  world’s largest oil firm.

More at: https://oilprice.com/Latest-Energy-N...ramco-IPO.html

----------


## Swordsmyth

Saudi Arabia’s “crown jewel” — Aramco, officially the Saudi Arabian Oil Company — announced on Sunday  that it is only offering 1.5 percent of itself for sale in December, at  a price far less than Crown Prince Mohammed bin Salman (MBS) had hoped  for. And if things don’t meet even those minimum now greatly reduced  expectations, the company could pull the offering before it goes public  in December.
 When first floated in 2016, MBS suggested he could sell five percent  of the state-owned and controlled oil company and receive $100 billion  to jump start his Vision 2030. He assumed that his “jewel” is worth $2  trillion.
 Analysts looking through the 600-page prospectus that was released  last week on the deal aren’t impressed, with many suggesting a much  lower valuation, perhaps as low as just $1 trillion. That could turn  MBS’s dream into a nightmare. If the offering goes well, he might  receive $25 billion. If it doesn’t go well it might generate nothing at  all, leaving behind bad press and a warning to investors to stay away  from such offerings in the future.

_The New American_ has pointed out some of the risks investors  face if they provide the funds needed to pay for MBS’s dream, including  the company’s recently declining profits as oil prices have dropped, a  credit downgrade by Fitch Ratings following the murder of _Washington Post_  journalist Jamal Khashoggi (which occurred on MBS’ watch), the  company’s deliberate manipulation of its numbers to make the offering  look better than it actually is, and the September attacks on its  production facilities that cut its production suddenly and severely.
 Now there’s the risk that the offering won’t take place at all.
 The company’s “road show” or “book building” tour across the globe apparently hasn’t gone well according to _Wall Street Journal_:  “International investors have so far signaled that a $1 trillion to  $1.5 trillion valuation would be more reasonable [number] for them to  consider investing.”
 The company is undertaking a massive marketing effort to sell shares  to Saudi’s citizens, with billboards touting the offering, talk-show  hosts talking up the “opportunity,” and even Islamic officials  “approving” the purchase of shares for the common folks. MBS himself is  pressuring some of the country’s richest individuals (many of whom he  investigated and temporarily incarcerated over charges of corruption) to  “invest” in his company, with the clear implication that if they don’t,  he could revisit their alleged illegal activities. That’s not an  investment; that’s blackmail.
 It’s increasingly unlikely that any of the funds raised will ever  help MBS reduce his country’s near total reliance on oil for its budget.  In April, the Saudis entered the bond market for the first time,  raising $12 billion in the process. This was necessary to help fund the  country enormous and increasing annual deficit spending. In 2018,  revenues fell short of spending to the tune of $36 billion, with a  similar shortfall likely this year. Next year, the country’s finance  minister expects that the country’s deficit will widen to $50 billion.  So, as large as the potential IPO might be (if it happens it would be  the second largest in history), the proceeds will quickly be absorbed by  the government to cover its excessive welfare state spending. MBS’  Vision 2030 will remain just that: a vision.
 As _The New American_ noted, the initial offering would  provide the company with a measure of just how hungry investors are to  holding a share of Aramco in light of a declining world economy and soft  oil prices. The idea is that if the offering goes well, a second,  much-larger offering would come, reflecting the initial offering’s  price. But money managers were leery that the price of such a small  initial offering could be manipulated to make it appear that the company  is worth more than it is.
 Accordingly Aramco has announced that there won’t be a second offering.
 A key giveaway is that, buried deep inside the 600-page prospectus that MBS hopes few will read, is this nugget:
 The government may direct the company to  undertake projects or provided assistance for initiatives outside [of  Aramco’s] core business, which may or may not be consistent with the  company’s immediate commercial objectives or profit maximization.
 One doesn’t have to read Arabic to conclude that the government  (which presently owns 100 percent of Aramco) considers the oil company  its own private piggy bank and may just decide that it has better uses  for the $25 billion that might come from the IPO than investing it in  real estate projects, tourism centers, or manufacturing facilities. It  may just decide to use the money to fund part of its ongoing deficits.

More at: https://www.thenewamerican.com/tech/...disappointment

----------


## Swordsmyth

Saudi Aramco has withdrawn from IPO roadshows in the US and London  after it's likely they don't want to disclose oil reserve totals to  Western banks and regulators. 

  Meanwhile, it's becoming a giant circle-jerk for the Saudis, the IPO  is expected to list on the Tadawul exchange, while the Saudi Arabian  Monetary Authority (SAMA) is expected to double the amount it would lend  out to domestic "buyers" for IPO purchases, reported Bloomberg. 
  Aramco set a price range Sunday for its IPO between $1.6 to $1.7  trillion, far below the $2 trillion levels the Saudi crown prince had  imagined, but priced higher than most what most institutional analysts  thought was possible. 

Besides the US and London, the IPO roadshow was also canceled in Canada  and even in major financial hubs across Europe this week.

Notably, even at this lower-than-$2 trillion valuations, it remains  notably rich to analysts' expectations.  According to 40% of 24  investors surveyed by Bloomberg, Aramco's value is between $1.2 trillion  and $1.5 trillion. 

More at: https://www.zerohedge.com/commoditie...-us-and-london

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## Swordsmyth

Saudi Arabia is doubling the leverage limits for loans that banks  will extend to domestic retail investors who want to buy shares in the  Kingdom’s oil giant Aramco in what would be the world’s largest initial  public offering (IPO) ever.

The central bank, the Saudi Arabian  Monetary Authority (SAMA), has told banks that they can lend money to  retail customers at a 2-to-1 ratio for every riyal they will invest in  Saudi Aramco, compared to average leverage ratio limit for loans of  1-to-1, the chief executive officer of Samba Financial Group, Rania  Nashar, told the Al Arabiya news outlet.
The  move from the monetary authority in Saudi Arabia is aimed at ensuring  that more retail customers will buy shares in the oil giant Aramco.  
Banks  are also allowed to extend loans to corporate and institutional  investors for buying Aramco’s shares at higher leverage ratios,  depending on each corporate customer’s creditworthiness, Nashar told Al  Arabiya.

More at: https://oilprice.com/Latest-Energy-N...nvestment.html

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## Swordsmyth

Russia needs to discuss with its OPEC partners the exclusion of gas  condensate from its cap under the OPEC+ production cut pact, as  condensate isn’t exported, while it is included in Russia’s oil  production statistics, Russian Energy Minister Alexander Novak said on Wednesday.
Production  of gas condensate—a side product known as ultra-light oil—in winter  months in Russia is high and it is set to increase with the start-up of  new gas fields.
According to Novak, condensate production is one factor that keeps Russia from fully complying with its share of the cuts.
Russia  aims to comply with the deal in November, but it also believes that  some nuances in production, such as condensate output, should be taken  into account, Novak told reporters on Wednesday.
The condensate mainly stays in Russia and therefore does not affect global supply, he said.
“This should be discussed with partners, as condensate does not go for export,” Novak noted.
Russia,  as leader of the non-OPEC group of producers who are cutting output as  part of the OPEC+ deal, is taking the lion’s share of non-OPEC cuts and  has committed to keep its production at up to 11.191 million bpd, down by 230,000 bpd from the 11.421 million bpd reference production level from October 2018.
Russia, however, includes condensate production in its monthly oil production statistics, while many other producers do not.

More at: https://oilprice.com/Latest-Energy-N...-Cut-Deal.html

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## Swordsmyth

Malaysia’s state oil company Petronas, which Aramco was courting as a  large investor in its upcoming initial public offering, has decided  against the investment.
“Petronas would like to confirm that after  due consideration, the company has decided not to participate in Saudi  Aramco’s initial public offering exercise,” Petronas said in a  statement, as quoted by Reuters.

More at: https://oilprice.com/Latest-Energy-N...uy-Shares.html

----------


## Swordsmyth

WTI Crude is plunging this morning amid chatter that OPEC and allied  crude producers are averse to deepening output cuts when they convene  next week.

  Bloomberg reports that, according to people familiar with the kingdom’s thinking, *Saudi Arabia probably will indicate it’s no longer willing to compensate for excessive production by other members of the cartel*.
  Additionally, the Tass news agency reported that Russia’s oil  minister said it’d be better to postpone any new supply caps until  April.

More at: https://www.zerohedge.com/energy/cru...tners-cheating

----------


## Swordsmyth

Three days after oil tumbled following a Bloomberg report that  Saudi Arabia was angry at its (N)OPEC co-members for not complying with  production quotas, and was no longer willing to compensate for  excessive production by other members of the cartel, the WSJ reports that Riyadh, furious that the price of oil refuses to rise and set to take Aramco public, *is  threatening to boost oil production and unilaterally flood the market  if "some" OPEC nations continue to defy the group’s output curbs.*
  The surprising ultimatum which reeks of what Saudi Arabia did in  November 2014 when it effectively dissolved the cartel, and flooded the  world with oil in hopes of putting shale producers out of business only  to fail miserably as it never accounted for cheap money and the greed of  US junk bond investors, comes one day ahead of a gathering between OPEC  and non-OPEC nations including Russia on Thursday and Friday in Vienna.
  As the WSJ reports,  at a technical meeting Tuesday, a Saudi delegate said his government is  growing tired of indirectly benefiting the budgets of countries that  are flouting the OPEC pact by overproducing oil, said a person who was  present. If the noncompliance continues, *"the Saudi official  signaled that the kingdom would begin merely complying with its  commitment—rather than overcutting to make up for laggards in the group*."
  The target of Saudi ire are reportedly three specific nations, namely *Iraq, Nigeria and Russia*;  this emerged during a slide presentation by a Saudi official who said  the trio of oil-producing nations weren’t adhering to the pact that  commits the 14 OPEC nations and 10 allied countries to a collective 1.2  million-barrel output curb.

  Saudi Arabia, the argument goes, is contending with weak oil prices  and members of the cartel who aren’t complying with the collective  output cut they agreed to last summer. As a result, the Saudis are  considering radical measures, *including a new pact that would  deepen production cuts although if there is one thing the cartel is  notorious for, it is ignoring self-imposed production limits when it  suits the individual member states as the Crown Prince is finding out  now.*
  The stakes for Riyadh are huge: the (N)OPEC spat comes as Saudi  Arabia is finalizing the IPO of its national oil company, Aramco, and  hopes to bring the company public at the highest possible price, however  that also needs a much higher oil price. While the company wasn’t  mentioned at the meeting, another delegate said the Saudi position was  "all about the IPO of Aramco."
  Meanwhile, in a paradoxical twist, with Saudi Arabia raging at Iraq  for overproducing, the Iranian neighbor signaled that it, along with  other cartel members, *favor deepening collective cuts by 400,000 barrels a day. Which of course it is all for...* as long as Iraq itself doesn't have to cut further.
  Saudi Arabia indicated privately that it would support such a cut if  it received watertight guarantees that current laggards would respect  the deal, the WSJ said citing people familiar with the matter. What was  left unsaid is that the only reason why the OPEC production cut worked  as well as it did and as long as it did, is because Venezuela's and  Iran's output has collapsed, not because it wanted to but because the  two countries had no choice, being subject to US embargo.
  In further disappointment to Riyadh, the WSJ gloats that the kingdom  "had hoped to keep such option a secret to create an upside surprise in  oil prices", with officials instructed to discuss it face-to-face rather  than electronically, one person said. Yet following the WSJ report, the  price of oil actually slumped amid fears that Saudi Arabia may have no  choice but to boost production as it squares off with increasingly  hostile cartel members.


More at: https://www.zerohedge.com/energy/oil...y-output-curbs

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## Swordsmyth

In line with expectations, Saudi Aramco just priced its IPO at the  high end of the targeted range, selling 3 billion shares or a 1.5% stake  at 32 riyals ($8.53) per share for a total of $25.6 billion, and giving  the oil giant a market valuation of $1.7 trillion, making it the  world's biggest company (surpassing Apple) thanks to the what is now the  world’s biggest-ever IPO. The money raised by the state-owned producer  breaks the record set by Chinese ecommerce giant Alibaba in 2014, but  gives the company a valuation well below the $2 trillion sought by Crown  Prince Mohammed bin Salman.
  According to Bloomberg, the closely watched deal which was confined  to Saudi accounts over fears of the types of questions that would emerge  in an international roadshow, saw a total of $119 billion in  subscriptions and was 4.65x oversubscribed but that is simply laughable  considering that the Saudi were forced to once again extorting its  oligarch like Prince Alwaleed to invest in the IPO at the metaphorical  (and perhaps literal) barrel of a gun.
  The oil company will also likely exercise its 15% “green shoe”, which  would allow it to issue up to 15% more shares to meet demand and could  see it ultimately raise more than $29 billion.
  In Riyadh's panicked scramble to get the IPO done at any cost, local  retail investors were offered loans to purchase stakes, promised bonus  shares and targeted in a nationwide advertising campaign. Meanwhile, in a  hilarious flashback two two years ago, wealthy Saudi families, many of  whom were caught up in the crown prince’s 2017 corruption crackdown,  were also pressured to invest.

  Saudi Aramco executives have in recent weeks also tried to drum up  interest from state-backed funds in the Gulf, including Abu Dhabi —  which was expected to invest $1.5bn. Kuwait was also considering putting  in $1bn.
  To make sure the deal goes smoothly, Saudi Arabia hired almost all of  Wall Street’s biggest banks to advise on the IPO that will see about  1.5% of the company sold. Some of Aramco's bankers had advised that a  more prudent approach would be to sell shares more cheaply in an effort  to ensure they trade higher after their debut, a person familiar with  the matter said. Clearly, they were overruled, and so the question is  how far will Aramco's price drop once it breaks for trading.
  “The banks advised the client to play it safe,” the person said. “There is a risk to the lenders if the shares trade down.”
  As the FT notes, the kingdom also sought to increase the company’s  appeal by pledging a bumper annual $75bn dividend, which is relatively  speaking, below what many of its western peers offer, changing tax and  royalty rates as well as curbing long-term capital spending to help cash  flows.
  Despite such enticements, overseas investors have remained cautious.
  The total amount raised -whether $26 or $29BN with the greenshoe -  will be a huge disappointment to Prince Mohammed, who for the last four  years pushed to raise $100 billion by selling 5% of the group in a  global financial capital such as London or New York. In the end he had  to satisfy himself with a quarter of this amount sold on a domestic  market.

More at: https://www.zerohedge.com/markets/ar...ds-biggest-ipo

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## Swordsmyth

The second-largest economy in the Middle East, the United Arab  Emirates (UAE), has just recorded business activity at a decade low,  reported Reuters.
  IHS Markit UAE Purchasing Managers' Index (PMI) printed at 50.3 in  Nov. from 51.1 in Oct., hitting the lowest level since Aug. 2009 and on  the threshold of declaring a contraction in growth.

  Last year, the manufacturing and services sectors (pretty much  covering UAE's non-oil sector) recorded growth of 55.8 but had slid to  almost contraction territory by late 2019.

  New orders plunged into contraction (48.9) in Nov. from 51 in Oct.,  which has resulted in companies discounting prices to attract new  business as the economic slump continued to intensify.
 "Anecdotal evidence commonly linked the decline to subdued market  conditions and weaker customer demand," said David Owen, an economist at  IHS Markit.An employment downturn was also initiated in 2019. Job levels dropped  in Nov., indicating that last month was one of the fastest decline in  the workforce for non-oil companies in nearly a year.
  Despite UAE's four years of economic deceleration since oil collapsed  in 2014, the country is finally experiencing weakness spreading from  its oil sector into the broader economy.

  The country's deteriorating property sector risks the quality of  assets held by domestic banks could create banking difficulties in the  early 2020s.

More at: https://www.zerohedge.com/economics/...ecession-fears

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## Swordsmyth

Saudi Arabia shocked the oil market on Friday, with its energy  minister Prince Abdulaziz bin Salman pledging to voluntarily cut even more oil production than its new quota, according to S&P Global Platts.
Under  the existing oil production quota, Saudi Arabia had agreed to keep  production under 10.311 million bpd—a cut of 322,000 bpd. But on Friday,  OPEC divvied out an additional 372,000 bpd of cuts to its members, with  Saudi Arabia’s new production cap coming in at 10.145 million bpd—an  additional cut of 166,000 bpd.
But Saudi Arabia is planning to do  more than even that—planning to keep its production at or below 9.744  million bpd. For reference, Saudi Arabia’s production for October was  9.890 million bpd, so this new voluntary pledge to cut even more than  the group had asked it to is even more of a reduction.
If all  members, including the non-OPEC side which must cut an additional  131,000 bpd, stick to their new production quotas including Saudi  Arabia’s voluntary cuts, it would mean a total of 2.1 million bpd in  restrictive oil production.

More at: https://oilprice.com/Latest-Energy-N...-It-Seems.html

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## Swordsmyth

Less than a quarter, or 23 percent, of the institutional portion of  Saudi Aramco’s initial public offering went to non-Saudi investors, the  head of Investment Banking at National Commercial Bank, Wassim  al-Khatib, told Al Arabiya news channel on Monday.  
The  Saudi Public Pension Agency was allocated shares which equal 11.5  percent of the institutional tranche of the IPO, al-Khatib said.
Following  the largest IPO in history, Saudi Aramco’s shares will be listed and  start trading on the main market of the Saudi oil exchange on Wednesday, December 11, the Saudi Stock Exchange, Tadawul, said last Friday.  

More at: https://oilprice.com/Latest-Energy-N...ional-IPO.html

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## Swordsmyth

Saudi Arabia is predicting that its budget deficit will balloon to  US$50 billion next year as low oil prices and lowered production eat  into the Kingdom’s oil revenue, according an official budget released Monday by the Saudi Arabian government.
The  anticipated 2020 budget deficit would be up $15 billion on 2019 and  will come even as Saudi Arabia plans to cut spending next year by 7.8%,  to $272 billion. Revenues are expected to be down by 14.6%, according to  the official statement.


The 2020 budget deficit will next year, then, be 6.5% of its gross domestic product, up from 4.7% in 2019.

More at: https://oilprice.com/Energy/Crude-Oi...o-Balloon.html

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## Swordsmyth

Saudi Arabia’s government itself sank nearly US$2.3 billion  in the record-beating initial public offering of the Kingdom’s oil  giant Aramco, according to one of the lead managers of the deal, which  was aimed at attracting fresh funds into the Saudi economic  diversification.
Saudi Arabia’s government institutions  represented 13.2 percent of the institutional investors, according to  lead manager Samba Capital, as quoted by Bloomberg.
Institutional  investors collectively took 1 percent of Saudi Aramco in the IPO, while  another 0.5 percent of the oil giant was sold to retail investors in  Saudi Arabia.
Less than a quarter, or 23 percent,  of the institutional portion of Aramco’s IPO went to non-Saudi  investors, the head of Investment Banking at National Commercial Bank,  Wassim al-Khatib, told Al Arabiya news channel on Monday.  
Saudi Arabia has had to rely on domestic interest in its oil giant, and possibly on large institutional investors from its Persian Gulf friends, as foreign fund managers have not been too keen to invest in the world’s most profitable oil company.
The  Saudi Public Pension Agency was allocated shares which equal 11.5  percent of the institutional tranche of the IPO, al-Khatib told Al  Arabiya.  
The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, will spend “a lot” of the US$25.6-billion  proceeds from the IPO for local large-scale investments, which could  otherwise be too steep for the private sector to handle on its own,  Saudi Arabia’s Finance Minister Mohammed Al Jadaan told Bloomberg in an interview earlier this week.

More at: https://oilprice.com/Latest-Energy-N...amcos-IPO.html

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## Swordsmyth

Saudi Arabia's oil company Aramco soared 10% limit up on its first  day of trading, reaching a valuation of $1.88 trillion, higher than any  other publicly traded company in the world. This means that after  pricing its IPO at $1.7 trillion, Jamie Dimon left about $180 billion on  the table, which will hardly impress the Crown Prince.

  The record valuation reflects an oversubscribed book of mostly local  investors who bought shares on the Saudi Tadawul stock exchange after  they were forced by Riyadh to pump the stock. 

 
  Aramco only sold a tiny 1.5% sliver in the company, meaning that the  kingdom and Public Investment Fund of Saudi Arabia (PIF) could easily  manipulate the price with such a small fraction of the stock public.  Aramco listed on the Tadawul exchange because of other international  exchanges and their investors found it hard to value the oil company  near the $2 trillion levels. 
 "They have had to launch the IPO on their own stock exchange as the  valuation was unlikely to be achieved elsewhere," said John Colley,  associate dean at Warwick Business School in the U.K, who spoke with Reuters. 
  Colley said the IPO pump is likely buyers affiliated with the  kingdom.   Aramco sold .50% of its shares to individual retail  investors, many of whom were Saudi nationals, financially incentivized  by the kingdom. The remaining 1% were domestic institutional investors  and other financial institutions from surrounding countries. 
  Reuters noted that Aramco would be offering a dividend of at least  $75 billion in 2020 to entice investors to hold. Also, investors who  hold for more than six months could be rewarded with up to 100 bonus  shares. 
  Saudi Arabia's central bank doubled leverage for retail investors ahead of the IPO. 
  State investment funds, like Public Pension Agency and PIF's Sanabil  Investments unit, are among domestic institutions who were buying shares  in the open market, reported Financial Times, adding that wealthy Saudi families were ordered by the kingdom to purchase stock.
  As the FT reported ahead of the IPO, Saudi Arabia was "persuading"  local institutions and wealthy families to buy shares in Saudi Aramco  after its initial public offering, as part of a plan to drive up the  stock price: the focus was to reach company’s $2t targeted valuation,  and as of this morning, the company is more than halfway there from $1.7  trillion.
 Families have been asked to pledge further funds, one unidentified adviser to families say
  State investment funds were also "encouraged" to buy shares.
  Public Pension Agency, the Public Investment Fund and the PIF’s  Sanabil Investments unit are among institutions likely to be called on  to support the shares once they are trading, FT reportsAramco declined to comment; PPA did not respond to FT’s requests for  comment, PIF denied it would intervene to support the price although  clearly that's precisely what it was doing this morning.
 The result of this massive pump spurred by the kingdom, which sent  shares soaring by the 10% limit on opening day, was Mohamed bin Salman's  attempt to catapult Aramco's valuation over the $2 trillion level.
 "Aramco should easily get to the $2 trillion valuation as soon as  tomorrow; there is plenty of appetite for it," Marie Salem, the head of  institutions at Daman Securities in Dubai, told Bloomberg. The Aramco IPO proceeds ($25.6 billion) will be used by Crown Prince  Mohammed bin Salman (MbS) to fund his Vision 2030 initiative and  transform the Saudi economy away from oil and gas. 

  As MbS and Aramco can claim fame to the world's largest IPO, there  was very little participation from foreign institutions, hence why the  kingdom incentivized domestic funds and citizens to buy the stock on the  day of the IPO.


Monica Malik, the chief economist at Abu Dhabi Commercial Bank, told  Reuters while Ice Brent Crude futures trade around $63-$64, the kingdom  needs about $87 per barrel to balance its budget.

  And one day before the IPO, the finance minister of Saudi Arabia Mohammed al-Jadaan told CNBC's Hadley Gamble that he rejected claims that the kingdom is running out of money. 
 "No we are not running out of money," al-Jadaan said. Last month, former director of the Central Intelligence Agency (CIA)  David Petraeus told CNBC that he believed Saudi Arabia is "gradually  running out of money," which could explain why Aramco was rushed to  IPO. 

More at: https://www.zerohedge.com/commoditie...s-188-trillion

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## Swordsmyth

The US oil and gas rig count increased by double digits this week,  according to Baker Hughes, reaching 813 rigs after increasing by 14 for  the week, according to Baker Hughes.
For oil rigs, this week saw  an increase of 18 rigs—the first double-digit growth since the beginning  of April, according to Baker Hughes data.

More at: https://oilprice.com/Energy/Energy-G...-8-Months.html

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## Swordsmyth

Oil freight rates from the US Gulf Coast for Aframax crude tankers  hit a new record this week, according to shipbrokers cited by Reuters,  as demand increases for US crude oil bound for Europe and the  Mediterranean in front of the new IMO 2020 rules that will go into  effect in just a couple of weeks.
Last week, the worldscale rate  for an Aframax tanker was $46,800 per day. But Equinor and Unipec have  chartered Aframax tankers this week for $60,700 per day—a near 30%  increase in just one short week.
That cost is spread out over the 700,000ish barrels of oil that an Aframax tanker holds.
Europe’s appetite for light, sweet crude oil has increased over the last couple of weeks, as new maritime rules—known as IMO 2020—will  cap the amount of sulfur allowed in fuel burned by maritime vessels.   This spike in demand is limiting the number of Aframax tankers  available, and as such, is increasing the costs to ship the IMO  2020-compliant oil. According to analysts and shipbrokers who spoke to  Reuters, this demand could increase US oil exports to 4 million barrels per day, in what would be a new high for the US.
US exports of crude oil has increased from an average of 2.065 million bpd at the start of the year, 3.633 million bpd now, according to the Energy Information Administration (EIA).



More at: https://oilprice.com/Latest-Energy-N...and-Booms.html

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## Swordsmyth

Saudi  Arabia, the world's biggest oil exporter, may cut the prices of its  light crude grades sold to Asia in February on signs of slowing demand  ahead of the region's peak refinery maintenance season, six trade  sources said on Monday.The  official selling price (OSP) of flagship Arab Light crude in February  could fall by 20-30 cents a barrel, four of six respondents in a Reuters  survey said. State oil company Saudi Aramco raised the Arab Light OSP  to the highest in six years in January, the fourth month of increases.
Aramco  may cut the OSP as the price structure for Middle East crude benchmark  Dubai indicated falling crude demand in February as cargoes loading that  month are likely to arrive when Asian refineries begin shutting for  maintenance in March, the sources said.
The  average backwardation between the first and third month cash Dubai  price so far this month narrowed by 15 cents from the previous month,  Reuters data showed. In a backwardated market prompt prices are higher  than those in future months.
The  OSPs are also likely to drop as the gross product worth, which measures  the value of a crude in terms of the fuels it yields after refining,  for Saudi oil grades are lower than last month because of falling  refining margins, one of the respondents said.
"Refining margins are under pressure," he said.
Arab Extra Light may see a bigger price cut in February after naphtha cracks weakened this month, the sources said.
However,  firm demand for January-loading cargoes and rebounding fuel oil margins  will support the OSPs for heavier Saudi oil, they said.
Most  of the survey respondents expect the February OSP for Arab Medium to  remain unchanged or drop slightly while the view was split between an  expected price hike and price cut for Arab Heavy.

More at: https://finance.yahoo.com/news/saudi...071429637.html

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## Swordsmyth

Saudi  Arabia's economy contracted by 0.46% in the third quarter from a year  earlier, hit by a drop in oil output as the de facto leader of the  Organisation of Petroleum Exporting Countries (OPEC) cut production,  government data showed on Tuesday.Oil  sector output declined 6.43%, but non-oil output grew 4.33%, led by  private sector activity, the data from the top world crude exporter's  General Authority of Statistics said.
On a seasonally adjusted basis, the economy contracted by 0.19% in the third quarter on a quarterly basis.
The  data came after the Saudi government in its budget cut its forecast for  economic growth to 0.4% in 2019 from 0.9%, with growth hit by lower oil  prices and crude production cuts agreed by OPEC nations and producers  outside the exporting group.
OPEC  and its allies have further agreed to deepen crude output cuts by  500,000 barrels per day until March 2020, which could weigh on the Saudi  economic recovery in early 2020.
The government expects real GDP growth at 2.3% in 2020.
Mining  and quarrying, which accounts for 38.2% of GDP, saw the biggest  decline, 6.39%, fuelled by a 6.52% drop in crude petroleum and natural  gas output, the data showed.
Petroleum  and refining dropped 6.11%, leading to a 2.4% decline in manufacturing  output. Manufacturing accounts for 12% of GDP on a constant basis.

More at: https://finance.yahoo.com/news/saudi...115439643.html

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## Swordsmyth

OPEC’s crude oil production further declined in December as the  cartel’s leader Saudi Arabia continued to lead by example cutting much  more than required and as the biggest laggards in compliance—Iraq and  Nigeria—moved to better comply with their quotas, the monthly Reuters survey showed on Monday.
According  to the survey of OPEC and oil companies sources, and ship-tracking  data, OPEC’s production in December 2019 dropped by 50,000 barrels per  day (bpd) compared to November and stood at 29.5 million bpd.


In November, OPEC’s crude oil production declined by  193,000 bpd from October, as Saudi Arabia cut production ahead of the  OPEC+ meeting, Iraq tried to fall in line with its quota, and Iran  further suffered from the U.S. sanctions, according to OPEC’s official figures.
In December, Saudi Arabia continued to reduce production, while OPEC and its Russia-led allies agreed to deepen the cuts in the first quarter of 2020 to prevent another glut on the market when demand is typically lower.
The  Saudis reduced their crude oil production by another 50,000 bpd in  December, taking the Kingdom’s over-compliance to more than 500,000 bpd  compared to its quota in the deal, according to the Reuters survey.
Iraq—OPEC’s  number two in terms of production and number one in terms of cheating  with production quotas—also reduced its production by 50,000 bpd.  Although this wasn’t enough to reach full compliance, Iraq was complying  at 59 percent with its quota last month, up from meager 23-percent  compliance in November, the survey found. 

Nigeria saw its production drop by 80,000 bpd, nearing its quota,  because of reduced exports of Bonga crude, traders told Reuters.

More at: https://oilprice.com/Energy/Energy-G...To-Comply.html

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## Swordsmyth

Saudi Arabia’s economy is expected to grow by 1.9 percent this year, the International Monetary Fund (IMF) said  on Monday, revising down its forecast of 2.2-percent growth from just  three months ago, due to expected lower Saudi oil production as the  Kingdom has pledged to overcomply with the OPEC+ oil production cuts.

In the October forecasts, the IMF had expected Saudi Arabia’s real GDP growth to pick up to 2.2 percent in 2020,  after sluggish 0.2 percent growth in 2019. Back then, the IMF said that  Saudi Arabia would need oil prices at US$86.50 in 2019 and US$83.60 in  2020 in order to balance its budget.
“The  downgrade for 2020 mostly reflects a downward revision to Saudi  Arabia’s projection on expected weaker oil output growth following the  OPEC+ decision in December to extend supply cuts,” the IMF said today.

More at: https://oilprice.com/Latest-Energy-N...-Oil-Cuts.html

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## Swordsmyth

Oil production in the seven most prolific shale plays in the United  States is set to increase by 22,000 bpd in February to 9.2 million bpd,  the Energy Information Administration said in the latest edition of its  monthly Drilling Productivity Report.
Production in set to  decrease in the Anadarko, Eagle Ford, and Niobrara regions by a combined  28,000 bpd next month, but are more than offset by increases in the  Permian and Bakken plays, which together should add 50,000 bpd in  February, according to the EIA.

More at: https://oilprice.com/Latest-Energy-N...ext-Month.html

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## Swordsmyth

Saudi Arabia will use part of the money raised through Aramco’s initial  public offering to strengthen its defense capabilities, Saudi Finance  Minister Mohammed al-Jadaan told Reuters in an interview at the World Economic Forum in Davos.

More at: https://oilprice.com/Latest-Energy-N...-Projects.html

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## Swordsmyth

The American Petroleum Institute (API) estimated on Wednesday a  surprise crude oil inventory build of 1.57 million barrels for the week  ending January 17, compared to analyst expectations of a 1.009-million-barrel draw in inventory.
Last week saw a build in crude oil inventories of 1.1 million barrels, according to API data. The EIA’s estimates, however, were of a draw of 2.5 million barrels for that week.


The API this week also reported another large build of 4.5 million  barrels of gasoline for week ending January 17, after last week’s large  3.2-million-barrel build. This week’s large gasoline build compares to  analyst expectations of a 3.090-million barrel-build for the week.
Distillate,  too, saw inventories increase, by 3.5 million barrels for the week,  adding onto last week’s large 6.8-million-barrel build, while Cushing  inventories fell by 429,000 barrels.
US crude oil production as  estimated by the Energy Information Administration showed that  production for the week ending January 10 increased to 13.0 million bpd, a record high for the United States.

More at: https://oilprice.com/Latest-Energy-N...ventories.html

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## Swordsmyth

Brazil produced more than 1 billion barrels last year, the first time it has breached the 1-billion-barrel mark, Reuters reports, citing the country’s oil regulator, ANP.
The daily average stood at 3.106 million bpd, up 7.78 percent on 2018, ANP also said.
More  than half of the total oil production Brazil recorded in 2019 came from  the prolific presalt zone off its coast. The contribution of the  presalt zone stood at 633.98 million barrels, which was an annual  improvement of 21.56 percent.
Brazil’s crude oil production topped  3 million barrels per day for the first time ever in November 2019, the  ANP reported lat month, adding that total oil and gas production rose  to 3.95 million barrels of oil equivalent daily - also a record-breaking  figure.

More at: https://oilprice.com/Latest-Energy-N...on-Record.html

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## Swordsmyth

Saudi  Basic Industries Corp (SABIC) expects a slowdown in demand in 2020, CEO  Yousef al-Benyan said on Wednesday, after the world's fourth-biggest  petrochemicals maker reported a fourth-quarter loss.SABIC's  first quarterly loss in more than a decade, sparked by lower average  selling prices and a writedown at an affiliate, sent its shares down 2%  to 86.90 riyals in early trade.
SABIC fell to a net loss of 720 million riyals ($192 million) from a profit of 3.22 billion a year earlier.
The CEO said a slowdown in economic growth, particularly in China and Europe, had weighed on the petrochemicals industry.
"At the same time, there is additional capacity coming to the market, specifically from the U.S. and China," he said.
"This  has really put pressure on product margins and slowed demand in certain  markets, therefore we have seen a slowdown in the second half of 2019  and we anticipate that the market will be more or less the same in  2020."
Benyan said it was too early to assess the impact of the outbreak of the coronavirus in China.
"We  have already seen an extension on Chinese holidays, this by itself  creates some impact and hopefully by the end of next week we'll have  much better clarity, but I assume that as soon as this is over, demand  will go back."
Yousef  Husseini, an analyst at EFG Hermes, said: "In my view, first quarter  2020 is likely to be equally, if not more challenging than the fourth  quarter from an operational perspective."

More at: https://finance.yahoo.com/news/sabic...071526990.html

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## Swordsmyth

WTI Crude •
51.56
-0.58
-1.11%

Brent Crude •
56.62
-0.71
-1.24%

Mars US •
52.06
-0.73
-1.38%

Opec Basket •
47.50
-11.30
-19.22%

----------


## Swordsmyth

The December lease sale  in Alaska by the Bureau of Land Management was hailed as the most  successful in as many as 13 years. The sale attracted bids worth a total  $11 million and covering more than a quarter of the acreage on offer.  That compared with just $1.5 million in bids under the December 2018  lease sale, with just 6 percent of the acreage offered attracting bids.


The vast oil reserves of Alaska are not a secret. But  until recently, many of these resources were simply too expensive to  exploit. Now, new tech is making these reserves recoverable—and Alaska’s  future brighter.
The U.S. Geological Survey earlier this month released  an update of its resource estimate for the North Slope—Alaska’s oil  heartland—estimating that the technically recoverable resources in the  Central North Slope alone stood at 3.6 billion barrels of oil and 8.9  trillion cu ft of natural gas. These resources, the USGS said, did not  include discoveries made between 2013 and 2017.
The fact that  discoveries are still being made in Alaska may come as a surprise if you  have only been following the shale industry, which has indeed hogged  the headline space in recent years. But oil companies are indeed  discovering new oil and gas in Alaska. Between 2017 and 2019 alone, some 1.5 billion barrels of new oil was discovered in the state.
One of the largest among these new discoveries was Willow. ConocoPhillips struck  oil in the northeastern part of the Alaska National Petroleum Reserve  in 2017. The field has resources of between 400 and 750 million barrels  of oil equivalent. The federal government approved  Conoco’s development plan for the Willow project last year, with  average daily production at peak levels seen at 130,000 bpd, with the  cumulative output over the project’s lifetime estimated at 590 million  barrels. 

Another company, an Australian energy junior named XCD Energy, earlier this month said  it had made an estimate of 1.6 billion barrels in resources at the  Peregrine project, in the North Slope. That was up from an earlier  resource estimate of 255 million barrels.
*A Renewed Frontier*
Oil  companies operating in Alaska could spend up to $24 billion on new  production in the state over the next ten years, S&P Global Platts  reported early in January. Much of this investment, the report noted,  would go towards maintaining current production levels of around half a  million barrels daily. New fields are coming on stream to replace  depleted ones. Yet, under the right price environment, production could  grow from the current level as well—and substantially.

More at: https://oilprice.com/Energy/Crude-Oi...-Oil-Boom.html

----------


## Swordsmyth

From an unpredictable monetary policy to its noisy domestic politics, Kuwait is often the odd one out in the Gulf.It  boasts the region’s first female finance minister and, uniquely for a  Gulf monarchy, has an elected legislature. But acrimony between  lawmakers and the appointed government has resulted in eight  administrations in as many years, and the fallout on fiscal policy is  becoming harder to contain.
Unlike most of its neighbors, OPEC’s  fourth-largest producer has failed to introduce taxes after taking a hit  from lower oil prices since 2014, earning the moniker of the “slowest  reformer” among Gulf Arab economies from Fitch Ratings. For the year  starting April 1, AA rated Kuwait expects to run its biggest-ever budget  deficit on anticipation of a decline in oil income and output.
The government’s financing needs “are projected to grow rapidly,” the International Monetary Fund warned last week.


The collateral damage also includes the government’s ability to  borrow, which it lost after issuing debut Eurobonds in 2017 because the  country’s public-debt law lapsed the same year. The main option for  covering the budget deficit is to draw down the holdings of the smaller  of the country’s two wealth funds that could be fully depleted next  fiscal year.
Finance Minister Mariam Al-Aqeel has said the government “will fight for getting this law approved.”
Lawmakers  have resisted efforts by the government to reclaim access to debt,  accusing it of mismanaging public finances and demanding a fix before it  can borrow again.


“Unless it’s under real pressure, there will be no reform to fiscal  policy,” said Jassim Al-Saadoun, head of Kuwait-based Al-Shall Economic  Consultants. “They have to convince people they will use it wisely, and  they have failed to do so.”
On track for its sixth straight fiscal  shortfall and lacking a new debt law, the government has relied on the  General Reserve Fund, managed by the Kuwait Investment Authority, the  world’s oldest sovereign wealth fund. Tapping the KIA’s much larger  Future Generations Fund, designed as a buffer for the time when Kuwait’s  oil runs out, would require a legislative change.
Kuwait doesn’t publicly disclose the size of its wealth fund holdings.
“The  urgency to update the debt law is growing,” said Maya Senussi, senior  economist at Oxford Economics. “The problem with the outdated debt law  is that in the current dynamics of low-trending oil prices, Kuwait will  continue to run deficits, maintaining pressure on GRF resources, which  are of course finite.”
Parliamentary elections later this year  will likely sideline discussions of reform and put off approval of the  law, which Fitch now expects to be delayed until the 2020-2021 fiscal  year.
The dearth of sovereign debt has also been a complication  for Kuwaiti banks. To comply with local liquidity rules, lenders need to  invest 18% of dinar customer deposits in instruments issued by central  bank or the government.
‘Difficult Situation’
“Yet, due to  the lack of sovereign issuance, banks find themselves in a difficult  situation, racing for limited Central Bank of Kuwait bonds or keeping  part of their dinar deposit in cash or placed with the central bank at  low returns,” said Bloomberg Intelligence analyst Edmond Christou.
Talk  of an economic revamp, by means of taxing people or cutting subsidies,  is currently the most contentious issue in parliament. Lawmakers have  vowed to grill Al-Aqeel over any reference to such measures, insisting  Kuwaitis must never bear the brunt of any fiscal reform.
Meanwhile, GRF’s readily available assets might dry up by the end of next March, according to Moody’s Investors Service.
While  there have been no reforms on the revenue side, the government has  tried to cut wasteful spending. By continuing to keep expenditure in  check, Kuwait may be able to avoid withdrawing money from the Treasury  next year, according to Al-Aqeel. Still, the legislation is a priority  since “the cost of borrowing is less than the cost of withdrawing from  the reserves,” the finance minister said at a briefing this month in  response to a question from Bloomberg.


The paradox is that despite the strain on Kuwait’s finances, its  wealth still sets it apart. Boosted annually by mandatory transfers of  10% of total revenue, assets in the KIA amount to over $400 billion,  according to the IMF, while Kuwait’s proven oil reserves could last  around a century at the current rate of production.
Kuwait has two  Eurobonds outstanding. Its $4.5 billion of notes maturing in March 2027  have rallied in the past year, sending the yield down 1.3 percentage  points in that period to 2.2%, below Saudi bonds of similar maturity.
S&P  Global Ratings estimates that at 420% of gross domestic product, the  government’s net general asset position was the highest of all rated  sovereigns at the end of 2019. Kuwait is ranked at the third-highest  investment grade level by the three major credit assessors.

More at: https://news.yahoo.com/borrowing-out...160000577.html

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## Swordsmyth

*Trump Expands Drilling In Utah*

----------


## Swordsmyth

After years of battle the approvals have come through. Trans Mountain is full speed ahead, pipe going in ground 
   	Enbridge line 3 also has go ahead 
   	Keystone XL got some good news as well. 
   	I've read many articles here discussing setbacks and often stating that  it was doubtful these pipelines would ever go ahead. Now they are going  ahead and there hasn't been a single news article about that on  Oilprice? 
   	These are big pipelines connected to the largest energy reserves in  North America, by far. Canada has the third largest oil reserves on the  planet. Saudi Arabia is second, Venezuela is first. Canada currently  ships about 4.4 mmbbls oil per day to the US,last I checked. 


   	Glen 
   	Some info on the pipelines. Most of this happened this week. 
https://www.google.com/amp/s/busines...adequate-2/amp 

https://www.google.com/amp/s/busines...-of-appeal/amp 
https://www.google.com/amp/s/busines...on-project/amp 
https://www.google.com/amp/s/amp.det...amp/4602081002 


More at: https://community.oilprice.com/topic...getting-built/

----------


## Swordsmyth

Brazil’s oil production jumped by 20.4 percent on the year to set a new  production record of 3.168 million barrels per day (bpd) in January,  thanks to the prolific pre-salt basin, oil regulator ANP said on Wednesday.

Last month, Brazil’s total oil and natural gas production also set a  new production record, exceeding 4 million barrels of oil equivalent per  day (boe/d) for the first time ever, the regulator said, noting that  combined oil and gas production stood at 4.041 million boe/d.    


Oil production in January 2020 rose by 2 percent compared  to December 2019 and by 20.43 percent compared to January 2019, ANP  said.  

More at: https://oilprice.com/Energy/Energy-G...n-January.html

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## Swordsmyth

International banks are suspending credit lines for some independent  oil refiners worried about the growing risk of defaults across  industries because of the coronavirus epidemic, Reuters reports, citing industry sources.


  According to the sources, at least three private refiners, or  teapots, have had credit lines to the tune of $600 million suspended by  banks including French Natixis, Dutch ING, and Singapore DBS Group  Holdings.

  _“All our applications for new open-account credits are  frozen ... these clean credits are pivotal as we buy 6 to 8 million  barrels of oil each month,”_ one source told Reuters.Refiners, both private and state, have already reduced their run  rates in response to the slump in fuel demand resulting from the  outbreak, and now they have deepened these cuts, Bloomberg reported last week.

*The average as of last Thursday was about 10 million bpd, down by 25 percent on the same time last year,* when  the average run rates were at a record high of close to 13 million bpd.  Analysts expect the low run rates to continue at least until the end of  this month, but if it spills into March, some refiners - notably  independent refiners - will start experiencing a lack of storage space,  too, after earlier this month they took advantage of low prices to stock  up on crude.

Now, on top of that, the teapots that have accounted for a large portion  of China’s increased thirst for oil that was instrumental in oil price recovery after the crisis, are having financing trouble.

More at: https://www.zerohedge.com/energy/no-...rs-run-trouble

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## Swordsmyth

The Middle East oil exporters are grappling with depressed demand in their key market, China, due to the coronavirus outbreak. 
 The economies of the Arab Gulf countries are feeling the  double sting of a sizeable loss of oil demand in Asia and a plunge in  oil prices as the markets fear a significant slowdown in global economic  growth because of the outbreak.
If that wasn’t bad enough for the  biggest economies in the Gulf, business activity in the non-oil sector  continues to deteriorate in OPEC’s biggest producer Saudi Arabia and in  OPEC’s third-largest producer, the United Arab Emirates (UAE).
The  start to 2020 hasn’t been good for the Saudi and UAE economies as they  cut oil production in the new round of OPEC+ cuts, and they cut more  than they are expected to, as they are trying to lead by example in the  OPEC+ group’s efforts to draw down oil oversupply.
But then China began reporting cases of coronavirus at the end of January, sending oil prices tumbling  to more than a year-low last week. Saudi Arabia and the UAE are not  only exporting much-lower-than-typical volumes of crude oil, but they  are also getting less money for it.
The coronavirus outbreak added  more pain to the Gulf economies—it slammed China’s factory output,  delayed supplies to export destinations, and depressed business  sentiment worldwide. In this way, even the non-oil sectors of the  largest oil producers in the Gulf suffered. The ‘diversification’ of  economies away from oil didn’t spare the Saudi and UAE economies in  February. 

In Saudi Arabia, factory output, new orders, and employment trends  all lost momentum since the start of 2020, IHS Markit said in its  Purchasing Managers’ Index (PMI) survey this week.
The  overall expansion of non-oil private sector business activity in  February was the weakest on record since the survey began in August  2009, IHS Markit said.
The Saudi Arabia PMI was at its lowest  level since April 2018, growth in factory output and in new orders  sharply slowed down, and business confidence was at its most pessimistic  in a year and a half, with concerns about China and the coronavirus  outbreak, according to the survey.

More at: https://oilprice.com/Geopolitics/Mid...eyond-Oil.html

----------


## Swordsmyth

Earlier this morning, The Wall Street Journal reported that Russia  opposed the Saudi plan to deepen OPEC+ cuts by 1.2mm b/d. Notably, oil  prices did not react to the headlines, but now that Russian Energy  Minister Alexander Novak has left the OPEC+ JMMC meeting - after *proposing that OPEC+ maintain its current output cuts* through the end of the second quarter - oil prices have started to tumble.  WTI is back below $47 after topping $48.50 earlier.

  *  *  *


More at: https://www.zerohedge.com/markets/sa...d-virus-crisis

----------


## Swordsmyth

A three-year pact between OPEC and Russia ended in acrimony on Friday  after Moscow refused to support deeper oil cuts to cope with the  outbreak of coronavirus and OPEC responded by removing all limits on its  own production. 

Oil prices plunged 10% as the development revived fears of a 2014  price crash, when Saudi Arabia and Russia fought for market share with  U.S. shale oil producers, which have never participated in output  limiting pacts. 
Brent has lost about a third of its value this  year, tumbling towards $45 a barrel, its lowest since 2017, putting  oil-dependent nations and many oil firms under heavy strain as the  global economy reels due to the virus outbreak, which has dampened  business activity and stopped people traveling. 


“From April 1 neither OPEC nor non-OPEC have restrictions,” Russian  Energy Minister Alexander Novak told reporters after  marathon talks at  the OPEC headquarters in Vienna on Friday. 
Saudi Energy Minister  Prince Abdulaziz bin Salman told reporters when asked whether the  kingdom had plans to increase production: “I will keep you wondering”. 
The  failure of talks may have more far reaching implications as OPEC’s de  facto leader Saudi Arabia and Russia have used oil talks to build a  broader political partnership in the last few years after effectively  supporting opposite sides in the Syrian war. 
“Russia’s  refusal to support emergency supply cuts would effectively and fatally  undermine OPEC+’s ability to play the role of oil price stabilizing  swing producer,” said Bob McNally, founder of Rapidan Energy Group. 
“It  will gravely rupture the budding Russian-Saudi financial and political  rapprochement. The result will be higher oil price volatility and  geopolitical volatility,” he said. 

More at: https://www.reuters.com/article/us-o...-idUSKBN20T0Y2

----------


## Swordsmyth

With the commodity world still smarting from the Nov 2014 Saudi  decision to (temporarily) break apart OPEC, and flood the market with  oil in (failed) hopes of crushing US shale producers (who survived  thanks to generous banks extending loan terms and even more generous  buyers of junk bonds), which nonetheless resulted in a painful  manufacturing recession as the price of Brent cratered as low as the  mid-$20's in late 2015/early 2016, on *Saturday, Saudi Arabia  launched its second scorched earth, or rather scorched oil campaign in 6  years. And this time there will be blood.*

  Following Friday's shocking collapse of OPEC+, when Russia and Riyadh  were unable to reach an agreement during the OPEC+ summit in Vienna  which was seeking up to 1.5 million b/d in further oil production cuts,  on Saturday Saudi Arabia kick started what Bloomberg called an all-out oil war, *slashing  official pricing for its crude and making the deepest cuts in at least  20 years on its main grades, in an effort to push as many barrels into  the market as possible.*
  In the first major marketing decision since the meeting, the Saudi  state producer Aramco, which successfully IPOed just before the price of  oil cratered...

 
  ... launched _unprecedented discounts_ and  cut its April pricing for crude sales to Asia by $4-$6 a barrel and to  the U.S. by a whopping $7 a barrel in attempts to steal market share  from 3rd party sources, according to a copy of the announcement seen by  Bloomberg. In the most significant move, *Aramco widened the  discount for its flagship Arab Light crude to refiners in north-west  Europe by a hefty $8 a barrel, offering it at $10.25 a barrel under the  Brent benchmark.* In contrast, Urals, the Russian flagship crude blend, trades at a discount of about $2 a barrel under Brent. *Traders said the Saudi move was a direct attack at the ability of Russian companies to sell crude in Europe.*
  Confirming the obvious, Iman Nasseri, managing director for the Middle East at oil consultant FGE said "*Saudi Arabia is now really going into a full price war."*
  The draconian cuts in monthly pricing by state prouder Saudi  Aramco are the first and clearest indication of how the Saudis will  respond to the break up of the alliance between OPEC and Russia, which  as we noted earlier, dumped MbS on Friday in  a stunning reversal within OPEC+. Talks in Vienna ended in  dramatic failure on Friday as Saudi Arabia’s gamble to get Russia to  agree to a prolonged and deeper cut failed to pay off.
  And the second indication that the OPEC oil cartel is now effectively  dead, came a few hours later when Bloomberg again reported that in  addition to huge price cuts, Saudi Arabia was set to flood the market with a glut of oil to steal market share and capitalize on its just announced massive price cuts as *the kingdom plans to increase oil output next month, going well above 10 million barrels a day.* 
  In addition to slashing prices,  *Saudi Arabia has privately  told some market participants it could raise production much higher if  needed, even going to a record of 12 million barrels a day,* according to Bloomberg sources.
  But before hitting a stunning 12mmb/d, Saudi production will first  rise above 10 million barrels a day in April, from about 9.7 millions a  day this month: "*That’s the oil market equivalent of a declaration of war*," an unnamed commodities hedge fund manager said.

  Meanwhile, as Bloomberg correctly notes, *"with demand being ravaged by the coronavirus outbreak, opening the taps like that would throw oil market into chaos."*
  According to preliminary estimates, with Brent trading at $45, a  flood of Saudi supply as demand is in freefall, could send oil into the  $20s if not teens, in a shock move lower as speculators puke on long  positions in what Goldman calls periodically a "negative convexity" event.

More at: https://www.zerohedge.com/commoditie...ing-oil-prices

----------


## Bern

Well this puts the political arrests in KSA in a new light.

----------


## Swordsmyth

> Well this puts the political arrests in KSA in a new light.


Preventative arrests before the chaos comes from low oil prices.

The whole middle east will collapse.

----------


## oyarde

West Texas Light Sweet Crude 41.28 . One year oil forecast 47.00 . Wholesale gasoline 1.39 .

----------


## Swordsmyth

Russia said Tuesday it was open to renewing cooperation with the OPEC  oil cartel even as kingpin Saudi Arabia escalated a price war with  Moscow by announcing it would flood markets with new supplies.The  oil price conflict broke out after OPEC and a group of non-member  countries dominated by Russia -- the world's second largest oil producer  -- on Friday failed to agree on production cuts.
Saudi Arabia,  the world's biggest crude exporter, responded by announcing unilateral  price cuts. This prompted the oil price to plummet and fuelled huge  drops on stock markets Monday.
On Tuesday, Saudi oil giant Aramco  announced a plan to massively increase oil output despite falling demand  during the novel coronavirus outbreak.
Russian Energy Minster  Alexander Novak said Tuesday that Moscow remains open to cooperation  with OPEC to stabilise the oil market.
"I want to say the doors  aren't closed," Novak told the state-run Rossiya 24 television channel,  hinting at the possibility of further talks.
Russia's failure to  reach agreement with the cartel "does not mean that in the future we  can't cooperate with OPEC and non-OPEC countries," Novak insisted.
Kremlin spokesman Dmitry Peskov told journalists: "No one rules out such a possibility."
Aramco  said Tuesday it would boost crude oil supplies to 12.3 million barrels  per day in April in a move that will flood markets when current  agreements expire.


The announcement "shows the Saudis have something to prove," director  of Britain-based RS Energy Bill Farren-Price said. "This is a grab for  market share."
Novak in turn said Russia could also swiftly increase its production.
"I  think in the short-term we can increase by 200-300,000 barrels (per  day) with the prospect of 500,000 barrels, that's in the near future."
"If  necessary we have various tools including reduction and increasing  production," Novak said, adding that a meeting of OPEC and non-member  producers was planned for May or June.

More at: https://news.yahoo.com/russia-reache...151642607.html

----------


## Swordsmyth

Even before the collapse of the OPEC+ talks last Friday, Saudi  Arabia’s finance ministry had asked government agencies to propose a  20-30 percent cut in their budgets due to the oil price slide, Reuters reported on Wednesday, citing four sources with knowledge of the plans.  
Before  the OPEC+ meeting last week, the Saudis were already planning  government spending cuts, including via delays in projects and contract  awards, as the coronavirus outbreak is dampening the oil demand outlook  and weighing on oil prices and on Saudi oil revenues. The Kingdom was  also expecting tough negotiations with its now former ally Russia about  deepening the OPEC+ production cuts, Reuters’ sources said.  
Now the oil price crash after the OPEC+ break-up and the all-out oil price war  between friends-turned-foes Saudi Arabia and Russia makes Saudi budget  spending cuts even more urgent, considering the fact that the Kingdom  needs oil prices at above $80 a barrel in order to balance its budget  and that it has been running widening budget deficits since the previous  oil price crash of 2014.
According to Capital Economics analysts, quoted by Reuters, at the current oil prices, Brent Crude  at $36 a barrel, Saudi Arabia’s budget deficit will jump to 15 percent  of gross domestic product (GDP) this year, compared to deficit of 4.7  percent of GDP in 2019.
The Saudi sovereign wealth fund could help  cover the shortfall as oil revenues slump with the price crash and glut  on the market, but investments of hundreds of billions of U.S. dollars  in mega projects and in the Vision 2030 plan to diversify away from oil  could be delayed.

More at: https://oilprice.com/Latest-Energy-N...ice-Crash.html

----------


## Swordsmyth

The  United Arab Emirates followed Saudi Arabia on Wednesday in promising to  raise oil output to a record high in April, as the two OPEC producers  raised the stakes in a standoff with Russia that has hammered global  crude prices.The  extra oil the two Gulf allies plan to add is equivalent to 3.6% of  global supplies and will pour into a market at a time when global fuel  demand in 2020 is forecast to contract for the first time in almost a  decade due to the coronavirus outbreak.
Oil  prices have almost halved since the start of the year on fears OPEC  states would flood the market in its battle with Russia after Moscow  rejected OPEC's call last week for deep output cuts and a pact on  cutting output that has propped up prices since 2016 collapsed.
But  Russia said on Wednesday it would not reverse its decision as it still  believed cutting output would make no sense if the virus hit demand  deeper than expected.
Saudi  Arabia, which has already announced it would hike supplies to a record  12.3 million barrels per day (bpd) in April, said on Wednesday it would  boost production capacity for the first time in more than a decade.
UAE  national oil company ADNOC said it would raise crude supply to more  than 4 million bpd in April and would accelerate plans to boost its  capacity to 5 million bpd, a target it previously planned to achieve by  2030.
By  raising supplies, Riyadh and Abu Dhabi will add a combined 3.6 million  bpd of extra oil in April to a market already awash with crude, compared  to their existing output that has been limited by the pact with Russia  that expires in March.
In addition, Moscow has said Russian oil firms might boost output by up to 300,000 bpd and possibly as much as 500,000 bpd.
Russian  Energy Minister Alexander Novak said on Wednesday Saudi plans to raise  output was "not the best option" and said Moscow was still open to  dialogue with OPEC. But his deputy told Reuters cutting output was not  an option either.

More at: https://finance.yahoo.com/news/saudi...070739550.html

----------


## Swordsmyth

The March 18 meeting of the OPEC+ panel monitoring the oil market and  producers’ compliance with quotas has been canceled, a source in one  delegation told Russia’s news agency TASS on Thursday, as Saudi Arabia and its OPEC allies face off with Russia in an escalating oil price war after the OPEC+ group failed to agree on joint actions last Friday.
The  meeting of the Joint Technical Committee (JTC) of OPEC and non-OPEC  countries, scheduled for next week, is unlikely to take place, three  sources familiar with the plans told Reuters, with one source saying that the meeting would be postponed.  
OPEC’s  top producer and de facto leader, Saudi Arabia, has signaled it would  not attend the panel meeting, regardless of its format, one of the  sources told Reuters.

More at: https://oilprice.com/Latest-Energy-N...s-Meeting.html

----------


## Swordsmyth

Saudi Arabia has stepped up efforts to squeeze Russia’s Urals oil grade  out of its main markets by offering its own cheap barrels instead after  their long-standing deal to support global oil prices fell apart, seven  oil sources said. 

Cooperation between Moscow and Riyadh dramatically collapsed last  week after Russia refused to support deeper oil output cuts desired by  Saudi Arabia to fight falling oil demand as a result of the spread of  the coronavirus outbreak.  
Market sources told Reuters that  state-controlled Saudi Aramco is trying to replace Urals in refiners’  feedstock around the world, from Europe to India.  
“They (the Saudis) knock on all doors offering a lot and cheaply...” a source with a Western oil major told Reuters.  
Saudi’s  national shipping firm, Bahri, provisionally chartered up to 19  supertankers this week, with six of them set to take about 12 million  barrels of Saudi crude to the United States, according to data and  sources. 
Saudi Aramco is in talks with European refiners,  including big buyers of Urals oil like Finland’s Neste Oil, Sweden’s  Preem, France’s Total, BP, Azerbaijan’s SOCAR, Italy’s Eni, the sources  said. 
The tactic has already started to pay off, with refiners  ordering extra volumes of its crude for loading in April at “very  attractive prices”, the sources added. 
Saudi Aramco, Neste Oil, Total, BP, Preem, Eni and SOCAR did not immediately respond to requests for comment. 
Saudi  Arabia will open the taps beginning on April 1, releasing 12 million  barrels of oil per day (bpd) into the markets. Russia’s maximum  production capacity is 11.80 million bpd, with Asia and Europe being key  export markets. 


“Riyadh is really mad at Moscow for their move in (the) OPEC meeting,  so they target (the) Urals markets first”, a source at a European  trading firm involved in Urals trading said.  
Market sources said  that Saudi Aramco is trying to replace Urals in refiners’ feedstock in  an attempt to punish Moscow and get the Russians back to the negotiation  table.      
On Saturday, the day after the landmark deal between  the group known as OPEC+ fell apart, Riyadh slashed prices for its  crude to customers worldwide.  
Saudi Aramco may send an extra 1.5  million bpd to Europe in April alone, said the third source, who does  calculations for a global trading house, said.  


Oil wars between Russia and Saudi Arabia are not new: both were at a  standoff before the OPEC+ deal three years ago. But now Riyadh is ready  to go to as far as Belarus. 
Russia and its ex-soviet neighbour  failed to reach a new oil supply deal in January, meaning that Minsk  started to look for Urals replacement.     
“We’ve been working  with Saudi Arabia since last year, there was a meeting in London last  week... The prices are just wonderful,” a source at a Belarus oil trader  told Reuters. 
Belarus said it would keep importing alternative crude oil even if supplies from Moscow are fully restored.         
Saudi  Arabia is also seeking to replace Urals crude in more unusual markets  for the Russian grade such as India and the United States, traders said.  
“There were phone calls over the weekend from Aramco to CEOs of  majors and big independents about taking an increase in Saudi oil. My  understanding is that this would be oil loading in April - reaching U.S.  in May and June”, a U.S. market source said. 
Indian refiners that had been increasing Russian oil purchases in recent months have also ordered extra Saudi oil.  
Azeri  state firm SOCAR ordered 3 million barrels from Saudi Arabia for  loading in April for its STAR refinery in Turkey, which so far was  processing mainly Urals, two sources said. 
And France’s Total,  one of the top Urals buyers, is in talks with Saudi Aramco to boost  intake of Arabian barrels by some 600,000-700,000 bpd next month,  another source familiar with the company’s plan said. 
Neste Oil, Eni and Preem may also receive extra barrels from Riyadh, ranging from a one to three-four cargoes, traders said. 

More at: https://ca.reuters.com/article/busin.../idCAKBN20Z2LH

----------


## Swordsmyth

It's not just US shale companies that are forced to retrench as they  scramble to survive in a world where the price of their key commodity  was just whacked by a third: overnight the world's largest oil producer,  Saudi Aramco, announced it will slash planned spending this year in the  first sign that plunging demand and the oil-price war which the Saudi  unleashed are starting to hit home.
  In a statement, Aramco said that its capex budget for 2020 will be cut by almost a third, and *will be between $25 billion and $30 billion in 2020* as spending plans for next year and beyond are being reviewed. Prior to the cut, *Aramco  had expected a planned capex in the range of $35 billion to $40 billion  per its IPO prospectus, and compares with $32.8 billion in 2019.*

  The capex cut comes as Aramco's profit tumbles 21% in lower oil  prices and production. Of course, the worst is yet to come as none of  the numbers below capture the historic crash in the price of oil which  is the primary driver behind the company's revenue and profits:

Net income including minority interests: 331 billion riyals ($88 billion) vs 417 billion in 2018Revenue: 1.11 trillion riyals vs 1.19 trillion riyalsOperating profit: 675 billion riyals vs 798 billion riyals
"We have already taken steps to rationalize our planned 2020  capital spending,” Aramco CEO Amin Nasser said. Given the impact of the  coronavirus pandemic on economic growth and demand, Aramco is adopting  “a flexible approach to capital allocation."
  "That was the surprise,” Ahmed EFG Hermes analyst Hazem Maher.  "They’re adding production in a low price environment so their cash  flows could be impacted." Cutting investment could help absorb some of  the impact of the drop in oil prices, but it would also have substantial  consequences on the local economy as far fewer people are employed.
  The capex cut is just the start. As Bloomberg writes this morning,  echoing what we said last weekend, the oil-price war led by Saudi Arabia  and Russia will mean more pain for Aramco as producing nations prepare  to boost supply. Discounted pricing to markets already reeling from weak  demand and crude that lost roughly half its value since the beginning  of the year is likely to hit revenue further.
  It also means that anyone who bought into the Aramco IPO is ruing the day: *the Saudi oil giant's shares fell as much as 0.9% on Sunday, extending the decline this year to about 18%.* Aramco’s  market value has slumped from a peak of over $2 trillion in December to  about $1.5 trillion, and it has much more to drop if the oil price war  does not end soon.

  What is odd is that Saudi Arabia pledged to supply 25% more oil in  April than it produced last month, and Wednesday ordered Aramco to boost  output capacity by 1 million barrels a day. However it is not clear how  the oil giant will do that if its capex is slashed by $10 billion.


More at: https://www.zerohedge.com/markets/ar...profits-plunge

----------


## Swordsmyth

Saudi Arabia continues to signal to the market that it is not backing  down from the oil price war despite the crumbling oil prices amid  coronavirus-hit demand and promises of huge extra supply next month.  
Oil  giant Saudi Aramco will proceed with the reduction of its refinery  rates in Saudi Arabia in April and May in order to free up more crude  oil for exports, an official at the company told Reuters on Thursday.
Saudi Arabia will continue to supply a record 12.3 million barrels per day (bpd) to the oil market in the coming months, as per order from the energy ministry, the official Saudi Press Agency reported on Wednesday. 
  The Kingdom is intent on unleashing growing crude oil volumes  on the market, aiming to significantly boost its crude oil exports to a record-breaking more than 10 million bpd in May.  
The  Saudis, who launched an all-out price war for market share with Russia  after Moscow refused to back deeper cuts, will not only boost April  exports from the current 7 million bpd, but will also grow exports in  May by another 250,000 bpd from April.

More at: https://oilprice.com/Energy/Crude-Oi...ces-Lower.html

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## Swordsmyth

Saudi Arabia said the government will cut spending by 5%, or about  $13.3 billion, to offset the impact of plunging oil prices and the  effects of the new coronavirus on its economic outlook and deficit.In  a statement carried by the state-run Saudi Press Agency late Wednesday,  Finance Minister Mohammad Al-Jadaan said additional measures would be  taken to deal with the drop in oil prices, but he did not elaborate  further.


Al-Jaadan said the government approved a partial reduction in  spending in areas “with the least social and economic impact." He did  not give specific details on where the spending cuts would happen.
The  kingdom, which leads one of the world's 20 biggest economies, relies  heavily on government spending to fuel its economy and pay the salaries  of most Saudi citizens who work in the public sector.
Saudi Arabia  has already announced a roughly $13 billion stimulus package to support  the private sector and extend financing to small and medium-sized  businesses impacted by the virus, which has affected countries around  the world.
The kingdom has halted all commercial flights and  closed its borders to travelers to slow down the spread of the virus,  which has infected nearly 240 people in the country. The government also  ordered most public and private sector employees to work from home for  two weeks, and closed schools, universities, restaurants, malls,  entertainment venues and even mosques, while keeping food delivery,  grocery stores and pharmacies operating.

More at: https://news.yahoo.com/saudi-arabia-...075743587.html

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## r3volution 3.0

I won't pretend to know what's being decided in the inner councils of Riyadh and Moscow, but this should end in tears for US shale, whether that's the plan or not. The only reason shale exists is that high prices justified those relatively expensive extraction methods. The shale patch just about flat-lined back in 2015, but then a bunch of private equity guys came in and bailed them out, which is fine; those guys took their risk, but that also means they need to bear the cost of the impending defaults (not the taxpayer). Of course, this is America, no one is permitted to suffer the consequences of their own stupidity. Oil at 50% of their production cost? No matter, the Fed will buy barrels, and then pay someone else to dump them into a ditch, if need be: because Wall Street loaded up on that $#@!, their bonds. 

Interesting times

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## Swordsmyth

> I won't pretend to know what's being decided in the inner councils of Riyadh and Moscow, but this should end in tears for US shale, whether that's the plan or not. The only reason shale exists is that high prices justified those relatively expensive extraction methods. The shale patch just about flat-lined back in 2015, but then a bunch of private equity guys came in and bailed them out, which is fine; those guys took their risk, but that also means they need to bear the cost of the impending defaults (not the taxpayer). Of course, this is America, no one is permitted to suffer the consequences of their own stupidity. Oil at 50% of their production cost? No matter, the Fed will buy barrels, and then pay someone else to dump them into a ditch, if need be: because Wall Street loaded up on that $#@!, their bonds. 
> 
> Interesting times


Now is the perfect time to fill the SPR to the brim.
And we should tariff foreign government oil companies that are waging economic warfare on us to try and make us reliant on them for our needs so they can blackmail us.

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## r3volution 3.0

> Now is the perfect time to fill the SPR to the brim.


That cup's about to overfloweth, from what I understand. 

Hence the talk about "negative" oil prices, paying someone to carry it elsewhere. 




> And we should tariff foreign government oil companies that are waging economic warfare on us to try and make us reliant on them for our needs so they can blackmail us.


Nonsense

The Fed is, as we speak, looting the rest of the world, via its exorbitant privilege, to bail out cruise lines, air lines, and everybody else. 

This is all financed by a tax on, inter alia, very poor people in the third world. 

...who we also periodically bomb. 

So, maybe, for a moment, check your national self-righteousness - hang the jingo-jango on the door for a few weeks.

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## Warlord

The shale boom is welll and truly over

https://oilprice.com/Energy/Energy-G...-To-Learn.html

Most of them are relying on a $55-60/barrel price point to *break even*.  

SS should rename the thread.

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## r3volution 3.0

> The shale boom is welll and truly over
> 
> https://oilprice.com/Energy/Energy-G...-To-Learn.html
> 
> Most of them are relying on a $55-60/barrel price point to *break even*.  
> 
> SS should rename the thread.


The US is living on a _very_ extended credit line.

It'll last through this crisis, but not the next one. 

This'll be the last great American bailout.

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