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Oil Price: cloudy outlook with bearish tendencies

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The slow growth rate of China's GDP, around 5% according to the latest forecasts,  coupled with the falling gas prices, is clearly inhibiting the potential rise of global oil prices.  China, the world's top oil importer and second largest consumer after the US, enjoyed four decades of robust growth that used to be close to 10% - the envy of the developed world. The latest data from China's Bureau of Statistics, the world's second largest economy is heading towards its own new 'normal' - a relatively modest growth around 5%. Although China still manages to keep its economy growing despite many headwinds, the concerns on many fronts eclipse the growth picture: its frosty relationships with the West, uneasy diplomatic relations with the neighbours, especially around the South China Sea and of course, its troubled neighbourly relationship with India, the world's third largest consumer of oil, to name but a few. The latest concern over China's growth comes in

Iranian New President: a heart surgeon who gauges nation's pulse - well!

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  Iranians elected a new president on Friday in a run-off election, who has pledged to take the country out of international isolation while promising women more rights that include relaxing the strict dress code - the compulsory hijab-wearing in public. Dr Masoud Pezeshkian, the president elect, aged 69, is a former heart surgeon, who had been a minister of health before, in a reformist government from 2001 to 2005. In the first round of the presidential election that was held on June 28 due to the unexpected death of the former president, Ibrahim Raisi, in a helicopter crash, Dr Pezeshkian marginally won the race while beating Saeed Jalili, his nearest rival and a conservative hardliner, who promised to uphold the status quo.  During the heated political debates in the runup to the election, Dr Pezeshkian criticised Iran's confrontational dealings with the West that resulted in hyperinflation and an economy in ruins; he accused the previous hard-line-regimes of leaving Iran in a

The Double-Edged Sword: Falling Oil Prices and Regional Impacts

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  The price of crude oil slightly increased as the weekend approached, something that has been attributed to the rising tension in the Middle East between Israel and Hezbollah, the Shite military group in Lebanon. As of 18:00 GMT, the prices of WTI and Brent were at $81.58 and $86.46 respectively. The price of LNG, liquified natural gas, meanwhile, was at $2,60. The US crude stocks, against all odds, rose again during the last week, deviating from the draw that was reported a week ago. It raises the prospect of feeble demand that has been the case for months; this is rather unexpected in the US, the world's top consuming nation of the fossil fuels, despite the onset of the summer driving season. The fact that the price of oil slightly went up despite the rising US crude stocks has been attributed to the rising tension between Israel and Hezbollah; the northern border between Israel and Lebanon has been a hotbed for hostilities involving both sides since Israel launched a full-scale

Oil price: diverging forecasts on oil demand from two global giants

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  Data and Image: credit - IEA IEA (2024), Annual oil demand growth, 2011-2025, IEA, Paris The Paris-based International Energy Agency, IEA, put a damper yet again on the perceived demand for oil in 2024 and 2025, in stark contrast to that of the OPEC+, the Organization of Petroleum Exporting Countries plus Russia. According to IEA’s latest report on the subject, released in June, 2024, the growth will be a fairly modest 960 kbpd - 960 thousand barrels per day in 2024; it is a drop of 100 kbpd from IEA’s own previous estimate. The IEA cites a weaker demand in China for the drop in demand in this year. China’s PMI, the key indicator that reflects the manufacturing activity, for instance, has been in decline for a few successive months, even below the psychologically sensitive 50%, the threshold; it went above 50% in March, only to come down again in April - and then, to continue the decline into May. It is no secret that the oil producers pin their hopes on China and India in or

Sharp rise in US crude stocks: the only chart that explains the oil price stagnation

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  Palpable anxieties in the oil markets The price of oil has been down for the fourth successive week with Brent hitting below $80 again. As of 18:00 GMT on Friday, the prices of WTI and Brent recorded $75.53 and $79.62 respectively.  The long-awaited meeting of the OPEC+, meanwhile, went ahead on Sunday, June 2, with some members opted for being online and the rest meeting in person. The members, although put on a brave front, tentatively agreed to extend the  production cuts beyond 2024 so that the dwindling prices can be shored up. It, however, appears to be easier said than done. At present, the OPEC+ cuts its production by 5.58 million bpd - barrels per day: there are 3.36 million bpd production cuts that were due to expire at the  end of 2024; in addition, 2.22 million bpd production cuts by 8 members of the cartel that were supposed to expire at the end of June. The OPEC+ on Sunday 2, June agreed to extend the production cuts of  3.36 million bpd by another year - until the end

The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again!

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  In the ascending order of anxiety, the OPEC+ has been forced to accumulate a growing range of bad news in recent times for its decision makers to digest. In this context, the latest manufacturing data from China hardly comes as a catalyst for optimism, as far as the oil cartel is concerned. China's manufacturing PMI, the key indicator that reflects its production activity, has fallen yet again in May, indicating a significant contraction: it has come down to 49.5 in May, from 50.4 in April; the threshold is 50% and anything below it, is a contraction in the manufacturing sector. The disappointing news from the world's second largest economy comes in the wake of the OPEC+ holding its meeting, scheduled to be held on June 1 in person, online - all of a sudden with no convincing explanation. On June 1, there was a sudden change of decision to meeting in person in Vienna, though. Prior to that, there were reports that Kazakhstan, a member of the OPEC+ from the Central Asia, wante

Argentinian Shale Oil Boom: is it Milei's miracle?

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  Image Credit: Times of India Javier Milei, the flamboyant, Argentinian president, who came to power in December  by performing a series of unorthodox, political stunts, appears to be determined to assign a range of controversial tasks to his most striking political symbol during the campaign - the chainsaw. With an administrative equivalent of a chainsaw, Mr Milei is already hacking his way through the  intricate, bureaucratic woods in his native Argentina, implying nothing was off-limit.   Mr Milei, to begin with, is planning to lay off over 70,000 government employees, has frozen public projects and and devalued Argentinian peso by more than 50%. To his credit, they appear to be working in his favour, at least for now; the inflation has been slowing down for four months in a row, but it is still high; Argentina, up until recently, had the world's highest inflation - a staggering 280%.  In 2025, if all goes well, economists believe that the inflation could be brought down to ar

The release of 1 million barrels of gasoline may not make a dent in the energy prices

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  With just six months to go before the presidential election in the fall, the Biden administration of the US appears to be taking the task of taming the inflation much more seriously than it did in the past few months. In this context, the announcement made by the DoE, Department of Energy, on May 21, Tuesday, does not come as a surprise: it announced that 1 million barrels of gasoline from the NGSR, Northeast Gasoline Supply Reserve, will be sold off in time for the peak travel period between the Memorial Day and July 4; gasoline will be sold in batches of 100, 000 barrels,  each.  “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state and northeast at a time hardworking Americans need it the most,”  said  the US Energy Secretary Jennifer Granholm  in a statement. The announcement by the DoE, coincided with the latest US crude inventory data from the API, American Petroleum Institute; there was a signifi

Cracks Appear in OPEC+ Facade as Kazakhstan Seeks Production Hike

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The OPEC+ alliance is bracing itself for yet another acid test in the next few days, as Kazakhstan, a key member from the Central Asian region, said on Tuesday that it wanted to have a bigger quota in 2025, when the currents oil output cuts expire. Unless the members of the OPEC+ settle the dispute amicably, the group is going to face a potential test of unity, before the scheduled meeting on June 1, to discuss the next move; maintaining the oil production cuts, lifting it up or in the worst case scenario, increasing it further. The fact the Kazakhstan move is already in the public domain shows that there is  discord  within the OPEC+ over the existing production cuts - or any further rise to shoring up the falling oil prices. The OPEC+, on its part, meanwhile, wants to investigate current oil  output capacity in order to set what it calls, reference production levels. According to Reuters, three global companies with the relevant experience in the field, have been tasked with the anal

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