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Rising oil prices and the inevitable US crude inventory build

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  The price of crude oil fell on Thursday in light of the second successive crude inventory build announced by the EIA, the US Energy Information Administration, on Tuesday. The EIA reported an inventory build of 2.4 million barrels for the week ending January, 21. It is a significant build, compared with the reported figure for the previous week - a modest 0.5 million barrels. As of 16:30 GMT, the price of WTI and Brent stood at $87.24 and $89.88 respectively. Earlier on, the latter even hit $91, only to come down later. The rise in crude oil price and that of natural gas may be related to the ongoing conflict between Ukraine and Russia too. Russia is a key player in the energy sector and analysts are watching President Putin’s next move carefully in order to gauge the immediate impact on the markets. The growth of the US crude inventories and the false dawn about a breakthrough between the US and Russia relations may have triggered off the fall in the crude oil prices, earlie

Conflicts in the Eastern Europe and Middle East push the crude oil prices down

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As the conflict between Ukraine and Russia intensifies, the crude oil prices stumbled in the crude oil markets, falling from the record prices on Friday, last week. The prices started falling despite the involvement of a key player in the global energy markets in the growing conflict. The NATO, meanwhile, has started deploying its fighter jets in the Eastern European countries, which are members of the organization, as deterrence, rather than a show of force. Russia, in turn, is planning its naval exercises in the international waters off Ireland, something that the latter is not very fond of observing. The US, meanwhile, is planning to deploy thousands of troops in the region, while providing Ukraine with military assistance. Although the sabre-rattling is on the rise, a direct military confrontation is unlikely between the warring factions at present, as both sides are fully aware of the cost on many fronts – when the world can least afford it. As far as the crude oil marke

Border Conflict between Ukraine and Russia: the energy crisis can only get worse!

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Crude oil prices have reached 7-year high with Brent approaching $90 a barrel, if the current momentum of the upward trend remains this way. As of 10:00 GMT, the price of WTI and Brent stood at $86.52 and $87.73 respectively. The rising energy prices and the inevitable inflation that stems from the former have already left the Western political leaders in a costly political lurch. The IEA, International Energy Agency, which discouraged the future investment in fossil fuels on a grand scale last year, now implies that the oil producers need to take some responsibility for the current energy crisis; for instance, according to the IEA, the OPEC+ added just 60% of what it planned to do – last month. The producers, while not denying that is the case, blame the failure on the lack of investment, among a few more grievances. The rising energy prices have cast an ominous global shadow, hampering the progress of many economies in the world that try to come out of the economic shock su

Growing drone threats against oil facillities in the Middle East

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The suspected drone attack at the heart of the UAE, United Arab Emirates, has escalated the prevailing tension in the region to a dangerous new level, with repercussions directly affecting the energy markets. In the aftermath of the attack, the crude oil price rose in the international markets. As of 09:50 GMT, the price of WTI and Brent were $85.37 and $87.55 respectively. The UAE has been enjoying peace for decades despite being in the middle of a highly volatile region – up until the serious drone attack on Monday. The reports say three foreign nationals died in the attack: two Indians and a Pakistani national while 6 sustaining injuries. The foreign minister of the UAE vowed retaliation and being true  to his words, the Arab coalition launched air strikes against the Houthis in Yemen, which have resulted in fatalities. Saudi Arabia, the world’s largest oil exporter, has been coming under drone attacks from Houthis for years; the latter usually fire them across the borde

Will the API confirm the consistent decline in the US crude inventories?

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  The price of crude oil has lost its upward momentum on Tuesday, but still remains relatively high in light of growing demand for the commodity. On Monday, there was a substantial increase in the price of natural gas, LNG, and in proportion, the price of crude oil went up too.   The price of LNG, however, fell on Tuesday, putting a drag on surging crude oil prices. Analysts are worried about the impact on the crude oil demand in the US, the world’s largest consumer, due to the steep rise in Covid-19 cases, as the optimism that stemmed from the relative success of the nationwide vaccine campaign started to wane. In this context, they are watching the latest data on the US crude inventories, scheduled to be released by the API, American Petroleum Institute, today. Since November 2021, according to the data from the API, the inventories have been falling, sometimes exceeding the weekly estimates of the former. If the trend is not broken, it is encouraging news for both investo

Crude oil supply woes: unrest in Kazakhstan, Libya and Nigeria cause major conerns

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As the US crude oil inventories have been falling consistently since November, new concerns have been growing in the same proportion about the scale of the challenges, when it comes to meeting the mounting demand. The unrest in Kazakhstan, the former Soviet Republic in Central Asia, the worsening situation in the Libyan oil sector due to the influence of competing militia groups for dominance, Nigeria’s inability to sticking to its OPEC+ quota due to endemic problems at loading facilities have exacerbated the potential disruptions in the supply chain. The failure of some members of the OPEC+ in contributing the quota agreed upon by the members surfaced in the recent monthly meeting of the block too; in short, although the members, in principle, agreed to increase the daily output by 400,000 barrels, in practice, it had not materialised in the past; nor will it work that way either in the near future, judging by the news that comes from the member nations. Even Russia faced mounti

Oil prices rise again: investors are active in the buying trend

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  Crude oil prices continue to rise despite the anticipated collective release of SPRs, strategic petroleum reserves, by the leading economies. As of 09:30 on Friday, the price of WTI and Brent stood at $80.06 and $82.60 respectively. Although the OPEC+ estimated an oil glut in the first quarter of 2022 last year, something they revised later on, the indications are the demand is fast reaching the pre-pandemic level. Data from the API, industry-funded American Petroleum Institute, and the EIA, US Energy Information Administration, clearly indicates that the US crude oil inventories are falling and the trend has been consistent for the last few weeks. With the talks over reviving the JCPOA, 2015 Iranian nuclear deal, keeping up the momentum just to avoid going passive, the prospect of crude oil markets flooded by Iranian oil remains a distant dream as far as far as beleaguered global importers are concerned. The optimism of Iranian oil producers has not met the political will

Latest OPEC+ meeting when the recovery of demand remains steady

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The monthly ministerial gathering of the OPEC+ members takes place on Tuesday as the recovery of the demand continues steadily, despite the rapid spread of the Omicron variant of the Coronavirus. With the revival of the JCPOA, 2015 Iran nuclear deal, oscillating between mild optimism and abject failure, the group has come under pressure from the leading economies in the world to increase its production quota in proportion to the growing demand. At present, the possibility of Iranian contribution to the crude oil markets appears to be remote. For the past few weeks, the US crude inventories have been falling, giving hope to the notion that the demand is approaching the pre-pandemic level – at last; the data from both the API, American Petroleum Institute, and the EIA, US Energy Information Administration, clearly showed that was the case. Even if the producers choose to overlook the clear fact on emotional grounds, the correlation between the rise in consumption and falling pric

Reiving the Iranian Nuclear Deal: will the latest talks result in a success at last?

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  The negotiators from Iran and the rest of the signatories to the JCPOA, 2015 nuclear deal, are back in Vienna, the Austrian capital, to resume the negotiations, which was halted a week ago in light of Christmas holidays. The Iranian team projected a sense of optimism this time while Iranian foreign minister went as far as summing up the progress so far, to say ‘a deal is within reach’ according to the Iranian media. Iran, however, according to the minister, does not want to reach the deal under threats from the West. He was referring to the remarks made by the British foreign secretary and the US Secretary of State that the negotiations would not go for ever, implying resorting to the unspecified ‘other options’ that President Biden often referred to – in the event of failure. The latest change over the talks must be looked at while taking into account the latest developments on political front in the Middle East: just before the talks ended for the Christmas holidays, the C

Wishing you a Merry Christmas & Happy New Year!

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Falling US crude inventories keep oil price steady despite Omicron outbreaks

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The US crude oil inventories have been falling steadily since the end of November, clearly indicating a strong correlation with the falling prices of the commodity in the international markets. The API, American Petroleum Institute, released its data on Tuesday that showed a fall of 3.67 million barrels during the past week – much more than its own estimate of 2.633 million barrels. Analysts await the same from the EIA, US Energy Information Administration, today to see whether the pattern that had been consistent with that of the API in the past few weeks, will continue in the same way. The price of crude oil fell sharply on Monday, only to recover the lost ground on Tuesday, perhaps boosted by the encouraging US crude inventory data. As of 10:40 GMT on Tuesday, the price of WTI and Brent were at 71.43$ and $ 74.19 respectively. In addition to the falling crude oil inventories, investors feel confident about that the possibility of oil markets facing a supply glut is not on

Omicron surge in Europe takes its toll on crude oil price

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The price of crude oil started falling on Monday, clearly indicating the impact on the demand by the surging Omicron across Europe. It is a body blow for a range of industries that had been waiting to breathe a sigh of relief during the Christmas period, having immensley suffered almost for two years due to the pandemic. With the Netherlands in the lockdown, judging by the surging rate of infections and the lack of corporation from a significant section of the populations in containing it, citing the ‘freedom’, it is only a matter of time before the rest of the major European nations falling in line – inevitably. Although such a move will be politically suicidal for some European politicians, the evolving circumstances will leave them with few palatable options. Although the price of crude oil showed an upward trend, perhaps buoyed by the falling US crude inventories, the surge in infections by the new variant of the Covid-19 has clearly dampened the positive sentiments. Inve

OPEC+ sees over 17.6% global growth in the next 25 years

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Global Oil prices have tumbled, yet the OPEC+ sees the light at the end of the tunnel, after revising its previous gloomy forecast for the first quarter, 2022; the cartel sees an increase in demand for the period, despite the risk of global spread of the Omicron variant of the Coronavirus. Its latest forecast clearly shows that the growth of demand for the crude oil in the next few years ahead: in the next 25 years, says the OPEC+, the global demand will grow by 17.6%. In the OECD countries, however, the data shows a decline in growth by 7.6% that could be accounted for by the anticipated growth of the renewables. In the non-OECD countries, on the other hand, there is a clear growth of 25.5%; it means, the fossil fuels are not going to go away as far as the majority of the global population is concerned, despite the ambitious net zero targets. In the US, meanwhile, the crude oil inventories continue to fall at a modest phase, clearly owing to the fall of crude oil prices recen

Oil Price: the failure to reviving the JCPOA and its direct impact on crude oil markets

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The price of crude oil fell again on Monday in the markets, perhaps over the fears of yet another potential conflict in the Middle East, involving Iran, the West, the Sunni Arabian powers in the region and of course, Israel. Although the signatories to the JCPOA, 2015 Iranian nuclear deal, are meeting in Vienna in the hope of reviving the deal that has been in permanent limbo, there are increasing signs that Iran and the West are just drifting apart in a whirlpool of mutual distrust. One of the many stumbling blocks, among many, appears to be Iran’s insistence on removing sanctions first and giving a guarantee that the next US administration will not tear the agreement up as President Trump did while in office. While making matters worse, the Iranian foreign minister said today that sanctions and the success of the talks are mutually exclusive. The West, on its part, views Iranian position as a calculated attempt to buy time until they take a leap in its nuclear programme – dev

Oil price between $70 - $80: it’s win-win situation for both consumers and producers

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The price of crude oil remains static at present, having been through some understandable fluctuations in light of the Omicron outbreak across the world. As of 09:00 GMT on Friday, the price of WTI and Brent stood at $71.33 and $74.66 respectively. The modest draw of the US crude inventories this wee, shown by both the API and EIA, did not boost an increase in price that some analysts predicted: perhaps, the four successive crude builds at the biggest storage hub in the US at Cushing, Oklahoma, may have dampened the mood of optimism of the traders to some extent; Bloomberg reports that the strategic facility managed to increase the volume above what it called, a key threshold – 30 million barrels. In another development, Indian oil ministry announced that the fuel demand in India fell by 11.4% in November: the sale of gasoline has come down by 0.7% and that of diesel by 7.6%. The drop of sale of diesel in the world’s third largest consumer should be an eye-opener for some of th