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Crude Oil Price: security vacuum left behind by the US in the Middle East worries investors!

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  The price of crude oil significantly fell on Monday defying the usually favourable factors to the contrary such as the drop in the US crude oil inventories and the clear upward trend of global demand. As of 10:30 GMT, WTI and Brent recorded $70.51 and $74.04 respectively; the prices of both benchmarks fell by nearly 2%. Of course, the Delta variant has not gone away yet, but there is a decline in the rate of infections and deaths across the world. Apart from random lockdowns, the pandemic does not petrify the masses anymore, as we slowly come to terms with its presence among us and adapt ourselves just to live with it. In light of this, the demand for crude oil is back on track and almost at pre-pandemic levels in many parts of world: factories are back in operation; traffic is back on roads; life is limping back to the new-normal. Then, what on earth is going on with the price of crude oil? It is true that the major oil importers in the world such as China and India are reso

How will crude oil markets react on Monday to diminishing Delta factor?

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  Analysts are keen on watching the crude oil markets on Monday, especially after a lacklustre performance during the past few days, despite a substantial drop in the US crude stocks. Both, the EIA, US Energy Information Administration, and the API, American Petroleum Institute, reported larger-than expected crude inventory fall. The figures were 6.4 million barrels and 1.3 million barrels respectively. In addition, the US oil rig count shows an increase as well, having been in passive mode for months. The movement of oil prices on the investors’ screens, however, did not reflect the usual effect associated with such a drop. On the contrary, for the most part on Friday, the crude oil price remained red in the screens of analysts and investors alike. Since the Delta variant of the Coronavirus appears to be on the wane, having wreaked havoc in the world, especially in Asia, analysts hope the region will put the crisis behind while taking the resilience in its stride. That means t

Anxieties still loom over the crude oil markets despite strong demand

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  The oil price recorded a modest rise this week despite the significant drop in the crude stocks in the world’s biggest consumer of the commodity, the US. Both the API, American Petroleum Institute, and the EIA, US Energy Information Administration, came up with the encouraging numbers that showed a consistent drop in the US crude oil inventories for the week ending September, 10. In addition, the US oil rig count has gone up as well, having been in the doldrums for months. Despite the demand being back on track, the slight rise in the crude oil price in the markets has baffled the investors and analysts alike. On one hand, the countries across the world are coming to terms with the impact on their economies by the new Delta variant of the Coronavirus; on the other hand, the crude oil inventories are falling across the world. Yet, markets chose to exercise caution rather than being buoyed by the statistics, which usually push the price up in the current circumstances. This

EIA and API show record US crude inventory draws: demand seems to be finally on track

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  The anxieties that gripped the crude oil markets may die down in the coming weeks as the US crude oil inventories fell by significant numbers, according to the latest data from the two most prominent agencies in the field. The latest, from the EIA, US Energy Information Administration, shows an inventory draw of over 6.4 million barrels for the week ending September, 10; it is in sharp contrast to the figure attributed to the previous week by the EIA that was just 1.3 million barrels. It is not just the EIA that gave out the encouraging figures as far as the crude oil markets are concerned. On Tuesday, the API, American Petroleum Institute, said that the US crude inventories fell by 5.437 million barrels, which was almost twice that of the analysts’ estimates for the same period. With the data that shows sharp consistency on the demand front, the crude oil markets see the most pressing concern about the state of crude oil use in the world’s top consumer gradually fading into th

Why does the price of crude oil record a modest hike, despte the concerns over supplies?

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  Despite the rising demand for crude oil, especially in the developed world, the rise in price of crude oil has been modest in recent days. The API, American Petroleum Institute, for instance, declared on Tuesday that the weekly draw for the previous week was 5.437 million barrels, 1.534 million barrels more than the figure expected by analysts. The EIA, US Energy Information Administration, will release its own data on Wednesday. The IEA, International Energy Agency, meanwhile, said that the US oil supply went down by 30 million barrels, when the Gulf coast was hit by Hurricane Ida – a figure much greater than originally feared.   Not only did it bring down the US crude stocks, but also brought the figure down at global level, according to the France-based organisation. Tropical Storm Nicholas, meanwhile, is battering Louisiana, while causing serious floods and it may dampen the supply activities in the US again. In short, there are enough worries about the global supply;

Norway' s Election Results: the victory of the Left may add more uncertainties to the fossile fuel markets

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  Norway, the Scandinavian nation that is Western’s Europe’s major oil producer, is about to get a government led by its Labour party in the coming days. The opposition led by Labour party achieved a landslide victory, gaining over 100 seats in 169-seat parliament in which the winning party just needs 85 seats. The election in Norway was a major concern for analysts in the crude oil markets, in particular and any other markets in general, due to its status as one of the wealthiest nations on the planet. In addition, it is Western Europe’s largest oil and gas producers with an enviable welfare state for its citizens with an impressive sovereign wealth fund of over $1.4 trillion. Although the future role of fossil fuel was at the centre of election campaigns of all major parties, the Labour party wanted to address what it called, ‘social inequalities’, in addition to the former. Both Labour party and the Conservatives that lost the election, prefer gradual transition to renewable

Perpetuating oil supply uncertainties: US removes air defence system and Patriotic batteries from Saudi Arabia

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  It’s confirmed that the US has started removing its state-of-the-art air defence system and the Patriotic missile batteries from Saudi Arabia for reasons unknown to the rest of world, leaving the move open to various interpretations. Saudi Arabia has been under attack by Houthis from neighbouring Yemen for the past few years. The Iran-backed rebels have been increasing the sophistication of the explosive-laden drones and missile in recent months, sending them across the border at an exponential rate. The air defence system provided the Kingdom with a reasonable protection against the projectiles, which were targeting Saudi assets ranging from airports to oil fields at heightended frequency. A very recent attack resulted in civilian casualties; in the past, there had been fatalities. In this context, the removal of batteries when the Saudis are under attack is like taking the crutches away from a man who struggles to move from point A to point B, carrying his own weight as his b

The phone call between the two economic superpowers ignites the optimism in the crude oil markets

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  The phone call between President Biden and President Xi of China, after a lull of seven months since the first of that kind being made, helped Asian markets make some gains in the early hours of trading. It is felt in the crude oil markets as well. Following the unexpected conversation, both sides said it was ‘candid’. Never in the recent history of the world, have the two top world economies seen a growing mutual animosity between them, which affects the global economy in many different ways; that’s why the thaw, no matter how illusive it may be in the long run, has such a positive impact on the markets worldwide that often are caught between in the tussle between two economic superpowers. The crude oil markets breathed a sigh of relief yesterday too; the oil price made a strong recovery. The reports of China’s recent tendency to tap its oil reserves, in order to mitigate the impact on the domestic energy costs, brought down the price of oil yesterday, having recorded a stro

China and India buy more oil, cashing in on price cuts by Saudi Arabia

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  The prices of crude oil turned green on the screens in the stock markets on Wednesday across the world – finally. As of 10:30 GMT, WTI and Brent prices recorded $68.61 and $71.88 respectively, a rise of 0.51% and %40 in that order. Some analysts attribute the rise in price today to a boost in China’s crude oil imports in August; it’s not official, though. According to China’s National Statistics Bureau, its economy suffered on many fronts due to the new outbreaks of the pandemic. China, however, managed to bring it under control in record time, as had done on a few occasions since the very first outbreak in China in 2020. China does not normally face what the West faces when it comes to imposing arbitrary, but deemed essential, lockdowns. Nor does it ever face anti-vaccine protests; China managed to vaccinate more than 60% of its population with its own, home-grown vaccines. The optimism expressed by analysts about the revival of China’s oil imports make sense in light of

Saudi Arabia's move to bring the oil price down for Asia: it's better late than never!

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  Saudi Arabia reduced the price of crude oil for Asia on Sunday, which came as a bolt from the blue for the beleaguered markets. The cut was substantial; it was more than $1 and the move makes perfect sense as far as the biggest markets base of the Kingdom is concerned. It goes without saying the turmoil that the region has been descended into due to the pandemic, which in turn causes cumulative chaos in the regional collective economy. The state of the regional economy has been in the doldrums for months; it’s not a new development. Yet, Saudi Arabia raised the price of crude oil for the very region in early August – for inexplicable reasons. Having been sandwiched between two adverse factors, the pandemic and rising oil price, the regional governments, from India to South Korea, were forced to turn to their respective SPRs, the Strategic Petroleum Reserves, to mitigate the impact of the lesser of the two devils, the price of oil price, as the last resort. The frequent appea

Norwegians go to polls next Monday: oil and gas industry is under intense spotlight

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  With a new election looming, the oil industry that transformed Norway from a poor nation in Europe to one of the wealthiest countries in the world in five decades, with an enviable welfare state to match, suffered a setback recently, which could have far-reaching consequences in the years to come. Norway recently offered eight licences for the exploration of oil, both in the North Sea and Barents Sea, while facing mounting criticism by its Green movement. Much to its horror, only four of them were taken by the companies interested in the task. In short, the oil companies have been forced to take the public mood on board before deciding to expand their activities in the sector. The Norwegian government has already decided to cut down on subsidies to the oil and gas sector, buckling under pressure from the Green movements, which can potentially determine the next government. The indigenous groups in Norway too have increased their agitation against the moves in exploring new oi

Crude oil markets: uncertainties gradually subside, without derailing the recovery

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  The weaker dollar managed to eclipse the psychological hindrances faced by the investors this week that in turn resulted in a diffident rise in oil price, which saw a significant fall in August. As of 18:00 GMT, the price of WTI and Brent were $69.29 and $72.61 respectively, recording the modest rise. Analysts expected significant, steady rise in light of larger-than-expected UScrude inventories. Both the EIA, US Energy Information Administration and the API, American Petroleum Institute, released the weekly data showing falls in crude stocks by over 7 million barrels and 4 million barrels respectively; asfor the latter, it was almost twice as big as what had been estimated Neither the alarm over a new wave of the pandemic nor the fact that the US being at the jaws of nature’s wrath in terms of wild fires and tropical storms has brought the industrial activities and the road traffic to a grinding halt; the inventory draws explicitly show that it was not the case. Even the PR di

Oil Price: Chinese success in controling Covid-19 rekindles the investors' spirit

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  China, the apparent epicentre of the Covid-19 catastrophe, once again proved once thing it is really good at – keeping the spread at bay. The data of daily infections, according to Google, shows that the curve is flattening, indeed. In proportion, the Chinese authorities have eased the restrictions that had been in place in major cities. In light of new development, traffic levels are slowly returning to near normal levels with industries gradually gathering the momentum.   The awakening of the world’s second largest economy – and the world’s top crude oil importer – has rekindled the sprit in the markets, which saw the worst monthly drop in oil price in August - for months. The positive sentiment that the investors see with regard to China’s containment of the new wave of the pandemic, is partially responsible for lifting the price of crude oil, despite the warning from the OPEC+ about a surplus of the commodity next year. If the price of crude oil goes up at an exponentia

Apparent unity of OPEC+ and US inventory data elevate the moods in the markets

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  Crude oil price rose modestly leaving behind the inexplicable fluctuations that we witnessed in the last few days. The markets breathed a sigh of relief when OPEC+ announced that it will ease the production cuts gradually on Wednesday. What was remarkable is the fact that the time it took for the ministers of the OPEC+ to coming to an agreement in unison. The ministerial meeting, known as the JMMC, unlike the previous meeting that ended in acrimony over the baseline disputes, ended in just 23 minutes. The apparent unity of the OPEC+ also a key factor in lifting the clouds of gloom that had been hovering over the crude oil markets for weeks. Some investors were still anxious yesterday, though. A day before the ministerial meeting, the JTC, Joint Technical Committee of the OPEC+, depicted a picture of a surplus in the crude oil markets in 2022, in the event of production cuts being reversed. Analysts, however, started taking into account two key indicators about the market cond

OPEC+ Ministerial Meeting: how will they handle the balancing act?

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  The JTC, Joint Technical Committee of the OPEC+, released its data on the eve of the group’s ministerial meeting scheduled on Tuesday evening at 17:00 at Vienna time. According to the JTC, the global demand of crude oil is going up at a steady rate, but the supply will not be able to catch up with it that could result in a tighter market. The reason, according to the JTC, is the depletion of the global crude oil stocks twice as fast as the daily increase in the output by the OPEC+, began in August for a period of four months; the figures in question are 825,000 and 400,000 bpd respectively. Under immense global pressure, the OPEC+ is expected to reverse the production cuts implemented last year in order to lift the crude oil price from rock-bottom values; the cuts were substantial. If they restore the cuts, the JTC of the OPEC+ argues, there will be a surplus during the early part of 2022 that could prevail throughout the year – an anxious scenario for the producers. The nu

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