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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

Oil Price: what goes down, comes up - slowly

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  The price of crude oil is slowly rising in the markets despite the recent volatility stemmed from the concerns over the Omicron variant of the Coronavirus.   As of 14:30 GMT on Wednesday, the prices of WTI and Brent were at $ 71.91 and $ 75.39 respectively. The price of crude oil did not follow the pattern that we see in the LNG, liquefied natural gas. It has come down nearly by 40% from its peak in November that triggered offed a panic wave in the markets, especially ahead of winter months in the northern hemisphere. Analysts attribute the upward momentum of the crude oil price to the diminishing danger of the latest outbreak of the Coronavirus: although it appears to be highly transmissible, the death toll across the world remains very low. The medical experts, however, are quick to note that it is far too early to say that the virus has ‘mellowed’ in order not to destroy its host, human beings; it remains to be seen, though. In another encouragement as far as the crude

Saudi Arabia increases the price of crude oil to Asia and US

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Saudi Arabia, the worlds’ largest exporter, has raised the price of crude oil for the US and Asia with effect from December. As for Asia, the Arab light crude has gone up by 60 cents. The rise in price will affect the key customers of the Kingdom in the region that account for 60% of its exports; they include China, Japan, South Korea and India. The Saudis have been increasing the price of crude oil for Asia and the US from time to time this year. On the other hand, there are instances when they reduced the price for the regions too; in short, the Kingdom listens to the grievances of its loyal customers when the latter feel the pinch – and then respond favourably.   Saudi Aramco, the state oil company, however, showed reluctance when the very nations joined the chorus of global calls to increase the production that ultimately led to the joint release of strategic petroleum reserves, SPRs, led by the US. Saudi Arabia may have been prompted to make the move in light of clear sign

China's manufacturing PMI rises after nine months: encouraging news for the crude oil markets

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  China’s Manufacturing Purchasing Managers Index, PMI, has risen by 0.9 in November, buckling the downward trend of the past 9 months, according to the latest data released by the National Bureau of Statistics of China. The encouraging news from the world’s second largest economy will be a significant booster for the markets in general and crude oil markets in particular, given the widely-predicted gloom in the first quarter of 2022. China, along with the other major consuming nations, resorted to tapping into strategic petroleum reserves, SPRs, in order to curb the rising energy costs. China had been doing it even before joint move in a controlled manner. Although the impact on the crude oil price was next to insignificance despite the collective move, the resurgence of the Coronavirus did what the former could not do; it brought down the price of crude oil by over $10 in a matter of hours since the gravity of the new wave of the pandemic became clearer. Although the OPEC+ st

Oil Price: OPEC+ strikes the right note and keeps the supply unchanged

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  The OPEC+ collectively decided not to act on impulse in the unprecedented circumstances, triggered off by the outbreak of the Omicron variant of the Coronavirus. No sooner was it announced than it was well received by the beleaguered consumers across the world, especially when the risk of yet another outbreak of the Coronavirus is on the horizon; the relief resonated with the global community regardless of the obvious wealth disparities, because the rising energy prices have been causing major problems on many fronts, which could eventually hurt the producers too. The ministerial meeting of the OPEC+ ended today, having decided to keep the existing policy unchanged; that means, the addition of extra 400,000 barrels per day to the crude oil markets in January will go ahead as previously planned. Up until the last minute, most analysts thought that the OPEC+ would curtail the crude oil output in light of falling crude oil prices, due to the combined impact of the outbreak of the

Oil price makes swift recovery defying the doom and gloom

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  The price of crude oil recovered on Monday defying the worst-case scenarios as the world still needs oil to function in a normal way. As of 15:00 GMT, the prices of WTI and Brent were $71.88 and $75.77 respectively. Most analysts hoped that the prices would recover gradually; many, however, did not believe the initial recovery - by over 5%   - would be that swift. Usually, the oil price recovers slowly in the event of a big crash like what we saw on Friday. This time, however, the prices recovered from the precipitous fall in just two days. There are two possible factors behind the quick recovery: the Omicron variant of the coronavirus, according to the South African doctors who discovered it, is not as deadly as initially feared; the other was the evaporation of hope of a possible breakthrough in the current talks on reviving the JCPOA in Vienna, Austria. Although the talks between Iran and the signatories to the JCPOA, 2015 Iran nuclear deal, started on Monday, the hope fo

Responsibility of the OPEC+ after the oil price crash: will there be a more pragmatic apporach next week?

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  . With the discovery of the new variant of Covid-19 virus, Omicron, the prevailing optimism in the energy sector has started evaporating, almost mimicking dew on a leaf on a calm summer morning. It was a bolt from the blue, indeed; it, once again, demonstrated how vulnerable we are despite the advent of sciences and medicine, leaps of data analytics skills gained over decades and of course, the AI; a microscopic organism managed to trigger off pandemonium across the world, causing chaos almost in every sector, literally pushing us back to square one on a whim – where we used to be two years ago, when the pandemic first broke out. In these circumstances, despite the precipitous crash of the crude oil prices, the gas price has not followed the same pattern yet, perhaps due to the prevailing cold weather in the northern Europe and Asia, exacerbated by an Arctic blast, and of course, a shortage in supply.   The major consuming nations in the world have been making appeals to the

Plummeting oil price leaves the OPEC+ in a slippery lurch

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  The price of crude oil fell precipitously on Friday when analysts were gauging the combined impact of the joint release of petroleum reserves and the discovery of new Covid-19 variant in Southern Africa. As of 18:00 GMT on Friday, the prices of WTI and Brent were $68.15 and $72.72 respectively. When the news broke out on Tuesday about the joint release of the petroleum reserves by the major global consumers last week, despite the speculation being in the public domain for days, the crude oil markets defied the obvious: the price of crude oil did not fall dramatically. The critics of the Biden administration and those who harboured the bullish sentiments lost no time in branding the move, at best politically disastrous and at worst an economic boomerang with a potential to harm many layers of the US administration. They were emboldened, perhaps, by the mysterious silence from the OPEC+ members in the aftermath of the joint release of the SPRs – the proverbial calm before the s

Gauging the oil price trend when two factors competing for dominance

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  The price of crude oil slightly dipped on Wednesday, in line not necessarily with the cumulative release of the SPRs, Strategic Petroleum Reserves, by the top global consumers. The drop coincides also with the latest data released by the API, American Petroleum Institute, which showed yet another US crude oil inventory build: the API said on Tuesday the figure was 2.307 million barrels for the last week; by contrast, there was a drop in the US crude inventories by 0.655 million barrels last week, for the week before. Both the API and EIA, the US Energy Information Administration, have been showing a consistent pattern, when it comes to the US crude oil inventories, sometimes, with one-off blips, as it happened last week – the US crude inventories have been growing. In this context, it is difficult to attribute the price drop that we witnessed this week so far, solely to the joint release of the SPRs by the US, Japan, China, India, South Korea and the UK. On the other hand, s

Oil price: will the joint release of SPRs produce the desired outcome?

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  Crude oil investors are bracing themselves for the ‘big news’ in the form of a public announcement by the world’s most powerful man in the evening, with regard to the steps taken by his administration to cut down on rising energy prices. Everyone expects that President Biden will address the issue while referring to the tools at his disposal and how he is going to use them; tapping the SPRs, the strategic petroleum reserves, may be his number one option, the nuclear one. The problem with this option, however, is exactly like in atomic radiation, the political fallout is going to linger on for years to come; most of the members of the OPEC+ that are on President radar are still staunch US allies in the Middle East. Realistically, in light of the relatively small fall in the price of crude oil, however, its long term impact has become a hot topic among analysts and investors. Of course, the Biden administration scored a diplomatic victory by taking all the major consuming nati

Oil Price: relasing SPRs amidst waves of Covid-19 surges in Europe

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  The price of crude oil that has been falling during the past three weeks recovered slightly on Monday when the markets opened for the business for the new week. As of 11:45 GMT, the WTI and Brent were back in the green, both standing at $76.08 and $79.00 respectively, recording modest gains. The prices have since fallen once again – slightly. Throughout last week, crude oil markets were bracing themselves for an increased output from strategic petroleum reserves of the major global consumers, including the US. Although officially being mute, the US, China and Japan have been contemplating the move to bring down the prices at the pumps in order to keep the corresponding economies on track to a fragile recovery in the aftermath of a once-in-a-century epidemic. The very urgency has forced the leaders of the major economic powers to temporary abandon the lingering disagreements over a range of issues to reach a common front in order to keep the rising energy costs at bay; the re