Crude Oil Futures

  Indian oil companies raised the price of petrol and diesel substantially in proportion to rising crude oil prices and consumer demand, as economic activities are coming back to life. The production cuts by the OPEC+ members, the draw in US inventories and the steady demand in Asia eclipsed the effect of Coronavirus in Asia. The rise in oil price in India will be a political football soon as the opposition parties lost no time in accusing government of ‘opportunism’; they are up in   arms against the move. On global front, President Trump’s move to let an orderly transition to the next administration on January 20, was encouraging news after all for commodity markets in general and oil markets in particular. His determination to bring Arab countries closer to Israel, leaving behind decades of mutual animosities, did bring in relative peace to the region. Although the Sunni Muslim nations are at loggerheads with the regional power, Iran, the threat of escalating tension in th

Factors that Lift Up Oil Price Draw in US Oil Inventories Vaccination Hope OPEC+ Production Cuts Growth in Demand in Asia Relative Calm in the Middle East www.oilfutures.co.uk   Neither the riots in the Capitol building nor the new lockdowns in the Western capitals caused a decline in oil price, as investors know from their bitter past experiences that these hiccups will pass off at some point in the future, having been left in a lurch of endless uncertainties. Even WTI crude oil hit above $50 a barrel this week and the positive trend continues unabated.  One of the key factors that drove the oil price to the current level is the anticipated draw in the US crude oil inventories. Although the API, American Petroleum Institute, predicted a drop on Tuesday, the EIA, the US Energy Administration, disclosed an even a higher draw on Wednesday. The inventory draw figures from the two camps were a modest 1.66 million barrels to significant 8

Oil price surge continued today with WTI benchmark hitting above $50, as investor confidence got buoyed by a stream of good news. The markets were a bit nervous on Monday, as the much-anticipated OPEC+ meeting ended without reaching an agreement. On Tuesday, however, they reached an agreement, with Russia and Saudi Arabia seeing eye to eye on the core of the details of it. On Tuesday, Saudis decided to take a deeper cut in their production, some of the members like Russia and Kazakhstan, meanwhile, were allowed to increase their production by a relatively smaller amount in order to compensate for the dip in global production. Both Russia and Kazakhstan can increase the production by a modest 75,000 barrels per day – much smaller than what they hoped for. Apart from its determination to curb the production, the Saudis have not spelled out their own production cut that was the part of the deal; the Saudi delegation was tight-lipped about it. The oil markets lost no time in reac

  United Kingdom is back in full lockdown with the closure of schools, universities and major businesses in light of the exponential increase in infection rates. Although the authorities want us to believe the light at the end of the tunnel in a month’s time, judging by the past experiences, it’s not going to be an easy goal to achieve. The evolving reaction by the authorities is fully understandable: they cannot afford to send the whole population into panic mode; they have to minimize the impact on businesses and the National Health Service, the NHS; they have to take on board those who vehemently oppose the lockdowns that include some influential voices on the side of the government. In short, Mr Boris Johnson, the prime minister, has been forced to walk the tight rope by the changing circumstances; it’s just a case of you are damned, if you don’t do anything; you are damned even if you do the right thing that the situation demands of you. Since it’s a lockdown with the toug

  As I observed in my previous post, some members of the OPEC+ are reluctant to go ahead with the anticipated hike in the production of crude oil; prolonging the session for another day or even more, is a clear sign that coming to an agreement in the current circumstances is easier said than done. It seems that Russia still believes that the alliance can agree upon its proposed increase in production – 500,000 bpd. Saudi Arabia, however, does not think that it is a step in the right direction, especially at a time when the developed world faces an unprecedented situation with the evolving Coronavirus; you just have to read between the lines of what the Secretary General of the cartel, Mohammad Barkindo, said on Sunday to sense the mood. In short, the prospect of increasing production by half a million barrels per day is in limbo as of Monday. In another development, Saudi’s closest ally in the region, the UAE, also wants to raise the production to a significant level in the hop

  A report by Bloomberg indicates that the members of the OPEC+ feel that the alliance must meet much more frequently than it does now, in order to gauge the oil market and then respond to demand with a firm focus on the revenues. The two major players of the OPEC+, which had been at loggerheads in the past, especially during the early phase of the pandemic, do not seem to see eye-to-eye yet on the same issue. They, however, do not appear to be poles apart either, as they were at the height of the Coronavirus crisis, until President Trump intervened and used his special talent that he always claims to possess – doing a deal while bringing warring factions together. During the pandemic, Saudi Arabia wanted to cut the production drastically in order to stabilize the price, which saw plummeting the price below zero on April 20 for the first time. Russia, on the other hand, wanted to keep pumping oil in order to bolster its coffers, having been hit by the sanctions by the West and

The US oil rig count has dropped sharply in the New Year and it may affect the oil price inthe coming days, as the former has been a consistent key factor in the past. The latest data from Baker Hughes suggests a signifcant drop during the past few days, from 348 to 267. The drop of this magnitude, 23%, can cause alarm in the markets, despte the recent resurgence of the oil price. The exponential increase in infections in the US, across almost all the states, can be attributed to the fall in rig count, as the producers fear a decline in demand; the recent sabre-rattling between the US and Iran does not help calm the geo-political tensions in the region. The sentiments will improve as the vaccination drive goes into full swing in the coming weeks and the new US administration take over the reins of the world's biggest economy in the turbulent times.