Showing posts from June 20, 2021

OPEC+ position amidst rising crude oil price

  With the rising crude oil price, the OPEC+ is once again under an intense spotlight in the run up to its next monthly meeting, scheduled to be on July 1. In the past, although the suspense had been building for weeks before such meetings, the outcome turned out to be neither dramatic nor exciting; more often than not, it was like going into labour to giving birth to an elephant calf, only to produce a mouse pup! In short, they were never like the hype usually associated with the launch of new Apple products or certain game consoles; as far as crude oil sector is concerned, the outcomes of OPEC+ meeting have always been foregone conclusions. It may be the case in the forthcoming meeting too on the first day of the next month, unless a last-minute intervention from an influential non-member of the OPEC+ comes about. The organization has been come under immense pressure in the past few days, especially from the crucial customers in Asia, asking the cartel to rein in the prices.

Oil Price rises with the fall of crude oil inventories, both in the US and Germany

  The gradual rise in price of crude oil continues on Thursday, further buoyed by the latest data from the EIA, indicating a sharp drop in US crude inventories. In fact, the drop exceeded analysts’ expectations. It means the recovery of demand is on track and irreversible with the engine of growth steaming ahead. On Wednesday, Brent crude and WTI crude rose by 0.5% and 0.3% respectively. Both benchmarks rose by 0.1% again in the early hours on Thursday, reflecting the strength of the market. The two benchmarks recorded the highest since October, 2018. The upward momentum is so strong that even the news about certain sanctions being lifted against Iran, first reported by the Iranians only to be denied by the US later, did not buckle the trend. The EIA, US Energy Information Administration, reported that the fall of US crude oil inventories in the week to June was 7.6 million barrels; the predictions by analysts, based on the secondary data, were far below this value; it also sho

Prospects of reviving the Iranian nuclear deal fades away; OPEC+ is back under spotlight

  The prospects of a success in reviving the JCPOA, 2015 Iranian nuclear deal, is slowly turning into a desert mirage, keeping a grand audience of investors, traders, analysts and of course and of course, men and women in the street in a state of confusion; it’s not a spectacle to watch that in turn keep you in awe. With the seizure of the domains of certain Iranian news websites by the US government, the possibility of reaching a deal seems much more unlikely than it was a few weeks before; when the newly-elected Iranian president says that negotiations for the sake of negotiations do not make any sense, it vaguely reflects the mood of the incoming administration in early August. Although the outgoing administration of President Hassan Rouhani wants to leave a happy legacy with the success of a deal, judging by the events since the election, it may be easier said than done; at some point in the past few weeks, Mr Rouhani was so optimistic about a deal being struck that it sent cru

Oil price rises: demand breeds dynamism, eclipsing political factors

  The price of crude oil gained momentum at the weekend again, as the possibility of a deal being struck during the sixth round of talks among the signatories of the 2015 Iran nuclear deal in Vienna, Austria, diminished. The talks, however, are going to resume in a few days’ time after the teams involved in the process consult their corresponding political leadership in seeking the green light for what Iranians called, the ‘document’. At present, the demand of crude oil is rocketing, especially in the US and Europe with strong signals from the aviation sector too. The following image, for instance, shows the sky near Heathrow airport at 11:35 am on Monday, 21, in the United Kingdom; this is in sharp contrast to what we saw a year ago with a less than a half a dozen planes in the skies over the same area. The OPEC+, meanwhile, is under pressure to increase the production to meet the growing demand. The latest appeal came from an unexpected source, though – the IEA, International E

Reviving the 2015 Iran Nuclear Deal: there will be 7th round of talks

  According to the Iranian Deputy Foreign Minister, Abbas Araghchi, all Joint Comprehensive Plan of Action (JCPOA) agreement documents were almost ready. He said it on Sunday after the end of the sixth round of talks. He, however, added, “but it requires decisions that mainly have to be made by the negotiating sides in Vienna,” in the same breath. The Iranians were pretty optimistic than ever before about the possibility of striking a deal during the last round of talks, the sixth, since the new US administration took the reins of power. Mohammad Javad Zarif, the outgoing Iranian foreign minister, for instance, was in an upbeat mood in the aftermath of the presidential elections about the success at the discussions in Vienna. Judging by the moods of both sides and reading between the lines of their communique, it’s clear that signatories have begun exercising flexibility not to let the deal collapse. When the head of the Iranian delegation says that the ‘document’ is almost

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