Crude Oil Futures

  The pendulum of the price of crude oil continues to oscillate in a path that defies the existing mathematical/statistical models. The surrounding uncertainty, meanwhile, seems to be pushing the major importers to look beyond the producers closer to home, as the rising oil price has already put many developing countries in danger of slipping into a spiral of inflationary whirlpool. The rise in India’s oil imports from the US in 2020 is a case in point: despite the great distance involved and shipping costs, India, the world’s third largest consumer of the crude oil, imported 10.7 million tonnes of crude oil from the US in 2020 – almost 5.4 % of its total imports, 204 million tonnes. On the eve of the ill-fated, latest OPEC+ meeting, Dharmendra Pradhan, the former energy and petroleum minster, had a meeting with the Secretary General of the OPEC+; although what they discussed was not disclosed in public – and in full – Mr Pradhan may have raised the need of increasing the product

  Crude oil price began its upward movement again on Thursday, having been on decline for two  consecutive  days at the beginning of the week. The unexpected fall was attributed to the more-than-expected production of crude oil in the US, for the week ending on June, 25. On Wednesday, however, the EIA, US Energy Information Administration, released its weekly report on the US crude oil inventories, something that both analysts and investors eagerly waiting for. The report was really encouraging as far as the entire oil sector is concerned: there is a significant fall in the US crude oil inventories for the week ending July, 2; it was drop of 8.1 million barrels – 0.75%. It is not just the weekly drop that was significant for the crude oil markets; the consistent fall for seven successive weeks that boosts the confidence of investors, reflecting the recovery of the US economy. Since the US is the largest consumer of the crude oil in the world, its economic strength is undoubtedl

  As the spat between the UAE and Saudi Arabia continues to dominate the news in the global oil sector, the feared supply crunch receded somewhat with some encouraging news from the EIA, the US Energy and Information Administration. In its annual report, the EIA revised up its own weekly forecast of the US crude oil production, for the week ending 25, June: it was up by 186,000 bpd. With that, as of the mentioned date, the US crude oil production stood at 16.3 million bpd. Although the US crude oil inventories have been on decline for 6 straight weeks, an increase in production by such an amount was not something that analysts anticipated. In this context, the fall is in oil price on Wednesday is understandable. When the planned ministerial meeting of the OPEC+ did not go ahead on Monday, with no agreement on the production hike for the period from August to December, on Friday, the crude oil price went up in response to the apparent fall in supply. In addition, the talks on

  With no prospect of the next OPEC+ ministerial meeting to get round the impasse involving its key players in the Middle East, the likelihood of the direct intervention by the US has increased dramatically. Since the price of crude oil rose to the highest in three years, the price at pumps has worried both economists and key policy makers in the West; the inflationary pressure is growing which could potentially derail the feeble revival of the economies across the world; the emergence of new variants of the Coronavirus is not encouraging news either. The White House admitted that the US administration took up the issue with the relevant parties in the OPEC+. By coincidence, the Deputy Saudi defence minister travelled to the US on Tuesday to meet the Pentagon officials. “We’re not a party to these talks but over the weekend and into this week, we’ve had a number of high-level conversations with officials in Saudi Arabia, the UAE and other relevant partners,” said Jen Psaki, the W

  In retrospect, the oil spat between the UAE and Saudi Arabia laid bare something we had been suspecting for long: oil production – or supply – cuts had been grudgingly brought about by the members of the OPEC+ despite the apparent connotations of unity stemming from a common front.   More often than not, it was Prince Abdulaziz bin Salman, the Saudi Energy Minister, who was at the forefront in defending the moves by the OPEC+, especially when it came to curtailing the production in order to maintain the price of crude oil. Not only did he use to exercise caution about the ‘health’ of the sector, but also rushed to point out the ‘sacrifices’ made by the Kingdom to achieve the desired goal – its own voluntary production cuts, perhaps to set an example to the rest of the OPEC+. Judging by the news that comes in dribs and drabs, it is clear that the baseline issue has not just been a problem for the UAE; a few other members have also raised the same issue with regard to individual

  On the eve of the next crucial meeting of the OPEC+, Prince Abdulaziz bin Salman, the Saudi Energy Minister, has said that a bit of rationality and a bit of compromise saved the organization. The group is meeting again on Monday to reach an agreement that they failed to do so on Friday. The bone of contention has been the insistence of the UAE on increasing its baseline from 3.2 million bpd to 3.8million bpd, something that both Saudi Arabia and Russia vehemently oppose. In clarifying further the stance of the OPEC+, Prince Abdulaziz said, “There are mechanisms to address the grievances within the OPEC+ and selectivity is difficult.” Arab sources, meanwhile, say that the UAE shows no sign of compromising on its position either. Both sides, however, agree that the production must be increased not to let the price of oil go through the roof and hamper the global growth. Analysts are hopeful that the members may reach a deal amidst acrimonious haggling.