Showing posts from November 28, 2021

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

  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

  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

  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?

  . 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