Showing posts from November 12, 2023

Oil price: can Venezuela fill the void, if demand is on the rise - again?

  Venezuela oil export The pendulum of oil prices is back in the bearish territory, dealing a heavy blow to the ambitious producers in the OPEC+, mainly Saudi Arabia and Russia that tried in vain to push it to the polar opposite. On  Thursday afternoon, the selling price of crude oil fell almost by $8, with WTI and Brent recording $73.75 and $78.28 respectively; at some point, the price went down by over $2. Oil price on the decline Neither the war sentiment in Gaza nor the supply constrains applied to Iranian oil could push the price of oil up, defying logic. Although Venezuela is allowed to sell its oil now, years of sanctions, coupled with negligence and lack of investment,  have taken their toll on its oil industry. Therefore, it is not feasible for Venezuela to make a swift, significant contribution to the oil markets. From June up until August  t his year, the oil exports from Venezuela have, actually, declined. The EIA, US Energy Information Administration, estimates the oil out

Will Saudi Arabia really extend the production cuts beyond December?

  Falling profits of Saudi Aramco - 2023 Aramco, the Saudi national oil company and the world's second largest company by revenue, reported 23% fall in year-on-year profit on Tuesday; in 2022, however, it made a record profit of just over $161 billion that is more than those of Google, Microsoft and Amazon combined for the same period. The fall in profit by a substantial margin has been attributed to the fall in oil price and of course, a drop in production: Saudi Arabia has been instrumental in reducing the global output by 1 million bpd - barrel per day - on its own; Russia has made a similar move with half a million bpd cuts in a show of solidarity with the de-facto leader of the OPEC+, Saudi Arabia.  The significant combined production cut, of course, led to a spike in oil prices perfectly in line with the most basic law of economics - supply and demand; the two benchmarks, WTI and Brent, went above $80 and $90 respectively, only to come down sharply this week. The rise in oil

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