Oil 12 (Feb 21 - Sep 23)

[winston]

Oil up $1 on Saudi plan to deepen output cuts from July

by Florence Tan and Emily Chow

The kingdom's output would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May. The cut is Saudi Arabia's biggest in years.

The group, known as OPEC+, pumps around 40% of the world's crude and has in place cuts of 3.66 million bpd, amounting to 3.6% of global demand.

Saudi remains keener than most other members in terms of ensuring oil prices above $80 per barrel, which is essential for balancing its own fiscal budget for the year.

The United Arab Emirates (UAE) was allowed to raise output targets by 200,000 bpd to 3.22 million bpd to "soothe concerns" about it possibly leaving OPEC.

Source: Reuters

https://finance.yahoo.com/news/oil-pric ... 27493.html

[behappyalways]

Boosting oil prices, Saudi Arabia will cut oil production by another 1 million barrels per day from July
提振油價 沙國七月起 每天再減產100萬桶油｜譚伊倫｜FOCUS全球新聞 20230605@tvbsfocus
https://m.youtube.com/watch?v=kHPDZlDOOvA


ExxonMobil: New Fracking Technology Can Double Oil Output
https://oilprice.com/Energy/Energy-Gene ... utput.html

[behappyalways]

The global oil market has entered a new era and the three cornerstones of 50-year pricing are collapsing!

全球石油市场进入新时代，50年三大定价基石正在坍塌！

https://m.youtube.com/watch?v=Zastocmnp9g

[behappyalways]

China Crude Stockpiles Hit Two Year High As US Strategic Reserve Drops To 40 Year Low
https://www.zerohedge.com/commodities/c ... 0-year-low

[winston]

Oil prices climbed over 3 per cent on Tuesday on hopes for growing fuel demand after China’s central bank lowered a short-term lending rate for the first time in 10 months, boosting crude prices after steep losses the previous session.

The rate cut is aimed at adding momentum to a hesitant post-pandemic recovery in the world’s second-largest economy and biggest crude importer.

Brent crude futures settled up US$2.45, or 3.4 per cent, to US$74.29 a barrel. US West Texas Intermediate (WTI) crude gained US$2.30, or 3.4 per cent, at US$69.42 a barrel.

On Monday, crude prices fell by about 4 per cent, in part because of concerns about the Chinese economy after disappointing economic data last week.

Brent’s six-month backwardation, a market structure whereby shorter-dated futures trade above longer-dated ones, fell to its lowest since March at around US$1.10, indicating faltering confidence that demand will exceed supply over the year.

Source: Phillips

[winston]

Twilight for oil?

Expect global oil demand to peak this decade as the world more rapidly adopts electric vehicles and other technologies, the International Energy Agency said.

“The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies advance,” said IEA Executive Director Fatih Birol.

In a report issued Wednesday, the IEA said annual demand growth will slow dramatically from 2.4 million barrels per day this year to 400,000 barrels a day in 2028.

China’s demand, which was pent up due to Covid shutdowns, will slow down more quickly, the agency projected.

The nation, one of the two most populous on Earth, alongside India, is experiencing a rapid expansion of its EV market.

Source: CNBC

[winston]

Sluggish Oil Market

Here’s Bloomberg from earlier in the month, just before OPEC+’s meeting:

…Global oil inventories are shrinking as the alliance’s latest production cuts take effect. On the other, disappointing Chinese economic indicators and fears of a US recession have emboldened bearish speculators.

And here’s FX Empire from a couple days ago:

WTI oil is moving lower as traders remain worried about the strength of the oil demand in summer. The recent announcements from OPEC+ did not provide material support to the market…

Brent oil is also moving lower amid a broad pullback in the oil markets. Recession worries remain an important negative catalyst for Brent oil.

Bottom line, when we talk stocks, the overall idea seems to be that the economy is going to tiptoe around a recession and achieve a soft landing.

But when we talk oil, the economy is headed into a recession. I don’t have a crystal ball to know which perspective is correct, but you don’t need a crystal ball to see the inconsistency.

Source: Investor Place

[winston]

HLIB expects global oil inventories to fall over next few quarters, sees Brent at US$70-80 in 2023

By Surin Murugiah

Expecting global oil inventories to fall over the next few quarters following Opec+’s announcement in early June it would extend oil production cuts through 2024.

In its 2H2023 sector outlook released on Tuesday (July 4), the research house said this will put some upward pressure on crude oil prices in 2H2023-1H2024.

Additionally, HLIB said Petronas has a domestic and total capex guidance of RM113 billion and RM300 billion for 2023-2027 — which translates into an average annual domestic spending of RM22.6 billion and total annual capex of RM60 billion.

“We maintain our Neutral stance on the Oil and Gas sector with Dagang NeXchange Bhd (Buy; TP: 80 sen) and Wah Seong Corp Bhd (Buy; TP: 96 sen) as our top picks,” it said.

Meanwhile, HLIB maintained a bearish outlook for the petrochemical sector this year, and said the sector is currently experiencing a down cycle as product spreads are seen to be coming off their respective peaks due to the following reasons:
(i) additional new supply globally — which shows the following increase in total global capacity (Ethylene: 9.9%; HDPE: 13.2%; LDPE: 2.3%; LLDE: 10.0%; PP: 8.4%);
(ii) weak demand resulting from a slowdown in the economy and higher interest rates impacting consumer spending.

“As such, we advise investors to avoid the downstream petrochemical names for the time being,” it said.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/673424

[behappyalways]

One big blip and oil could get back to triple digit territory very quickly
This is a very tight supply situation, and SPR is now at its lowest level since 1983
Hedge funds are also short WTIC and have very low net exposure to energy stocks
Call it a powder keg. Just needs a fire.
https://twitter.com/Mayhem4Markets/stat ... 1468163072


How Big Is The Market For Crude Oil
https://www.zerohedge.com/commodities/h ... -crude-oil

[behappyalways]

US Strategic Petroleum Reserve Will Not Be Replenished Anytime Soon
https://www.zerohedge.com/energy/us-str ... ytime-soon