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-Oil prices edged higher on Tuesday, as a U.S. government agency projected a rosier outlook on the economy, but bearish data on China's crude imports and exports weighed.
Brent crude futures gained 83 cents to settle at $86.17 a barrel. U.S. West Texas Intermediate crude rose 98 cents to $82.92. Both contracts fell by $2 earlier in the session.
Prices reversed course on Tuesday after a monthly report from the U.S. Energy Information Administration projected GDP growth to rise by 1.9% in 2023, up from 1.5% in a previous forecast. [EIA/M]
The EIA also expects Brent crude oil prices to average $86 in the second half of 2023, up about $7 from the previous forecast.
All of this means that barring a deep global recession, which doesn’t look likely based on recent economic data, things are lining up for a large and sudden rise in oil prices. This isn’t a good thing for central bankers who are doing their best to fight inflation
On the supply side, we find it very encouraging that OPEC is aggressively defending the commodity, throwing fewer and fewer barrels at the paper market bears. The response for now has been, ”Who cares?” OPEC already cut 840,000 barrels per day in July up from the 460,000 barrels per day cut in May and will continue cutting in the months to come.
global air traffic is the highest it’s been in years and according to Rystad, jet, diesel, and gasoline demand is 1.3 million barrels a day higher than last year. The EIA recently made a massive revision to its U.S. oil demand estimate for May increasing it by 973,000 barrels a day to 20.776 million barrels. For some perspective, this is the highest level ever for total U.S. oil demand in May. Meanwhile, U.S. exports to China are the second highest on record. Interestingly, this lines up with the reports on Friday that the U.S. Minister of Energy has been coordinating the release of oil from the Strategic Petroleum Reserve (SPR) with Chinese officials.
On Wednesday morning, the Energy Information Administration (EIA) announced the biggest weekly inventory draw on record. For the week ending July 31, the EIA reported that U.S. crude inventories dropped by a whopping 17.049 million barrels as exports rose to more than five million barrels per day and refineries boosted demand. What did oil do? It sold off by more than two per cent on the day, and no one I spoke to in the industry could explain why. It took OPEC stepping up a day later announcing that it is extending its million-barrel-per-day voluntary production cut into September — and warning the cuts could be “extended or extended and deepened”
Oil prices rebound as bullish inventory draw helps risk sentiment
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Thu, August 3, 2023 at 5:30 AM EDT
Investing.com -- Crude oil prices rebounded Thursday after the previous session’s sharp losses, as worries over tight global supplies offset the hit to risk sentiment caused by the downgrade of the U.S. credit rating.
Extreme heat in some areas of the US has also impacted gasoline supply.
"Like people, refineries do not like a heat index of 110-115. They must cut their production rates and that impacts gasoline and diesel supply. In addition, several refineries have had unscheduled outages limiting supply," Andy Lipow of Lipow Oil Associates recently told Yahoo Finance.
The interruptions could get worse if the US experiences a major hurricane this season.
The price of oil is often inversely correlated to the dollar and long-term Treasury yields, both of which have been on an upward trend. Supply concerns, however, are keeping crude prices elevated.
"Regardless of the yields going up today, or the dollar going up, we know that there are factors in commodities that ignore all of that when we come into a real supply-demand situation."
On Thursday, Saudi Arabia said it will extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to maintain a floor on prices.
This year's record-breaking summer heat has also had an impact, driving up demand for air conditioning and forcing refineries to operate at reduced capacity.
The kingdom announced the extension in a statement on the state-run Saudi Press Agency, quoting an anonymous official in the Energy Ministry. The official added that the cut “can be extended or deepened” if the need arises.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the official said.
Hydrogen-to-power strategies are key to decarbonisation pathways in Europe and Asia, making these key potential export markets for hydrogen produced in Colombia. We estimate the levelised cost of hydrogen (LCOH) in Colombia could be similar to Chile’s. Potential export volumes from Colombia would be globally competitive, especially into Europe.
DUBAI, United Arab Emirates (AP) — Saudi Arabia said Thursday it will extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to boost flagging energy prices, a move that could push U.S. gas prices higher.
another brewing tech here that i think those will try and get a piece of
that is a good point Gator.
petro has a lot to riding on this
Colombia possesses vast natural resources, and its mining and energy sectors have become significant drivers of economic growth. The country is a major producer of coal, oil, and natural gas, which are essential commodities in the global market. Continued investments in these sectors have not only bolstered exports but also fostered domestic energy security.
Colombia, the jewel of South America, is basking in a renewed era of economic optimism. With an increasing focus on fiscal reforms, infrastructure development, and regional cooperation, the nation is poised for robust economic growth. This article delves into the factors propelling Colombia’s economic resurgence, highlighting the key indicators, sectors driving growth, and the potential challenges that lie ahead.
A Strong Foundation
Colombia’s economic growth is underpinned by a robust foundation. Over the past few years, the nation has undertaken significant economic reforms and displayed prudent fiscal management, which has bolstered investor confidence. This newfound stability has attracted both domestic and foreign investment, spurring economic activities across various sectors. You can have latest Colombia news.
Infrastructure Development
A critical factor in Colombia’s surging economic growth is its emphasis on infrastructure development. The government has prioritized investing in transport networks, energy projects, and telecommunications, significantly improving connectivity and fostering regional development. As a result, there has been an upswing in trade, tourism, and business opportunities, particularly in previously marginalized regions.
Goldman Sachs estimated that global oil demand rose to a record 102.8 million bpd in July and it revised up 2023 demand by about 550,000 bpd on stronger economic growth estimates in India and the U.S., offsetting a downgrade for China's consumption.
Oil inventories are beginning to drop elsewhere too, especially in the U.S., where the government has started refilling the Strategic Petroleum Reserve from its lowest level in multiple decades. Five analysts polled by Reuters on Monday estimated on average that U.S. crude inventories fell by about 900,000 barrels in the week to July 28.
"After the end of SPR releases and recession fears and a liquidity drain due to bank stability fears, which caused the markets to ignore a looming supply squeeze, the coming supply deficits are getting too big to ignore," Price Futures Group analyst Phil Flynn said.
(Reuters) -Oil prices rallied to a fresh three-month high on Monday and recorded their steepest monthly gains since January 2022, supported by signs of tightening global supply and rising demand through the rest of this year.
More actively traded October Brent crude futures rose $1.02, or 1.2%, to settle at $85.43 a barrel. The September Brent contract, which expired at settlement on Monday, rose 0.7% to close at $85.56 a barrel.
gas prices at the pump going up too
Oil Prices Jump on Signs of Tightening Supply
good find gator i think hydrogen is coming everywhere too
While there is no immediate threat of a reversal to the oil rally — not with an OPEC meeting round the corner — WTI was slowly headed toward the key resistance of $86, said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
The Saudis have pledged to take an additional million barrels per day off their production for all this month — and possibly forever — if that meant keeping the market above $80 a barrel at any time.
That promise is a powerful motivator for oil bulls as Saudi production would theoretically drop by a total of 2.5 million barrels daily from their norm of 9.5 million a day. With cuts pledged by Russia and nine other oil producers participating in the production squeeze by the 13-member OPEC, the market is missing at least 4.0 million barrels per day in daily supply.
Increasing demand from China is expected to result in record demand this year, with the International Energy Agency forecasting in June that global oil demand would rise by 2.4 million barrels per day in 2023, outpacing the previous year’s 2.3M barrel per day increase.
“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven said on CNBC earlier Monday.
Crude oil higher; Expected supply deficit boosts prices
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Mon, July 24, 2023 at 5:06 AM EDT
Investing.com -- Crude oil prices rose Monday, as expectations of tightening supply in the second half of the year overshadowed the likelihood of further tightening from the Federal Reserve and the European Central Bank.
By 09:05 ET (13:05 GMT), the U.S. crude futures traded 1.1% higher at $77.91 a barrel, while the Brent contract climbed 0.7% to $81.47.
Production cuts help sentiment
The crude market has been on the up lately, boosted by the announcement earlier this month that Saudi Arabia and Russia, the world's biggest oil exporters, will deepen oil production cuts, starting in August, in an attempt to boost crude prices.
China, in particular, could help fuel demand as the effects of the pandemic start to dissipate. On the supply side, cutbacks by OPEC could help add additional tailwinds for oil prices to trend higher.
"After languishing for months, crude surged above $80 a barrel in London last week as fuel demand in China and elsewhere recovers from the pandemic to reach new highs," Bloomberg added. "That’s happening just as production cutbacks by Saudi Arabia and its OPEC+ allies are set to rapidly drain storage tanks around the world."
Commentary out of China is disappointing to some markets, but the fact that we are seeing stimulus, if they do anything to support the economy, it’s positive for crude because I don’t think crude has priced in stimulus,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth.
- Oil rose to a three-month high, trading above a key technical barrier, as signs of a tighter crude market outweighed the prospect of another hike from the Federal Reserve.
Oil Hits Three-Month High Amid Tighter Supplies, Refinery Outage
Saudi Arabia is trying to buy time propping up prices for as long as it can hoping that the world avoids a recession, or better yet, a soft landing, so that demand can return and prices eventually catch up to $100+/bbl. Perhaps it needs to reassess that supply, too, is picking up in other parts of the world that most had written off, namely Iran and Venezuela.
Oil bulls keep referring to the U.S. Strategic Petroleum Reserve being refilled as a reason to be bullish just as they hope for China to boost their imports after their reopening. Given U.S. shale production, the requirement to have 700 million barrels or so in the SPR is no longer a valid concern as the U.S. today is a net energy exporter and produces about 12.3 mbpd of oil, with shale being easily scalable. The U.S. is now one of the largest swing producers, so the need to hedge itself is not as much of a priority as it was before.
Given the costs of the technologies involved, some level of government support will be required for carbon capture, utilisation and storage (CCUS) to see a return on capital. Colombia has yet to announce any CCUS projects, even though it has a net zero target in place and CCUS storage potential. Colombia’s government has indicated policy support for low-carbon hydrogen – to meet its net zero pathway, CCUS has to be part of the equation in Colombia too.
Hydrogen-to-power strategies are key to decarbonisation pathways in Europe and Asia, making these key potential export markets for hydrogen produced in Colombia. We estimate the levelised cost of hydrogen (LCOH) in Colombia could be similar to Chile’s. Potential export volumes from Colombia would be globally competitive, especially into Europe.
While the fallout from the energy crisis has boosted oil and gas investment in the short term, decarbonisation is a structural trend driven by economics and policy. For example, costs for electric vehicles (EVs) are already at parity with internal combustion engine (ICE) stock in major markets. Net zero targets cover 88% of global emissions, and associated policy will incentivise investment into zero carbon technology and away from fossil fuels. Unsurprisingly, forward-looking announcements by companies around the world show that spending on new energies is set to accelerate.
Ocampo has repeatedly told reporters that the country remains open to new oil and gas projects as it relies heavily on the sector’s revenue
TIPRO President Ed Longanecker said from Austin that his outlook remains bullish for the second half of the year despite continued market volatility driven by recessionary fears and economic concerns.
"I believe many analysts are underestimating the impact of demand growth in China, the potential for further supply disruptions, whether geopolitical or operational in nature, and the impact of OPEC members' commitment to maintain higher prices," Longanecker said. "Supply will remain tight this year and demand will reach record levels.
"Under this scenario higher commodity prices are highly likely later this year, but how these market factors play out will determine if we stay in our projected $75-$80 range for West Texas Intermediate crude or reach the $100 threshold."
We’re expecting a sharp tightening of the market,” Toril Bosoni, head of oil markets at the International Energy Agency in Paris, said in an interview with Bloomberg television. “As demand increases seasonally, we do think there’s a risk that prices will continue to increase into the third quarter.”
After languishing for months, crude surged above $80 a barrel in London last week as fuel demand in China and elsewhere recovers from the pandemic to reach new highs. That’s happening just as production cutbacks by Saudi Arabia and its OPEC+ allies are set to rapidly drain storage tanks around the world.
The reasons for the expected rise in price are: (1) forecasters across the globe expect consumption and demand to increase, and (2) forecasters believe supply is declining and will continue to decline through the remainder of 2023.
“We have slightly increased our forecasts for world petroleum consumption in recent months, in contrast to our downward revisions in world petroleum production,” EIA stated in their Short-Term Energy Outlook issued on Wednesday.
EIA expects China and India to lead the growth in consumption.
EIA forecast this week a rise in oil prices during the remainder of this year.
“We forecast higher oil prices in the second half of 2023 and into 2024 on the back of moderate but persistent inventory drawdowns in our most recent Short-Term Energy Outlook,” EIA stated.