- Oil Rises as Oversupply and Trade Tension Fears Abate
Oil prices rose about 1 percent on Tuesday as the market shifted focus to the possibility of increased Chinese demand, drawing attention away from trade tensions between that country and the United States after a series of tariffs imposed by both countries.
Brent crude was up 76 cents at $73.82 a barrel by 12:27 p.m. EDT (1627 GMT). U.S. West Texas Intermediate (WTI) was up 95 cents at $68.84. Earlier in the session, WTI reached a high of $69.05.
Reports that China will increase infrastructure spending helped lessen fears that U.S.-China trade tensions will reduce the country’s demand for oil, said Phil Flynn, analyst at Price Futures Group in Chicago.
“That’s going to be very bullish for oil demand,” Flynn said. “Infrastructure spending from China in the past had really jacked up oil demand, and I think that’s adding some outside support for prices.”
In addition, after an 8 percent decline from multi-year highs, buyers were coming back into the market, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
With notable reductions in crude inventories because of strong global demand growth, the supply-and-demand picture will remain strong unless there are significant production increases from Russia and Saudi Arabia, McGillian said.
Both benchmarks have fallen this month as crude supplies from Russia, Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries have increased and some unscheduled production losses have eased.
Market sentiment has been driven by fears that supply could be disrupted by confrontation in the Middle East or that Washington’s trade dispute with major trading partners could dampen global growth.
Iran, OPEC’s third-largest producer, which pumps 3.75 million barrels per day, has come under increasing U.S. pressure, with the administration of President Donald Trump pushing countries to cut all imports of Iranian oil beginning in November.
Saudi Arabia and other large producers are ramping up output to offset losses likely to come as the November deadline approaches.
Meanwhile, U.S. crude inventories at the U.S. crude futures delivery hub at Cushing, Oklahoma rose in the four days to Friday, according to data supplier Genscape, traders said.
Stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.
A Reuters survey on Monday estimated on average that total U.S. crude stocks fell 3.2 million barrels last week. [EIA/S]
U.S. industry group the American Petroleum Institute will release inventory data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday. Official U.S. Energy Department data will follow on Wednesday.
South Africa’s iGas, PetroSA and Strategic Fuel Fund Merge to Create South African National Petroleum Company
The South African Department of Mineral Resources and Energy (DMRE) has announced the merger of Central Energy Fund (CEF) subsidiaries iGas, PetroSA and the Strategic Fuel Fund (SFF).
The merger will be effective from 1 April 2021 and the new company will be called the South African National Petroleum Company.
The merger, driven by the pursuit of implementing a new company that has a streamlined operating model via the development of a shared services system and a common information platform, comes a few months after cabinet approval and the confirmation that PetroSA had incurred losses of R20 billion since 2014.
Additional factors which prompted the move included the determination to strengthen PetroSA which had not had a permanent CEO in five years prior to the appointment of CEO Ishmael Poolo last and, had become majorly ungainful since its failure to secure gas for the gas-to-liquids refinery project in Mossel Bay.
While the merger deadline has been set, the portfolio committee expressed reservations to the department’s likelihood of meeting the deadline, considering the existing legislative regime, pending issues raised in the SFF and PetroSA forensic reports, as well as PetroSA’s current insolvency and liquidity challenges, the official press statement on the briefing revealed.
“South Africa’s energy sector is entering a new dawn,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With gas discoveries off the coast and the announcement of the REIPPP programme bid window 5 and 6 on the horizon, now is the most opportune time for the merger of the CEF subsidiaries. Of course, it is not an easy task and delays may be anticipated but, this move signals a real change towards a meaningful strategy that will not only be beneficial to the DMRE but to potential investors and local development as well.”
The African Energy Chamber welcomes this move and acknowledges that this is yet another step supporting the country’s determination to restarting the engines of sustainable growth and the transformation of energy policy and infrastructure.
Crude Oil Hits $71.34 After Saudi Largest Oil Facilities Were Attacked
Brent Crude Oil Rises to $71.34 Following Missile Attack on Saudi Largest Oil Facilities
Brent crude, against which Nigerian oil is priced, jumped to $71.34 a barrel on Monday during the Asian trading session following a report that Saudi Arabia’s largest oil facilities were attacked by missiles and drones fired on Sunday by Houthi military in Yemen.
On Monday, the Saudi energy ministry said one of the world’s largest offshore oil loading facilities at Ras Tanura was attacked and a ballistic missile targeted Saudi Aramco facilities.
“One of the petroleum tank areas at the Ras Tanura Port in the Eastern Region, one of the largest oil ports in the world, was attacked this morning by a drone, coming from the sea,” the ministry said in a statement released by the official Saudi Press Agency.
It also stated that shrapnel from a ballistic missile dropped near Aramco’s residential compound in Eastern Dhahran.
“Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” a ministry spokesman said in a statement on state media.
Oil price surged because the market interpreted the occurrence as supply sabotage given Saudi is the largest OPEC producer. A decline in supply is positive for the oil industry.
However, Brent crude oil pulled back to $69.49 per barrel at 12:34 pm Nigerian time because of the $1.9 trillion stimulus packed passed in the U.S.
Market experts are projecting that the stimulus will boost the United States economy and support U.S crude oil producers in the near-term, this they expect to boost crude oil production from share and disrupt OPEC strategy.
A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.
Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.
A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.
One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.
However, Saudi authorities are yet to confirm or respond to the story.
The Fastest Growth in Decades: Investors Top-up Portfolios – but in What Stock?
BUA, Kainos Exploration to Drag Each Other to Court Over $20 Million Scandal
Polaris Bank Set to Unveil Second Millionaire, Other Winners in its ‘Save & Win’ Promo
News4 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin2 weeks ago
Bitcoin Rebounds To $50,881 Per Coin on Wednesday
Bitcoin3 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
News2 weeks ago
U.S. COVID-19 Deaths Hit 500,000
Economy3 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
Economy4 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Stock Market3 weeks ago
Jeff Bezos Topples Elon Musk as Experts Predict Tesla’s Doom
News3 weeks ago
WAEC Releases 2020 Result, Just 39.8 Percent Passed