Oil Prices

[weijian]

The history of Brent and WTI could be traced back to the oil production sources. Chinese are big buyers from Central Asia/Russia, probably these suppliers of crude oil would be inclined to use them instead?

China's First Ever Yuan Oil Futures Begin Trading in Shanghai

Rival to U.S.’s WTI and U.K.’s Brent trades at 440 yuan/barrel
Futures in Shanghai are about $3/barrel higher than WTI crude

China launched its first ever crude-futures contract as the world’s biggest oil buyer seeks to wield greater power over pricing and challenge benchmarks in the U.S. and Europe.

https://www.bloomberg.com/news/articles/...n-shanghai

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Oil Holds Above $65 as Easing Trade Tensions Offset Supply Fears

By Sharon Cho
March 27, 2018, 8:32 AM GMT+8 Updated on March 27, 2018, 3:23 PM GMT+8

Oil traded above $65 a barrel as easing fears of a global trade war offset concerns over rising U.S. crude stockpiles, boosting prices to near the highest level this year.

Futures in New York were up 0.1 percent after closing 0.5 percent lower on Monday. A resurgence in risk appetite has helped lift markets from global equities to commodities after a report the Trump administration is to be urging China to lower tariffs as part of talks to resolve rising trade tensions. Still, concerns over American shale oil remain, with analysts forecasting a gain in U.S. crude inventories last week.

Oil has recovered to near recent highs seen in January after President Donald Trump appointed John Bolton as national security adviser, signaling the U.S. may pursue a more hard-line approach against Iran and disrupt outflows from the OPEC member. While global stockpiles are tightening in a sign that the Organization of the Petroleum Exporting Countries and its allies’ production cuts are working, fears still remain that surging U.S. production could thwart those efforts.

More details in https://www.bloomberg.com/news/articles/...-expanding

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Iran fears send oil above $70 for first time since 2014
Rising oil prices just passed another milestone, jumping above $70 per barrel in Monday morning trade in Asia.

by Jethro Mullen
May 7, 2018: 2:13 AM ET

Oil prices have been climbing partly because of expectations that President Donald Trump will abandon the 2015 Iran nuclear deal, which allowed Iran to export more crude.

This is the first time the US crude benchmark has been above $70 since November 2014.

"The focus of oil markets is currently on the US president's pending decision on the fate of the Iran nuclear deal," said Victor Shum, an oil industry analyst at research firm IHS Markit.

The recent surge in prices suggests markets are assuming there will be some disruption to Iran's exports, Shum said. Trump has to decide by May 12 whether to bring back sanctions against the country.

US oil prices have gained more than 16% since the start of the year. Brent, the global benchmark, is up around 13%.

More details in http://money.cnn.com/2018/05/06/investin...index.html

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Investors see big oil surge, but physical markets suggest caution

Devika Krishna Kumar, Libby George, Florence Tan
May 15, 2018

NEW YORK/LONDON/SINGAPORE (Reuters) - Oil futures prices have soared past three-year highs, OPEC’s deal has cut millions of barrels of inventory worldwide and investors are betting in record numbers that prices could rocket past $80 and even hit $90 a barrel this year.

But physical markets for oil shipments tell a different story. Spot crude prices are at their steepest discounts to futures prices in years due to weak demand from refiners in China and a backlog of cargoes in Europe. Sellers are struggling to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in west Texas and Canada.

The divergence is notable because traditionally, physical markets are viewed as a better gauge of short-term fundamentals. Crude traders who peddle cargoes to refineries worldwide say speculators are on shaky ground as they drive futures markets above $70 a barrel, their highest levels for three-and-a-half years, on concerns about tighter supply from Venezuela and the potential impact of U.S. sanctions on supply from Iran.

Investors have piled millions of dollars in record wagers in the options market, betting on a further rally on the back of rising geopolitical tensions, particularly in Iran, Saudi Arabia and Venezuela, and the global decline in supply.

“Guys who are trading futures have a view that draws are coming and big draws are coming,” a U.S.-based crude trader at a global commodity merchant said, adding that demand could ramp up as global refinery maintenance ends.

More details in https://www.reuters.com/article/us-globa...IG0GG?il=0

[Behappyalways]

Oil shortage or surplus? Floating storage swamps Europe
https://www.hellenicshippingnews.com/oil...ps-europe/

[BlueKelah]

Trump is throwing his weight around and getting what he wants. Lower oil prices and making China sweat. Tough negotiator indeed.

Russia has shown their disinterest in the OPEC cartel by trashing Saudi football team! Oil price should be back to $40 pretty soon once all the oil majors start flooding supply and Chinese EV push lowers demand.

[Behappyalways]

Why oil prices plunge?

2018.12.01【文茜世界周報】卡舒吉葬禮前一天　沙國公佈11名嫌犯名單
https://www.youtube.com/watch?v=7vCZVZ8G...AU&index=4

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Oil hits nearly 6-month highs as US says it will end Iran sanctions waivers
* The Trump administration will reportedly announce that it will no longer grant sanctions waivers to any country that is currently importing Iranian oil.
* The move threatens to wipe roughly 1 million barrels per day off the market
* The move comes as oil markets are already tightening and the cost of crude and gasoline is on the rise.

Tom DiChristopher & Weizhen Tan
PUBLISHED MON, APR 22 2019 • 1:22 AM EDT  UPDATED 16 MIN AGO

Oil prices spiked on Monday — past highs not seen since last fall — after reports that Washington is set to announce that all buyers of Iranian oil will have to end imports, or be subject to U.S. sanctions.

The White House confirmed the reports on Monday morning.

Brent crude futures surged more than 3% to $74.31 per barrel on Monday, sailing past last week’s 2019 high at $72.27 and hitting the highest level since Nov. 1, 2018. Brent, the international benchmark for oil prices, was last up $1.82, or 2.5%, $73.79.

U.S. West Texas Intermediate crude futures rose $1.52, or 2.4%, to $65.52 per barrel, after hitting $65.87, its highest level since Oct. 31, 2018. WTI had been trading sideways after hitting a 2019 high at $64.79 nearly two weeks ago.

More details in https://www.cnbc.com/2019/04/22/energy-p...n-oil.html

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Oil prices could crash by $30 if China buys Iranian crude: BofA
* Bank of America Merrill Lynch warns the oil price could slip sharply if China buys Iranian oil.
* Beijing could undermine Washington’s foreign policy stance by ignoring U.S. sanctions placed on Iran.
* BofA is keeping its $60 per barrel price estimate in place for 2020.

Dan Murphy
PUBLISHED 5 August 2019

Crude oil prices could sink by as much as $30 a barrel if China decides to buy Iranian crude oil in retaliation to the latest U.S. tariff measures, according to Bank of America Merrill Lynch.

“While we retain our $60 a barrel Brent forecast for next year, we admit that a Chinese decision to reinitiate Iran crude purchases could send oil prices into a tailspin,” a BofA Merrill Lynch Global Research report said Friday, warning that prices could sink by as much as $20-30 a barrel in that scenario.

The Chinese Ministry of Commerce has threatened countermeasures after President Donald Trump threatened to slap a 10% tariff on $300 billion dollars of Chinese goods. The decision Thursday floored oil markets and sent crude plunging 8% — the most in four years.

Analysts warn that “oil volatility is set to rise again” as markets wait for a Chinese response to the latest US tariff threat, which could include purchasing Iranian oil.

“This decision would both undermine US foreign policy and cushion the negative terms-of-trade effects on the Chinese economy of rising US tariffs,” the report added.

Iranian oil exports slide

Shipments of Iranian oil fell below 550,000 b/d (barrels per day) in June from about 875,000 b/d in May and about 2.5 million b/d in June 2018, according to data from S&P Global Platts. Roughly half of Iran’s exports were shipped to China in June and July, according to the firm.

But a Chinese decision to purchase Iranian oil in a further defiance of U.S. sanctions could act as a double edged sword, according to other analysts.

“Iran would welcome any opportunity to increase its production whether or not it breaches the terms of the U.S. sanctions, but the strategy there would introduce China to a partner over which it doesn’t have an enormous amount of control,” Edward Bell, Director of Commodities Research at Emirates NBD told CNBC’s “Capital Connection.”

“Don’t forget there are other producers that would also be targeting that trade with China, so for instance you could see Iraq or Saudi Arabia step in and try and discount the volumes that they would be exporting to China as a way to circumvent Iran getting that extra market share,” he added.

Traders fret on crude demand

Crude oil prices slumped further on Monday, as traders focused on a deteriorating demand outlook.

Analysts at BofA Merrill Lynch said the latest round of US tariffs could reduce global oil demand by 250,000-500,000 barrels per day, adding to worries about a demand slowdown that is challenging the fundamentals for crude.

More details in https://www.cnbc.com/2019/08/05/brent-an...n-oil.html

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Oil will hit levels ‘we haven’t see in our lifetimes’ if Iran isn’t stopped, Saudi Crown Prince says
* “Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes,” in the event of greater conflict with Iran, Saudi Crown Prince Mohammed bin Salman told CBS 60 Minutes.
* The warning comes two weeks after a drone and missile attack on Saudi Arabia’s oil facilities that Riyadh and Washington blame on Iran.

Natasha Turak
PUBLISHED AN HOUR AGO

Saudi Arabia’s Crown Prince Mohammed bin Salman has warned of astronomical oil prices in the event that tensions escalate in the Persian Gulf, two weeks after his country was hit by a drone and cruise missile attack that Riyadh and Washington have blamed on Iran.

“If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests,” the crown prince said in an interview with CBS’ 60 Minutes over the weekend.

“Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes.”

The pre-dawn attacks on September 14 hit two of state oil giant Saudi Aramco’s largest oil facilities, forcing the country to temporarily shut down roughly 50% of its output, or 5% of the global oil supply. The following Monday, international benchmark Brent crude rose as much as 19.5% to $71.95 per barrel at the open ⁠— the biggest jump on record ⁠— before paring gains.

The Middle East “represents about 30% of the world’s energy supplies, about 20% of global trade passages, about 4% of the world GDP,” the crown prince, who is next in line for the Saudi throne and considered the kingdom’s de-facto ruler, told CBS.

“Imagine all of these three things stop. This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries.”

Energy industry experts have cited figures between $100 and $150 per barrel of oil if the adversaries — OPEC’s highest and third-highest oil producers, respectively — went to war.

Aramco quickly promised it would bring its oil output back to normal by the end of September, and has already brought roughly 50% of that back online, company executives said. Two weeks later, Brent was trading at $61.48 Monday morning London time.

Yemen’s Houthi rebels, at war with the Saudis since the kingdom launched a bloody offensive on its southern neighbor in 2015, claimed responsibility for the attack. But officials in the U.S., U.K. and Saudi Arabia say the rebels would not have been capable of launching an attack of such scale and precision and assert the Iranians were behind it, something Tehran has vehemently denied.

Washington and Riyadh also blame Iran for a series of mysterious sabotage attacks on several foreign oil tankers in the Gulf near the vital Strait of Hormuz, the narrow conduit through which 30% of the world’s seaborne oil passes. Iran denies those allegations as well.

The attacks began taking place shortly after the Donald Trump administration ended waivers for countries importing Iranian oil, amplifying the effect of crippling sanctions it’s imposed on Iran since late 2018 after the U.S. withdrew from the Iranian nuclear deal. Animosity between Washington and Tehran has skyrocketed since then.

More details in https://www.cnbc.com/2019/09/30/oil-will...n-mbs.html