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Oil prices in the international market dropped today over signs of increasing supply and rising concerns of weak demand due to global economic slowdown. Benchmark Brent crude futures contract fell 0.61%, and were traded at $74.58 per barrel. US WTI crude futures dipped to $64.90 a barrel. Data releases by EIA yesterday showed a climb in crude oil inventories for a sixth straight week.
Azerbaijan’s state-owned SOCAR is all set to start-up its new refinery in Turkey, next week. The $6.3 billion Star refinery will provide feedstock to Turkish petrochemicals firm, Petkim to help cut Turkey’s reliance on imported refined oil products. SOCAR’s refinery would have the capacity to process about 200,000 barrels of crude per day, estimated to produce 1.6 million tonnes of naphtha and 420,000 tonnes of xylenes, apart from other products.
If sources were to be believed, the Joint Technical Committee of OPEC and non-OPEC will meet this Sept 17 to decide on the distribution of the agreed boost in oil production. Proposals on how to distribute the increase have come from Iran, Algeria, Russia and Venezuela. Elevation in the oil production was decided in June to ease supply curbs, when the cartel met in Vienna.
When the market found an equilibrium between decreasing US crude inventories and Sino-American trade tensions, oil prices calmed down on Friday. The US crude inventories have touched their lowest since 2015 and the emerging market has signs of economic weakness. Among all these disturbances, Brent dipped and was traded at $76.46 a barrel while WTI increased a little, at $67.79 per barrel.
The oil giant, ExxonMobil raised a concern regarding the blockade at Nigerian oil facilities by previous employees. According to the company, these actions have put the country’s crude oil production at risk. Exxon’s subsidiary, Mobil Producing Nigeria informed that the company’s production is almost 550,000 bpd and added that "continued denial of access to production facilities could impact the company's ability to safely continue production operations".
China-based PetroChina Co’s net profit in the recent quarter folded twice from a year earlier. The profit of second-quarter increased to $2.48 billion from the corresponding last year quarter. The revenue of the recent quarter has climbed up by 17.5% which is highest since the 2014 third quarter. The surge in the overall earnings was due to high crude oil prices, strong gas sales, and good refining margins.
China’s oil giant, Sinopec will increase its production in the second half of this year. The oil major informed on Sunday that it will take up the production to 146 million barrels of crude oil in the second innings of yearly production which was 143.6 million barrels in the in the initial half of the year. Sinopec has decided to process 121 million tonnes of crude this time.
The latest monthly statistical report coming from American Petroleum Institute (API) showed record 4.4 MMbpd productions of natural gas liquids (NGL) in US, last month. US also leveled the previously set record for crude oil production at 10.7 MMbpd. Solid economic activities in July drove the demand for US petroleum to 20.6 MMbpd, which is its highest level in 11 years.
Pemex-owned, Mexico’s largest refinery in Salina Cruz resumed operation, post a shutdown due to a power outage on Wednesday. The Salina Cruz refinery processes 330,000 barrels of crude oil per day (bpd). Mexico’s state-owned oil company, Pemex has increased processing at the refinery to somewhat more than 200 Mbpd of crude.
Fuel retailer, Hindustan Petroleum Corporation (HPCL) reported a hike of 86% in its net profit for the first quarter at Rs 1,719 crore. The company’s income from operations increased by 21% in the recent quarter. In the corresponding quarter last financial year, HPCL reported a net profit of Rs 925 crore. The crude throughput increased only by less than 1% to 4.52 MT in this quarter.
Looming US sanctions has forced state-run IOCL to buy US crude as an alternative to Iranian oil. Indian Oil bought 6 million barrels of US crude for delivery in November to January, through a mini-term tender. After the United States pulled out from the 2015 nuclear deal and declared a renewal of sanctions on Tehran, India has asked refiners to prepare for a severe cut or even zero imports from Iran.
Oil guzzler, Indian Oil Corp is planning to invest Rs 1.75 lakh crore to double its refinery capacity, expand the gas business, boost its petrochemical production and lay new pipelines. The oil refiner will increase its capacity of turning crude oil into fuels to150 million tonnes per annum by 2030. Moreover, the projects costing Rs 32,000 crore are already in the execution stage.
Crude oil export from Brazil climber 50% higher than 2017, hitting 8.1 million tonnes peak last month. Brazilian Government data showed nearly three times jump in Brazil’s crude shipments from June stats. State-run Petrobras began operations on the platforms in Buzios field and Tartaruga field in June. The Brazilian government refrained from commenting over the record July export statistics.
Zhejiang Petrochemicals of China, owned by Rongsheng Group, reportedly secured an oil import quota to import 5 million tonnes of crude oil this year. The huge import quota will allow Zhejiang to sustain the recently built oil refining and petrochemical complex. The complex will consist of two 400,000 barrels-per-day oil refineries and two 1.4 million tonnes-a-year ethylene plants.
Russian government data revealed that the country’s crude production jumped by 148, 000 barrels to 11.215 million barrels a day. An official revealed that Russia is looking forward to maintaining high supplies to market for the next five months. Russian Energy Minister referred the boost in production as “joint efforts of OPEC and non-OPEC countries aimed at stabilizing the oil market.”
Iranian crude import to India suffered in June as Indian refiners purchased 12% less than usual. According to the statement by Indian oil minister, 664,000 bpd of Iranian crude has been bought in the month of June, which is less than the previous month. The first wave of US sanctions on Iran is coming on August 6, after the US backed out of the 2015 nuclear deal.
National Energy Administration released a report of China’s energy consumption in a press conference on Monday. According to the report, natural gas demand climbed up to 16.8 percent, while consumption of crude oil has increased up to 2.5% in the first half of 2018. There has been an increase of 3.1% in the coal consumption. Furthermore, investments have decreased in thermal power utilities and increased in gas-related utilities.
Oil prices, in wait of fresh fundamental drivers, stabilized today with a marginal rise. Brent crude prices remain untouched from last week’s settle at $74.29 per barrel, while the NYMEX September light sweet crude contract was 0.28% higher, traded at $68.88 per barrel. Last week, the market was mostly driven by Saudi’s oil halt and other factors.