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Pipeline giant Energy Transfer LP claimed that operator companies in North-America have started reopening oil wells. These wells were previously shut-in, owing to the COVID-19 pandemic and the social lockdown that had followed. With demand creeping up, reportedly 25% of the stalled operations have been resumed. The reopening of wells may undermine POTUS’ pledge support a coalition of OPEC and allied producers like Russia in taming a global gut.
The oil cartel, OPEC yesterday agreed to deepen output cuts by an additional 1.5 million barrels per day (bpd) in the second quarter of 2020 to regulate fuel prices amidst coronavirus outbreak. The cartel has, however, made its action conditional on Russia and others chipping in. The oil demand outlook has tumbled as countries take stringent measures to contain coronavirus spread, pushing OPEC to consider its deepest cut since 2008.
State-owned PDVSA has restarted supplying gasoline to fuel-deprived Venezuela on Tuesday. The company has announced delivery to six different regions from country’s large crude producing state Anzoategui. Costly and complicated fuel exports and refinery underinvestments had caused fuel shortages in many regions including country's capital Caracas. Shortages increased after there was a sharp decline in fuel exports from 210,000 BOPD in October to 135,000 BOPD in November.
Following the biggest-ever attack on its oil installations, Saudi Arabia has assured of its commitment towards India's energy security needs. India and Saudi's relations have been flourishing over the last few years because of healthy energy ties. "We look forward to India's continued partnership. Saudi Arabia has valued India as a close friend and a strategic partner", said the Saudi Ambassador.
With mammoth new refineries in China yielding huge fuel output, the Chinese refiners are now moving to curb their output in the third quarter. In May, private refiner Hengli Petrochemical ran its 400,000-bpd plant in northeast China to full capacity, while Zhejiang Petrochemical commenced experimental runs at a similar-sized refinery. Sources have revealed that Dongming Petrochemical Group will shut down its 240,000-bpd plant this week for two months of maintenance.
Oil prices dipped down in the international market on Friday, as the market remained in stress over threat to global economic growth. International benchmark, Brent crude futures dropped 0.1% to $63.25 per barrel. US WTI crude futures dipped by 1.1% to $56.72 per barrel. Worries over future demand amidst trade disagreements threatened global economic growth. However, OPEC-led supply cut commitment maintained a check on further losses.
Oil prices eased down in the international market on Thursday, worried by smaller-than-expected decline in US crude stockpiles. Benchmark Brent crude futures LCOc1 dropped 0.4%, to $63.60 per barrel. US WTI crude futures CLc1 were priced 0.3% lower, at $57.18 per barrel. EIA data released on Wednesday showed a decline of 1.1 million barrels last week, denying analysts’ expectations of a 3-million-barrel drop.
PKN Orlen-owned Czech oil refiner Unipetrol has halted oil import through the Druzhba pipeline from Russia, citing chloride contamination. The chief of Czech state strategic reserves yesterday tweeted, “Unipetrol has stopped taking oil from the Druzhba pipeline due to detected contamination by chlorides. Further tests of samples are underway”. Czech Industry and Trade Minister was earlier quoted informing about detecting an increased level of contamination in the Druzhba pipeline.
The largest pipeline company in the world, Transneft reportedly informed about discovering more contamination at a section of the Druzhba pipeline from Belarus to Poland. Transneft said that pumping was halted on Wednesday evening, but later resumed on Thursday. In April, all the west-bound flows through the pipeline were ceased due to extreme levels of organic chloride in the crude, distressing refiners in numerous European countries.
US sanctions has pushed a lot of countries into submitting to Trump administration’s bid to drive down oil imports from Iran and Venezuela to zero. The latest to comply with the US sanctions is India. India’s Ambassador to the US, Harsh Vardhan Shringla informed that the South Asian country had ended oil imports from Iran and Venezuela, despite being dependent on Iran for 10% its oil needs.
Oil prices gained in the international market on Friday, over growing tensions in the Middle East which has stoked concerns of potential supply disruptions. Brent crude futures rose 0.3% to $72.82 a barrel. WTI crude futures, on the other hand, climbed by 0.5%, and were priced at $63.18 per barrel. Several air strikes by a Saudi-led military coalition were carried out on the Houthi-held capital Sanaa yesterday.
An announcement of supply cut in December by top exporter Saudi Arabia sent oil prices for a 1% gain today. Crude suffered a 20% decline since early October and the move is most likely intended to pull through the market. Benchmark Brent crude futures rose 1.7%, and were priced at $71.37 per barrel. US WTI crude futures climbed 1.1% to $60.87 per barrel.
The International Energy Agency yesterday released its monthly report and said that the oil markets appear to be “adequately supplied for now” after a boost in production in recent months. It also noted, however, that the oil industry is coming under stress as it deals with the swelling global demand.The energy watchdog said that the world’s spare oil production capacity is already down to only 2% of global demand.
A top US envoy on Iran is en route to India this week to hold talks, ahead of the next wave of US sanctions scheduled on November 4. US administration is persuading oil importing countries to bring down their import of Iranian oil to zero. Hook will also visit Europe to further discuss US foreign policy toward Iran.
Polish state-owned, PKN Orlen’s CEO has said that the firm is expecting its first-ever Nigerian oil shipment next month. A batch of 130,000 tonnes of Nigerian oil is scheduled to arrive in Poland, in November. Poland’s biggest refiner, PKN Orlen imports most of the crude oil from Russia through pipelines. The firm signed a long-term agreement with Saudi Aramco in 2016, in its bid to reduce reliance on Russian supplies.
With Chinese refiners struggling to find alternatives to Iranian crude, oil shipments from West Africa oil to Asia will reach a two-month high in October. Reuters’ calculations and Refinitiv Eikon data show 2.52 million barrels per day (bpd) growth in the loadings for Asia in October. West African oil imports to China are predicted to rise to a record 1.94 million bpd.
Japanese downstream major, Cosmo Oil has found new suppliers to substitute Iranian oil imports at the head of the looming US sanctions on Iran in November. Oil supply to Cosmo will come from Saudi Arabia, UAE and Kuwait to cover for its 10,000 barrels per day (bpd) shortfall from Iran. Japan’s refinery association last week stated that the country terminated oil imports from Iran in mid-September.
The first wave of US sanctions on Iran has started affecting global oil supply. Iran’s Petroleum Ministry confirmed that South Korea halted oil imports from the country. Xinhua News reported PR of the ministry stating “It is for three successive months that South Korea has not imported oil from Iran”. Before the US sanctions came into effect, the Asian country imported 180,000 barrels per day of Iran’s crude oil.