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China non-committal on U.S. ‘drop in the ocean’ oil release

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China non-committal on U.S. 'drop in the ocean' oil release
© Reuters. FILE PHOTO: A China Ocean Shipping Company (COSCO) vessel is seen near oil tanks at the China National Petroleum Corporation (CNPC)’s Dalian Petrochemical Corp in Dalian, Liaoning province, China October 15, 2019. REUTERS/Stringer.

By Yew Lun Tian, Ahmad Ghaddar and Olesya Astakhova

BEIJING (Reuters) -China, the world’s largest crude importer, was non-committal about whether it will release oil from its reserves as requested by Washington, while OPEC sources said the U.S. action has not made the producer group change course.

On Tuesday, U.S. President Joe Biden’s administration announced plans to release https://www.reuters.com/markets/commodities/us-set-unveil-emergency-oil-release-bid-fight-high-prices-2021-11-23 millions of barrels of oil from strategic reserves in coordination with other large consuming nations, including China, India and Japan, to try to cool prices.

The United States has made the largest commitment for a reserves release at 50 million barrels of pre-approved sales along with loans to the market, but without China, the action would have less impact.

There was no further announcement from Beijing on Thursday after China on Wednesday said it was working on its own reserves release, confirming a Reuters report last week that China would release oil according to its needs.

On Tuesday, Biden had told a briefing China “may do more”.

Rumours of coordinated action drove crude prices lower ahead of the U.S. announcement, but the international market rose more than 3% on Tuesday as Washington confirmed it would tap its strategic reserve and the market lacked clarity on China’s intentions.

The market is also keen to see OPEC’s next move as Washington’s announcement raised speculation that the Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, might respond.

However, three sources told Reuters the group was not considering pausing its current agreement to boost output by 400,000 barrels per day every month, a rate considered too slow by some consumer nations.

Fuel demand collapsed early in the pandemic but has resurged this year, and oil prices have climbed, stoking wider inflation.

Biden, facing low approval ratings ahead of next year’s congressional elections, was frustrated after OPEC+ shrugged off his repeated requests to pump more oil. Retail U.S. gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000.

On Thursday, slipped 31 cents to $81.94 a barrel by 1000 GMT.

“The market seems to believe in OPEC+ to keep oil balances tight more than it believes in the transitory nature of an SPR release,” said Rystad Senior Oil Markets Analyst Louise Dickson on Wednesday.

OPEC RESPONSE

OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf as well as Russia, meets again on Dec. 2 to discuss policy.

The group is monitoring whether oil markets are balanced, Iraq’s oil minister Ihsan Abdul Jabbar said on Wednesday, saying the group needs to study the latest data before making decisions about supply.

Already the producer nations are struggling https://www.reuters.com/markets/europe/us-wants-more-oil-opec-cant-turn-tap-much-harder-2021-11-23 to pump enough oil to meet existing targets and they are also concerned a resurgence of COVID-19 cases could again drive down demand.

Washington’s effort to team up with major Asian economies to lower energy prices was a warning to OPEC+ to control crude prices that are up more than 50% so far this year.

In the past, multi-country releases from reserves have been coordinated by the International Energy Agency (IEA), a Paris-based watchdog. The IEA does not intervene to influence prices, but the head of the agency said on Wednesday some producers have been restricting supply too much.

“Some of the key strains in today’s markets may be considered artificial tightness … because in oil markets today we see close to 6 million barrels per day in spare production capacity lies with the key producers, OPEC+ countries,” Fatih Birol, IEA head, said.

Under the plan, the United States will release 50 million barrels, the equivalent of about 2-1/2 days of domestic demand. However, some analysts called the structure of the U.S. release – a combination of 18 million barrels of pre-approved sales and a loan of 32 million barrels – too small and temporary.

Goldman Sachs (NYSE:) said the volume announced was “a drop in the ocean”. [O/R]

The impact of the sale from strategic reserves is expected to be felt first in the United States and then Asia https://www.reuters.com/article/global-oil-reserves-usa-idCNL1N2SG0A0.

Commodities

Halliburton says not buying Exxon stake in Iraqi oilfield

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2/2
Halliburton says not buying Exxon stake in Iraqi oilfield
© Reuters. FILE PHOTO: A member of security foreign personnel walks with an Exxon’s foreign staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, during the opening ceremony near Basra, Iraq June 17, 2019. REUTERS/Essam Al-Sudani

2/2

By Aref Mohammed

BASRA, Iraq (Reuters) -Halliburton has not proposed buying Exxon Mobil (NYSE:)’s stake in Iraq’s West Qurna 1 oilfield, a spokesperson for the U.S. oil services company said on Wednesday, denying comments from a senior official from Iraq’s Basra Oil Co. (BOC).

“We are not buying an oil field and are not partnering to buy an oil field. We do not typically discuss commercial terms for bids or tenders, but in this case we want to be clear that we are not buying any fields,” said Halliburton (NYSE:) spokesperson Emily Mir.

Hassan Mohammed, deputy BOC manager in charge of oilfields and licensing rounds affairs, earlier told a press conference that Halliburton had submitted a proposal to buy Exxon’s stake in the southern West Qurna 1 field

He added, however, that the Iraqi government’s preferred option was for BOC itself to buy Exxon’s stake in the field.

Iraq said in April that Exxon was seeking to sell its 32.7% stake in West Qurna 1, and that the oil ministry had started discussions over a possible deal.

Separately, Iraq will start work to maintain and upgrade its key undersea oil exports pipelines and its two onshore ports that will help boost export capacity to six million barrels per day (bpd) in 2025 from 3.2 million bpd currently, Ahmed Fadhil, deputy BOC manager in charge of oil exports facilities upgrading operations told Reuters.

Fadhil said bids had been completed to invite foreign services companies to compete to build two undersea 48-inch oil exports pipelines to replace existing outdated lines.

Construction work to build the two lines to ship to the Basra offshore terminal is expected to start in the second quarter of 2022 and the new undersea lines are expected to be operational in mid 2024, said Fadhil.

A third undersea pipeline is under construction currently and is expected to be completed in mid 2023. The three export lines have a combined capacity to export three million bpd.

Iraq has also awarded a deal to a Russian company to assess damages and start repair works on another 42-inch undersea export pipe which transport crude oil to its Khor al-Amaya terminal, one of its two southern offshore oil export terminals, said Fadhil, without naming the company.

Loading operations have been halted at Khor al-Amaya since 2017 when the pipeline suffered ruptures and leakages, and had to be shut.

Maintenance operations are expected to be completed to bring back crude loading operations at Khor al-Amaya by the end of 2022, with initial capacity to pump 400,000 bpd, said Fadhil.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

U.S. could tweak timing of oil stockpile release if prices fall -official

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U.S. could change timing of oil stockpile release if prices drop -official
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Timothy Gardner

WASHINGTON (Reuters) -The Biden administration could adjust the timing of its planned release of strategic stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

Turk, speaking in a video interview for the Reuters Next conference https://reutersevents.com/events/next to be broadcast later on Wednesday, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing if needed.

“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.

The administration of President Joe Biden had announced last month https://www.reuters.com/markets/commodities/us-set-unveil-emergency-oil-release-bid-fight-high-prices-2021-11-23 that it would release 50 million barrels from the U.S. Strategic Petroleum Reserve, alongside smaller releases from China, India, Japan, South Korea and Britain, to help lower consumer energy costs.

The unusual agreement was designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington and other consumer nations to pump more quickly to match rising demand as the world began to exit the pandemic.

Oil prices have since declined, however, amid worries that the new Omicron variant https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-variant-could-outcompete-delta-south-african-disease-expert-says-2021-11-30 of the coronavirus will spread and trigger extensive lockdowns, reducing global energy demand.

“The president gave us flexibility,” Turk said about the U.S. planned release of strategic stockpiles.

“So if the price of oil goes down significantly, if the pain at the pump that is currently being experienced by consumers around our country, and around the world as well, dissipates for whatever reason, then we use the tools differently,” he said.

“The metric of success for any policy from our end related to these issues is what is the price at the pump? … not whether we get 50 million barrels out as quickly as we possibly can,” he said.

Turk added that the White House was still studying proposals from some of Biden’s fellow Democratic lawmakers to ban crude oil exports to keep prices down, saying it remained among the range of tools the administration could eventually use.

“We’ve certainly heard from members of Congress who feel both ways on this issue,” he said. “And so we’re putting together all that analysis, all that information to inform decision making by our secretary and ultimately by the president.”

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

U.S. could change timing of oil stockpile release if prices drop -official

Published

on

U.S. could change timing of oil stockpile release if prices drop -official
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Timothy Gardner

WASHINGTON (Reuters) – The Biden administration could adjust the timing of its planned release of strategic stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

Turk, speaking in a video interview for the Reuters Next conference https://reutersevents.com/events/next to be broadcast later on Wednesday, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing if needed.

“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Continue Reading

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