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Crude Oil Drifts Lower as Market Waits for OPEC+ Response to Reserve Release

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Crude Oil Drifts Lower as Market Waits for OPEC+ Response to Reserve Release
© Reuters.

By Geoffrey Smith 

Investing.com — Crude oil prices edged lower in depressed trade on Thursday as the market used the U.S. Thanksgiving Day holiday to take a breather ahead of next week’s key OPEC+ meeting.

By 5:10 AM ET (1010 GMT), futures were down 0.7% at $77.86 a barrel, while , the international benchmark, was down 0.6% at $81.79 a barrel.   

The OPEC+ group, which brings together the world’s largest exporters, is due to meet in a week’s time, on December 2nd, under pressure to respond to a coordinated signal from the world’s biggest buyers that prices are too high. 

Speculation on a joint release of reserves had pushed prices to a seven-week low before Tuesday’s announcement, and while prices have leaped by more than $2 since then, they’re still some 8% off their October highs.

So far, the group hasn’t indicated any shift in its output policy, but the Organization of Petroleum Exporting Countries, which had already warned of the global market tipping back into surplus early next year, noted on Thursday that the planned release of strategic reserves by the U.S. and others would equate to a global supply increase of around 1 million barrels a day.

OPEC+ has pledged to restore the output it cut at the start of the pandemic in monthly increments of 400,000 barrels a day. In recent months, it has struggled to meet that commitment due to production difficulties in members such as Nigeria and Angola. Some now see that pledge as subject to review.

“The alliance…may opt to reduce future production hikes when they meet,” said Saxo Bank strategist Ole Hansen in a morning note to clients.

The U.S. intends to hold regular auctions of barrels from its Strategic Petroleum Reserve between January and April.

“The total stock release numbers could exceed 60-70 million barrels based on what we know now, which warrants attention on the drawdown rate of such a release,” said Rystad Energy oil market analyst Bjornar Tonhaugen in e-mailed comments.

There was only a modest reaction on Wednesday to weekly data from the U.S. government showing a 1 million barrel increase in commercial crude stocks last week, not least because inventories of gasoline and other fuels continue to fall, suggesting that final demand from airlines, drivers and chemicals companies is still robust. 

Airlines in particular have increased available capacity to deal with pent-up demand on transatlantic routes, after the lifting of restrictions on visitors from the U.K. and EU allowed Americans in Europe to return home for Thanksgiving for the first time in two years.

Elsewhere, U.S. gasoline RBOB futures were likewise down 0.7% at $2.3035 a gallon.  The U.S. government acknowledged that retail prices this Thanksgiving would be their highest in nine years.

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.

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.

Continue Reading

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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