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Oil prices and the recession graph: What will happen to oil prices this week?



oil prices and recession graph

The price of Brent, which fell to nearly $92 a barrel on Tuesday, came close to $97 a barrel on Friday. The U.S. DOE report showed a 7.1 million-barrel decline in commercial and a 3.4 million-barrel decline in strategic crude inventories, or 1.2%, for a total of 10.5 million barrels. 

The main factor was the increase in oil exports to a new record of 5.0 million barrels per day (mb/d). U.S. net oil imports fell to an all-time low of 1.1 mb/d as a result. U.S. oil production estimates also fell by 0.1 mbps to 12.1 mbps. However, fluctuations in export and import flows from week to week are temporary factors that cannot support the price of oil for long.

Oil and gas quotes – what’s happening in the market?

Demand for petroleum products in the U.S. is a much more important driver. U.S. gasoline shipments rose 2.5% over the previous week and 0.2% year-to-date to 9.35 mbps, also 3.1% above the four-week average. As a result, gasoline inventories fell by 4.6 million barrels, or 2.1%. Gasoline supplies provide an indication of the dynamics of demand. They have declined year-over-year for nine consecutive weeks, with a 13% drop twice in July. Therefore, even a slight increase in apparent demand is perceived by the market with optimism.

Oil prices strengthened as gas prices rose rapidly to new records: the monthly TTF contract closed Friday at about $2,600 per thousand cubic meters, adding 19% over the week.

In terms of energy units, gas is now more than four times more expensive than oil in Europe. This is why everywhere possible, gas is being replaced by oil products – particularly in the energy and petrochemical industries. The total volume of substitution is not great, but it is enough for gas prices to start “pulling up” oil prices.

This dependence will continue to affect the oil market in the coming weeks. That is why, he said, “we are not expecting a sharp drop in oil prices while gas in Europe is trading above $2,000 per thousand cubic meters. Analysts forecast that Brent will stay above $95 per barrel in the new week.

At the same time, the alarming dynamics of diseases and quarantines in China limit the potential for oil growth. The new outbreak in Hainan province is likely to be localized, but the experience of the last months suggests a high probability of new outbreaks. Therefore, the forecast is a $95-100 range for Brent over the coming week.

Earlier we reported that a fall in Brazil’s harvest will trigger a rise in black coffee prices.


Bloomberg: UAE to boost oil production beyond plan by 2025



UAE to boost oil production

UAE to boost oil production. One of Russia’s main competitors for oil exports plans to reach five million barrels per day by 2025. The Middle Eastern country was initially expected to reach this level only by 2030, Bloomberg reported, citing sources.

“Energy concern Abu Dhabi National Oil Co. (Adnoc), which produces almost all of the UAE’s oil, wants to be able to produce 5 million barrels a day by 2025. The company planned to reach such a level only by 2030,” – says the material.

But a crude oil production boost will be difficult without additional financing for expenses for the project. Adnoc explained the acceleration of production increase by the policy of the leading countries of the world on accelerated energy transition to renewable energy sources (RES).

“As we embrace the energy transition and focus our business on the future, we will continue to explore potential opportunities that can further add value, free up capital and improve profitability,” the Arab oil company said.

To realize the goal, Adnoc has asked international companies that are partners in its oil fields to increase long-term crude production by 10% or more, sources said. In the case of positive results of the negotiations, the UAE will be able to significantly increase the volume of oil production by 2025, concludes Bloomberg.

On September 19, the Times of India, citing sources in the Indian Ministry of Commerce, reported that the Asian country has saved since February 2022, $439.7 million on imports from Russia of oil at a discount. A total of about 62.5 million barrels of Russian crude were purchased by Indian state and private companies over the last six months. Moreover, volumes of imports have increased many times over as compared to 2021.

Earlier, we reported that Nigeria stopped benefiting from the sale of Nigerian oil due to the lack of dollars.

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FT: Nigeria stopped benefiting from Nigeria crude oil sales due to lack of dollars



nigeria crude oil sales

Nigeria’s crude oil sales used to grow steadily. But now the country, which is considered one of the world’s largest oil exporters, is facing a crisis. The country is short of dollars, and the factor of “massive theft” has only exacerbated the problems of the African state, reports the Financial Times.

“Since the beginning of the year, Nigeria’s foreign exchange reserves have fallen by 5%, to $38 billion. Restrictions on the purchase of dollars and the resulting deficit has led to the emergence of a black currency market. $1 is worth 420 naira at the official exchange rate and 700 naira on the black market,” the paper said.

Because of increasing corruption in the country, Nigeria, the world’s tenth largest oil exporter, can no longer increase production of crude oil. Nigerian crude oil buyers are not happy with this fact. The African state exports a little more than half of the established OPEC quota – 1.1 million barrels per day, instead of the required 1.8 million.

Despite all the difficulties going on in Nigeria’s economy, Timipre Silva, the African country’s Minister of State for Petroleum, announced plans to increase liquefied natural gas (LNG) exports to Europe by the coming winter. According to him, to realize this goal, it is necessary to improve safety in Nigeria’s fields and infrastructure.

Earlier we reported that coffee stocks in Brazil in six months will approach a record low level

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Coffee exporters in Brazil: coffee stocks in Brazil in six months will approach a record low level



coffee exporters in Brazil

Coffee exporters in Brazil said that coffee stocks in the largest coffee-producing country in the world – Brazil – in six months will fall to a record low level. This was written by Bloomberg agency about the statement of the president of the National Council of Brazilian Coffee Silas Brasileiro.

According to his forecast, stocks of coffee in Brazil’s coffee supply companies by March will drop to 7 million bags, whereas analysts consider a comfortable level of 9-12 million bags of 60 kg each.

Cecafe Exporters Group board member Nelson Carvallaish said the country’s coffee stocks are so small that even if next year’s crop is good, Brazil will barely have enough coffee to meet demand.” “We just need rain,” he concluded.

In August, The Wall Street Journal wrote that the price of coffee could rise seriously by the end of 2022 because of Brazil’s poor harvest. 

Earlier we reported that aluminum production in China in August reached a record 3.51 million tons.

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