During the day oil quotes turned to fall on fears of slowing growth of the Chinese economy and increasing oil supplies to the world market. Brent crude futures on London’s ICE Futures exchange fell $4.71, or 4.8%, to $93.44 a barrel. Will crude oil prices fall even more?
By that time, WTI September futures on the NYMEX fell $4.54, or 4.93%, to $87.55 per barrel.
Why did oil prices fall today?
On Friday, Brent was $1.45 cheaper and WTI fell $2.25.
It became known on Monday that growth in retail sales and industrial output in China in July was weaker than analysts’ forecasts. Retail sales rose 2.7% year-over-year instead of the expected 5%, and industrial production growth in China slowed to 3.8% last month from 3.9% in June, although the consensus analyst forecast was for a 4.6% gain.
Last week, OPEC lowered its 2022 oil demand growth forecast by 0.3 million bpd to 3.1 million bpd because of some regional changes. The 2023 growth forecast was kept at 2.7 million bpd, the organization said in its monthly report.
Thus, in 2022, according to OPEC estimates, oil consumption will be 100.03 million bpd, rather than 100.3 million bpd, as previously expected.
Meanwhile, Amin Nasser, head of Saudi Aramco (TADAWUL:2222), the Saudi state oil and gas company, said over the weekend that Saudi Aramco was ready to increase its oil production to the maximum possible 12 million bpd if the Kingdom’s government expresses a desire to do so.
Earlier we reported that сopper price per pound declined on doubts about demand in China.
Bloomberg: UAE to boost oil production beyond plan by 2025
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.
FT: Nigeria stopped benefiting from Nigeria crude oil sales due to lack of dollars
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.
Coffee exporters in Brazil: coffee stocks in Brazil in six months will approach a record low level
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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