© Reuters. FILE PHOTO: Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song
By Laura Sanicola
(Reuters) – Oil prices rose sharply on Monday as expectations of strong demand and a belief that a key producer group will not turn on the spigots too fast helped reverse initial losses caused by the release of fuel reserves by No. 1 world energy consumer China.
futures were up 84 cents, or 1%, to $84.56 a barrel at 12:49 p.m. EDT (1649 GMT) , after hitting a session low of $83.03.
U.S. West Texas Intermediate (WTI) crude futures gained 61 cents, or 0.7%, to $84.18, having fallen to $82.74 earlier.
A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel.
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.
The increase in OPEC’s oil output in October fell short of the rise planned under a deal with allies, a Reuters survey found on Monday, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq.
OPEC+ is expected by analysts to stick to the 400,000 figure at its Nov. 4 meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate.
“We feel that their position will be one where the status quo will be maintained while a ‘wink and a nod’ will be provided in accepting violation of quotas should Brent values gravitate back up into new 7-year high territory,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery, part of a broad effort to pressure OPEC+ to raise supplies.
Prices rose despite China saying in a rare official statement that it had released gasoline and diesel reserves to increase market supply and support price stability in some regions.
Exxon (NYSE:) and Chevron (NYSE:) are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said on Friday.
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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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