Friday, November 16, 2018

OPEC’s First Female President May Be Extradited Back To Nigeria



Nigeria is looking for the extradition of former oil minister and the first female president of OPEC from the UK to face trial in her home country, because a corruption investigation in Britain is taking too long, the head of Nigeria’s Economic and Financial Crimes Commission (EFCC) said on Monday.

Diezani Alison-Madueke served as petroleum minister of Nigeria between 2010 and early 2015 under then Nigerian president Goodluck Jonathan, until he was defeated in the elections by current president Muhammadu Buhari in 2015. Alison-Madueke was also the first female president of OPEC.
She was arrested in 2015 in London as part of a two-year-long investigation by the UK National Crime Agency (NCA) into global corruption, bribery, and money laundering. Alison-Madueke was released on bail after being questioned. She has been on bail ever since, according to AFP.

Police and investigators suspect that Alison-Madueke was involved in siphoning off billions of U.S. dollars from Nigerian oil deals and state accounts when she was overseeing Nigeria’s oil industry, for personal benefits, including for buying luxury homes in London and in Nigeria’s capital Abuja.

More than two years ago, a Nigerian ad-hoc parliamentary committee revealed that there were no formal contracts between the Nigerian National Petroleum Corporation (NNPC) and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.

According to the results of the investigation, Alison-Madueke illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura.

The former Nigerian oil minister denies wrongdoing. Now Nigeria seeks extradition from the UK to put her on trial at home.

EFCC’s chairman Ibrahim Magu told a news conference in Abuja on Monday that “It is very unreasonable that she is not being tried there,” referring to the UK.

“That’s why I say, if you cannot prosecute her, bring her here. We will prosecute her... We cannot wait endlessly like this. I think three years and above is sufficient to take her to court,” AFP quoted Magu as saying.   

By Tsvetana Paraskova for Oilprice.com

Monday, November 12, 2018

NNPC Considers Crude-for-Product Deals with Shell and ExxonMobil


Nigerian oil company Nigerian National Petroleum (NNPC) is reportedly considering crude-for-product deals with Shell and ExxonMobil.

The potential deal could be similar to NNPC’s agreement with British firm BP last week, Reuters reported citing the former’s upstream chief operating officer Bello Rabiu.

NNPC depends on foreign imports for the country’s fuel needs as it buys 70% of the demand, especially gasoline, through swap deals with overseas companies.

The national oil company signed such contracts with ten consortiums, including Vitol, Trafigura, Mercuria and Total.

Rabiu was quoted by the news agency as saying: “Unfortunately, Shell and ExxonMobil exited the downstream sector in Nigeria a couple of years ago, but they are coming back for this particular arrangement because it’s an opportunity for them to get crude and sell their products to the refineries.

The company extended the existing contracts to June next year, however, several trading sources in the consortiums have reportedly sought new price terms.

Furthermore, Rabiu stated that the company aims to create savings of around $1bn, as achieved in 2016, during next year.

He further added that the existing arrangement of crude-for-product swaps could end once NNPC enhances its refineries.

Rabiu said: “If our refineries are back, which we want in the next 18 months, this thing will stop. So, all these things are just stop-gap measures, but the key issue is that we wanted to import at the least cost before our refineries come back on-stream.”

In a bid to reduce its dependence on fuel imports, the company has been engaged in discussions with consortiums such as traders, energy majors and oil services companies to improve its oil refineries. Talks are said to be in the final stages and the company is expecting to reach a deal by the end of this year.

Railed Refined Products to Mexico Hinge on Storage

https://theodora.com/pipelines/united_states_pipelines_map.jpg

Railed movements of refined products are a small portion of Mexico's total imports, but they will grow once Mexico builds new terminals and storage to handle increased traffic, industry officials said at the Argus Mexican Refined Products Markets conference.

Railed crude shipments from Canada to the US Gulf coast run along more efficient networks and offer better returns for energy companies looking to deploy their fleets of owned or leased railcars, said Jennifer Fussell, assistant vice president of sales and marketing for chemicals and petroleum at Kansas City Southern (KCS). The railway runs unit trains from US Gulf coast refining centers into central Mexico.

"These energy companies are looking at … crude by rail that's getting incredible turn times on equipment that is expensive, and then looking at the current infrastructure limitations for Mexico," Fussell said. "Those railcar turns are not as efficient, but they will be."

Terminals capable of unloading unit trains within 24 hours will be key to boosting railed refined products shipments, Fussell said. To that end, KCS said it expects substantial storage to be built in Mexico, to the tune of about 1.5mn bl each year from 2019-2021.

About 60pc of US refined exports to Mexico move by vessel, followed by pipeline at 20pc, truck at 12pc and rail at 8pc, based on an analysis of US cross-border trade data, said Rangeland Energy vice president of business development Michael Moss.

Rail could boost its share to 15-20pc of US refined products exports by 2020 as more terminals and storage are built, Moss said. Rangeland Energy's Corpus Christi products-by-rail and LPG loading terminal came on stream for manifest carload service in June, and is targeting unit train shipments by late in 2019.

Truck operations have had first-mover advantages in Mexico, with cross-border shipments from Corpus Christi and even Houston moving "deep into Mexico," Moss said. Trucking operations will be increasingly limited to border-area deliveries once rail and port options are built out, Moss said.

New international marine fuel rules set to go into effect in 2020 could create new opportunities for Mexico's rail networks.

Pemex's six refineries produce a large amount of high-sulfur residual fuel, which is mostly sold into the bunkers market from Mexico's ports. Once the marine fuels rules take effect, Pemex will need to find other markets for its high-sulfur material. Both Rangeland and KCS said they were targeting ways to tap additional business to carry fuel oil.

The new marine rules will be a significant challenge for Mexico and its refineries, said Jerry Phillips, global market analysis manager for Phillips 66. Mexico's refineries yield about 30pc high-sulfur residual fuel, versus about 3pc for US Gulf coast refineries, Phillips said.

Railroads could support imports of US light, sweet crude to Mexico, which could help Pemex's refineries decrease their residual fuel output because US crude has less sulfur content than many Mexican grades.

"There is no reason why clean products can't import in and crude import out, or even bringing some light sweet into the country," Fussell said. "We see that as an opportunity for Mexico."

Friday, November 9, 2018

Keystone XL pipeline project blocked by judge in Montana

Crewmen work on TransCanada's Keystone XL project near Winnsboro in Wood County in 2012.

https://www.houstonchronicle.com/business/energy/article/Keystone-XL-Pipeline-Project-Blocked-by-Judge-in-13377532.php

TransCanada Corp.’s long-delayed Keystone XL pipeline project was blocked by a Montana federal judge pending further environmental review.

Thursday night’s ruling is the latest set-back for the Calgary-based pipeline company in its decade-long push to construct a 1,179-mile long conduit to deliver crude from Alberta’s oil sands to a Nebraska junction, en route to refineries near the Gulf of Mexico.

The Indigenous Environmental Network, River Alliance and Northern Plains Resource Council filed a pair of lawsuits against the U.S. in March 2017 shortly after President Donald Trump gave his approval for the project to cross the U.S.-Canada border. TransCanada joined the litigation to defend the permit approval.

U.S. District Judge Brian Morris in Great Falls agreed with the groups’ argument that a 2014 environmental impact assessment fell short of the National Environmental Policy Act and other regulatory standards.

The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.

Morris was appointed in 2013 by then-President Barack Obama, who had refused to grant a cross-border permit for the international project. Morris has ordered it vacated.

Nebraska’s Supreme Court last week heard arguments from attorneys for landowners seeking to overturn that state’s public service commission approval of its route there.

The case is Indigenous Environmental Network v. U.S., 17-cv-00029, U.S. District Court, District of Montana (Great Falls).

©2018 Bloomberg L.P.

Zero US Crude oil exports to China recorded for second month

The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.  
Eddie Seal | Bloomberg | Getty Images
The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.


The lack of US seaborne exports of crude oil to China recorded in August, continued into September. 
 
This is despite crude oil not being a part of the ‘official trade war’, BIMCO’s Peter Sand said.

 “The trade war between the US and China is now impacting trade in both tariffed and some untariffed goods with both countries looking elsewhere for alternative buyers and sellers.

“Tonne/mile demand generated by total US crude oil exports has risen 17% from August to September, but is down 4.8% from the record high in July.

“For the crude oil tanker shipping industry distances often matter more than volumes, with exports of US crude oil to Asia generating 74% of tonne/mile demand in September, up from 70% in August,” Sand explained.

In 2017, Chinese imports accounted for 23% of total US crude oil exports. For the first seven months of this year, the number was 22%, but has dropped to zero in August and September.

For the seventh month in a row, total US crude oil exports, excluding to china, hit a new all-time high reaching 7.9 mill tonnes in September.

South Korea has become the largest long-distance importer of US crude oil taking 1.1 mill tonnes in September, the highest level. Similarly, the next top three overseas importers of US crude oil, namely the UK, Taiwan (both at 0.94 mill tonnes) and the Netherlands (0.74 mill tonnes) all imported more in September than before.

Exports to Asia jumped in June and July, from a 43% share of total exports since the start of 2017 to reach a 56% share. This share was down to 46% in August, but climbed back to 51% in September.

The two other major importing regions in September were Europe (33%) and North and Central America (13%), while South America (2%), the Caribbean (1%) make up the rest.

Thursday, November 8, 2018

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil
Venezuela will present its state-backed cryptocurrency Petro as a unit of account for crude oil trading to the Organization of the Petroleum Exporting Countries (OPEC) in 2019, the country’s oil company PDVSA reports on its Twitter Nov. 7.


The PDVSA has cited its president Manuel Quevedo, who also holds the position of Venezuela’s Minister of Oil and Mining, speaking about the future presentation:
"We will be presenting Petro to OPEC in 2019 as the main digital currency backed by oil."
According to the PDVSA, Quevedo also added that Petro will be offered as a unit of account for global crude oil trading, noting that all Venezuelan oil will be traded for Petro.

OPEC is a global intergovernmental organization made up of 15 nations, founded in 1960 in Baghdad to develop regulation and policies for the world’s main oil exporters. According to OPEC’s website, the organization has not yet scheduled its agenda for 2019; the nearest meeting of the oil industry members will be held Dec. 6 in Vienna, Austria.

Venezuela officially launched the sale of its widely discussed oil-backed cryptocurrency at the end of October. 11 months after country’s leader announced the national coin, Petro can now be purchased directly from its official website or from six local crypto exchanges authorized by the government. However, crypto wallets for trading the coin have reportedly been suspended by Google.

As Cointelegraph has often reported, the Venezuelan government is actively promoting Petro. For instance, Maduro appealed to the county’s citizens in October, asking them to invest in gold and Petro while the national currency, the sovereign bolivar, is facing hyperinflation.

The country’s president also stated that Petro would be used for international commercial transactions starting in October 2018. Moreover, Venezuela announced that the currency would be used as a unit of account within the country, making salaries and pricing systems tied to Petro.

However, some experts, journalists, and economists are sceptical about Venezuela’s coin. A Reuter's report claimed that Petro was not backed by oil nor mined anywhere in the country. The news agency also cited former Oil Minister Rafael Ramirez who wrote that "the petro [...] only exists in the government’s imagination.”

Experts also told media outlet Wired that PDVSA, which reportedly backs Petro, had $45 billion in debt and showed no signs of any trading activity. The publication noted that this might mean the currency is only a "smoke curtain" to conceal Maduro's recent failure to reanimate the national fiat currency.

Wednesday, November 7, 2018

World’s Most Indebted Oil Company Reports 20-Fold Increase in Profit

Petrobras offices in Rio de Janeiro


Brazilian state-run oil firm Petrobras (NYSE:PBR) reported on Tuesday a net income for Q3 surging more than 20 times compared to the profit for the same quarter last year on the back of higher oil prices. 

Petrobras reported a consolidated net income of US$1.77 billion (6.644 billion Brazilian reais) for Q3 2018, up from just US$70 million (266 million reais) for Q3 2017. Compared to the second quarter of 2018, Petrobras’s net income dropped by 34 percent, due to higher net financial expenses and increased income tax expenses, the company said in its earnings release. In the second quarter of 2018, Petrobras had reported an even stronger surge in earnings, as net income jumped thirty-fold on the year, benefiting from the rising oil prices.

The third quarter this year was the third consecutive quarter in which Petrobras has booked a profit, it said.

Petrobras’s domestic crude oil and natural gas liquids (NGLs) production, however, dropped in the third quarter—at 1.937 million bpd, it was 6 percent lower compared to Q2 2018 and lower than the 2.134 million bpd production in Q3 2017.

The company attributed the lower production of oil, NGLs, and natural gas mostly to maintenance and the sale of a 25 percent stake in the Roncador field, partially offset by the start of production of the FPSO Cidade dos Campos dos Goytacazes in the Tartaruga Verde Field.

Related: Analysts See Opportunities In Embattled Energy Stocks

For the nine months January to September, Petrobras’s crude oil and NGL production in Brazil declined by 6 percent to 2.028 million bpd.

For the nine months to September, Petrobras reported a net income of US$6.3 billion (23.677 billion reais), the best result since 2011 and a 371-percent surge compared to the same period of 2017, thanks to higher oil prices, the depreciation of the Brazilian currency, higher diesel sales, and lower general and administrative expenses.

Petrobras, considered the most indebted oil company in the world, said that its net debt was US$72.888 billion at end-September, down by 14 percent compared to end-2017, and down from the US$73.662 billion net debt at end-June 2018.

By Tsvetana Paraskova for Oilprice.com

Monday, November 5, 2018

Oil up as U.S. imposes sanctions on Iran, Tehran defiant

Iraqi Shi'ite Muslims hold portraits of Iran's late leader Ayatollah Ruhollah Khomeini (C), Supreme Leader Ayatollah Ali Khamenei (L) and Iraq's top Shi'ite cleric Grand Ayatollah Ali al-Sistani during a parade marking the annual al-Quds Day.
Iraqi Shi'ite Muslims hold portraits of Iran's late leader Ayatollah Ruhollah Khomeini (C), Supreme Leader Ayatollah Ali Khamenei (L) and Iraq's top Shi'ite cleric Grand Ayatollah Ali al-Sistani during a parade marking the annual al-Quds Day.
Image: KHALID AL-MOUSILY


By Stephanie Kelly

NEW YORK (Reuters) - Oil prices rose on Monday after a steep five-day slump, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.

The sanctions are part of U.S. President Donald Trump's effort to curb Iran's missile and nuclear programs and diminish its influence in the Middle East. 

Oil markets have been anticipating the sanctions for months. Prices have been under pressure as major producers including Saudi Arabia and Russia have ramped up output to near-record levels, while weak economic figures in China have cast doubt on the demand outlook.

News of waivers on the sanctions limited price gains, and recent weakness in equities markets have fed concerns about global oil demand, said Bob Yawger, director of futures at Mizuho in New York.
"We're not getting the price rally that many participants thought they were going to get out of the Iran sanctions situation," Yawger said.

Brent crude futures gained 89 cents to $73.72 a barrel, by 10:59 a.m. EST (1559 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 57 cents to $63.71 a barrel.

Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October. Hedge funds have cut bullish bets on crude to a one-year low.

The United States has granted exemptions to eight countries, China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to temporarily continue buying Iranian oil, Secretary of State Mike Pompeo said on Monday. Some of these are OPEC member Iran's top customers.

U.S. officials have said the aim of the sanctions is eventually to stop all Iran's oil exports. 

Pompeo said more than 20 countries have already cut oil imports from Iran, reducing purchases by more than 1 million barrels per day.

Iran said on Monday it would break with the sanctions and continue to sell oil abroad.

China's foreign ministry expressed regret at the U.S. move.

Combined output from Russia, the United States and Saudi Arabia rose above 33 million bpd for the first time in October, up 10 million bpd since 2010, with all three pumping at or near record volumes.

The Abu Dhabi National Oil Co plans to boost oil production capacity to 4 million bpd by the end of 2020 and to 5 million bpd by 2030, it said on Sunday, from output of just over 3 million bpd.

Data from analysis firm Kayrros showed Iranian crude production was broadly unchanged in October from September, with barrels still hitting the market alongside additional production from Saudi Arabia and Russia. 

(Reporting by Stephanie Kelly in New York, Christopher Johnson in London and Henning Gloystein in Singapore; editing by Jason Neely and Louise Heavens)

‘Lomonosov Prospect’ successfully completes NSR transit

Lomonosov Prospect


On 30th October, 2018 at 23:59 Moscow time, ‘Lomonosov Prospect’, Sovcomflot's (SCF) Aframax using LNG fuel as its primary fuel, successfully completed a commercial voyage along the Northern Sea Route (NSR).
 
She delivered a petroleum product cargo loaded in South Korea and destined for Northern Europe.

The high-latitude voyage from Cape Dezhnev at Chukotka to Cape Zhelaniya of the Novaya Zemlya archipelago took the Arc4 vessel 7.8 days to complete, during which the tanker covered a distance of 2,194 nautical miles.

During the voyage, the crew successfully tested the ship’s engines and the fuel control systems using LNG, as well as the operation of navigation equipment and machinery in ice conditions and sub-zero temperatures.

The successful voyage has confirmed the vessel’s high manoeuvrability and icebreaking capabilities, as well as being a highly safe, environmentally friendly and efficient vessel, SCF claimed.

The tanker sailed along almost the entire NSR without icebreaker escort, having covered some 950 nautical miles in ice conditions. She was escorted by Atomflot's nuclear-powered icebreaker ‘Taimyr only when traversing the most navigationally and hydrographically challenging area of the Ayon ice massif in the East Siberian Sea.

The tanker’s Master was Dmitry Belozerov, who has extensive high-latitude navigation experience. In 2010, Capt Belozerov served as Chief Officer on SCF's Aframax ‘SCF Baltica – the first large-capacity vessel to complete an NSR transit.

The results obtained during this experimental voyage provided the foundation for developing marine transportation solutions for major industrial projects in the Arctic, such as Yamal LNG and Novy Port.

During the latest voyage, the crew was aided by a second Master/ice advisor.

‘Lomonosov Prospect is the second of six Aframaxes designed to operate on LNG as the primary fuel. She was delivered to SCF last month.

In September, 2018, SCFplaced with Zvezda Shipbuilding Complex orders for a series of two similar LNG-fuelled Aframaxes, both of which will be timechartered to Rosneft for 20 years each, following their deliveries.

In addition SCFwill provide technical supervision during the construction of the five similar LNG-fuelled Aframaxes for Rosneft, also ordered at Zvezda Shipbuilding Complex.
 
Upon the delivery of these vessels, SCF will provide a range of services to ensure the effective and safe management of these vessels, including the recruitment of high-skilled crews and their management.

Sunday, November 4, 2018

Oil rally faces tidal wave of supply

Trump blamed OPEC


By Devika Krishna Kumar and David Gaffen

(Reuters) - The oil market's two-year bull run is running into one of its biggest tests in months, facing a tidal wave of supply and growing worries about economic weakness sapping demand worldwide. 

After topping out at more than $75 and $85 a barrel just a month ago, both U.S. crude and Brent benchmark futures have grappled with near-relentless selling. For a time, prices had some support on hopes that renewed U.S. sanctions on Iran would force barrels off the market. 

That changed in the last week. The world's three largest producers - Russia, Saudi Arabia and the United States - all indicated they were pumping at record or near-record levels, while the United States said it would allow waivers that could allow buyers to keep importing Iranian oil, lessening the threat of a supply crunch. 

Those factors, along with a spate of recent weak economic reports out of China and other emerging markets, have shifted the conversation back toward worries about oversupply, and pushed U.S. futures to lows not seen since April, interrupting an upward move that had consistently found support during the rally's modest pullbacks.

The structure of the U.S. crude futures curve had for several months indicated expectations for tighter supply, but future-dated contracts now suggest investors think markets could be awash in oil over the coming months.

"The magnitude of recent selling is strongly suggesting that global oil demand is weaker than expected as a result of tariff issues, especially between the U.S. and China," said Jim Ritterbusch, president of Ritterbusch & Associates. 

There has been an exodus among speculators as well. In the last two weeks, net bullish bets on oil have declined to the lowest level in over a year. Selling notably accelerated on Thursday after U.S. West Texas Intermediate crude futures fell below $65 a barrel, a level that had stood firm in previous selloffs during the summer and fall. 

The oil market ran higher in anticipation of this week's formal re-imposition of sanctions against Iran by the United States, and on concerns that supply from producers like Saudi Arabia would not be able to make up the difference.

However, the U.S. government said on Friday it will temporarily allow several countries including South Korea and Turkey to keep importing Iranian oil when U.S. sanctions come back into force on Monday, sparing them for now from the threat of U.S. economic penalties.

Still, some analysts believe the current selloff has come too far, too quickly. Major OPEC producers won't be able to add more supply should it become necessary, particularly with production in Iran, Venezuela and Libya still at risk. 

"A loss of 1 million bpd from Iran, further declines in Venezuela, coupled together with geopolitical disruption in Libya and Nigeria could easily wipe out what little spare capacity we have left," Bernstein analysts said this week. 

Output from the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, rose to levels not seen in two years. U.S. production hit a record 11.3 million barrels a day in August, and Russia's output rose to 11.4 million bpd, a post-Soviet era peak. 

For U.S. crude, the key area to watch is between $64.45 and $64.80, where prices had found support in the past, said Fawad Razaqzada, analyst at futures brokerage Forex.com. If oil dips below this point, "the path of least resistance would be to the downside," he said.

For Brent, Razaqzada is watching the range between $69.50 and $69.60 a barrel, and if it were to slip below that, we could see a much larger correction, he said. 

(Reporting By David Gaffen and Devika Krishna Kumar in New York; Editing by Andrea Ricci)

Friday, November 2, 2018

Finance Companies Express Interest in Port Harcourt Refinery


https://www.petroleumafrica.com/finance-companies-express-interest-in-port-harcourt-refinery/

NNPC, Nigeria’s state-owned oil company, revealed that a number of the finance companies it has approached to modernize the country’s refineries have expressed interest in the modernization of the Port Harcourt refinery.

“About three finance companies have expressed interest in the Port Harcourt refinery,” said a NNPC statement signed by NduUghamadu, Group General Manager, Group Public Affairs Division.

The official assured that according to the schedule set by the Ministry of Petroleum, the refineries will be fully operational by 2019 and will add their production capacity to that of the Dangote refinery that is currently under construction. The modernization of its refineries, along with the addition of the Dangote refinery, will bring the West African nation one step closer if not to the final step to the end of costly petroleum product imports.

The combined capacity of the Kaduna, Warri and Port Harcourt refineries is currently 445,000 bpd. The goal of the Nigerian government is to increase this production capacity.

Thursday, November 1, 2018

Trump will reportedly allow India and South Korea to keep buying sanctioned Iranian oil

 
Indian Prime Minister Narendra Modi and U.S. President Trump hold a joint news conferences at the White House. Kevin Lamarque/Reuters


https://www.cnbc.com/2018/11/01/trump-near-deals-with-india-south-korea-on-iran-oil-imports-reports.html
  • The Trump administration has agreed to allow India and South Korea to continue buying some Iranian crude, according to reports.
  • Washington is threatening sanctions against countries that continue importing oil from Iran after a deadline on Nov. 4.
  • Without waivers to continue purchasing Iranian oil after the deadline, foreign firms face the risk of being locked out of the U.S. market.
The United States is poised to grant waivers to India and South Korea that will allow the countries to continue buying oil from Iran, despite the renewal of U.S. sanctions next week, according to news reports.

The Trump administration gave oil buyers 180 days to wind down purchases of Iranian crude in May, when President Donald Trump announced he was abandoning a nuclear accord with Iran and restoring sanctions on its economy. The administration told importers to completely cut off purchases by Nov. 4, but it is widely expected to allow some countries to continue reducing purchases beyond that date.

On Thursday, the Economic Times reported that the administration will allow India to purchase 1.25 million tons of Iranian oil each month through March. A source told the English-language Indian newspaper that India and Washington have "broadly agreed on a waiver" and that "India will cut import by a third."

India, the second largest purchaser of Iranian oil, imported about 22 million tons from Iran in the 2017-2018 period, according to the paper.

High crude prices and a deteriorating Indian rupee have caused oil price inflation in the country and sparked protests over fuel costs. While Brent crude is trading at about $75, India is essentially paying double that after inflation, Fatih Birol, executive director of the International Energy Agency told CNBC this week.

The payment mechanism remains uncertain, but India is expected to continue paying for Iranian oil in euros and rupees, sources said. Iran would use rupees to pay for rice, drugs and other items, while the balance of revenues would be held in escrow until sanctions are lifted, the Economic Times reported.
Bloomberg News later reported that South Korea, in addition to India, has agreed to the outlines for a waiver with the United States. Bloomberg also reported that funds from Indian imports would go into an escrow account.

Sources told both news outlets an announcement from the administration could come in the next few days. The State Department did not immediately return a request for comment.
Several other oil importing nations are also seeking waivers.

Japan's top spokesperson for the government on Thursday said the nation had yet to receive a waiver, Reuters reported. China, Iran's biggest oil customer, has also sought a waiver, and its biggest refiners have reportedly halted imports in November until Beijing gets clarity from Washington.

U.S. sanctions have cut Iran's exports by roughly a third, with shipments shrinking to roughly 1.7 million to 1.9 million barrels per day by the end of September, according to estimates from several sources.

 

The sanctions were developed by Congress and implemented by the Obama administration, which marshaled international support for the policy in order to put pressure on Iran to negotiate restrictions on its nuclear technology program. The United States and five world powers reached a deal with Iran in 2015 that paved the way for sanctions relief the following year.

The Trump administration, hoping to secure a tougher nuclear accord and force changes to Iran's foreign policy, pulled the United States out of the accord in May over widespread international objection. The European Union is trying to preserve the nuclear deal, but the continent's multinational companies have dropped business ties with Iran under threat of U.S. sanctions.

The Obama administration allowed some foreign firms to gradually wind down their purchases from Iran so long as their home country reduced imports by 20 percent every 180 days. The Trump administration has not announced hard terms for waivers.

Wednesday, October 31, 2018

OPEC oil output rises to highest since 2016 despite Iran: Reuters survey

Saudi Aramco has embarked on a programme to develop gas fields not associated with oil production.


OPEC has boosted oil production in October to the highest since 2016, a Reuters survey found, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to U.S. sanctions. 

The 15-member Organization of the Petroleum Exporting Countries has pumped 33.31 million barrels per day this month, the survey on Wednesday found, up 390,000 bpd from September and the highest by OPEC as a group since December 2016. 

OPEC agreed in June to pump more oil after pressure from U.S. President Donald Trump to curb rising prices and make up for an expected shortfall in Iranian exports. Oil LCOc1 hit a four-year high of $86.74 a barrel on Oct. 3 but has since eased to $76 as concerns over tight supplies faded. 

“Oil producers appear to be successfully offsetting the supply outages from Iran and Venezuela,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. 

The June pact involved OPEC, Russia and other non-members returning to 100 percent compliance with output cuts that began in January 2017, after months of underproduction in Venezuela, Angola and elsewhere had pushed adherence above 160 percent. 

In October, the 12 OPEC members bound by the supply-limiting agreement lowered compliance to 107 percent as production rose, from a revised 122 percent in September, the survey found.
This is the closest OPEC has moved to 100 percent compliance since the June agreement.

UAE, LIBYA

The biggest increase has come this month from the UAE. 

Output in October rose by 200,000 bpd to 3.25 million bpd, the survey found, and could in theory rise further as the UAE says its oil-production capacity will reach 3.5 million bpd by the year-end. 

The second-largest came from Libya where production averaged 1.22 million bpd, the survey found, a rise of 170,000 bpd. Libyan output remains volatile due to unrest, raising questions about the stability of current OPEC production. 

Saudi Arabia, after opening the taps in June and then scaling back its plans to pump more, supplied 10.65 million bpd in October, more than in June and close to a record high, the survey found. 

The kingdom, OPEC’s top producer, has indicated it is concerned about potential oversupply, raising the prospect that its next production adjustment could be to rein in output. 

OPEC’s second-largest producer, Iraq, also raised output in October. 

Iraqi supply could rise further if Iraq’s new government goes ahead with a deal reached by the outgoing administration and the Kurdistan Regional Government (KRG) to resume exporting Kirkuk crude to Turkey via the KRG. 

Angola, where natural declines at oilfields curbed production in recent years, boosted supply in October due to supply from a new field, Gindungo. Output is still far below its OPEC target. 

Exclusive: Saudi arms deal may create few new U.S. jobs
 
Supply in Nigeria rose by 30,000 bpd. Like Libya, Nigeria is not part of the OPEC supply-cutting pact because it often faces unplanned outages stemming from unrest. 

Output in Kuwait edged lower, the survey found. The country had raised production in July following the OPEC deal, and kept it steady in August and September. 

Among countries with lower output, the biggest drop - 100,000 bpd - occurred in Iran. Exports fell as returning U.S. sanctions discouraged companies from buying the country’s oil, although the decline was lower than some analysts expected. 

“Iran is going to come in above expectations,” said an industry source who tracks OPEC output, referring to Iranian supply in October. 

Production also slipped further in Venezuela, where a lack of funds for the oil industry because of the country’s economic crisis is cutting refinery operations and crude exports. 

Despite these decreases, OPEC output in October has risen to the highest since December 2016, the month before the supply-cutting pact took effect, according to Reuters surveys. 

Some of the extra oil has come from Congo Republic and Equatorial Guinea, which joined OPEC in 2018 and 2017 respectively. 

Before Congo joined, OPEC had an implied production target for 2018 of 32.78 million bpd, based on cutbacks detailed in late 2016 and Nigeria and Libya’s expectations of 2018 output. 

According to the survey, OPEC excluding Congo pumped about 530,000 bpd above this implied target in October. 

The survey aims to track supply to the market and is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms. 

Additional reporting by Rania El Gamal in Dubai; Editing by Dale Hudson

Tuesday, October 30, 2018

Oil Production On Federal Lands To Hit New Record



Image: Drill Rig and American Flag
(Credit: Jessica K Robertson, USGS. Public domain.)

https://oilprice.com/Energy/Energy-General/Oil-Production-On-Federal-Lands-To-Hit-New-Record.html

Crude oil production from onshore federal lands reached a record high over the first seven months of this year, New York Times’ Eric Lipton said in a tweet responding to a claim that oil production in Wyoming had peaked three years ago.

Lipton quoted data from the Department of the Interior, which has not been made public yet, as part of an investigation he and climate reporter Hiroko Tabuchi recently published about a second shale oil boom.

The investigation cites calculations based in Interior Department data made by Taxpayers for Common Sense, which suggests over 12.8 million acres of federal land were offered for leasing to oil and gas companies in FY 2018, which ended last month. This, Lipton and Tabuchi note, is three times more than the average acreage offered for leasing during the second Obama administration.

Take-up has also been higher: leases in the same 12 months were the highest since 2012, the peak of the first shale revolution, as the Trump administration pursues its energy dominance agenda.

The figures from the first seven months of this year follow another record set last year. Reuters reported in June that crude oil production from federal lands and waters rose 7 percent in 2017 to the highest since at least 2007 if not longer. The average daily stood at 2.22 million barrels, compared with 2.07 million barrels daily a year earlier.

Washington has been doing its best to stimulate a second shale boom by rolling back Obama-era regulations that restricted drilling on federal lands. This has naturally sparked a lot of opposition, so part of the changes introduced by the Trump administration have targeted opponents to the oil and gas industry by reducing the opportunities that drilling opponents have to put the brakes on oil and gas exploration.

Earlier this year, the Interior Department approved a policy featuring provisions such as a 60-day deadline for processing proposed lease sales and cutting the protest periods to 10 days. Also, the department repealed a provision approved by the previous administration that gave other users of federal land such as hunters and anglers the power to object to a lease sale.

In addition, the public participation in some lease sale reviews was redirected to lower-level government officials, and environmental reviews of lease sales were reduced to six months with BLM officials no longer required to visit the site of the lease while they conduct the review.

By Irina Slav for Oilprice.com

PDVSA Makes Critical Bond Payment

maduro-pdvsa-1 
El presidente Nicolás Maduro

https://oilprice.com/Latest-Energy-News/World-News/PDVSA-Makes-Critical-Bond-Payment.html

Venezuela’s state oil company PDVSA has made a US$949-million payment on a bond maturing in 2020, Argus Media reports, citing sources from the financial sector. The report noted that this is PDVSA’s only bond it has not defaulted on and that the payment included both principal and interest: US$842 million in principal and US$107 million in interest.

This bond is backed by 50.1 percent of the stock of PDVSA’s U.S. business, Citgo, with the rest of the stock was offered to Russian Rosneft as backing for a US$1.5-billion oil-for-cash deal that last year sparked worry in Washington that Rosneft could come to control a sizeable portion of a U.S. company if PDVSA defaulted on these particular payments. At the time, the danger of default was seen as considerable.

The troubled Venezuelan company also has two more payments on this bond coming due next year, one a US$71-million interest installment and another US$842 million in principal payment.

It’s not clear how much longer PDVSA will be able to continue servicing the payments on this particular bond, analysts at JP Morgan, Torino Capital, and Eurasia Group told Bloomberg, which reported on the upcoming payment last week, saying that the government of Nicolas Maduro would make the payment due at the end of this month because it will want to hang onto this key asset as long as possible.

Citgo, however, itself has debts of US$3 billion, and some of it may have to be repaid. Earlier this year, Canadian gold miner Crystallex won the right to tap Citgo for compensation of US$1.4 billion for the forced nationalization of its assets by the Hugo Chavez government. Russia’s largest producer Rosneft could also claim Citgo shares, if PDVSA, which had pledged 49.9 percent in Citgo as collateral for loans from Rosneft in 2016, defaults on those loans.

By Irina Slav for Oilprice.com

Monday, October 29, 2018

After the Khashoggi Murder, Pakistan Shakes Down Weakened Saudi Prince for $6 Billion

https://img.thedailybeast.com/image/upload/c_crop,d_placeholder_euli9k,h_1440,w_2560,x_0,y_0/dpr_2.0/c_limit,w_740/fl_lossy,q_auto/v1540765695/181027-reidel-pakistan-lede_duwwf1
Pakistan’s Imran Khan rushed to support Mohammed bin Salman as the Khashoggi murder case destroyed the kingdom’s credibility—and the move paid off.

https://www.thedailybeast.com/after-the-khashoggi-murder-pakistan-shakes-down-weakened-saudi-prince-for-dollar6-billion?yptr=yahoo

Pakistan has emerged as an apparent winner from the international outcry that followed a Saudi hit team’s murder of journalist Jamal Khashoggi in Istanbul at the beginning of October. By rushing to stand by Saudi Crown Prince Mohammed bin Salman, widely accused of ordering the execution, Pakistani Prime Minister Imran Khan got a $6 billion aid package, which he desperately needs to salvage the Pakistani economy. There undoubtedly is more to the deal, including benefits for Saudi-backed terrorist groups in Pakistan.

Khan was elected in August as a populist who promised to shake up Pakistani politics and fight corruption. He was aided by the all-powerful army intelligence service, the ISI, which was determined to keep former Prime Minister Nawaz Sharif’s party from regaining power. Khan has long been a harsh critic of the United States and friendly to the Taliban.

Better known for leading his country as a cricketer than as a politician, Khan is a man in a hurry. He inherited an economy in crisis, and shortly after the election Khan traveled to Saudi Arabia looking for a bailout.

The Kingdom has been a major aid donor to Pakistan for decades, but the Saudi war in Yemen has strained relations. Nawaz Sharif turned down Mohammed bin Salman’s repeated requests for Pakistani troops to help pursue the war against the Houthis in Yemen. Sharif took the Saudi request to the Pakistani parliament, which unanimously voted against sending troops—a stunning rebuke to Riyadh and the crown prince. Without Pakistani armor the war quickly became a stalemate and an expensive quagmire for Saudi Arabia. It costs at least $50 billion a year and has created one of the world’s worst humanitarian crises.

“Since the deal was signed, the Pakistani government has removed from a list of proscribed groups two organizations headed by Hafez Saeed – the mastermind of the Mumbai terrorist attack.”
 
The Pakistani “no” on Yemen sent another message. For decades, Saudi Arabia had implied that if it ever needed nuclear weapons it would have access to the Pakistani nuclear arsenal, the fastest growing nuclear weapons inventory in the world. But if Pakistan would not send troops to fight the Houthis, it would surely not send the bomb. Mohammed bin Salman, widely known as MBS, had eroded the Kingdom’s deterrent with his reckless behavior in Yemen.

Imran Khan did not get a handout from his first trip in September, but he went back last week, and the Saudi crown prince is now a much-diminished figure in the wake of the Istanbul affair.

Once touted as a reformer who would transform the Kingdom, he is now condemned for the murder of Khashoggi, the humanitarian catastrophe in Yemen, a series of diplomatic gaffes, and repression at home. A much advertised investment conference in Riyadh was boycotted by most invitees from the West. The Saudi cover story changed daily.

Khan got a deal this time. In fact, he got a bigger deal from his second trip than he had asked for on his first. The Saudis provided Khan with a $3 billion balance of payments deposit at a time when Pakistan’s reserves are at a four-year low. In addition, the Saudis agreed to defer payments for oil deliveries to Pakistan for three years, which is worth at least another $3 billion. The Pakistanis are asking the United Arab Emirates, Saudi Arabia’s junior partner in Yemen, for additional aid.

Pakistani Foreign Minister Shah Qureshi has said that there are no strings attached. Asked how the deal happened, the urbane Qureshi said “by the grace of the Holy Prophet.” He was adamant that Pakistan is not changing its approach on Yemen, and since Khan’s party is a strong critic of the war, that’s probably correct. Qureshi also said that the Saudi deal has nothing to do with the ongoing criminal charges against Nawaz Sharif.

Since the deal was signed, the Pakistani government has removed from a list of proscribed groups two organizations headed by Hafiz Saeed—the mastermind of the Mumbai terrorist attack, which took place 10 years ago next month. Saeed was one of the few voices who lobbied to send Pakistani troops to fight in Yemen and he has long raised funds for his terrorist activities in the Kingdom. He also has close ties to the ISI, which trained and assisted the Mumbai killers.

The ISI also has a long record of killing journalists who write about its connections to terrorists like Saeed. He has a $10 million bounty on his head from the United States.

By his own admission, Khan was desperate to get a deal, and he played his cards wisely. He can also seek help from the Chinese and Iranians in the weeks ahead. China has made a multibillion-dollar commitment to build an economic corridor across Pakistan linking western China to the Persian Gulf with a new port at Gwadar on the Gulf of Oman. Khan has said he wants to mediate between Saudi Arabia and Iran to ease tensions in the region and reduce sectarian violence between Sunnis and Shias. Pakistan has a large Shia majority and needs to calm down the Saudi-Iranian proxy war.

The United States also needs Pakistan to help it get out of Afghanistan. Donald Trump is a reluctant warrior in Afghanistan. He agreed to stay last year against his own intuition. The Pakistanis have provided sanctuary and safe havens for the Afghan Taliban for 17 years. The ISI trains them and helps plan their military operations. The army leadership has stonewalled American generals and diplomats from three administrations seeking to end the connection to the Taliban. It’s only gotten stronger.

Pakistan is still in deep economic trouble and will probably need IMF aid. Khan played the Khashoggi backlash to his advantage in Riyadh, but it is way too soon to suggest that he has a coherent plan to make Pakistan prosperous and corruption free. For now, it is amusing to see Mister Bone Saw—MBS’ new nickname—get shaken down by a batsman.

New Houston Oil Pricing Benchmark Launches

Home4

A new oil pricing benchmark launched Monday that could make Houston the new hub for U.S. oil pricing.

The commodities trading firm Intercontinental Exchange Inc., called ICE, initiated the West Texas Intermediate pricing guide that will price oil based on volumes produced from the Permian Basin and delivered to Houston's refining and export hub.
 
The new ICE Permian WTI futures contract will price West Texas oil delivered  to Magellan Midstream Partners' large terminal in East Houston along the Houston Ship Channel.

West Texas' booming Permian Basin is producing a record volume of about 3.5 million barrels of oil a day - nearly one-third of the nation's total. With those rising volumes much more oil is headed to export destinations out of Houston and Corpus Christi.
 
With most of the nation's oil exports shipped from the Gulf Coast, ICE sees Houston as a more accurate delivery point than the current West Texas Intermediate benchmark that's delivered to Cushing, Okla. Cushing is a major storage and trading hub nicknamed the pipeline crossroads of the world.

"We're offering customers a trusted standard for WTI straight from the Permian Basin, and over time, it's one that we think could develop into a benchmark for other grades to price around."said Jeff Barbuto, vice president of oil markets at ICE.

Thursday, October 25, 2018

In change of tack, Saudi Arabia says Khashoggi's murder 'premeditated'

FILE PHOTO: Saudi dissident Jamal Khashoggi speaks at an event hosted by Middle East Monitor in London, Britain, September 29, 2018. Middle East Monitor/Handout via REUTERS 
 

Saudi Arabia's public prosecutor said on Thursday the murder of journalist Jamal Khashoggi in the kingdom's Istanbul consulate was premeditated, reversing previous official statements that the killing was unintended.

The death of Khashoggi, a Washington Post columnist and critic of de facto Saudi ruler Crown Prince Mohammed bin Salman, has sparked global outrage and mushroomed into a crisis for the world's top oil exporter and strategic ally of the West.

Saudi officials initially denied having anything to do with Khashoggi's disappearance after he entered the consulate on Oct. 2, before changing the official account to say an internal investigation suggested Khashoggi was accidentally killed in a botched operation to return him to the kingdom. 

Turkey and Western allies of Riyadh have voiced deep scepticism about Saudi explanations of the killing, with Turkish President Tayyip Erdogan dismissing Saudi efforts to blame rogue operatives and urging the kingdom to search "top to bottom" for those responsible.

On Thursday, Saudi state TV quoted the Saudi public prosecutor as saying the killing was premeditated, and that prosecutors were interrogating suspects on the basis of information provided by a joint Saudi-Turkish task force.

"Information from the Turkish side affirms that the suspects in Khashoggi's case premeditated their crime," said the statement carried by state TV.

The disclosure came a day after U.S. President Donald Trump, the kingdom's staunchest Western ally, was quoted by the Wall Street Journal as saying that Prince Mohammed, also known as MbS, bore ultimate responsibility for the operation that led to Khashoggi's death.

Two informed sources told Reuters on Thursday that CIA director Gina Haspel heard an audio recording of the killing during a fact-finding visit to Turkey this week, the first indication Ankara has shared its key investigative evidence.

A White House spokeswoman said Haspel would meet with Trump later on Thursday to brief him on the case. Representatives of the CIA declined to comment.

"We have shared with those who sought additional information some of the information and findings that the prosecutor has allowed us to share," Turkish Foreign Minister Mevlut Cavusoglu told reporters, without giving specific details.

INTELLIGENCE RESTRUCTURING

Saudi Arabia has detained 18 people and dismissed five senior government officials as part of the investigation into Khashoggi's murder. Some were members of a 15-man hit team, many of them Saudi intelligence operatives, who flew into Istanbul hours before Khashoggi's death, Turkish security sources say.

Turkish police were investigating water samples from a well at the consulate on Thursday after initially being denied access, broadcaster CNN Turk said.

King Salman, who has delegated the day-to-day running of Saudi Arabia to his son MbS, on Saturday ordered a restructuring of the general intelligence agency.

Saudi state news agency SPA said on Thursday that MbS had presided over the first meeting of a committee to carry out that restructuring and that it had come up with recommendations to improve the agency's work.

How Western allies deal with Riyadh will hinge on the extent to which they believe responsibility for Khashoggi's death lies directly with MbS and the Saudi authorities.

MbS promised on Wednesday the killers would be brought to justice, his first public comments on the matter after speaking by phone with Erdogan.

Erdogan has called Khashoggi's murder a "savage killing" and demanded Riyadh punish those responsible, no matter how highly placed. Cavusoglu said Turkey had no intention of taking the Khashoggi case to an international court but would share information if an international inquiry were launched.

DEFIANT

Saudi Arabia is the lynchpin of a U.S.-backed regional bloc against Iran but the crisis has strained Riyadh's relations with the West. Dozens of Western officials, world bankers and company executives shunned a major three-day investment conference in Riyadh this week.

But striking a defiant tone, MbS told international investors at the conference on Wednesday that the furor would not derail the kingdom's reform drive.

"We will prove to the world that the two governments (Saudi and Turkish) are cooperating to punish any criminal, any culprit and at the end justice will prevail," he said to applause.

Saudi Energy Minister Khalid Al-Falih conceded on Wednesday that the scandal had hurt the kingdom's image. But he said Saudi Arabia had signed $56 billion of deals at the conference despite the partial boycott and that it expected the United States to remain a key business partner.

"The interests that tie us are bigger than what is being weakened by the failed boycotting campaign of the conference," he told Saudi state TV.

Britain, like the United States a major weapons supplier to the kingdom, has described Riyadh's explanations for the killing as lacking credibility. France has said it will consider sanctions against Saudi Arabia if its intelligence services find Riyadh was behind Khashoggi's death.

For their part, the Trump administration and the U.S. defense industry are scrambling to save the few actual deals in a much-touted $110 billion arms package for Saudi Arabia.

(Reporting by Asma Alsharif and Tuqa Khalid in Dubai; Ali Kucukgocmen and Tulay Karadeniz in Ankara; Susan Heavey in Washington; Writing by Mark Heinrich; Editing by Nick Tattersall)

Tuesday, October 23, 2018

Big Oil Walking A Tightrope As Prices Rise


https://oilprice.com/Energy/Energy-General/Big-Oil-Walking-A-Tightrope-As-Prices-Rise.html

Supermajors have had a great year so far, and their third-quarter results, to be released over the next couple of weeks, are likely to strengthen this impression. But this does not necessarily mean that investors will reward them. Investors have become a lot more careful in the past few years, and chances are they will want to see more proof of post-crisis flexibility and strict cost discipline before stock prices reflect an increase in trust.

On the face of it, Exxon, Shell, Chevron, and their likes have everything going for them: oil prices are higher, free cash flow is coming in at higher rates, and there have even been a few discoveries, most notable among them Exxon’s 4-billion-barrel elephant off the coast of Guyana. But Big Oil still needs to be cautious.

In a recent article for 24/7 Wall Street, its senior editor Paul Ausick noted the heightened prospects of even higher oil prices after a Reuters report revealed that OPEC has been having trouble lifting production by the promised 1 million bpd. From May to September, the cartel’s combined production plus Russia’s had fallen well short of that figure because of production declines in Venezuela, Iran, and Angola, among others. These, the internal OPEC document that Reuters saw, offset some substantial output hikes from Saudi Arabia, Russia, the UAE, Iraq, and Kuwait.

What this means is that there seems to be less spare capacity than optimists believed. This, in turn, means prices are likely to climb further, despite a fresh assurance from Treasury Secretary Steven Mnuchin that traders have already factored in the U.S. sanctions against Iran. Mnuchin’s warning that Washington will insist on importers cutting Iranian crude imports by more than 20 percent most certainly has not helped rein in prices, though its effect has yet to be fully acknowledged.

For Exxon, Shell, and Chevron, as well as the rest of the Big Oil club, higher prices are not something to be too happy about. There are already warnings from economists that Brent at US$80 has dampened demand from some major consumers including India. If the international benchmark adds another few dollars, the impact on demand will be more severe, and any negative price impact on oil demand will affect the supermajors. In other words, oil prices, which boosted the industry’s earnings in the first half of the year and is more likely than not to continue boosting them in the third quarter, could push these lower if they rise enough.

Another thing investors are watching, Ausick noted in his review of Exxon and Chevron’s expected performance, is cost control. This is still big on the agenda of investors - even if Big Oil itself is slowly slipping back into the deep rut of the cycle: spending big when prices are high and cutting costs when prices drop. For now, this return to the industry norm has been very gradual—oil stocks have been underperforming oil prices consistently and companies are wary of scaring investors off—but if prices continue to be strong, risk appetite is bound to increase for both investors and companies.

Big Oil, in other words, is being tested in a context of super volatility in prices brought about by uncomfortable uncertainties surrounding the world’s spare oil production capacity and demand prospects in emerging economies where growth is slowing down. Third-quarter figures might provide some indication as to how things stood at the end of September, but the situation is so dynamic right now they might tell us nothing about the next three months.

By Irina Slav for Oilprice.com