Bullish pressure on crude oil markets doesn’t seem to be easing
Crude oil prices fell last week, notching their second weekly decline in the face of concern that rising interest rates could push the global economy into recession. Yet the future of crude oil still seems bullish to many. Spare capacity, or lack of it, is just one of the reasons. The global surplus of crude…
The best bet remains to bring sanctioned Iranian oil back to the market
American gasoline prices have crossed the unprecedented US$5-a-gallon mark. American Automobile Association data shows prices at the pump are up roughly 60 per cent from a year ago. And prices in Canada are already more than $2 a litre. We are seeing new record prices around the world with each passing week. And no respite…
And we can blame political meddling
The crude oil world has inched into a crisis mode. The world faces a “much bigger” energy crisis than the one in the 1970s. Fatih Birol, the executive director of the International Energy Agency (IEA), told the German daily Der Spiegel in an interview last Tuesday. The IEA, the Organization for Economic Co-operation and Development…
And the U.S. is getting ready to cave in
With crude oil fortunes on an upswing, Saudi Arabia – the world’s largest crude producer – is playing its cards very well. The crude oil markets have been transformed, with prices starting in 2022 at US$75.69 and now trading at around US$115 a barrel. That’s a gain of just over 50 per cent so far…
Despite the sanctions, Russian oil revenues are soaring
The energy pieces on the global chessboard are altering geopolitical realities, with serious consequences. China is boosting the volume of crude oil it purchases in order to increase its strategic reserves, Reuters’ Clyde Russell reported on Friday. China, the world’s largest crude importer, is buying more oil at a point when the demand-supply balance is…
A climate catastrophe seems in the making. And mitigating the impact of the Ukraine crisis won’t be easy
The Paris-based International Energy Agency is widely viewed with respect, its analyses providing a better understanding of the direction of energy markets and the issues impacting the industry. IEA is the energy watchdog of the Organization for Economic Co-operation and Development (OECD), founded by the likes of Henry Kissinger in the immediate aftermath of the…
And OPEC is in no mood to open taps to fill in any gaps created by the absence of Russian crude
The oil markets are likely to face another round of supply disruptions. Most indicators point to a bullish trend in the near future. After recently announcing the release of over 180 million barrels of crude oil from its strategic reserves (SPR) over the next six months to cool down the markets, the United States government…
Putin's war on Ukraine has changed everything
Energy security is back on the global agenda. Not long ago, energy security was almost taken for granted by all. With the emergence of new energy frontiers over the last decade and a half – including shale oil and gas and the growing emphasis on renewables in the Americas – it was felt that energy…
Full European Union ban on Russian oil could have unintended economic consequences for the West
The war in Ukraine is transforming global geopolitics and crude oil dynamics. On the geopolitical front, the United States has relentlessly rallied its allies against Russia. The Russian energy sector has still not been directly impacted by the sanctions. But the repercussions are apparent, even as the world is finding it hard to replace Russian…
How much Russian crude will be locked out and for how long?
The global oil markets are far from stable. Having entered a turbulent phase, the see-saw continues. After almost touching the US$130-a-barrel mark in early March, crude oil prices have registered a dramatic reversal, hovering around US$100 a barrel. Early last week, crude prices were on a slippery slope. With some underlining issues, markets were heading…
The relief we’re seeing from market manipulation could fade soon
Bearish sentiments continue to overshadow the crude oil markets. Despite a small spike at the tail end, prices registered a back-to-back retreat last week. Several factors are in play. The announcement of the release of 180 million barrels of crude from the United States Strategic Petroleum Reserves (SPR) over the next six months played a…
Oil headed for its biggest weekly loss in more than 10 years
Global crude oil markets are cooling. The United States’ announcement that it would release one million barrels per day (bpd) of crude from strategic reserves for six months and an expected similar announcement from other countries have helped cool the markets. The announcement followed growing questions about the real supply disruptions from Russia, reports that…
It won’t be easy because Canada lacks the infrastructure to ship oil or gas to Europe directly
With serious endeavours to reduce dependence on Russian energy supplies underway, global energy markets are faced with a real challenge: where will the oil come from to fill the emerging supply shortfall? As part of their efforts to punish Russia for its Ukraine misadventure, Western countries are trying to cut off their dependence on Russian…
Saudi Arabia is in active talks with China to price some of its oil in yuan
The United States owes a significant part of its eminence as the sole superpower to the dominance of its dollar in the global economy. This dominance is aided by the fact that the dollar is the currency of the global oil trade. Every country in the world needs U.S. dollars to buy oil. Even without…
Pushing Russia out of the global energy equation virtually impossible at this stage
The crude oil market has passed through a highly volatile week. The impact seemed to ripple all around the globe. Early last week, oil prices began approaching their highest level since 2008, generating anxiety and concern all around. Prices surged and the markets tightened further as the United States and its allies, including the United…
The world needs Russian oil. So buyers shying away from Russian crude are scrambling
Froth is enveloping global energy dynamics. Nothing is clear. Confusion prevails. Gasoline prices have already topped $2 a litre in British Columbia and other provinces, Ontario included, aren’t far behind. It’s virtually impossible to keep track of all the factors impacting energy prices. The key issue is the volume of crude oil that’s off the…
Why isn't the West reacting more strongly to Russian aggression? Energy supplies
Ukraine is under fire and United States President Joe Biden and his NATO colleagues are talking tough on the Russian invasion of the country. But their hands seem tied. Russian President Vladimir Putin, the ex-KGB man, is already emerging as the winner of the first round of the battle for Kyiv. Ukrainian President Volodymyr Zelenskyy…
Geopolitics has been behind the surging markets
Oil and politics go hand in hand. They’re virtually inseparable. Recent events once again highlight the energy world’s dynamics. Fundamental factors have played a significant role in getting crude oil prices to the current levels. Yet, none can deny that, to a great extent, geopolitics has been behind the surging markets. Recent events underline this.…
Cancelling Keystone XL and Energy East were political blunders
The United States is divided on issues stretching from racial discrimination to the environment and energy. With global crude oil supplies under pressure and prices about to touch the three-digit mark per barrel, an interesting debate has begun: Has the Biden administration, with its commitment to climate change issues, undermined the health of that country’s…
It may just be a matter of time until we’re closing in on triple-digit prices
With a winter storm gripping the United States, geopolitical tensions continuing to haunt the markets and oil-producing nations unable to meet their output targets, crude oil prices reached a seven-year peak last week. Brent crude rose US$1.71, or 1.9 per cent, to US$92.82 a barrel on Friday afternoon, having earlier touched its highest level since…
The U.S. made it clear that Russia will pay for a Ukrainian invasion. But so will other nations
The possibility of Russia invading Ukraine is the hottest geopolitical issue today. And this carries implications for the global energy balance. Growing concerns over the possible military conflict in Ukraine, resulting in disruption of natural gas supplies to Europe, is a point of deliberation in Washington and other NATO capitals. The United States has made…
Oil prices may reach triple figures later this year
Global oil markets touched a seven-year high last week before capping gains late Friday. Prices have already gone up by more than 10 per cent this year. But the signals are ominous. Continued signs of robust demand have come despite: the COVID-19 Omicron wave; growing geopolitical instability in Eastern Europe and the Middle East; the…
China is making strong strategic moves to secure its future oil needs
China – the world’s largest crude oil importer, second-largest oil consumer after the United States and the world's number 1 polluter – is increasingly leveraging its position of influence on the global energy chessboard. In a bid to tame rising oil prices last November, the United States spearheaded a co-ordinated release by major oil-consuming nations…
Oil markets breaking out of their long-term downward trend
Despite the Omicron variant of COVID-19 hitting the world badly, the Organization of Petroleum Exporting Countries and its allies in the expanded OPEC+ have confirmed the scheduled output increase of 400,000 barrels per day (bpd) for February. By now, OPEC+ countries have restarted about two-thirds of the production they halted in the early stages of…
No one has a real handle on the market and its future direction
Despite the growing call for a cap on their consumption, fossil fuels are going nowhere. They will continue to drive our energy-driven civilization for the foreseeable future. Global oil demand is on the verge of reaching its pre-pandemic levels. As a result, oil markets posted their biggest gains since at least 2016 as 2021 wound…
Lack of investment in the industry could lead to an energy crisis
Led by kingpin Saudi Arabia, oil-producing nations are gaining confidence and delivering a message: the oil era is far from over. Last week, Saudi Petroleum Minister Prince Abdulaziz bin Salman warned that global oil production could drop by a massive 30 million barrels per day (bpd) by 2030. That’s around 30 per cent of the…
Major oil-consuming nations seem to have gained some leverage in a market full of uncertainties
As 2021 winds down, oil markets face uncertainties. Omicron has begun to change crude demand perceptions. Economies – especially in Europe – are beginning to stutter, and Canada is also under pressure, with increasing restrictions in place. All this will impact crude oil consumption in the months to come. There’s no unanimity among experts on…
The current European/Asian energy crisis is a preview of what we can all expect in the years ahead
Industry and environmentalists are on a clash course. The 23rd World Petroleum Congress in Houston last week was enough to highlight the emerging trends, complexities and challenges faced by the oil and gas industry. The message from the industry was clear – a global oil scarcity is on the horizon. Underinvestment since oil prices began…
In this cat and mouse game, OPEC+ had little option but to veer off the collision course
Despite bearish crude oil market signals over the last 10 days, thanks to the Omicron COVID-19 variant and the associated possibility of demand destruction, the Organization of Petroleum Exporting Countries and its allies in the extended OPEC+ opted to veer off a collision course with consumers. They avoided a knee-jerk reaction and decided instead to…
The dip came as a new COVID-19 strain sparked fears of renewed lockdowns and demand destruction
World crude oil markets crashed on Friday by more than 10 per cent. For the first time since late September, West Texas Intermediate, the U.S. crude, tumbled below $70 a barrel, while the global benchmark, Brent, slumped to less than $75 a barrel. This crash wasn’t anticipated. The relief didn’t just come from the co-ordinated…