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…
U.S. "commitment" to tackle climate change crumbles in the face of climate poverty
With the possibility of co-ordinated moves by major crude-oil consuming nations, the markets took a hit last week. On Friday, oil prices were down four to six per cent. Strong demand growth and a tight leash on global supplies have driven the oil markets in recent months. New COVID-19 lockdowns in parts of the world…
Most likely course of action is a release of oil from emergency reserves
U.S. President Joe Biden must act – and act quickly – to rein in the crude oil markets. Pressure is coming from all sides, including from his Democratic Party. Last week, 11 Democratic senators, including several known for their concerns on climate change, urged Biden in a letter to act quickly. “As the United States…
It is defying oil-consuming nations to increase output, for now
A tug of war has erupted on the world oil market. Despite growing pressure from major crude-oil consuming nations, the Organization of Petroleum Exporting Countries and its allies in the expanded OPEC+ announced they would stick to their original plan by increasing output by only 400,000 barrels per day (bpd). OPEC+ members seemed to be…
Is Biden getting ready to cave in to Iran to help rein in oil prices?
Diplomatic pressure is mounting as the Organization of Petroleum Exporting Countries and allies in OPEC+ prepare to decide their next crude oil output move. Global leaders are assembling in Glasgow for the COP26 climate summit this week with considerable unease over increasing gasoline prices. The leaders seem intent on discussing ways to rein in the…
The push and pull of conflicting factions may be providing some relief to consumers
Last week ended on a calmer note for crude oil markets and major oil-producing countries. Crude oil prices fell slightly as the week ended, finally hovering a little below the recent highs. Forecasts of a warm U.S. winter put some brakes on the price rally that carried the crude markets beyond $86 a barrel early…
Movement to reduce global emissions toward net-zero is still too slow
With the United Nations climate summit in Glasgow scheduled to open on Oct. 31, global powerhouses are coming up with their annual energy outlooks earlier than the customary November. With climate issues coming to the forefront at the COP26 summit, most of these reports and analyses are meant to help world leaders make decisions. But…
Decision to open the taps and let the markets surge comes just before UN Climate Change Conference
Rapid moves with long-term ramifications are being made on the global energy chessboard. Early last week, the Organization of Petroleum Exporting Countries and its allies in OPEC+ opted to stick to their original plan and gradually open the crude oil taps. After their Oct. 4 ministerial meeting, OPEC+ said it had “reconfirmed the production adjustment…
A global energy crunch could help propel prices above US$100 a barrel
All eyes are focused on the Organization of Petroleum Exporting Countries and its allies in OPEC+ as they meet today. With crude oil prices touching US$80 a barrel and prospects of hitting US$100 this winter looming large, markets are on edge. The market trajectory is virtually impossible to delineate. A global energy crunch could help…
The bull run is on
Is Brent crude oil heading toward US$80 a barrel? If the market signals and the pundits are to be trusted, the bull run is on. Oil prices headed to a third straight week of gains on Friday. Brent futures rose 84 cents, or 1.1 per cent, to settle at US$78.09 a barrel, while U.S. West…
If OPEC forecast turns out to be correct, oil prices could go much higher
A strong message is being sent to major global oil capitals: it’s time to cool down the markets. By urging the Organization of Petroleum Exporting Countries and their allies in OPEC+ to open taps – and endeavouring to impact the markets by selling crude oil from strategic reserves – the world’s major oil consumers are…
New restrictions to fight the Delta variant will slow demand growth in the second half of 2021
Interesting moves are being made on the global energy chessboard. In an unexpected move, Saudi Arabia announced it would slash its official selling prices (OSPs) for oil exports to Asia in October. The price cut was more than expected. Saudi Aramco, the state-controlled oil giant, said in a statement on Sept. 5 that the official…
Non-fundamental factors appear to be controlling crude oil market patterns
A number of major events weighed on global oil markets throughout last week. Those factors included: Hurricane Ida; the United States Federal Reserve delaying the tapering off of its economic stimulus; the decision of the Organization of the Petroleum Exporting Countries and its allies in OPEC+ to stick to their original output increments; the rising…
Asia’s market is softening
The crude oil rally is stuttering. Having ceded some 15 per cent in prices in recent months, the rally we saw earlier this year has lost steam. Despite talk of growing demand, tightening markets, galloping prices and the call by U.S. President Joe Biden to the Organization of Petroleum Exporting Countries and their allies in…
Global markets’ overdependence on China backfires as COVID resurgence forces travel restrictions
China has been the sole driver of the global crude oil markets for years. Its growing crude thirst has, time and again, pulled the markets up. Last year, while crude markets were touching the ebb, even going into negative territory, “Chinese buyers dragged oil prices out of the doldrums single-handedly as they stocked up on…
Oil producers are facing a structural transformation in the market
The global crude oil market is undergoing a structural transformation. In its recent Monthly Energy Review, the U.S. Energy Information Administration (EIA) pointed out a sharp decline in United States energy intensity – the energy consumption per unit of gross domestic product (GDP). In crude oil terms, the contribution of each unit of energy to…
The summer driving season is upon us and Americans are hitting the road in much larger numbers than a year ago
Crude oil markets face an interesting mix of influences. While the COVID-19 Delta variant continues to affect the markets, conflicting signals seem to push oil prices in the opposite direction. Reports confirm that American oil consumption is rushing back much faster from the pandemic slump than initially predicted. The summer driving season is upon us…
Declining Chinese demand, a rising rig count in the United States and a devastating resurgence of COVID-19 in Asia all play a role
It has been a fluctuating week for the oil markets. In the immediate aftermath of the agreement within the Organization of Petroleum Exporting Countries and their allies in OPEC+, crude prices fell by a devastating seven per cent on July 19. However, with signs of demand holding despite the spread of the Delta COVID-19 variant,…
All eyes are focused on Saudi Arabia. Will it continue to single-handedly maintain stability in the markets?
Uncertainty has overtaken the crude oil markets again for several reasons. Since March, crude oil markets have mostly been ascending. But prices declined last week by a greater margin than any time in the last four-plus months. And the resurgence of COVID-19 in many parts of the world is clouding the near-term future of oil.…
U.A.E. prepares for a post-oil world, endeavouring to make the best of the oil it has before demand shrinks for good
Crude oil markets have left a confused picture and observers can’t decipher where prices will stabilize. In the immediate aftermath of the Organization of Petroleum Exporting Countries (OPEC) fiasco last week, oil prices were on a slippery slope. OPEC+ ministers halted crude oil output talks on July 5 after the United Arab Emirates rejected a…
As OPEC+ talks to increase crude oil production stall, the Saudis seem to have lost a key ally in the United Arab Emirates
Adrenalin never stops flowing in the oil business. Dull moments are rare. The emerging scenario among the Organization of Petroleum Exporting Countries and their allies in the expanded OPEC+ is no different. The group was on the verge of finalizing a deal on Thursday to increase its crude output by two million barrels per day…
But much still depends on United States-Iran nuclear talks and how OPEC+ members will react to any deal
Crude oil markets are hot. Prices are up and the US$75 line has been breached. Chatter about oil touching US$100 is getting loud and clear. Global oil consumption is getting closer to the pre-pandemic levels. The bleak clouds hanging over the crude oil horizon are beginning to dissipate. Industry eyes are again on the Organization…