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Oil Rallies Towards $80

Consumption oil

It was only a week ago that OPEC and Non-OPEC agreed to add 1 million barrels per day (mb/d) to the market, but it already feels like a distant memory with the oil bulls back on the march

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Brent rose more than 1 percent in early trading on Friday, and is not far off of $80 per barrel. This week saw prices gain about 10 percent compared to last week after a combination of fears of Iran production outages, disruptions in Libya and a bullish stock draw in the U.S. It was only a week ago that OPEC+ promised to add 1 million barrels per day (mb/d) to the market, but it already feels like a distant memory with the oil bulls back on the march.

U.S. dials back hardline on Iran imports. Earlier this week, a State Department official laid out what sounded like a “zero tolerance” policy for nations cutting oil imports from Iran. The official said that countries need to “zero” out their imports by November, and that it would be unlikely anyone would receive a waiver. The statement led to a spike in oil prices because the market had to dramatically revise up the assumed outage from Iran. On Thursday, a State Department official appeared to soften the line. “Our focus is to work with those countries importing Iranian crude oil to get as many of them as possible down to zero by Nov. 4,” the official said Thursday. “We are prepared to work with countries that are reducing their imports on a case-by-case basis. We are serious about our efforts to pressure Iran to change its threatening behavior.” The walking back of the “zero” imports mantra suggests the U.S. fears the fallout of pushing oil prices too high.

India tells refiners to prepare for “zero” imports from Iran. India’s oil minister advised its refiners to prepare for a “drastic reduction or zero” oil imports from Iran by November, due to the threat of U.S. sanctions. India, as a close neighbor and significant purchaser of oil from Iran, appears willing to wind down oil imports from Iran even as it does not recognize the sanctions as legitimate. India’s actions are an indication that Washington could wield far-reaching influence over Iran’s oil exports, even though much of the world is not lined up with the U.S. position.

Saudi Arabia to ramp up production to 10.8-11.0 mb/d. Saudi Arabia reportedly will ramp up oil production to 10.8 mb/d in July, perhaps as high as 11.0 mb/d. The plans come as a series of outages around the world have pushed oil prices and left the market in a deficit. The increase in production, however, could eliminate as much as 40 percent of Saudi Arabia’s spare capacity, taking available capacity down to around 1.5 mb/d, a rather small buffer. “It basically leaves us with no spare capacity, at a time when Iran isn’t the only issue,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a Bloomberg television interview. “Venezuelan production’s falling, Angola, Libya, Nigeria –there are lots and lots of issues everywhere in the world.”

Oil jumps on massive crude draw. The U.S. saw crude inventories plunge by 9.9 million barrels last week, another sign of a tightening oil market. Oil futures jumped more than 3 percent on the news.

Argentina puts in place price controls, roiling shale industry. In an effort to shield consumers from inflation and a weak currency, Argentina’s government capped the price at which oil producers can sell their oil to refiners, and also fixed the price of petrol at the pump. That means oil producers in Argentina have to sell their product at prices much lower than the international price. “Suddenly from moving in the right direction, it feels like the country is taking a step back,” Anuj Sharma, CEO of Phoenix Global Resources, told the FT. “If there’s one thing markets hate, it is uncertainty. It makes planning very difficult.”

BP to buy UK electric vehicle charging company. BP (NYSE: BP) said it plans to acquire the largest EV recharging company in the UK. BP will pay $170 million for Chargemaster, which runs 6,500 charging points in the UK. The acquisition is the latest sign that the oil majors are beginning to plan for a post-oil world, diversifying their assets as a hedge against peak oil demand.

Venezuela to restart oil upgrader. Venezuela’s PDVSA said earlier this week that its Petropiar oil upgrader, a joint venture with Chevron (NYSE: CVX), will restart after being offline for maintenance for weeks. The 210,000-bpd facility help process heavy oil into an exportable product have been under strain because of poor maintenance and bottlenecks at the country’s ports.

Libya sees internal strife, oil output hangs in the balance. The outage of Libya’s ports have knocked more than 400,000 bpd offline but the decision by General Khalifa Haftar to hand over the ports to a rival National Oil Corp. in Benghazi, as opposed to the internationally-recognized NOC in Tripoli, has opened up a new flashpoint that could keep oil sidelined for longer. The government in Tripoli is trying to line up international support to prevent oil exports from the east. The U.S., U.K., France and Italy expressed concern about the transfer to “an entity other than the legitimate National Oil Corporation,” the countries said in a joint statement.

Royal Dutch Shell exits Iraq Majnoon oil field. Royal Dutch Shell (NYSE: RDS.A) exited the Majnoon oil field in southern Iraq this week, handing over its operations to the state-run Basra Oil Co., according to Reuters. Operations are not expected to be affected at the 235,000-bpd field.

Energy stocks best performing sector in S&P 500. After being one of the worst performing sectors in the S&P 500 in 2017, energy is now one of the best. Energy stocks are set to close out the second quarter up 12 percent, the largest quarterly gain since 2011. The gains make energy the best performing sector in the S&P for the second quarter.

Minnesota greenlights Canadian oil pipeline. While Keystone XL and the Trans Mountain Expansion remain in limbo, the most likely major Canadian oil pipeline to go forward is Enbridge’s (NYSE: ENB) Line 3 Replacement. The project, which would replace an old and deteriorating pipeline, allowing it to more than double capacity, just cleared an important hurdle this week when it received a regulatory approval from Minnesota. The pipeline runs from Alberta to Minnesota and Wisconsin, allowing Canadian oil to reach refineries in the U.S. Midwest. Native American tribes who sit in the pipeline’s path have threatened massive protests similar to the Dakota Access protests from two years ago.

By Tom Kool for


68 Comments on "Oil Rallies Towards $80"

  1. Cloggie on Sun, 1st Jul 2018 3:14 am 

    And Cloggie, other than lobotomy, there is no cure for psychopathy.

    If it were up to me, Upstate New York will become one giant open air museum for applied Marxism, where the millimind types of this world can be dumped into in the best German traditions.

  2. MASTERMIND on Sun, 1st Jul 2018 6:59 am 


  3. MASTERMIND on Sun, 1st Jul 2018 7:03 am 

    Wild brawl, explosions, beatings at the Patriot Prayer rally and march.

    Anti fa chucked a grenade at the fascist!


  4. MASTERMIND on Sun, 1st Jul 2018 7:15 am 

    How many did you kill?

    No men, just fascist..

  5. JuanP on Sun, 1st Jul 2018 7:57 am 

    MM, I don’t understand why you keep posting links to all those insignificant protests and manifestations. How are they relevant? They don’t change anything at all. The USA hasnt had a relevant protest movement since the 60s and there is none in sight.

  6. JuanP on Sun, 1st Jul 2018 8:21 am 

    MM “Here is a map of all the worlds nuclear power plants..And when the global economy collapses..They will all melt down and explode 10k Hiroshima bombs worth of radiation..And every human being on earth will go extinct..”
    MM, Atmospheric nuclear tests have already released 29,000 Hiroshimas and we are still here. You should learn more about this subject before arguing about it. Your ignorance is only superseded by your arrogance!

  7. shoal on Sun, 1st Jul 2018 8:40 am 

    “2018 Is Looking Increasingly Like 2015”: Why JPMorgan Expects Even More Pain From China”

    “With the yield curve flattening, Emerging Markets sliding, China’s currency tumbling almost as fast as its equity markets, and the global economy once again on the skid, comparisons between 2018 and 2015 are becoming increasingly louder. Indeed, with the Chinese renminbi losing 3.5% against the dollar over the past two weeks alone, and a sharp 5.5% since the middle of April when the PBOC first cut its Required Reserve Ratio, indicating a new easing phase has begun, this has been a steeper depreciation in the Yuan than the surprising August 2015 devaluation.”

    “Which brings us to JPMorgan’s conclusion: if indeed both the Yuan and stocks are set to continue declining on concerns of escalating trade wars, coupled with margin limit positions being hit on institutional stock loans, it is possible that another global risk-off wave could be unleashed with China now set to become the epicenter of the next Emerging Market turmoil: In all, the combination of Chinese equity market declines and currency depreciation pressures revive memories of 2015, and this combination has the potential to unsettle risky markets. Especially if a hawkish Fed or an escalation of trade tensions put further upward pressure on the dollar. It is the combination of these market risks emanating from China that “make 2018 look even more like 2015.”

  8. peakyeast on Sun, 1st Jul 2018 8:48 am 

    @GregT: There are some indications that getting the balls cut off at least helps with the active manifestations of psychopathy.

  9. Makati1 on Sun, 1st Jul 2018 9:07 am 


    “A time lapse Map of every nuclear explosion since 1945”

    Get educated…

  10. BobInget on Sun, 1st Jul 2018 9:46 am 

    KSA can’t do it all, even if it were possible.

    India tells refiners to prepare for “zero” imports from Iran. India’s oil minister advised its refiners to prepare for a “drastic reduction or zero” oil imports from Iran by November, due to the threat of U.S. sanctions. India, as a close neighbor and significant purchaser of oil from Iran, appears willing to wind down oil imports from Iran even as it does not recognize the sanctions as legitimate. India’s actions are an indication that Washington could wield far-reaching influence over Iran’s oil exports, even though much of the world is not lined up with the U.S. position.


    Inget’s points: India, not China is driving current oil boom, here’s why;
    1) India’s consumption demands, +9% year over year.

    2) KSA simply can’t materially increase production w/o damaging historic wells.

    3) It takes 35 to 65 days for any ME oil to reach the US. Not to mention one empty tanker every 48 hours.

    4) 24 to 48 hours pipelined from Canada. In the past when Venezuela exported significant crude, one week.
    (Venezuelan exports no loger a factor)

    Bottom line, the Saudis, President Trump are not telling the truth. Nothing new there.

    Oh, Happy Canada Day Weekend.

  11. deadly on Sun, 1st Jul 2018 9:58 am 

    Why is there so much oil traded, bought and sold, stuff like that, every doggone day?

    Why? Why? Why?

    Who wants oil? Gotta be somebody.

    Who? An owl? No. You.

    And if you don’t want any, somebody does.

    Just the way it is. You would think people would be tired of using oil all of the time. Stuff gets old, but not oil consumption. Has to be a reason.

    If you want to watch Russia versus Spain battle it out in soccer, you either have to be there or view it on a television.

    That will take oil every time.

    The oil addiction remains and won’t go away.

    I have to spend many hours pulling weeds or there won’t be a thing in the garden except for weeds four and five feet tall blanketing to entire thing. It will be a disaster. Removing weeds has to be job one.

    All by hand, no gasoline powered machine to help with the pain and suffering of eliminating weeds.

    It is something that must be done. You have to eat.

    The greased wheel doesn’t squeak.

  12. BobInget on Sun, 1st Jul 2018 10:24 am 

    for Deadly;

    Pulitzer Prize- and National Book Award-winning author Richard Rhodes reveals the fascinating history behind energy transitions over time—wood to coal to oil to electricity and beyond.

    People have lived and died, businesses have prospered and failed, and nations have risen to world power and declined, all over energy challenges. Ultimately, the history of these challenges tells the story of humanity itself.

    Through an unforgettable cast of characters, Pulitzer Prize-winning author Richard Rhodes explains how wood gave way to coal and coal made room for oil, as we now turn to natural gas, nuclear power, and renewable energy. Rhodes looks back on five centuries of progress, through such influential figures as Queen Elizabeth I, King James I, Benjamin Franklin, Herman Melville, John D. Rockefeller, and Henry Ford.

    In Energy, Rhodes highlights the successes and failures that led to each breakthrough in energy production; from animal and waterpower to the steam engine, from internal-combustion to the electric motor. He addresses how we learned from such challenges, mastered their transitions, and capitalized on their opportunities. Rhodes also looks at the current energy landscape, with a focus on how wind energy is competing for dominance with cast supplies of coal and natural gas. He also addresses the specter of global warming, and a population hurtling towards ten billion by 2100.

    Human beings have confronted the problem of how to draw life from raw material since the beginning of time. Each invention, each discovery, each adaptation brought further challenges, and through such transformations, we arrived at where we are today. In Rhodes’s singular style, Energy details how this knowledge of our history can inform our way tomorrow.

  13. Go Speed Racer on Sun, 1st Jul 2018 3:45 pm 

    How many of y’all have been watching
    ‘InfoWars’ and Alex Jones?

    C’mon, I need a show of hands.

  14. Cloggie on Sun, 1st Jul 2018 3:49 pm 

    I just read the headlines

  15. Cloggie on Sun, 1st Jul 2018 3:49 pm 

    Because of Portland

  16. Go Speed Racer on Sun, 1st Jul 2018 6:14 pm 

    Hi Clogster, What happened in Portland?

  17. Anonymouse1 on Sun, 1st Jul 2018 7:05 pm 

    Put up your hand Cloggraham. You’re a long-time AJ cheerleader. CLoggen-fraud loves promoting jewish, controlled opposition frauds like that fat, medicated retard, Jones.

  18. MASTERMIND on Sun, 1st Jul 2018 7:11 pm 


    So ture..Alex Jones never criticizes his kosher owners..Just another fake used to distract the ignorant before the world collapses..

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