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Oil price: diverging forecasts on oil demand from two global giants – By Hemantha Yapa Abeywardena Source : oilfutures Data and Image: credit – IEA  IEA (2024), Annual oil demand growth, 2011-2025, IEA, Paris The Paris-based International Energy Agency, IEA, put a damper yet again on the perceived demand for oil in 2024 and 2025, in stark contrast to that of the OPEC+, the Organization of Petroleum Exporting Countries plus Russia. According to IEA’s latest report on the subject, released in June, 2024, the growth will be a fairly modest 960 kbpd – 960 thousand barrels per day in 2024; it is a drop of 100 kbpd from IEA’s own previous estimate. The IEA cites a weaker demand in China for the drop in demand in this year. China’s PMI, the key indicator that reflects the manufacturing activity, for instance, has been in decline for two successive months, even below the ...

Jun 17, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , ,
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The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! – By Hemantha Yapa Abeywardena Source: oilfutures In the ascending order of anxiety, the OPEC+ has been forced to accumulate a growing range of bad news in recent times for its decision makers to digest. In this context, the latest manufacturing data from China hardly comes as a catalyst for optimism, as far as the oil cartel is concerned. China’s manufacturing PMI, the key indicator that reflects its production activity, has fallen yet again in May, indicating a significant contraction: it has come down to 49.5 in May, from 50.4 in April; the threshold is 50% and anything below it, is a contraction in the manufacturing sector. The disappointing news from the world’s second largest economy comes in the wake of the OPEC+ holding its meeting, scheduled to be held on June 1 in person, online – ...

Jun 1, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , ,
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The release of 1 million barrels of gasoline may not make a dent in the energy prices – By Hemantha Yapa Abeywardena Source : oilfutures   With just six months to go before the presidential election in the fall, the Biden administration of the US appears to be taking the task of taming the inflation much more seriously than it did in the past few months.  In this context, the announcement made by the DoE, Department of Energy, on May 21, Tuesday, does not come as a surprise: it announced that 1 million barrels of gasoline from the NGSR, Northeast Gasoline Supply Reserve, will be sold off in time for the peak travel period between the Memorial Day and July 4; gasoline will be sold in batches of 100, 000 barrels,  each.     “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows ...

May 22, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , , , , , ,
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Cracks Appear in OPEC+ Facade as Kazakhstan Seeks Production Hike – By Hemantha Yapa Abeywardena Source : oilfutures The OPEC+ alliance is bracing itself for yet another acid test in the next few days, as Kazakhstan, a key member from the Central Asian region, said on Tuesday that it wanted to have a bigger quota in 2025, when the currents oil output cuts expire. Unless the members of the OPEC+ settle the dispute amicably, the group is going to face a potential test of unity, before the scheduled meeting on June 1, to discuss the next move; maintaining the oil production cuts, lifting it up or in the worst case scenario, increasing it further. The fact the Kazakhstan move is already in the public domain shows that there is  discord  within the OPEC+ over the existing production cuts – or any further rise to shoring up the falling oil prices. The ...

May 17, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , ,
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Stagnating Oil Prices: can OPEC+ ever provide the crucial spark? – By Hemantha Yapa Abeywardena   www.oilfutures.co.uk   Source : oilfutures The members of the OPEC+, who met virtually last week, decided to leave the production cuts unchanged, perhaps in light of stagnating oil prices.  Having failed to shore up the prices by tinkering with the supply side of the oil equation, the de facto leader of the organization, Saudi Arabia, even the raised the price of its flagship Arab Light crude for Asian buyers for the third successive time, while inadvertently leaving the loyalty of the old customers in the region on the line. Although the Kingdom had been in the habit of raising the price of oil for this particular domain in the recent past, only to bring it down a few weeks later, judging by the frequency of price rises, it may not happen very soon this time. ...

May 7, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , ,
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Drill Baby Drill! Uncle Sam’s strategy of elbowing his way to the front of energy markets – By Hemantha Yapa Abeywardena Source : oilfutures On October 6, 1973, coalition of Arab countries, comprising Egypt, Syria and Jordan launched a surprise attack on Israel that ultimately developed into a full-blown war between the Jewish state and Arabs. The war, known as Yom Kippur War or Ramadan war, inadvertently motivated the United States explore ways and means to reach a status of energy independence; the embargo, in this context, was a blessing in disguise, indeed. Exactly like what it is doing today, the US extended its ‘ironclad’ support to Israel to defend itself from the collective onslaught on the Middle Eastern battle front in 1973. It, however, came at a price – a huge price, to be more accurate. The Arab members of the OPEC, Organisation of Petroleum Exporting Countries, known as OAPEC, ...

Apr 15, 2024 Posted by In Articles, Hemantha Yapa Abeywardena Tagged , , , , , , ,
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