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In oil markets, it’s back to 1998 crisis pricing

Brent oil futures may be trading at $27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s. Most are offloading their oil for below $20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets. While some crude grades typically sell at ...

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Japanese refiners prepare to keep products supply steady amid talk of Tokyo lockdown

Japanese refiners are preparing to maintain their supply of oil products and refining operations even if Tokyo imposes a citywide lockdown to combat a spike in coronavirus cases, company and industry officials said Friday. The Japanese refiners’ readiness to ensure their stable oil products supply came to light after recent remarks by Tokyo Governor Yuriko Koike about a possibility of imposing tough quarantine measures, including a lockdown, amid a sharp rise in COVID-19 cases in Tokyo. Although it remains unclear how exactly the lockdown could be enforced, Japan’s top two ...

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US oil, gas rig count drops by 47 to 766 on week amid extreme activity cutbacks

The US oil and natural gas rig count dropped by 47 to 766 on the week, according to rig data provider Enverus, as exploration and production operators continued to steeply reduce capital budgets and activity for 2020 owing to both low oil demand and plunging crude prices due to the coronavirus pandemic. The drop was the largest single-week hit since the final week of December 2015, when the rig count fell 77 to 691 while oil prices were in the mid-$30s/b and falling. Crude prices are even lower now. Around ...

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PetroChina posts 23% wider net loss in imported gas business for 2019

State-owned integrated oil and gas giant PetroChina posted a 23% increase in losses in its imported natural gas segment for 2019 on the back of expensive oil-linked contracts, which could not be offset by its downstream prices. The trading losses underscore the impact of long-term contract pricing on national oil companies, and signal lesser price pressure in 2020 as the price spread between oil-linked and Platts JKM spot prices has narrowed due to the oil price collapse. PetroChina posted a net loss of Yuan 30.7 billion ($4.3 billion) in its ...

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Italy’s Eni to cut upstream oil, gas capex over next two years

Italian oil and gas company Eni is to cut capital and operational expenditure over the next two years due to sharp drops in commodity prices, following similar moves by a number of global energy majors. Eni will reduce capex by Eur2 billion ($2.2 billion) in 2020, equivalent to 25% of what it originally planned to spend, while opex will be Eur400 million less than intended. A bigger percentage of scheduled capital expenditure is set to be dropped in 2021, to the tune of Eur2.5 billion-3 billion, or 30%-35% of what ...

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Petronas sets April crude price factor at 10-month low

State oil firm Petronas has set the price factor for Malaysian Crude Oil (MCO) for April at $5.70 per barrel, down $3.60 from the previous month, the company said on Friday. * This is the lowest monthly price factor since May * The monthly price factor is added to the average of Platts’ dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP) * Petronas changed its OSP mechanism effective January 2017, basing its benchmark price on a basket of four Malaysian crude grades ...

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The world is running out of tanks to store oil as coronavirus and price war lead to flood of crude

A fast-rising tide of crude oil — courtesy of a plunge in demand due to the global COVID-19 pandemic and an ill-timed price war between Russia and Saudi Arabia — is filling up storage tanks around the world and putting a strain on the global refining system. Soaring storage costs will leave producers no choice but to sharply slash production, analysts said. IHS Markit estimated in a Thursday report that the global oil market is headed for a first-half 2020 surplus of 1.8 billion barrels, exceeding the top end of ...

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Russia calls for new enlarged OPEC deal to tackle oil demand collapse

A new OPEC+ deal to balance oil markets might be possible if other countries join in, Kirill Dmitriev, head of Russia’s sovereign wealth fund said, adding that countries should also cooperate to cushion the economic fallout from coronavirus. A pact between the Organization of the Petroleum Exporting Countries and other producers, including Russia (known as OPEC+), to curb oil production to support prices fell apart earlier this month, sending global oil prices into a tailspin. “Joint actions by countries are needed to restore the(global) economy… They (joint actions) are also ...

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GECF Expert Commentary – How Will the New Oil Price Environment Impact the Main Oil Producers

The beginning of the new decade has seen oil prices declining sharply. The ongoing coronavirus (Covid-19) pandemic has put a lid on oil demand growth. In fact, in its latest Monthly Oil Market Report, the Organization of the Petroleum Exporting Countries (OPEC), projects oil demand growth in 2020 at 60,000 barrel per day (b/d) from 2019. This growth compares to OPEC’s 2020 demand growth projection from a couple of months ago at more than 1 million barrel per day (mb/d). The marked slowdown of demand growth, coupled with the break-up ...

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Saudi says no talks with Russia over more OPEC+ countries or joint pact

A Saudi Arabian energy ministry official said on Friday there had been no contact between the Saudi and Russian energy ministers over any increase in the number of OPEC+ countries, nor any discussion of a joint agreement to balance oil markets. The comments come after a senior Russian official said Moscow was in contact with Riyadh and a number of other countries to see if the number of OPEC+ members might increase, raising the possibility of a joint agreement to balance oil markets. Source: Reuters (Reporting by Rania El Gamal; ...

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Russia’s RDIF: New OPEC+ deal possible to address demand if others join

Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF), believes a new OPEC+ deal to balance oil markets might be possible if other nations joined it and that countries should cooperate to mitigate the economic fallout from coronavirus. “Joint actions by countries are needed to restore the(global) economy… They (joint actions) are also possible in OPEC+ (group of the Organization of Petroleum Exporting Countries and non-OPEC members) deal’s framework,” Dmitriev told Reuters in a phone interview. Russia is a leading non-OPEC member and Saudi Arabia is a key ...

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Saudi Aramco boosts European crude inventories in bid to gain market share

Saudi oil giant Saudi Aramco is moving a substantial amount of its crude to storage caverns in Rotterdam in the Netherlands and Sidi Kerir in Egypt, in line with pledges by the world’s largest exporter to supply more barrels to the market in April, shipping and trading sources said. With refinery demand severely weakened by the coronavirus pandemic, sources said Aramco was making use of its storage hubs near the world’s key refineries. This week five tankers carrying a total of 7 million barrels of crude have been placed on ...

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Swelling Middle East supply limits upside for Dubai futures

Benchmark Dubai crude futures were largely steady in mid-morning trading hours in Asia on Friday, with market participants nervously eying a mounting number of unsold April and May loading cargoes available in the spot market. “People are either storing or offering [April and May cargoes],” said a Singapore based refiner. May Dubai futures was pegged at $31.07/b at 11 am in Singapore (0300 GMT), up a few cents from $31.03/b assessed at the 0830 GMT Asian close Thursday. The May Brent/Dubai Exchange Futures for spread shrank however, as ICE Brent ...

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Oil Price War: Texas V. Saudi Arabia?

The CEO of Latigo Petroleum in Odessa, Texas has called out Saudi Arabia in the Midland Reporter-Telegram complaining that Texans are supporting the Saudis in their price war against Texas producers. The proposal is that Texans should reject the daily imports of approximately 1 million barrels per day from Saudi Arabia and, further, refuse to buy the fuel from the Saudi refinery company, Motiva. Located in Port Arthur, Motiva also employs more than 2,300 workers—most of them Texans. Those of us who witnessed the 30%-plus unemployment across Beaumont, Orange and ...

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Amid demand erosion, China likely to supply equity oil to India

A sharp fall in global crude oil demand caused by the Covid-19 pandemic may fuel further cooperation between India and China, the world’s third and second-largest oil importers respectively. Chinese oil giants are keen to offload their share of so-called equity oil to Indian refiners as the viral outbreak has squeezed demand in their home market, said two people with knowledge of the developments. The development assumes significance as state-run China National Petroleum Corp.’s (CNPC) overseas equity oil and gas production is expected to touch 100 million tonnes by 2020. ...

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