It is hard to escape from the fact that nearly every single piece of news and analysis appears to be indicating that a recession is looming. Be it the Bank of England’s warning of a five-quarter-long recession drag or the lack of action from OPEC+ on oil production, the bad omens just keep on coming, OilPrice reports.
OPEC+ increases September target by a meager 100,000 b/d.Meeting to set its collective September 2022 production target, OPEC+ has agreed to the lowest monthly quota increase since 1986, at 100,000 b/d, implying that the oil group is still assessing the risks of recession to take more radical steps. OPEC promises to have more capacity for winter.Saudi Arabia and the United Arab Emirates are apparently ramping up spare production capacity to be able to deliver any significant demands in case of a winter supply crisis, seeking to soften the reputational blow following the 100,000 b/d quota hike for September.
Giant Kazakh oil field halted amidst gas leak. Crude production at Kazakhstan’s 13-billion-barrel Kashagan field was completely halted mid-week amidst fears that pipelines connecting the shallow-water platforms to the shore might be leaking, probably due to equipment corrosion.
India wants to stimulate fuel exports. Just a month after the introduction of fuel export taxes, the Indian government has halved export taxes on gasoline, jet fuel, and diesel, whilst simultaneously hiking taxation on domestically produced crude, raking in $30 per barrel of local output.
Diesel stocks indicate trouble brewing ahead.Whilst the markets at large have been focusing on rising gasoline inventories in the US, middle distillate stocks have been nearing critically low levels with this week’s data showing another 2-million-barrel decline, with total inventories more than 21 million barrels below the corresponding point in 2008.
UN head calls for taxing “grotesquely greedy” oil.UN Secretary General Antonio Guterres called governments globally to tax these excessive profits and redistribute them, saying oil companies have been making immoral profits on the backs of the poorest people. For the first time in weeks, oil futures contracts started to reflect expectations of a weak winter, with monthly spreads halving week-on-week. We are still firmly in backwardation, but it no longer seems as drastic as it had been before the summer, OilPrice said.