Oil market watchers have become senior macroeconomists lately, with price swings increasingly dependent on larger market sentiment, OilPrice said.
Last week’s seesawing was in large part driven by the market expecting a 100 basis point hike, sending all global crude benchmarks crashing down to double digits, however as soon as the US Federal Reserve opted for a more modest 75 bps hike, ICE Brent bounced back to $102 per barrel. Following the recent hedge fund sell-off, it seems that there is still no consensus on the main driving trend in the markets – fears of economic recession are just as strong as the feeling of immediate physical tightness, OilPrice reports.
U.S. not expecting Saudi Arabia to immediately boost oil output. Saudi Arabia, UAE hold bulk of spare capacity within OPEC. U.S. eager for more oil to ease high cost of gasoline, inflation. With President Biden’s visit to Saudi Arabia in full swing, senior US officials have confirmed that Washington is not expecting Riyadh to boost crude production immediately, lifting crude prices by $2/barrel in Friday’s trading. The United States does not expect Saudi Arabia to immediately boost oil output and awaits the outcome of an OPEC+ meeting on Aug. 3, the U.S. national security adviser said on Friday, lowering expectations as U.S. President Joe Biden visits the kingdom, Reuters reported.
Iraqi export capacity upgrades get delayed.Whilst Baghdad has been maintaining that it would expand crude export capacity by 150,000 b/d (to 3.4 million b/d in total) thanks to new infrastructure in Basrah, that goal is now postponed into Sept-Oct amidst pumping station upgrade setbacks. Iraq’s 150,000 Bpd oil export boost delayed, OilPrice said.
Iraq is experiencing delays in upgrading its oil export facilities at Basra, which also delay the planned increase in the oil export capacity of OPEC’s second-largest producer, an oil source in Iraq told Reuters on Wednesday. Iraq plans to increase crude oil export capacity at its Gulf ports to 3.45 million barrels per day (bpd) from 3.3 million bpd.
However, Iraq has seen in recent weeks delays in finalizing the tenders for the upgrade of pumping stations at the export terminals and in obtaining the approvals needed for the work, a representative from Iraq’s oil industry told Reuters. The delay in the 150,000-bpd export capacity boost comes as the world grapples with constraints in physical oil supplies despite the currently bearish sentiment on the oil market. In June, Iraq’s oil exports averaged 3.37 million bpd, per the Iraqi Oil Ministry cited by Xinhua.
The delays in the pump station upgrades mean that Iraqi state-owned Basra Oil Company (BOC) will not be able to raise exports to 3.45 million bpd in the coming weeks. “I’m not sure if BOC can meet this deadline due to the delay in the [pumping stations] project,” the Iraqi oil source told Reuters. Without the upgrade, Iraqi crude oil exports will remain at around 3.3 million bpd, the source said. In terms of production, Iraq was 75,000 bpd below its target for June, according to OPEC’s secondary sources in its Monthly Oil Market Report published on Tuesday.
The ten OPEC producers bound by the OPEC+ pact pumped 24.8 million bpd of crude oil in June, which was 1 million bpd short of the target levels. Although the 150,000-bpd Iraqi capacity boost is relatively small, any constraint in crude supply could further tighten the global oil market later this year, when the EU embargo on seaborne imports of Russian crude oil and refined products enters into force. https://oilprice.com/Latest-Energy-News/World-News/Iraqs-150000-Bpd-Oil-Export-Boost-Delayed.html
Libya’s Tripoli government said it had installed a new National Oil Corporation (NOC) chairman in the state producer’s headquarters on Thursday amid a power struggle to control a company whose revenues are the source of all state funding, Reuters reports. Tripoli government pulls off hostile takeover. The UN-backed Government of National Unity has sacked the longtime chairman of Libya’s NOC Mustafa Sanalla and replaced him with former central bank governor Farhat Bengdara, storming the oil company’s headquarters to install the new head.