Despite plenty of bullish catalysts, oil prices are meeting resistance every time they break above $95, with traders nervous that Saudi Arabia may unwind its production cuts earlier than expected, OilPrice said. 

The expiry of November ICE Brent futures has seen backwardation between the expiring month and the December contract shoot up to a whopping $2 per barrel. At the same time, despite some very bullish news this week, ranging from wafer-thin Cushing stocks to an improving macro outlook in China, oil prices have been rangebound lately as crude remains overbought and any surge above $95 per barrel triggers resistance. With OPEC+ meeting this week on October 4, focus will now move back to Saudi Arabia and the future of its production cuts.

Oil prices are under pressure as the U.S. dollar continues to strengthen and fears of a higher-for-longer interest rate weight on demand expectations. In its latest 2023 Net Zero Roadmap, the International Energy Agency softened its stance on upstream projects, changing its 2021 wording of “no new oil and gas fields” to a more nuanced “no new long-lead-time upstream projects”. 

Setting the stage for COP28 in Dubai from November 30 to December 12, the IEA has hailed electricity as the new oil, calling on all countries to speed up the permitting and modernization of power grids. The IEA’s repeated calls on fossil fuels to peak before 2030, followed closely by global carbon dioxide emissions, have done little to stop emissions from jumping to an all-time high of 36.8 billion gigaton CO2 last year. The IEA bemoaned the slow progress seen in the hydrogen and CCUS industries, pointing out that so far it is only the solar segment and electric car sales that are growing in accordance with 2050 net-zero targets.

US shale producer Devon Energysaid it expects 2024 capital expenditure to be lower than this year due to falling production costs, aiming to maintain production levels around 650-660,000 boepd.Shale pioneer Harold Hamm has called for the end of back-and-forth energy policy coming from the White House, arguing that the Biden-era rule of not drilling on federal lands should be overturned as restricted land availability increases energy costs.

Italy’s oil majorEni landed the most exploration deals in Egypt’s recently finalized oil and gas licensing round, taking two blocks by itself and one in a consortium with BPand QatarEnergy. UK-based energy major Shellspudded a much-anticipated exploration well in the largely untapped offshore waters of Mauritania, aiming to unlock some 1 Bbbls of oil with the Panna Cotta-1 wildcat. Chevron ramps up Venezuela drilling.US oil major Chevronexpects to add 65,000 b/d of crude production in Venezuela by the end of next year, as laxer sanctions allow it to start the first major drilling campaign in the country, although sourcing drilling rigs might be a problem.