Crude oil price rise: Markets speculate low supply

Crude oil price rise on Tuesday came across with speculation that the future supply may be hit gradually, especially in the United States. At Record price, Brent crude oil went up by 20 cents at $51.86 a barrel by 0930 GMT. U.S. light crude was 15 cents higher at $47.52.

Market analyst, Fawad Razaqzada at futures brokerage said that the US crude oil stocks have been falling consistently in recent weeks.

“If the downtrend in oil inventories is maintained, then a bullish case can be made for oil, especially given the ongoing supply restrictions from OPEC and Russia,” Razaqzada added

A 13% fall has been recorded in the US commercial crude inventories from their March figures, to 466.5 million barrels.

In addition, Organization of the Petroleum Exporting Countries and non-OPEC producers including Russia have pledged to hold back around 1.8 million bpd of output between January this year and March 2018 in order to tighten supplies which would eventually lead to rising prices.

Whereas on the contrary, oil production elsewhere has been rising, blunting the impact of output cuts by OPEC and its allies.

With a record crude production in US breaking 9.5 million barrels per day (bpd), its highest since July 2015. Some analysts say that output growth may slow down as energy corporations cut a number of rigs drilling for oil. However, the rise in production has been relentless with increasing volumes from shale, significantly from the enormous Permian basin in Texas and New Mexico.

“With U.S. shale oil production proving more than resilient, the autumn period presents a lot of downside risk to oil prices,” Harry Tchilinguirian, chief oil market strategist at French bank BNP Paribas, told Reuters Global Oil Forum.

To see if the recent downward trend in US stocks continues; the weekly data on US inventories have to be tracked which starts later on Tuesday. According to a Reuters poll, U.S. crude inventories are expected to fall for the eighth week in a row and drop by 3.4 million barrels

Hans van Cleef, senior energy economist at ABN AMRO Bank NV in Amsterdam said, Another decline in US crude stocks may lead to somewhat higher prices again, though the upside may be limited – especially if U.S. crude production ticks higher again.




India to import its first US crude oil 

India is prepared to import crude oil from the United States(US) for the first time after Indian Oil Corporation (IOC) bought a cargo which will be delivered in October.

India is the third largest importer of oil, this purchase comes after Prime Minister Narendra Modi’s visit to the U.S in June when President Donald Trump expressed his readiness to export more energy sources to India.

As per Reuters, IOC’s head of finance A.K Sharma said that IOC bought 1.6 million barrels of U.S. Mars crude- a heavy, high-sulphur grade, and 400,000 barrels of Western Canadian Select that will be delivered onboard a Very Large Crude Carrier.

A tender was granted to PetroChina to sell the cargoes, and the oil is expected to be loaded off the US Gulf coast. As the local regulations favour the use of Indian flagged carriers for imports, IOC had to get special permissions from the shipping ministry to buy the cargo on a delivered basis.

After  South Korea, Japan, China, Thailand, Australia and Taiwan, India is now the latest Asian country to buy U.S. crude oil.

The U.S. could become an alternative source for the Indian Companies as Indian refiners are looking for these heavy, high-sulphur grades as feedstocks after alterations at their plants make it less demanding to prepare these type of crudes, which normally offer at a lower cost in relative to other oil types.

Bharat Petroleum Corp Ltd too has purchased a tender to buy its first ever U.S crude oil.

Sources: Reuters and News18.

OPEC raises concerns as oil prices fall on rising crude stocks

11 countries and OPEC members agreed to cut oil prices
11 countries and OPEC members agreed to cut oil prices


The Organisation of the Petroleum Exporting Countries (OPEC) issued concerns over the potential threat of the falling oil prices in the upcoming year if the member nation and outside producers do not cut back production.

The global oil prices fell with the United States increasing its crude oil stocks. As a consequence, International Brent crude futures were down 82 cents at $54.90 per barrel while U.S. West Texas Intermediate (WTI) crude oil futures were down 92 cents at $52.06 a barrel, reported Reuters.

In a monthly report, OPEC said that without cuts the 2017 overhang would reach 1.24 million bpd (barrel per day), about 300,000 bpd higher than the forecast in its previous report. In a surprising turn of events, data from the American Petroleum Institute showed U.S. crude inventories rose by 4.7 million barrels in the week to Dec. 9, compared with analysts’ expectations for a 1.6-million-barrel decline.

In an effort to end two years of oversupply and cheap oil, OPEC and 11 producing countries from outside the group agreed to cut almost 1.8 million bpd of production.


Sources: Reuters CNBC

Image source: Reuters

U.S Enforces New Visa Rules for the Iranians, Iraqis

Washington: On January 21st, The United States declared that it will add provisional changes to the US Visa Waiver Programme (VWP) for citizens of 38 foreign countries.

In a meeting, the US state department stated that, from Thursday, all the nationals of the VWP partner countries will be required to get a visa ahead of their trip to the US, if they have ever travelled to or have ever stayed in Iran, Iraq, Sudan, or Syria on or after March 1, 2011. It also added that, nationals of VWP countries, including nationals of the four above mentioned countries will no longer be regarded as eligible for the VWP programme.

However, there are some limited exceptions for those who have visited the targeted countries as correspondents of media, during government duty, administrator humanitarian work, and legal business purposes.

Sources have reported that the changes to the visa-waiver program, were passed by the U.S. Congress in December 2015. The programme however got signed into a law by the U.S. President Barack Obama only on January 21st.

According to various reports, this is the first step that the government has taken to control the terrorist attacks such as the ones that occured Paris and San Bernardino, California, last year.


Afghanistan’s Karzai heads to Qatar to discuss peace with Taliban

Afghanistan's President Hamid Karzai speaks during the opening ceremony of the third year of the Afghanistan parliament in Kabul March 6, 2013. REUTERS/Mohammad Ismail

In an effort to find a solution to the twelve year war, the Afghan President will travel to Qatar to discuss peace with the Taliban. This trip of Karzai was announced by the Afghan foreign ministry spokesman, Janan Mosazai. The announcement comes weeks after the President made a fiery speech at the arrival of the new U.S. Defense Secretary Chuck Hagel in his country accusing the U.S. of holding peace talks with the Taliban without his presence.

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