• 3 hours U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 hours Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 hours Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 9 hours EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 11 hours Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 11 hours Aramco Says No Plans To Shelve IPO
  • 3 days Trump Passes Iran Nuclear Deal Back to Congress
  • 3 days Texas Shutters More Coal-Fired Plants
  • 3 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 3 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 3 days Chevron Quits Australian Deepwater Oil Exploration
  • 4 days Europe Braces For End Of Iran Nuclear Deal
  • 4 days Renewable Energy Startup Powering Native American Protest Camp
  • 4 days Husky Energy Set To Restart Pipeline
  • 4 days Russia, Morocco Sign String Of Energy And Military Deals
  • 4 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 4 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 4 days India Needs Help To Boost Oil Production
  • 4 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 4 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 4 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 4 days District Judge Rules Dakota Access Can Continue Operating
  • 5 days Surprise Oil Inventory Build Shocks Markets
  • 5 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 5 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 5 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 5 days Oil M&A Deals Set To Rise
  • 5 days South Sudan Tightens Oil Industry Security
  • 6 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 6 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 6 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
  • 6 days Record U.S. Crude Exports Squeeze North Sea Oil
  • 6 days Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan
  • 6 days Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says
  • 6 days Saudi Arabia Ups November Oil Exports To 7-Million Bpd
  • 6 days Niger Delta State Looks To Break Free From Oil
  • 7 days Brazilian Conglomerate To Expand Into Renewables
  • 7 days Kurdish Independence Could Spark Civil War
  • 7 days Chevron, Total Waiting In The Wings As Shell Mulls Majnoon Exit
  • 7 days The Capital Of Coal Is Looking For Other Options
Alt Text

Canada’s Pipeline Industry Takes Another Hit

Canada’s struggling oil industry has…

Alt Text

Has The Bear Market In Oil Finally Ended?

Recent data provides reasons to…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Saudis Force Russian Ural Blend To Discount In This Key Market

Saudis Force Russian Ural Blend To Discount In This Key Market

Juxtaposed with the 45th birthday of comedian Sarah Silverman, the crude complex is looking rather surly and serious today. While the OPEC meeting and Nonfarm Friday lurks (like an 800-pound gorilla) at the end of the week, a new month brings an onslaught of economic data to weigh up, kicked off overnight by Chinese manufacturing.

The official manufacturing PMI came in at 49.6, below consensus (of 49.8) and showing ongoing contraction. Its nemesis, the Caixin manufacturing number, came in slightly better than expected (48.6 vs. 48.3), but also underscoring the theme of a shrinking industrial sector. Japan’s manufacturing print was below consensus at 52.6, but showing expansion for the sixth consecutive month (let’s be glass half-full about this, folks).

Onto Europe, and the Eurozone PMI manufacturing number was in line with consensus at 52.8, aided by better-than-expected prints from Germany, Italy, and Spain – while France provided headwinds. Eurozone unemployment ticked down to 10.7%, the lowest rate since January 2012 (hark, below). The disappointment of the day thus far comes from Brazil, with its economy shrinking by a larger-than-expected 4.5% YoY for Q3, contracting 1.7% on the prior quarter…its third consecutive quarterly drop. Related: Saudi Cash Crisis Intensifies As Interbank Rates Soar

Eurozone unemployment, % (source: investing.com)

A piece in today’s Wall Street Journal addresses how Saudi Arabia has been aggressively marketing oil into European countries such as Poland and Sweden, challenging Russia’s stronghold in the region. This has caused Russia to respond by selling its oil (Urals) into Europe at almost triple the discount in October, according to OPEC’s monthly report. Saudi’s OSP (official selling price) for January into Europe and Asia is expected to be priced aggressively once again, as the battle for market share intensifies.

Related: An Unnoticed Casualty of The Commodities Price Drop

An added dimension to this battle is going to come early next year with the return of Iranian barrels. As the image at right illustrates, Iran provided 5% of EU crude imports prior to economic sanctions.

As our ClipperData illustrate below, the majority of Iranian exports currently make their way to Asia (~80%), with China being the leading recipient (40%), followed by India (14%) and Japan (12.5%). With the lifting of sanctions, we will see both a higher volume of exports from Iran, with a larger variety of destinations (think: the EU).

(Click to enlarge)

Iran crude oil exports (source: ClipperData) Related: This British Bank Is Backing The Bullish Case For Oil

Despite the dollar weakening – and the euro strengthening – on the back of stronger Euro-centric economic data, the impending API report later today and tomorrow’s weekly EIA inventory report is set to bring focus back onto a saturated US oil market, as US inventories are just shy of a record high for both total stocks and for PADD3 (the Gulf coast).

Nonetheless, as of yesterday, 49 vessels are waiting in the Gulf of Mexico to discharge just under 37 million barrels. (Normally we only see 10 million barrels waiting at any one time). So despite gasoline prices getting a boost today from a variety of refinery issues and a rally in RINs, crude is once again weighed down by oversupply concerns.

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News