• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 day Schlumberger Warns Of Moderating Investment In North America
  • 1 day Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 1 day Energy Regulators Look To Guard Grid From Cyberattacks
  • 1 day Mexico Says OPEC Has Not Approached It For Deal Extension
  • 1 day New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Alt Text

Oil Prices Rise Amid Falling U.S. Rig Count

Oil prices inched higher on…

Alt Text

Why Petrol Powered Cars Aren’t Going Anywhere

Internal combustion engines are still…

Alt Text

The Geopolitical Consequences Of U.S. Oil Exports

The United States has ramped…

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

Oil Seesaws As Markets Wait For OPEC Cuts To Materialize

Oil barrels Port

As we shuffle into two weeks of lower trading volume over the holiday period, and as we await next month's production cuts to start showing up in our export data (woot woot!), oil is looking decidedly undecided today. Hark, here are five things to consider in oil markets today.

1) The chart below shows how Russian volumes into China have ramped up considerably in recent years, via both pipeline and waterborne deliveries. The chart below is based on a 12-month moving average for flows.

(Click to enlarge)

We can see in our ClipperData that much of the increase in Russian flows to China in the last two years have come from waterborne deliveries, and of Espo to teapot refiners in the northern part of the country. Saudi flows continue to hold firm, averaging just shy of 1 million bpd this year - vying with Russia and Angola to be China's leading supplier.

(Click to enlarge)

2) In a surprise announcement, Beijing has said it will not issue export quotas for independent refineries next year. Teapot refiners were granted licenses for the first time this year to export petroleum products - hot on the heels of them being allowed to import crude (rather than buying it through state-run companies).

Current quotas will expire this month, and apparently new quotas will not be issued, handing power back to China's state-run oil companies (PetroChina, Sinopec, CNOOC). The rise of teapot refineries this year has been disruptive for both Chinese domestic and export markets, contributing to a product glut in Asia which has pressured refining margins lower.

As our ClipperData illustrate below, Chinese product exports have tripled since the beginning of last year, not only disrupting the Asian market, but regularly heading as far afield as the U.S. West Coast.

(Click to enlarge)

3) The chart below shows how stock issuance by U.S. E&P companies has been completely nutty this year. As oil prices rise and bankruptcy fears dissipate, U.S. companies have sold more stock in 2016 than in the last two years combined. Related: The Oil Mystery Behind Saudi Arabia’s Production Cut

(Click to enlarge)

4) We've talked about fossil fuel subsidies here a number of times before, but the chart below from the IEA sums it up excellently. With the fall in oil prices giving petro-states the impetus to remove subsidies, global fossil fuel subsidies dropped precipitously in 2015 to $325 billion, down from almost $500 billion in the year prior.

All the while, renewable fuel subsidies continue to climb, up to $150 billion - but still half that of fossil fuels.

5) Finally, last Monday we highlighted how speculative net length would likely increase to its highest since 2014 in the following release of CFTC data, and this is exactly what we have seen, with bullish bets on WTI via futures and options increasing to 303,661 contracts.

Regardless of the level of adherence by OPEC and NOPEC on the production cut front, hedge funds are expecting a bullish price response.

(Click to enlarge)

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