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Turkmenistan Pledges To Reduce Extreme Methane Emissions

Turkmenistan Pledges To Reduce Extreme Methane Emissions

Turkmenistan picked the lowest possible…

Saudis Could Extend Production Cuts Well Into 2024

Saudi Arabia may extend its voluntary oil output cuts into the first quarter or the first half of next year, Reuters cited Energy Aspects co-founder Amrita Sen as saying on Wednesday, citing oil prices that are still too high and fundamentals that are still too strong to support a reversal. 

Sen’s forecast comes as oil prices as Brent crude prices were just under $82 at 11:01 a.m. Wednesday, with West Texas Intermediate (WTI) trading down a percentage point, at around $77.5 per barrel. 

On November 26, OPEC+ will hold another ministerial meeting. Earlier in November, Saudi Arabia, the world’s largest exporter, said it would extend its 1-million-barrel-per-day voluntary production cuts until the end of this year. The Kingdom also left official selling prices for Asia unchanged for deliveries in December because of weakening refining margins, supporting Sen’s forecast. 

The Saudi decisions sent the markets down on worries of oil demand outlook, suggesting these moves highlighted Saudi uncertainty. That uncertainty was compounded when Saudi Aramco reported a 23% drop in Q3 profits on lower oil prices and lower sales, despite the fact that this, in part, resulted from voluntary output cuts. On Tuesday, oil prices made some gains following OPEC’s Monthly Oil Market Report (MOMR), which indicated that the cartel sees fundamentals as strong and that demand in the U.S. and China is not troublingly low. Oil prices were climbing upwards midday Monday, with Brent crude gaining over 1.6% after the market digested an OPEC report suggesting demand in the U.S. and China is not lowering to the point of concern

The markets were also responding to unclear indications from the U.S. Federal Reserve about a potential end to rate hikes, with various investment banks speculating on rate reductions in the next 12 months. OPEC said it expected to see Chinese crude imports reach a new annual record this year, and criticized negative market sentiment as overblown. 

By Tom Kool for Oilprice.com

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  • Mamdouh Salameh on November 15 2023 said:
    The Saudi voluntary cut is the cut that never was since Saudi Arabia wouldn’t have beeen able to produce the 1.0 million barrels a day (mbd) that were supposedly cut anyway. The reason Is Saudi production difficulties.

    If not for production difficulties, Saudi Arabia would neither have sacrificed lucrative oil export revenues at Prices higher than it’s fiscal breakeven price of 83-85 US dollar nor would have caused Aramco’s profits in the third quarter to fall by 23 percent.

    Saudi production cuts will become a permanent fixture of the global oil market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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