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commented on a stock11/22/2022 10:43

$RH PetroGas(T13.SG)$$Rex Intl(5WH.SG)$$Dyna-Mac(NO4.SG)$$Crude Oil Fu...

$RH PetroGas(T13.SG)$$Rex Intl(5WH.SG)$$Dyna-Mac(NO4.SG)$$Crude Oil Futures Main(MAR3)(CLmain.US)$
There are another 2 weeks to go for the OPEC+ meeting, but the Saudis and Russians have decided not to sit back and let the market collapse continue. In an urgent response to a Wall Street Journal story on Mon, Saudi Energy Minister Abdulaziz bin Salman denied that the alliance was working on a production hike of 500,000 bpd to announce at their Dec. 4 meeting.
If the WSJ report had been true, it would have been a hike small in barrels, yet huge in goodwill, doing wonders for Saudi-U.S. relations but, unfortunately, further hammering already free-falling crude prices.
"It is well-known that OPEC+ does not discuss any decisions ahead of the meeting," Abdulaziz said, referring to the Dec. 4 meeting.
He added: “The current cut of 2m bpd by OPEC+ continues until the end of 2023 and if there is a need to take further measures by reducing production to balance supply and demand we always remain ready to intervene."
Russian Deputy Prime Minister Alexander Novak came in with his own responses to the upcoming Dec. 5 decision by Western nations on a prospective import ban and price cap on Russian oil.
Novak reiterated Russia's stand of not selling its oil to nations that would participate in the price-cap, a plan devised by the West to limit the funding that Moscow could put in its war against Ukraine. The Russian deputy premier also said something else that helped crude prices go back into the positive for the day: in the event of an oil price cap, Russia may also reduce oil production.
Brent sank about 5% to USD82.36 earlier on Mon, its lowest since Feb, before recovering to settle at USD87.45, down 0.2% in volatlle trading. WTI, which hit a session low of USD75.30 , lowest since Jan recovered most of their losses by midday, responding to the remarks by Abdulaziz and Novak. It settled at USD79.73 a barrel, down 0.4%.
Talk of a production increase emerged after the Biden administration told a federal court judge that Saudi Crown Prince Mohammed bin Salman should have sovereign immunity from a U.S. federal lawsuit related to the brutal killing of Saudi journalist Jamal Khashoggi. The immunity decision amounted to a concession to Mohammed, bolstering his standing as the kingdom's de facto ruler after the Biden administration tried for months to isolate him.
The WSJ acknowledged in its report that it would be an unusual time for OPEC+ to consider a production increase, with global oil prices falling more than 10% since the first week of Nov itself on a rash of Covid headlines out of China.
Rising COVID-19 cases in China invited new lockdown measures in some of the country's biggest cities. It is currently struggling with its worst COVID outbreak since Apr. A report earlier this month said that several Chinese refiners asked Saudi Aramco to supply lower amounts of oil in Dec, which could point to slowing oil shipments to the country. China has also ramped up its refined fuel export quotas, potentially indicating a surplus in crude stockpiles due to waning demand.
Even so, some delegates to the OPEC+ apparently told WSJ that a production increase could take place in Dec in response to expectations that oil consumption typically rises in the winter. Oil demand is expected to increase by 1.69m bpd to 101.3m bpd by the first quarter next year, compared with the average level in 2022.

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