A reluctant Russia is expected to agree with OPEC and other producers to continue to curb global oil production, but the deal may have more caveats than initially expected by the market. The somewhat rocky road to reaching an agreement by Thursday's OPEC meeting has also exposed some cracks in the new world order of oil – where Saudi Arabia and Russia use their combined heft to influence prices and global supply. The cause of those "cracks" in the new 'R-OPEC' appears to be U.S. shale oil.
While the stock market seems to be hiccupping and frightening the bulls, the turmoil in Saudi Arabia has attracted the notice of the financial world because the agreement between Saudi Arabia and the US regarding the use of the dollar as the preferred currency for oil transactions may be coming to an end or at least about to be changed significantly. The rapprochement with China and Russia has received widespread publicity, and MBS, the Crown Prince, is bent on bringing change and progress to the Kingdom. Allowing women to drive provided that they are accompanied by a family member is revolutionary for the Middle East country. One can therefore assume that MBS is serious about his undertaking to bring the future closer and establish a new modern city in the desert.
Russia is ready to discuss an extension of a global deal between OPEC and other countries to cut oil output in Vienna on November 30, TASS news agency quoted the Energy Minister Alexander Novak as saying on Friday. The Organization of the Petroleum Exporting Countries, Russia and several other major producers cut their combined output by about 1.8 million barrels per day since January to reduce bloated inventories and boost oil prices.
A couple of months ago I had analyzed the bullish pattern that was developing on Crude Oil, when the WTI had exceeded the 200 days moving average and was about to test the crucial resistance of the trendline that joins the 2014 top with the decreasing highs of the first half of this year.
The use of oil in the road transportation sector will increase even as the sale of electric vehicles is expected to rise, according to the annual long-term outlook from OPEC. If a quarter of the world’s cars have batteries, global oil demand would reach a plateau of about 109 million barrels a day during the second half of the 2030s, the Organization of Petroleum Exporting Countries said in its annual World Oil Outlook.
Following their retracement down during the Spring, China and Industrial metals have been moving up since May. Oil has followed with a lag, and from late June, it has been rallying strongly. Again, following China and Industrial Metals by a few weeks, oil topped out late September. We believe that this is an intermediate top and that from November, at the latest, it should resume up towards year-end.
The last Newsletter ended with a suggestion that US marines might soon be setting foot in Venezuela. The fact is that America has been spending a lot of money financing the opposition in this oil-rich country and has been fomenting regime change as a matter of course. The reason for this policy is not only hate for Hugo Chavez and his successor Maduro but rather the huge oil reserves that Venezuela has, which are the largest in the entire world.
Established to manage Norway's oil revenues, the country's sovereign wealth fund surpassed the $1-trillion (1.8-trillion-euro) mark on Tuesday thanks to the recent appreciation of the world's major currencies against the US dollar and rising stock markets across the world. This amount equals nearly $189,000 (€157,000) for each of the 5.3 million people living in Norway. Established in the 1990s to manage the Norwegian state's oil revenues, the fund set the record thanks to the appreciation of the world's major currencies against the dollar and a good stock market health.
Crude Oil is showing an interesting technical pattern. The rally that has developed in the first half of September has now exceeded the 200 days moving average. Furthermore the WTI is now testing the not less important trendline that joins the 2014 top with the decreasing highs of the first half of this year. This movement is part of an accumulation that had begun form the lows of 2016 and gained strength on the progressively rising lows of the last 12 months.
BP beat analyst expectations on Tuesday, despite profits more than halving from the first three months of the year after a hefty charge from an unsuccessful project in Angola. The British oil giant is the last of the world's biggest Western oil companies to report its quarterly earnings. The British oil giant's profits were down from $1.5 billion in the first quarter of 2017 and lower than the $720 million reported over the same period in 2016. Shares of BP were more than 3.6 percent higher during morning deals on Tuesday.
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