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OPEC production issues push oil prices higher

By Loriann Hicks
February 12, 2022
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Saturday February 12, 2022 / 04:50 / by Tom Kool of Oilprice.com / Header image credit: Oilprice.com


News of an “imminent” nuclear deal with Iran sent oil prices lower this week, but the reality of OPEC undersupply quickly changed sentiment and pushed prices higher on Friday.



Proshare Nigeria Pvt. ltd.Friday, February 11, 2022

Wherever you looked this week, it seemed like Iran was at the center of all the oil market news. The prospect of a breakthrough in the nuclear deal, a breakthrough that was assumed to be imminent by several participants, sent oil prices lower on the week after last week’s bull run to around $90. The fact that Iranian crude would take several months to reach the markets if a deal was struck shows that this was largely driven by sentiment. On the fundamental front, OPEC+’s underperformance is potentially flirting with 1m bpd in February, news that even led the IEA to get involved in the demand for more oil. The IEA has joined the ranks of India and other major importers, all calling on Middle Eastern exporters to bring more rough to markets.


The IEA calls on Saudi Arabia and the United Arab Emirates. The International Energy Agency (IEA) declared that Saudi Arabia and the United Arab Emirates could use their spare capacity to compensate for the ever-increasing underperformance of OPEC+, with missing volumes totaling some 800,000 bpd since the start of 2021.


The global shortage extends to diesel. Global diesel shortages have become the new talk of the town as stocks in northwestern Europe have fallen to their the lowest level since at least 2008, while Singapore’s diesel stocks also fell to multi-year lows of 8.2 million barrels.


Libya is once again approaching the edge of the abyss. Oil production prospects in Libya were uncomfortable after the east-based parliament in Tobruk named Fathi Bashagha the country’s new prime minister, unbeknownst to the other government in Tripoli, raising the risk of further infighting.


USGC’s Canadian exports continue to soar. Thanks to improvements in pipeline connectivity, Canadian oil producers exported record crude volumes from U.S. Gulf Coast terminals, hitting 300,000 bpd in December-January, about double what they were a year ago.


Qatar is no longer in the sights of the EU. With spot gas prices in Europe still trading above €70/MWh ($27/mmBtu) and Brussels looking for alternative sources of supply, the European Commission fall its 2018 survey of QP gas contract pricing (linking delivered prices to oil).


The EU admits the spike in carbon prices could be too fast. Peter Liese, the European Parliament’s chief negotiator in charge of an overhaul of the European carbon market, noted he was considering changes that would allow policymakers to intervene in carbon markets if prices rose too quickly – just as the December 22 contract is trading at the range of €100/mt.


China wants to exploit the wind and the sun of the desert. China for increase total wind and solar capacity to 1,200 GW by 2030, almost double what it is now, with the aim of becoming carbon neutral by 2060, with major investments in generation projects and network upgrading in remote areas like the Gobi Desert.


Pressure is mounting against electricity reform in Mexico. Several senior US energy officials have reached in Mexico in an attempt to halt the passage of a power sector reform that would prioritize the utility CFE over other suppliers, undermining Mexico’s renewable energy prospects.


Iran increases crude exports amid progress in talks. Iranian crude exports hit their highest level since early 2019 as talks on reviving the Iran nuclear deal enter their final stages – December and January saw outflows of around 800,000 bpd , nearly a quarter more than year-on-year.


TotalEnergies doubles down on US Solar. French oil major TotalEnergies (NYSE: TTE) bought US solar company SunPower’s (SPWR) commercial and industrial solutions business for $250 million as it seeks to expand its manufacturing operations in the United States.


European shipper warns of high transport costs in 2022. Europe’s leading shippers, including container carrier Maersk (COP:MAERSK), have warned that freight costs are likely to remain high through 2022 as COVID-related disruptions and an increase in consumer demand keep vessel availability limited.


Chinese coal prices are falling due to government interference. After rising 24% on the year, Chinese thermal coal futures fell this week to ¥835 per metric ton ($130/mt) after China’s economic planning body said it crack down on companies that inflate coal prices and pledged to do everything possible to stabilize prices.


France is betting on nuclear power as a long-term electricity champion. The French government confirmed its plans to build six new nuclear reactors worth around $60 billion over the coming decades, with President Macron saying the first of the batch would be commissioned by 2035 and could be followed by eight more centers if necessary.


US jet fuel prices climb to highest since 2014. Boosted by a global crunch in middle distillates and record diesel demand, U.S. jet fuel prices rose to $2.75 a gallon, their highest level since September 2014, despite domestic production of about 1 .5 million bpd exceeding consumption by nearly 100,000 bpd.






Credit:

The post office OPEC production issues push oil prices higher first appeared in Oilprice.com on February 11, 2022.

Proshare Nigeria Pvt. ltd.

Related News – Previous Oil Price Report

1.
Optimism over Iran nuclear deal drives oil prices down – OIR 080222

2.
Permian cold spell pushes oil prices up – OIR 040222

3.
Bullish sentiment strengthens as OPEC underperforms – OIR 010222

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ten.
Geopolitical and Production Issues Push Oil Prices Higher – OIR 070122

Proshare Nigeria Pvt. ltd.

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Proshare Nigeria Pvt. ltd.

Proshare Nigeria Pvt. ltd.

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