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Crude oil prices gained 2% earlier today after a missile strike on a hospital in Gaza killed about 500 people.

Israel’s army and Hamas blamed each other for the attack. Oil market watchers, meanwhile, began worrying about an increased possibility of oil supply disruption from the region as the prospect of a diplomatic solution became rather remote.

The latest indication for this was the cancelation of a summit between U.S. President Joe Biden and the presidents of Egypt and Palestine, to be held in Jordan. Jordan canceled the summit on Tuesday, Reuters reported. Jordanian King Abdullah has blamed the tragedy at the Gaza hospital on Israel.

With Saudi Arabia also taking a pro-Palestine stance in its recent conversations with the U.S., the possibility for a quick end of the fighting is fading away while the possibility of greater regional involvement appears to be rising if oil prices are any indication.

"A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel-Hamas conflict expands and potentially draws in Iran directly," Commonwealth Bank of Australia analyst Vivek Dhar told Reuters.

“Clearly a widening of the conflict would bring more supply risks to a market which is already very tight,” Warren Patterson, head of commodities strategy for Dutch ING, told Bloomberg. “The most immediate supply risk likely remains around Iranian barrels.”

Bloomberg recalled Iran had earlier this week warned that the escalation of the conflict regionally was getting “inevitable”.

Meanwhile, the latest GDP data from China provided additional support for prices. The country’s economy grew faster than expected in the third quarter, booking a 4.9% annual increase and a 1.3% quarterly growth rate.

Later today, oil watchers’ attention will be focused on the EIA weekly oil inventory report after the American Petroleum Institute estimated a solid 4-million-barrel draw when analysts had expected a much more modest one of about half a million barrels.

Inflation rate stuck at 6.7% in September despite first monthly fall in food costs since 2021

Https://www.livecharts.co.uk/MarketCharts/brent.php

Good morning

At least 500 people have been killed in a bombing of a hospital in Gaza City, the Palestinian Health Ministry has claimed.

Palestinian officials have pointed the finger at Israel for the attack, but Jerusalem says the Palestinian Islamic Jihad (PIJ) group was responsible for the blast on the Al Ahli al Arabi hospital - an accusation the Islamist militant group denies.

The Israel Defence Forces (IDF) said the explosion was caused by a misfired Palestinian rocket.

Israeli Prime Minister Benjamin Netanyahu has said "barbaric terrorists" in Gaza bombed the hospital, reiterating Israel's military was not responsible.

Palestinian President Mahmoud Abbas declared three days of mourning following the explosion, and cancelled a planned meeting with US President Joe Biden.

Some 350 casualties were rushed from the blast site to Gaza City's main hospital, al Shifa, already overwhelmed with those injured from other strikes, said its director, Mohammed Abu Selmia.

Https://www.livecharts.co.uk/MarketCharts/brent.php

Lebanon Block 9 Sees No Gas Discoveries. Lebanon’s energy minister confirmed that exploratory drilling at the country’s offshore Block 9 yielded no hydrocarbon discoveries, pouring cold water on the plans of TotalEnergies (NYSE:TTE) and ENI (BIT:ENI) in the Eastern Mediterranean.

NY Rejects Majors’ Request for Higher Prices. The regulator of New York state NYPSC denied requests from oil majors BP (NYSE:BP), Equinor (NYSE:EQNR), and Orsted to renegotiate power supply contracts to include inflation and other cost increases on new wind power plants.

Kazakhstan Wants Billions from Oil Producers. Following a failed attempt to sue an international consortium managing the Kashagan oil field for $5 billion over excessive sulfur deposits, Kazakhstan’s Ecology Ministry has appealed the decision and seeks another court battle.

Shale Output to Continue Falling in the US. The US Energy Information Administration (EIA) expects US shale production from the country’s leading producing regions to decline for a third month in a row in November, falling to 9.533 million b/d from 9.604 million b/d this month.

Germany Starts Up Coal Generation for Winter. As heating season started in Germany, the country’s authorities have decided to fire up a 500 MW coal-fuelled power plant in the State of Brandenburg to cope with this winter season’s first cold snap in northern Europe.

VLCC Freight Rate Soar to Strength. Freight rates for VLCC tankers from West Africa to Europe soared to a 16-week high as the market assessed early November-loading fixtures at w75 thanks to strong demand, a sea change compared to the 19-month low w41 seen as recently as October 6.

- Qatar has been actively leveraging fears over energy security in the long run with decades-long term LNG supply deals still only covering a third of its incremental production from the North Field East and North Field South expansions.

- Once the world’s largest gas exporter dethroned by the US, Qatar is expected to regain that spot again by ramping up its LNG production capacity by 64% to 126 mtpa by 2027.

- However, up until now Qatar has only contracted 15.3 mtpa of future production out of the total 48 mtpa of total capacity, with Shell, ExxonMobil, and ENI (all minority stakeholders in the expansion project) still waiting for their respective shares.

- The Russia-Ukraine war has put the continent’s gas supply front and center to EU policy, which is why Qatar has been making inroads into infrastructure, too – it booked regasification capacity in France, Belgium, and the UK until 2050, seeking to squeeze out US LNG volumes that currently account for 43% of the European market.

Market Movers

- Canadian oil producer Tourmaline Oil (TSE:TOU) agreed to buy rival firm Bonavista Energy for $1.1 billion in cash and stock, bringing its total production to more than 600,000 boe/d.

- The world’s largest energy trader Vitol will invest around $1 billion, half of its capital expenditure this year, into its burgeoning renewable energy and electricity portfolio.

- Italy’s oil major ENI (BIT:ENI) started drilling one of the most anticipated exploration wells this year, the Orion-1X wildcat in Egypt’s part of the Eastern Mediterranean, brushing aside war risks in adjacent Gaza.

Tuesday, October 17, 2023

Whilst the reported deal between the United States and Venezuela on the relaxation of sanctions has driven Brent back below the $90 per barrel threshold, tensions in the Middle East continue to keep the oil market on tenterhooks. Now the attention is on US President Joe Biden traveling to Israel on Wednesday, a move that could either mark the launch of a full-blown offensive or, alternatively, cool tensions in the region and push oil prices lower.

US to Announce Venezuela Sanctions Deal. The White House and Venezuela’s Presidential Office are expected to announce a deal as early as Tuesday, easing US sanctions on the embattled Latin American country’s oil sector in return for freer 2024 presidential elections.

Saudi Calls for More Focus on Emissions. Speaking at the Energy Intelligence Forum in London, Saudi Aramco CEO Amin Nasser said the COP 28 climate conference should focus on cutting emissions from hydrocarbons rather than aim to cut supply of conventional energy sources.

Albemarle-Liontown Megadeal Falls Apart. US lithium miner Albemarle (NYSE:ALB) abandoned its $4.2 billion buyout bid for Australia’s Liontown Resources after Australia’s richest person Gina Rinehart raised her stake in Liontown to 19.9%, seeking to block the A$3 per share takeover.

Tinker tunnocks you make me laugh. Tiramisu in the next few days :))))

Https://www.livecharts.co.uk/MarketCharts/brent.php

Good morning all

Https://www.ig.com/en-ch/news-and-trade-ideas/ftse-100-oil-majors--bp-and-shell-shares-could-rise-as-israel-ha-231016

Saudi Arabia’s crude exports plunged to a 28-month low in August as the world’s largest crude oil exporter continued to cut its production to “stabilize” the market, data from the Joint Organizations Data Initiative (JODI) showed on Monday.

Saudi crude oil exports fell to 5.58 million barrels per day (bpd) in August, down by 428,000 bpd from July—the lowest level in 28 months, according to the latest available data in JODI, which compiles self-reported data from many countries.

The Kingdom’s crude oil exports have been steadily falling since March this year, from a high of over 7.5 million bpd in January, due to the OPEC+ cuts in which Saudi Arabia reduced production by around 500,000 bpd, and to the voluntary Saudi cut of 1 million bpd, which is now extended until the end of this year.

In August, Saudi Arabia’s crude oil production dropped by 95,000 bpd to 8.92 million bpd, the lowest in 27 months, according to the JODI data published today. The Kingdom started to implement the voluntary cut of 1 million bpd in July this year.

After extending the production reduction for a month for two consecutive months, Saudi Arabia said in September it would extend the extra cut until the end of 2023.

Earlier this month, Saudi Arabia and Russia, the key OPEC+ partners, said they are keeping their oil supply cuts in November despite the crude oil price rally in September.

Both Saudi Arabia and Russia reiterated that the ongoing oil supply cuts were aimed at keeping “stability and balance on the oil markets.”

The Saudi production cuts and the drop in its crude oil exports have been tightening the oil market in recent months. The lower supply sent prices soaring to the highest level so far this year at the end of September.

Webcast details

bp's chief executive officer (interim), Murray Auchincloss and chief financial officer (interim), Kate Thomson will host a webcast covering our results for the third quarter 2023. The results presentation will be followed by a question and answer session.

Date

Tuesday 31 October

Time

9 –10.30am GMT (approx.) / 5 – 6.30am EDT (approx.)

Crude oil prices began trading relatively flat on Monday after a hugely volatile week in which both WTI and Brent saw two significant drops before a massive rally on Friday.

In morning trade in Asia, Brent crude and West Texas Intermediate were trading at a slight loss of between 0.3% and 0.4% after soaring by some 6% on Friday in the biggest single-day rally since April. That brought the weekly gain for the U.S. benchmark to some 4%.

The latest Middle Eastern violence was one of the reasons for last week’s rally, along with a move by the U.S. Treasury to sanction two tanker operators for shipping Russian oil sold above the G7/EU price cap.

The sanction news sparked renewed concern about the security of Russian oil supply even though the Treasury repeated what it had said since the start of the sanction push—that it did not aim to curb supply.

Meanwhile, traders are waiting for the latest news from Gaza, after Israel warned the locals to move out as it prepares for the next step in its retaliation after the Hamas attacks from last weekend.

"Investors are trying to figure out the impact of the conflict while a large-scale ground assault has not begun after the 24-hour deadline that Israel first notified residents of the northern half of Gaza to flee to the south," a Nissan Securities analyst told Reuters earlier today.

“Historically, Middle East conflicts have rarely translated to a sustained rise in oil prices when they have not disrupted supply,” Han Zhong Liang, investment strategist at Standard Chartered told Bloomberg, meanwhile.

However, this time the situation seems to be different, according to Han, who also said that “there is a low risk of both direct and indirect supply disruptions.”

The biggest risk, according to analysts and other observers, appears to be a potential Iran's involvement in the violence. The country’s foreign minister warned recently that there was a risk of the conflict spreading if Israel continued on its current path.

Separately, the Iran mission to the UN warned that "If the Israeli apartheid's war crimes & genocide are not halted immediately, the situation could spiral out of control & ricochet far-reaching consequences - the responsibility of which lies with the UN, the Security Council & the states steering the Council toward a dead end."

Https://www.livecharts.co.uk/MarketCharts/brent.php

Good morning all

Gingy strongly upwards

Which is not good for the world. Plus I feel for all the people caught up in this dreadful war

Hoping that some way there will be peace

Please no abuse

Https://oilprice.com/Energy/Crude-Oil/All-Eyes-On-Iran-For-Security-Of-Oil-Supply.html

Israel preparing for 'co-ordinated offensive' in Gaza Strip - as Iran pledges co-operation with Hamas

Https://www.livecharts.co.uk/MarketCharts/brent.php

Oops should have said £6.40 per share by Christmas highly likely :)

Imho