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Crude Oil Traders Await Fed Rate Cut, Industry Sees Storage Drop

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Oil surged as the Federal Reserve moved toward a rate cut to boost the economy while tensions with Iran threatened to choke Middle East supplies.

Futures in New York closed 2.1% higher, rising for a fourth straight session. The Fed opened a two-day meeting on Tuesday where it’s expected to lower borrowing costs for the first time in more than a decade. Iran, meanwhile, appealed to France for help in the face of U.S. sanctions that have caused the OPEC member’s crude exports to plunge. read more @ https://finance.yahoo.com/

What is helping American Oil companies right now?

Iranian SANCTIONS.

Iran Crude oil in floating and onshore storage has exceeded 110 million barrels, French energy data analysts Kpler reported this week, noting the number of barrels in floating storage specifically had increased almost twofold over the last two months. Iranian oil exports have dropped in July to as low as 100,000 barrels per day (bpd) due to sanctions and rising tension with the United States and Britain, according to an industry source and tanker data, deepening global supply losses.

Venezuela SANCTIONS.

The US Treasury Department granted Chevron a three-month extension of sanctions waivers that were scheduled to expire at midnight. The decision gives Chevron and four US oil services companies permission to continue doing business with national oil company PDVSA, which has been sanctioned by the Trump administration.

extension of a waiver from sanctions will keep San Ramon, California-based Chevron’s joint venture with state-owned Petroleos de Venezuela SA running for another three months, the U.S. Treasury Department’s Office of Foreign Assets Control said in a statement Friday. The waiver, previously due to end on July 27, will now last until Oct. 25.

Oilfield service companies Schlumberger Ltd., Halliburton Co., Baker Hughes and Weatherford International Plc were also allowed to continue their work in Venezuela for three months.

The Heavy Crude from Venezuela is used for the construction of roads in the U.S and surrounding countries. with the sanction, in place, American road construction is going to get a lot more expensive.

Sanctions on Iranian and Venezuelan Crude is mostly benefiting the American Oil Companies.

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Commodities

Crude Oil Slumps – On Recession Fears And Oversupply Concerns

Amidst the declining economic growth and OPEC+’s supply cuts, oil industry braces for possible economic headwinds.

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The recent streak of oil market dips has been due to a faltering global demand for oil as a result of the trade war and oversupply concerns.

The Recession Fears
Oil prices weakened on Thursday as worries about the global economy weighed and equity markets were under pressure as uncertainty over the outlook for U.S. interest rate cuts left investors on edge. – cnbc.com

Adding to the Oversupply Concerns.
The US will sell another 10 million barrels of sour crude oil, the Department of Energy said on Wednesday in a Notice of Sale, according to S&P Global Platts. – oilprice.com

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Commodities

More Countries are turning to China for Help

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Libya NOC representatives traveled to China today to discuss China’s interest in helping to restore Libya’s oil industry that has suffered through years of civil unrest, according to the Libya Observer.

While there, the Libyan delegation met with CNPC and other companies to discuss “cooperation in Libyan exploration and development, oilfield services, and trading of Libyan crude, with parties, potentially cementing future relations through the signature of a memorandum of understanding (MoU) at their next meeting,” NOC’s statement read.

“With a more stable security environment, we could easily add between 300-400,000 barrels to daily production and grow oil revenue receipts. Our long-term strategy is to produce 2.1 million bpd by 2023. China can help us on that journey,” NOC Chairman Mustafa Sanallah said. – https://oilfieldforums.com

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