Oil Trading News livened up as markets continue to feel the brunt of Russian volatility.
A softer US Dollar is making oil more affordable, and the EU is seeing record high green-energy flows.
Dive into the latest oil trading news and discover how unstoppable growth and revolutionary boosts are reshaping the market for the better.
Oil Trading News: Markets Hold Steady
Higher oil prices prevailed on March 26 with a complex investor sentiment about Ukrainian attacks on Russian refinery operations.
This added to a marginally softer US dollar, and provided some upward pressure on prices.
Brent crude futures for June were down 12 cents at $86.63 a barrel at 11:59 EDT, while U.S. West Texas Intermediate (WTI) was up 13 cents at $82.08.
The June Brent contracts were down 12 cents at $85.96, which comprises of 80% of the Brent/WTI front-month futures trade volumes.
Oil trading news – Price boost
The price change comes after a boost on Monday when Brent surged 1.5% closing and WTI by 1.6%. This comes after President Vladimir Putin ordered a production cut to meet the target of its second-quarter output of 9.0 million barrels per day by OPEC+ commitments.
Russia is a key exporter in the global oil market facing problems with Ukrainian attacks on its oil infrastructure with significant shutdowns of its oil refineries, accounting 14% of its total capacity.
Oil trading news – Strong Gasoline Demand
Strong US gasoline demand supporting US prices, Jim Ritterbusch, from Ritterbusch and Associates said in a report that stressed Russian oil export constraint is impinging its gasoline availability to the world market, and to the US too.
Boost Your Portfolio: The Commodity Market’s Winning Streak in March!
Oil analysts at FGE said Russian refinery activity will shrink for a long period, expecting them to come back to full capacity only in the second half of the year.
Oil trading news – Softer US Dollar
The softer US dollar is also making oil affordable to purchasers paying for it in other currencies, escalating upward pressure on oil prices.
OPEC+ sources said no changes are expected to oil output policies at least before the June ministerial meeting.
Oil trading news – Tensions in the Red Sea
Meanwhile escalating tension in the Israel-Gaza conflict and reported attacks from Iran-backed militants in the Gulf of Aden and the Red Sea are supporting these upward forces on oil prices.
OPEC+ will stick with its current oil output policies until a full ministerial meeting in June, according to two well-placed OPEC+ sources who spoke to Reuters ahead of Monday’s ministerial meeting expected to consider proposals from oil producers around the world.
Oil trading news – Upcoming OPEC Meeting
OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, will hold a virtual Joint Ministerial Monitoring Committee (JMMC) meeting on April 3 to review market fundamentals and compliance with agreed cuts.
One of the sources, speaking on condition of anonymity, said that decisions would likely be deferred until June, predicting that the April session would be a short one.
Oil trading news – voluntary cuts
Earlier in the month, under Russian urging and backed by allies including Saudi Arabia, the OPEC+ cartel decided to continue voluntary cuts of 2.2 million barrels per day (bpd) through the second quarter to support the market.
Steady international oil prices, maintained by the Russia-Ukraine conflict and the constant threat of resource disruption, have also kept the price of Brent crude, the international benchmark, above $86 a barrel on Tuesday, up from just over $70 late last year.
Oil trading news – Tensions in the Middle East
This year, factors such as Middle Eastern conflict and attacks on Russian energy infrastructure supported oil price resilience, but fears of a global recession and increased non-OPEC+ supply ultimately capped further increases.
Those voluntary upstream cuts would end at the end of June, leaving OPEC+ with aggregate output reductions of 3.66 million bpd from earlier commitments starting in 2022 as a result of prior initiatives.
Oil trading news – Trader’s eyeing JMMC
The JMMC, meanwhile, is a panel of nine key OPEC+ countries (Saudi Arabia, Russia, the UAE and others), which issues non-binding recommendations on policy changes that are then discussed and approved by the full ministerial meetings with all member countries.
Oil trading news – Vitol bottleneck
The world’s largest energy trading company Vitol today reported that the oil products market is tightened from the diversion out of Europe to Asia of Russian crude oil and products, and from the crisis in the Red Sea which has created bottlenecks in the Suez Canal.
Crude supplies to China are rising dramatically from new imports from Russia, India and the Middle East, ‘most significantly gasoil which was previously flowing in the opposite direction to Europe,’ he added.
Oil trading news – Houthi attacks hit Red Sea trade
If rerouting and Houthi attacks in the Red Sea are not enough to concentrate oil product storage at record levels, then Vitol’s emergence as a prime mover in the liquefied natural gas and power sectors should be.
‘Global oil demand will peak in the early 2030s,’ the company now calculates, a later peak than that it suggested last January.
Meanwhile, its revenue sank to $400 billion in 2023, some 20% lower than the year before as oil and gas prices decreased after the initial energy-price spike in 2022 following the Western sanctions against Russia after it invaded Ukraine.
Oil trading news – World’s biggest oil trader
Vitol’s crude and oil-product trading, though, fell only by 1.6% in 2023 to 7.3 million barrels per day – a drop in crude volumes more than offset by an increase in gasoline and gasoil trading.
Vitol also reported that it forecasts a 1.5 million barrels per day increase in global demand for refined products for this year.
Oil trading news – Record profits
Net profits are not publicly available from Vitol, but it is estimated that the company made a record $15 billion in profits in 2022, according to its internal balance sheet.
Oil trading news – Egyptian Government repay billions
The Egyptian government has started to repay debts owed to oil and gas companies operating in Egypt, with an official statement on Tuesday revealing that up to $1.5 billion has been set aside for the service.
The statement added that the initiative, which will cover around 20% of the debt, will be spread over a number of months to clear the remainder.
Their arrears were a result of years of foreign currency shortages.
But that’s improving after last month’s flurry of economic measures, including a landmark investment deal, currency devaluation and an expansion of Egypt’s International Monetary Fund (IMF) arrangement.
One source from the industry told YNet that Egypt has informed at least one of the companies that it would start repaying between $1.5 billion and $2.5 billion of its debt as early as Tuesday.
Another industry source told Reuters that the Egyptian cabinet allocated $1.5 billion ‘for disbursing at least 20% of the dues to each company’. ‘
Some companies are expecting to receive their payments today,’ the source said.
Requests for comments from Egypt’s finance and petroleum ministries did not receive immediate responses.
As Egypt’s foreign currency supplies dwindled in the first half of this year, import bans and payment delays on government projects – all standard features of the legacy that fuel subsidies leave behind – were raised to a whole new level.
In the wake of an agreement with the UAE’s sovereign fund ADQ announced last month, Egypt said on April 22 that it has received $10 billion of $24 billion it earmarked for developing prime coastal land at Ras El Hekma on the Mediterranean.
Moreover, on March 6 Egypt clinched a $8 billion support package from the IMF (which had been expanded since the initial agreement reached last year), as well as further support pledges from the World Bank and EU.
Egypt has yet to release how much it owes the oil firms Want to learn more? Check out Heinrich Schiff’s recent research essay on this very topic at the edmonds.org website.
