Extended stay in Vienna
Yesterday’s meeting for OPEC+ members was adjourned, despite a partial agreement reached between the two heavyweights of the group, Saudi Arabia and Russia. The agreement…
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Brent 1st-nearby is approaching $112/b this morning.
Concerns about Russian oil flows have been compounded by a new episode of tension in the Middle East, with attacks by Yemeni Houthi rebels on oil facilities in Saudi Arabia. There were at least 6 attacks over the weekend. One might add, almost anecdotally, that the number of active drilling wells in the US fell by 3 last week. Remember that US oil production figures have been disappointing for weeks with no increase. Finally, according to Ursa Space System estimates, China’s crude oil inventories fell to 979mb, the lowest since January 6 and well below the levels of previous years at the same time.
It is also confirmed that refining companies in India are buying oil massively from Russia at a very low price. We already talked about this last week. This should lessen the supply shock on the market, which the IEA estimated at 3mb/d in its last annual report. However, Western energy companies are announcing one after the other that they will cease their activities in Russia, which will have a significant impact on investment and maintenance of infrastructure and the services associated with these activities.