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Friday, October 28, 2016
Oil prices faltered in the second half of this week, on deteriorating expectations of an OPEC deal. Prices regained some ground on Thursday following EIA data showing a surprise drawdown in crude oil stocks after the market predicted an increase. Gasoline stocks also fell by more than expected. Adding a bit more buoyancy to the market were comments from OPEC officials suggesting that the cartel would be willing to cut production by 4 percent.
The markets initially took the announcement as positive news, but in what has become a familiar script from the oil cartel, the lack of details or hard commitments ultimately meant the price impact wore off. OPEC is meeting today and tomorrow to discuss the technical details of the Algiers accord, ahead of its official meeting at the end of November. Investors should take every OPEC utterance with a giant grain of salt, and wait to see what happens in a month’s time. WTI hovered slightly below $50 per barrel in early trading on Friday.
Third quarter earnings start coming in. The quarterly earnings reports started this week, with Statoil (NYSE: STO)
Exxon considers setting up trading division. The
Iraq angles for data revision, eyes higher output. Iraqi officials are not only demanding that they be exempt from any OPEC production cut, but they are also pushing the cartel and energy watchers to see its side of the story. OPEC uses data from “secondary sources” to calculate each member’s production levels, and Iraq is disputing the accuracy of that data. It is not an academic argument – Iraq does not want its production to be restrained by inaccurate production figures. Iraqi officials rolled out the red carpet for energy reporters this week, Bloomberg
Meanwhile, Iraq is also soliciting bids from international oil companies to develop 12 “small and medium-sized” oil fields, Reuters
Protests heat up in Venezuela. After Venezuelan President Nicolas Maduro cancelled a public referendum to recall him, the opposition took to the streets. Hundreds of thousands of people protested on Wednesday, and the fracas took a disturbing turn. A policeman was
Nigerian militants hit Chevron pipeline. The Niger Delta Avengers proved that they have not gone dormant, announcing the successful
Dakota Access pipeline protest turns violent. On Thursday, more than 200 police officers
GE considers merging oil unit with Baker Hughes. GE (NYSE: GE) has
By Evan Kelly of Oilprice.com
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