Here’s the news:

·       OPEC is about to release a document showing who’s cutting what

·       Oil’s lowest in a year

·       Libya rebooting El Sharara

·       Really bearish numbers in India crude imports, lowest in four years

·       As oil sinks, Canada’s Husky Energy cuts 2019 capex by 300 million Canadian bucks

·        Exxon, Chevron, BP, Shell and Statoi… I mean Equinor… are facing increased investor pressure on climate targets

 

UPDATE 1-OPEC to release country quotas for oil output cut – document – Reuters News

20-Dec-2018 04:27:42 AM

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  • Saudi Arabia to cut by more than agreed from Jan
  • OPEC secretariat to publish quotas this week

Adds table showing country quotas, details

DUBAI, Dec 20 (Reuters) – Oil producer group OPEC plans to release a table detailing output cut quotas for its members and allies such as Russia in an effort to shore up the price of crude, OPEC’s secretary-general said in a letter seen by Reuters on Thursday.

Mohammad Barkindo said to reach the proposed cut of 1.2 million barrels per day, the effective reduction for member countries was 3.02 percent.

That is higher than the initially discussed 2.5 percent as OPEC seeks to accommodate Iran, Libya and Venezuela, which are exempt from any requirement to cut. He commended Saudi Arabia for pledging to cut to 10.2 million barrels per day from January, a deeper reduction than allocated.

Sources had initially said the Organization of the Petroleum Exporting Countries would not publish individual quotas. (Full Story)

“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo told members in the letter.

“I would urge Your Excellencies to kindly make positive announcements reinstating your countries’ commitment to implementing the agreed decisions. This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment.”

The OPEC secretariat plans to publish the table below by the end of this week, he added.

 

Adjustment based on the 175th Meeting of the OPEC Conference and the 5th OPEC and non‐OPEC Ministerial Meeting, effective as of January 2019, in thousands of barrels per day.

Source: OPEC document seen by Reuters

Reference production* Voluntary adjustment Voluntary production level
Algeria 1,057 -32 1,025
Angola 1,528 -47 1,481
Congo 325 -10 315
Ecuador 524 -16 508
Eq. Guinea 127 -4 123
Gabon 187 -6 181
Iraq 4,653 -141 4,512
Kuwait 2,809 -85 2,724
Nigeria 1,738 -53 1,685
Saudi Arabia 10,633 -322 10,331
UAE 3,168 -96 3,072
Azerbaijan 796 -20 776
Bahrain 227 -5 222
Brunei 131 -3 128
Kazakhstan 1,900 -40 1,860
Malaysia 627 -15 612
Mexico 2,017 -40 1,977
Oman 995 -25 970
Russia 11,421 -230 11,191
Sudan 74 -2 72
South Sudan 132 -3 129
Total OPEC 26,749 -812 25,937
Non-OPEC 10 18,320 -383 17,937
Total OPEC+Non-OPEC 10 45,069 -1,195 43,874

* Reference production is October 2018 except for Kuwait, Azerbaijan and Kazakhstan

 

Notes:

‐ Libya, Iran and Venezuela exempted.

‐ Kuwait based on September 2018 production level.

‐ Azerbaijan based on September 2018 production level.

‐ Kazakhstan based on November 2018 production level.

UPDATE 6-Oil slumps to lowest in a year as stock markets sink – Reuters News

20-Dec-2018 08:35:06 AM

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  • Worries over weak demand, oversupply drag on oil prices
  • S&P500 hits 15-month low, Fed less dovish than hoped
  • European shares slump to 2016 levels
  • U.S. crude may retest support at $45.94 – Reuters analyst
  • Drop in U.S. crude inventories offers some support

Updates prices in paragraphs 3-4

By Christopher Johnson

LONDON, Dec 20 (Reuters) – Oil prices fell more than 4 percent on Thursday, hitting their lowest in more than a year on worries about oversupply and the outlook for energy demand as a U.S. interest rate rise knocked stock markets.

Equities dropped worldwide after the U.S. Federal Reserve raised rates and maintained most of its guidance for additional hikes over the next two years, dashing investor hopes for a more dovish policy outlook. MKTS/GLOB

U.S. light crude oil CLc1 fell by $2.35 a barrel, or 4.9 percent, to a low of $45.82, before recovering some ground to around $46.45 by 1430 GMT.

Brent LCOc1 dropped by $2.60, or 4.5 percent, to $54.64 a barrel, its lowest since September 2017, and last traded around $55.54, down $1.70.

Both major oil futures contracts rallied sharply on Wednesday but are now at or close to their lowest levels for over 15 months, more than 30 percent below multi-year highs reached at the beginning of October.

“Oil prices are selling-off once again as market players take their cues from a rout on global stock markets,” said Stephen Brennock, analyst at London brokerage PVM Oil.

The Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed this month to curb output by 1.2 million barrels per day (bpd) in an attempt to drain tanks and boost prices. (Full Story)

But the cuts will not happen until next month, and production has been at or near record highs in the United States, Russia and Saudi Arabia.

Saudi Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market remained vulnerable to political and economic factors as well as speculation. (Full Story)

OPEC plans to release a table detailing voluntary output cut quotas for its members and allies such as Russia in an effort to shore up prices, OPEC Secretary-General Mohammad Barkindo said in a letter seen by Reuters on Thursday. (Full Story)

U.S. inventory data offered some support. EIA/S

U.S. crude inventories USOILC=ECI fell by 497,000 barrels in the week to Dec. 14, the U.S. Energy Information Administration said, smaller than the decrease of 2.4 million barrels analysts had expected.

Distillate stockpiles USOILD=ECI, which include diesel and heating oil, dropped by 4.2 million barrels, the EIA said, versus expectations of a 573,000-barrel increase.

Distillate demand rose to the highest since January 2003, which bolstered buying, particularly in heating oil futures, the market’s proxy for diesel. (Full Story)

https://fingfx.thomsonreuters.com/gfx/ce/7/2461/2460/Reuters%20global%20oil%20inventories%20balance%20201218.png

 

Libya is restarting oil production at El Sharara – sources – Reuters News

20-Dec-2018 10:04:51 AM

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TUNIS/BENGHAZI, Libya, Dec 20 (Reuters) – Libya is restarting production at the 315,000 barrel a day El Sharara oilfield, two Libyan oil sources said on Thursday.

But a third oil source said output had not yet resumed, while a spokesman for state oil firm NOC could not be reached for comment.

Libya’s Tripoli-based government said on Wednesday production at the field, located deep in south, would resume after the prime minister visited it and persuaded protesters to end a blockage.

 

UPDATE 1-India’s November crude imports mark biggest decline in nearly 4 years – Reuters News

20-Dec-2018 09:10:49 AM

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Adds milestones and details

Dec 20 (Reuters) – India’s monthly crude oil imports in November marked their biggest year-on-year decline in nearly four years, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Thursday.

The country’s November crude imports slid 11.4 percent to 17.01 million tonnes, registering their largest year-on-year percentage fall since Feb. 2015, when it tumbled 21.3 percent, the government data showed.

The fall was largely attributed to maintenance shutdowns at some Indian refineries. (Full Story)

In November, oil imports from Iran also declined to the lowest level in a year as purchases were curbed as a result of the reimposition of U.S. sanctions on Iran. (Full Story)

Meanwhile, imports of oil products declined about 7 percent and exports fell 6.8 percent, the data showed.

NOTE: The data for imports and exports is preliminary because private refiners share numbers at their discretion.

 

All figures are in millions of tonnes:

 

+ 2018 2018 2018 2018 2017 2017 2017 2017
CRUDE OIL NOV OCT SEP AUG NOV OCT SEP AUG
IMPORTS 17.01 21.11 17.92 18.64 19.19 19.03 17.64 18.11

 

REFINED PRODUCT IMPORTS:

 

+ 2018 2018 2018 2018 2017 2017 2017 2017
PRODUCTS NOV OCT SEP AUG NOV OCT SEP AUG
LPG 1.03 1.01 1.12 1.22 1.23 1.20 0.87 1.11
Petrol 0.04 0.04 0.04 0.04 0.00 0.00 0.00 0.00
Naphtha 0.18 0.18 0.16 0.15 0.12 0.23 0.18 0.17
Kerosene 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Diesel 0.01 0.01 0.00 0.00 0.02 0.00 0.00 0.01
Fuel Oil 0.05 0.05 0.06 0.08 0.09 0.12 0.06 0.04
All 2.64 2.59 2.28 2.71 2.84 3.29 2.45 3.23

 

EXPORTS:

 

+ 2018 2018 2018 2018 2017 2017 2017 2017
PRODUCTS NOV OCT SEP AUG NOV OCT SEP AUG
Petrol 1.11 1.18 1.17 0.84 1.14 1.00 1.15 1.06
Naphtha 0.66 0.56 0.76 0.68 0.75 0.85 0.64 0.63
Diesel 2.31 2.74 2.81 2.84 2.61 2.95 3.04 2.79
Fuel Oil 0.07 0.31 0.32 0.34 0.23 0.27 0.42 0.32
Jet Fuel 0.61 0.60 0.65 0.61 0.56 0.65 0.58 0.57
All 5.24 5.74 6.07 5.60 5.62 5.99 6.26 5.87

 

NOTES:

– Tables include estimated imports and exports by private refiner Reliance Industries RELI.NS.

– Totals may not tally because all items are not included in the table and numbers are rounded up or down. The numbers for previous months have been revised.

 

-COLUMN-Trump takes the 2019 outlook for commodities hostage: Russell – Reuters News

20-Dec-2018 07:00:00 AM

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Repeast earlier story for wider readership with no change to text. The opinions expressed here are those of the author, a columnist for Reuters.

By Clyde Russell

LAUNCESTON, Australia, Dec 20 (Reuters) – Forecasting the year-ahead outlook for commodities, while popular among analysts, is a bit of a mug’s game at the best of times, but the view for 2019 is made even more complicated by one volatile factor: Donald Trump.

While there are other drivers of commodity prices next year, the mercurial U.S. president looms large over the sector, and the actions of his administration will either amplify or partially nullify the established trends.

Before trying to decipher Trump’s likely actions it’s worth looking at the trends likely to move commodity markets in 2019.

Chief among these is increasing concern about slower global economic growth, with particular worries over China, the world’s second-largest economy and the biggest importer of commodities.

There are roughly two schools of thought on China, the first being that the country will have to endure lower growth and tighter credit conditions as it struggles to overcome U.S. tariffs on its exports and slower growth in other trading partners.

The second is that once again Beijing will successfully manage to open the spending taps and the subsequent raft of infrastructure and construction projects will keep commodity demand healthy and economic growth above the 6 percent level.

The second scenario would be supportive for imports, and prices, for bulk commodities such as iron ore and coal, and for industrial metals, most notably copper.

However, it’s also worth noting that much of what Beijing is likely to do is dependent on how its trade dispute with the United States unfolds.

Trump and his Chinese counterpart Xi Jinping appeared to reach some sort of detente at the recent G20 meeting in Argentina, but it’s still an open question as to whether this can morph into an agreement acceptable to both sides.

The pattern of the dispute so far has been dictated by Trump, who has alternated between ramping up rhetoric and calming it down, which does little more than create opportunities for volatility traders.

The real question to be answered is whether both China and the United States are prepared to weather the pain of an extended trade dispute.

It’s likely to be the case that the country upon which the most tariffs are imposed, in this case China, will feel the economic cost first.

But the United States will also eventually feel the fallout through higher costs of goods, rising inflation, lower consumer spending and a loss of competitiveness in industries no longer exposed to international rivals.

How these dynamics play out largely depend on Trump’s actions.

 

TRUMP’S DISTRACTIONS

The U.S. leader may come under increasing pressure from within his Republican Party to reach an accommodation with China if the economy starts to slow and the equity markets continue their recent downward trend.

Trump has staked much of his presidency’s success on delivering a strong economy with high returns for investors, and if this is challenged it may force him to seek ways to maintain economic momentum.

However, Trump is also likely to be distracted by his mounting legal difficulties and by the takeover of the House of Representatives by the Democratic Party.

The threat of legal action and further investigations into his affairs, as well as his friendliness toward Saudi Arabia and Russia, also are a major factor likely to influence crude oil.

The Trump administration effectively kicked the can on its re-imposition of sanctions against Iran over its nuclear programme down the road until April, when the import waivers granted to Tehran’s biggest customers are set to expire.

This is likely to ignite debate over whether the crude oil market will tighten if Trump does end the waivers allowing Iran to export, or whether U.S. shale output will be enough to keep the market in surplus.

The interplay between Trump, embattled Saudi Crown Prince Mohammed bin Salman and Russian strong man Vladimir Putin will also be key for the actions taken by the world’s three largest oil producers.

The trouble for analysts is that there is no way to be certain how all the factors around Trump will develop.

His legal woes may amount to little, or they may lead to his impeachment and removal from office.

Trump may reach a deal with China that ends the tariff war, or he may not and it could escalate.

He may really crack down on Iran’s oil exports, or he may not.

In some ways, commodity markets have become unwitting hostages to the man likely to be regarded as the most controversial political leader of his time.

 

UPDATE 1-Husky Energy cuts 2019 capex by C$300 mln – Reuters News

20-Dec-2018 06:54:51 AM

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Adds details on Alberta output curbs, oil price movement, production targets

Dec 20 (Reuters) – Canadian oil and gas producer Husky Energy Inc HSE.TO on Thursday cut its 2019 capital expenditure program by about 8 percent, or C$300 million, citing Alberta’s mandatory curbs on output and lower oil prices.

The company now expects 2019 capital expenditure of C$3.4 billion ($2.52 billion), lower than the C$3.7 billion it forecast at its Investor Day in May 2018.

Husky forecast average annual 2019 production to be about 300,000 barrels of oil equivalent per day (boepd). The company had estimated annual production in the range of 310,000 to 320,000 boepd for 2018. (Full Story)

Alberta earlier this month mandated temporary oil production cuts to deal with a pipeline bottleneck that has led to a glut of crude in storage and deep price discounts on Canadian crude.

Producers will be forced to cut output by 8.7 percent, or 325,000 barrels per day (bpd), until the excess crude in storage is drawn down. The cuts will then drop to 95,000 bpd until Dec. 31, 2019. [https://reut.rs/2EGg7PX]

“The company retains further flexibility to reduce capital spending, including the ability to pace development of growth projects that are currently in flight,” Husky said.

The company also cited lower crude prices, which have slumped more than 30 percent since reaching a four-year high at the beginning of October on concerns over oversupply.

Husky, which made an unsolicited formal offer in October to buy rival MEG Energy Corp MEG.TO in a deal valued at C$6.4 billion, said its 2019 forecast does not include any production associated with the proposed acquisition.

The company said it will provide a more detailed 2019 production and capital guidance update in the first quarter, following resolution of the proposed purchase of MEG.

 

UPDATE 2-Five oil majors face 2019 climate target pressure by investors – Reuters News

19-Dec-2018 03:24:58 PM

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  • Chevron, Equinor targeted alongside BP, Shell, ExxonMobil
  • Activist investors push for hard targets on emissions

Adds Chevron comment

By Jennifer Hiller and Shadia Nasralla

HOUSTON/LONDON, Dec 19 (Reuters) – U.S. and Norwegian oil majors Chevron and EquinorEQNR.OL have become the latest targets of activist investors moving to force five of the biggest oil companies to commit to fixed emissions targets and align with the Paris climate agreement.

The effort, part of a wave of climate-related proxy resolutions planned for spring 2019 annual shareholder meetings, is being led by investor groups Follow This, As You Sow and Arjuna Capital.

The Paris climate agreement, adopted by almost 200 nations in 2015, set a goal of capping temperature warming to well below 2 degrees Celsius (3.6 Fahrenheit) before the turn of the century.

The activist investors in Chevron Corp said on Wednesday they had filed annual meeting resolutions calling for the oil company to embrace greenhouse gas reductions.

They now want Chevron CVX.N to report on how it can reduce its greenhouse gas emissions to meet the Paris accord, arguing climate change presents “portfolio risks to investors,” according to a copy of the resolution reviewed by Reuters.

Chevron’s board will review the proposals and publish recommendations on how shareholders should vote on April 9, spokesman Sean Comey said by email. He added that the company is already “taking prudent, practical and cost-effective actions to address potential climate change risks.”

“We filed the first carbon asset risk resolution in 2013,” said Danielle Fugere, president of As You Sow. “There has been progress, but not enough.”

In Europe, Follow This filed a climate resolution for Equinor’s 2019 annual general meeting, mirroring its activist moves on BP BP.L and Royal Dutch ShellRDSa.AS.

A spokesman for Equinor said it was supporting the Paris climate agreement. “We have our own climate roadmap and clear goals for how to cut Co2 emission,” he said.

Following pressure from its investors, Shell made a U-turn setting out plans to introduce three-year or five-year carbon emissions targets linked to customers’ use of its fuels and affecting executive pay beginning in 2020. (Full Story)

BP BP.L and Total TOTF.PA also have set short-term targets on reducing their own carbon dioxide emissions.

When asked why Follow This has not targeted Total and Italy’s Eni ENI.MI, the group’s founder Mark van Baal said ownership thresholds make it harder to file resolutions in some countries, for example, a 1 percent hurdle in France.

This week, two other groups of Exxon Mobil CorpXOM.N investors said they would file a shareholder resolution calling on the world’s largest oil company to set targets. (Full Story)

 

 

About Crude News: I’m the Reuters oil markets correspondent in Houston, Texas. I provide updates from the news wire each morning for people interested in oil markets. It’s my job to talk to traders, brokers and analysts to follow what’s driving crude markets, particularly in the United States. I don’t ask for anything in return except for the occasional answer to a question, and I treat messages and conversations with traders as on background or off the record, meaning it’s not for attribution in a news clip. When you’re feeling generous, please reach out with tips, ideas, interesting tidbits. You can reach me by email, phone, the Eikon terminal or What’s App (cell below).

 

I also write Reuters’ daily cash crude report, which is an assessment of prices for U.S. crude grades. Please let me know if you see trades for WTI-Midland, LLS, HLS, WTI Sour, Mars, Bakken, Thunderhorse, Southern Green Canyon, MEH, P+, Bonito and Poseidon.

 

 

Collin Eaton

Energy Reporter

Reuters, Houston

collin.eaton@thomsonreuters.com

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