- Oil’s rally takes a pause amid market headwinds despite tightening supplies
- October ’23 WTI lost 35c this morning to trade around $87.19/Bbl
- Crude faces pressure after a nine-day rally; equities trade lower while the dollar’s on track for an eighth straight weekly gain
- Goldman Sachs outlined a bullish scenario where extended OPEC+ cuts could drive oil prices to $107/Bbl barrel by December 2024
- However, the bank emphasizes it is not their base case, given past responses to the 2022 energy crisis, U.S. shale activity, and the political implications of U.S. gasoline prices
- Mixed data from China showed crude imports surged by 30.9%, while overall exports and imports declined by 8.8% and 7.3% Y-o-Y
- Saudi Arabia raises crude prices in a tightening market (Bloomberg)
- Saudi Arabia raised its Arab Light crude price to Asia by 10c, marking $3.60/Bbl in October, its peak since December
- Aramco also increased prices to the US by 20c but reduced prices for Northwest Europe and the Mediterranean by 10c
- Sour crude prices surged post-Saudi cuts since July, prompting Europe to look for alternatives
- China’s oil imports surge as the nation snaps up cheap Iranian barrels (Bloomberg, Kpler)
- China's crude oil imports in August surged by 21% from July, reaching 12.5 MMBbl/d, nearing a record from June 2020
- The rise in imports is attributed to attractive pricing from Iran and Chinese refiners' restocking activities
- Oil products exports from China also saw an 11% increase to 5.89 million tons in August, marking the highest since February
- Biden admin moves to block drilling on millions of wild Alaskan acres (CNN)
- Biden administration cancels seven oil and gas leases in the Alaska Arctic National Wildlife Refuge, reversing Trump-era decisions
- The Interior Department is also proposing federal protections for 13 million acres in the NPR-A, explicitly banning new oil and gas leasing on 10.6 million of those acres
- The 2017 GOP tax bill allowed drilling in a portion of the wildlife refuge, but no development occurred; major oil companies like Chevron canceled their leases after they were suspended in 2021
- However, the 2017 tax law requires ANWR leasing, compelling the Biden administration to conduct a new lease sale by 2024, likely with stricter environmental provisions