Oil for a week fell by 11%
last week oil prices fell by 11%, playing out an excess of cheap Russian oil, unclaimed in the European market. At the same time, Europeans have not yet presented increased demand for alternative deliveries, which led to a decrease in prices. Such a skew can be temporary, but here it is important to take into account the weakness of the European economy, which is already beginning to influence demand.
EIA analysts in the next market report increased the forecast for world stocks and reduced the estimation of the average Brent oil price in 2023 by $ 3 For the barrel, which did not add optimism. This week, an updated view of the market will be presented by OPEC (Tuesday) and the IEA (Wednesday).
Brent futures at the end of the week have been noted at minimums since the beginning of the year. The potential for further falling looks limited, although the deterioration of forecasts from OPEC and IEA may well contribute to another surge of selling moods. The risks of reducing world production at the expense of Russia are still relevant, which can contribute to the turn when the sentiment is improved. Today is in focus There may be weekly tracking data of Bloomberg ships, which will show the results of the first sanctions week for Russian shipments.
deliveries from Russia. Active restructuring
after the entry into force of European sanctions in the media is actively covered by the difficulties that Russian suppliers faced. In Turkish straits, there is an accumulation of tankers, from which it is required to provide written confirmation about the absence of problems with the insurance coating.
according to Bloomberg, in the middle Last week, Urals prices in the moment fell below $ 44 per barrel – the level of November 2020. However, this applies only to individual sea parties, while pipeline deliveries are held at much higher prices.
until the end of the month, the situation with Russian oil cargo can remain volatile. The sea routes are rebuilt, the bureaucratic apparatus forms new rules to reduce legal risks for all parties. The first price reaction in the form of an active decline may be premature, Since an excess of cheap Russian oil can be temporary. By the end of the month, it will be possible to better evaluate how much Russian oil will remain on the market and how the Urals discount to Brent will look like.
Keystone accident. Deliveries at a pause
KEYSTONE Pipe, pumping oil from the Canadian oil province of Albert in the United States, remains closed. About 620 thousand b/s stopped acting in the United States, which creates a local deficit and can support the prices of American oil WTI. Canadian TC Energy, which controls the oil pipeline, does not call the specific terms for the resumption of work.
Book activity in the United States
The number of active drilling plants in the United States last week decreased by 2 oil and 2 gas, to 625 and 153 lips. respectively. Data in the framework of expectations, reasons for a significant reassessment of US production prospects are not observed. Last week, EIA adjusted the production assessment for the IV quarter of 2022 and full of 2023 to 12.3 million b/s and 12.34 million b/s, respectively. By December 2023, oil production in the United States may exceed 12.6 million b/s.
today EIA will publish the monthly Drilling Productivity Report, according to which it will be possible to evaluate the prospects for mining at shale deposits in December – January and trace the dynamics of the DUC reserve wells. In the morning, Brent futures grow by 0.4% and are traded in the region of $ 76.4 per barrel.
