[snakeoil]

OPEC Supply Cut Compliance Hits Record, Oil Glut Going Fast

Compliance with a global deal to cut oil supply hit a new high in February and an inventory glut is shrinking fast, a joint OPEC and non-OPEC committee said, bringing producers close to the pact’s original aim.

OPEC and its allies achieved 138 percent of pledged output reductions last month, OPEC said, up from 133 percent in January and the highest since the deal aimed at clearing a glut began in January 2017.

The Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers have extended the pact until the end of 2018, even though OPEC sources say the market is now expected to balance between the second and third quarters.

A rapidly shrinking glut will fuel debate over how long the curbs need to be in place, although top exporter Saudi Arabia has said it is too early to discuss an exit strategy. A ministerial panel meets to review the deal in April.

“The committee stressed that all participating countries should strive to achieve or exceed full conformity with their voluntary production adjustments,” the OPEC statement said.

“February continued the accelerated rebalancing path witnessed in recent months.”

The supply cut’s original aim was to shrink oil inventories in developed economies to their five-year average. Stocks in February were 44 million barrels above that level, OPEC said, the closest the group has come to the target.

“Stocks can now be considered as close to normal levels,” an OPEC source said.

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[snakeoil]

President Donald Trump‘s pick for national security advisor signals a willingness by the administration to take a more aggressive stand against U.S. adversaries like Iran or Venezuela —and that could mean higher oil prices in the very near future.

Analysts said the appointment of John Bolton, former U.N. ambassador, makes it even more likely that the Trump administration will withdraw from the Iran nuclear deal when it is up for review in May, and tensions could ramp up against the Middle Eastern country. Bolton succeeds H.R. McMaster, who resigned.

“I can’t think of a more hawkish appointment than John Bolton,” said Helima Croft, global head of commodity strategy at RBC. “He’s a powerful advocate for a confrontational approach.”

Croft also said the appointment leaves the question of whether Defense Secretary James Mattis looks like he’s the only one representing a moderate foreign policy at this point. “Are the Iranians seeing the writing on the wall? Will they curb their activities? His appointment should put the fear of God in them, but who knows.”

Bolton has advocated for pre-emptive action against both Iran and North Korea because of their nuclear programs. His first act may be to successfully encourage Trump to end the Iran nuclear deal, struck with Iran by the U.S., some members of the European Union and other countries as a way to curb its nuclear program in return for ending sanctions on the country, including its oil.

Mattis and former Secretary of State Rex Tillerson had been reluctant to abandon the Iran deal, which also included China and Russia. Further financial sanctions against the country have also been discussed.

Venezuela’s economic crisis is complicating matters and damaging its energy production capabilities. Venezuelan President Nicolas Maduro is running for re-election despite the objections of the U.S. and other countries that the election is unfair. Venezuelan oil already is coming off the market, and could continue to decline as the country’s energy infrastructure deteriorates.

“Even if it’s just additional sanctions on Iran, that could hurt investment in the country and reduce flows of their oil. The market would really miss their oil this time around because of Venezuela,” said John Kilduff of Again Capital. “Because of Iran’s advanced ballistic missile capabilities, the other countries have offered additional sanctions to try to keep Trump in the nuclear pact.”

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[RealJustme]

Great post. The Middle East is in trouble and thank God Trump has reduced the red tape for U.S. oil companies to provide the oil we need. MAGA!

[snakeoil]

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The U.S. Department of Energy sold about 5.2 million barrels of oil from the Strategic Petroleum Reserve (SPR) to five companies including top refiners Valero Energy Corp and Phillips 66, according to a notice on Wednesday:

* Phillips 66 was sold the most amount of oil – about 2.3 million barrels – and Valero Marketing and Supply Co was sold 900,000 barrels.

* Other winners include commodities trader Trafigura AG, which was sold 1 million barrels, refiners Motiva Enterprises and Marathon Petroleum Corp which were sold 600,000 barrels and 400,000 barrels respectively.

* The oil was sold at an average price of about $63 a barrel.

* The Department of Energy said earlier in March it will sell 7 million barrels of sweet crude oil from the country’s petroleum reserve as it complies with a 2015 law to help fund the federal government.

* As domestic oil output has grown with the fracking revolution, lawmakers have increasingly seen sales from the reserve as a way to help fund the government.

Not too sure of the wisdom of this strategy.

[namngulfvet]

the US has over 200 capped off wells off the coast of California. They have been sitting there for about 100 years now.

Not to mention new wells being dug in the gulf.. Screw Saudi we dont need em .

[Intrepid]

With the advent of directional drilling hitting oil is no longer a guessing game, anywhere you punch a hole you get oil. North Dakota surpassed Alaska some time back in oil production. They're drilling into the Bakkan formation up there now and deeper is the Pronghorn formation with at least another formation below that one.

We have all the oil we need far into the foreseeable future right here.

And that shitweasel Lucky used to bleat in here about "peak oil."