Britain and Iran Are Negotiating a Tank Release
July 15, 2019
A little bullish support for prices came on Friday from the Baker Hughes rig count which reported that 4 crude oil rigs came offline in the US last week bringing the total to 784 rigs. This is the lowest number of rigs since 2/2/2018.
British foreign minister Jeremy Hunt told his Iranian counterpart over the weekend that Britain would facilitate the release of the detained tanker if Iran could guarantee it would not go to Syria.
Reuters is reporting that the USA may approve licenses for companies to re-start new sales to Huawei in as little as two weeks. This could be a sign that the recent efforts to ease restriction on the Chinese company could move forward quick.
Reuters also reported that Iranian President Hassan Rouhani said over the weekend in a televised speech that Iran was ready to hold talks with the United States under the conditions of lifting sanctions and returning to the 2015 nuclear deal. The Iranian President said, “We have always believed in talks… if they lift sanctions, end the imposed economic pressure and return to the deal, we are ready to hold talks with America today, right now and anywhere.”
The IEA said increasing US oil output will outpace global demand and lead to a large stock build around the world in the next nine months. It said the global call for OPEC oil in the first quarter of 2020 will fall to 28 million bpd, the lowest since the third quarter of 2003. Historically, OPEC has played a market balancing role, but with US energy exports continuing to increase, a 390,000 bpd increase in non-OPEC supply in June far outweighed a 90,000 bpd decline in OPEC output. Non-OPEC production in 2020 is estimated to increase by 2.1 million bpd, out of which a full 2 million bpd is expected to come for the US. At current OPEC output levels of 30 million bpd, the IEA predicted that global oil stocks could increase by 136 million barrels by the end of the first quarter of 2020.
There was some data released over the weekend on China and the headline is that their economy is slowing, as growth was the slowest since 1992, but further in the story there is some optimism for growth. A bit of mixed signal or the news being spent in a positive light I am not sure which.