Unrest in Hong Kong Has Raised Concerns for the Economy
August 12th, 2019
The Baker Hughes crude oil rigs count was down by 6 rigs putting the total number of crude rigs at 764. This compared to 869 rig last year at this time. Rigs drilling for natural gas were done 2 to 169 compared to 186 rigs a year ago. Canadian producers added 3 rigs putting the total number of oil rigs at 94 compared to 140 a year ago. Rigs looking for natural gas were unchanged at 46 compared to 17 a year ago.
The unrest in Hong Kong has shut down the airport and this ongoing unrest among their citizens has increased the fear for others around the globe. The protesters have disrupted the city a few times now and that has raised concerned for their economy, as well as, the global economy. This increased fear has stocks projected to open lower and has put a bit of selling pressure on energy markets.
Iran continues to keep the pot stirred up around the Strait of Hormuz with comments that capture headlines and keep the market on edge. Iran’s Foreign Minister, Mohammad Javad Zarif, said that any military presence in the Gulf from outside the region would be a source of insecurity for Iran, and Iran would act to safeguard its security. Earlier, Iran Foreign Mistry spokesman, Abbas Mousavi, said any Israeli involvement in any maritime coalition in the Gulf is a “clear threat” to Iran’s national security and the Islamic Republic has a right to conform the threat.
Russia’s Energy Minister said that Russia had taken into account the possibility of a slowdown in oil demand when it extended a global cut agreement with OPEC earlier this year. It said the IEA’s estimates published earlier on Friday where largely in line with the ministry’s own forecast.
Chinese oil trader Unipec chartered a supertanker to ship US crude oil to China in September. It is the first cargo since US President Donald Trump announce additional tariffs on Chinese imports. China is set to receive nearly 11 million barrels of US crude in August, the highest since June 2018, another 4.1 million barrels are currently set to arrive in September.
The equities markets are off as concerns about Us-China trade deal with not get done any time soon. President Trump said he was not ready to make a deal with China and suggested that they September talks could be canceled.
The US Environmental Protection Agency (EPA) has approved 31 new refinery exemption for the 2018 compliance year. It is estimated that that exempts 1.430 million RINs.