Oil prices rise by more than 1% on Friday. This is after better-than-expected U.S. employment data. Both benchmarks fell more than 3% on the week on U.S. interest rate hike jitters.

Brent rose $1.19, or 1.5%, to $82.78 a barrel. U.S. West Texas Intermediate crude (WTI) was up 96 cents, or 1.3%, at $76.68.

Expectations of further rate hikes in the world’s largest economy and in Europe have clouded the global growth outlook. It is due to both crude benchmarks down this week.

However, the U.S. Federal Reserve may have less reason to raise interest rates as aggressively as some is fearing. After a government report on Friday. it gives hopes of easing inflation amid signs the pandemic-disrupted labor market is normalizing.

Fed Chair Jerome Powell has warned of higher and potentially faster rate hikes, saying the central bank was wrong in initially thinking inflation was “transitory”. Its next monetary policy meeting is planned for March 21-22.

“Oil prices are fluctuating wildly on renewed fears of Fed interest rate increases,” said Price Group analyst Phil Flynn.

A strengthening dollar is also making oil more expensive for holders of other currencies.

Global shares, which often move in tandem with oil prices, hit a two-month low as investors dumped banks.

Broader U.S. employment data for February beat expectations with nonfarm payrolls rising by 311,000, compared with expectations of 205,000 jobs added, according to a Reuters survey. This is likely to ensure that the Fed will raise interest rates for longer, which analysts have said would weigh on oil prices.

On the supply side, major oil producers Saudi Arabia and Iran, both members of the Organization of the Petroleum Exporting Countries, re-established ties after days of previously undisclosed talks in Beijing.

U.S. oil rigs fell by 2 to 590 this week, their lowest since June, according to data from Baker Hughes.

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Source: Street Insider

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Oil prices could hit the $90-$100 per barrel range in the second half of this year as global demand is set to reach record levels amid constrained supply, Russell Hardy, CEO at the world’s largest independent top energy trader, Vitol Group, told Bloomberg Television on Monday.

“The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility”. This is what Hardy told Bloomberg in an interview.

According to Hardy, global oil demand will rise by 2.2 million barrels per day (BPD) in 2023. This is in comparison to 2022 and will reach a record level. It was driven by a jump in diesel, naphtha, and liquid petroleum gas (LPG) demand.

“You don’t have much room on the supply side is the reality. So the potential for a rally is certainly there”. Hardy told Bloomberg.

The Peak Oil Demand

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Source: Oil Price

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Oil prices rise on Thursday on expectations that Russia will cut its oil exports more than previously announced.

International benchmark Brent crude traded at $80.79 per barrel at 9.35 a.m. local time (0635 GMT), up 0.24% from the closing price of $80.60 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $74.14 per barrel, a 0.26% rise after the previous session closed at $73.95 a barrel.

A bigger output cut by major oil producers will put pressure on global supply.

Russia is expected to cut oil production by 500,000 barrels per day in March, but reports indicate that the country may cut supply even further. The country is reducing its supply in response to Western sanctions against Russian oil exports.

The EU ban on Russian seaborne oil products, as well as a price cap of $100 per barrel on premium Russian oil products such as diesel, and a price cap of $45 per barrel on discounted products such as fuel oil, went into effect on Feb. 5.

Russian Deputy Prime Minister Aleksandr Novak warned at the beginning of the month that Western countries’ price caps on Russian oil and petroleum products could cause supply problems on the market.

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Source: AA

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The global oil and gas industry profits in 2022 jumped to some $4 trillion. It is from an average of $1.5 trillion in recent years. This is what the head of the International Energy Agency (IEA), Fatih Birol said on Tuesday.

Despite those profits, countries depending on oil and gas revenue should prepare to reduce their reliance on petroleum. This is as demand is going to fall in the longer term, Birol told a conference in Oslo while speaking via video link.

“Especially the countries in the Middle East have to diversify their economies. In my view, the COP28 (climate summit) could be an excellent milestone. It will change the destiny of the Middle East countries” Birol said.

“You cannot anymore run a country whose economy is 90% reliant on oil and gas revenues. It is because oil demand will go down,” he added.

United Arab Emirates as an OPEC Member Oil and Gas Industry

This year’s United Nations climate talks will be hosted by the United Arab Emirates, a member of the OPEC group of oil-producing countries.

The United Arab Emirates comprises seven emirates – Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al-Khaimah, Sharjah, and Umm Al-Quwain – located along the southeast coast of the Arabian Peninsula. The country covers an area of around 84 thousand square kilometers and has a population of around 9.5 million. More than one million people live in the capital, Abu Dhabi. Arabic is the country’s official language.

Since the discovery of oil in the UAE, the country has become a modern state with a high standard of living. The currency is the dirham.

The United Arab Emirates President is HH Sheikh Mohammed bin Zayed Al Nahyan. The country joined OPEC in 1967.

Did you know?

• Desert Park in the Sharjah Emirate is a center for the breeding of the endangered Arabian leopard. It is thought that very few of these cats exist in the wild.
• The first commercial oil was discovered in 1958 – onshore in the Bab-2 well and offshore at Umm Shaif.

Oil and gas companies and producers based on the Texas side of the Permian Basin looked to capitalize on the growth. Growth in the New Mexico portion of the region, looking to buy lands in the southeast corner of the state.

Permian Resources Corporation announced an agreement. They will see it purchase about 4,000 leasehold acres and 3,300 royalty acres, mostly in Lea County for $98 million.

The lands were estimated to produce about 1,100 barrels of oil equivalent per day. It is 73 percent oil according to a company announcement.

The price reflected about $8,000 per leasehold acre and $7,000 per royalty acre. This is what the release read, including operated and non-operated assets the company said it could include in future trading.

James Walter, co-chief executive officer at Permian Resources said the move was part of a broader effort by the company to manage its portfolio and shift its footprint to areas of the basin expected to bring higher production and revenue returns.

The Price Reflection

The price reflected about $8,000 per leasehold acre and $7,000 per royalty acre, the release read, including operated and non-operated assets the company said it could include in future trading.

James Walter, co-chief executive officer at Permian Resources said the move was part of a broader effort. This is by the company to manage its portfolio and shift its footprint. They will shift to areas of the basin. There is an expectation to bring higher production and revenue returns.

He said the deal included 45 operated locations and was expected to generate about $100 million. Take note that this is in net cash proceeds.

The company also planned to divest oil and gas properties on the Texas side of the basin in Reeves County, Texas. This is along the New Mexico border.

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Source: Carlsbad Current-Argus

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