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The price of oil collapsed while OPEC is preparing to increase its supply



Oil prices declined on Friday, when markets are preparing for more OPEC supplies, following Trump's decision not to resume sanctions from Iran.

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Friday, April 26, 2019

Oil prices fell sharply at the start of trading on Friday, when the market again assessed the impact of US sanctions on Iran. Analysts argue that Iran can manage to ease its influence, maintaining some degree of exports. OPEC's expectations are also expected to be activated. Oil prices fell by almost 2 percent on Friday.

Spare capacity in the spotlight following Iran's sanctions. While Saudi Arabia and the United Arab Emirates have apparently shown a willingness to offset Iran's disruptions, it will come at the expense of spare capacity. OPEC has about 3 mb / d of reserve capacity, but Iran could lose nearly 1 mb / d if the US succeeds. A failure elsewhere leaves a margin of error. "If we assume that Iran's exports do not go to zero, and China continues to take some Iranian barrels, then yes, the Gulf countries should be able to replace them," Bloomberg said, Olivier Jacob, executive consultants Petromatix GmbH. "But you're still returning to the fact that free capacity is gone."

Poland and Germany suspended oil imports from Russia due to quality problems. Citing worries about quality, Germany and Poland temporarily suspended oil imports from Russia. The suspension could have hurt the legal effects, as buyers in Western Europe could open lawsuits against Russian suppliers, Reuters reported.

Swap administrator pages with Haftar. Bloomberg reports that President Trump confirmed his support for an attack on the Libyan National Army (LNA) in Tripoli last week, in a telephone conversation with forces Khalifa Haftar, returning the US official policy of supporting the internationally recognized government in Tripoli. Trump was apparently convinced to return Haftar after discussing with Egyptian President Abdel Fattah El-Sisi and Crown Prince Abu Dhabi, Mohammed bin Zayed al-Nahyan, who emphasized Haftar's significance in securing the oil fields in Libya.

Related: What's next for Algeria How Bouteflika quit

China is withdrawing from Iran. Asian companies are beginning to retreat from Iran, fearing revenge from US sanctions, according to the Wall Street Journal. Iran hoped that international companies, especially companies from China, would provide economic salvation after the US withdrew from the nuclear deal. But many deals between Iran and China "are now dead in the water," an adviser to the Chinese oil company in Iran said. China may try to continue to import oil from Iran, defying US sanctions, but Chinese companies are reducing their exposure.

Mok: Tesla may need to raise money. After two quarters of the profits, Tesla (NASDAQ: TSLA) returned to unprofitable territory in the first quarter. EV's producer reported one of the worst losses in its history on Wednesday, and its available cash declined by more than 40 percent to $ 2.2 billion. Elon Musk suggested that the company may need to raise money. Tesla reiterated his forecast for the delivery of 400,000 vehicles this year, and hopes to return to profit in the third quarter.

Ford will invest $ 500m in rival Tesla. Ford (NYSE: F) said he would invest $ 500m in Rivian, starting EV, seen as Tesla's rival. Rivian plans to produce an electric pickup truck and SUV by the end of 2020. Amazon (NASDAQ: AMZN) invested $ 700 million in Riviéwan in February.

Anadarko subject to a bidding war. Occidental Petroleum (NYSE: OXY) submitted a rival offer for Anadarko Petroleum (NYSE: APC), hoping to get out Chevron (NYSE: CVX). But Chevron can overcome an antenna to ensure it wins. Occidental offers $ 76 per share to Anadarko shareholders, an agreement estimated at around $ 57 billion. It's at the top of a Chevron offer of $ 65 per share, or $ 50 billion. It seems that Anadarko prefers Chevron despite the Occidental's stronger offer, and analysts believe Chevron will prevail.

Shell publishes a massive discovery in the Gulf of Mexico. Royal Dutch Shell (NYSE: RDS.A) a major discovery of water in the Gulf of Mexico on Wednesday. The so-called. The Blaketti Prospect is the second significant discovery of the company in the Perdido Corridor.

Oil supplies are expected to publish disappointing results. Lower oil prices, weak LNG prices, and reduced margins at the refinery could cause deterioration in the profits of oil oils when they report revenues from the first quarter, according to Reuters. "We do not want a great first quarter for the group," said Blake Fernandez, a research analyst at Simons Energy by Piper Jeffrey and Co. Total SA (NYSE: TOT) reported a adjusted net income of $ 2.76 billion, down 4.3% from a year ago, but is still seen as a strong result with rising cash flow and increased oil and gas production. ExxonMobil (NYSE: XOM) said its profit in the first quarter was 50 percent lower than the previous year.

Trump postpones the extensive oil extension until the election. The Trump administration will postpone its proposal to open a large section of the US offshore exploration site until the 2020 presidential election. Drilling is widely opposed along the east and west coast, including in the Republican-controlled states. Most notably, Republican Governor Ron DeSantis, in Florida's battlefield, suggested that Trump's re-election might be in jeopardy if he pushed him forward to open Florida's drilling rigs.

Related: An energy solution that could put an end to the debates at the border wall

Chevron is struggling to return operations to Venezuela. Chevron (NYSE: CVX) is trying to regain its Petrophary Petroleum upgrades, its largest joint venture in Venezuela, again in normal operations following the widespread eclipse of chronic power outages in the country. Production in the facility fell by half of February to March, according to Bloomberg. Venezuelan oil production fell to just 732,000 bpd in March, with more losses expected. "We estimate a loss of 400,000 barrels due to the economic and electrical crisis," said Binberg Reinaldo Quintero, president of the Venezuelan Oil Chamber.

Trump considers the abolition of the Jones Act. Bloomberg reports that President Trump is considering abandoning the rules of the Jones Act that requires ships traveling between US ports must be US ships. Cancellers will allow Puerto Rico and the northeastern United States to import LNG from ships with foreign flags. Since there are no ships capable of moving LNG in accordance with the Jones Law, Puerto Rico and New England had to import LNG from abroad at a higher price, not from other parts of the United States.

By Tom Col for Oilprice.com

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