This is not a paywall.

Register for free to continue reading.

The news sucks. But your reading experience doesn't have to. Help us improve that for you by registering for free.

Please create a password or click to receive a login link.

Please enter your password or get a login link if you’ve forgotten

Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Oil Falls Towards $40 With Supply Constraints Beginning...

Business Maverick

Business Maverick

Oil Falls Towards $40 With Supply Constraints Beginning to Ease

Tanker train cars sit parked near Sunray, Texas, U.S., on Saturday, Sept. 26, 2020. After all the trauma the U.S. oil industry has been through this year -- from production cuts to mass layoffs and a string of bankruptcies -- many producers say they’re still prioritizing output over reducing debt. Photographer: Angus Mordant/Bloomberg
By Bloomberg
12 Oct 2020 0

Oil dropped for a second day as operations in the U.S. Gulf of Mexico started to resume following Hurricane Delta and Libya took a major step toward reopening its biggest field.

Futures in New York fell towards $40 a barrel after closing down 1.4% Friday as oil workers in Norway called off a strike. Crude explorers and tugboat operators got back to work on Saturday after Delta, which had seen about 92% of oil production and 62% of gas output shuttered. The hurricane and hopes for more U.S. fiscal stimulus contributed to a price jump of almost 10% last week.Libya’s National Oil Corp. lifted force majeure on the western deposit of the Sharara field and instructed its operator to resume production, according to a statement on Sunday. Sharara’s output will reach its daily capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.
Oil Tapering

The resumption of supply from the North African country is an added headache for the OPEC+ alliance as it considers whether to proceed with a plan to restore more output in January. With coronavirus cases accelerating in many countries, the group faces a tough decision at its next policy meeting on Nov. 30-Dec. 1.

“We have supply coming back to the market, while there is still plenty of concern over demand, with the flaring up in Covid-19 cases in parts of Europe,” said Warren Patterson, head of commodities strategy at ING Bank NV in Singapore. With Libya coming back, the market is close to balance, but it will depend on demand assumptions, he said.

  • West Texas Intermediate for November delivery fell 0.8% to $40.28 a barrel on the New York Mercantile Exchange at 10:14 a.m. in Singapore
    • The contract rose 9.6% last week
  • Brent for December settlement declined 0.8% to $42.49 a barrel on the ICE Futures Europe exchange after dropping 1.1% on Friday.

Brent’s six-month timespread was $2.08 a barrel in contango — where prompt prices are cheaper than later-dated ones — compared with $1.95 on Friday. The change in the market structure indicates concern about over-supply has increased slightly.

Iraq expects crude prices to remain at around $41 to $42 a barrel this year before rising to $45 in the first quarter of 2021, the state-run Al-Sabah newspaper reported, citing an interview with Oil Minister Ihsan Abdul Jabbar. The minister reiterated that Iraq, OPEC’s second-biggest oil producer, would continue to comply with the OPEC+ pact to curb output.

Drilling activity in the U.S., the world’s largest producer, is starting to pick up despite signs demand might not recover to pre-virus levels until 2022 or 2023. Active rigs targeting crude oil rose by 4 to 193 last week, according to Baker Hughes, an increase of 14 in the last three weeks.

Other oil-market news:
  • Saudi Aramco gave full contractual crude oil supply to at least five refiners in Asia for November sales, according to refinery officials with knowledge of their procurement operations.
  • For decades, diesel has underpinned India’s economic growth and the fortunes of its refiners, but the pandemic has caused the nation’s most consumed fuel to lose some of its luster.
  • Crude futures fell 0.8% to 262.4 yuan a barrel on the Shanghai International Energy Exchange after jumping 3.9% on Friday as trading resumed after public holidays.

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted