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OPEC Considers 500,000 Bpd Cut In Emergency Meeting – OilPrice.com

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OPEC+ Considers 500,000 Bpd Cut In Emergency Meeting | OilPrice.com

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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OPEC and its key ally in the OPEC+ coalition, Russia, are set to convene an extraordinary meeting of a joint technical committee on Tuesday or Wednesday this week, to discuss the continued decline in oil prices since the coronavirus outbreak in China, a source close to OPEC told AFP on Sunday.  

The OPEC+ group of producers are said to be considering deepening the cuts by another 500,000 bpd, due to depressed oil demand amid the virus outbreak, OPEC and industry sources told Reuters on Monday.

There’s also growing speculation that OPEC may move up the meeting scheduled for March 5-6 to February.

OPEC and its allies are now considering moving the meeting to February 14 and 15, three weeks earlier than initially planned, an OPEC source told Reuters today.

Since the start of the virus outbreak last month, more than 360 people have died in mainland China so far, while oil prices have dropped by around 15 percent in two weeks.  

Early on Monday, oil prices were also depressed, weighed down by continued fears that the travel restrictions and the slowdown in China’s economy will have taken a toll on oil demand not only in China, but also in wider Asia. Related: Oil Bankruptcies Are Reaching Worrying Levels

Despite last week’s assurances from OPEC’s leader and largest producer, Saudi Arabia, that OPEC+ has “the capability and flexibility needed to respond to any developments,” and despite the United Arab Emirates (UAE) chiming in to downplay what it called a “market over-reaction,” OPEC is now facing a tough dilemma how to proceed with its price-fixing policies, considering that the market is so bearish on demand that it is totally ignoring a huge loss of supply from Libya.

OPEC is inclined to extend the ongoing production cuts at least through June and could discuss deeper cuts if need be, OPEC sources told Reuters last week, as oil prices continued to slide on fears that the coronavirus outbreak will impact oil demand.

Russia is ready to react and doesn’t see any problem meeting with its OPEC allies earlier than planned, Russian Energy Minister Alexander Novak said on Friday, noting that it’s too early to say how hard the virus is hitting oil demand.   

By Tsvetana Paraskova for Oilprice.com

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Oil Prices Rally As Traders Focus On Tight Supply Outlook – OilPrice.com

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Oil Prices Rally As Traders Focus On Tight Supply Outlook | OilPrice.com


Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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  • WTI crude rallied almost 3.5% on Thursday morning.
  • Tight supply and falling U.S. crude oil inventories support prices.
  • U.S. crude oil inventories are now 6% below the 5-year average.

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Crude oil prices resumed their climb on Thursday, reclaiming some of the ground lost over the last month.

At 1:30 p.m. ET, the WTI benchmark was trading at $91.09, a 3.38% gain on the day. WTI prices are still down from the $100+ barrel mark seen last month, as recession fears took hold of the market, threatening to subdue crude demand growth.

Crude oil prices are still nearly $20 over where they were at the start of the year, and roughly $28 per barrel gain over the last 12 months.

While recession fears—and the possible demand destruction that could come with such a recession—has pulled down prices over the last month, market fundamentals continue to be tight, with crude oil inventories in the United States continuing to slide. On Wednesday, the EIA estimated that crude oil inventories had fallen by 7.1 million barrels, on top of millions of barrels of crude oil making its way out of the nation’s Strategic Petroleum Reserves. Gasoline inventories in the United States also fell by another 4.6 million barrels for the week ending August 12, the EIA reported on Wednesday.

U.S. crude oil inventories, excluding those in the SPR, are now just 425 million barrels,–6% below the five year average. Gasoline inventories are 8% below the five-year average, and distillates are 23% below the five-year average.

The EIA data also calmed fears that gasoline demand could be falling, after it showed the four-week average of implied gasoline demand rose to the highest level this year.

Also on Thursday, U.S. economic data saw a stronger labor market, further bolstering crude prices.

Disappointing economic data out of China this week—a predictor of lower crude demand from the world’s largest oil importer, has capped oil’s increase, as has a stronger dollar, which makes crude oil more expensive for foreign buyers.

By Julianne Geiger for Oilprice.com

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TD faces public scrutiny, support, of First Horizon takeover in public meeting – Business News – Castanet.net

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TD Bank Group’s proposed takeover of Memphis-based First Horizon Bank is the issue before a public meeting Thursday where community members are being given a forum to voice their opinions on the deal.

The virtual meeting is being convened jointly by the Federal Reserve Board and the U.S.Office of the Comptroller of the Currency, which are reviewing the proposed US$13.4 billion deal.

The meeting comes as TD has faced renewed criticism in recent months for allegedly aggressive sales tactics in the U.S., including from Senator Elizabeth Warren who has called for the merger to be blocked until the bank is “held responsible for its abusive practices.”

TD agreed to a US$122 million settlement with U.S. regulators in 2021 stemming from illegal overdraft practices, while an investigative report released in May alleged that problematic practices continue at the bank, something the bank had strenuously denied.

The federal agencies also held a public meeting in mid-July for BMO’s proposed US$16.3 billion takeover of Bank of the West, where numerous community groups urged the deal be blocked until a strong community benefits agreement can be reached.

The bank also faced criticism for the proportionately low number of mortgages granted to Black and Latino borrowers, while numerous community groups that have received funding from BMO voiced their support of the deal.

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Judge sides with Enbridge Inc. in Michigan’s latest effort to halt Line 5 pipeline

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WASHINGTON — The international dispute over Line 5 belongs in federal court, a Michigan judge declared Thursday, dealing a critical blow to Gov. Gretchen Whitmer’s bid to shut down the controversial cross-border pipeline.

It’s the second time in nine months that District Court Judge Janet Neff ruled in favour of pipeline owner Enbridge Inc., which wanted the dispute elevated to the federal level.

That first decision prompted Michigan Attorney General Dana Nessel — believing her only path to victory to be in state court — to abandon the original case, turning instead to a separate, dormant, nearly identical circuit court case to try again.

Neff’s disdain for that tactic was palpable throughout Thursday’s ruling.

“The court concludes that (the) plaintiff’s motion must fail, based on …(the) plaintiff’s attempt to gain an unfair advantage through the improper use of judicial machinery,” Neff wrote.

“The court’s decision … is undergirded by (the) plaintiff’s desire to engage in procedural fencing and forum manipulation.”

A spokesperson for Nessel did not immediately respond to media inquiries.

Whitmer is a Democrat and close ally of President Joe Biden whose political fortunes depending on the support of environmental groups in the state. She ordered the shutdown of Line 5 in November 2020.

She cited the risk of an ecological disaster in the Straits of Mackinac, the environmentally sensitive passage between Lake Michigan and Lake Huron where the pipeline runs underwater between the state’s upper and lower peninsulas.

They went to circuit court, where Enbridge pushed back hard, arguing that Whitmer and Nessel had overstepped their jurisdiction and that the case needed to be heard in federal court.

Late last year, Neff sided with Enbridge, prompting Whitmer and Nessel to abandon the complaint and try again, this time with a similar circuit court case that had been dormant since 2019.

Nessel had hoped to head off Enbridge’s jurisdictional argument on a technicality: that under federal law, cases can only be removed to federal jurisdiction within 30 days of a complaint being filed.

But Neff wasn’t buying it, citing the precedent she herself established in 2021 when she ruled for Enbridge the first time.

“It would be an absurd result for the court to remand the present case and sanction a forum battle,” Neff wrote.

“The 30-day rule in the removal statute is intended to assist in the equitable administration of justice and prevent gamesmanship over federal jurisdiction, but here, it is clear to the court that (the) plaintiff is the one engaging in gamesmanship.”

The Line 5 pipeline ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U. S. border and the Great Lakes by way of a twin line that runs along the lake bed.

Critics want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophe in one of the area’s most important watersheds.

Proponents of Line 5 call it a vital and indispensable source of energy, especially propane, for several Midwestern states, including Michigan, Ohio and Pennsylvania. It is also a key source of feedstock for refineries in Canada, including those that supply jet fuel to some of Canada’s busiest airports.

In a statement, Enbridge described Thursday’s decision as “consistent with the court’s November 2021 ruling that the state’s prior suit against Line 5 belonged in federal court.”

That, the company said, is the correct forum for “important federal questions” about interstate commerce, pipeline safety, energy security and foreign relations.

The statement goes on to say that shutting down Line 5 would “defy an international treaty with Canada that has been in place since 1977.”

Line 5 talks between the two countries under that treaty, which deals specifically with the question of cross-border pipelines, have been ongoing since late last year.

“Enbridge looks forward to a prompt resolution of this case in federal court.”

This report by The Canadian Press was first published Aug. 18, 2022.

 

James McCarten, The Canadian Press

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