OPEC, Russia and allies agreed on Saturday to extend record oil production cuts until the end of July, prolonging a deal that has helped crude prices double in the past two months by withdrawing almost 10 per cent of global supplies from the market.
The group, known as OPEC+, also demanded countries such as Nigeria and Iraq, which exceeded production quotas in May and June, compensate with extra cuts in July to September.
OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7 million bpd from July to December.
“Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain,” Saudi Energy Minister Prince Abdulaziz bin Salman told the video conference of OPEC+ ministers.
Benchmark Brent crude climbed to a three-month high on Friday above $42 a barrel, after diving below $20 in April. Prices still remain a third lower than at the end of 2019.
WATCH | Canadian oil producers don’t see relief after OPEC deal to cut output:
“Prices can be expected to be strong from Monday, keeping their $40 US plus levels,” said Bjornar Tonhaugen from Rystad Energy.
Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act of pushing up oil prices to meet their budget needs while not driving them much above $50 US a barrel to avoid encouraging a resurgence of rival U.S. shale production.
1 billion barrels of excess oil inventories
The April deal was agreed under pressure from U.S. President Donald Trump, who wants to avoid U.S. oil industry bankruptcies.
Trump, who previously threatened to pull U.S. troops out of Saudi Arabia if Riyadh did not act, spoke to the Russian and Saudi leaders before Saturday’s talks, saying he was happy with the price recovery.
While oil prices have partially recovered, they are still well below the costs of most U.S. shale producers. Shutdowns, layoffs and cost cutting continue across the United States.
As global lockdown restrictions to halt the spread of the coronavirus are being eased, oil demand is expected to exceed supply sometime in July but OPEC has yet to clear 1 billion barrels of excess oil inventories accumulated since March.
Tonhaugen said Saturday’s decisions would help OPEC reduce inventories at a rate of 3 million to 4 million bpd over July-August.
“The quicker stocks fall, the higher prices will get. And that is crucial for many OPEC+ economies, whose fiscal budgets count on oil sales,” he said.
Nigeria’s petroleum ministry said Abuja backed the idea of compensating for its excessive output in May and June.
Iraq, with one of the worst compliance rates in May, agreed to extra cuts although it was not clear how Baghdad would reach agreement with oil majors on curbing Iraqi output.
Iraq produced 520,000 bpd above its quota in May, while overproduction by Nigeria was 120,000 bpd, Angola’s was 130,000 bpd, Kazakhstan’s was 180,000 bpd and Russia’s was 100,000 bpd, according to OPEC+ data.
OPEC+’s joint ministerial monitoring committee, known as the JMMC, would now meet every month until December to review the market, compliance and recommend levels of cuts.
The next JMMC meeting is scheduled for June 18, while the next full OPEC and OPEC+ meeting will take place on Nov. 30-Dec. 1.
How home buyers are competing in the GTA's fired up market amid COVID-19 pandemic – CTV News
People looking to buy a home in the Greater Toronto Area are facing stiff competition to secure their purchase.
Peter Yu and his wife are currently learning what it’s like to be buyers in the Yonge Street and Eglinton Avenue area.
“There’s a lot of competition still in the market. It’s not what we were anticipating, but it’s a process we’re working through,” Yu said.
The couple started looking into purchasing a home in the city in May. They missed out on one house already after they were out bid by five per cent.
As COVID-19 pandemic lockdown restrictions have lifted, findings from the Toronto Regional Real Estate Board show a fired up market.
Sales in the month of May compared to June spiked up to 89 per cent, and the average selling price for all homes in June was $930,869 — up 11.9 per cent compared to last year.
Bosley Real Estate Broker Davelle Morrison told CTV News Toronto Tuesday that there are many people who have decided they want to buy a home after being cooped up for months.
She said people living in condos are looking for homes, and people with homes are looking for cottages.
Morrison said she’s aware of several properties in the GTA which received multiple offers and is aware of one place in Toronto’s west end that received dozens of bids before it sold over the asking price.
“We got a bit of pent up demand and now the number of showings is basically back to pre-COVID levels. Everybody is ready to get out of their house and they want a new home,” Morrison said.
Morrison’s advice for buyers is to get a mortgage broker, have finances lockdown and do research.
Toronto couple with $1.1M budget looking to buy a home for a year
Together for a decade, Grégory Thinet and husband Jason Chow would love to upgrade from their two bedroom condo and buy a house.
They want a backyard, and have more space for pets and family.
“It’s been very frustrating to find our little piece of heaven because of how crazy the situation is in Toronto,” Thinet said.
The couple both have steady employment, but said they have yet to put in an offer because many properties sell for two to three hundred dollars above the listed price and therefore are out of reach.
“We’re hopeful. We’re always hopeful,” said Chow.
“This is our next step in our life, and we’d like to take it, but we can’t right now.”
Oil Price Rally On Hold After API Reports Rising Crude Inventories – OilPrice.com
The American Petroleum Institute (API) estimated on Tuesday a build in crude oil inventories of 2.048 million barrels for the week ending July 3.
Analysts had predicted an inventory draw of 3.114 million barrels.
In the previous week, the API reported a major decrease in crude oil inventories of 8.156 million barrels, after analysts had predicted a much smaller build. It was the largest crude draw this year.
WTI was trading slightly down on Tuesday afternoon prior to the API’s data release with prices feeling minor pressure from an increase in the number of new coronavirus cases in the United States.
Oil production in the United States has now fallen from 13.1 million bpd on March 13 to 11 million bpd for June 26, according to the Energy Information Administration, for the second week in a row. Production has rebounded somewhat from week ending June 12, which saw an average of 10.5 million bpd produced.
At 3:23 pm EDT on Tuesday the WTI benchmark was trading down on the day by $0.20 (-0.49%) at $40.43. The price of a Brent barrel was trading down on Tuesday as well, by $0.20 (-0.46%), at $4290—both benchmarks are trading up on the week.
The API reported a draw of 1.825 million barrels of gasoline for week ending July 3—compared to last week’s 2.459-barrel draw. This week’s draw compares to analyst expectations for a smaller 2,000-barrel draw for the week.
Distillate inventories were down by 847,000 barrels for the week, compared to last week’s 2.638-million-barrel build, while Cushing inventories saw a build of 2.219 million barrels.
At 4:42 pm EDT, WTI was trading at $40.33 while Brent was trading at $42.78.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
Uber launches grocery-store delivery service in Montreal and Toronto – Montreal Gazette
You can now order your groceries in Montreal and Toronto via your Uber app.
San Francisco-based Uber Technologies announced on Tuesday that it is launching a new service in Montreal, Toronto and 16 Latin American cities that allows Uber users to order from grocery stores, including Metro and IGA. You can order using the Uber and Uber Eats apps.
“We want to make life easier for our users,” said Jonathan Hamel, manager of public affairs in Quebec for Uber, in a phone interview Tuesday. “So now we’re adding this new product.”
The service in Montreal will also allow people to order from Jean Coutu, Walmart, Première Moisson, Costco, Canadian Tire, Sephora, Mondou and Yves Rocher.
You can also select what time of day you’d like the delivery to arrive.
Uber is launching the service in partnership with Cornershop, a Chilean grocery-delivery startup. In 2019, it was announced that Uber had acquired a majority stake in Cornershop, a deal that is expected to close in the coming days. The purchase price has not been revealed.
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