Good morning and happy Friday. As of 11:26 am Singapore time (0326 GMT), the ICE September Brent crude futures contract rose 2 cents/b (0.03%) from the previous close at $73.49/b, while the NYMEX August light sweet crude contract was up 4 cents/b (0.06%) at $71.69/b. The front month ICE Brent and NYMEX light sweet crude markers had fallen 3.94% and and 4.78% over July 13-15.
Reports have emerged that the impasse between the UAE and Saudi Arabia is on the verge of a resolution. Tensions between the two members of OPEC+, a coalition of OPEC and other oil producers, had flared after the UAE had objected to Saudi Arabia’s plan to tie OPEC+ production increases to a lengthening of the supply management pact, insisting that its baseline production level, from which its quota is determined, be raised first.
Negotiations between the two seem to be heading towards an upward revision of the UAE’s baseline production to 3.65 million b/d, from the current 3.168 million b/d, although this figure has yet to be ratified by other OPEC+ members. It appears OPEC+ members in general remain committed to making the coalition’s supply pact work, and that they may not necessarily follow the UAE in demanding an increase in their baseline production levels as they will be quite aware that doing so carries a genuine risk.
The market also received some assurance from OPEC’s July 15 monthly oil market report, in which OPEC analysts have kept their 2021 forecast for oil demand at 96.58 million b/d, up 5.95 million b/d from 2020. Furthermore, OPEC’s analysts see demand growing by another 3.28 million b/d to 99.86 million b/d in 2022, expecting demand to top the 100 million b/d mark in the second half of the year.
In other news, China’s highly anticipated national carbon market was launched July 16 and is expected to become the world’s largest by volume of carbon allowances traded. The launch of China’s carbon market is an early step toward the decarbonization of the country’s industrial sectors, even as the government strikes a precarious balance between maintaining economic growth and putting a price on carbon. (S&P Global Platts/Bloomberg)
INDEX: (MTD Estimates)
* Sing 380: 413.13
* Rott 3.5%: 399.25
* Sing 0.5%: 538.98
* Rott 0.5%: 525.64
OIL MARKET ROUND-UP:
* OPEC Sees Gradual Recovery in Demand for Its Oil Into Next Year
* OPEC+ Must Keep 2M B/d Idle to Get $80 Brent in 2022: JPMorgan
* Indian Oil Buys About 8M Bbls of Crude for Aug.-Sept
Rotterdam 3.5% INDIC
Aug21 389.25 / 391.25
Sep21 384.75 / 386.75
Oct21 380.25 / 382.25
Nov21 376.50 / 378.50
Dec21 373.25 / 375.25
Jan22 371.00 / 373.00
Q4-21 376.75 / 378.75
Q1-22 369.25 / 371.25
Q2-22 363.75 / 365.75
Q3-22 356.50 / 359.50
CAL22 359.50 / 362.50
Singapore 380 INDIC
Aug21 401.50 / 403.50
Sep21 398.50 / 400.50
Oct21 395.00 / 397.00
Nov21 392.00 / 394.00
Dec21 389.25 / 391.25
Jan22 387.25 / 389.25
Q4-21 392.00 / 394.00
Q1-22 385.50 / 387.50
Q2-22 380.25 / 382.25
Q3-22 373.75 / 376.75
CAL22 377.25 / 380.25
Rott VLSFO 0.5% INDIC
Aug21 505.50 / 510.50
Sep21 502.50 / 507.50
Oct21 499.75 / 504.75
Nov21 497.00 / 502.00
Dec21 494.25 / 499.25
Jan22 491.50 / 496.50
Q4-21 497.00 / 502.00
Q1-22 488.75 / 493.75
Q2-22 480.50 / 486.50
Q3-22 473.00 / 479.00
CAL22 476.75 / 482.75
Singapore VLSFO 0.5% INDIC
Aug21 524.50 / 529.50
Sep21 521.25 / 526.25
Oct21 518.25 / 523.25
Nov21 515.50 / 520.50
Dec21 512.50 / 517.50
Jan22 510.00 / 515.00
Q4-21 515.50 / 520.50
Q1-22 507.50 / 512.50
Q2-22 499.50 / 505.50
Q3-22 492.50 / 498.50
CAL22 496.25 / 502.25
Sing 10ppm GO INDIC
Aug21 78.67 / 78.81
Sep21 78.56 / 78.76
Oct21 78.37 / 78.57
Nov21 78.05 / 78.25
Dec21 77.70 / 77.90
Jan22 77.41 / 77.61
Q4-21 78.05 / 78.25
Q1-22 77.14 / 77.34
Q2-22 76.42 / 76.62
Q3-22 75.89 / 76.09
CAL22 76.07 / 76.47
Ice Gasoil Swap
Aug21 593.06 / 595.06
Sep21 593.85 / 595.85
Oct21 592.76 / 594.76
Nov21 590.29 / 592.29
Dec21 588.18 / 590.18
Jan22 586.65 / 588.65
Q4-21 590.40 / 592.40
Q1-22 585.40 / 587.40
Q2-22 579.27 / 581.27
Q3-22 583.11 / 585.11
CAL22 580.95 / 583.95
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