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Brent up 10pc as Trump talks deal

  • Market: Crude oil
  • 02/04/20

Crude futures rose by 10pc today after US president Donald Trump suggested that Saudi Arabia and Russia may be close to "a deal" to alleviate the oil price collapse.

"Russia and Saudi Arabia at some point are going to make a deal in the not too distant future," Trump said. "Because it's very bad for Russia, it's very bad for Saudi Arabia. It's very bad. I mean, it's bad for both, so I think they're going to make a deal."

The prospect of some kind of agreement to curtail the vast oversupply seen in the crude market since the start of last month sent Ice Brent crude futures soaring. At 09:31 GMT, the front-month contract was up by 10.5pc at $27.35/bl.

But this is still down by around 50pc from levels of a month ago, before the collapse of the Opec+ agreement that triggered a battle for market share just as the coronavirus pandemic began to eat into demand. The IEA said yesterday that this scenario is presenting the oil industry with its worst crisis. Around 5mn b/d of global production is unprofitable at crude prices below $25/bl, and 7.5mn b/d is unprofitable at $20/bl, the agency said.

Trump has previously said that he is considering joining discussions on what the US, Saudi Arabia and Russia could do in response to the collapse in prices, and he spoke with Russian President Vladimir Putin on energy issues this week.

There has been no indication from either Riyadh or Moscow that direct talks have taken place on oil market actions. The most vocal recent proponent of co-ordinated production cuts has been the Texas Railroad Commission, which hopes to hold a meeting on the matter this month

In the absence of any deal — either in Texas, Riyadh or Moscow — Trump suggested that he could intervene: "I think I know what to do to solve it … if [Russia and Saudi Arabia are] unable to solve it, I think I know what to do to solve it," he said, without giving details.


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Tariffs have ‘pluses and minuses’: ConocoPhillips

Tariffs have ‘pluses and minuses’: ConocoPhillips

New York, 7 February (Argus) — Threatened US tariffs targeting Canadian imports have both "pluses and minuses" for US independent producer ConocoPhillips which has production on both sides of the northern border. The company's primary exposure to tariffs would center upon sales from its Surmont oil sands operations in Alberta, Canada, into the US. "We sell around half of our Surmont liquids into the US on a mix of pipeline and rail," said Andy O'Brien, ConocoPhillips senior vice president for strategy, commercial, sustainability and technology. "But the remainder is actually transported to the Canadian West coast or sold in the local Alberta market." If tariffs were to be implemented, it is "pretty difficult" to say exactly who would carry the burden -- producers or buyers -- he added. "The refiners in the Midwest and the Rockies have less options to substitute versus, say, the Gulf coast or the west coast refiners," O'Brien said. The company's diversified portfolio would also help shelter it from some exposure. "If we were to see tariffs, we'd likely see strengthening differentials for Bakken, for [Alaska North Slope crude] and possibly even the Permian," said O'Brien. "So lots of moving parts." Like others in the oil industry, ConocoPhillips is looking at the potential to supply power to cater to the boom in AI data centers. "It's got to be competitive for capital, but it certainly looks like some growth opportunities potentially coming, and we're assessing some of those opportunities right now," chief executive officer Ryan Lance told analysts after posting fourth quarter results. Although the Trump administration has called on domestic producers to step up output, Lance said his priority was to drive further efficiencies in operations. "A lot of our focus and attention right now is on permitting reform," Lance said, and the need to build out energy infrastructure. Drilling approvals, rights of ways, and permits on federal land all slowed under the administration of former-president Joe Biden and there is an opportunity now to get back on track. "That just adds to the overall efficiency of the system and should lead to a more sustained plateau or growth in our production coming out of the Lower 48 in terms of liquids and certainly the growing amount of gas volumes that are coming as well," Lance said. "So it just creates a better environment for investment and more efficient operations." Full-year 2025 output at ConocoPhillips is seen in the range of 2.34mn-2.38mn b/d of oil equivalent (boe/d), which includes 20,000 boe/d of planned turnarounds. Fourth quarter 2024 profit fell to $2.3bn from $3bn in the final three months of 2023, as higher volumes were more than offset by acquisition-related expenses and lower prices. Averaged realized prices fell 10pc to $52.37/boe from the fourth quarter of 2023. Fourth quarter output of 2.18mn boe/d represented an increase of 281,000 boe/d from the same quarter of the previous year. After adjusting for acquisitions and dispositions, output grew by 6pc. As part of a $2bn divestment goal, ConocoPhillips has signed agreements to sell non-core Lower 48 assets for $600mn. They are expected to close in the first half of the year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Crude Summit: Argentina coexisting with TMX crude line

Houston, 6 February (Argus) — Competition into the western US from the expansion of Trans Mountain's 890,000 b/d crude pipeline system in western Canada was not as severe as feared by Argentina producers. There is "still a place" for Argentina's Medanito crude on the US west coast, Francisco Villamil, executive trading manager at upstream producer Vista, said at the Argus Global Crude Summit Americas in Houston. Argentina producers were "pretty concerned" when the expansion went into service last May. At first, they felt price effects of the increased supply in the Pacific basin, but differentials stabilized and 50pc of TMX exports now go to Asia. The TMX system connects producers in Alberta to the docks at Burnaby, adjacent to Vancouver, British Columbia, and its capacity roughly tripled when the 590,000 b/d Trans Mountain Expansion (TMX) went into service. TMX has been a popular outlet for shippers, both for selling to US west coast refiners and also for producers looking to bypass the US altogether and target Asian countries. Since the TMX expansion came on line, the US west coast has received about 159,000 b/d from Vancouver, or 48pc of total Vancouver crude exports, according to Vortexa. Most of the remaining Vancouver exports went to China. Argentina averaged a record-breaking 717,100 b/d of crude production in 2024, the country's energy secretary reported. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Crude Summit: Tariffs risk drying up forward trading


06/02/25
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Crude Summit: Tariffs risk drying up forward trading

Houston, 6 February (Argus) — US tariffs aimed against its largest trading partners creates both opportunity and uncertainty for traders, but the threat alone also dissuades trading oil too far forward. "It's not just whether tariffs come in, but it's the threat of tariffs coming in," Equinor vice president of crude trading and refinery optimization Simon James told delegates at the Argus Global Crude Summit Americas in Houston, Texas, on Thursday. The expectation of tariffs has the risk of drying up some forward trading. "People will be nervous about committing too far forward," said James, highlighting the severity of the threats made by US president Donald Trump against its North American neighbors. "The fact that the initial tariffs around Canada and Mexico were so punitive at 25pc, how someone handles that risk ... is extremely difficult," said Simon. "I think that's something the market is starting to work through and I don't think there's a good answer yet." Buying patterns have already been disrupted with traders re-thinking traditional flows in light of the potential tariffs, whether they come or not. "Already today, traders and people who are trying to connect the dots, are looking into how they should change their buying patterns," SOCAR chief trading officer Taghi Taghi-Zada said on the panel. While the actual imposition of tariffs would be an important milestone, he said, the fact people are speaking about them with confidence has already affected the markets. Traders on the edge of information flow will be better equipped to make some kind of prediction and manage exposures, said Taghi-Zada, while Barbara Harrison, vice president of crude supply and trading at Chevron, expects news headlines are what will continue to drive volatility in the near term. "For us as traders, it also creates market opportunity, but it certainly does create a lot of market uncertainty," said Harrison. "We're going to continue to have that long-term fundamental drive on markets, and short-term headline drive on markets," said Harrison. She expects the short-term to be centered around tariffs and conflict in the Middle East and long-term related to Chinese demand and supply from Opec+ nations. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Crude Summit: US to remain top crude producer


06/02/25
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06/02/25

Crude Summit: US to remain top crude producer

Houston, 6 February (Argus) — The US is likely to remain the world's top crude producer for some time to come, according to shale executives at the Argus Global Crude Summit Americas in Houston, Texas, today. "In the foreseeable future, I don't really see a lot of change," said Shannon Flowers, director of crude and water marketing at Coterra Energy. There is still enough high-quality acreage to go after, while efficiency gains around faster drilling times and targeting longer wells are also helping to drive output gains. "There's a lot of creativity that goes on in trying to understand how we can do more with less," Flowers said today at the event. While the rig count is down 20pc over the last two years, production has grown by more than 1mn b/d. "Doing more with less is kind of a common theme," Flowers said in reference to operations at Coterra and across the industry. "I expect that to continue." While the Permian has dominated all the attention of late, the offshore Gulf of Mexico is likely to be an important driver of output going forward, with several projects starting up this year. Other regions such as the Rockies, Wyoming and possibly Utah could also see some growth. A recent round of mergers and acquisitions that saw $300bn of upstream oil and gas deals inked has further to run, says John Argo, vice president for the Williston Basin at Continental Resources. "There will continue to be more consolidation," Argo said. Scarcity with regard to remaining high-quality acreage means that valuations will continue to climb, he said. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Crude Summit: Asset-backed oil trades on the rise


06/02/25
News
06/02/25

Crude Summit: Asset-backed oil trades on the rise

Houston, 6 February (Argus) — Asset-backed trading is becoming commonplace in the oil industry as companies up and down the supply chain bring capabilities in-house, delegates heard at the Argus Global Crude Summit Americas in Houston, Texas, today. "Traditionally, long term hedging was popular, and it still is, but in general we've seen a move towards the front end of the curve," said CME Group's managing director and global head of energy and environmental products Peter Keavey. "The risks are really in the prompt," said Keavy. "We're seeing a lot of hedging in the short term [and] that also is reflective of asset-based optimization." HC Group managing partner Paul Chapman has also noticed a continued shift in trading by banks, which either exited or scaled down operations in 2014 and 2015, to those directly in the industry. "I would argue that pretty much every single business around the world — producer, miner, refiner, retailer of fuels and major — is on some spectrum of developing some asset trading," said Chapman. "And it's driven by a need to capture more margin." Changing trade flows have naturally had a bearing on who becomes more involved in individual markets. "Over the past five years, European players have more and more exposure to US molecules, whether it be crude oil or natural gas," said Keavey, which has driven the growth of trade of WTI, RBOB, gasoline, and heating oil in international markets. Changing energy policy, and policies to reach other political objectives, have a tendency to shape energy flows, whether they are intended or not, the speakers said. The Russian-Ukraine conflict is a prime example, and there are clear signs that US president Donald Trump's second term in office will do the same. "As this world gets more shaped by trade wars and there's more and more government intervention, that itself starts to break down some of the fundamentals of how some of these markets work," said Chapman. Keavey expects Canadian crude to continue to flow even under a Canada-US trade war, but "the question is, what disruption happens to the pricing?" By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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