Trump sees output cut from Saudis, Russia: Update
President Donald Trump said he expects and "hopes" that Saudi Arabia and Russia will be cutting oil output by 10mn-15mn bls, following discussions with the leaders of two Opec+ members.
Trump announced the possible cuts today through a Tweet, after talking with Saudi crown prince Mohammad bin Salman, who he said had spoken with Russian president Vladimir Putin. The White House has not provided further details, such as the timing of the output cut or if the amount would be 10mn-15mn bls or the far larger amount of 10mn-15mn b/d.
"I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" Trump said in a post on Twitter. He added the cut "could be as high as 15 Million Barrels."
Brent prompt-month crude futures briefly surged past $33/bl on the news, up from $26/bl earlier in the day, but dropped to $30/bl as further details trickled out that have raised questions about the likelihood of such production cuts.
Putin, Saudi talks denied
The Kremlin denies there was a conversation between the crown prince and Putin. Putin's spokesman told state-run newswire RIA Novosti there was "no such conversation," after Trump said the conversation occurred.
Saudi Arabia today called for an urgent meeting of Opec+ members with the goal of seeking a "fair solution to restore a desired balance of the oil markets," according to the government-owned press agency SPA. But the statement said the meeting should involve a "group of other countries," suggesting output cuts might need support from other producers. The US in 2019 was the world's largest oil producer.
Trump late yesterday said he was "confident" the two Opec+ members would reach a deal on oil production, in response to a price collapse that has upended global markets. Trump declined to offer specifics on what an agreement would entail, or if the US would need to make its own commitments on lower production.
"If they are unable to solve it, then I think I know what to do to solve it," Trump said. "We will not mention it now, but it is tough."
US shale producers have floated the idea of reinstating policies to restrict oil production in Texas. Former US energy secretary Rick Perry earlier this week said his advice to Trump would be to ban foreign crude imports for 60-90 days. But large oil producers and refiners oppose the idea.
The American Petroleum Institute and the American Fuels & Petrochemical Manufacturers said yesterday in a letter to Trump such a move would "jeopardize gains" in energy dominance in the US.
Russia not ruling out talks
Russian energy minister Alexander Novak earlier today said he did not rule out resuming talks with Saudi Arabia, and said there was no incentive for Russia to boost production now.
"Everyone is suffering now", Novak said on Echo of Moscow radio. "Russia does not increase production now as there is no economic sense."
Asked if Russia would seek to revive talks with Saudi Arabia and other members of the Opec+ coalition, Novak said: "This is one of the options and we do not rule out it if becomes necessary". But he said no ministerial-level talks have taken place.
After the Opec+ agreement on production restraint broke down in early March, Novak said that Russia could increase production by 200,000-300,000 b/d and had the potential to add 500,000 b/d.
Those comments were made after Saudi Arabia's state-controlled Aramco said it would boost its supplies to its international and domestic customers to 12.3mn b/d of crude in April. This provoked a sharp fall in the price of crude, which has since been exacerbated by measures taken to prevent to spread of the coronavirus epidemic.
Related news posts
Indonesia's Pertamina to complete gasoline unit in Aug
Indonesia's Pertamina to complete gasoline unit in Aug
Singapore, 25 April (Argus) — Indonesian state-controlled refiner Pertamina aims to finish building its new 90,000 b/d residual fluid catalytic cracker (RFCC) in the Balikpapan refinery in August, the firm said. The RFCC is a gasoline production unit, which typically uses residual fuel as a feedstock. The unit will be able to produce propylene, LPG and 92R gasoline that will meet the Euro V specifications, said Pertamina last week, without disclosing further details such as the start-up date. The newly built RFCC unit will be the largest in Indonesia, with the second-largest being the 83,000 b/d RFCC in Balongan and the third-largest the 54,000 b/d RFCC in Cilacap. The new RFCC will also help reduce Indonesia's reliance on gasoline imports. Indonesia currently imports around 9mn-11mn bl/month of gasoline, making it the largest gasoline buyer in the Asia-Pacific. The new RFCC will increase Pertamina's gasoline production by a conservative estimate of 45,000 b/d or 1.3mn bl, or around 10pc of Pertamina's current import demand, according to estimates from an oil analyst. The installation of the new RFCC is part of Pertamina's Refinery Development Master Plan (RDMP), which will take place in two phases. The first phase includes revamping existing units at the Balikpapan refinery, such as the crude distillation unit, vacuum distillation unit, and hydrocracking unit. It also involves building new units, such as the aforementioned RFCC, a gasoline hydrotreater, diesel hydrotreater, and naphtha hydrotreater. The second phase includes building a new residue desulphurisation unit. The RDMP also includes expanding the capacity of the Balikpapan refinery from 260,000 b/d to 350,000 b/d, said Pertamina's chief executive officer Nicke Widyawati. The Balikpapan expansion is expected to be completed in May. By Aldric Chew Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Gail to shut Dabhol LNG terminal for monsoon
India’s Gail to shut Dabhol LNG terminal for monsoon
Mumbai, 25 April (Argus) — Indian state-controlled gas distributor Gail is planning to shut its 5mn t/yr Dabhol LNG terminal on the west coast from 15 May, ahead of monsoon rains. Gail will also stop importing LNG from mid-May at the terminal, a company official told Argus . This is because of the lack of a breakwater facility at the terminal, which prevents it from anchoring ships in turbulent seas. The breakwater facility was expected to be completed in January, but the cause of the delay is unknown. The terminal is likely to resume operations from the end of September, similar to its plans in 2023 , as this shutdown over the monsoon season is routine. Gail is set to receive a total of 139,635t LNG at the Dabhol terminal in May, which will arrive in two separate shipments from the US' 5.75mn t/yr Cove Point export facility. Both cargoes will be the last that the terminal will receive before it shuts in mid-May. It has received 583,326t of LNG at the terminal since the beginning of the year, lower by 4pc on the year, data from market analytics firm Kpler show. The Dabhol terminal only receives about 2.9mn t/yr of LNG, despite having a nameplate capacity of 5mn t/yr, because it is not used during the monsoon season. Gail intends to gradually increase the capacity of the Dabhol terminal to 12mn t/yr by April 2030–March 2031. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Barge delays at Algiers lock near New Orleans
Barge delays at Algiers lock near New Orleans
Houston, 24 April (Argus) — Barges are facing lengthy delays at the Algiers lock near New Orleans as vessels reroute around closures at the Port Allen lock and the Algiers Canal. Delays at the Algiers Lock —at the interconnection of the Mississippi River and the Gulf Intracoastal Waterway— have reached around 37 hours in the past day, according to the US Army Corps of Engineers' lock report. Around 50 vessels are waiting to cross the Algiers lock. Another 70 vessels were waiting at the nearby Harvey lock with a six-hour wait in the past day. The closure at Port Allen lock has spurred the delays, causing vessels to reroute through the Algiers lock. The Port Allen lock is expected to reopen on 28 April, which should relieve pressure on the Algiers lock. Some traffic has been rerouted through the nearby Harvey lock since the Algiers Canal was closed by a collapsed powerline, the US Coast Guard said. The powerline fell on two barges, but no injuries or damages were reported. The wire is being removed by energy company Entergy. The canal is anticipated to reopen at midnight on 25 April. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cepsa supplies HVO bunker fuel in Algeciras
Cepsa supplies HVO bunker fuel in Algeciras
London, 24 April (Argus) — Spanish refiner and bunker fuel supplier Cepsa has recently delivered 150t of 100pc hydrotreated vegetable oil (HVO) by truck to the Ramform Hyperion at the port of Algeciras. The supply follows market participants reporting firmer buying interest for HVO as a marine fuel from ferry lines in the Mediterranean in recent sessions. The supplied HVO is said to be of class II, with used cooking oil (UCO) as the feedstock. Cepsa added that the supply was completed in cooperation with Bunker Holding subsidiary Glander International Bunkering, and could bring about a greenhouse gas (GHG) emissions reduction of up to 90pc compared with conventional fuel oil. Cepsa will also look to obtain capability to supply marine biodiesel blends exceeding 25pc biodiesel content by the end of the year, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. This also follows plans by Cepsa to build a 500,000 t/yr HVO plant in Huelva , set to start production in the first half of 2026. Argus assessed the price of class II HVO on a fob Amsterdam-Rotterdam-Antwerp (ARA) basis at an average of $1,765.54/t in April so far, a premium of $906.41/t to marine gasoil (MGO) dob Algeciras prices in the same month. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more