The U.S. shale patch is trimming capital expenditure budgets to preserve cash amid the lower oil prices. American producers could further cut back on spending and activity if the prevailing forecasts of a global oversupply materialize in the coming months.
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.
Trump said after his talks with Vladimir Putin in Alaska on Friday that he would urge Zelensky to make a quick deal and sounded receptive to the Russian leader’s demand that Ukraine give up large swathes of land. But in a show of support for Ukraine, leaders including European Commission President Ursula von der Leyen, French President Emmanuel Macron and NATO Secretary-General Mark Rutte joined the high-stakes meeting in Washington.
“Betting markets aren’t overly convinced that we’ll see a ceasefire before the end of the year,” ING commodity analysts said in a note following the meeting. Indeed, the surrender of the Donbass, most of which is already under Russian control, remains a no-no for Zelensky, it appears, while it also remains a hard condition for Russia. This mars the prospect of peace quite considerably unless both sides are willing to make concessions.
In one of his more controversial decisions last week, President Trump said the U.S. would impose an additional 25% on many Indian imports—because of India’s imports of Russian crude oil. The news lifted oil prices, and Indian refiners suspended their Russian oil orders.
Kuwait expects oil prices to remain below $72 per barrel in the near term, Tareq Al-Roumi, the Oil Minister of one of OPEC’s top producers, said on Thursday.
Crude oil prices were headed for a steep weekly drop as of Friday morning, with a combination of tariff fears and OPEC+ production instilling a strong sense of bearishness in oil traders.
As regards OPEC+ production policy, the analysts said that “While OPEC+ policy remains flexible, we assume OPEC+ will keep its production quota unchanged after September as we expect the pace of builds in OECD commercial stocks to accelerate and seasonal demand tailwinds to fade away.”
Analysts note that much of the actual production growth since April has come from Saudi Arabia and the UAE, with other OPEC+ members struggling to meet their targets. RBC Capital Markets’ Helima Croft said the strategy has favored producers with spare capacity, as prices have held steady compared to early-year lows despite rising supply.
The U.S. government has made it clear it wants to prevent the Venezuelan government from reaping any financial benefit from the country’s oil wealth, but this has proved difficult, since U.S. refiners are sizable buyers of Venezuelan crude and the chief reason why Chevron was granted that sanction exemption. Last year, imports of Venezuelan crude in the U.S. hit peaks of some 300,000 barrels daily, per data from Kpler.