THE MONTH IN BRIEF: Crude back above $50, more US sanctions and UK's motor cars go electric
| Date | 01 August 2017 |
| DOI | http://doi.org/10.1111/oet.12494 |
| Published date | 01 August 2017 |
THE MONTH IN BRIEF
Crude back above $50, more US sanctions and UK’s motor cars go electric
Crude oil found itself back above $50/bbl as Brent
front-month futures passed the mark on July 25, clos-
ing out at $52.65/bbl on the 31st: the day that saw WTI
breach the $50 mark for the rst time since the middle
of May, settling at $50.17/bbl. Crude’s journey upwards
began on July 7 when Brent hit its low of the month at
$46.71/bbl. ereaer,it began its rise of nearly $6 to the
end of the month largely on the back of a series of bullish
stories about curbs on production, falling stock levels
and US oil sanctions. In the US, the EIA cut its forecast
for US production,w hile the news from OPECwas f ull of
tales of tighter production controls in future, including
bringing Nigeria and Libya into the current quota sys-
tem, plus a self-imposed cap on exports by Saudi Arabia
in August and the announcement of a meeting of some
OPEC members and their allies to ensure full compli-
ance with the production quotas thatwere renewed from
the start of the month. No matter that several countries
were in excess of their quotas orthat the Saudi export cut
coincided with an increase in domestic oil demand, all
the markets wanted to hear was news that b oosted prices.
Both houses of the US Congress voted overwhelm-
ingly for a new package of sanctions on Russia and
Iran including the energy industries of both countries.
Among the areas targeted were Arct ic exploration and
shale oil in Russia, which were declared o-limits to
US rms. A furt her provision of the bill opened-up
the possibility of s anctions on non-US rms involved
in nancing or building Russian pipelines, which
prompted howls of rage from some European countries
involved in negotiations over future gas pipelines. In
a separate move, the Trump administration threat-
ened economic sanctions on Venezuela following an
election that paved the way for President Maduro
to gain greatly increased powers, which the US
said was undemocratic. e sanctions include a
possible ban on US e xports of crude and products
to Venezuela. Plans to ban the import of Venezuelan
crudewerealsodiscussedbutreportedshelved.e
White House dropped plans for a ‘border adjustment
tax’ that would have included a tax on US imports
of oil.
Libya’soilproductionedgedabove1mnbpd,forthe
rst time since June 2013, following yet another cease-
re between rival factions. In Nigeria, yet another attack
on an oil pipeline led to a c ut in production and exports.
e Syrian Army recaptured two oilelds from Islamic
State. e conf rontation be tween Saudi Arabia and its
allies withQatar continued, withthe Abu Dhabi National
Oil Company being forced to bring in condensate f rom
the US to replace its nor mal imports from Qatar. Egypt
becamethelatestMiddleEasterncountrytocutsubsi-
dies on domestic gasoline and diesel in an attempt to
curb their consumption. Power cuts were reported in
Pakistan as several utilities ran out of money to pay for
fuel oil.
e British government revealed plans to ban the
sale of petrol-driven and diesel motor cars from 2040
in order to reduce emission levels. Diesel emissions in
particular have come under re for the pollution they
cause, especially in urban areas, which has prompted
some European countries to announce future restric-
tions or prohibitions on their use, reversing the EU’s
previous policy of promoting diesel-powered vehicles
over petrol ones. e move away from petroleum-based
fuels has prompted fears of further renery closures
across Europe. Abu Dhabi’s state investment com-
pany, Mubadala, has revived plans for a 200,000 bpd
reneryinFujairah.Iraqinvitedbidsforthebuild-
ing of a 150,000 bpd renery at Nassiriyah which
would have access to discounted supplies of crude
oil.
© 2017 John Wiley& Sons Ltd
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