BP (NYSE:BP) says that global oil demand today has already exceeded 100 million barrels a day, officially putting to bed that incorrect prediction that global oil demand had peaked. That, among other reasons, is why oil is staying solid despite attempts by China to cool the market by releasing gasoline and diesel reserves to boost supply as the market realizes that this is just a short-term fix and will only serve to increase demand in China.
Chinese vice-premier asked coal-fired power companies to restore power generation to normal levels ASAP. Probably in homage to the COP26 conference that Chinese President Xi Jinping failed to attend or give any time frame where they might curtail coal usage. Of course President Xi is probably feeling pretty bad because Joe Biden said that he was very disappointed with him for not showing up. He might lose some sleep.
Biden is also disappointed with OPEC and Russia. Russia because Vladimir Putin failed to show up—except by video conference—and he came without any new commitments to lower greenhouse gas emissions. He is disappointed with OPEC because they failed to jump at his request to increase output, especially after Biden has soured relations with Saudi Arabia and the rest of the cartel. Maybe Crown Prince Mohammed Bin Salman is losing sleep, now broken-hearted by Biden’s disappointment with him.
Bloomberg reports that Russia’s oil output increased in October for a second straight month as companies open the taps under the OPEC+ agreement to raise output. The nation produced 45.86 million tons of crude oil and condensate last month, according to data from the Energy Ministry’s CDU-TEK unit.
That equals 10.843 million barrels a day, based on a 7.33 barrel-per-ton conversion ratio, and is 1.1% higher than September. Russia has the right to increase its crude-only production by some 100,000 barrels a day each month starting August. That’s a quarter of the total crude supply hikes targeted by the Organization of Petroleum Exporting Countries and its allies.
The increases are set to continue until all of the production curbs that were implemented during the depths of the pandemic are rolled back. The alliance will meet Nov. 4 amid mounting pressure from oil consumers to increase output faster to stem price growth.
The Russian report broke oil but it is unlikely that OPEC Plus will add much more oil. OPEC Plus is key this week. We get API tonight. Looking for a modest draw yet next week draws should pick up.