RIYADH: Oil prices dipped on Monday as investors tread cautiously ahead of fresh economic data from top consumers in the US and China this week, though expected crude supply cuts from Saudi Arabia and Russia limited losses.
Brent crude futures fell 55 cents, or 0.7 percent, to $77.92 a barrel by 9:30 a.m. Saudi time. US West Texas Intermediate crude was at $73.31 a barrel, down 55 cents, or 0.7 percent.
“Oil traders may be cautious ahead of the US CPI (consumer price index) and China’s slew of economic data later this week,” said CMC Markets analyst Tina Teng.
However, she added that crude prices could rebound after the Organization of the Petroleum Exporting Countries and its allies, also known as OPEC+, announced plans to reduce supply further.
China’s factory-gate prices fell at the fastest pace in over seven years in June, government data showed on Monday, as the momentum of economic recovery in the world’s second-largest economy has slowed.
The oil benchmarks gained more than 4 percent last week to touch their highest marks since May, rising for a second straight week after the world’s biggest oil exporters Saudi Arabia and Russia pledged to deepen supply cuts in August.
“The presence of economic slowdowns in China adds to the prevailing uncertainty in the oil market,” said Mukesh Sahdev, head of downstream and oil trading at Rystad Energy.
“The market’s instability is further fueled by the ongoing tug-of-war between fears of demand control by Western economies and the supply-control strategies employed by OPEC, which impacts the oil market’s delicate balance.”
Qatar Energy signs 10-year deal with ENOC group to sell condensate
Qatar Energy has signed a 10-year agreement with the UAE-based Emirates National Oil Co, to supply 120 million barrels of petroleum condensate beginning this month.
Qatar Energy signed the deal with ENOC Supply and Trading Co., affiliated to the ENOC Group.
According to Qatar News Agency, Minister of State for Energy Affairs Saad bin Sherida Al-Kaabi said the signing of this long-term agreement for the sale of condensate will strengthen Qatar Energy’s relationship with the ENOC, which dates back to 2008.
“We look forward to building on the historical working relationship, and on the confidence in the State of Qatar’s exports of condensate, which contribute to enhancing the growth and development that our partners aspire to,” said Al-Kaabi, who is also the CEO of Qatar Energy.
This agreement sheds light on Qatar Energy’s strategy related to direct sales operations to end users and building strategic business relations and cooperation.
The terms of the agreement allow the parties to increase the volumes of condensate included in the contract, as additional quantities of condensate are expected to be exported from Qatar once production starts from the Northeast and South field expansion projects.
Mexican Pemex estimates loss of 700k barrels of oil
Mexican oil company Pemex estimates that a deadly fire on a major offshore platform off the southern edge of the Gulf of Mexico has led to the loss of 700,000 barrels of crude oil production so far, the CEO of the state company, Octavio Romero said.
The fire started early Friday on the Nohoch-A link platform of the company’s Cantarell Field and later moved to a compression complex, killing two people. The fire has since been controlled, the company said.
“Today, 700,000 barrels of losses have been reflected … because we closed practically all the wells in the area,” Romero said via the company’s Twitter account.
As of Saturday afternoon, the executive added 600,000 barrels of production had resumed.
The company said that searchers were still looking for the person who disappeared after the fire in Cantarell, an emblematic asset producing some 170,000 barrels of oil per day.
(With input from Reuters)