Crude exports from Middle East to drop by 1.2 million b/d

Crude exports from Middle East to drop by 1.2 million b/d

Baku, Azerbaijan, Nov. 3

By Leman Zeynalova – Trend:

The near $10 per barrel drop in Brent crude seen over October is a spillover from the global sell-off in equities and broader risk-off sentiment in the market, according to the report of Fitch Solutions Macro Research (a unit of Fitch Group).

"Sentiment has been damaged by concerns over rising risks to global economic growth, including rising protectionism, global quantitative tapering, rate-hiking in the US, a stronger US dollar and higher oil prices," said the report obtained by Trend.

The company believes that a significant slowdown in global trade and economic growth would undermine demand for oil, particularly when compounded by the rising price of Brent.

However, the physical threat to demand is not immediate, unlike the acute risks on the supply side that are unfolding around Iran, according to Fitch Solutions.

The company analysts believe that from a short-term and technical perspective oil looks vulnerable.

"Downside momentum is building and the front-month contract has broken back below its 50-day moving average. Time spreads have collapsed, with the front-to-second month spread flipping into contango. As of yet, the sell-off does not look overdone. Options pricing signals that buyers are seeking greater downs ide protection, while bullish positioning in Brent has partly reversed over recent weeks. The ratio of long positions to short held by money managers in Brent has fallen to 15.3, down from a peak of 23.4 in late September," said the report.

Bearish market sentiment and general risk aversion could force a retest of support in the low $70 /bbl range, according to the Fitch Solutions forecasts.

"The focus on the broader macro environment is taking focus away from the fundamentals in oil, which remain broadly bullish. Most importantly, market participants seem to have lost sight of November 5 and the re-imposition of nuclear-related sanctions on Iranian oil. Tanker tracking data for the first two weeks of October put crude and condensates exports somewhere in the region of 2 million barrels per day. Under our base case scenario, exports will fall to 1.2 million barrels per day," said the report.

However, this scenario requires that US extend (limited) sanctions waivers, according to the company.

"Given the hardline position of the US and lack of visible progress on waivers negotiations to-date, there are very substantial risks to this view. The market is ill-prepared for the los s of these barrels and is at growing risk of an upwards spike in prices, when supply-side drivers once again take the market's focus ahead of demand," said the report.

---

Follow the author on Twitter:@Lyaman_Zeyn

WHO says COVID-19 vaccine supply hitches could reignite upticks in Africa
WHO says COVID-19 vaccine supply hitches could reignite upticks in Africa
Ambedkar remembered on birth anniversary in Dubai
Ambedkar remembered on birth anniversary in Dubai
AzTV releases video on April 2016 battles: "We honor the April victory with pride!"
AzTV releases video on April 2016 battles: "We honor the April victory with pride!"
Loading Bars
Latest
Over 610 Palestinians injured in clashes with Israeli police in East Jerusalem - newspaper
Some 20 terrorists killed, 4 bases destroyed in Burkina Faso
WHO records over 677,000 new daily cases of COVID-19 worldwide
Italy reports just over 5,000 new COVID-19 cases, 198 deaths
7 rockets fired from Gaza at Jerusalem area: Israeli military
Saudi Arabia to require arriving visitors to quarantine for a week
Oil prices inch higher as traders eye U.S. pipeline shutdown
Palestinians report several killed in Israeli air raids on Gaza
Biden confident he will meet with Putin
Over 1.6mln receive COVID-19 vaccine in Kazakhstan
Azerbaijan's import of cars from Turkey drops
Iran makes advanced industrial flame arrester
Putin says 21.5 mln Russians vaccinated against COVID-19
U.S. Treasury launches access to $350 billion in state/local COVID-19 aid
President Ilham Aliyev receives delegation led by Russian foreign minister (PHOTO)
Global COVID-19 cases, deaths reach plateau - WHO
Electric, hybrid car sales in Turkey surge over 200% in 4 months
Georgian, North Macedonian Presidents sign visa-free agreement
Second component of Sputnik V vaccine delivered to Kyrgyzstan
Iran produces oil-based ozone generator
India COVID cases hold close to record highs as calls widen for national lockdown
USAID’s focus to remain on modernization of energy sector in Kazakhstan
China-made meteorological satellite for dawn-dusk orbit passes review
Saudi Arabia's GDP contracts 3.3% in Q1 on oil output, non-oil economy recovers
Azerbaijan purchasing new equipment to speed up mine clearance on liberated lands (VIDEO)
Iran's Energy Exchange announces products to be on sale on May 11
Weekly review of Azerbaijani precious metals market
Activities in Iran’s Khorramshahr port climb
Iran’s Bahar Azadi gold coin price continues to increase
New facility to be put into operation in Iran’s electricity sector
Iran boosts production, export of greens and vegetables
Azerbaijan shares data on number of vaccinated citizens for May 10
Iran's ICOFC to develop two gas fields
National leader Heydar Aliyev`s 98th anniversary marked at parliament (PHOTO)
Program of Russian FM's visit to Azerbaijan unveiled
Azerbaijan confirms 371 more COVID-19 cases, 892 recoveries
Public reps of Azerbaijan paying tribute to late National Leader Heydar Aliyev (PHOTO)
Mine-clearing operations begin in Azerbaijan's liberated villages
Iran talks IAEA monitoring cameras at nuclear sites
Presidents of Russia, Azerbaijan hold phone conversation
Int'l organizations notified about Armenia's crimes against Azerbaijani civilians - Azerbaijan's prosecutor general
Criminal cases against Armenian terrorists who fought in Karabakh nearing completion - Prosecutor General of Azerbaijan
Uzbekistan eyes ratifying two more conventions of International Labor Organization
Uzbek mining and metallurgical complex exceeds export plan by half
Cargo movements in Iran’s Imam Khomeini port up
Iran reveals details of saffron exports
Various results achieved in Vienna every day – Iran’s MFA
Oil gains after cyberattack forces shutdown of U.S. fuel pipelines
Heydar Aliyev saved independent Azerbaijan from disappearing from political map - Russian expert
Iran, Saudi Arabia conduct both bilateral, regional talks – Iran's MFA
Registration of presidential candidates starts in Iran
Volume of loaded, unloaded cargo in Iranian ports grows
President Ilham Aliyev ends visit to Nakhchivan Autonomous Republic (PHOTO)
Uzbekistan notes significant increase in bank cash turnover in 4M2021
Uzbekneftegaz reveals indicators of oil and gas production and processing in 4M2021
Uzbekistan and France sign cooperation program
Uzbekistan Helicopters LLC opens tender for refueling vehicle
Political will of Heydar Aliyev bearing fruit - colonel general
Carbon price to rise, as governments pursue deeper decarbonisation strategies
Iran expects to increase vaccination
President Ilham Aliyev interviewed by Azerbaijan Television (PHOTO)
Death toll from COVID-19 exceeds 75,000 people
Number of confirmed coronavirus cases in Russia rises by 8,465 per day
President Ilham Aliyev views Ordubad railway station (PHOTO)
President Aliyev attends launch of project for reconstruction of drinking water supply, sewerage systems in Ordubad (PHOTO)
President Ilham Aliyev views construction of Ordubad Hydroelectric Power Plant (PHOTO)
ERIELL to work on wells at field in Uzbekistan’s Karakalpakstan
First Vice President of Azerbaijan shares publication on occasion of 98th anniversary of birth of National Leader Heydar Aliyev
President Ilham Aliyev attends inauguration of Julfa-Ordubad highway (PHOTO)
Uzbekistan’s 1Q2021 tomatoes export revealed
Turkey sees increase in cement exports to Azerbaijan
Kazakhstan-Israel trade plummets y-o-y
Uzbekistan to connect number of small industrial zones to utility networks
Weekly review of Azerbaijani currency market
ACG oil transshipment from Ceyhan terminal exceeds 70 mb YTD
EBRD, EIB, Proparco to fund construction of solar power plant in Uzbekistan’s Samarkand
President Ilham Aliyev attends opening of Artificial Insemination Center in Nakhchivan (PHOTO)
Azerbaijan creating 'green' energy zone in liberated Karabakh
President Ilham Aliyev attends opening of Nakhchivan Garrison Central Hospital (PHOTO)
President Ilham Aliyev attended inauguration of Nakhchivan branch of “Azerkhalcha” OJSC (PHOTO)
Weekly review of Azerbaijani oil market
Bank of Israel cuts government bond purchases
President Ilham Aliyev viewed construction of “ASAN xidmət” Center in Nakhchivan (PHOTO)
Turkey's 4M2021 steel exports to Turkmenistan shrink
Armenian Parliament to reconsider issue of electing new prime minister
Iran increases sturgeon farming
World's largest cargo plane with UK Covid aid takes off for India
President Ilham Aliyev visits statue of national leader Heydar Aliyev in Nakhchivan (PHOTO)
India to recruit 400 retired medical officers of AMC, SSC; Defence Ministry issues orders
Iran eyes to expand ties Turkmenistan
Azerbaijani president visits graves of martyrs of Patriotic War at Nakhchivan city cemetery (PHOTO)
Indian-Led Ground-Breaking Cancer Test Hopes To Launch This Year
President Aliyev attends opening of military aerodrome of Special Combined Arms Army (PHOTO)
Iran to renovate public transport fleet
Iranian water and electricity companies to enter EAEU market
Artists of Int'l Arts Festival create 'Kharybulbul' model in Azerbaijan's liberated lands (PHOTO)
Indian and Indonesian navies carry out military drill in southern Arabian Sea
President Aliyev attends presentation of new runway at Nakhchivan International Airport (PHOTO)
Iran continues investments for dev't of postal network
Iran, Serbia to expand ties by preferential trade agreement
All news