Inside U.S. Oil

INSIDE U.S. OIL

WEDNESDAY, NOVEMBER 28, 2018, U.S. EDITION

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TOP NEWS

Falih says Saudi Arabia won't cut oil output alone Saudi Energy Minister Khalid al-Falih said on Wednesday his country would not cut oil output on its own to stabilise the market, as OPEC peer Nigeria said it was too early to signal whether it would take part in any decision to reduce production. Falih was in Abuja for a meeting with Nigerian oil minister Emmanuel Ibe Kachikwu. The Saudi minister said signals from fellow OPEC members Iraq, Nigeria and Libya were positive ahead of the Dec. 6 OPEC meeting in Vienna as all ministers were keen to bring back stability to oil markets.

ANALYSIS-Oil investors still on edge, waiting on OPEC's word Global oil markets are nervously eyeing OPEC's upcoming meeting for clarity on future supply as the dust settles after a full-fledged rout in crude markets over the last several weeks. So far, there is no clear view if production will be cut or remain steady, and that uncertainty raises the risk of more volatile trading after mass selling caused oil to drop by more than 30 percent in little over a month.

ANALYSIS-Contender: Saudi Arabia nabs new China oil demand, challenges Russia's top spot Saudi Arabia is set to expand its market share in China this year for the first time since 2012, with demand stirred up by new Chinese refiners pushing the kingdom back into contention with Russia as top supplier to the world's largest oil buyer. Saudi Arabia, the biggest global oil exporter, has been surpassed by Russia as top crude supplier to China the past two years as private "teapot" refiners and a new pipeline drove up demand for Russian oil.

EXCLUSIVE-Brazil oil tanker collision reveals offshore regulatory gaps Brazil has more than doubled the number of risky ship-to-ship oil transfers this year, but its monitoring of such offshore maneuvers is lax, to a point where a July 2017 collision between two tankers was not reported, according to a Reuters review of government and shipping records. Transfers are projected to keep rising as the country's deep- water discoveries have lured major companies including Exxon Mobil Corp and Royal Dutch Shell Plc to recent offshore auctions. During these maneuvers, ships pull alongside one another and oil is transferred to a vessel via high-pressure hoses. The practice has only been allowed since 2013 in Brazilian waters. November 28, 2018

Some countries trying to harm Iran by manipulating oil market - Iran minister Some countries are trying to harm Iran by manipulating the oil market, Iranian Oil Minister Bijan Zanganeh said on Wednesday, according to the semi-official Mehr news agency. Zanganeh did not name a country but Iranian officials have accused Saudi Arabia of trying to take Iran's share of the oil market in recent months. The United States restored sanctions targeting Iran's oil, banking and transport sectors this month.

Gazprom Neft's thirst for oil shows Russian dilemma on OPEC pact In the green-to-golden steppe some 1,500 km east of Moscow, a unit of Gazprom Neft, Russia's third-biggest oil producer, is drilling hard as it eyes a production hike of 20 percent a year, developing once-forgotten and depleted fields. That thirst for growth, a cornerstone of Gazprom Neft's plans to increase its oil production by 8 percent to 100 million tonnes (2 million barrels per day) in 2020, shows the struggle Moscow faces in adhering to a global deal on oil output.

EXCLUSIVE-Murphy Oil in talks to sell Malaysian oil, gas assets -sources Murphy Oil Corporation is in talks to sell its Malaysian oil and gas assets after an unsolicited bid that could fetch between $2 billion to $3 billion, people familiar with the matter said, in the latest energy M&A deal in the Southeast Asian nation. The independent U.S. oil and gas exploration and production company has tapped banks for the potential sale of its majority interests in eight separate offshore production sharing contracts in Malaysia, said the people, who declined to be identified because the matter is confidential.

Three North Sea Forties oil cargoes dropped as Buzzard field shut The shutdown of Britain's largest oilfield for repairs is reducing supply of a North Sea crude that helps to set global prices, as trade sources said on Tuesday three cargoes due to load in December had been cancelled. The Buzzard oilfield, which pumps about 150,000 barrels per day and is the largest contributor to the Forties crude stream, has closed temporarily after the discovery of pipe corrosion. A smaller field linked to Forties, Total's Elgin-Franklin, is also shut for maintenance.

Trinidad Drilling top execs quit as Ensign tender gets most shares Canada's Ensign Energy Services Inc said on Tuesday 56.38 percent of Trinidad Drilling Ltd shares have been tendered in its hostile offer, resulting in rival bidder Precision Drilling Corp walking away and the resignation of Trinidad's top executives. The oilfield services provider said the tendered shares helped meet the statutory minimum condition for its C$947 million ($711.8 million) offer. Ensign now owns 66.18 percent of Trinidad shares, including the stake it previously owned.

Asian gasoil refining margins skid to 4-mth low as China opens export taps Asian refining margins for gasoil slid to their lowest in four months on Wednesday, squeezed as traders brace for a flood of extra Chinese fuel hitting a region already awash in supplies at a time of unexpectedly lacklustre demand. Refining margins - known as 'cracks' - for gasoil with 10 parts per million (ppm) sulphur content fell to $14.52 a barrel over Dubai crude on Wednesday, their weakest since Aug. 2.

China's Zhejiang Petrochemical plans trial runs at some refining units China's privately-run Zhejiang Petrochemical Corp is expected to start partial test operations at some units around end of this year and early 2019, but a full trial operation is only expected in the second quarter of next year, a company executive said. "The company is planning to start trial runs at the crude unit and also some downstream units around end of the year and early in 2019," said the Zhejiang-based executive, who declined to be named as he is not authorized to speak to press.

2 November 28, 2018

Middle-East Weekly Oil Flows - Crude exports from the Middle East drop to 112 mbbl last week

Crude exports from the Middle East Gulf were assessed at 112 million bbl last week, a w-o-w drop of almost 11 million bbl, while also being the lowest level in the last four weeks. Exports for week ending November 18th were revised at 122.8 million bbl, an upward revision of 1.6 million bbl. The drop in exports for last week came largely on the back of lower shipments from Kuwait, the UAE and Iraq, with Saudi Arabia however offset a large part of the drop. To read more, click here.

MARKETS TODAY

OIL: Oil rose further above $60 a barrel, supported by expectations that OPEC and its partners will next week decide to curb supply and helped by a drop in North Sea output.

FOREX: The dollar rose before a speech by the Federal Reserve's chairman that may provide insights into the central bank's plans for monetary tightening and its reaction to recent criticism by U.S. President Donald Trump.

U.S. EVENTS SCHEDULED FOR THE DAY (ET)

0830 GDP 2nd estimate for Q3: Expected 3.5 pct; Prior 3.5 pct 0830 Wholesale inventories Adv for Oct: Prior 0.4 pct 1000 New home sales-units for Oct: Expected 0.575 mln; Prior 0.553 mln 1030 EIA Weekly Crude Stocks: Expected 0.769 mln; Prior 4.851 mln 1200 Federal Reserve Chairman Jerome Powell speaks before the Economic Club of New York Signature Luncheon

TECHNICAL CHARTS

(Inside U.S. Oil is compiled by Shruthi Narayanan in Bengaluru)

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