The Biden administration is trying to win friends in Iran and influence Ayatollahs basically begging and pleading for Iran to rejoin the 2015 nuclear deal. Not only has Biden offered to call the Supreme grand poo-bah Ali Khamenei directly but his administration says it is ready to lift all sanctions that are inconsistent with the JCPOA nuclear accord. Oil traders have seen this coming and in the recent selloff had started to price in the return of Iranian oil, but I am not sure that they expected it might be this quick, assuming it happens.
Iran is already laughing off oil sanctions, exporting over 1.5 million barrels a day and rising so it is unclear that Iran has any real incentive to call back into the deal unless they can get Biden to give them boatloads of U.S. taxpayers money. Maybe if Biden kisses the ring of Ayatollah Khamenei against the backdrop of shouts of “death to America and Israel” the supreme whatever he is might agree.
It is hard to see a good strategic reason for rendering this accord. Iran has continued to support terror groups and has actively attacked either directly or through proxies U.S., Saudi Arabian and Israeli interests. They support Hamas and the Houthi rebels and have fought to prop up the Bashar Assad regime in Syria. Iran caused havoc in Iraq, extending the war and is responsible for the deaths and injuries of countless American soldiers by IED devices.
Several sources, among them Reuters, believe that since mid-June 2014, Iranian combat troops are in Iraq, which Iran denies. Iran recently attacked by proxies ISIS a US military base in Syria. So why are we in such a hurry to get Iran back in this deal. Oh yeah, right. I remember, Trump is bad. Of course what do you expect from an administration that used poor migrants as political pawns leading children to be exploited in the worst possible way so you can promote your false political narrative. Human trafficking and human misery, so ok as you can regain political power. If we lift sanction on Iran perhaps they could squeeze out 1 million barrels a day of oil and condensate.
The Energy Information Administrations (EIA) weekly data included a slew of adjustments. The EIA reported that crude oil fell by 3.5 million barrels last week to nearly 502 million barrels, putting them 3% above the five -year average. Yet gasoline saw a sharp 4-million-barrel increase but are still 2% below the five-year average for supply. This means refiners still have work to do as gasoline demand will start to rise as more people get vaccinated. Distillate fuel inventories increased by 1.5 million barrels and are about 5% above the five-year average for this time of year. A mixed report to say the least even a bit bearish yet adjustments by EIA seemed to create confusion and had many questioning the underlying numbers.
One number in question was on the U.S. oil production numbers that many believed were overestimated. The EIA said:
“This week’s domestic crude oil production estimate incorporates a re-benchmarking that lowered estimated volumes by 92,000 barrels per day, which is about 0.8% of this week’s estimated production total.”
Fires by the Houston Shipping Channel and a major fire at one of Mexico’s PEMMEX Refineries. So far Houston is still open but facing delays. Reuters reports, “a major fire broke out on Wednesday at an oil refinery run by Petroleos Mexicanos (Pemex) in the eastern city of Minatitlan by the Gulf of Mexico, though there were no immediate reports of fatalities, Mexican media and authorities said. The blaze started on Wednesday afternoon, according to media reports, and Mexico’s safety, energy, and environment regulator ASEA said it was monitoring the situation. Pemex said in an early evening statement that it so far had no reports of any fatalities or serious injuries to people from the fire. Emergency services were at the scene, it added. ASEA’s executive director Angel Carrizales said on Twitter the fire started in a gasoline transfer pump. Footage posted on social media showed flames leaping inside the refinery and thick black plumes of smoke billowing out.
The Wall Street Journal reports that, “Royal Dutch Shell (NYSE:RDSa) said gains it made from higher oil prices in the first quarter would be partly offset by a 200 Million Dollar hit from the disruption related to the winter storm in Texas, knocking the energy giant’s recovery from the pandemic. The company said Wednesday that the cold snap had hurt its production, refining, and chemicals operations in the state, and would reduce earnings by around $200 million. The Journal says that despite the disruption, Royal Dutch Shell and other big oil companies are looking to mount a recovery this year after reporting some of their worst results on record for 2020. Covid-19 lockdowns sapped oil demand, sending prices lower, prompting Royal Dutch Shell and its peers to reduce costs, shrink workforces and cut dividends.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.