US crude oil stocks posted a large increase of 9.9 MMBbl from last week. Gasoline inventories increased 0.9 MMBbl and distillate inventories decreased 1.3 MMBbl. Yesterday afternoon, API reported a crude oil build of 6.8 MMBbl, alongside gasoline and distillate draws of 1.1 MMBbl and 2.1 MMBbl, respectively. Analysts were expecting a crude oil build of 2.0 MMBbl. The most important number to keep an eye on, total petroleum inventories, posted a significant increase of 12.7 MMBbl. For a summary of the crude oil and petroleum product stock movements, see the table below.
US crude oil production increased 100 MBbl/d last week, per the EIA. Crude oil imports were up 265 MBbl/d last week, to an average of 7.4 MMBbl/d. Refinery inputs averaged 16.4 MMBbl/d (137 MBbl/d less than last week), leading to a utilization rate of 89.2%. The significantly large crude oil and total petroleum stocks build pushed prices down offsetting some of the support from the turmoil in Venezuela and Libya. Prompt-month WTI was trading down $0.95/Bbl, at $62.96/Bbl, at the time of writing.
After topping the $66/Bbl level after the US government’s announcement it was canceling Iranian sanction waivers and bringing Iran exports to zero, prices sharply declined on Friday after President Donald Trump told reporters that he “called OPEC” seeking lower gasoline prices, and tweeted later that he had discussed increasing oil flows with Saudi Arabia and that “all were in agreement.” In addition to President Trump’s comments, the expectation of lost Iranian barrels eventually getting replaced by production increase from OPEC and Russia also pressured prices.
Prices steadied and recovered some of their losses at the beginning of the week as the market shrugged off President Trump’s comments, given that none of the OPEC and Saudi representatives came forward to acknowledge his comments and any discussions occurring between the parties. In addition to uncertainty around Trump’s comments, prices got support from the news from Venezuela that opposition leader Juan Guaido called the population and the military to seize power from President Nicolas Madura, as well as from a statement by Saudi Arabia that a deal between producers to withhold output could be extended beyond June to cover 2020.
It is unclear what OPEC’s decision will be in terms of supply cuts, and the decision will most likely depend on Iranian production and global supply-demand levels in July as OPEC gears up for their meeting. Until then, both bearish and bullish headlines and geopolitical turmoil (Venezuela and Libya being key countries) will most likely cause volatility and be the main driver for prices. Any significant gains in prices will be capped by gloomy global economic and demand growth projections and continuously increasing US production.
As expected, prices consolidated, retracing to lows from early April trade. The declines during a week that contained the elimination of sanction waivers suggest that expectation had already been part of the price run. As traders continue to digest the headlines, prices are likely to have a higher level of volatility near term than in recent months. The high side of the range that the volatility will test is between $65/Bbl and $68/Bbl, with last week’s high similar to the highs established in January 2018 ($66.66/Bbl). This area held the market for four months before the major break-out in spring and summer 2018. With the weak close, expect continuation of the declines, perhaps testing the support from the March break-out area ($60.00/Bbl) in the coming weeks.
Petroleum Stocks Chart
Large amounts of discovered gas and substantial exploration upside provide an opportunity for the Eastern Mediterranean to become a significant exporter. With the region increasingly in the spotlight, due to a number of recent discoveries and acreage offerings, we are taking a closer look at the current E&P picture in the littoral states, and some of the challenges they face.
To date, eight exploration wells have been drilled offshore Cyprus, four of which have been successful. Noble Energy drilled one well in 2011 and one in 2013, discovering and confirming gas in the Miocene Tamar sandstones in the Aphrodite Field (estimated at 4.5 Tcf recoverable). Eni targeted the same play in Block 9 in 2014 and 2015 (Amathousa and Onasagorus), but both wells came up dry. In February 2018, the Italian company attempted to drill a further well on the play in Block 3 however, rig operations with the Saipem 12000 drillship were impeded by Turkish military vessels, which prevented the vessel from reaching the wellsite. A future return to the prospect by Eni has been muted.
Blocking the ship was the latest twist in decades-old feuds and overlapping, contested claims in the eastern Mediterranean. Turkey and its vassal state, the Turkish Republic of Northern Cyprus (TRNC), object to the Republic of Cyprus (RoC) drilling in waters that the RoC claims under international maritime law. The RoC ratified the U.N. Convention on the Law of the Sea (UNCLOS) in 1988 and proclaimed its EEZ, in conformity with UNCLOS, in 2004.
Turkey is the only member state of the U.N. that does not recognize the RoC, and it is not a signatory to the UNCLOS. In addition, Turkey considers that a recent agreement between RoC and Egypt, which ratifies the delimitation of their respective economic waters, is null and void.
Just before this hostile episode in the Cyprus-Turkey relations, Total and Eni had some success in chasing the Zohr play in the RoC EEZ. The Total-operated Onesiphoros West 1 well on Block 11 found non-commercial gas in September 2017, whereas the Eni-operated Calypso 1 NFW on Block 6 was announced as a gas discovery in February 2018. Calypso reportedly contains 6-8 Tcf (assumed to be GIIP); Eni plans an appraisal program.
Subsequently ExxonMobil in partnership with Qatar Petroleum, conducted a two-well back-to-back drilling campaign on Block 10 in late 2018/early 2019. While the first well in the campaign, Delphyne 1, failed to find commercial quantities of hydrocarbons, the second well was successful. Glaucus 1 was announced as a gas discovery, with quantities of natural gas estimated at 5-8 Tcf.
While there had been talk of another offshore bid round (the 4th licensing round), the Cypriot cabinet has decided to go a different route this time around. In early October 2018, it invited companies already licensed to explore offshore Cyprus to submit their expressions of interest (EOI) for Block 7 (Herodotus Basin). The invitation concerned companies with concessions bordering the open block, namely Eni (Blocks 6 and 8), ExxonMobil (Block 10), and Total (Block 11), which were given one month to submit their EOIs. Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry, and Tourism, stated that the government chose to offer the block in this way instead of another licensing round as, “there are particular geological reasons related to the Calypso discovery.” The Minster’s statement, and the fact the Calypso discovery is located in the SE corner of Block 6, suggest that the Calypso structure extends into neighboring concessions. Total and Eni submitted a joint application for Block 7 and negotiations regarding the award of an E&P sharing contract are underway.
Figure 1. RoC demarcated offshore blocks and exploration wells. Also shown are the RoC’s proclaimed and partly agreed EEZ (light blue line), the TRNC’s proclaimed EEZ and outline of demarcated blocks (red line), the outer limits of the continental shelf as claimed by Turkey (orange line), as well as Turkey’s offshore exploration wells.*
In Turkey, more than a dozen wells were drilled in the Eastern Mediterranean between 1966 and 2014. None of them were successful, apart from some oil and gas shows. While the shows suggest a working petroleum system, it is not a very good track record. However, it must be said that offshore exploration drilling has been limited to near-shore zones in the Gulf of Alexandretta and the Gulf of Mersin, leaving large areas unexplored.
In an effort to extend exploration in the Eastern Mediterranean, the Turkish state oil company (Türkiye Petrolleri Anonim Ortaklığı – TPAO) has conducted extensive seismic acquisition programs over the last few years. In 2013, TPAO bought an 8-streamer 3D seismic vessel from Polarcus (the “Samur,” rechristened the “Barbaros Hayreddin Pasa”). Since then, it has been acquiring masses of data in the Mediterranean and the Black Sea. In the Eastern Med, the vessel has concluded at least seven separate surveys, with another currently ongoing. Surveys have been acquired to the northeast, south, and southwest of Cyprus, parts of which cover disputed areas.
Turkish officials, keen on reducing the country’s energy imports, have stated on various occasions that the country would take steps toward exploring and drilling in the Mediterranean. TPAO acquired its own drillships, the “Deep Sea Metro II” (now renamed “Fatih”) in late 2017, and the “Deep Sea Metro I” (now renamed “Yavuz”) in late 2018. In addition, it signed a two-well contract with Rowan Companies for the “Rowan Norway” ultra-harsh environment jack-up rig.
In November 2018, “Fatih” and “Rowan Norway” commenced drilling activities, with the former spudding the Alanya 1 well, in the Gulf of Antalya, and the latter spudding the Erdemli North 1 well, in Gulf of Mersin. Erdemli North 1 finished drilling in January 2019 and Alanya 1 in mid-April. Results have not been announced so far for either well. The “Rowan Norway” subsequently moved on to the Kuzupinari 1 location at the entrance of the Gulf of Alexandretta.
Some reports suggest that in the future, TPAO will conduct drilling operations in contested waters around Cyprus. For the ultra-deepwater “Fatih” and “Yavuz” drillships with ratings of 3050m, the water depths in the Eastern Med present no problem, allowing them to drill on any of the demarcated Turkish or TRNC offshore blocks.
Turkey and TRNC signed a continental shelf delimitation agreement in September 2001. Turkey’s claim on the island’s EEZ partly overlaps with the RoC’s blocks 1, 4, 5, 6, and 7. Ankara also supports the TRNC’s claims over RoC’s Blocks 1, 2, 3, 8, 9, and 13, where the self-declared TRNC has demarcated Blocks F and G. Should TPAO start drilling in any of these areas, it could lead to a serious geopolitical – or even military – crisis.
After the conclusion in 2017 of the delayed First Offshore Licensing Round, Lebanon is looking ahead to the drilling of the first exploration well. A joint venture between Total (40 percent), Eni (40 percent), and Novatek (20 percent), the only bidding group in the tender, signed E&P Agreements (EPA) for Blocks 4 and 9 in February 2018. Subsequently, Lebanese authorities approved exploration work plans submitted by the Total-led consortium, paving the way for operations; drilling is expected to begin in Q4 2019.
Total’s stated priority is to drill a first well on Block 4, with a second expected to follow on Block 9. With regards to Block 9, the company said that the consortium is fully aware of the Israeli-Lebanese border dispute in the southern part. However, given that the main prospects are located more than 25km from the disputed area, exploration drilling on the acreage will have no interference at all with any fields or prospects located close to the southern border.
Following a once again delayed approval by the Council of Ministers, Nada Boustani Khoury, Minister of Energy, officially launched Lebanon’s Second Offshore Licensing Round in early April 2019. The acreage on offer includes Blocks 1, 2, 5, 8, and 10, which are located in three distinct major geological zones. Block 1 falls within the Lattakia Ridge zone in the NW of the EEZ, Blocks 5 and 8 are located in the deep Levant Basin in the SW, and Blocks 2 and 10 cover parts of the Levant margin in the NE and SE. The blocks have been chosen to offer a number of different play types, as each zone is characterized by different structural and sedimentological features.
As in the first bid round, interested companies will be required to form a consortium composed of three partners or more, with at least one prequalified as operator. Companies will be able to choose their partners and prepare their bids, which have to be submitted by January 31, 2020. Once bids are submitted, the LPA will evaluate them and prepare a recommendation to the Minister of Energy and the cabinet. Negotiations with successful bidders and subsequent awards are currently planned for late March 2020 and early April 2020, respectively.
Figure 2. Lebanon’s exploration and bid blocks.*
Following several offshore gas discoveries in Israel between 2009 and 2013, current activity is focused on bringing the discovered resources onstream. Noble Energy’s Tamar Field (~10 Tcfg 2P) is the only producing offshore field, with Leviathan (~12.5 Tcfg 2P), also operated by Noble, currently under development. Leviathan’s first phase is more than 80 percent complete, on track to deliver first gas by the end of 2019.
Plans are also in place for the development of the Karish and Tanin fields. Operator Energean’s Field Development Plan (FDP) envisages a two-phase approach, with the Karish Field being developed first. The FDP includes the drilling of three development wells at the Karish Field and the installation of a new FPSO around 90 km from the shore. Development drilling started in March 2019, and first gas is planned for 2021. In a second phase, the Tanin Field development will follow, with the drilling of six wells. These will also be connected to the FPSO.
In terms of exploration, Energean is the only operator currently conducting exploration drilling.
In April 2019, it announced that its Karish North near-field exploration well has made a significant gas discovery in the Tamar B and C sands and the well is being deepened to test the hydrocarbon potential in the D4 horizon. Initial gas-in-place is estimated between 1-1.5 Tcf. Energean has drilling options for six further wells in its contract with Stena Drilling. The company has mapped various prospects and leads on the Karish and Tanin leases, as well as on the five exploration blocks it was awarded the First Offshore Licensing Round.
Further drilling in 2019 may be carried out by EDF subsidiary Edison, which operates the 399 Royee exploration license along the border with Egypt. While the first well on the acreage has been postponed on a number of occasions, Delek Drilling’s recent decision to acquire a 24.99 percent stake in the block may give the endeavor renewed momentum. However, drilling will have to start soon, as the license is only valid up to April 14, 2020. At that point the license will have reached its maximum term of seven years.
Israel’s Second Offshore Bidding Round (OBR2), launched in November 2018, may result in additional exploration activity in the country’s EEZ. The acreage offered for bidding in OBR2 includes 5 Zones (A to E) located south of the large gas fields presently being developed offshore Israel. Zones A, B, C, and D include four blocks each, while Zone E includes only three. Each block measures up to 400 sq km. Most of the area offered for bidding was held by various operators in the past, which acquired seismic data and developed exploration prospects that have not been drilled. The closing date for the submission of bids is June 17, 2019. Following a relatively timid response in the First Offshore Bidding Round, with only two companies submitting bids, Israel hopes for better participation this time. ExxonMobil is rumored to have expressed an interest.
Figure 3. Israel’s exploration and production licenses. The Second Offshore bid round zones consist of 19 blocks.*
As the most mature offshore area in the East Mediterranean, and with gas production in the Nile Delta Basin since the 1970s, the focus in recent years has been the ambition of turning the country into the center of an Eastern Mediterranean gas hub. It has not been smooth sailing, however. The country had been in a net gas deficit since 2014 and began importing LNG in 2015. The two LNG export terminals on the Mediterranean coast, Idku and Damietta, had stood idle. In response, authorities earmarked the fast-tracking of significant gas developments, including BP’s Atoll and West Nile Delta (WND) projects, alongside Eni’s Nooros Field.
Then the 30 Tcfg (in place) Zohr discovery came along in September 2015, at just the perfect time. Nooros was brought onstream in September 2015, WND saw first gas in March 2017, with Zohr coming online in December 2017. Atoll soon followed in February 2018, seeing the total addition of c.40 Tcfg of resource available for production. Concurrently LNG exports at Idku terminal have restarted, albeit modestly at c.500 MMcfg/d. A new gas marketing law was passed in 2017, liberalizing the gas distribution market. In 2018, Noble Energy signed a deal with Dolphinus Holdings to supply gas over a 10-year period (via the East Mediterranean Gas Co pipeline from Ashkelon to El Arish), and a proposed gas pipeline between Cyprus and Egypt was ratified by both countries. LNG imports also ceased in September 2018. The recent EGAS 2018 International Bid Round also saw 13 blocks for tender, the largest offering since 2001. Just three were ultimately pre-awarded, to ExxonMobil (one) and Shell/PETRONAS (two). All three blocks are in the prolific inboard and mature part of the Nile Delta.
No bids were successful in the deepwater frontier acreage where Zohr lies, which brings us to the potential thorn in the side of the gas hub debate. Yes, gas from Cyprus (via Aphrodite) may eventually come to Egyptian shores and possibly also Israeli gas (from Leviathan, Tamar and others). However, it is the indigenous gas supply that could potentially become an issue. Since 2016, there have just been five wildcats drilled in the offshore Nile Delta. Four of the five (Baltim South West 1, Nour 1, Swan East 1, Qattameya Shallow 1) were successful, but have added just around c.2 Tcfg to the resource figures. A maximum of 13 NFWs are planned offshore in 2019, although in reality only around half are likely to be drilled. Coupled with a two-year hiatus between Mediterranean licensing rounds (EGAS 2015 and EGAS 2018 bid rounds), and the delay to the launch of a tender offering for the frontier western portion of Egyptian’s Mediterranean waters, there remains a lot of undrilled acreage in the Nile Delta. In reality there is a need for a ramping up of exploration offshore Egypt in the short term, and ideally the finding of another multi-TCF discovery, in order to both sustain the gas-hungry nation, as well as continue to contribute to the gas hub picture into the future.
Figure 4. Egypt’s exploration and production licenses in the Eastern Mediterranean.*
The gas in the Eastern Mediterranean provides risks and opportunities alike for the littoral states. Further successful exploration campaigns and export solutions could significantly help reduce the energy dependence for some of the countries and provide additional revenue to the public coffers. However, even if further significant resources are discovered, it is not guaranteed these will be quickly developed. As shown in the case of Aphrodite and Leviathan, a number of factors can result in long delays.
In addition, complex geopolitics always present a challenge in the Eastern Mediterranean. Should resources be discovered in disputed waters, it could potentially cause further friction in the area, or worse. On the other hand, the common desire to profit from the gas riches in the region might lead to more collaboration. A case in point is the establishment of the East Med Gas Forum, which includes seven members – Egypt, Israel, Greece, Cyprus, Jordan, Italy, and the Palestinian Authority. However, the absence of Turkey and Lebanon highlights the difficult relationships
As mentioned above Egypt’s hopes of becoming a gas hub in its own right in the Eastern Mediterranean are dependent on the country’s indigenous demand and future exploration success. However, taking the significant discovered resources in Israel and Cyprus into account, the idea of Egypt becoming a gas hub is not implausible. Another much discussed possible export route for Israeli and Cypriot gas is the EastMed pipeline from Israel to Italy, via Cyprus and Greece. The current design envisages a 1,300km offshore pipeline and a 600km onshore pipeline, capable of transporting 353 Bcfg per year. The project has been deemed technically feasible and financially viable by IGI Poseidon (a 50-50 joint venture between Edison and DEPA). However, questions remain on whether the gas transported through the pipeline could compete with gas from other sources, like Russia and U.S. (LNG).
* The maps are not an authority on international boundaries.
email@example.com – Regional Manager Middle East
firstname.lastname@example.org – Regional Manager North Africa
East Med Gas Hub – future reality or pipe dream?
US crude oil stocks posted an increase of 5.5 MMBbl from last week. Gasoline and distillate inventories decreased 2.1 MMBbl and 0.7 MMBbl, respectively. Yesterday afternoon, API reported a crude oil build of 6.9 MMBbl while reporting a gasoline build of 2.2 MMBbl and a distillate draw of 0.87 MMBbl. Analysts, to the contrary, were expecting a crude oil draw of 0.5 MMBbl. The most important number to keep an eye on, total petroleum inventories, posted a large increase of 8.8 MMBbl. For a summary of the crude oil and petroleum product stock movements, see the table below.
US crude oil production increased 100 MBbl/d last week, per the EIA. Crude oil imports were up 1.16 MMBbl/d last week, to an average of 7.1 MMBbl/d. Refinery inputs averaged 16.6 MMBbl/d (505 MBbl/d more than last week), leading to a utilization rate of 90.1%. The crude oil and total petroleum stocks build stopped the price rally and pushed prices down below $66/Bbl. Prices are still getting support from the US government’s decision to cancel Iranian sanction waivers and the unrest in Libya potentially threatening the country’s supply levels. Prompt-month WTI was trading down $0.38/Bbl, at $65.92/Bbl, at the time of writing.
Prices have been rising and rallied to their six-month highs at the beginning of the week, breaking through the $66/Bbl mark on Tuesday. The sharp increase in prices was due to the US government’s decision to drive Iran’s crude exports to zero. The tightening global supply levels and situation in Libya also supported prices.
Prices pierced $66/Bbl after the Trump administration announced that it will not extend sanction waivers to certain countries that import Iranian oil, as well as announcing that all Iranian oil buyers will have to end imports from Iran in about a week or be subject to US sanctions. The Trump administration’s announcement certainly increased the bullish sentiment, as cancellation of waivers can erase as much as 1 MMBbl/d of additional supply in a market that has already been tightening due to OPEC-led supply cuts and declining production in Venezuela. Escalating tensions in Libya continue to threaten supply levels in the near term.
The US government’s goal of reducing Iran’s exports to zero and its latest announcements certainly have increased the possibility of a supply deficit and triggered the price rally. However, this rally may be temporary, as there were already discussions between OPEC and Russia about possibly not extending the supply cuts into the second half of the year, with a potential scenario of increasing the supply levels. After the Iranian sanctions announcement, the OPEC meeting in June becomes even more important, as OPEC (led by Saudi Arabia) and Russia may decide to fill the gap created by the reduction in Iranian and Venezuelan supply levels and try to grab market share from the United States, as the US is showing no signs of slowing down, instead continuously ramping up production. Another risk to prices will be the execution of Iranian sanctions, as Iran already retaliated by threatening to close the Strait of Hormuz, a crucial shipping lane in the global oil trade, which could cause disruptions and be detrimental to global supply levels.
The US government’s announcement on canceling waivers and bringing Iranian exports to zero took prices between $65/Bbl and $68/Bbl range (an area of consolidation from last fall during the price collapse) as previously mentioned here. The market will need further bullish headlines to break through this range whether from further news on sanctions or any supply disruptions from Libya. In the meantime, the possibility of OPEC and Russia ending the supply cuts and potentially increasing supply levels to replace the Iranian and Venezuelan crude, increasing US production and a gloomy global economic and demand growth outlook will keep the pressure on prices. If Iranian sanctions are not fully executed, get lash back or are denounced by countries with waivers at the same time if OPEC decides to end the supply cuts and increase output, prices could trace back to the $60/Bbl range, especially given the weak demand growth projections.
Petroleum Stocks Chart
US crude oil stocks posted a decrease of 1.4 MMBbl from last week. Gasoline and distillate inventories decreased 1.2 MMBbl and 0.4 MMBbl, respectively. Yesterday afternoon, API reported a crude oil draw of 3.1 MMBbl alongside a gasoline draw of 3.6 MMBbl and a distillate build of 2.3 MMBbl. Analysts, to the contrary were expecting a crude oil build of 1.7 MMBbl. The most important number to keep an eye on, total petroleum inventories, posted an increase of 2.5 MMBbl. For a summary of the crude oil and petroleum product stock movements, see the table below.
US crude oil production decreased 100 MBbl/d last week, per the EIA. Crude oil imports were down 0.60 MMBbl/d last week, to an average of 6.0 MMBbl/d. Refinery inputs averaged 16.1 MMBbl/d (22 MBbl/d less than last week), leading to a utilization rate of 87.7%. The crude oil inventory draw and China’s first quarter GDP showing a growth gave support to prices. Also supporting prices is the unrest in Libya potentially threatening the country’s supply levels. Russia’s statements on abandoning supply cuts and potentially increasing output for second half of the year is pressuring prices. Prompt-month WTI was trading up $0.11/Bbl, at $64.16/Bbl, at the time of writing.
Prices retracted back from their five-month highs, but still traded in the $63/Bbl-$64/Bbl range last week as tightening supply market and the bearish news on supply cuts for the second half of the year pulled prices in both directions. The move up to near the $65/Bbl mark last week was mainly due to news about Libya and the possible impact of fighting on the country’s crude production levels, bringing supply further down in an already tightening market due to declines in Venezuela and Iran.
The price increase due to news from Libya last week were offset by the fears of a slowdown in global economic growth and Russia’s remarks on supply cuts. The US government announcing tariffs on European goods and the IMF lowering its economic growth forecast both increased the fears about global economic outlook while Russian Energy Minister Alexander Novak’s remarks on the extension of supply cuts into second half of the year being unnecessary put uncertainty what OPEC+ may decide in their upcoming meeting in June.
Bearish sentiment and pressure on prices increased at the start of the week due to concerns about OPEC-led supply cuts potentially not being renewed for the second half of the year. The concerns began after Alexander Novak’s comments last week and reached a new level on Monday after Russian Finance Minister Anton Silunav was quoted by Russian TASS agency as saying that OPEC and Russia could decide to abandon the deal and boost production to fight for market share with the United States. Although tightening supply levels, due to declining Venezuelan and Iranian production, as well as the renewed fighting in Libya support the bullish sentiment, the recent news from Russia certainly put some question marks on supply/demand levels for the second half of the year. Increasing US production and gloomy global economic and demand growth will continue to pressure prices, and this pressure can intensify given any other bearish news on supply cuts from Russia and OPEC.
Last week, WTI prices gave their first indication that the price run may follow a more traditional bullish extension. While trading higher early in the week, prices respected the bearish inventory numbers from the EIA and the headline news and promptly started to retrace some of the week’s gains. The $0.50 decline in WTI during the last 45 minutes of trade on Friday is an indication that some of the bullish elements are taking profits on short-term gains. This profit activity is part of a bull market behavior pattern. Participants need to collect profits before adding to additional commitments, and this usually leads the market to periods of consolidation that have been discussed before. The key this week is how far the declines will go before bullish participants add to existing positions. Further extensions taking prices between $65/Bbl and $68/Bbl (an area of consolidation from last fall during the price collapse) will require more bullish headlines and will likely run into selling. The market will closely watch any news surrounding Iranian sanctions, Libyan supply levels, OPEC-led supply cut news, and US-China trade talks. Any slight shift in sentiment due to fundamentals or bearish news could cause a consolidation phase, with a potential retracement back to the $60/Bbl range.
Petroleum Stocks Chart