"We have no problem with cooperating with anybody. Even with the United States producers. If they want to talk to us, we are willing talk to them, because now the situation is really affecting almost everybody. United States, OPEC, non-OPEC, everybody."
Meanwhile, Shell`s CEO Ben Van Beurden said Tuesday that it was starting to see the impact of the low price environment: "In May and June we saw the first signs of reduced production. This could entail higher prices, if OPEC at the same time can come to an agreement" in reference to keeping production in check. (This debate will go "On and On and On").
There has been a lack of economic data out overnight for us to get our teeth into, with the main piece of note out in the US this morning relating to the trade balance. The trade deficit increased to $48 billion versus $41 billion last month, as exports continue to lag.
The deficit increased by $4.2 billion to $32.9 billion with China, the highest reported with any country. Nonetheless, a positive attitude again in broader markets is buoying the mood in the crude complex, and black gold, Texas tea is finding support once more.
On to the next bit of randomness, and this chart via the mighty @johnkempenergy shows that research from the University of Michigan Transportation Research Institute highlights the short-term memory of US motorists.
As gasoline prices have spent much of this year $1/gal below the level seen last year, more gas guzzlers are being purchased — meaning the average miles per gallon of a car sold in the US in September was 25.2 mpg, down by 0.6 mpg since August 2014:
In a couple of other interesting tidbits, Saudi Aramco is pursuing the purchase of some refining assets from Sinopec in China. This seems a mutually agreeable arrangement, as Saudi Aramco is looking to boost ties with Asia, the largest growing demand market, while Chinese President Xi Jinping is encouraging foreign investment in China to boost both trade and transparency.
Meanwhile, deteriorating relations between Russia and Turkey has led Gazprom CEO Alexey Miller to announce that a planned pipeline between the two, known as Turkish Stream, is now seen at a capacity of 32 billion cubic meters (1.1 Tcf) – half that recently envisioned. The reason for the pipeline in the first place is to bypass Ukraine, who Russia has faltering relations with.
Finally, in other high-cost producer-related news, Norway is to start tapping its $830 billion sovereign wealth fund (which is supposed to be a nest egg for future generations), as oil-related revenues drop off.
Tax revenue from petroleum extraction has dropped 42% versus the prior year, and budget spending for next year is projected to outstrip income. Norway`s non-oil deficit continues to increase as the country spends; all the while, crude output drops and revenues fall …
