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OPEC+ fears second virus wave could lead to oil surplus in 2021 By Reuters

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© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

By Vladimir Soldatkin

MOSCOW (Reuters) – OPEC and its allies fear a prolonged second wave of the COVID-19 pandemic and a jump in Libyan output could push the oil market into surplus next year, according to a confidential document seen by Reuters, a gloomier outlook than just a month ago.

A panel of officials from OPEC+ producers, called the Joint Technical Committee, considered this worst-case scenario during a virtual monthly meeting on Thursday. In September, the panel had not seen a surplus under any scenarios it considered.

Such a surplus could threaten plans by OPEC, Russia and allies, known as OPEC+, to taper record output cuts made this year by adding 2 million bpd of oil to the market in 2021.

The Organization of the Petroleum Exporting Countries has not indicated any plan so far to scrap that supply boost.

“The earlier signs of economic recovery in some parts of the world are overshadowed by fragile conditions and growing scepticism about the pace of the recovery,” according to the document used in the panel’s monthly meeting in October.

“In particular, a resurgence of COVID-19 cases across the world and prospects for partial lockdowns in the coming winter months could compound the risks to economic and oil demand recovery,” it said.

The document presented scenarios that included a base case that still showed a deficit in 2021 of 1.9 million barrels per day (bpd) on average, albeit less than the deficit of 2.7 million bpd forecast in the previous month’s base case.

But under its worst-case scenario, the document said the market could flip into a surplus of 200,000 bpd in 2021.

This year, OPEC+ agreed to make record output cuts to support plunging prices as oil demand collapsed. It cut 9.7 million bpd from May, tapering that to 7.7 million bpd from August. From January, cuts are due to ease to 5.7 million bpd.

However, since the JTC met in September, Libyan output has climbed and a global rise in coronavirus cases has led to renewed restrictions on movement in some countries, weakening demand for crude.

OPEC-member Libya is exempt from any production cuts.

Under the document’s worst-case scenario, Libyan production would rise in 2021 to as much as 1.1 million bpd, a source familiar with the details of the meeting said. Under its base case, Libyan output would be 600,000 bpd in 2021.

Under the worst-case scenario, OECD commercial oil inventories – a benchmark OPEC+ uses to gauge the market – would remain high in 2021 compared to the five-year average rather than starting to fall below that mark.

This scenario also sees a stronger and more prolonged second wave of COVID-19 in the fourth quarter of 2020 and first quarter of 2021 in Europe, the United States and India leading to a lower economic recovery, weakening oil demand.

Under the document’s base case, OECD oil stocks are expected to stand slightly above the five-year average in the first quarter of 2021, before falling below that level for the rest of the year.

A ministerial OPEC+ panel, known as the Joint Ministerial Monitoring Committee (JMMC), will consider the outlook when it meets on Monday. The JMMC can make a policy recommendation.

Oil ministers from OPEC+ countries are scheduled to meet again on Nov. 30-Dec. 1.





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Commodities

Oil Stockpiles Fell by 1 Million Barrels: EIA By Investing.com

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© Reuters.

investing.com — Oil stockpiles declined roughly in line with expectations last week,  according to the Energy Information Administration.

fell 1 million barrels, against expectations for a draw of 1.02 million barrels. That comes a week after crude stocks fell 3.8 million barrels.

Inventory has fallen in all but one of the last six weeks as the economy tries to come back to life after Covid-related shut downs earlier this year. 

, the U.S. benchmark, fell 2% in morning trading ahead of the data release. 

Crude oil stored at , Oklahoma, increased 975,000 barrels compared to an expected build of 1.1 million barrels.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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EU countries back binding green farming schemes By Reuters

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© Reuters. FILE PHOTO: A farmer irrigates his field of potatoes during sunset, in Tilloy-Lez-Cambrai

2/4

By Kate Abnett

BRUSSELS (Reuters) – European Union agriculture ministers agreed on Wednesday to set aside part of the bloc’s massive farming policy budget for programmes that protect the environment.

The EU is nearing the end of a two-year struggle to overhaul its agriculture policy, to attempt to align it with the bloc’s climate change commitments, while supporting farmers’ livelihoods.

The agriculture policy as a whole will suck up roughly a third of the EU’s 1.1 trillion euro ($1.30 trillion) budget for 2021-202, to be split between direct payments to farmers and other support for rural development.

Ministers agreed that 20% of the payments to farmers will be earmarked for green schemes such as organic farming or agroforestry. Farmers will not be able to access the cash for other purposes.

The policy kicks in from 2023 and ministers agreed a two-year pilot phase for the green schemes, meaning they would become binding from 2025. Some countries had raised concerns that tying cash to environmental aims would mean the money was left unspent.

“We can’t simply leave it up to member states to decide whether or not eco-schemes are used and, if so, what money will be made available,” said German agriculture minister Julia Kloeckner, who chaired the meeting.

With agricultural sites comprising 40% of all EU land, farming has a large influence over the health of Europe’s natural habitats.

Agriculture is the most frequently reported threat to nature in Europe, amid intensive farming techniques including pesticides and irrigation, the EU environment agency said on Monday.

Campaigners said the 20% share for green schemes was too low.

“Agriculture ministers are largely perpetuating a farm policy which will throw taxpayers’ money at polluting, industrialised agriculture until at least 2027,” said WWF senior policy officer Jabier Ruiz.

The farming policy negotiations do not end with Wednesday’s deal. EU countries must now strike an agreement with the European Parliament and the European Commission on the rules. Parliament is voting on the policy throughout this week.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Gold Up Over Soft Dollar and Rising Stimulus Hopes By Investing.com

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© Reuters.

By Gina Lee

Investing.com – Gold was up on Wednesday morning in Asia, boosted by a weak dollar and the prospect of the U.S. Congress passing the latest stimulus measures ahead of the Nov. 3 presidential election.

were up 0.38% at $1922.75 by 12:26 PM ET (4:26 AM GMT). The was down on Wednesday morning.

The gap between the Republicans and Democrats seemed to decrease after President Donald Trump indicated on Tuesday that he was willing to accept a stimulus package with a larger price tag, saying, “I want to do it even bigger than the Democrats.”

House of Representatives Speaker Nancy Pelosi added to hopes that the stimulus measures would be passed by Congress, saying, “I hope so. That’s the plan,” for an agreement to be reached the following week. Pelosi will continue talks with Treasury Secretary Steven Mnuchin later in the day.

However, with Republicans still opposed to the measures’ price tag, it remains to be seen whether both parties will reach a consensus.

The Federal Reserve struck a positive note, with Chicago Federal Reserve Bank President Charles Evans saying that the current rise in U.S. COVID-19 cases may not dent the recovery too much, remaining “reasonably optimistic” that unemployment will fall to 5.5% by the end of 2021. Evans’ colleagues at the Fed called for more fiscal support to complement unprecedented monetary aid, and the central bank is due to release its ‘Beige Book’ economic survey later in the day.

Across the Atlantic, investors continue to monitor the progress of Brexit talks between the U.K. and the European Union (EU). Both sides called for the other to compromise to save the fast-deteriorating talks.

Swiss gold exports to China and India decreased in September, importing record volumes of bullion from Hong Kong instead and exporting the yellow metal to the U.K., according to customs data. Other data showed that holdings in SPDR Gold Trust (P:) fell 0.23% to 1,269.93 tons on Tuesday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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