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Oil Update — Crude Up; Iraq plans to increase oil exports by 250k bpd in 2023

RIYADH: Oil prices were up more than 1 per cent in Asian trade on Wednesday, led by a fall in US crude stockpiles and a slide in the greenback.

Brent crude futures rose 95 cents, or 1.14 percent, to $83.98 a barrel by 0411 GMT, while US West Texas Intermediate crude futures climbed 80 cents, or 1.02 percent, to $79.00 a barrel.

Venezuela to sign new contracts to boost oil production in joint ventures

Venezuela will soon sign new contracts to promote oil joint ventures between state firm PDVSA and private energy companies, the country’s Oil Minister Tarek El Aissami said Tuesday, a move that would benefit Chevron Corp.

The US Treasury Department on Saturday authorized the No. 2 US oil producer to expand operations at its Venezuelan joint ventures. The authorization is expected to help the country increase crude oil production and exports after nearly four years of harsh US oil trade sanctions.

US President Joe Biden’s administration has said sanctions on Venezuela could be further eased based on progress in major political talks that resumed this month in Mexico aimed at agreeing on a presidential election and other demands.

El Aissami made the announcement on Twitter after meeting with Javier La Rosa, Chevron’s top executive in Venezuela. Chevron was authorized by Washington earlier this year to meet with Venezuelan officials, including personally approved officials such as Al Aissami.

“Meetings with PDVSA and government representatives authorized for Chevron Venezuela leadership is a routine exercise the company is authorized to do in the country,” Chevron said in a statement.

Chevron is a minority partner in four oil joint ventures in Venezuela with PDVSA, which have produced between 60,000 and 100,000 barrels of crude per day this year. The new license authorizes the American company to export oil from its projects to the US.

Iraq plans to increase oil exports by 250,000 bpd in 2023

Iraq plans to increase production by 250,000 barrels per day in the second half of next year to 3.6 million bpd from the current 3.35 million bpd, Iraq’s state news agency quoted Saadoun Mohsen, a senior official at the country’s state oil marketer SOMO, as saying. As they say on Tuesday.

EU moves towards deal on Russian oil price cap this week

Diplomats said Tuesday that EU countries are moving toward a deal this week on a price cap on Russian oil, a way to adjust the cap in the future, and on adding it to a package of new sanctions against Moscow. .

The deadline for a deal is December 5 because that is when the EU’s own full ban on Russian marine oil purchases kicks in at the end of May.

The price cap, a softer measure proposed by the Group of Seven nations, is supposed to replace a tougher EU plan to protect global supplies and prevent price rises, but disagreement among the 27 EU countries over the level of the limit Is.

“Consultations have been ongoing since last Wednesday and we are moving towards an agreement, we are getting closer,” a senior EU diplomat involved in the talks was quoted as saying by Reuters.

The G7 proposal, presented to EU governments by the European Commission, had a price cap in the range of $65-70 a barrel – a level that diplomats said had been fixed in September when Russian oil marketed at $68-76 a barrel. Was trading on barrels.

A second senior diplomat said, “The idea was that a cap of about 5 percent below market value would serve to sell the Russians off, reducing their revenue.” “But since then prices have continued to decline and are now below the cap level, so no purpose is served by that level,” he said.

Therefore, Poland, Lithuania and Estonia rejected the G7 proposal, saying that the cap should be closer to Russian production costs, which are estimated to be around $20-25 per barrel. All three countries, which all share borders with Russia, support the $30 price cap.

He also argued that, given the changing global oil markets and Russia’s ability to finance the war, the price cap should not be set in stone, but should be a dynamic tool that is frequently reviewed under a mechanism On which agreement has not yet been reached.

(with inputs from Reuters)