Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
The U.S. House Judiciary Committee thought they would send a message to OPEC this week by passing another so-called NOPEC bill. The bill if it became law would allow the U.S. Justice Department to bring anti-trust lawsuits against oil-producing countries in OPEC and I assume their coconspirator Russia. Yet OPEC is not taking this threat laying down.
Reuters reports that “U.S. assets and personnel overseas could be at risk if the country decided to pass a bill against OPEC, known as NOPEC, the head of the Organization of the Petroleum Exporting Countries told member states. Reuters says that in a letter, seen by Reuters, Mohammad Barkindo encouraged member countries to engage with the U.S. administration. Member countries must reinforce diplomatic bilateral contacts with government officials in the U.S. … and explain the disadvantages for the U.S. should the NOPEC bill become law”. “These disadvantages might include weakening the immunity principle at a global level, putting at risk U.S. interests overseas, and the protection for their personnel and assets,” the letter said. Letters from OPEC’s secretariat to members are fairly common and are part of due diligence of events that may impact global energy consumers and producers.
Of course, we already know that OPEC in many cases business is based on those countries nationalizing wells and oil that was created by the U.S. and other foreign oil companies. If NOPEC passes get ready for retaliation.
Oil prices are still trying to get a bid, yet they could start moving higher if the trade can get over worries about demand from India. Indian Oil Corp Ltd.’s (IOC) (IOC.NS) refineries are operating at about 95% of their capacity, down from 100% at the same time last month, two sources familiar with the matter told Reuters. In the U.S., the demand outlook is rising, and China is still humming along. Oil popped on a report that Yemen’s Houthi movement said on Friday it had launched attacks with drones on a military airbase and oil facility in Saudi Arabia, the latest indication that diplomacy to end the six-year conflict has so far failed to take hold. The Houthi military spokesman said on Twitter the group had targeted the King Khalid airbase with two drones and had struck a facility of Saudi Arabia’s oil company Aramco with a drone in the southwestern Saudi city of Jizan. He later said the Houthis had launched a third strike on the airbase according to Reuters.
We still look for oil to move higher, yet it would help if we got a higher close today to propel us higher.
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