A new Bloomberg survey revealed on Tuesday that OPEC’s crude oil production fell by 70,000 barrels per day in August, to 27.06 million barrels daily. The loss was due to Libya’s production hiccup, which saw a dip of 150,000 bpd. Meanwhile, the survey showed that Kuwait and Nigeria both increased production.

Libya’s production losses are currently much more significant than 150,000 bpd. But the steep losses are recent and didn’t affect most of the month. Current production losses have been estimated at anywhere from 500,000 bpd to 700,000 bpd, with a new force majeure placed on the El Feel field.

The largest member of the OPEC group, Saudi Arabia, complied with its quota for August as expected. Iraq, on the other hand, has again failed to cut production in line with its quota and still produced 320,000 bpd more than it had agreed to in August, according to the survey. Iraq has insisted it will engage in compensatory cuts to make up for its overproduction.

Despite the significant production losses from Libya which are not yet completely reflected in the August OPEC figures, oil prices remain on a downward spiral, sinking more than 4% on Tuesday in a market that has some traders stumped. The overriding market fear is OPEC’s possible unwinding of its production quota beginning in October—although the group has been adamant that it will only do so if market conditions dictate that it makes sense to do so.

Source: OILPRICE

Libya’s two legislative bodies agreed on Tuesday to appoint jointly a central bank governor, potentially defusing a battle for control of the country’s oil revenue that has slashed production.

The House of Representatives based in Benghazi, in eastern Libya, and the High State Council in Tripoli in the west signed a joint statement after two days of talks hosted by the UN Support Mission in Libya.

They agreed to appoint a central bank governor and board of directors within 30 days. Libya’s central bank is the sole legal repository for Libyan oil revenue, and it pays state salaries across the country.

The two chambers also agreed to extend consultations for five days, concluding on Sept. 9.

Libya has had little peace since a 2011 NATO-backed uprising and it split in 2014 between eastern and western factions. Major warfare ended with a ceasefire in 2020 and attempts to reunify, but divisions persist.

The House of Representatives parliament and the High State Council were both recognized internationally in a 2015 political agreement, although they backed different sides for much of Libya’s conflict.

The standoff began when the head of the Presidency Council in Tripoli moved last month to oust veteran central bank Governor Sadiq Al-Kabir and replace him with a rival board.

This prompted eastern factions to declare a shutdown to all oil production, demanding Kabir’s dismissal be halted. The dispute threatened to end four years of relative stability.

Some oil output has since resumed, and oil prices dropped nearly 5 percent on Tuesday to their lowest levels in almost nine months in a sign that traders expect the latest agreement to get more oil flowing.

Libya’s central bank has been paralyzed by the battle for its control, leaving it unable to conduct transactions for more than a week. Underlying the issue is the country’s fractured political landscape of rival governing institutions with tenuous claims to legitimacy.

Source: ARAB

Australia’s economic weakness persisted in the three months through June as consumers hunkered down in the face of elevated borrowing costs and stubbornly sticky inflation.

Gross domestic product advanced 0.2 per cent from the prior quarter, propped up by government spending and matching economists’ estimate, Australian Bureau of Statistics data showed Sept 4. From a year earlier, the economy grew 1 per cent from an upwardly revised 1.3 per cent and forecast of 0.9 per cent.

“Excluding the Covid-19 pandemic period, annual financial year economic growth was the lowest since 1991-92 – the year that included the gradual recovery from the 1991 recession,” Ms Katherine Keenan, ABS head of National Accounts, said in a statement. The economy expanded 1.5 per cent during the financial year ended June 30.

The Australian dollar held onto its declines, as did the interest-rate sensitive three-year government bond yield.

With annual growth slowing from a decade average of 2.4 per cent, the data are likely to ease concerns about demand-driven inflation pressures in the economy. That suggests the RBA can remain in a holding pattern for a while in order to assess the economy, with the cash rate currently at a 12-year high of 4.35 per cent.

The RBA reckons the second quarter was the nadir of the slowdown, predicting the annual expansion will accelerate to 1.7 per cent by year’s end before picking up to 2.5 per cent in late 2025.

Bloomberg Economics expects growth will remain subdued in 2024, as the cumulative impact of higher rates damps household demand and housing-related activity.

Sept 4’s data showed the household savings ratio held at 0.6, having slipped from a peak of 24.1 per cent in June 2020 and underscoring the limited financial cushion available to Australians.

Household spending slid 0.2 per cent in the second quarter, detracting 0.1 percentage point from GDP growth. “The strongest detractor from growth was transport services, particularly reduced air travel,” the ABS’s Keenan said. “This was the first fall for this series since the September 2021 quarter.”

Government spending climbed 1.4 per cent, led by programs for health services and adding 0.3 point to GDP growth.

The figures follow the RBA’s decision to leave rates unchanged in August, with Governor Michele Bullock saying it’s premature to think about rate cuts yet. Her deputy Andrew Hauser last week reinforced that view, saying inflation was still a “bit stickier” in Australia than in countries like the US.

Most economists believe the RBA has concluded its tightening campaign, with a cut seen in February 2025. By comparison, the Federal Reserve is likely to cut rates this month with Europe, New Zealand and the UK already on an easing path.

“Today’s National Accounts confirm the Australian economy barely grew in the June quarter,” Treasurer Jim Chalmers said in a statement. “Really soft growth reflects the impacts of global economic uncertainty, higher interest rates and persistent but moderating inflation.”

Sept 4’s GDP report also showed:

Services exports rose 5.6 per cent in the second quarter following falls in the previous two periods. This was led by education-related travel services particularly from a rise in average spending

Per capita GDP fell for a sixth consecutive quarter, sliding 0.4 per cent

Gross disposable income rose 0.9 per cent, outpacing a rise in nominal household spending of 0.7 per cent, the ABS said

Higher household earnings were partly offset by an increase in income tax payable and mortgage payments

Source: Straitstimes

Crude oil analysis:

A long-awaited United States Federal Reserve interest rate cut could push Bitcoin down — the opposite direction of many market participants’ expectations — and possibly cause its price to dive to levels not seen since February, analysts say.

“If we were to speculate, we would caution to expect a 15-20 percent decline when rates are cut this month, with a bottom of $40-50k for BTC,” Bitfinex analysts wrote in a Sept. 2 note.

Bitfinex’s analysts backed up their claims by reiterating that September has historically been a “volatile month” for Bitcoin, and the anticipated Fed rate cut only adds another “layer of complexity, potentially exacerbating the market’s volatility.”

“This logic could be negated quite easily if macroeconomic conditions change.”

“These are uncertain times for traders,” the note added. The Fed interest rate decision is scheduled to take place on Sept. 18, and the market sentiment is optimistic that it will lower rates after dovish comments from Fed Chair Jerome Powell in August saying that “the time has come.”

Investors often view perceived riskier assets like Bitcoin as more attractive when interest rates are cut, as traditional assets like bonds and term deposits become less lucrative.

Bitcoin is down 2.67% over the past seven days.

A 20% drop from its current price will place it around $46,000, which it last traded at on Feb. 8. It’s also a level that 10xResearch head of research Markus Thielen said is the point Bitcoin needs to reach before a bull run begins.

Thielen said in early August that “to ideally time the next bull market entry, we aim for Bitcoin prices to fall into the low 40,000s.”

The Bitcoin Layer analyst Joe Consorti wrote in a Sept. 3 X post that “$60,000 is no longer a blow-off top level dominated by speculators, it is a consolidation zone where long-term, mature holders accumulate and HODL.”

Meanwhile, crypto trader Daan Crypto Trades opined that Bitcoin is “still fighting around its Bull Market Support Band.”

“Doesn’t seem to want to move away from it to either side at this point,” they added.

Source: COINTELEGRAPH

(Sept 3): Oil plummeted — erasing its gains for the year — after a prospective deal to restore supplies from Libya turned traders’ attention back to concerns about tepid global demand for crude.

Global benchmark Brent dropped 4.9% to settle below $74 a barrel after earlier touching the lowest intraday price since mid-December 2023. The plunge came after a Libyan central banker said a deal that would revive the OPEC nation’s output appears imminent.

With more than half a million barrels of Libyan crude possibly coming back into the market, the focus is once again on tepid global oil consumption. Economic concerns in key consumer countries — including China and the US — have weighed on sentiment in recent months, with only occasional geopolitical concerns and minor supply disruptions masking the angst. Looking ahead, the market is bracing for OPEC+ to gradually restore production, starting with 180,000 barrels of daily supplies within weeks.

“A toxic mix of excess supply, sliding demand, bearish technicals, and bad product fundamentals are conspiring to destroy crude oil today,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA.

The concerns about China have only grown louder in recent days after a drumbeat of economic data over the weekend raised doubts that the world’s top crude importer may struggle to meet this year’s economic growth target.

Options are signaling the market is now anticipating a lower risk of futures spiking. The bias toward puts in Brent’s second-month options skew has deepened to the most bearish since early June as traders continue to protect against price drops.

The US, meanwhile, is laying the groundwork for new sanctions on Venezuelan government officials in response to Nicolás Maduro’s disputed reelection, according to documents seen by Bloomberg. The measures target key leaders that the US says collaborated with Maduro to undermine the July 28 vote.

Source: Theedgemarkets