Oil prices are rising. We have a falling U.S. oil rig count and a surprise drop in Saudi oil production, against a backdrop of increasing geopolitical risk. Baker Hughes’ oil rig was countdown two, gas rig count dipped by three.
Reuters reported that Saudi Arabia pumped around 10.29 million barrels per day (bpd) of crude in July, two OPEC sources said on Friday, down about 200,000 bpd from a month earlier. This is a good reason for oil to rise as many thought that last month’s production increase near a record high production rate meant the Saudis would keep the market well supplied during maintenance season. In fact, with so much geopolitical risk it is hard to know where to start.
Reports overnight that hundreds of Iraqis demonstrated in the southern city of Basra on Sunday amid a growing anger over high unemployment and poor public utilities. Protesters blocked a main road to crude oil tankers near Al-Qurna oil field west of Basra, according to local media. Security forces have tightened up security measures near the oilfield to avoid any escalation, as reported by ALBWABA news. Secretary of State Mike Pompeo says the White House is ready to enforce sanctions against Iran that will be re-imposed starting Monday. “It’s an important part of our efforts to push back against Iranian malign activity,” he said. “The United States is going to enforce these sanctions.”
This comes after Reuters reported that Iran’s Revolutionary Guards confirmed on Sunday it had held war games in the Gulf over the past several days, saying they were aimed at “confronting possible threats” by enemies, the state news agency IRNA reported.
In a presidential speech, Venezuelan President Nicolas Maduro cut short a speech when drones went off and exploded on Saturday during a military event and soldiers were seen running before the televised transmission was cut short. Officials later said Maduro was the target of a drone “attack” but was unharmed. Six people were arrested for the so-called terrorist attack. Some think it was a staged event to give Maduro an excuse to round up some of his political enemies.