While the blockade in China is causing significant destruction of demand and adding pressure to lower oil prices, the EU’s threat to ban Russian oil imports has the potential to send prices significantly higher.
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Friday, April 15, 2022
China’s move to an almost nationwide blockade of COVID triggers the first large-scale search blockade in 2022, with about 45 cities, representing 40% of the country’s economic output, in some form of mobility restrictions. On the other hand, the European Union continues to consider banning the import of Russian oil, raising the Brent complex even higher than other regional indicators. ICE Brent futures for the first month closed the week just above $ 110 a barrel, but uncertainty in both supply and demand will provide volatility in the coming days.
Henry Hubb jumped to 13-year highs. Boosted by unusually small gas reserves at this time of year and a recent decline in U.S. domestic production, Henry Hub’s futures in the U.S. rose to a 13-year high of $ 7.3 per mmBtu, marking the strongest weekly profit since August 2020 and leads to 2022 so far increased to almost 100%.
Putin warns of redirection of energy flow. Russian President Vladimir Putin has said that Moscow will redirect its energy to the east and build new infrastructure to Asia, arguing that unfriendly regimes in the West are raising prices for themselves, despite their dependence on Russian flows.
Chinese refineries are cutting prices due to declining demand for COVID. Chinese refineries are cutting back on the largest scale since the start of the pandemic in early 2020, reducing their intake by 900,000 b / d in April (equivalent to 6% of domestic demand) as the country continues to struggle to blockade of COVID.
The EU’s ban on Russian coal raises prices. After Brussels agreed to a phasing out of Russian coal, the regional benchmark API2 earned about 15% of the week and is currently trading at about $ 320 / mt, further backed by the EU’s ban on Russian timber, which is likely to add another layer. coal demand in Europe.
Texas oil fields face the biggest fire risk in a decade. With nearly 85 percent of Texas drought for months, leaving the grass dry and ready to burn, the U.S. Storm Forecast Center warned that parts of West Texas were at critical risk of fire. This is a risk for shale deposits in the Midland and Odessa basins.
Italy’s ENI will increase Egyptian gas production. In another move to boost liquefied natural gas supplies to Europe, Italian energy giant ENI (NYSE: E) has signed a deal to increase gas production in Egypt, especially in the super-giant Zohr field, which produces about 3 billion cubic meters of LNG. exports more this year.
A Singapore probe detects a source of HSFO contamination. The maritime and port authorities of Singapore said their preliminary findings found that chlorine-contaminated high-sulfur fuel oil, which subsequently tarnished the bunker fuel of about 200 vessels, had been supplied by Glencore (LON: GLEN). Related: The richest in the world took $ 400 billion in wealth amid the crisis in Ukraine
A New York prosecutor is investigating gasoline prices in the United States. New York Attorney General Leticia James has launched an investigation into whether the oil industry has been involved in raising gasoline prices, just a week after US Big Oil officials testified in Congress that no company sets gasoline prices.
Petrobras’ new CEO promises consistency. Jose Mauro Coelho has been officially elected the new CEO of the state-controlled oil company Petrobras in Brazil (NYSE: PBR), promising to maintain the company’s pricing policy, which runs counter to the Bolsonaro administration’s ambition to see fuel prices more low.
Saudi Arabia is not against the division of the disputed gas field. Saudi Arabia and Kuwait have invited Tehran to negotiate the eastern border of the Dura natural gas field, which the two Gulf monarchies wanted to develop together less than a month after Iranian authorities called the Saudi-Kuwaiti agreement illegal.
Germany is considering a fourth floating LNG terminal. After securing three FSRU projects for liquefied natural gas through German energy companies RWE (FRA: RWE) and Uniper (ETR: UN01), the German government is now considering leasing a fourth floating unit to diversify its gas supplies away from Russia.
Nigeria approves $ 10 billion fuel subsidy. The Nigerian government has approved a $ 10 billion gasoline subsidy, increasing the state subsidy tenfold as high global prices and lower domestic production (the annual plan reduced to 1.6 million barrels per day) continue to raise domestic fuel prices.
Japan wants more investment in liquefied natural gas. Japanese companies plan to increase investment in upstream liquefied natural gas projects to increase seizures, with the effects of the Russia-Ukraine war intensifying competition for liquefied natural gas spot cargo worldwide, forcing Asian buyers to bid on Europe.
Wind energy is ahead of coal and nuclear power in the US electricity industry. For the first time in history, wind power became the second largest source of electricity in the lower 48 states at the end of March, ahead of coal and nuclear power and listing total power above 2,000 GWh.
By Tom Cool for Oilprice.com
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