The first week of May may have brought us the long-awaited paradigm shift, but markets are still assessing the impact of blocking COVID in China amid massive tests in Beijing and the likelihood of a full European embargo on Russian oil. With no clear outcome for any of them, Brent futures remained tied to the range, closing around $ 106 a barrel on Tuesday.
Against the background of unstable prospects for search
– While OPEC + is expected to agree to another monthly increase of 432,000 barrels per day, the growing gap between the stated goals of the oil group and reality is becoming too blatant to ignore.
– For March, the last month for which official OPEC + data are available, the discrepancy reached 1.45 million barrels per day and is expected to increase only in April, as Russian production went down.
– Africa is a source of headaches in itself, as the blockade of Libya’s key infrastructure reduces about 550,000 barrels per day of global supplies, while Nigeria and Angola continue to decline amid force majeure and extreme declines.
– The release of 240 million barrels from the IEA in the coming months and the reduction in China’s demand by up to 1 million barrels per day after the COVID-19 blockade eased demand problems, but demand must be restored in the summer. worsened again.
Market movements
– French energy TotalEnergies (NYSE: TTE) has stated that it will continue to supply liquefied natural gas from the Yamal LNG project with a capacity of 17.5 million tons per year, in which it has a 20% share, defending its main interests in Russia.
– US oil company Chevron (NYSE: CVX) has raised its target for Permian production by 15% from 2021 levels, starting to expect to produce 725,000 barrels per day, while maintaining the promise of a repurchase of 10 billion dollars unchanged.
– Portugal’s Galp Energia (ELI: GALP) is reportedly considering selling its upstream operations in Angola, one of its key production areas, signaling that its pursuit of renewables is becoming more timely.
Tuesday, May 3, 2022
Germany withdraws opposition to Russian oil embargo. Senior German government officials have confirmed that Berlin will be ready to support an immediate European Union ban on Russian oil imports, although yesterday’s EU summit failed to resolve differences across the bloc over the embargo.
Libya’s blockade shrinks stockpiles. Libya’s NOC has warned rival two governments that the risks of preserving some of Libya’s varieties have long-term consequences – those like Bo Atifel require constant heating, otherwise they harden in tanks and pipelines due to their high wax content.
Rocket attacks Rock Kurdish refining. In a rocket attack for which no one claimed responsibility, a series of missiles were aimed at two refineries in the Kurdish capital, Erbil, damaging oil storage facilities on the premises just two months after Iran’s IRGC launched a missile strike in the area.
The Gulf of Mexico in the United States will see an outbreak of new activity. In the coming months, the floating production facilities of BP (NYSE: BP) Argos and Shell (NYSE: SHEL) Vito will be put into operation, coming on the back of Murphy Oil’s recently launched King Quay platform, adding about 280,000 b / d new Production capacity . Related: American shale stains face many problems
Slate pioneers stick to payouts. Diamondback Energy (NASDAQ: FANG) and Devon Energy (NYSE: DVN) drilled dividend payments while keeping production at the same level, with the former doubling its quarterly payout, despite pressure from the Biden administration. to increase production.
Unprecedented heat is increasing energy demand in India. Seeing the hottest spring months of decades, India’s electricity demand rose to its highest record last month of 135 billion KWh, while causing widespread power outages across the country as supply fell below 2 , 4 billion units.
Russia wants to conclude the latest deal for the African gas pipeline. Nigerian Petroleum Minister Timipre Silva said Russia has expressed interest in investing in the long-awaited Nigeria-Morocco gas pipeline, which has been under discussion since 2016, without specifying whether the route will be offshore or onshore.
South African coal mining struggling with logistics. South African mining companies have resorted to transporting coal to ports amid widespread disruptions in the country’s rail network – with Newcastle’s coal trade at $ 320 per metric ton, the price is acceptable, although rail is four times cheaper .
US gas futures are rising again amid the pull of LNG. Natural gas prices in the US rose again, with the supply contract from early June 22 exceeding $ 8 per mmBtu amid the ever-increasing export attraction of domestic gas production, with production falling slightly to 92-93 bcfd.
PEMEX surprised with a profit for the first quarter. Mexico’s National Oil Company PEMEX reported $ 6.17 billion in net profit for the first quarter of 2022, reversing a loss of $ 2 billion in the previous period as rising production and higher crude oil prices allowed it to reduce overall financial debt up to $ 108 billion out of $ 109 billion.
The UK government is asking the oil industry to reinvest. UK Business Minister Quassi Quarteng has written to companies operating in the UK’s North Sea to set out a clear plan to reinvest its profits in the North Sea, with the opposition increasingly calling for an unforeseen tax on oil and gas producers. .
Mauritania attracts investors for offshore licensing. With several discoveries for world-class offshore gases, such as BP (NYSE: BP) 13 TCf Bir-Allah, Mauritania has opened bids for 28 new offshore units around the existing area, while also seeking to attract green hydrogen investment for cheap reliable energy supply.
Ukraine is facing a leak in storage. According to media reports, Ukraine is ready to face a significant shortage of storage facilities, as stocks of grain and oilseeds have already reached a record level of 21 million tons amid limited export opportunities, which affects agricultural prices Worldwide.
By Tom Cool for Oilprice.com
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