Oil markets are once again on the brink of potential supply disruptions. The EU’s ongoing efforts to ban Russian oil imports and renewed efforts by the US Senate to pass the NOPEC bill will cut off supplies.
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Friday, May 6, 2022
Another week has passed since the European Union failed to agree on a comprehensive oil embargo on Russian crude oil, hampered by internal disagreements over the phasing-out schedule. If the project is approved, we can expect a new cut in supplies, as OPEC + has made it clear that it values consistency over sharp movements. If the United States moves forward with its NOPEC bill, the oil group’s desire to meet global demand could fall even further.
OPEC + signs another deal for 432,000 barrels per day. In a meeting that lasted only 13 minutes, OPEC + countries agreed to increase their production target for June 2022 by 432,000 barrels per day, avoiding any talk of sanctions against Russia and showing that the global picture of demand and supply is more or less balanced.
Russia’s oil ban depends on repulsion by CEE. Although Germany is coming to accept a Russian oil embargo, the European Union is still unable to agree on a phasing out of Russian crude oil imports, as most dependent countries such as Hungary or Slovakia continue to demand exceptions.
The US Senate Commission has passed the NOPEC bill. The US Senate has passed a bipartisan support for the NOPEC bill, potentially lifting sovereign immunity to protect OPEC and Middle Eastern NOCs from litigation as high gasoline prices and inflation force US lawmakers to take more aggressive action. .
Vale enters into a nickel supply deal with Tesla. Brazil’s Vale (NYSE: VALE), the world’s largest producer of iron ore and nickel, has signed a long-term agreement with carmaker Tesla (NASDAQ: TSLA) to supply nickel from its operations in Canada.
India is behind its increased Russian purchases. The Indian government has defended its continued purchases of Russian oil after buying more crude oil in April 2022 than in 2021 as a whole, saying it was part of a broader strategy to diversify away from the Middle East and maintain fuel prices. Related: OPEC + agrees to increase production by 432,000 Bpd in June
Venezuela’s crude oil exports are falling due to quality problems. According to media reports, crude oil exports from Venezuela’s national oil company PDVSA fell 8% a month in April to about 650,000 barrels a day as poor crude crude quality and limited modernization capacity limit further jumps.
China is doubling its fleet of liquefied natural gas tankers. China’s state-controlled CNOOC (SHA: 600938) has reportedly awarded 2.5 billion contracts to build 12 liquefied natural gas tankers at Hudong Zhonghua Shipyards, seeking to grab a higher share of the liquefied natural gas market. natural gas in Asia.
Electricity prices in the Nordic countries are rising to historically high levels. In the first year, electricity prices in Scandinavia in Europe rose to their highest level this week of 92 euros per MWh due to low water storage available in southern Norway, with the country’s total water reservoirs only 22% full. .
Wind turbine manufacturers are looking forward to forgetting Q1. All wind turbine manufacturers such as Vestas (CPH: VWS), GE Renewable Energy (NYSE: GE) and Siemens Gamesa (BME: SGRE) report losses for the first three months of 2022, amid rising raw material costs and rising competition.
Petrobras sees New Guyana on its northern border. Brazil’s state oil company Petrobras (NYSE: PBR) hopes to recreate Guyana’s success in oil exploration at its northern offshore border after deciding to invest $ 2.5 billion in drilling the equatorial border.
EU countries are starting to replenish their gas reserves. Gas stocks in the European Union and the United Kingdom have been growing steadily in recent weeks, with total stocks rising to 380 TWh by 1 May as extremely high gas prices discourage electricity generation consumption.
LME bans Russian lead from the market. The London Metal Exchange announced this week that it will stop trading in Russian-made lead and admit it to its warehouses, raising fears that such a decision could happen in the case of aluminum and nickel, where its impact will be much greater. seriously by 2% jump in the water.
Germany establishes 2 FSRUs to deal with Russian supply risk. The German utility company Uniper (ETR: UN01) will hire two large FSRUs from the Greek shipping company Dynagas, each with a capacity to send 7.5 billion cubic meters of gas per year to deal with a potential supply disruption. Russian gas.
India insists on maximum coal supplies. India plans to reopen more than 100 coal mines that were previously considered financially unsustainable as heat waves continue to hamper electricity production across the country, potentially preventing off-peak consumption later in the late 2020s.
By Josh Owens for Oilprice.com
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