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Schedule of the week
– Just days after OPEC + accelerated production growth, Saudi Aramco raised its formula prices in July for Asian buyers to higher-than-expected levels, fueling fears that supply may be lower than expected.
– The OSP of July 22, 2022 for the largest crude flow in Saudi Arabia Arab Light was raised by $ 2.1 per barrel since June, almost one dollar above the monthly changes in the spread of money to futures in Dubai.
– As purchases from China are expected to return after recording some of the worst data for the country after the pandemic in April-May, Aramco can afford to raise prices, especially when Russia is expected to reduce production.
– Also by raising prices in Europe, keeping only US prices unchanged, Saudi Arabia may show that it will not be able to produce as much crude oil as the OPEC + deal, sending Brent prices again above $ 120 a barrel.
Engines on the market
– Australia’s largest upcoming gas project, the $ 3.6 billion Barossa, run by Santos (ASX: STO), could be threatened as groups of local Australians have filed a lawsuit, saying the project threatens their way of life.
– The US equity fund EIG is reportedly in talks with Spanish oil company Repsol (BME: REP) to buy up to 25% of the company’s upstream business in a deal worth $ 4-5 billion.
– Energy Transfer (NYSE: ET) has signed a 25-year liquefied natural gas supply agreement with China Gas Holdings on a FOB basis of 0.7 million tonnes per year, coming from the upcoming Lake Charles liquefied natural gas project. expected to begin in 2026
Tuesday, June 7, 2022
Less than a week after OPEC + decided to accelerate production cuts and bring 648,000 barrels a day to markets in July-August, ICE Brent returned above $ 120 a barrel. There are several reasons why the initial pressure to lower oil prices has not continued. In the first place, doubts began to creep in as to whether OPEC + could produce more – in this sense, sharp increases in OSP certainly did not help. Second, everything is set for a particularly stable period of summer demand, and global crude oil reserves are likely to continue to decline. As expectations of a weaker macroeconomy have not yet hit demand, significant upward pressures will be observed in the coming weeks.
Russia is confident it can circumvent the EU’s insurance ban. Russia has said it is confident of circumventing the EU’s recent green ban on insurance and financing of Russian crude oil, which will begin after a six-month suspension period, mainly through the use of state guarantees to cover cargo.
The White House allows debt shipments to Venezuela. In a symbolic move to ease Venezuela’s oil sanctions, the Biden administration has signaled European oil companies Eni (NYSE: E) and Repsol (BME: REP) to begin supplying Venezuelan oil to Europe by resuming oil-for-debt oil exchanges. were stopped in 2020
India doubles crude oil supplies to Russia. According to Bloomberg, India’s state-owned oil refineries are working collectively to finalize and secure new six-month supply contracts with Russia’s main oil producer Rosneft, as Russian imports have already risen to 750,000 barrels a day in May.
Lebanon warns Israel against encroachment on the disputed area. Tensions erupted in the Eastern Mediterranean after Beirut warned Israeli authorities against any activity in the disputed area, which has yet to be demarcated between the two nations, in response to the arrival of an FPSO ship there.
US NatGas futures are jumping in growing demand. Henry Hub’s natural gas futures rose to $ 9.37 a mmBtu earlier this month as record-breaking Texas power demand and higher cooling generation combined with lower gas production kept the boost steady. prices up.
All the big players are leaving Alaska. Oil and gas companies are abandoning federal leases to the Arctic National Wildlife Refuge in Alaska, with BP (NYSE: BP) and Hilcorp Energy rejecting options last week amid fierce pressure from conservationists, although state authorities are still hope to revive the drilling.
The closely desired NWS well does not detect hydrocarbons. One of the most closely monitored feral cats to be drilled in Australia this year, the Sasanof-1 exploration well off the northwestern shelf of Western Australia has proved dry, despite initial estimates of 7.2 TCf of gas reserves, threatening future LNG production in the country.
Kurdistan opposes Iraqi authorities and courts. Iraqi Kurdistan authorities have rejected a ruling by the Iraqi Federal Supreme Court declaring separate marketing of raw raw material by the KRG illegal, and a new round of talks between Baghdad and Erbil is expected this week.
Russia’s legal battle for an aluminum refinery. Russia’s aluminum conglomerate Rusal has launched a lawsuit against Rio Tinto (NYSE: RIO), seeking to regain its 20% stake in Australia’s Queensland Alumina refinery, which they held together in a joint venture, before Rio cut off Rusal’s access to production. will take over.
BP-Shell Tandem The only candidate in Trinidad’s licensing. The government of Trinidad and Tobago has received bids for four of the 17 deepwater units it has put up for auction to stem the decline in gas production, with a consortium of BP (NYSE: BP) and Shell (LON: SHEL) making all bids.
The Biden administration is abandoning solar panel tariffs. Despite earlier fears of China’s circumvention of tariffs, the White House has abandoned tariffs on solar panels from Cambodia, Malaysia, Thailand and Vietnam for two years amid slowing solar projects in the United States amid slowing supply chain.
Elliott is suing the LME for discontinuing the nickel trade. The American hedge fund Elliott Associates is suing the London Metal Exchange for $ 456 million to cancel nickel deals in the trade chaos this March, arguing that the exchange should not have erased the deals after prices doubled over $ 100,000 / mt for a few hours.
The United States may never build a new oil refinery again. Amid unprecedented refining margins boosting downstream profitability to unprecedented levels, Chevron CEO (NYSE: CVX) Mike Wirth said there may never be a new refinery built in the United States, although the latest large-scale the refinery was launched in 1976.
By Josh Owens for Oilprice.com
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