Chart of the week
– As national average gasoline prices have exceeded the US $ 5 gallon mark for the first time in history, the market is ready for further bottlenecks after ten consecutive weeks of falling inventories.
– With US gasoline demand rising to 9.2 million b / d recently, gasoline exports remain strong at 1 million b / d as Mexico and other Latin American countries continue to depend on US supplies.
– As US refineries can no longer buy Russian VGOs as it remains banned, many are forced to choose between petrol and diesel, which means that both sections can not be serviced at the same time.
Both diesel and petrol cracks have jumped above $ 50 a barrel against the WTI, although petrol will have to surpass the former due to the even higher demand expected during the summer months.
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Not yet ready to leave Angola, French company Total (NYSE: TTE) has made a final investment decision of $ 850 million in Phase 3 of the Clov deepwater complex, which has been in production since 2014.
– Having sold its oil business in Woodside, mining giant BHP (NYSE: BHP) has reoriented its focus on the fertilizer industry as it accelerates the development of its first mine in central Canada.
– British energy company Shell (LON: SHEL) has received two bids for its Nigerian onshore oil and gas reserves worth about $ 5 billion, with local companies Heirs Oil and Gas and ND Western claiming its Delta portfolio. Niger.
Tuesday 14 June 2022
The news for OPEC + members who are underperforming their production targets is not at all surprising, however this week’s oil trading was significantly affected by the prospect of under-supply. While Chinese demand is once again suffering from lockdowns due to the coronavirus, the continuing supply disruption in Libya and OPEC revising its growth prospects have more than offset the declining climate. With several banks and rating agencies raising their prospects for the price of crude for 2022, the new rule for ICE Brent appears to be around $ 125 a barrel.
Biden attacks oil companies. US President Biden singled out the big oil company ExxonMobil (NYSE: XOM), saying that the administration will ensure that everyone knows Exxon’s profits and that the company has made more money from God, while allegedly holding back investments in new wells.
Permian oil production is expected to reach an all-time high. According to the EIA, crude production in the Permian Basin in Texas and New Mexico is expected to increase by another 84,000 b / d in July, bringing total production to 5.32 million b / d.
OPEC further reduces supply prospects. In its latest monthly oil report, OPEC reduced its non-OPEC liquid supply growth by 250,000 barrels per day compared to May, most likely reflecting the slower absorption by the US, while keeping annual demand at $ 100.3 million untouched. barrels per day despite the difficulties of China.
Lebanon is openly showing compromise on the naval claim. With US envoy for energy Amos Hochstein arriving in Lebanon, the territorial dispute between Beirut and Tel Aviv seems to be fading as senior Lebanese officials say they are ready to get involved.
JP Morgan wins lawsuit against Nigeria. US investment bank JP Morgan has won the case of the Supreme Court of London against Nigeria. The country sued JP Morgan for $ 1.7 billion, arguing that the bank was grossly negligent in transferring funds to a company linked to the embarrassed African oil minister Dan Etete in 2011.
BP drops Oil Sands, doubles off the coast of Canada. British oil company BP (NYSE: BP) sold 50% of its stake in Sunrise oil sands in Alberta to Cenovus (NYSE: CVE), while buying a 35% stake in the Canadian underdeveloped Bay du Nord offshore project.
Drilling in Suriname is another disappointment. The American oil company Apache (APA) announced that the Rasper-1 wildcat’s well in block 53 of offshore Suriname hit only the water, which caused another setback after the non-commercial nature of the Bonboni-1 exploration well at the end of last year. year.
Multiplying Long Term Charter Push Up LNG Shipping. Market rates for LNG tankers have risen to multi-year highs as long-term chartered vessels limit the supply of available tankers, with a spot voyage in the Atlantic basin estimated at $ 100,000 a day.
Iran and Venezuela sign a 20-year partnership agreement. Following Nicolas Maduro’s visit to Tehran, Iran and Venezuela signed a 20-year cooperation agreement that requires closer alignment in oil and gas, with Iranian companies already repairing the El Palito refinery with a capacity of 140,000 new b / d and building .
Energy demand in Texas hits record high in mid-heat. With much of Texas experiencing strong off-season heat, US energy demand rose to 75 GW on Sunday and rose further the next day, setting a new Lone Star energy record.
Libya is still unable to recover from the unrest. As the internal conflict in Libya further degenerates, some 1.1 million b / d of Libyan production has stopped at this time as protesters removed the 200,000 b / d Sarir deposit and closed the ports of Es Sider and Ras Lanuf, leaving only one drop. older production.
Tanzania concludes framework agreement for LNG terminal. The Tanzanian government has signed a framework agreement with Equinor (NYSE: EQNR) and Shell (LON: SHEL) in a bid to begin construction of a $ 30 billion LNG terminal that has been delayed for years amid regulatory confusion.
Aluminum prices exceed the blows from China. Aluminum prices fell to a six-month low of $ 2,630 / mt following news of further lockdowns in China, the world’s largest consumer of metal, added to an already declining outlook, with inflation and higher interest rates also on the rise. .
By Josh Owens for Oilprice.com
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