June 30, 2022

Gulf of Mexico

The calm before the storm in the oil market

The first week of May could have brought us a long-awaited paradigm shift, but markets are still assessing the impact of China’s coronavirus lockdowns amid mass testing in Beijing and the possibility of a blanket European ban on Russian oil. With no clear way out for either of these, Brent crude futures remained range-bound, closing on Tuesday near $106 a barrel.

Amid faltering demand expectations

– While it is widely expected that OPEC + will agree to another monthly increase of 432,000 barrels per day, the widening gap between the stated goals of the oil group and reality is becoming too obvious to ignore.

– For March, the last month for which official OPEC+ data was released AvailableHowever, the variance increased to 1.45 million barrels per day and is set to rise only in April as Russian production declines.

Africa was a source of headache in its own right, as the major infrastructure blockade in Libya cut off about 550,000 barrels per day of global supplies, while Nigeria and Angola continued to decline amid force majeure and terminal decline.

The IEA’s release of 240 million barrels over the coming months and a Chinese demand slump of up to 1 million barrels a day in the wake of the COVID shutdown have alleviated demand-side problems, but demand should bounce back in the summer. It could get worse again.

market movers

French energy pioneer total energy (NYSE:TTE) said it will continue to ship LNG from the 17.5 million tons per year Yamal LNG project in which it holds a 20% stake, protecting its core interests in Russia.

A major American oil company chevron (NYSE: CVX) Starch Its production target for the Permian region is 15% against 2021 levels, as it began expecting to produce 725,000 barrels per day, while keeping its $10 billion buyback pledge unchanged.

– for Portugal bring energy (ELI: GALP) is It said Looking at the sale of exploration and production operations in Angola, one of the main areas of production, indicating that its orientation towards renewables is more timely than ever.

Tuesday 3 May 2022

Germany drops its opposition to the Russian oil embargo. Senior German Government Officials confirmed Berlin would be willing to support an immediate EU ban on Russian oil imports, despite the failure of yesterday’s EU summit to overcome bloc-wide disagreements over the embargo.

The blockade of Libya puts pressure on stocks. The Libyan National Oil Corporation has warned The country’s two warring governments argue that the risks of storing some Libyan grades have long-term consequences – the likes of Bou Atifil require constant heating, or else they freeze in tanks and pipelines due to their high wax content.

Rocket attacks Kurdish refining. In a missile attack in which no one claimed responsibility, a series of missiles targeted Two refineries in the Kurdish capital, Erbil, damaging the building’s oil storage capabilities, just two months after Iran’s Revolutionary Guards launched a missile strike in the area.

The US Gulf of Mexico is witnessing an outbreak of new activity. The coming months will see commissioning from BP’s Vito (NYSE: BP) floating production rigs Argos and Shell (NYSE: SHEL), which comes on the back of Murphy Oil’s recently launched King Quay drilling rig, which added about 280,000 barrels The day of new production capacity. Related topics: The US shale patch is facing a large number of problems

Shale pioneers stick to payments. Diamondback Energy (NASDAQ:FANG) and Devon Energy (NYSE: DVN) shale rigs have boost Their dividend payments while keeping production essentially flat, the former went to five times its quarterly payments, despite pressure coming from the Biden administration to ramp up production.

Unprecedented heat raises energy demand in India. Seeing the hottest spring months in decades, Power India the demand It soared to an all-time high last month at 135 billion kWh, simultaneously leading to widespread power outages across the country as supply fell short of demand by 2.4 billion units.

Russia wants to build latest African gas pipeline deal. Nigerian Petroleum Minister Timipre Sylva advertiser That Russia has expressed interest in investing in the long-awaited Nigerian-Moroccan gas pipeline that has been discussed since 2016, without specifying whether the route will be onshore or offshore.

Coal miners in South Africa struggle with logistics. mining companies in south africa have Refuge To truck coal to ports amid widespread disruptions across the country’s rail network – with coal in Newcastle trading at $320 a metric ton, the cost is palatable, even though the rail is four times cheaper.

US gas futures rise against the withdrawal of LNG. US natural gas prices are on the rise again, with the June 22 delivery contract for the first month exceeding $8 per million British thermal units amid an ever-increasing export drag on domestic gas production, with production dropping slightly to 92-93 billion cubic feet. Per day.

Pemex surprises with first-quarter earnings. Mexican National Oil Corporation PEMEX mentioned $6.17 billion in net profit for the first quarter of 2022, reflecting a $2 billion loss in the same period last year, as production growth and higher crude prices allowed total financial debt to drop to $108 billion from $109 billion.

The UK government is asking the oil industry to reinvest. British Business Secretary Kwasi Quarting written For UK companies operating in the North Sea to put in place a clear plan to reinvest their profits in the North Sea, with growing segments of opposition calling for an unexpected tax on oil and gas producers.

Mauritania attracts investors for licensing abroad. Mauritania has several world-class offshore gas discoveries as BP (NYSE: BP) 13 TCf Birallah has opened bids for 28 new offshore blocks surrounding the existing space, and is also seeking to attract investments in green hydrogen for reliable, low-cost energy supply.

Ukraine faces storage tightness. According to media reports, Ukraine is ready to Face A major shortage of storage facilities as stocks of cereals and oilseeds have already reached an all-time high of 21 million tons amid limited export opportunities has affected agriculture prices worldwide.

By Tom Cole for Oilprice.com

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