by Speculation surrounding China’s zero-covid policy has fueled volatility in the oil market, and while crude oil prices rallied last week, a reversal could occur this week.
Chart of the week
Russian oil exports continue to be strong despite the headwinds
– Total exports to EU countries have risen to 800,000 bar/d, which is slightly more than before February, but most deliveries have gone to the Mediterranean.
– At the same time, Russia’s product exports have decreased due to exporters’ difficulties in competing with refineries in Asia and the Middle East, and Asian circulation has so far been limited mostly to fuel oil.
– During a meeting between the foreign ministers of India and Russia this week, former top diplomat Subrahmanyam Jaishankar said that India will continue to buy Russian oil because it benefits the country.
Market movers
– US energy company Dominion Energy (NYSE:D) is reportedly plans to sell its 50 percent stake in the Cove Point LNG facility in Chesapeake Bay, Maryland for several billion dollars.
– US oil major ExxonMobil (NYSE:XOM) is set to value receive A $2 billion loss in the Santa Ynez offshore oil and gas field in California, which has been idle since 2015 after a pipeline leak.
– The German government seems inclined to prevent a Chinese takeover of the chip factory it owns and operates Elmos (ETR:ELG), the first European intervention in the semiconductor industry.
Tuesday, 08.11.2022
China first gives, but then it takes away, if you could tell me about the events of the last couple of days in the oil market. A pre-weekend rally in oil prices on reports that Beijing is preparing a plan to ease zero-to-Covid-19 restrictions to ease day-to-day business was dented first by top officials fueling speculation and then by a surge in COVID cases in the country. Amid expectations of a rise in US crude inventories last week, the second half of this week may not be so rosy for oil.
Related: The era of the price cap and the loss of free energy markets
Island nations want big oil to pay for climate damage. The COP27 climate summit began in Egypt’s Sharm el-Sheikh managers from poor countries criticizing oil companies for contributing to global warming and saying they should pay for the damage because “the planet is burning.”
Not drilling anymore? Campaign rally in New York state testifying US President Biden said there will be no more oil drilling on federal land and in federal waters, meaning that despite the IRA’s deal with Senator Manchin, the White House still plans to end the lease.
The IMF demands a price of 75 USD/MT of carbon dioxide. IMF Managing Director Kristalina Georgieva said The price of coal must be at least €75 per ton globally by the end of this decade for climate goals to succeed, setting the tone for the COP27 climate talks that recently launched in Egypt.
China Hope drives copper higher. After registering its biggest one-day gain since January 2009 of 7.1% last Friday, copper prices continue to support hopes that China will gradually ease its zero-to-COVID restrictions despite continued spikes in cases, trending at $7,880 a tonne.
A quarter of US coal power plants will be gone by 2030. by According to the US Energy Information Administration, 23% of the current 200 GW of coal generating capacity will be phased out by the end of this decade due to pressures from more cost-effective renewables and natural gas.
Egypt doubles wind turbines. Governments of Egypt and UAE agreed build one of the world’s largest wind farms in Egypt, with a capacity of 10 GW expected to produce 48 GWh of clean energy annually, offsetting approximately 10% of the country’s current carbon dioxide emissions2 effluent.
Guyana wants more from the new blocks. Guyana does offer 14 new offshore exploration areas, including three in deep water, in a new license auction coming up, after revising upstream terms to a 10 percent royalty rate (five times that of ExxonMobil) and a 10 percent corporate tax rate.
Trinidad asks the US for exemption from sanctions. The Government of Trinidad and Tobago is asked The White House authorizes Venezuelan gas imports to restart an idle liquefaction train in the Caribbean islands to bring production from the stalled 4.2 TCf Dragon field.
Freeing a grounded VLCC is not easy. The Indonesian authorities are stated the release of a recently sanctioned Djibouti-registered supertanker that ran aground in the country’s Riau Islands at the end of October, believed to be carrying Iranian crude, could take up to a month.
New gas discovery in Offshore Israel. Energean (LON:ENOG), an oil company focused on the Mediterranean made Another commercial gas discovery off the coast of Israel, when the Zeus-01 exploration well hit a structure estimated to contain more than 13 billion cubic meters (0.5 TCf) of recoverable gas reserves.
Canada wants to tax share buybacks. Canada’s federal government plans to introduce a 2 percent share buyback tax expected to boost its revenue by $1.6 billion over five years, but industry groups warn such a change would affect investment decisions from 2024 onwards.
Corruption is a pressing problem in Mexico. According to the latest reportsMexico’s national oil company PEMEX signed a deal with the country’s energy regulator in 2016 to invest more than 3 billion euros to fix flaring problems, but reneged on the deal and continues to burn huge amounts.
ENI continues oil deliveries to Venezuela. The Italian oil giant ENI (BIT:ENI) has been prescribed two million-barrel cargoes for November loading in Venezuela, after a four-month hiatus as it restarted the oil-and-debt deal approved by the US government earlier this year.
Tom Kool for Oilprice.com
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