The aggregate data dominate the oil markets

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Shipping is the new Achilles heel in the oil market

Major shifts in oil trade flows appear to be leading to a new form of disruption, with tanker freight rates inflated due to less availability of ships amid increasingly longer supply routes.

– Following sharp increases in freight at Aframax and Suezmax, chartering demand shifted to supertankers, pushing freight rates to the highest level since May 2020, with daily earnings of over $45,000 across all trade areas.

– According to Platts, monthly crude tanker shipments are set to rise 26% in the third quarter to 135 loadings as arbitrage urges exporters in the US, the Middle East and West Africa alike to target Asia.

– For the delivery of supertankers from the United States to China, the total prices rose to 10.7-10.8 million dollars, equivalent to 5.1-5.2 dollars per barrel, however, even at this level, it is still more profitable than renting the Suezmax.

market movers

– Germany is expected to announce the nationalization of the country’s largest gas importer, which is faltering Uniper (ETR: UN01)tomorrow, in a deal costing Berlin more than 30 billion euros.

American energy pioneer Chevron (NYSE: CVX) It is reported to be selling its stakes in three non-operated oil fields in Alaska as bids are submitted this month, in a move that could fetch about $500 million.

A private American oil exploration company based in the Gulf of Mexico Quarternorth Considering a potential sale of more than $2 billion, with a draw while prices are still high.

Tuesday 20 September 2022

One might be tempted to think that news of a growing OPEC+ production shortfall or more Nigerian and Kazakh production outages will have a major impact on oil prices, however, during the past 4-5 trading sessions, ICE Brent crude has been immune to the extreme volatility seen. for most of this year. The reason is that supply/demand no longer dictates key pricing trends, as macro data does, so all eyes are firmly on the Federal Reserve’s upcoming policy meeting this Wednesday.

OPEC+ production shortfall is still astounding. The gap between OPEC+ production targets and actual production continues to widen, reaching 3.6 million bpd in August, a massive increase of 0.7 million bpd month over month amid worsening compliance from Russia and Nigeria.

Venezuela’s best performing refinery is still burning. Venezuela’s 190,000 barrels per day Puerto La Cruz refinery is still burning after a lightning strike struck an oxidation lake to treat water, just several days after another fire caused a hose ruptured in a shipment of gasoline.

Germany acquires oil refineries owned by Russia. The German government placed all three refineries in Russia Rosneft (MCX: ROSN) It has stakes under the tutelage of the Federal Network Agency, a move that could lead to further retaliation from the Russian side.

US coal producers hedge against fuel prices. With US diesel stocks at their lowest level in decades, surface coal miners across the country began tying sell agreements to diesel indices as distillate prices continued to hover around $5/$, up 75% year over year.

Troubled European concerns for LNG in Nigeria. With Nigeria’s oil and gas production notably affected by theft and sabotage, long-term buyers of the country’s LNG production such as Portugal are anxiously anticipating the coming months as Bonny LNG continues to operate at 60% capacity.

It seems that Kazakhstan’s supply problems never end. DISCOUNTED PRODUCTION Since early August, Kazakhstan’s giant Kashagan field will not return to full production capacity until at least October, according to the country’s energy minister, which is struggling to contain an earlier gas leak.

Adding salt to Germany’s nuclear injury. One of Germany’s two remaining nuclear reactors, the Isar-2 plant will be forced to shut down in October for repairs after a leak was discovered this week, only to be shut down completely by December 31, 2022.

The United States warns Africa of the huge gas projects. US climate envoy John Kerry has warned against investing in long-term gas projects in Africa, a continent where 43% of the population lacks electricity, saying recovering investments will be difficult because renewables will be given top priority.

Turkey and Russia settle nuclear disputes. Presidents Recep Tayyip Erdogan and Vladimir Putin reached an agreement to resolve the row over the Russian-built Akkuyu nuclear plant in southern Turkey, as Turkish contractor IC Iktas retook the deal to build the $20 billion project.

The solidarity of European power is under threat. According to media reports, France’s state-controlled utility company EDF (Environmental Protection Agency: EDF) It sent a written notice to Italy that it might halt electricity exports to the country, possibly even two years, due to its ongoing problems with nuclear power generation.

Chinese coal production has been affected by rain. Putting an end to a hot streak of record high production, China’s daily coal production fell to a three-month low of 11.95 million tons per day amid heavy rains in Inner Mongolia and Shaanxi as well as ongoing lockdown measures.

The Netherlands is moving to maximum energy prices. The Dutch government will set gas and electricity prices at their January 2022 level from January onwards, and will also require energy companies not to isolate any customers for the next six months, a move it expects to be covered by increased wealth and corporate taxes.

The outlook for Nigerian oil production remains dire. Just as Nigeria’s oil production plunged to a multi-decade low of 1.18 million b/d last month amid sabotage and oil theft, production is set to drop even lower as the 225,000 b/d Bonga field will be shut down for maintenance. in October.

By Tom Cole for

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