A combination of rising Covid infections in China, uncertainty about the G7 oil price limit and an increase in US oil inventories pushed oil prices lower this week. Although oil prices rose early Friday morning, the buildup of bearish sentiment is palpable.
Friday, November 25, 2022
With the oil price cap coming into effect in just 10 days, oil markets are desperately awaiting clarification on the actual details of the price cap. The European Union met to agree on a joint oil price cap, but talks broke down as members failed to agree on the best price. Media reports suggest that the oil price cap proposed by the G7 would be between 65 and 70 per barrel, significantly higher than initially assumed. This news, coupled with the COVID crisis in China and stockpiling in the US, has sent oil prices down this week.
China’s opening no longer feels real. Daily recorded cases of Covid-19 in China hit an all-time high this week, rising above 31,000, with Henan and Guangdong going back into lockdown mode while Beijing residents were placed under the strictest restrictions since the start of the crisis. pandemic.
EU Countries Lambast Gas Price Cap Proposal. The EU’s recently announced proposal to limit gas prices to €275 per MWh has been heavily criticized by member states, with some dissatisfaction about the lack of clarity, while Germany and the Netherlands argue that any cap would shift supply elsewhere.
Biden is considering expanding fuel oil stocks. The Biden administration is considering an increase in the purchase of heating oil going to the Northeast Home Heating Oil Reserve as the current supply of 1 million barrels of diesel (10 days’ worth of stock) is not enough to ease the pressure on the middle distillate. light up.
New Lula era means no more asset sales for Petrobras. Brazil’s president-elect Lula da Silva’s transition team has asked the outgoing Bolsonaro government to halt all pending asset sales of the national oil company. Petrobras (NYSE:PBR) while at the same time pledging to pursue a non-interventionist policy.
Chevron in for more action in Venezuela. American oil company Chevron (NYSE:CVX) may be allowed to significantly increase oil production in Venezuela if Nicolas Maduro’s government resumes Mexico-brokered negotiations with the opposition.
Iran’s nuclear program has sparked international anger. Following an IAEA report finding that Iran was enriching uranium to 60% at its Fordow site, Germany, France and the United Kingdom condemned Tehran’s actions as a challenge to the non-proliferation system, reducing the likelihood of an Iran deal getting smaller every moment. even lower soon.
Factory fire fuels fears for Frac sand supply. A fire at the Superior Silica Sands plant, which produces frac sand that is pumped into shale wells during drilling, jeopardizes the supply of the key component in the Eagle Ford Basin, driving frac sand prices to as high as 2022 have already tripled.
Nigeria estimates oil theft damage at $2 billion. An investigation conducted by the Senate of Nigeria found that the African country lost more than $2 billion in oil theft in January-August 2022 and that only 66% of the country’s oil production was safe, with even major projects such as Shell’s (LON:SHEL) Pitchforks susceptible to attacks.
Chinese Majors Accelerate US Divestment. According to media reports, China’s offshore oil company is big CNOOC (HKG:0883) steps up sales of its US assets with a UK oil producer Port Energy (LON:HBR) It is rumored to be in talks about its interests in two Gulf of Mexico fields, Appomattox and Stampede.
Germany joins the Windfall Tax Club. Germany joins the UK or Italy in introducing a 33% windfall profit tax on oil, gas and coal companies in case their current profits exceed 20% or more of their 2018-2021 average number.
Italian city launches challenge against LNG terminal. The Italian city of Piombino took the country’s government to court over a planned 5 bcm LNG terminal at its Tuscan port, saying work on the project should not begin until safety guarantees have been given to local fishermen and businessmen.
New drilling frontier opens in Africa. Buoyed by the success of his Venus discovery in Namibia, the French oil company TotalEneries (NYSE:TTE) plans to launch a drilling campaign on the west coast of South Africa, against the Namibian offshore bloc with the discovery of the supergiant.
Ghana wants to pay for oil with gold. Ghana’s government is trying to formalize a new policy that would allow the use of gold instead of US dollars to buy oil products as the African country’s international reserves have dwindled to just $6.6 billion, a third year -by-year.
Power outage shuts down Ukraine’s largest steel plant. Amid Russia’s ongoing missile attacks on power generation infrastructure, recurring blackouts have halted production at Ukraine’s largest steel mill, operated by ArcelorMittal (AMS:MT) in Kryvyi Rih, with current power supply not enough to support production even at 20% capacity.
By Tom Kool for Oilprice.com
More top results from Oilprice.com: