Oil prices are on the right track for a fifth straight monthly increase despite significant demand destruction in China, a trend that highlights just how big the present supply problem is. As we are becoming closer to next week’s OPEC+ meeting, the market has been increasingly questioning the requirement of yet one more formal rubber-stamping of monthly production quotas. With Russia’s production down by almost 1 million b/d compared to February levels and Libya constantly battling supply disruptions, the oil group’s compliance rate is simply visiting increase. Despite a major call demand from China, oil is about for a fifth straight monthly gain, with ICE Brent settling in at around $110 per barrel. Russia Cuts Poland and Bulgaria Gas Supply. Russia halted gas supplies to Poland and Bulgaria after the countries refused to open new bank accounts and buy Gazprom (MCX:GAZP) deliveries in roubles, a call that the ecu Commission denounced as blackmail. OPEC+ Expected to Ram Through Another Agreement. Already in their second year of supply discipline, OPEC+ countries are expected to greenlight another 432,000 b/d monthly increase for June at their monthly 05 June meeting, when Kazakhstan and Russia are happening in terms of drilling. Russia’s Sakhalin-1 Goes into catastrophe. The Sakhalin-1 project within the Russian Far East, producing some 270,000 b/d of crude, saw its operator ExxonMobil (NYSE:XOM) declare vis major because it became increasingly difficult to ship crude from there. US Congress Vows to travel After Oil Companies. US Democrats in Congress have accused domestic oil companies of gouging and profiteering off high gasoline prices, seeking to introduce legislation that will allow the US Federal Trade Commission to travel after them and double the penalty to $2 million per day. ExxonMobil Makes Three New Stabroek Discoveries. US oil major ExxonMobil (NYSE:XOM) made three new discoveries in offshore Guyana, namely Patwa, Barreleye, and Lukanani, taking the full recoverable resource of the Stabroek Block to 11 billion barrels. No One Knows a way to acquire Russian Gas. Amidst the continent-wide confusion on whether using Gazprombank accounts to get Russian gas breaches EU sanctions, Germany’s economy ministry stated that if the businesses declare that contracts are fulfilled with the euro payment, it shouldn't contradict the sanctions regime. China to chop Coal Import Tariffs to Zero. As domestic coal production reached an all-time high of 395 million tons in March, China scrapped import tariffs altogether from May 01 amidst unprecedentedly high global prices, potentially freeing up the way for more discounted Russian coal into the country. Chevron Signs Up for Suriname Block. Suriname’s state company Staatsolie and US oil major Chevron (NYSE:CVX) signed a production sharing agreement for exploration and production for the offshore block 07 within the west of the shallow offshore area, with the latter taking an 80% stake within the project. Glencore Cuts Guidance on Metals Production. Citing operational challenges and COVID-related drawbacks, UK-listed trading major Glencore (LON:GLEN) lowered its 2022 production guidance on cobalt, copper, and zinc by some 5-10%, with the latter two seeing a 15% q-o-q decline in Q1 2022. Shell Tightens Russia Restrictions on Crude Buying. UK energy major Shell (LON:SHEL) revised its restrictions on buying Russian oil, stating that it'd not accept products with any Russian content after rumors of an emerging ‘Latvian Blend’ stoked fears of tacit blending. Germany Wants to require Over Rosneft Refinery. Germany is preparing to require over the Schwedt refinery operated by Russia’s state-owned company Rosneft (MCX:ROSN), the sole refinery remaining within the country that's running predominantly on Russian oil, in a very drive to bring total imports to zero. No Quick COVID Rebound Looming for China. Despite a five-day Labour Day developing, China's crude demand is about to remain depressed as some 180 million residents remain under some style of lockdown, with gasoline and demand still over 25% below year-ago levels and jet fuel demand down quite 50% year-on-year. US Sues Leading Metals Producer. The US Securities and Exchange Commission sued Brazilian miner Vale SA (NYSE:VALE) over ‘false and misleading’ dam claims following the 2019 Brumadinho dam disaster that killed 270 people, saying that the firm knew about the dam not meeting international standards. Shell Doubles Down on Indian Renewables. UK oil firm Shell (LON:SHEL) agreed to shop for India’s renewable energy-focused company Spring Energy for $1.55 billion, boosting 2.9 gigawatts-peak of solar and wind projects, becoming the third energy major to try and do so after BP (NYSE:BP) and TotalEnergies (NYSE:TTE). Thanks for reading and we’ll see you next week.
Yusuf Bhandarkar +917977231537
