The Friday, October 22nd, 2021 Oil has now comfortably settled above $80, with Asian country refusing to change its strategy and U.S. shale companies maintaining their spending discipline. Energy stocks are bouncing back to the limelight, significantly outperforming the broader S&P 500 index. Oil prices have remained largely stagnant over the week, with Brent trending round the $85 per barrel mark and WTI narrowing its Brent differential at $83 per barrel. Whilst both coal and gas prices have fallen back in the week from earlier peaks, that decline wasn't enough to balance tight supply. Moreover, oil found marginal support from a surprise US crude stock draw as EIA data contradicted a solid weekly gain forecast by the API. Despite the steep back-wardation in crude futures, oil prices are unlikely to vary significantly until there's a fundamental shift within the ongoing energy crunch.
Saudi Arabia Refuses to alter Crude Strategy. Saudi Energy Minister Prince Abdulaziz bin Salman dismissed involves a change in OPEC+ production strategy amidst increasing pressure to bring down outright prices, claiming this energy crunch isn't because of there being a shortage of crude. India Wants Fixed Price Supply Contracts. India, the third-largest crude importer globally, has called on oil producers to reconsider their approach to crude supply, with the state-owned IOC reportedly seeking the maximum amount as 70% of long-term supply deals to incorporate a set asking price.
Japan Stocks Up LNG previous Winter. Japanese LNG stocks held by major utility companies reached a 5-year high consistent with METI data, indicating there's an occasional likelihood that this winter will trigger power shortages as importers built up their inventories before the anticipated LNG price rally came about. Chinese Coal Futures Plunge Amidst Government Intervention. China’s most-traded Zhengzhou thermal coal futures dropped almost 30% over three days as China’s state planner NDRC pledged to bring prices back to a “reasonable range”, amongst others by raising transaction fees and restricting trading positions.