In this week’s newsletter, we'll take a fast examine a number of the critical figures and data within the energy markets. we'll then take a look at a number of the key market movers early in the week before providing you with the most recent analysis of the highest news events going down within the global energy complex over the past few days.
The recent oil price surge triggered by rumours of an impending OPEC+ production cut has hit a ceiling and although the meeting is simply per week away, focus has shifted towards aggravating macroeconomic environment, dragging ICE Brent right down to $100 per barrel. Inflation has roared back to disputation, however, now around it's not the US, the limelight but Europe. With almost every single major country seeing double-digit inflation and still not yet seeing the height, the EU financial organisation is already testing the thought of a steeper-than-expected rate hike of 75 basis points. And this might still be removed from the top.
OPEC+ Supply Cuts Getting Real. With most of OPEC+ heavyweights continuing to bemoan the alleged disconnect between paper and physical oil markets, with the United Arab Emirates and Nigeria joining the ranks of such countries, the probabilities of seeing a concerted production cut are increasingly higher.
IEA Eyes More SPR Releases. With the 180-million-barrel U.S. SPR release coming to an end in November, the pinnacle of IEA Fatih Birol advocated more strategic stock releases, saying that members should consider them whenever the prospect of supply disruption emerges.
- With the euro zone already in recession territory and most governments mulling the chance of blackouts, the economic prospects of Germany are worsening by the day amid plunging German stocks.
- Germany’s largest gas importer Uniper (ETR:UN01) requested a further €4 billion of bailout money from the German government, having already fully drawn down an extra €9 billion credit line from state lender KfW.
- Soaring energy costs have resulted in Germany recording its first monthly deficit since 1991 this June, with the German economy becoming more passionate about China in H1 2022 amidst increasing investments, despite political pressure on Berlin to pivot far from Beijing.
- Seeking to halt runaway power prices, the concept of implementing a Europe-wide gas price cap is increasingly gaining traction, with rumours circulating that the September 09 emergency meeting of EU countries is getting to just do that.
- U.S. oil major ExxonMobil (NYSE:XOM) sold its Fayetteville shale assets in Arkansas to Flywheel Energy, an Oklahoma-based exploration company, for an undisclosed sum as a part of its $15 billion divestment goal.
- China’s largest oil refiner, the state-owned Sinopec (SHA:600028), reported an all-time high net income of $5.8 billion in H2 2022, prompting it to begin share buybacks for the primary time on record.
Canada Invokes 1977 Pipeline Treaty with U.S. With Michigan governor Gretchen Whitmer seeking to stop working the Enbridge-operated Line 5 pipeline, Canada invoked a 1977 pipeline treaty with the US to trigger negotiations that will settle the prolonged standoff between the 2 countries.
ExxonMobil Threatens to Sue Russian Government. U.S. oil major threatened to sue the Russian government if Moscow continues to dam its divestment of a 30% stake within the Sakhalin-1 project, of which it's the operator, because the Kremlin banned foreign stakeholders from selling shares until the top of the year.
U.S. Authorities Issue Fuel Waivers on Whiting Fire. Last week’s fire at the 435,000 b/d Whiting Refinery in Indiana and its subsequent shutdown have compelled the US Transportation Department and also the EPA to waive federal regulations for fuel volatility and maximum driving time rules for truckers.
France’s Engie the New Gazprom Victim. per French media, Russia’s gas major Gazprom (MCX:GAZP) will curtail deliveries to France’s Engie (EPA:ENGI) during a dispute over contracts, though the French firm has already managed to chop its Russia dependence to 4%, compared with 17% before the war in Ukraine.
Sadr Puts Iraqi Future on Tenterhooks. News of the Iraqi Shia cleric Muqtada al-Sadr leaving politics amidst a protracted government impasse have sparked riots in the capital city of Baghdad, with Sadrists storming the presidential palace with a minimum of 15 protesters killed, potentially plunging the country into a extended period of unrest.
German Power Prices Can’t Stop Soaring. Rising for eight consecutive trading sessions already, German benchmark power prices for annual delivery in 2023 have surpassed the record €1000 MWh threshold in the week, despite falling spot gas prices and water levels along the River Rhine increasing on the rear of weekend rain.
India to Double Down on Petrochemicals. India’s leading downstream firm Reliance Industries (NSE:RELIANCE) will invest $9.4 billion over the subsequent 5 years to maximise oil-to-chemicals refining yet on build up production of green hydrogen and solar modules.
Iran and Russia to Sign Gas Swap Deal Soon. in line with the Iranian Oil Minister Javad Owji, Tehran and Moscow will sign a gas swap deal within the very near future – despite last month’s contracts that saw Gazprom going in three large-scale gas projects, the scope of swaps continues to be unknown.
France Warns Industry they're going to be Hit First. The French government urged companies to draft energy savings plans by next month, warning they might be the primary to feel the impact of power rationing and adding the state would lead the way with its decide to curb energy usage by 10%.
Russia to Sell Gasoline to Taliban. In what would probably be the smallest amount anticipated a part of Russia’s Asian pivot, the Taliban administration of Afghanistan is reportedly within the final stages of talks with Moscow over the terms of a contract to get gasoline.