We will then examine 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. We hope you enjoy.
Europe Struggles to chop Gas Demand
- As Bloomberg has noted, the most tenet of European gas policy going into the winter season of 2022/2023 - lower consumption - isn't yet happening.
- The last week of September has seen the primary string of below-average temperatures in Europe and German consumers increased their gas consumption to 14% above the 5-year average.
- EU member states have agreed to scale back gas demand by 15% this winter, ranging from August, meaning that despite high gas inventories the demand loss is lagging significantly.
- Peaking in late August, Europe’s benchmark TTF spot prices are plummeting recently to €170 per MWh, some 30% lower month-on-month but still triple what they were a year ago.
Market Movers
- US oil major Chevron (NYSE:CVX) is reported to possess bought into the PEL 90 license offshore Namibia, adjacent to what's going to probably become the biggest oil discovery of 2022, the multi-billion-barrel Venus.
- German power producer RWE (RWE) agreed to shop for US energy company ConEdison’s (NYSE:ED) Clean Energy Businesses for $6.8 billion, making it the fourth-largest renewables player within the US market.
- Brazil’s state company Petrobras (NYSE:PBR) soared 10% this Monday, as closer-than-expected presidential elections will likely force Lula to edge closer to the middle.
Following several weeks of macro-driven weakness, on has finally brought something more tangible to grease markets. Namely, a considerable OPEC+ market intervention. Reports put the potential cut in OPEC+ production targets at round the 1 million bpd mark. This potential reduction in OPEC+ production will combine with Russian sanctions kicking in and also the US SPR release running its course to feature real upward pressure to grease prices.
OPEC+ Is Serious a few Huge Cut. Meeting face to face for the primary time since March 2020, the OPEC+ meeting in Vienna in the weekis anticipatedto work outthe most important coordinated downward revision in years because the oil group is reportedly considering a 1 million b/d cut for November 2022.
Israel-Lebanon Maritime Deal Really Could Happen. Following several years of diplomatic negotiations, US envoy Amos Hochstein has presented Israel and Lebanon with a draft agreement on a way to split a 330-square-mile disputed area within the Eastern Mediterranean, nearing a resolution to the longtime row.
White House Restarts the Fuel Price Blame Game. The Biden Administration has stirred emotions in the industry again after Energy Secretary Jennifer Granholm blamed majors for his or her failure to keep up sufficient fuel inventories, increasing the chances of regulatory caps on fuel exports out of the US.
IEA Forecasts Huge Gas Demand Drop. The International Energy Agency has forecast a tenth decline in European gas demand, the biggest year-on-year drop on record, followed by an additional 4% decrease in 2023, with most of the losses coming from the continent’s embattled industry.
Nord Stream Rupture the biggest Methane Release Ever. The UN’s International Methane Emissions Observatory stated that the ruptures on the Nord Stream pipelines 1 and a pair of are possiblythe most important single release of methane in history, leaking at a rate of twenty-two,920 kg per hour.
California Mulls net profit Tax. Seeking to react to a eruption in gasoline prices, California Governor Gavin Newsom is aiming to introduce a profits tax on oil companies within thekind ofthe nextrate on earnings for the given year, the primary state to try and do so across the country.
Prepare for an enormous Chinese Export Spike. Beijing finally issued a large 15-million-ton export quota for refiners, the most important single allocation in 2022, paving the way for a ramp-up in Chinese crude demand and refinery runs.
Things Turn Hot Again in Libya. the choice of Libya’s Tripoli government to sign a preliminary deal on energy exploration with Turkey was met with unprecedented fury as governments in Greece and Egypt, also as Libya’s concurrent government in Benghazi, have protested against drilling in contested waters.
Prisoner Swap Eases US-Venezuela Tensions. A high-level exchange of prisoners that saw five Citgo employees released reciprocallyfor 2 Venezuelans (nephews of Venezuela’s first lady Cilia Flores) has marked another step toward a normalization of relations between the US and Venezuela.
Iron Ore Remains Surprisingly Stable. Whilst other commodities are wedged within the turmoil of recession fears, ore has been surprisingly stable over the past two months, with 62% ore trading slightly below $100/mt because the good and bad news commencing of China seem to offset each other.
Chinese Delisting Starts in London. A mere month after rumors of Chinese companies delisting from Western exchanges emerged, the Asian country’s largest refiner CNPC (SHA:600028) indicated it'd delist its American Depositary Shares (ADSs) from the London exchange.
Australian Profits Soar on Fossil Boom. All the ramifications of the Russia-Ukraine war in 2022 thus far have boosted the economic outlook of Australia as thermal coal revenue is about to leap 35% year-on-year (to A$62 billion) whilst the worth of LNG exports is predicted to extend by 30%.
Saudi Arabia Talks Spare Capacity Again. Reminding the oil business of supply fundamentals, Saudi Aramco (TADAWUL:2222) CEO Amin Nasser argued that the remaining spare production capacity has shrunk to as little as 1.5% of worldwide demand.