Wednesday, February 16th, 2022
In this week’s newsletter, we are going to take a fast take a look at a number of the critical figures and data within the energy markets.
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 happening within the global energy complex over the past few days. We hope you enjoy.
- the worth spread between spot Brent assessments like Dated Brent and also the exchange-traded ICE Brent rose to an all-time high of $5 per barrel amid ongoing geopolitical concerns.
- ICE Brent backwardation, too, is mirroring the unprecedented tightness in oil markets straight away, with the M1-M3 spread between the March and will ’22 contracts trading as wide as $4 per barrel.
- As Russian benchmark Urals sank to its weakest level in additional than a year on sanctions fears and weak de-sulphurization margins, premiums for North Sea grades Eko-fisk and Forties soared.
Market Movers
- Global trader Glencore (LON:GLEN) will put aside $1.5 billion for investigations into bribery and market manipulation which it expects to resolve over the course of this year.
- US oil firm ConocoPhillips (NYSE:COP) is reportedly considering a buying deal of its Permian Basin acreage located primarily within the Delaware region, worth over $1 billion, because it seeks to reduce its assets after it had bought out Shell’s US assets.
- UK-based major Shell (NYSE:RDS.A) is preparing to launch the sale of its gas assets within the Southern North Sea, a number of them under development since the 1960's, expecting to fetch $1 billion from the transaction.
Oil prices very nearly hit the $100 per barrel threshold on Monday as supply disruption fears spiked because of reports of Russia potentially invading Ukraine. At its peak, the backwardation within the commodity exchange was so steep that the Brent M1-M2 spread surpassed $2 per barrel - the last time markets saw such a discrepancy between spot assessments and forwards was back in 1993. the top of Russia’s practice session next to the Ukrainian border eased concerns somewhat, nudging Brent back to the lower 90's. Yet the market continues to be struggling to search out a decent bearish story to believe - OECD inventories remain unprecedentedly tight and OPEC+ seems reluctant to build up production, even as the windfall revenues began to flow in.
White House Mulls excise Pause. in step with media reports, the White home is considering a short lived halt on federal taxes on gasoline - currently amounting to 18.4 cents per gallon - to assist offset rising fuel prices at the pump.
India Faces Another Coal Shortage. With coal remaining the most effective performing hydrocarbon of 2022 to date, its prices might see another upswing as Indian smelters, textile mills, and fertilizer makers have all complained a few burning shortage of coal as power generators use the majority of the supplies.
Total’s $27 Billion Iraq Deal Stalled. the biggest Iraqi energy deal of the past decade, Total Energies’ (NYSE:TTE) four major projects in oil, gas, and renewables totaling $27 billion, has reportedly stalled because the prolonged approval process across Iraqi ministries led to Baghdad reconsidering the deal’s terms.
EU Is Putting Gazprom Under hand glass. the eu Union’s antitrust regulators are expected to work up pressure on Russia’s Gazprom (MCX:GAZP) to determine if the superior planet withheld extra gas supplies to send regional gas prices spiking.
China Increases Efficiency Targets. The Chinese authorities have raised the benchmark levels of energy efficiency for its most energy-intensive industries, tightening expectations for aluminum, copper, and zinc smelting plants as their power consumption took up almost 9% of the country’s total.
Exxon Starts Up Second Guyana Project. US oil major Exxon-Mobil (NYSE:XOM) started production at the second phase of the Liza deep-water field in offshore Guyana, bringing the country’s total production capacity to 340,000 b/d.
EIA Expects Permian Record in March. The US Energy Information Administration expects that production within the Permian Basin will rise 70,000 b/d to a record level of 5.2 million b/d in March, despite well productivity falling to its lowest since August 2020.
Alberta Wants to Tighten Oil Sands Emissions. the govt. of Alberta is functioning to tighten emission standards for oil sands mines, the foremost carbon-emitting upstream projects globally, as Canadian producers can up as yet choose the benchmarking of their emissions.
Corn-based Ethanol Worse for Climate than Gasoline, Study Says. A recent US academic study found corn-based ethanol, a key fuel blending component, to be 24% more carbon-intensive than gasoline thanks to emissions coming from land-use changes to colic root, provoking the ire of the ethanol trade lobby.
France Suffers Another Nuclear Setback. With France’s state-owned power group EDF (EDF) having arguably the worst winter this century to date, Paris has seen another nuclear – Bugey 3 – go offline thanks to an overhearing connection, bringing the entire capacity off to fifteen GW, 1 / 4 of the country’s output.
Exxon may be Late to the Brazil Party. Despite 4 billion spent on drilling rights, allowing US oil major ExxonMobil (NYSE:XOM) to become the second-largest offshore acreage holder in Brazil, the corporate is yet to report an advert oil discovery whilst it still sees the country in concert of its highest-quality growth areas.
Platts Wants WTI Midland in Brent Valuations. S&P Global Platts indicated it'd seek to feature WTI Midland to its assessment of oil benchmark Dated Brent, converted into a virtual fob North Sea basis to stay the world benchmark in line with other BFOET grades, though the oil market remains split on the requirement to incorporate non-North Sea Crudes.
In Conclusion: The Metals Soar on Russia-Ukraine Fears. Alongside crude prices, aluminum and nickel prices rose towards multi-year highs amidst concerns that a possible conflict could reduce Russian supply and aggravate existing shortages, with the previous trending around $3,340 per metric tonne, near all-time highs.