In this week’s newsletter, we are going to take a fast have a look at a number of the critical figures and data within the energy markets.
We will then have a look at a number of the key market movers early on before providing you with the newest analysis of the highest news events going down within the global energy complex over the past few days. We hope you enjoy.
- in step with Bloomberg, the ESG industry is facing an increasing amount of criticism despite its incredible growth. While the industry is worth the maximum amount as $40 trillion, an oversized portion of that value is reportedly thanks to greenwashing.
- The investment head of the $660 billion Dimensional Fund blasted the ESG segment for ‘struggling both in terms of real-world impact and returns’, finding that activist investors have generally did not induce structural changes in firms.
- the speculation that sustainable investors will ultimately change the price of capital for companies has didn't materialize, with a recent Goldman Sachs report finding that the continued concentrate on decarbonization is after all doing the precise opposite.
- After ESG funds performed marginally better than conventional products from 2019 to 2021, this year has seen continuous declines, with European ESG stocks dropping 14% thus far so far, whilst oil stocks soared.
Market Movers
- Buoyed by high prices, Canadian oil firm Cenovus Energy (NYSE:CVE) decided to restart its West White Rose Project offshore Newfoundland, hoping to achieve peak output of 80,000 b/d by 2029.
- while Colombia’s presidential standoff sees two anti-establishment populists going into a second-round runoff, the country’s NOC Ecopetrol (NYSE:EC) aims to spice up its structurally declining oil and gas production by 40% by 2030.
- Brazil’s president Jair Bolsonaro lambasted the national company Petrobras (NYSE:PBR) for desperate to hike fuel prices, saying that such moves could ‘break’ Brazil, with the country’s Energy Ministry simultaneously calming fears that it's running out of diesel.
Oil prices are climbing another time on the news that the EU has agreed to a partial ban on Russian oil imports. Whilst Russia will almost inevitably see its production decline as a results of the ban, the final anticipation is that Asia, and particularly China, will build its purchases. The sanctions deal steepened backwardation within the markets, with the ICE Brent six-month spread popping up $15 per barrel again - not an honest time to be hoarding inventories.
The EU Creates Pipeline Exemption for Russia Sanctions. the EU finally reached an agreement on Russian oil sanctions, aiming for a six-month phase-in period, giving a short lived waiver for crude delivered by pipeline, without specifying their wind-down period.
US Gasoline Prices Rise on national holiday Demand. US gasoline prices have strengthened during the long Decoration Day holiday weekend, with nationwide prices trending at $4.62 per US gallon, boosted by strong driving demand and low availability of high-octane components across dry land.
Iran Retaliates By Seizing Two Greek Tankers. Merely a pair of days after the US seizure of two vessels allegedly carrying Iranian crude, Teheran has seized two Greek-flagged vessels that it claims were smuggling fuel, making the likelihood of a nuclear pact even thinner.
India’s Coal Shortages Show No Signs of Abating. in keeping with an enclosed power ministry presentation reported by Reuters, India is predicted to face an excellent worse coal shortage over the following quarter ending September, assuming that coal supply will fall 42.5 million tons wanting demand over that period.
Mexico’s Refining Readies for Hurricane Agatha. in line with US and Mexican forecasts, Mexico’s largest refinery, the 320,000 b/d Salina Cruz, that only very recently restarted operations after an explosion, is inside Hurricane Agatha’s area of impact on the country’s Pacific geographical region.
Russia Wants to limit Foreign Access to Its Subsoil. In another wave of Russia becoming ever-more reliant on itself amidst sweeping sanctions, the Moscow government is considering amendments to the country’s subsoil law that will make it illegal for foreign companies to access its oil and gas reserves.
Gazprom Expected to chop of Danish and Dutch Buyers. With the May 31 payment deadline looming today, Gazprom (MCX:GAZP) has cut gas supplies to Denmark’s Ørsted (CPH:ORSTED) and also the Netherlands’ Gasterra, with both companies refusing to pay the Russian company in rubles.
Iran Oil Revenue Up 60% on Higher Prices. The Iranian Oil Ministry stated that over the past months its oil, condensate, and gas export revenues rose 60% year-on-year, as triple-digit prices were boosted by crude exports moving up to some 900,000 b/d.
Venezuela Allows Diesel Sales in US Dollars. Venezuela’s state company PDVSA has ordered petrol stations across the country to sell diesel in dollars, scrapping a subsidy that allowed many poor citizens to shop for the fuel almost at no cost, with the new retail price set at $0.50 per liter.
China Wants More of Algerian Hydrocarbons. China's state-controlled company Sinopec (SHA:600028) signed a replacement PSA with Algeria's NOC Sonatrach to further develop the Zarzaitine oil field, extending its foothold within the geographic area country by boosting gas production and adding 12 new production wells.
UK Wants to stay Coal-Fired Power Plants for the Winter. Having scared the populace with past statements saying that up to six million people could experience power rationing within the winter, the united kingdom government subsequently announced that it'd keep coal-fired plants open throughout the winter.
Recession Qualms Keep Investors from Taking Larger Positions. The hedge fund community sold the equivalent of 5 million barrels within the six key futures contracts last week and despite the still-strong bullishness (long-to-short ratio at 6:1) the combined long positions are still ‘only’ 599 million barrels.
Russian Crude Production Rises Despite Sanctions Pressure. Media reports are suggesting that Russian boring increased by 1% month-on-month and rose to 10.17 million b/d this month up to now, implying that the ten million b/d trough last month may well be the low point of output.
