Oil Production Report of this week - Yusuf Bandarkar

Saturday, January 22nd, 2022

Leading investment banks issued their outlooks for 2022 in the week, with both Goldman Sachs and Morgan Stanley expecting fossil oil prices to hit $100 per barrel this year as oil inventories still ebb further and OPEC+ spare capacity falls. These reports drove ICE Brent past the $90 per barrel mark for the primary time since 2014 on, but the oil rally fizzled out by Friday because the priced-in geopolitical premium weakened. Despite recurring forecasts of an impending supply shortage, the approaching weeks should see more crude on the market - Libya is already back and Ecuador are going to be getting there soon, too. The wide backwardation in futures markets, with the Brent M1-M12 spread at $8 per barrel, indicates that market fundamentals still point towards a drop from here, instead of a rally continuation. By Friday, global benchmark Brent traded around $88 per barrel, whilst WTI was trending at $85 per barrel.

US Congress Has Another Go at Big Oil. A US congressional committee invited top officials from four leading oil majors - ExxonMobil, Chevron, Shell, and BP - to testify in February about the industry’s role in global climate change, the subsequent phase of the House oversight committee’s inquiry into fuel companies blocking action on temperature change.

China Fines Petrochina for Trade Irregularities. together with punishing independent refiners’ for evading fuel tax, China’s authorities also fined the country’s leading oil firm Petrochina for irregular trade of rock oil totaling 180 million tonnes since 2006, successively ‘facilitating the blind development of outdated production capacity at independents’.

Oil Majors Quit Myanmar. Oil majors TotalEnergies (NYSE:TTE) and Chevron (NYSE:CVX) decided to quit Myanmar following last year’s military coup, getting out of the Yadana offshore gas project off the country’s southwest coast with none financial compensation.

Still-torn Libya Aims to maximise Output in 2022. With Libya just a pair of days out of the woods after a month-long supply disruption, the pinnacle of the country’s NOC Mustafa Sanallh claimed Libya aims for a mean annual production level of 1.2 million b/d in 2022.

Turkey to Ration Electricity to Industry after Iran Pipe Halt. Turkey’s Energy Ministry stated it might impose mandated power outages to large industrial plants after Iran cut gas flows to Ankara for up to 10 days on the rear of a technical failure on the Iran-Turkey gas pipeline.

ExxonMobil-SABIC JV Adds to USGC Petchem Capacity. Teaming with Saudi Arabia’s petrochemical giant SABIC, US oil major ExxonMobil (NYSE:XOM) commissioned a 1.8 million tons p.a. polyethylene plant near Corpus Christi, TX, representing roughly 20% of future polyethylene capacity turning out within the US sea-coast.

Thanks for reading and we’ll see you next week..