In this week’s newsletter, we'll take a fast take a look at a number of the critical figures and data within the energy markets.
We will then study a number of the key market movers early on 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.
OPEC+ Meets Amid Faltering Demand Prospects
- Whilst OPEC+ is widely expected to comply with another monthly increase of 432,000 b/d, the widening gap between the oil group’s stated objectives and reality is becoming too glaring to ignore.
- For March, the last month that official OPEC+ data is accessible, the discrepancy added up to 1.45 million b/d and is ready to only increase in April as Russia’s production went downhill.
- Africa has been a source of headache of its own, with Libya’s key infrastructure blockade trimming some 550,000 b/d from global supply, whilst Nigeria and Angola still slide lowed amidst force majeures and terminal declines.
- The IEA’s release of 240 million barrels over the following months and China’s demand falling by the maximum amount as 1 million b/d on the heels of its COVID lockdowns have both mitigated demand-side issues, however should demand regain within the summer, tightness may well be worsening again.
Market Movers
- French energy major TotalEnergies (NYSE:TTE) stated that it'll continue shipping LNG from the 17.5 mtpa Yamal LNG project during which it's a 20% stake, protecting its core interests in Russia.
- US oil major Chevron (NYSE:CVX) raised its production target for the Permian by 15% vs 2021 levels, starting expecting to supply 725,000 b/d, whilst keeping the $10 billion buyback pledge unchanged.
- Portugal’s Galp Energia (ELI:GALP) is reportedly considering the sale of its upstream operations in Angola, one in all its key areas of production areas, signaling that its drive towards renewables is becoming ever more timely.
The first week of May could have brought us a much-awaited paradigm shift, however, the markets still appraise the impact of China’s COVID lockdowns amidst the mass-testing happening in Beijing and therefore the probability of a comprehensive European embargo on Russian oil. With no clear solution for either of these, Brent futures remained range bound, closing Tuesday around $106 per barrel.
Germany Drops Opposition to Russian Oil Embargo. Top officials from the German government confirmed that Berlin would be able to back an on the spot world organisation ban on Russian oil imports, although yesterday’s EU summit did not overcome the bloc-wide disagreements on the embargo.
Libya Blockade Squeezes Inventories. Libya’s NOC has warned the country’s warring two governments that the risks of storing a number of Libyan grades have long-term consequences – the likes of Bu Attifel require continuous heating, otherwise they solidify in tanks and pipelines due to their high wax content.
Rocket Attacks Rock Kurdish Refining. in a very missile attack that was claimed by nobody, a string of rockets targeted two refineries within the Kurdish capital city of Erbil, damaging oil storage capacities at the premises, only two months after Iran’s IRGC administered a missile strike within the area.
U.S. Gulf of Mexico to determine Burst of recent Activity. The upcoming months will see the commissioning of BP’s (NYSE:BP) Argos and Shell’s (NYSE:SHEL) Vito floating production rigs, drawing near the rear of Murphy Oil’s recently started King Quay rig, adding some 280,000 b/d of recent output capacity.
Shale Pioneers follow Payouts. Shale drillers Diamondback Energy (NASDAQ:FANG) and Devon Energy (NYSE:DVN) have boosted their dividend payments whilst keeping production essentially flat, with the previous going as far on quintuple its quarterly payout, despite pressure coming from the Biden administration to build production.
Unprecedented Heat Sends India’s Power Demand Soaring. Seeing the most popular spring months in decades, India’s power demand rose to its highest on record last month at 135 billion KWh, concurrently triggering widespread power cuts across the country as supply fell wanting demand by 2.4 billion units.
Russia Wants to create Latest African Gas Pipe Deal. Nigeria’s petroleum minister Timipre Sylva stated that Russia has expressed interest in investing within the long-mulled Nigeria-Morocco gas pipeline that has been discussed since 2016, without specifying if the route are going to be offshore or onshore.
South African Coal Miners scuffling with Logistics. Mining companies in African country have resorted to trucking coal to ports amidst widespread disruptions across the country’s railway network - with Newcastle coal trading at $320 per t the value is palatable, despite rail being fourfold cheaper.
U.S. Gas Futures Rise Again Amidst LNG Pull. U.S. gas prices are on the increase again, with the front-month June ‘22 delivery contract edging above $8 per mmBtu amidst an ever-increasing export pull on domestic gas production, with output marginally dropping to 92-93 bcfd.
UK Government Asks industry to Reinvest. the united kingdom business minister Kwasi Kwarteng has written to companies active within the UK North Sea to line out a transparent attempt to reinvest their profits into the sea, with increasing swaths of the opposition advocating a windfall tax on oil and gas producers.
Mauritania Attracts Investors for Offshore Licensing. Wielding several world-class offshore gas discoveries like BP’s (NYSE:BP) 13 TCf Bir-Allah, Mauritania has opened bids for 28 new offshore blocks surrounding the present acreage, also seeking to lure in investments for green hydrogen for low-cost reliable power supply.
Ukraine Confronts Storage Tightness. in line with media reports, Ukraine is ready to face a big shortage of storage facilities as grain and oilseeds stocks already reached an all-time high of 21 million tons amidst limited export opportunities, weighing on agriculture prices across the world