We had study 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.
- Whilst most of 2022 could only be characterized as a period of hardship for Europe’s embattled industries, things are on the point of get even worse as Russian pipeline supply falls and power prices across the continent soared.
- Despite its gas-focused power generators struggling, with main sufferer Uniper (ETR:UN01) losing some 60% of its stock value since the start of June, Germany remains reticent about its plans to declare a gas emergency.
- Poor hydro performance has also aggravated the case, with Platts estimating a loss of 6GW across Europe, whilst nuclear continues to be kneecapped by recurring French strikes and outages, also as German decommissioning.
Market Movers
- As we had predicted, Algerian national oil and utility Sonatrach confirmed it'd be seeking to review gas pricing formulas with all its clients, moving far from the oil peg.
- UK-based energy firm Shell (LON:SHEL) signed a cope with Qatar Energy for the North Field East expansion project, taking a 6.25% stake within the project, the identical stake as Total Energies and ExxonMobil.
- Speculation is rife that US oil major ExxonMobil (NYSE:XOM) may be certain its best-ever quarterly performance, with Q2 operating profit moving above $16 billion, probably much to the ire of the Biden Administration.
A look at today’s securities market is enough to know the most concern for oil markets straight away, recession. Whilst most assessments expected recession to kick in later this year, its first signs are already emerging with European economies potentially entering a recession in Q3. Seeing Brent futures losing a hefty 10% today and dropping near $102 per barrel, one would perhaps fail to note that provide remains abundantly a problem – Libya’s almost complete degradation into an all-out internecine conflict and Norway’s offshore production seeing the primary massive strike campaign of recent years have narrowed potential supply sources even further. Moreover, Saudi Aramco’s August OSPs also point towards little if any remaining spare capacity. Yet all of this can be not enough to interrupt the cycle of fear.
Saudi Aramco Flirts with Record High OSPs. thanks to weak supply, robust demand, and exorbitantly steep backwardation, Saudi Aramco increased all its August 2022 formula prices, with the Asian Arab Light benchmark set at $9.30 per barrel, only 5 cents off the all-time high seen in May.
Germany Overhauls Bailout Law to assist Energy Firms. Confronted with an ever-aggravating outlook for Uniper (ETR:UN01), the German government revamped legislation that might allow Berlin to supply firms with bailout packages modelled on pandemic relief for airline Lufthansa.
JP Morgan Warns of $380 Oil After Price Cap. Analysts from US investment bank JP Morgan (NYSE:JPM) warned that just in case a price cap is introduced on Russian crude, the following (deliberate) cutting of boring could send oil prices quite tripling to $380 per barrel.
Saudi Arabia and Kuwait Want More Crude from Neutral Zone. Negotiators from Riyadh and Kuwait met onto debate ways to develop output from the jointly managed Neutral Zone, seeking to manoeuvre the present production of 175,000 b/d to the nameplate capacity of 500,000 b/d.
Security in Libya Gets Even Worse. Tensions have reached an apogee on as Libyan protestors not only continue blocking oil fields but have also stormed the parliaments of both the Tripoli and Tobruk governments, decrying never-ending power cuts across the geographical region country.
Pakistan Is Looking Into Russian Crude. Impressed by India’s sudden ramp-up of Russian crude imports to almost 1 million b/d, the Pakistani government has asked its refineries to seem into its discounted purchases as a method to alleviate the impact of a soaring energy import bill.
Norway Goes for Offshore Oil Strike. ranging from today, a union-organized strike of offshore platform workers are gradually paralyzing some 10% of Norway’s oil and gas production after previous rounds of negotiations did not yield any progress on wage demands.
Uneven Outlook Scares Oil Perma bulls. Amidst a deteriorating economic outlook, the past week has seen another decrease in long positions held in petroleum contracts by investors, though the sale of 9 million barrels last week is way milder than the hefty 71 million barrels within the week to 21 June.
Green Investors Pledge to travel Hard on Utility Firms. but every week after the US Supreme Court curbed federal powers on environmental regulation, activist green investors vowed to follow even more thoroughly the ESG performance of utility companies.
US LNG Exports Continue Their Decline. US outflows of LNG have fallen to their lowest level since February at 6.42 million tons because the shut-down of Freeport LNG continues to kneecap export possibilities, whilst atmospheric condition has to this point kept domestic gas prices from plummeting.
Russia Finds Light Oil in Offshore Arctic. Russia’s largest oil producer Rosneft (MCX:ROSN) has announced a over 600 million barrel discovery of sunshine sweet crude within the Pechora Sea within the Arctic, claiming that it's the competence to travel it alone.
India Slaps Windfall Tax on Fuel Exports. With India seeking ways of managing its fiscal deficit, the govt. in capital of India has introduced a windfall tax on exports of gasoline, diesel, and jet fuel, despite actual exports being under last year amid strong domestic demand.
Chile Moves Closer to Implementing Copper Mining Royalties. the govt of Chile has introduced a draft bill that might increase copper mining royalties to fund its social programs, whilst also taxing the adjusted margins by a marginal rate of 2%-40%, betting on the present market prices.
