After weeks of losses, the oil market looks poised for a rally with multiple bullish catalysts coming together. US release of his SPR comes to an end following expected cuts in OPEC+ production targets, after which new sanctions on Russian oil and fuel will take effect.
– As noted by Bloomberg, the low consumption goal of Europe’s gas policy for the 2022/2023 winter season has yet to materialize.
– The last week of September marked Europe’s first series of average temperature drops, with German consumers increasing their gas consumption by 14% above the five-year average.
– EU Member States have agreed to cut gas demand by 15% from August this winter. This means that the decline in demand has been significantly delayed despite high inventories of gas.
– Europe’s benchmark TTF spot price, which peaked in late August, has recently plunged to €170 per MWh.
market mover
– US Oil Major Chevron (NYSE:CVX) It has reportedly purchased a PEL 90 license off the coast of Venus-adjacent Namibia with billions of barrels of what will likely be the biggest oil discovery of 2022.
– German power company RWE (RWE) Agreed to Acquire U.S. Energy Company ConEdison’s (NYSE:ED) Its clean energy business is $6.8 billion, making it the fourth largest renewable energy company in the US market.
– Brazil’s national oil company Petrobras (NYSE:PBR) With the presidential election closer than expected, the Lula surged 10% this Monday as it is likely to be closer to the middle.
Tuesday, October 04, 2022
After weeks of macro-driven weakness, this week finally brought something more concrete to oil markets. In other words, it is a substantial OPEC+ market intervention. OPEC+ production targets could reportedly be cut by around 1 million bpd. This potential cut in OPEC+ production is combined with his SPR release by the US, which, coupled with the launch of sanctions on Russia, is running a course that will put real upward pressure on oil prices.
OPEC+ is serious about deep cuts. This week’s OPEC+ meeting in Vienna, the first in-person meeting since March 2020, has been slowed in recent years as the oil group is reportedly considering a 1 million b/d cut in November 2022. We expect to see the largest adjusted downward revision of the year.
A maritime deal between Israel and Lebanon could really come to fruition. After years of shuttle diplomacy, US Special Envoy Amos Hochstein has come close to resolving a long-standing dispute by presenting Israel and Lebanon with a draft agreement on how to divide up the disputed 330-square-mile area of the eastern Mediterranean.
The White House resumes the blame game on fuel prices. The Biden administration has rekindled sentiment in the oil industry after Energy Secretary Jennifer Granholm accused Majors of failing to maintain sufficient fuel inventories, calling for a possible regulatory cap on fuel exports from the United States. increased.
The IEA forecasts a significant drop in gas demand. The International Energy Agency forecasts a record 10% year-on-year decline in European gas demand and a further 4% decline in 2023, with most of the losses coming from the continent’s beleaguered industry. .
The Nord Stream ruptures, causing the largest methane release ever. The United Nations International Methane Emissions Observatory says the rupture of Nord Stream pipelines 1 and 2 is most likely the largest methane release ever, leaking at a rate of 22,920 kg per hour.
California Mulls windfall profit tax. In response to a sharp rise in gasoline prices, California Governor Gavin Newsom plans to introduce an unexpected profit tax on oil companies in the form of a higher tax rate on their earnings in certain years. doing. .
Be prepared for China’s export surge. Beijing has finally issued a large refiner export quota of 15 million tonnes, the largest single quota in 2022, paving the way for an increase in China’s crude demand and refinery operations.
Things heat up again in Libya. Libya’s government of Tripoli’s decision to sign a preliminary agreement with Turkey on energy exploration sparked unprecedented outrage as the governments of Greece and Egypt, as well as Libya’s incumbent government in Benghazi, protested drilling in disputed waters. faced with
Prisoner swaps ease tensions between the US and Venezuela. The high-level prisoner exchange, in which five Citgo employees were released in exchange for two Venezuelans (the nephew of Venezuela’s first lady, Syrian Flores), marks another step towards normalizing relations between the United States and Venezuela. showed.
Iron ore is surprisingly stable. While other commodities have been caught in the turmoil of recession fears, iron ore has remained surprisingly stable over the past two months, with 62% of iron ore trading just below $100. Good news and bad news from China seem to be offset. each other.
China delisting begins in London. Asia’s largest refiner just a month after rumors circulated that the Chinese company would be delisted from Western exchanges CNPC (SHA:600028) announced the delisting of its American Depositary Shares (ADS) from the London Stock Exchange.
Fossil boom soars Australian profits. All of the so far impacts of the 2022 Russia-Ukraine war have impacted Australia’s economic outlook, with thermal coal revenues up 35% year-on-year (A$62 billion) and the expected value of LNG exports was boosted. 30% increase.
Saudi Arabia again talks about reserve capacity. Reminding the oil industry of the basics of supply, Saudi Aramco (TADAWUL:2222) CEO Amin Nasser claimed the remaining reserve capacity had shrunk to just 1.5% of global demand.
By Tom Kool of Oilprice.com
Other top leads from Oilprice.com:
