Oil
Oil Prices Continue to Rise Over Mid-East Tensions
Crude prices are set to close out the first week of the new year with a small gain as tensions in the Middle East continue to provide support.
The Middle Eastern tensions helped recoup losses after US inventory data. Despite a hefty 5.5-million crude stock draw, believed to be the usual year-end clearing of inventory to minimize ad valorem inventory taxes, the immediate reaction was a slight downward correction after both gasoline and diesel posted huge stock builds. However, continued Houthi attacks in the Red Sea and a worsening Israel-Iran confrontation has limited the pricing downside, with Brent trading around $78 per barrel, OilPrice.com reports.
Libya’s largest oil field, the 300,000 b/d capacity El Sharara, has been shut down after protestors lamenting over poor government and inadequate infrastructure took over the field, for the second time in the past six months.
US oil producer APA Corp (NASDAQ:APA) agreed to buy shale peer Callon Petroleum (NYSE:CPE) in an all-stock transaction valued at $4.5 billion including debt, adding some 145,000 acres in West Texas and New Mexico as APA boosts its US upstream operations.
Following years of project overruns, Mexico’s national oil firm Pemex stated its long-awaited Olmeca refinery will process 243,000 b/d of crude in 2024, suggesting the 340,000 b/d plant built in AMLO’s hometown will only reach full capacity in 2025.
Europe’s leading energy majors BP (NYSE:BP) and Equinor (NYSE:EQNR) cancelled their agreements with the state of New York to sell electricity from the Empire Wind 2 offshore wind farm, aiming to renegotiate their terms in a new round of solicitation.
Apart from Houthi missile attacks, the Red Sea is increasingly posing a piracy risk for shippers after a Bahrain-bound bulk carrier was boarded by pirates off the coast of Somalia, a route used by tankers as they sail to the Cape of Good Hope.
Bangladesh tripled its coal-fired electricity generation in 2023 to ease power shortages and alleviate soaring generation costs, with a total of 21 billion KWh produced last year, lifting the market share of coal from 9% in 2022 to 14.2% in 2023.
US LNG exports hit monthly and annual record highs in December, making the United States the world’s largest exporter of liquefied natural gas, as 8.6 million tonnes departed last month, taking the annual total to 88.9 million tonnes, up 15% from 2022.
Without Angola but desperate to project an image of cohesion and unity, OPEC+ intends to hold its first ministerial meeting of 2024 on February 1, seeking to assess the implementation of voluntary production cuts totalling 2.2 million b/d.
The Chinese government has restored import duties on coal that were scrapped in May 2022 as commodity prices went into turmoil, slapping a rate of 6% on thermal coal and 3% on coking coal in a move that could threaten Russian coal suppliers.
The spot price of uranium soared to another post-Fukushima record this week, hitting $91 per pound amidst supply hiccups and looming Russia sanctions, with Morgan Stanley analysts expecting yellowcake futures to hit $95/lb by March.
India has offered 28 upstream oil and gas blocks in its 9th licensing round, almost evenly split between onshore, shallow-water and deepwater blocks, aiming to expand the list of bidders beyond ONGC, Reliance/BP and the state-controlled Oil India.
Russia’s state-owned natural gas firm Gazprom announced that it had set a new daily record for gas supplies to China through the Power of Siberia pipeline, taking the total of exports to 22.7 bcm in 2023, 50% more than the 15.4 bcm in 2022.
US oil major ExxonMobil signaled that its Q4 results (to be posted on February 2) would be adversely affected by a $2.5 billion impairment of assets in Southern California, citing a challenging regulatory environment from the state
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