Oil Markets On Edge Over OPEC, Debt Ceiling Uncertainty

News of the tentative McCarthy-Biden deal had provided some comfort for oil prices but not enough them from falling on Tuesday morning. Mostly, the decline was due to re-emerging skepticism that the debt ceiling deal might still be derailed during congressional hearings. The bipartisan deal to raise the $31.4 trillion debt ceiling will face its first test in Congress today and votes will likely continue through the week. With OPEC+ sending mixed signals before its meeting this Sunday, oil markets continue to be on edge.

With public attention fixed on the outcome of Alberta elections, oil companies have been restarting operations amidst slowing wildfires in Canada’s most oil-prolific province, with at least 90,000 boepd of the 400,000 boepd of previously shut-in production now back.

Aiming to raise refining capacity to 9 million b/d. India’s oil minister Hardeep Singh Puri said the country’s refiners would seek to build smaller refineries as difficulties of acquiring land are making it increasingly difficult to build large-scale projects.

Vietnam could face power blackouts this summer as intense heat led to a notable drop in hydropower generation, with 11 out of 47 dams reaching dead water levels, prompting the country’s electricity providers to increasingly rely on coal.

US oil firm ConocoPhillips (NYSE:COP) exercised its pre-emption rights to acquire the 50% stake that France’s TotalEnergies (NYSE:TTE) agreed to sell to Suncor Energy, paying $3 billion to take full ownership over its operated Surmont oil sands project.

Investment fund positioning in copper on the London Metal Exchange turned into a net short for the first time since June 2020 last week, with short interest being the highest on record at almost 40,000 lots, driven by weak Chinese demand and high inventories.

Venezuela’s national oil company PDVSA has teamed up with the Latin American country’s army to build an 82-mile natural gas pipeline to the Amuay refinery, hoping to ramp up production of petrochemicals and fertilizers there for exports into Colombia.

Malaysia’s Petronas sold its all assets in Chad to the African nation’s state-owned SHT entity for an unreported sum after a planned purchase to Savannah Energy was pre-empted and the government nationalized the assets in question.

According to media reports, the government of Trinidad and Tobago will announce the result of its latest auctioning round in the upcoming days with six out of eight blocks getting final bids, although the licensing did not elicit any interest from oil majors.

After the government of Gabriel Boric pushed through its reform of Chile’s lithium industry, the battered giant SQM (NYSE:SQM) began talks with the country’s leading copper miner Codelco to set up a public-private partnership to extract lithium in the Atacama salt flat.

Should the UK Labour Party, currently in opposition, win the next election, the country’s largest future project – the $10 billion Rosebank operated by Equinor (NYSE:EQNR) – might never produce as its leader promised not to approve any new oil fields in the North Sea.

The re-election of Turkish President Erdogan was expected to bring an end to the ongoing halt in Kurdish exports, but Iraq’s recent changes to the 2023-2025 budget triggered an outcry in Kurdistan, accusing Baghdad of stymieing a prospective deal.

According to media reports, Democratic Senator Joe Manchin managed to include a federal green light for the 303-mile Mountain Valley Pipeline into the draft deal on the US debt ceiling, putting an end to years of litigation with environmentalists.

The windfall tax-triggered closure of the Ninian field this March, the second largest source of the Brent blend, has forced other UK North Sea producers to find new means of transportation as previously they were reliant on Ninian’s web of pipelines.