Oil

Oil Prices Continue To Climb Toward $100

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Oil prices are set to continue their climb toward the $100 mark this week thanks to supply disruptions in Libya and expectations of a further U.S. inventory draw.

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As the oil markets anticipate US inflation data for August and the ECB’s interest rate decision later this week, supply disruptions in Libya have added a little upside to prices again, with ICE Brent moving past the $91 per barrel mark. Expectations are that this week will bring about another US crude inventory drop, and absent any negative macro news, the climb toward $100 per barrel is set to continue.

Battered by Hurricane Daniel for several days already, Libya has shut four oil ports – Ras Lanuf, Es Sider, Brega, and Zueitina – as state authorities kept oil infrastructure at maximum alert and mandated that workers restrict any movements between sites.

As Saudi Arabia extended its 1 million b/d production cuts until December, the country is set for a 9% year-on-year drop in output, the largest decline in 15 years, with analysts expecting Riyadh to witness a slight 0.2% GDP reduction this year.

Feedgas flows to the Freeport LNG facility, the second-largest liquefaction plant in the US, declined sharply from 1.640 mcf/day on September 8 to 284 mcf/day currently, reportedly due to a customer’s failure to take confirmed quantities to the terminal.

Europe’s solar industry trade groups have warned the continent’s authorities that PV manufacturers are facing a “precarious situation” as photovoltaic unit prices plunged to all-time lows, with Chinese competition potentially bankrupting European firms.

As two key refineries across the East Coast, Irving Oil’s St. John refinery and Delta’s (NYSE:DAL) Trainer refinery, are set to go down for prolonged maintenance from mid-September, NYH ULSD diesel prices rose by 8% already amidst stubbornly low inventories.

According to Bloomberg reports, South Sudan’s own national planning body acknowledged the African country’s plans to assume control of oil fields from foreign companies by 2027 cannot be feasibly carried out due to a lack of financing and know-how.

The US Army Corps of Engineers released a draft environmental statement of Energy Transfer’s (NYSE:ET) 750,000 b/d Dakota Access oil pipeline without making a recommendation on the five alternative route options for it, waiting for public and agency comments.

US oil producer Diamondback Energy (NASDAQ:FANG) formed a JV with private equity firm Five Point Energy to create a sustainable water management network for produced water in the Midland Basin, taking a 30% stake in the new project.

Despite assertive Turkish mediation that included an Erdogan visit to Russia, Turkish negotiators are failing to renew the Black Sea grain deal first brokered in July 2022 as Moscow demands market access for its own grain and fertilizer exports.

The Indian government introduced an anti-dumping duty on Chinese steel for five years after China became the second-largest steel exporter into India in Q2 with 0.6 million metric tonnes supplied.

Whilst Chevron’s projects in Venezuela continue to churn out some 150,000 b/d of oil thanks to more than 2 MMbbls of US naphtha, the country’s national oil firm PDVSA is struggling to source enough diluents for its heavy production, limiting its production upside.

Russia is shipping its first post-sanctions crude cargo to Brazil, a country that over the past year become the second-largest buyer of Russian diesel despite being a prolific oil producer and boasting a refining park capacity of more than 2.4 million b/d.

Joining the ranks of China and other Asian nations, Malaysia is intent on banning exports of rare earth raw materials, arguing the move would help develop a domestic mineral industry and prevent the exploitation of Malaysian resources.

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