Oil Prices On Course For Fourth Consecutive Monthly Loss

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Oil prices were up slightly on Tuesday morning but remained on course for a fourth consecutive monthly loss. There are some potentially bullish catalysts looming this week, with the market preparing for new Chinese economic data (especially industrial activity readings) and U.S. crude inventories. WTI might see some additional support should U.S. oil stocks reverse the trend after eight consecutive weeks of builds, although preliminary data still seems to suggest a minor inventory increase.

Forecasts for colder weather and a stronger pull from U.S. liquefaction facilities (at 12.8 Bcf per day) have pushed up Henry Hub natural gas futures to a one-month high of $2.7 per mmBtu, easing fears that low prices would trigger output cuts.

Following three unsuccessful attempts the European Union approved late Friday a 10th package of Russia sanctions including export restrictions on dual-use goods, SWIFT bans on several private banks, and the blacklisting of individuals Brussels says are Russian propagandists.

Poland’s national oil company PKN Orlen (WSE:PKN) announced Russia halted its pipeline oil supplies to the Eastern European country over the weekend, adding that Russia only accounted for 10% of supply and it would tap into other sources for its refinery needs.

The Paris civil court is set to rule on a lawsuit filed by NGO Friends of the Earth, accusing French oil major TotalEnergies (NYSE:TTE) of widespread land expropriation and drilling in environmentally fragile areas in Uganda, potentially derailing the $3.5 billion East African Crude Oil pipeline.

Ecuador’s oil production has halved to 240,000 b/d as a deadly landslide in the Amazonian province of Napo damaged the country’s two main pipelines, the 360,000 b/d Sote and 450,000 b/d OCP, and forced producers to halt production.

In a big win for the country’s finance ministry and ethanol producers, Brazil will resume the collection of federal taxes on transportation fuels in a reversal of a Bolsonaro-era waiver in a bid to generate $5.6 billion of additional revenues to the federal budget.

In a boost to US smelters such as Alcoa (NYSE:AA), the Biden administration introduced sanctions on Russia’s aluminum exports into the United States and slapped a 200% ad valorem tariff starting from March 10, decrying the increase in US imports in both 2021 and 2022.

The Chinese government launched an investigation into environmental infringements of lithium producers in the province of Jiangxi, with potential disruptions in lepidolite mining threatening between 8% and 13% of global supply.

Mexico’s national oil company, Pemex, has had a tough week. As it attempts to fix its downstream system after three refinery fires last week, the company has now posted a $9.4 billion loss for the fourth quarter of 2022. Its debt has now spiked to $107.7 billion.

A Dutch parliamentary inquiry found energy majors Shell (LON:SHEL) and ExxonMobil (NYSE:XOM) repeatedly ignored the risks of gas production at the Netherlands’ Groningen field, leading to tremors that have damaged thousands of buildings.

Colombian rebels have once again bombed the country’s main crude export conduit, the 220,000 b/d Cano Limon-Covenas pipeline as ceasefire talks between the government and the ELN group have so far yielded no results.

France will convene a meeting of 12 EU countries on the sidelines of the upcoming energy ministers meeting in Stockholm as Paris seeks to build a pro-nuclear bloc to counter the likes of Germany and Spain that opposes labeling nuclear as “green”.

China approved the construction of 106 GW of new coal-fired power plants last year, the highest number since 2015 and four times higher than in 2021, with the speed of project approvals speeding up to only a couple of months.