Oil
Oil Set for Another Weekly Gain in Global Markets
Oil prices are headed towards a second straight weekly gain of 1%, with ICE Brent hovering slightly above $68 per barrel, as hopes for a negotiated settlement in the Russia-Ukraine conflict dissipate and US-India trade tensions remain unresolved.
Market activity was seasonally low in late August; however, next week could provide a much-needed boost to oil trade as OPEC+ countries meet on September 7 to assess current market conditions and their output cuts, OilPrice.com reports.
French President Macron and German Chancellor Merz issued a joint statement calling for secondary sanctions on buyers of Russian oil, potentially prohibiting European exports and technology transfers to countries such as India, China and Turkey.
As OPEC+ countries finalize the 2.2 million b/d unwinding next month, Saudi Arabia is expected to cut Asia-bound October formula prices by $0.50-0.70 per barrel in line with easing Dubai time spreads and waning demand as Asian refiners start seasonal maintenance.
Russia’s pipeline gas monopoly Gazprom has failed to advance negotiations on the stalled Power of Siberia-2 pipeline ahead of Putin’s visit to China this weekend; however, Beijing expressed readiness to boost gas supplies via PoS-1 by 6 bcm per year.
Russia’s crude oil exports via the Baltic port of Ust-Luga are expected to be capped at around 350,000 b/d, or half the usual throughput capacity, after Ukraine damaged the Unecha pumping station in a drone strike last week, diverting oil to other export terminals.
US downstream giant Phillips 66 (NYSE:PSX) will begin the decommissioning of its 140,000 b/d Los Angeles refinery next week, perhaps even earlier than the previously mentioned Q4 2025 deadline for idling, creating a void in fuel supply in California.
According to media reports, Chinese authorities are set to initiate industry consultations to limit steel production between 2025 and 2026, forcing the closure of inefficient furnaces as the country’s steel exports hit a record high this year to date, at 68 million tonnes.
Mexico’s much-anticipated 340,000 b/d Dos Bocas refinery has been taken offline following a power outage in the state of Tabasco, a force majeure triggered by heavy rainfall that damaged the plant’s transformer just as it was ramping up runs to half capacity.
Global trading house Vitol is expected to load the first cargo of Syrian oil – known for its viscosity and high sulphur content – ever since the United States lifted sanctions on the al-Sharaa government this June, reportedly taking the crude to an Italian refiner.
As South Korean petrochemical firms agreed to cut 25% of the country’s naphtha cracking capacity earlier this month, it is reported that small and stand-alone crackers would be the first ones to be scrapped, with cash-strapped YNCC bearing the brunt of closures.
US and European officials have been voicing their concerns around a potential Chinese takeover of Vietnam’s Nui Phao tungsten mining complex, currently owned by Masan, which was put up for sale and prompting Chinese firms to look out for reliable proxy bidders.
Brazil’s national oil company Petrobras (NYSE:PBR) concluded an emergency drill in the untapped Foz do Amazonas basin, the last step to secure a final exploration license at the mouth of the Amazon River, believed to be the country’s next oil-producing frontier.
The rebound in lithium carbonate futures lasted less than a month as Chinese miners started securing renewals of production licences, sending prices to a three-week low of ¥75,700 ($10,585/mt) this week as Yongxing’s (SHE:002756) Jiangxi mine reported a successful extension.
The government of Bangladesh started talks with Saudi national oil firm Saudi Aramco (TADAWUL:2222) to sign an MoU for energy cooperation, including a term deal covering LNG imports after the South Asian nation signed a 17-cargo contract with Oman’s OQ Trading.
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