Oil
Recession Fears Loom Large Over Oil Markets
Oil prices experienced the worst start in the year in over three decades this week, falling by more than 9% over the first two days of trading. They have since recovered some of that loss, but are still set to be down significantly week-over-week.
Oil prices are set for a 7% week-on-week decline as US recession fears and China’s troubled reopening amidst soaring coronavirus cases led market bulls to put their short-term optimism on the back burner. Lower gasoline and distillate stocks in the US, most probably a result of the recent bomb cyclone, have offset some of that downward pressure, but that has not been enough to move Brent back above $80 per barrel.
The Pathways Alliance, a group of six companies representing 95% of Canada’s oil sands production, has started work on a vast $12 billion underground carbon storage site that will store emissions from 14 projects in northern Alberta by 2030.
Rebounding Nigerian oil production lifted OPEC’s collective crude output in December, with the oil group adding 120,000 b/d compared to November figures and coming in at 29 million b/d, some 800,000 b/d below its production quota.
Colonial Pipeline shut one of its lines after a product spill at a Virginia delivery station, halting 885,000 b/d of gasoline and distillate deliveries from Greensboro, NC to Linden, NJ, with a tentative restart set for 7 January.
Chinese President Xi Jinping declared Beijing is ready to resume oil and gas negotiations with the Philippines, saying that regardless of the territorial disputes in the South China Sea they could jointly develop adjacent projects which are in non-disputed areas.
Japan’s largest gas company Tokyo Gas (TYO:9531) is reportedly closing in on the $4.6 billion purchase of US natural gas producer Rockcliff Energy in a deal that includes debt, boosting its portfolio with 1 Bcf per day of production in the Haynesville shale play.
Reports of lower production from Chile and China’s expected stimulus measures for its battered property market have pushed three-month copper prices at the LME to $8,475 per metric tonne, putting them back on a trajectory of growth.
Pipeline gas exports of Russia’s gas major Gazprom (MCX:GAZP) to the European continent decreased by more than 50% last year, totaling just 86.9 bcm, with future deliveries remaining just as subdued on the back of the Nord Stream explosions.
As US oil major Chevron (NYSE:CVX) seeks to ramp up operations in Venezuela as soon as possible, the shallow waters of the Maracaibo Lake allow only tankers with a draft of 10 meters as dredging has been completely neglected over the recent years.
A Nevada court stated that a decision on whether former US President Trump erred when he approved Lithium Americas’ Thacker Pass mining project – the largest sedimentary lithium deposit in the US with 13.7 million tons of Li2Co3 – will be coming in the next couple of months.
US deepwater-focused producer Talos Energy (NYSE:TALO) discovered two new offshore fields in the Gulf of Mexico, finding oil and gas with its Lime Rock and Venice prospects, with first production expected in 2024 and boosting output by some 20,000 b/d.
Afghanistan’s Taliban-led government is reportedly set to sign an oil exploration deal with China’s Xinjiang Central Asia Petroleum and Gas Co. in the northern Amu Darya basin, the first-ever extraction deal signed by the Taliban since taking power in 2021.
Chile’s congressional committee approved this week a controversial mining royalty bill that would increase royalties on copper sales, compelling large miners to pay an additional 1% to the state, to the dismay of the country’s mining industry.
ADNOC, the national oil company of the United Arab Emirates, pledged to invest $15 billion in low-carbon energy by 2030, aiming to capture 5 million tonnes of CO2 by the end of the decade and build a 1 mtpa blue ammonia facility Ta’ziz.
Pioneer Natural Resources (NYSE:PXD), one of the biggest US shale players, revised downwards its long-term projection for crude output from the Permian Basin by 1 million b/d, saying the Permian would be “only” producing 7 million b/d by 2030 amidst fading well productivity.