Uncertainty Spikes In Oil Markets As Israel Goes To War With Hamas

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The rapid escalation of the military conflict between Israel and Palestine’s Hamas allowed oil prices to regain some of the lost ground from last week, with ICE Brent adding almost $4 per barrel Monday and closing at $88 per barrel. The focus is on Iran now, with ramifications of the Gaza standoff potentially impacting the country’s oil exports if the US political establishment enforces stricter enforcement of sanctions, OilPrice.com reports.

In its recently published 2023 World Oil Outlook, OPEC defied IEA calls to abandon fossil fuels and raised its world demand forecast, expecting peak demand by 2045 at 116 million b/d, which is a whopping 6 million b/d increase compared to last year’s report.

The White House would struggle to thwart ExxonMobil’s (NYSE:XOM) mulled $60 billion takeover of Pioneer (NYSE:PXD) despite its previous adverse disposition towards the US major, as it’s usually refinery or retail deals that trigger antitrust risks.

Following Friday’s announcement that Russia would lift the ban on most diesel exports, the world’s top seaborne exporter of the fuel has resumed full-blown port operations, though the prohibition of gasoline exports remains in place.

According to the Financial Times, the European Union is planning to announce an anti-subsidy investigation against Chinese steelmakers, aligning with the US so as to avoid the re-imposition of Trump-era tariffs on EU steel.

Ugandan authorities have suspended works at the Kingfisher oil field operated by China’s state-owned firm CNOOC (HKG:0883) after a fatal incident during drilling operations, with a resumption only expected after security checks are fully over.

The Chinese Ministry of Commerce issued a new batch of crude import quotas totaling 9.54 million tonnes (70 million barrels), mostly to independent refiners that didn’t receive their full allocation for 2023, boosting the outlook for China’s oil imports.

The United States and Venezuela have progressed in negotiations that would see at least one additional foreign company, believed to be the French upstream firm Maurel & Prom (EPA:MAU), would be allowed to resume operations alongside PDVSA.

Israel has suspended operations at the Tamar offshore gas field operated by US major Chevron (NYSE:CVX) off the southern coast of the country, fearing a retaliatory strike by Hamas as the platform is within rocket fire range from the Gaza Strip.

European gas prices moved above the €40 per MWh threshold after a subsea gas pipeline connecting Finland and Estonia experienced a sudden drop in pressure, with the operator saying it might take months or more to repair the leak.

The International Copper Study Group (ICSG) announced that the balanced 2023 copper market will transition to a major supply surplus next year, with the production surfeit hitting 467,000 metric tonnes, aggravated by a worsening demand outlook in China.

Iraq’s oil ministry called on international oil companies to submit letters of intent into the country’s 6th oil and gas licensing round, expected to award 14 oil and gas projects with a new profit-sharing agreement, eyeing increased gas output to meet demand.

Mexico’s national oil company Pemex cut its production forecast for 2024 to 1.89 million b/d, significantly lower than the initial 2.6 million b/d plan and even lower than the 1.95 million b/d announced a mere three months ago as legacy fields continue to decline.

With gasoline demand decreasing and oil prices dropping below 90 per barrel, US gasoline prices have declined in virtually all 50 states and edged lower to a national average price of 3.704 per gallon, down 3% week-on-week.