Oil prices are under pressure from continued demand concerns but geopolitical risks and the recent rally from last week's crash means Brent is still sitting comfortably above the psychologically-important $80 mark.
- Ukraine’s incursion into Russian territory, occupying parts of the Kursk region in and around the key pipeline station in Sudzha, have sent European natural gas prices soaring to their highest this year to date.
- Whilst pipeline flows to Europe via Ukraine continue largely uninterrupted, fears of a potential cut-off lifted TTF prices above €40 per MWh ($14 per mmBtu), despite EU gas inventories being 87.6% full and demand generally lagging pre-COVID levels.
- TTF futures have dropped back below €40 per MWh on Tuesday, seeing there is no immediate disruption as both Austria and Hungary confirmed there have been no pressure fluctuations so far.
- With European prices trending higher and Asia-bound arbitrage being the weakest in two months, US LNG exporters will need to decide whether they prioritize higher prices in the short term or healthier demand in Asia.
Market Movers
- Barrick Gold (NYSE:GOLD), the world’s second-largest producer of gold, declared itself ‘ready’ to partner with the Panamanian government for First Quantum’s Cobre Panama copper mine, closed since November 2023.
- Canada’s upstream firm Tourmaline Oil agreed to purchase peer Canadian producer Crew Energy for $950 million in an all-stock deal, boosting its presence in Alberta’s Montney shale play.
- French energy major TotalEnergies (NYSE:TTE) has delivered the first-ever fully biofuels-origin cargo of marine fuel to the Singaporean market, sourced from used cooking oil and sold to a Hyundai car carrier ship.
Tuesday, August 13, 2024
As the global markets bounced back from the all-encompassing panic seen a week ago, oil prices were ideally set for a technical recovery, with both Brent and WTI pulling off a string of five straight days of price gains. OPEC’s belated acknowledgment that 2024 demand growth will not be as stellar as they’ve signaled for months has sapped some of that upward momentum, but Brent futures still sit comfortably above $81 per barrel.
OPEC Finally Cuts 2024 Demand Outlook. The Organization of Petroleum Exporting Countries cut its forecast for global oil demand growth in 2024 on the back of weaker-than-expected H1 data and a slacker outlook for China, predicting 2.11 million b/d year-over-year growth, down 140,000 b/d from the previous forecast.
Oil Investors Lose Hope in Bullish Future. Investors have cut their market positions in crude oil futures and options to the lowest level for at least a decade, selling a whopping 110 million barrels in the six most important contracts in the week ending August 06.
Shell Commits to Joint Gas Project with Venezuela. UK-based energy major Shell has taken an FID on the 2.7 TCf Manatee offshore gas field straddling the border between Venezuela and Trinidad and Tobago, slated to start production in 2027 and feed gas to the 15 mtpa Atlantic LNG plant.
Chevron (NYSE:CVX) Starts First Ultra-High-Pressure Oil Field. US oil major Chevron has reported first oil in the Gulf of Mexico’s first-ever field under extreme subsea pressures, as strong as 20,000 pounds per square inch, with the $5.7 billion Anchor project expected to reach output of 75,000 b/d.
Libya Buoys Oil Bulls with Pipeline Fire. A week after Libya’s largest field El Sharara was forced to shut down amidst military protests, the country’s second-largest crude stream Es Sider is set to be disrupted after a fire along the pipeline connecting the port's storage tanks with oil fields.
Major Chile Strike Lift Copper Sentiment. Workers at BHP's (NYSE:BHP) Escondida copper mine, the world’s largest producing unit, have rejected the Australian mining giant’s collective offer and after the government’s mediation failed to reach any substantive advances, declared industrial action on Tuesday.
Carlos Slim Sets Sight Firmly on Mexican Gulf. Having already farmed into Mexico’s largest upcoming oil project, the Zama offshore field, Mexican billionaire Carlos Slim is now buying up stocks of Talos Energy (NYSE:TALO), purchasing 1.26 million shares in the first week of August and now owning 21.3% of the firm.
Belgrade Pours Cold Water on Rio Tinto’s Lithium Mine. Less than a month after the Serbian government reinstated Rio Tinto's (NYSE:RIO) license to develop Europe’s largest lithium mine in Serbia, the country’s Energy Minister said permits and approvals could take two years to secure.
US to Restrict Future Leases in North Dakota. The Biden administration is set to restrict oil and coal leasing in more than 210,000 acres of federal land in North Dakota, classifying the territories as low potential as only 2% is currently under lease and there is no active production there.
Electric Cars Gradually Take Over the Chinese Market. For the first time on record, Chinese consumers bought more new energy vehicles (NEVs) than gasoline ones, tallying 878,000 units vs 840,000 units, as buyers benefit from generous government subsidies and traction in the car-hailing market.
Iran President Names Industry Veteran as Oil Minister. Iran’s recently elected President Masoud Pezeshkian nominated Mohsan Paknezhad as his oil minister, formerly deputy minister for the supervision of hydrocarbon resources, in what is seen as a sign of Tehran’s policy continuity.
LME Stocks Abound with Russian Aluminium. Defying the April ban of the London Metal Exchange on Russian-origin metals, the share of available aluminum stocks in warehouses approved by the LME rose to 65% in July compared to 50% in June, as Indian supplies have seen a dip to 33%.
Chinese Demand for Saudi Oil Recovers. Chinese term buyers of Saudi Arabian crude oil have nominated 43 million barrels from the September-loading program, slightly lower than the 46 million barrels this month, despite Saudi Aramco raising the OSP of Arab Light to $2 per barrel above the Oman/Dubai benchmark.