Just days after OPEC+ accelerated the pace of production increases, Saudi Aramco raised its July formula prices for Asian buyers to higher than expected levels, fueling fears that supply may be weaker. provided that.

– The July 22 OSP for Saudi Arabia’s largest crude oil feeder, Arab Light, was raised by $2.1 a barrel from June, nearly a dollar above monthly changes of the difference between cash and Dubai futures.

– While Chinese buying is expected to largely return after recording some of the country’s worst post-pandemic figures in April-May, Aramco can afford to raise prices, especially as Russia is expected to cut production.

– By also raising prices in Europe, keeping only US prices unchanged, Saudi Arabia could signal that it will not be able to produce as much crude as the OPEC+ agreement stipulates, sending Brent prices back above $120 a barrel.

market movers

– Australia’s biggest upcoming gas project, the $3.6 billion Barossa operated by Santos (ASX: STO), could be in jeopardy as groups of Indigenous Australians have filed a lawsuit claiming the project threatens their way of life.

– US equity fund EIG is reportedly in talks with Spanish oil major Repsol (BME:REP) to buy up to 25% of the company’s upstream business in a deal worth $4 at $5 billion.

– Energy Transfer (NYSE:ET) has signed a 25-year LNG supply agreement with China Gas Holdings on an FOB basis for 0.7 mtpy from its upcoming Lake Charles LNG project with first deliveries expected to begin in 2026 .

Tuesday, June 07, 2022

Less than a week after OPEC+ decided to accelerate its production cuts and bring 648,000 bpd to markets in July-August, ICE Brent is back above $120 a barrel . There are several reasons why the initial downward pressure on oil prices did not last. First, doubts have started to creep in as to whether OPEC+ can produce more – in that sense, the big OSP rises certainly haven’t helped. Second, all is set for a particularly robust summer demand period and global crude inventories should continue to fall. While expectations of a weaker macro economy have yet to meet demand, the coming weeks will see considerable upside pressure.

Russia is confident it can circumvent the EU insurance ban. Russia has said it is confident of circumventing the recent EU ban on insuring and financing Russian crude which would come into effect after a six-month liquidation period, mainly by using state guarantees. to cover cargo.

The White House authorizes Venezuela’s debt deliveries. In a symbolic move to ease Venezuela’s oil sanctions, the Biden administration has given the green light to European oil companies Eni (NYSE:E) and Repsol (BME:REP) to begin shipping Venezuelan oil to Europe, resuming the oil-for-debt swaps that were stopped in 2020.

India is doubling its supply of Russian crude. According to Bloomberg, India’s state-owned oil refiners are collectively working to finalize and secure new six-month supply contracts with major Russian oil producer Rosneft, as Russian imports have already soared to 750,000 bpd in May. .

Lebanon warns Israel against encroaching on disputed area. Tensions suddenly erupted in the eastern Mediterranean after Beirut warned Israeli authorities against any activity in the disputed area yet to be demarcated between the two nations, reacting to the arrival of an FPSO vessel there.

U.S. natural gas futures are jumping on growing demand. U.S. Henry Hub natural gas month-ahead futures hit $9.37 per mmBtu yesterday as record power demand in Texas and higher overall cooling output combined with output of Weaker gas maintained a steady upward push on prices.

All the great players leave Alaska. Oil and gas companies drop federal leases in Alaska’s Arctic National Wildlife Refuge, with BP (NYSE:BP) and Hilcorp Energy dropping options last week amid fierce environmental pressure, though state authorities hope always a resumption of drilling.

The closely coveted NWS well finds no hydrocarbons. One of Australia’s most-watched wildholes this year, the Sasanof-1 exploration well off Western Australia’s northwest shelf has proven dry despite initial estimates putting it at 7.2 TCf gas reserves, jeopardizing future LNG production in the country.

Kurdistan defies Iraqi authorities and courts. Authorities in Iraqi Kurdistan have rejected the decision of the Iraqi Federal Supreme Court which declared the separate marketing of crude oil by the KRG illegal, and a new round of negotiations between Baghdad and Erbil is expected this week.

Russia’s legal fight over an alumina refinery. Russian aluminum conglomerate Rusal has filed a lawsuit against Rio Tinto (NYSE: RIO), seeking to restore its 20% stake in Australia’s Queensland Alumina refinery that the two held in a joint venture before Rio cut off access from Rusal to the production and does not take it over.

BP-Shell Tandem The sole bidder at Trinidad Licensing. The government of Trinidad and Tobago has received bids for four of the 17 deepwater blocks it auctioned to stem a decline in gas production, with a consortium including BP (NYSE:BP) and Shell ( LON:SHEL) making all offers.

The Biden administration is waiving solar panel tariffs. Despite earlier fears of tariff circumvention from China, the White House removed tariffs on solar panels from Cambodia, Malaysia, Thailand and Vietnam for two years amid a nationwide slowdown in US solar projects due to delays in the supply chain.

Elliott sues LME for cancellation of nickel trade. US hedge fund Elliott Associates is suing the London Metal Exchange for $456 million over the cancellation of nickel swaps amid the trading chaos seen in March, arguing the exchange shouldn’t have wiped out the deals after prices spiked more than doubled above $100,000/ton within hours.

The United States may never build another oil refinery again. Amid unprecedented refining margins that are driving downstream profitability to unprecedented levels, Chevron (NYSE:CVX) CEO Mike Wirth says there may never be a new refinery. built in the United States, although the last full-scale one was launched in 1976.

By Josh Owens for Oilprice.com