We will take a
quick look at some of the critical figures and data in the energy markets.
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.
Chart of the Week
Tuesday, August 31, 2021
Hurricane Ida made the headlines this week, forcing the evacuation and shut-downs of offshore platforms in the Gulf of Mexico, shutting in some 1.7 million barrels per day (mbpd) of crude output and 2 mbpd of refining capacity. The prospect of smaller crude demand in the USGC, as Louisiana refiners will struggle to bring back full capacity anytime soon, has weighed on crude prices, setting them for a downward correction.
Simultaneously, the upcoming OPEC+ meeting on 01 September has left market watchers guessing as to how the oil-producing club will react to the US' call to produce more. We assume that the initial production target allocation, agreed last month, will remain unchanged.
Hurricane Ida Shuts 2 Mbpd of US Refining Capacity. With most of New Orleans and Louisiana assessing the damage brought about by the hurricane, some 2 mbpd of refining capacity remains still offline in the US Gulf Coast, including ExxonMobil's (NYSE:XOM) 500kbpd Baton Rouge Refinery and Marathon's (NYSE:MPC) 565kbpd Garyville Refinery.
PetroChina Starts up $1.2 Billion Ethylene Project. China's largest oil producer PetroChina (SHA:601857) launched a $1.2 billion ethane-to-ethylene project in the westernmost province of Xinjiang, using gas production from the country's largest Tarim field as feedstock. The plant will reduce China's dependence on feedstock imports.
PEMEX Brings Back Idled KMZ Output. Sticking to its word (and surprising analysts who anticipated a longer period of disruption), the Mexican national oil company PEMEX did bring back 125 production wells on the Ku-Maloob-Zaap platform, resuming some 420 kbpd worth of production.
Vestas Launches New Low-Wind Prototype. The Danish wind turbine maker Vestas (CPH:VWS) has installed its first-ever V155 prototype in Western Jutland, Denmark, its latest product designed for the low- and ultra-low-wind segment, with mass production assumed to start in early 2022.
EU Carbon Price Surpasses 60/ton Mark for The First Time. Europe's benchmark carbon price, traded on the EU Emissions Trading System, surpassed the 60 per metric ton of CO2 equivalent for the first time ever on Monday, as the tightening European gas balance stokes fears of higher coal consumption over the winter months.
Ecopetrol Seeks Share Issuance. Colombia's national oil company Ecopetrol (NYSE:EC), which has just agreed to buy the country's electricity transmission company ISA, is planning an issuance of shares over the next 5 years that will see the government's overall stake drop from 88.5% now to 80%.
Libyan NOC Ouster Opens Pandora Box. The recently appointed oil minister in Libya's new Government of National Unity fired the country's long-standing NOC chair Mustafa Sanallah, arguing that he could not represent Libya whilst traveling abroad, and appointed a new candidate, Jadallah al-Awkali, in his absence.
India Wants More Coal to Meet Demand. India's largest utility firm NTPC (NSE:NTPC) is ramping up domestic coal production and increasing overall coal imports as most power plants' forward stock cover has dropped to single-digit territories, compelling large players to expand their coal inventories.
Aluminum Surge Sees Prices Hit 13-Year High. The benchmark Shanghai aluminum futures contract for October saw trading soar to the highest level since 2008, rising to 21,550 yuan on Monday (equivalent to 3,330 per metric ton) as Chinese domestic supplies were aggravated by regionally-mandated output curbs.
Mozambique LNG Back on the Agenda. According to the African Development Bank, the 13.1 mtpa capacity Mozambique LNG project led by the French major TotalEnergies (NYSE:TTE) should be resumed within 18 months after a force majeure declared this April, pushing out the prospective commissioning date to 2025-2026.
Carmakers Curb Production amid Semiconductor Shortage. Carmaking firms Ford Motors (NYSE:F) and Stellantis (BIT:STLA) have extended their production curtailments in North America on the back of an ongoing semiconductor chip shortage that has already marred their Q2 performance.
Equinor Launches Troll Phase 3. Norway's national oil company Equinor (NYSE:EQNR) commissioned Phase 3 of its flagship Troll project, aiming to develop more than 300 BCm (12 TCf) of gas reserves in the Troll West prospect. The annual export volume from Troll will be equivalent to 8% of the EU's gas consumption.
Canada Plans 2 Monster Carbon Capture Hubs. According to media reports, the Canadian government intends to launch two major carbon capture hubs by 2030, presumably utilizing Alberta's underground caverns, to increase the country's total carbon sequestering potential to 15mtpa (from the current level of 4mtpa).