Tuesday, August 10, 2021
/06:24 PM / by Michael Kern of Oilprice.com / Header Image
will take a quick look at some of the critical figures and data in the energy
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
- July fuel demand in
India rebounded to
its highest since April as New Delhi cleared restrictions and lockdowns,
netting a 3% month-on-month increase to a total of 16.83 million tons.
- The rebound might have been even more
pronounced, were it not for fuel prices rising to all-time highs, triggered by
a chaotic taxation regime.
- In India, petroleum products are not included
in the goods and services tax regime, meaning every state can set its own fuel
tax levies and they have been on the rise throughout 2021, up 20% year-on-year
- Analysts anticipate India surpassing its
pre-pandemic consumption readings in Q4-2021, with fuel pricing remaining the
primary factor in the extent of demand recovery.
- Crude imports in June-July dropped to average
2014-2015 levels of 3.5 mbpd, but August loadings have surged to a healthy 4.2
mbpd on the back of demand recovery.
- Saudi Aramco (TADAWUL:2222) saw
its Q2 results surge as higher oil prices brought its net profit to $25.5
billion, quadrupling year-on-year. Aramco's capex infrastructure has been
increasing q-o-q as the Saudi NOC seeks to ramp up offshore spare production
- Australian miner BHP (NYSE:BHP) managed
to stave off a union strike at the Escondida copper mine in Chile, the world's
largest, though negotiations are still yet to yield results. With copper prices
almost 25% up on the year, the strike would see copper skyrocket.
- US electric vehicle producer Tesla
(NASDAQ:TSLA) saw its July sales in China plunge by almost
70% month-on-month, despite having dropped the starting price for Model 3
sedans, sapping confidence in future prospects.
Tuesday, August 10, 2021
prices rebounded from last week's losses as the market seemed to shrug off
fears of Chinese lockdowns, with demand strength across the Atlantic
overshadowing COVID-related concerns. It is assumed President Biden's $1
trillion infrastructure bill will boost oil product demand and lift US economic
performance in the short-to-mid term, providing much-needed support for prices.
IPCC Report Targets Methane. The landmark report by the UN
Intergovernmental Panel on Climate Change calls on the global community to make
"strong, rapid and sustained reductions" in methane emissions alongside CO2-related
initiatives. Having 80 times the warming power of CO2 per unit of mass, methane
nevertheless has a much shorter atmospheric lifetime of some 20 years.
Iran Cuts Electricity Supply to Iraq. Facing unprecedentedly high domestic power
demand, Iran has cut electricity exports to Iraq, despite there being a US
waiver allowing it. Iran routinely exports some 2GW to its neighbors, but this
August its exports dropped more than tenfold, to 150MW.
US Refiner Seeks EV Battery Move. The US' fourth-largest refiner, Philips 66
(NYSE:PSX), is mulling a larger move
towards electric vehicle batteries and EV storage systems as it seeks to
leverage its graphite know-how and existing non-fossil retailing solutions.
Cargill Reports Largest-Ever Profit. The largest privately-held US company, the agriculture
giant Cargill, recorded the highest-ever net income in its 156-year history
with its 2021 fiscal year results, amounting to $4.93 billion. Following a
brief one-year pause in COVID-stricken 2020, Cargill resumed making its results
China cutting runs as Delta variant hits refining. China's state-owned oil refiner Sinopec
(NYSE:SHI) is cutting run rates by
5-10% across China as strict government-mandated mobility curtailments and
restrictive measures slacken its demand nationwide.
Petrobras Wants to Emulate Guyana. The Brazilian state oil company Petrobras
(NYSE:PBR) plans to drill two
wildcats in the Foz do Amazonas offshore basin, seeking to replicate the
drilling success of Guyana and Suriname. Petrobras controls all six blocks in
the basin after BP and Total bailed out of the project.
Rio Tinto Mismanages Supergiant Mongolian Mine. The WSJ reports that an expert
group found that the main reason why Rio Tinto's (NYSE:RIO) largest
copper project, the Oyu Tolgoi mine in Mongolia, has seen its initial $5.3
billion budget expand by another $1.5 billion, lies in the mismanagement of the
asset. Rio Tinto shares dropped 3% over the week.
ExxonMobil Suspended from US Climate Group. US oil major ExxonMobil
(NYSE:XOM) was unseated from
the Climate Leadership Council, a group promoting a US federal carbon price,
following a leaked recording of a company lobbyist stating the firm is watering
down climate measures with the White House.
Billionaire-Backed Startup to Search Greenland for EV
Metals. KoBold Metals,
a mineral exploration company backed by Bill Gates and Jeff Bezos, signed an
agreement with Bluejay Mining (LON:JAY) to
join the search for nickel, copper, cobalt and other metals in Greenland's
Disko-Nuussuaq acreage, Reuters reports.
Canada Eyes Asia Pacific Exports. Canada's Trans Mountain pipeline expansion, with a
throughput capacity of 590kbpd, shall be ready by December 2022, allowing
Canadian oil producers to export crude to East Asian markets. CNR (TSE:CNR), Suncor (NYSE:SU), Imperial Oil
(TSE:IMO), and others have already claimed their stake in
the pipeline's offtake.
Mozambique Retakes Key LNG Port with Rwandan Help. The strategically located Mocimboa da Praia port town
was retaken by joint Mozambique-Rwandan forces, presumably taking the first
step in restarting the halted 13 mtpa Mozambique LNG project operated by TotalEnergies
Russia Raises Metals Taxation. Russian President Vladimir Putin announced that his
government would increase the mineral extraction tax on metals in 2022, the
third time since the start of this year that the Kremlin hikes taxes on metals
as it seeks to fill its deficit budget.
Japan Ends 300 Years of Trading Rice Futures. The first commodity exchange in the world, the
Japanese Dojima Exchange trading rice futures, will end trading in
June 2022 as Japan's agriculture ministry refused to reissue its license,
arguing the traded volumes were too small to maintain trades.
The post Oil Prices
Bounce Back as Demand Recovers first appeared in Oilprice.com on August 10, 2021.
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