Saturday, September 25, 2021 /07:10 AM / by Tom Kool of
Oilprice.com / Header Image Credit: Oilprice.com
Oil prices are heading
for another weekly gain as supply disruptions led to tighter supply. The risk
of traders taking profits, however, could push prices lower.
Friday, September 24, 2021
Oil prices are heading for a third straight week of gains despite a slight
downward correction on Friday, buoyed by ongoing supply disruptions in the
United States and several OPEC+ countries (such as Nigeria and Angola) failing
to increase production according to their production targets. The anticipated
Chinese SPR sale turned out to be a marginal blip on the screen, with most of
the discussion now focusing on countries' capabilities and willingness to meet
robust demand across the globe. As of Friday, global benchmark Brent traded
around $77 per barrel, whilst WTI was most recently assessed at $73 per barrel.
Barring the Hurricane Ida period, the Brent-WTI spread is at its widest since
late March 2021.
SPR Sale Fails to Impress. Of the 7.3 MMbbls of crude
on offer, only 4.4 MMbbls were allocated amongst two
bidders, state-owned Petrochina (SHA:601857) and
private refiner Hengli (SHA:600346). Despite them
paying a relatively low price of $65 per barrel on all crudes except Upper
Zakum, the desired effect of sending a strong signal to markets didn't
Largest Floating Wind Farm Comes Online. The 50MW
Kincardine floating offshore wind park, located 15km off the coast from
Aberdeen, Scotland, has been brought online this week, with
Norway's Statkraft purchasing all electrical output under a guaranteed feed-in
price until 2029.
Majors Not Reporting Payments Abroad. US oil
majors Exxon Mobil (NYSE:XOM) and Chevron
(NYSE:CVX) reportedly failed to publicly
disclose their taxes and other payments to foreign governments that are not
members of the Extractive Industries Transparency Initiative (EITI), such as
Angola, Pakistan, or Qatar, Reuters reports.
Under Brazilian Scrutiny. Leading US investment
bank JP Morgan & Chase (NYSE:JPM) is being investigated by Brazilian
authorities for participating in a bribery and money laundering scheme that
reportedly existed all the way back in 2011, with the bank seemingly getting
fuel oil deliveries from Petrobras with artificially low prices.
Prices Keep the Metals Heat On. Tin prices reached record highs
this Friday, with the Shanghai Futures Exchange contract jumping to 288,000
yuan per metric tonne ($44,500 per mt), as inventories in both LME and ShFE
were nearing all-time lows of 1180 and 1700 metric tonnes respectively.
Moves into EV Infrastructure. Oil trading major Vitol
has formed a partnership
with China's BYD (SHE:002594), pledging an initial $250
million to expand electric vehicle infrastructure and charging grids, having
already invested into EV charging infrastructure in Colombia.
LNG Imports Set Record in September. Overall LNG
imports into Brazil are heading for an all-time
high this month (at 1 million tons LNG) with Petrobras
(NYSE:PBR) and others continuing to buy US cargoes.
Sees a Nuclear Way Forward. The government of Great
Britain initiated nuclear talks
with US nuclear firm Westinghouse to build a new atomic plant in Wylfa,
Northern Wales on the back of the ongoing energy crunch, reviving an erstwhile
Hitachi project that ran aground last year.
Boosts Battery Recycling Segment. Germany's leading
chemicals firm BASF (ETR:BAS) has been developing a global network
for the reuse of cathode materials in a bid to recycle metals used in EV
batteries such as cobalt and nickel as their supply becomes harder to come by.
Sells Secondary US Acreage. Following its $9.5 billion
mega-deal to buy Shell's Permian assets, US major ConocoPhillips
(NYSE:COP) decided to sell some of
its conventional acreage in west Texas and New Mexico worth roughly $0.5
billion, in a bid to partially offset the effect on its balance sheet.
Arrests Senior Manager of Russia's LNG Champion. Mark
Gyetvay, deputy head of Russia's leading LNG producer NOVATEK
(MCX:NVTK) who holds both US and Russian passports, has
been arrested in the United
States on tax charges related to $93 million hidden in offshore accounts in
Crunch Prolongs Coal Plants' Life. UK-based utility
company Drax Group (LON:DRX) announced it could keep its coal-fired
plants operating beyond their planned closure deadline in 2022, on the back of
exorbitantly high gas prices pushing power prices to all-time highs.
Natural Gas Firm Up for Sale. US natural gas
upstream-focused company Gulfport Energy (NYSE:GPOR) is
reportedly considering a possible sale,
only months after control of the company was transferred to creditors on the
back of its completing a Chapter 11 bankruptcy process. Gulfport's current
market value hovers around $1.6 billion.
Admits Blocking PDVSA Payments. In a US court hearing
this week, executives from Citigroup acknowledged they blocked an
attempt by Venezuela's national oil company PDVSA to pay its debt to an
oilfield equipment provider, boosting the former's argument that its debt
repayment efforts were stymied by banks.
Prepares Its Own Carbon Tax. Wary of being subject to
the European Union's carbon border mechanism tax that is supposed to come into
effect in the mid-2020s, Russia is reportedly drafting its own
carbon tax to avoid cross-border taxes. The Russian government expects to have
draft legislature ready in 12-18 months.
The post Oil Prices Continue to Climb on Supply Disruptions first
appeared in Oilprice.com on September 24, 2021.
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