Saturday, September 04 2021 /05:50 AM / by Tom Kool of
Oilprice.com / Header Image Credit: Oilprice.com
A disappointing U.S. Non-Farm Payrolls report brought oil
prices down slightly on Friday morning, but the supply destruction caused by
Hurricane Ida looks set to keep prices elevated over the week.
Friday, September 3rd, 2021
improving demand picture and a slower-than-anticipated supply recovery after
Hurricane Ida damaged offshore platforms and flooded refineries have kept oil
prices elevated this week. With 1.7 million b/d of offshore production yet to
come back onstream and most of Louisiana's refining industry debilitated by the
impacts of flooding, Hurricane Ida will bring U.S. crude and product stockpiles
down, maintaining pressure on prices to move up. This week also saw the OPEC+
meeting which brought no surprises as member states reiterated their commitment
to the 400,000 b/d monthly increase over the remainder of this year.
Refiners Suffer Hurricane Ida Blow. Three
Louisiana-based refineries have reported damages from Hurricane Ida, as both
Shell's 250kbpd Norco Refinery and Phillips
66's 250kbpd Alliance Refinery ended
up being fully flooded. Louisiana's largest refinery by capacity, Marathon's
565kbpd Garyville Refinery, also sustained damage.
Teams Up with Bunge. US major Chevron
(NYSE:CVX) invested $600 million in two soybean crushing
facilities owned by agricultural firm Bunge (NYSE:BG) in
Louisiana and Illinois, securing feedstock for its renewable fuels needs.
Wants to Nationalize DiDi. DiDi (NYSE:DIDI),
China's leading ride-hailing company, is poised to suffer another setback
following its botched IPO in June, as rumors started spreading that the Beijing City government is
seeking to take the firm under state control, intent on wielding control over
the data DiDi holds.
Fighting Stoke Fears of Libya Sliding Back into Chaos. Media
sources report heavy clashes
breaking out Friday in Tripoli, the worst in more than a year, stoking fears
that increasingly tangible fissures between the western and eastern governments
would impact Libya's crude production and exports.
Coal Futures Move to All-Time High. Already double
their usual trading range, Chinese coking coal futures in Dalian moved to an
all-time high on Thursday (January delivery prices traded at almost 2700 yuan
per metric tonne, i.e. $415 per tonne) as worsening COVID dynamics in Mongolia
imply September would see minimal exports to China.
Mubadala Takes Share in Israeli Gas Field. Less than a
year after the UAE and Israel established diplomatic ties, the state-owned
Emirati firm Mubadala Petroleum bought a 22% stake in Israel's second-largest
offshore Tamar gas field operated by Delek (TA:DEDR).
Moves to Halt Supplies via Maghreb-Europe Pipeline. Algeria's
state-owned oil company Sonatrach is expanding throughput capacity in its
Medgaz gas pipeline that links it to Spain, by 2.5 BCm to reach a total
capacity of 10.5 BCm per year, indicating that it wants to discontinue flows
through its other Maghreb-Europe pipeline (MEP) as its conflict with Morocco (a
transit country for MEP) intensifies.
Natural Gas Prices Soar to Highest Since November 2018. Upon
hearing the latest IEA-reported gas storage build, coming in much lower than
expected at 20 BCf during the week ended 27 August, US gas prices rose to $4.73
per mmBtu, the highest level since November 2018.
to Restart Drilling Offshore Cyprus. Following a
protracted hiatus, ExxonMobil (NYSE:XOM) will drill a long-anticipated
appraisal well at its 2019 Glaucus discovery, assumed to contain up to 8 TCf of
gas, in November-December this year. Cyprus' Energy Ministry expects ENI and
Total to start drilling again in 2022.
Seeks Carbon-Free Steel. German carmaker Daimler
Mercedes-Benz (ETR:DAI) partnered with Swedish
firm SSAB (STO:SSAB) to introduce fossil-free steel into
its vehicle portfolio, using the steelmaker's proprietary HYBRIT system to
replace coking coal.
to Launch Karbala Refinery in 2022. Iraq's largest
downstream investment of the 21st century, the 140kbpd Karbala Refinery, built
by a South Korean consortium led by Hyundai (KRX:000720), will be commissioned by September
2022, four years behind schedule. Combining an FCC unit with a poly-naphtha
unit, Karbala will be the first Iraqi refinery to produce Ron 95
Releases Another 150,000 Tons of Metal Stocks. For the
third time this year already, China's reserves administration released metal stocks - namely 70,000 tons of aluminum; 50,000 tons of zinc, and 30,000 tons of copper - to cool down surging prices as aluminum prices hit a 13-year high last
Sues Government over Permit Approval. The
environmentalist organization Greenpeace sued the UK
Government in Scotland's Court of Session for failing to appropriately assess
and inform the public about the impacts of the 30 MMbbls Vorlich prospect in
the North Sea. The BP-operated (NYSE:BP) project
was approved back in 2018.
Straps Shell of OML 11 License. In another episode of
the long-standing row between Nigeria and Royal Dutch Shell (NYSE:RDS.A),
the Nigerian Oil Minister exercised his right to reallocate OML 11 to NNPC,
despite a 2019 court decision that upheld the Anglo-Dutch major's right to the
license. Shell filed an appeal.
Wants to Extend MET to Fertilizers. Halfway through
into its deliberation on how to introduce a mineral extraction tax (MET) for
metals that would be linked to global prices, the Russian government now wants
to extend the same idea to fertilizers and introduce MET there as well,
searching for additional sources of income and wary of runaway inflation.
The post Oil Remains Elevated After Hurricane Ida Hurts Supply first appeared in Oilprice.com on September 3, 2021.
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