Saturday, July 31, 2021
/07:00 AM / by Micheal Kern of Oilprice.com / Header Image
prices climbed this week as U.S. inventories tightened and the risk of Iran reaching
a new deal and bringing extra crude online decreased.
Friday, July 30th, 2021
Crude prices drew hefty support this week from
U.S. inventory dynamics, with commercial stocks falling to their lowest since
January 2020 and indications that the tightening is set to continue.
Concurrently, the markets have seemingly got accustomed to the idea that there
will not be any Iranian cliff-hanger as President-elect Raisi is to be sworn
into office next week, mitigating erstwhile concerns that Tehran might flood
the market with incremental barrels. COVID headwinds persist, however, as
several European countries see rising Delta variant cases.
Fails to Replenish Gas Storage. European countries are
struggling to replenish their gas reserves amid exorbitantly high LNG prices
and limited availability of pipeline supplies, with total EU gas reserves
standing at a mere 616 TWh, equivalent to some 63 billion cubic meters, the
lowest level since 2015.
Buys into Singapore EV Charging. Teaming up with
another French firm BollorÃ©, TotalEnergies (NYSE:TTE) agreed
to buy Singapore's leading electric vehicle charging network (accounting for
85% of the city-state's charge points), acquiring Blue Charge for an
undisclosed sum. TotalEnergies seeks to increase its charge point tally tenfold
to 150,000 by 2025.
market backwardation. Whilst gasoline cracks remain
the best-performing segment of most European refiners' slate, the derivatives
market indicates that the global gasoline balance is tightening as the Eurobob
oxy M1-M2 swap surged past the $20 per metric ton earlier this week, the widest
in almost two weeks.
court to reopen $7 billion BHP dam lawsuit. The London
Court of Appeal reopened a lawsuit against the Anglo-Australian mining
firm BHP (NYSE:BHP) over the 2015 Mariana dam disaster,
Brazil's worst-ever environmental disaster, allowing a 200 000-strong claimant
group to appeal against a lower court decision.
to Ease October 2021 production cuts. The UAE state
oil company ADNOC informed its term buyers that it would ease its export
nomination cuts for October 2021, bringing back 10 percentage points worth of
output compared to September, a clear indication that the Emirates remains
earnest in its production ramp-up drive.
Majors Leave Venezuela. France's TotalEnergies
(NYSE:TTE) and Norway's Equinor (NYSE:EQNR) have
quit their PetrocedeÃ±o joint venture, transferring their stakes to a subsidiary
of PDVSA. The JV manages the Juni oil field in the Orinoco Belt and a 180kbpd
heavy crude upgrader - this was used by both companies, arguing that developing
the heavy barrels is incompatible with their low-carbon strategies.
Seeks to Remove China from Nuclear Projects. UK
media report that China's
national nuclear firm CGN might be blocked from building new infrastructure on
the British Islands, triggered by concerns that increased Chinese participation
in Britain's energy infrastructure could be detrimental to the nation's overall
Tinto Starts $2.4 Billion Serbia Lithium Project. Rio Tinto
(NYSE:RIO) brought forward a much-anticipated investment
decision on the project, stating that it would already launch construction next
year with a commissioning aim of 2026-2027. Jadar in Serbia is bound to become
Europe's largest lithium supply source.
Administration to Revise Toxic Coal Wastewater Rule. The
White House will revise a Trump-era rule that allowed US coal-fired plants to
delay installing equipment that could prevent lead, selenium, or other
pollutants seeping into rivers and streams, Reuters reports. The US government
intends to finalize the new set of rules by 2024.
Buys Inspire Energy as it Seeks to Gain Green Credentials. Shell (NYSE:RDS) purchased
the US-based renewable energy retailer Inspire Energy, Reuters reports, amidst increasing
domestic pressure to speed up its decarbonization efforts.
High Court Clears Repsol CEO. Antonio Brufau, the CEO
of Spanish oil firm Repsol (BME:REP) was cleared
of allegations that he had spied on market competitors to block a takeover bid
by PEMEX and its partner. The court found no evidence of the chairman's direct
involvement in the spying case, triggering a more than 2% hike in Repsol stocks.
Rises on Inclement Weather. Wheat futures at the
Chicago BOT rose to a 2-month high as droughts in the US Midwest and freezing
temperatures in Brazil have sapped global spring wheat yields. The Wv1 CBOT
contract surpassed the $7 per bushel threshold, whilst the Paris December
contract rose beyond â‚¬220 per ton (equivalent to $7.1 per bushel).
Sets 2060 Net Zero Objective. Indonesia announced it
would seek to achieve net carbon neutrality by 2060 or sooner, seeing its
aggregate greenhouse gas emissions peak in 2030. Interestingly, it is oil that
will be phased out the swiftest in the upcoming future, with abundant coal
retaining its importance in power generation well into mid-century.
Revisits Obsky LNG. The Russian LNG-focused producer
abandoned its 5mtpa Obsky LNG project and revamped it instead into a gas
petrochemicals complex that would produce ammonia and hydrogen from natural
gas. NOVATEK initially intended to use its proprietary Arctic Cascade
liquefaction technology for the project.
Suriname Production Gets Real. Two appraisal drilling
programs carried out by operator TotalEnergies (NYSE:TTE) in
Suriname's Block 58 confirmed net black oil pays in both the Sapakara and
Kwaskwasi prospects, marking another important step towards oil
commercialization. This year will still see another appraisal well at the
Bonboni field and a flow test of Sapakara.
The post Oil Bulls
Remain Confident Despite Covid Concerns first appeared in Oilprice.com on July 30, 2021.
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