Although there are still many supply risks that could lead to higher oil prices, bearish sentiment has taken over oil markets so weak due to declining demand in China and expectations of a slowdown in the global economy.
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Friday, April 22, 2022
Prospects for weakening global economic growth continue to weigh on crude oil prices, with the US Federal Reserve hinting at a half-point increase in interest rates at the next policy meeting in May and China’s woes with COVID growing protracted amid Shanghai’s announcement of a new round of blockades. Rising risks are still on the table as the European Union considers oil sanctions against Russia and Libya on the brink of war, but bearish sentiment is currently pulling prices lower.
Russia’s ruble payment scheme compatible with EU law. The European Commission says the newly introduced Russian gas payment system, which will convert prices into rubles at Gazprombank, a subsidiary of gas giant Gazprom (MCX: GAZP), may be compatible with the EU sanctions regime, easing fears in European gas. market.
The world is on the verge of a prolonged energy collapse. The world must find $ 1.3 trillion in additional investment by 2030 to increase global energy production and improve infrastructure, said US investment bank JP Morgan, otherwise the world risks seeing energy demand exceed supply with incredible 20%.
American SPR barrels, ready to stay at home. The US Department of Energy has awarded contracts for 30 million barrels of SPR crude oil, with US refiner Valero (NYSE: VLO) and Saudi-owned Motiva Enterprises receiving the largest volumes of 6.85 and 4.05 million barrels, respectively. which means that most barrels will be refined internally.
China’s ban on coal abroad halts 15 projects. According to a recent study, China’s decision to ban coal financing abroad has led to the closure of 15 power generation projects with a total capacity of 12.8 GW and could potentially shut down another 37 GW, which are currently in the pre-construction phase. .
The United States wants Brazil to produce more oil. Brazilian Energy Minister Bento Albuquerque said the United States has asked Latin America to produce more crude oil to cut oil prices directly, a feat Brazil considers logistically difficult, with production now hovering around 3 million barrels. per day.
Argentina wants gas connections amid a boom in gas production. Just as gas production in Argentina rose 10% in March to reach a new monthly record, Argentina said it wanted to speed up the construction of gas links that would connect the Vaca Muerta shale with Buenos Aires, with the government calling for a mid-term 2023 is the deadline for the planned Nestor Kitchener pipeline (to which the contract has not even been awarded).
Low-capacity wells are becoming a headache for US emissions. According to a new study, low-capacity oil and gas wells, which account for only 6% of total U.S. production, emit more than half of the methane coming from all wells, a harbinger of changes in methane monitoring coming from the Environmental Protection Agency. Wednesday.
Russia wants full prepayment in a raw auction. Russia’s national oil company Rosneft (MCX: ROSN) has demanded a full prepayment in rubles (alternatively in Chinese yuan or Turkish lira) in its latest tender for the Urals and ESPO for cargo loading in May, amid markedly low Western interest in buying.
American refineries receive the latest Russian cargo. As the April 22 shutdown deadline for U.S. refineries to stop buying Russian crude oil and products takes effect today, there were a total of nine tankers delivering their cargo to the USGC, the vast majority of whom were carrying fuel oil.
LyondellBasell leaves US refining, closes Houston. The international chemical company LyondellBasell (NYSE: LYB) has announced that it will permanently close the Houston refinery with 265,000 barrels per day by the end of 2023 and leave the US refinery altogether, citing high costs and low margins as key reasons for the decision. .
Shell will sell a stake in Russian gas to Chinese companies. According to media reports, the British oil company Shell (LON: SHEL) is in talks to sell its 27.5% stake in the Sakhalin-2 liquefied natural gas project with Chinese state oil companies CNOOC (HKG: 0883), CNPC SS: 601857) and Sinopec (SS: 600028).
European carbon prices are rising in weak auctions. European carbon prices rose to a seven-week high of 89 euros per metric tonne this week, most likely on the backs of market participants, who rebuilt their positions amid low auctioning and falling gas prices.
PEMEX will finally pay off its debt. Thanks to unforeseen profits from rising crude oil prices, Mexico’s national oil company PEMEX will resume its debt this year, totaling about $ 5 billion, and will no longer require the government to make payments for its costs.
Copper blow from China. Along with other industrial metals, copper prices soared to $ 10,230 per metric tonne this week, amid fears that longer-than-expected Chinese blockades and aggressive tightening of US monetary policy will hamper demand, as seen of growing copper reserves.
By Josh Owens for Oilprice.com
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