Another bearish sentiment in the oil markets


A combination of increasing Covid infections in China, uncertainty about the G7 oil price limit and a rise in US oil inventories caused oil prices to fall this week. As oil prices rose early Friday morning, bearish sentiment is evident.

Friday, November 25, 2022

With the oil price cap coming into effect in just 10 days, oil markets are eagerly awaiting clarification on the actual details of the price cap. The European Union met to agree on a joint oil price cap, but talks broke down as members failed to agree on the best price. Media reports suggest that the oil price cap proposed by the G7 will be between 65 and 70 per barrel, much higher than initial estimates. This news, coupled with the coronavirus slowdown in China and the build-up of inventories in the US, caused oil prices to fall during the week.

The opening of China no longer seems realistic. China’s daily recorded cases of Covid-19 surged above 31,000 this week as Henan and Guangdong plunged back into lockdown mode, while Beijing residents have been placed under the strictest restrictions since the start of the pandemic.

EU countries reject proposal for gas price cap. The EU’s recently announced proposal to cap gas prices at €275 per MWh has been heavily criticized by member states, with some dissatisfaction over the lack of clarity, with Germany and the Netherlands claiming any cap would shift supplies elsewhere.

Biden is considering expanding fuel oil supplies. The Biden administration is considering purchasing more fuel oil for the fuel oil reserve in the northeast of the country, as the current supply of 1 million barrels of diesel (10 days’ supply) is not enough to relieve pressure on the middle distillate.

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The new Lula era means no more asset sales for Petrobras. The transition team of Brazil’s newly elected president, Lula da Silva, has asked the outgoing Bolsonaro government to halt the ongoing asset sale of the national oil company. Petrobras (NYSE:PBR) At the same time, he promised to pursue a non-interventionist policy.

Chevron for more Venezuelan action. american oil company Chevron (NYSE:CVX) Venezuela’s oil production could be boosted significantly if Nicolas Maduro’s government resumes Mexico-brokered talks with the opposition.

Iran’s nuclear program sparked international anger. Following an IAEA report finding that Iran was enriching uranium up to 60% at its Fordow site, Germany, France and the United Kingdom condemned Tehran’s actions as a challenge to the non-proliferation regime. Also removed barriers to the Iran deal at the time. Soon even less.

The fire at the factory raises fears about the supply of fracsand. A fire at the Superior Silica Sands plant, which produces frac sand to be pumped into shale wells during drilling, threatens the supply of key ingredient in the Eagle Ford Basin, frac sand prices are soaring through 2022 already tripled.

Nigeria estimated the loss from oil theft at $2 billion. A study by Nigeria’s Senate found that the African country lost more than 2 billion euros in oil theft in January-August 2022 and that only 66% of the country’s oil production was safe, even on major projects such as shell (lon: shell) Susceptible to Forcados attacks.

The Chinese Major Driven American Divestment. According to media reports, China’s offshore oil company is big CNOOC (HKG:0883) increases sales of its US assets with a British oil producer Port Energy (LON:HBR) Two areas in the Gulf of Mexico, Appomattox and Stampede, are said to be in talks for their share.

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Germany joins the windfall tax club. Germany joins the UK or Italy in imposing a windfall tax of 33% on oil, gas and coal companies if their current profits exceed the 2018-2021 average by 20% or more.

Italian city takes up challenge against LNG terminal. The Italian city of Piombino has taken the country’s government to court over a planned 5 bcm LNG terminal in a Tuscan port, saying work on the project should only begin after safety assurances are given to local fishermen and traders.

New drilling frontiers are opening up in Africa. French oil company buoyed by success of Venus discovery in Namibia Total Energy (NYSE: TTE) South Africa plans to launch a drilling operation off the west coast, including offshore blocks off Namibia, with huge discoveries.

Ghana wants to pay for oil with gold. Ghana’s government is trying to formalize a new policy that will allow the use of gold instead of US dollars to buy oil products as the African country’s international reserves fell for a third year-on-year to just $6 .6 billion. It’s left.

Blackout shuts down Ukraine’s largest steel mill. Repeated power outages at Ukraine’s largest steel plant have halted production amid Russia’s continued missile attacks on power generation infrastructure. ArcelorMittal (AMS:MT) In Kryvyi Rih, the current power supply is not enough to support production even at 20% capacity.

By Tom Cool for

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