Oil prices rebound as Omicron fears fade
A flood of bullish factors pushed oil prices higher earlier in the week as concerns over Omicron faded following promising reports.
Graph of the week
– The purported goal of the US government’s decision to release 50 million barrels of crude in January-April 2022 – to bring gasoline prices down – appears to be slowly materializing.
– OPEC + ‘s decision to maintain the agreed production additions of 400,000 bpd helped further in outright terms, pushing WTI prices down to $ 70 per barrel, as crude prices heavily influence oil prices. gasoline.
– The seasonal drop in demand for gasoline could have lowered its price anyway, reinforced by the reintroduction of travel restrictions following the spread of Omicron boxes.
– NYMEX RBOB gasoline futures for the first month of January 2022 fell below the $ 2 per gallon level in early December, rebounding to their current level of $ 2.1 per gallon.
– Following a presidential order from Russian President Putin, the state oil company Rosneft (MCX: ROSN) is now likely to be allowed to export 10 billion m3 of gas abroad under an agent agreement with Gazprom, which previously maintained a pipeline export monopoly.
– Under increasing pressure to demonstrate its ambition to reduce emissions, the American major ExxonMobil (NYSE: XOM) said it would aim to achieve zero greenhouse gas emissions from its assets in the Permian Basin by 2030.
– The Mexican oil company PEMEX will receive $ 3.5 billion in government assistance to stay afloat and issue new “money market securities” that are expected to further worsen its financial situation, with financial debt already amounting to $ 113 billion at the end of the third quarter of 2021.
Tuesday 07 December 2021
After last week’s oil crash, the oil market is now recovering thanks to growing bullish sentiment. Omicron concerns fade following medical reports showing milder-than-expected symptoms, causing demand fears to subside earlier this week. This bullish outlook has been corroborated by Saudi Arabia’s aggressive pricing policy for cargoes bound for Asia for January 2022. With Iranian nuclear talks showing no real progress, crude oil prices have cooled comfortably. Settled in the mid-1970s, ICE Brent traded above $ 75 a barrel. and WTI hitting $ 72.5 a barrel Tuesday morning.
Chinese crude imports rebounded in November. According to data from the General Administration of Customs of China, imports of crude reached an average of 10.17 million barrels per day last month, up 14% from October levels, with independents increasing their purchases thanks to the new import quotas issued in October.
Brazil introduces an export tax on crude. In a long-standing struggle between the Brazilian government and its national oil company Petrobras (NYSE: PBR), the country’s Senate has approved a bill that would introduce an oil export tax on crude oil output, simultaneously creating a fuel price stabilization fund.
India signs crude supply agreement with Russia. Indian state-owned oil refiner Indian Oil Company (NSE: IOC) sign a supply agreement with Russia Rosneft (MCX: ROSN) up to 2 million tonnes per year, with the aim of diversifying Indian crude imports from excessive dependence on flows from the Middle East.
The rise of Chinese imports arouses the windfall of metals. China’s iron ore imports hit their highest level since July 2020 (up 15% month-on-month) and copper imports also hit a six-month level. high, and although it was mainly triggered by expedited customs clearance procedures, the news has bolstered global stocks of metals.
Aramco will cash the pipeline loan / lease agreements. Saudi national oil company Saudi Aramco (TADAWUL: 2222) sign a $ 15.5 billion agreement with its own subsidiary (Aramco Gas Pipelines, a joint venture between Aramco and a BlackRock / Hassana consortium) leasing the rights to use its own network of gas pipelines and re-letting them to Aramco on a 20-year period.
Foreign bidders bid on the US SPR sale. According to Bloomberg reports, foreign refiners actively bid in the next US SPR swap release, as domestic refiners subject to year-end crude inventory taxes were somewhat deterred from the auction.
Petrobras will start drilling the next oil frontier in 2022. Brazilian state oil company Petrobras (NYSE: PBR) is prepare drill the first of 14 wells planned at South America’s new deep-water border, the equatorial margin located in the country’s northern offshore area.
ThyssenKrupp is looking for ways to decarbonize lithium production. germany ThyssenKrupp (ETR: TKA) team up with Australian metal producer Infinity Lithium (INF) to develop scalable technologies for using green hydrogen to produce lithium, a critical component of electric vehicles.
Shell wins lawsuit in South Africa against environmentalists. A High Court in South Africa authorized Royal Dutch Shell (NYSE: RDS.A) to continue its exploration work in the waters off the country, believing that the allegations of irreparable damage to marine life, as presented by Greenpeace, are speculative.
Record heat in the United States is pushing gas prices down. With weather forecasts predicting that December will be the third warmest month since 1950, U.S. natural gas futures contracts for delivery in January 2022 continued their downward movement to $ 3.65 per mmBtu, down 40% from October.
Canada’s Trans Mountain pipeline is back online. The 300,000 bpd Trans Mountain pipeline, the only pipeline connecting British Columbia to the oil-rich province of Alberta, restarted this week after a three-week shutdown caused by flooding easing pressure on Canadian crude differentials.
Metal prices supported by the Central Bank of China. Metal prices were reinforced by China’s central bank forcing it to reduce the amount of liquidity banks must hold as reserves, in a bid to spur economic growth, with copper prices rising above $ 9,500 per metric tonne.
Trinidad is offering 17 blocks of deepwater oil in a new auction. The Government of Trinidad and Tobago spear its 2021 competitive tender for 17 deep-water blocks off the country’s northern and eastern coasts, just as the country saw a new discovery of light oil with the Royston-1 well.
By Tom Kool for Oil Octobers
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