Oil prices rebounded in the mid-1970s this week amid tighter U.S. crude inventories and a force majeure event over Libyan crude oil exports.

Friday 23 December 2021

The interdependence of oil prices and Omicron news eased somewhat this week, with the overall decline in U.S. crude inventories and the disruption of supply in Libya leading to higher prices. Despite the crude supply in the United States hovering around 11.6-11.7 million barrels per day, robust demand triggered a further drop in week-over-week inventories to a whopping 4.7 million barrels. As Libya escalates into another internal conflict, stripped some 300,000 bpd of crude in an instant, providing a welcome Christmas present to oil bulls. On Tuesday, Brent was trading around $ 75.5 per barrel while the US benchmark WTI was last seen at around $ 73 per barrel.

Gas prices in Europe drop to yesterday’s peak. As Gazprom fills the second line of Nord Stream 2, to be ready by the end of the year, TTF day-ahead futures contracts have fallen 20% overnight to € 132 per MWh (48 $ per mmBtu), potentially signaling more Russians. the supply is coming soon to Europe.

Iranian talks resume for the post-Christmas cycle. The eighth iteration of the Iranian nuclear negotiations program will begin on December 27 in Vienna, less than two weeks after the interruption of the previous session by the Iranian delegation.

Argentina will build the Vaca Muerta gas pipeline. Despite Argentina’s near-default state, its authorities are said to be on the verge of signing a decree to begin construction of a major gas pipeline that would link the abundant Vaca Muerta shale deposit to Buenos Aires, YPF (NYSE: YPF) perspectives.

The EU is still investigating Gazprom’s actions in Europe. As European daily gas prices hit a new record high of € 182 / MWh (equivalent to $ 63 per mmBtu) earlier this week, the European Commission has re-energized its investigation into the shares of the Russian gas company Gazprom (MCX: GAZP), although he found no evidence of speculation earlier.

ADNOC wants to decarbonize offshore oil production. UAE National Oil Company ADNOC spear a new $ 3.6 billion project to connect its offshore production operations to the onshore power grid primarily powered by solar and nuclear power through a 3 , 2 GW.

Nigerian crude exports hit by another force majeure. The Nigerian branch of the oil major Shell (NYSE: RDS) has been forced to declare force majeure at the Forcados export terminal this week after a failing barge continues to block access and tanker loading operations, the second FM this year already.

ExxonMobil resumes drilling in Cyprus. American oil major ExxonMobil (NYSE: XOM)resumed drilling in Cyprus offshore Block 10 after a 20-month hiatus triggered by COVID, drilling an appraisal well until the 2019 Glafcos discovery which is expected to contain up to 8 trillion cubic feet (225 billion meters cubes).

SPR inventories in the United States are dropping to their lowest in 19 years. As the United States pushed ahead with planned SPR outflows, the total stockpile of strategic crude reserves fell to 596 million barrels, the lowest since November 2002.

Iran is looking to build a $ 10 billion heavy oil refinery. According to a budget proposal for the next Iranian year starting in March, Tehran is looking at in the construction of a new 300,000 bpd oil refinery called Qasem Soleimani in Bandar Abbas, intended for refining heavy oil.

Mexico claims the Deer Park refinery as a done deal. Mexican government declaredthat the offer from its national oil company PEMEX for the purchase of the 303,000 bpd deer Park refinery in Shell (NYSE: RDS) received US government approval and that the long-delayed deal would finally be finalized in early 2022.

German companies enter Russian ammonia forward deals. Russian LNG Major Novatek (MCX: NVTK) has signed a long-term sales agreement with German utility company Uniper for 1.2 mtpa of ammonia, which will be turned into hydrogen gas when it arrives on German soil, the second such deal already this year.

Albemarle shakes the blow of the elections in Chile. Despite having lost 15% of its market value this month on the back of the Chilean president-elect wanting to create a national lithium company, the lithium producer Albemarle (NYSE: ALB) noted he does not expect his operations to be affected by a “one-size-fits-all” contract structure.

Giant Maersk’s shipment doubles Chinese storage. Container transport company Maersk (CPH: MAERSK) Okay to buy Hong Kong-based storage company LF Logistics which has a network of more than 200 warehouses across Asia for $ 3.6 billion as it seeks to gain a foothold in Asia-Pacific.

Baytown’s Exxon refinery is the victim of a major accident. Baytown’s 560,000 bpd integrated refining complex operated by ExxonMobil (NYSE: XOM) Texas experienced a major industrial accident after a bypass line leak caused a fire in the refinery’s desulfurization unit.

Sri Lanka will repay its oil debt to Iran by bartering tea. Struggling to repay debt commitments, Sri Lanka plans settle its $ 251 million oil import debt to Iran by bartering tea over the next four years, in an offer that would not trigger US sanctions.

By Tom Kool for Oil Octobers

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