Tuesday, July 11, 2023
Oil prices have marginally moved beyond the $72-77 per barrel range for Brent and $67-72 per barrel for WTI, and there is a growing sense that the market is starting to feel Saudi Arabia’s production cuts and Russia’s export curbs. Hedge fund net positioning in the ICE Brent contract went up by the equivalent of 25 MMbbls last week, the largest week-on-week build in two months, pointing at a potential short-term pricing upside.
UAE Refuses to Commit to Voluntary Cuts. As Saudi Arabia extended its 1 million b/d production cut into August and is widely expected to do the same into September, the United Arab Emirates announced it would not join its OPEC peer and that Riyadh’s cuts are enough to balance markets.
Mexican Oil Disaster Hard to Contain. Mexico’s national oil company Pemex estimates that the fire that broke out at its Nohoch-A platform and spread to the strategic Cantarell compression complex - causing the death of three people in the process - has led to the loss of 700,000 barrels of crude oil production so far.
US-EU Minerals Pact Coming By End-2023. According to senior US officials, a deal between the United States and the European Union to allow critical minerals mined or processed in Europe, including lithium and graphite, to be compatible with US tax breaks will be signed by end-2023.
Norway Lauds Largest Condensate Find in Years. Norwegian upstream firm DNO (OSL:DNO) announced a major gas and condensate discovery at its Carmen prospect in the Norwegian Continental shelf, the largest condensate find in decades with 120-230 mmboe of reserves.
Iran Accuses US of Shielding Fuel Smugglers. Less than a week has passed since Iran tried to intercept a US-bound tanker chartered by Chevron (NYSE:CVX), Tehran now accused the US Navy of defending fuel smuggling in the Gulf as another tanker was seized despite US aircraft interference.
HRW Attacks Total’s Uganda Project. Human Rights Watch claimed that the planned East African Crude Oil Pipeline led by TotalEnergies (NYSE:TTE) will devastate thousands of lives of people that have received inadequate compensation for their land, adding to the overall pressure on Uganda’s upstream projects.
Kuwait to Speed Up Development of Disputed Field. As Kuwait and Saudi Arabia move closer to jointly developing the Durra gas field in the Gulf, Kuwait’s Oil Minister Saad al Barrak called on Iranian authorities to demarcate their maritime borders before claiming joint ownership of the asset.
Fukushima Water Release Triggers IAEA. Japan’s plan to release treated radioactive water from its Fukushima nuclear plant has kept the IAEA on its toes as South Korea criticized the UN body’s findings and China threatened legal action if the plans moved ahead as currently planned.
Venezuela’s Opposition Wants to Redraw Export Map. Venezuela’s opposition is now suggesting that the Latin American country should redirect 200,000 b/d of its exports to a selected trustee to pay a group of creditors, as Caracas fights tooth and nail to retain Citgo as its key asset.
Satisfying No One, IMO Revised Its Emissions Strategy. As the International Maritime Organization revised its greenhouse gas emissions strategy and adopted a 2050 net zero target after 5 years of protracted negotiations, with developing nations voicing their dissatisfaction over potential fines if countries fail to deliver.
South Sudan Postpones Oil Expansion. As South Sudan’s oil industry struggles to bounce back from the ongoing war in Sudan, the country has postponed its long-term production growth of 230,000 b/d by at least two years to 2026, yet oil field flooding and lack of investment remain structural shortfalls.
Falling Rhine Levels Scare Central Europe. Falling water levels on the Rhine River in Germany are increasing freight costs across Germany and increasing the likelihood of supply shortages as levels at the Kaub chokepoint stand at 105 cm currently and are expected to fall below 1 m by the end of this week, allowing for only half-loaded cargoes.
Iron Ore Lives Through Worst Day of 2023. Depressed by weak Chinese domestic demand and steel output curbs, the two key Asian iron ore futures in Dalian and Singapore recorded their worst day in 2023 so far on Monday, falling by almost 4% on the day to $109 per metric tonne.
Tom Kool
Editor, Oilprice.com
