June 24, 2022/OilPrice.com
The world’s most-watched oil data report won’t be released this week due to a power problem. Oil prices, meanwhile, are climbing higher on Friday to cancel out losses from earlier in the week.
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Friday, June 24th, 2022
Disruptions, disruptions, and disruptions. Even the Energy Information Administration can’t avoid them, with electricity problems meaning the world’s most-watched oil data report won’t be released this week. Preliminary estimates pointed to the largest crude stock build in the past four months. The EIA hopes to shed more light on that on Monday. Meanwhile, the US Federal Reserve’s unconditional focus on taming inflation continues to squeeze speculators out of the Brent and WTI futures contracts. This means that, despite backwardation being almost as steep as it was at the peak of the market madness in March, prices have barely moved this week, with ICE Brent around the $112 per barrel mark.
Russian Gas Cuts Top EU Agenda. Arguing that it is only a matter of time until Russia shuts down all gas shipments to Europe, this week’s meeting of EU leaders focuses on the need to seek alternative supplies as the continent’s 40% dependence puts its energy-hungry industry on the brink.
Texas Helps Cheniere Avoid Pollution Limits. According to Reuters, the Texas state regulators have repeatedly increased the pollution limits of Cheniere’s (NYSEAMERICAN:LNG) liquefaction plant in Corpus Christi, TX, doubling it over the past eight years instead of slapping fines on the emitter.
LNG Squeeze Pushes Asian Prices. As Europe’s gas squeeze and the force majeure at Freeport LNG narrowed down the options of spot buyers, LNG prices in Asia have also seen strong upwards momentum, trending around $37-38 per mmBtu as Asian gas stock replenishment rates lag European ones.
Ecuador Crude Output Still Blocked by Protests. Ecuadorian crude production dropped 45% in less than a decade, currently averaging 275,000 b/d, as protests of indigenous nationalities demanding fuel subsidies saw them invade and vandalize at least a dozen of oil fields and risk pipeline supply to the country’s ports.
US Refining Capacity Drops to Lowest Since 2014. According to IEA data, US refinery capacity fell below the 18 million b/d mark at the beginning of 2022 (at 17.94 million b/d), marking the lowest level of operable downstream capacity since 2014.
Gunvor Lobbies for a Jones Act Waiver. The trading firm Gunvor has formally requested a waiver from the Jones Act, stipulating that any blending onboard a vessel in a foreign port cannot create new product, to deliver some 13 million gallons of gasoline into the US, marking the first time traders have tried this shortcut.
Mexico Just Cannot Stop Flaring. Amidst news of PEMEX’s excessive natural gas flaring at its legacy shallow water fields, Mexico’s hydrocarbon regulator CNH went on surprise visits to the Mexican oil firm’s latest development projects and found similar levels of flaring at the up-and-coming Quesqui and Ixachi fields, too.
London and Berlin Push For Biofuel Mandate Stop. Negotiators from European G7 countries, primarily Britain and Germany, will push for temporary waivers on biofuels mandates to tame runaway food prices at the upcoming meeting in Bavaria, wary of increasing food vs biofuels crop competition.
China Wants More Exploration in East China Sea. Brushing aside Japanese accusations of building two unwarranted drilling platforms not far away from the disputed Senkaku/Diaoyu islands, China reiterated its interest in developing its oil and gas resources in the East China Sea, a move Beijing considers to be justified under its sovereign rights.
Unfazed by Court Freeze, Shell Wants to Quit Nigerian Onshore. With Nigeria’s Supreme Court barring UK energy firm Shell (LON:SHEL) from selling its onshore Nigerian assets amidst an ongoing 2 billion compensation case that revolves around a 2019 oil spill, the major reiterated its interest to leave the country.
Chevron Takes Up Huge LNG Term Commitments. US oil major Chevron (NYSE:CVX) signed two LNG supply deals to buy 2mtpa from both Cheniere Energy (NYSEAMERICAN:LNG) and Venture Global, presumably starting from 2026 as Chevron wants a larger share of the LNG trading market.
EU Finally Agrees on Carbon Reform. Following a failed attempt earlier this month, the European Parliament agreed to reform the EU carbon market by phasing out all CO2 permits by 2032 and expanding emissions trading into international shipping, both to and from EU countries.
Apache-Total Tandem Strikes Oil in Suriname. Suriname’s offshore prospects received a much-needed boost after APA (NASDAQ:APA) and TotalEnergies (NYSE:TTE) discovered more than 180 million barrels with the Krabdagu-1 well in Block 58, abutting the oil-prolific Stabroek block of Guyana.
P66 Runs into Permitting Trouble. US refiner Phillips 66 (NYSE:PSX) has been accused of California regulators of improperly processing renewable diesel from soybean oil at its Rodeo, California refinery, namely without modifying its existing air permit.