Oil prices have soared over the past three weeks as geopolitical tensions increased, although economic data in the US could drive prices back down.
Friday June 28, 2024
All eyes are on US inflation data as crude oil prices have maintained their hot streak and are expected to end this week with a third weekly gain. Rising geopolitical tensions around Israel and Lebanon have overshadowed weakening US economic data in May, with each day this week up day-on-day and Brent expected to end the week at $87 a barrel.
Calcasieu Pass 2 got the green light. The U.S. Federal Energy Regulatory Commission voted 2-1 to approve construction and operation of the 20 million-ton-per-year Calcasieu Pass 2 liquefaction plant in Louisiana, clearing the way for operator Venture Global to become the second-largest U.S. LNG exporter.
Not every merger or acquisition can impress oil investors. After the Eagle Ford-focused upstream company SM Energy (NYSE:SM) bought private equity-backed XCL Resources’ shale assets in Utah’s Uinta region for about $2 billion, shares fell as much as 10% during Thursday’s trading session.
Hedge funds are making a U-turn on oil futures. Hedge funds and other money managers have increased their exposure to Brent futures and options, buying the equivalent of 69 million barrels in the week ended June 18, the fourth-fastest week-on-week increase since 2013.
Nigeria’s refined dreams are destroyed by fire. Nigeria’s 650,000 barrel-per-day Dangote refinery caught fire this week, with its wastewater treatment plant sending plumes of dark smoke over Lekki port, while gasoline deliveries from the refinery were delayed until at least July.
Norway will start mining on the seabed in 2025. The Norwegian government said it would open up large parts of the Arctic in the first licensing round for seabed mining, which will take place in the first half of 2025, offering 386 blocks covering 280,000 km2, as two companies have already applied for permits.
Dallas Fed sees little improvement in US upstream. The Federal Reserve Bank of Dallas’ quarterly survey shows oil and gas activity in Texas, Louisiana and New Mexico increased only slightly in the second quarter. Most upstream executives surveyed expect the trend to be sideways in the future.
Russia is considering pipeline gas supplies to Iran. Russian natural gas giant Gazprom has signed a memorandum of understanding with Iran’s national gas company NIGC to supply pipeline gas to Iran, despite Tehran having the world’s second largest gas reserves after Russia.
European airlines are charging for clean fuel. The largest aviation group in Europe Lufthansa (FRA:LHA) will introduce a surcharge of up to $77 per flight from early 2025 to cover the rising costs of alternative fuels, coinciding with the EU’s requirement to use at least 2% SAF from next year.
Alaska’s offshore investment appeal is waning. Italy’s major oil company ENI (BIT:ENI) has agreed to sell its upstream oil business in Alaska to US producer Hilcorp for an undisclosed amount. This increases the latter’s production to 135,000 boe/d, two months after the Biden administration restricted drilling in Alaska.
Argentina still has not found oil off its coast. Norwegian state oil company Equinor (NYSE:EQNR) revealed that the first offshore well drilled in Argentina’s territorial waters, the Argerich-1 exploration well, found no obvious signs of hydrocarbon deposits.
Saudi Aramco looking for more LNG. Saudi Arabia’s national oil company has signed a non-binding agreement with an American energy developer Sempra (NYSE:SRE) to supply 5 million tonnes of LNG per year over 20 years and is preparing for a 25% equity investment in phase 2 of the Port Arthur LNG project.
TMX is in urgent need of spot shippers. It may take years for Canada’s recently launched TMX pipeline to become profitable as the operator needs full utilization of spot tolls, equivalent to 20% of nameplate capacity, for equity to become positive by 2026; in the worst case this could take eight to nine years.
Trafigura seeks Glencore’s displacement in Congo. Global trading giant Trafigura has signed a supply agreement with the Kipushi zinc mine in DR Congo, operated by Ivanhoe Mines (TSE:IVN)strengthening its position in zinc concentrates after rival Glencore refused to renew its exclusive purchasing rights.
By Michael Kern for Oilprice.com
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