Oil prices rise as bullish sentiment strengthens

Following OPEC + ‘s decision to keep its production increases at 400,000 bpd per month, very few downside factors remain in the oil markets to keep prices from rising.

Rigs per basin

Number of American platforms

Energy graph of the week

Electricity demand in China

– China is about to experience a tumultuous winter as nationwide power crisis is eating into Chinese demand for commodities, forcing analysts to revise their forecasts for its economic performance in 2021.

– Two-thirds of the national total, 19 provinces introduced electricity rationing in September, forcing players in the refining industry and other segments to cut production.

– The current global gas shortage, which has already pushed Asian LNG spot prices to around 35 per mmBtu, and the simultaneous surge in coal prices, have been the main suspects, although the Communist Party’s ban on electricity producers to raise consumer bills also played a large part.

– Chinese authorities appear willing to relax safety rules at the country’s many coal mines to ease the energy shortage before the official winter heating season begins on November 15.

Energy market movers

  • French oil major TotalEnergies (NYSE: TTE) is seeking to sell a third of its 60% stake in Laggan Tormore, a major UK gas field in the North Sea, in a deal that is expected to generate $ 300 million.
  • Qatar Oil placed a order with Chinese shipyard Hudong-Zhonghua for the construction of four new LNG carriers to be built for $ 760 million, the first batch of shipbuilding orders for North Field’s upcoming expansion.
  • American investment company Cime-de-Pierre said he would be purchase carrier Teekay LNG (NYSE: TGP) in a deal worth $ 6.2 billion – Stonepeak has offered an 8% premium on Teekay shares, a sign that it expects LNG transport to remain profitable for an extended period.

Oil price today, Tuesday 05 October 2021

The October OPEC + ministerial meeting did not bring any surprising announcements, as all participating states agreed that staying on course would be in the collective interest of the group. As a result, crude prices hit their highest level in 3 years (with WTI approaching a 7-year peak) as the December ICE Brent contract was already trading above $ 82 per barrel. . While there are still downside risks that could throw cold water on the rise in prices, including the tightening of electricity in China that could weigh on October refining rates, it will take several days, it may even be several weeks before the market begins to notice these signs.

Saudi Aramco maintains ambitious plans.

Saudi Aramco (TADAWUL: 2222) projects to reach 13 million b / d of production capacity by 2027, up 1 mb / d from current sustained production levels, largely due to increased offshore production from the fields of Marjan, Berri and Zuluf.

Rosneft and Vitol meet again.

Russian national oil company Rosneft (MCX: ROSN) To would have signed a new long-term supply agreement with trading company Vitol, stipulating supplies of 9 million tonnes per year, the first such agreement since their 2013 contract.

ExxonMobil hopes to remain a key partner of Qatar LNG.

As Qatar Petroleum moves closer to selecting partners in North Field Expansion’s $ 30 billion development plan, the US major ExxonMobil (NYSE: XOM) has been Express his certainty that he would get that deal.

Related: Rapid Recovery in Demand Hints at Even Higher Oil Prices

Mexico wants the rebirth of the monopoly of power.

The government of Andres Manuel Lopez Obrador has proposed a proposed constitutional amendment this would bring Mexico back to market conditions before 2014, that is, by granting state-owned electricity company CFE a 54% market share and preferential treatment.

Gazprom launches the Nord Stream 2 tests.

Russian gas giant Gazprom (MCX: GAZP) has begun fill a Nord Stream 2 pipes for testing, as Germany has reportedly asked the company operating the gas pipeline to provide assurances that it will properly operate the pipeline, a sign that regulatory approval may not be so far away.

Chevron buys biofuels on the European market.

Committed to intensifying its investments in renewable energies, the American major Chevron (NYSE: CVX) To purchased all the base oil activities of the Finnish refiner Neste Oil (HE: NESTE), resuming all current operations with a Bahraini subsidiary without specifying the price.

Canada is escalating the Line 5 dispute with the United States.

Canada officially invoked a 1977 pipeline treaty with the United States to spark political talks over the fate of Line 5, a 540 kbpd crude pipeline operated by Enbridge (TSE: ENB) which stretches from Wisconsin to Ontario, while the state of Michigan intends to shut down the pipeline for fear of potential leaks.

Petrobras pays nearly $ 1 billion in US fines.

Brazil’s national oil company Petrobras (NYSE: PBR) said he had paid $ 853 million to the US Department of Justice following a lengthy corruption investigation launched by the Car Wash investigation, bringing the investigation to a definitive end.

BHP will supply nickel to Toyota-Panasonic.

Australian miner BHP (NYSE: BHP) will supply nickel sulphate from Australia to a joint venture of Japanese battery companies Toyota (TYO: 7203) and Panasonic (TYO: 6752), its second strategic agreement after a similar nickel supply agreement with Tesla signed this summer.

Phillips 66 plans to rebuild the Alliance refinery.

After weeks of speculation about a possible sale or even closure of the Alliance refinery damaged by Hurricane Ida in Louisiana, the American refiner Phillips 66 (NYSE: PSX) would have decided to repair and reboot the refinery with a capacity of 255,000 bpd.

Soaring European coal futures.

Rotterdam coal futures, the European price benchmark, hit an all-time high this week as the API2 2022 coal futures contract rose to $ 180 per metric tonne as gas prices continue to rise. ‘to augment.

Petrofac shares flourish following a corrupt decision.

Ironically, the shares of a UK-based oil services company Petrofac (LON: PFC) jumped this week following a London court ruling that sentenced him to pay a fine of $ 95 million to make payments to agents in Iraq, Saudi Arabia and the United Arab Emirates to secure potential contracts.

Libya wants to build a new refinery.

The Libyan National Unity Government and the National Oil Corporation have presented a joint statement of intent on building a new $ 600 million refinery in Sebha, in the south of the country, relaunching a project that began in the 1980s and finally fell off the agenda.

By Josh Owens for Oil Octobers

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