Oil prices have surged over the past three weeks amid rising geopolitical tensions, but U.S. economic data is a cause for concern and could send prices falling again.
Friday, June 28, 2024
Attention is on U.S. inflation data as oil prices remain strong and are on track to rise for a third straight week this week. Rising geopolitical tensions between Israel and Lebanon have overshadowed weak U.S. economic data for May, with Brent crude rising every day this week and set to end the week at $87 a barrel.
The green light is on for Calcasieu Pass 2. The Federal Energy Regulatory Commission has given a two-to-one green light to build and operate the 20-million-tonne-per-year Calcasieu Pass 2 liquefaction plant in Louisiana, paving the way for operator Venture Global to become the second-largest U.S. LNG exporter.
Not all M&A deals impress oil investors. Upstream companies focused on Eagle Ford SM Energy (NYSE:SM) The company bought private-equity-backed XCL Resources’ shale assets in Utah’s Uinta region for about $2 billion, but the company’s shares plunged as much as 10% in trading on Thursday.
Hedge funds pivot on oil futures. Hedge funds and other asset managers increased their bets on Brent crude futures and options, buying the equivalent of 69 million barrels in the week ended June 18, the fourth-fastest weekly increase since 2013.
Nigeria’s refining dreams shattered by fire. A fire this week at Nigeria’s 650,000 barrel-per-day Dangote refinery sent plumes of black smoke from a wastewater treatment plant into the Lekki port area and has delayed gasoline deliveries from the refinery until at least July.
Norway to start seabed mining in 2025. The Norwegian government has said it will open up a vast swath of the Arctic in the first seabed mining licensing round in the first half of 2025, offering 386 mining plots covering 280,000 square kilometres, and two companies have already applied for licenses.
The Dallas Fed sees little improvement in the U.S. upstream sector. According to a quarterly survey by the Federal Reserve Bank of Dallas, oil and gas activity in Texas, Louisiana and New Mexico increased only slightly in the second quarter, and most upstream executives surveyed expect the trend to remain stable going forward.
Russia is considering supplying gas to Iran via pipeline. Russian natural gas giant Gazprom has signed a memorandum of understanding with Iranian national gas company NIGC to supply pipeline gas to Iran, even though Iran has the world’s second-largest natural gas reserves after Russia.
European airlines start charging for clean fuel. Europe’s largest airline group Lufthansa (FRA:LHA) The airline plans to introduce a surcharge of up to $77 per flight from early 2025 to compensate for the rising cost of alternative fuels, in line with an EU requirement to use at least 2% SAF from next year.
Offshore Alaska becomes less attractive for investment. Italian oil giant ENI (BIT:ENI) Two months after the Biden administration restricted drilling in Alaska, the company agreed to sell its upstream oil operations in Alaska to U.S. producer Hilcorp Corp for an undisclosed fee, which will increase Hilcorp’s production to 135,000 barrels of oil equivalent per day.
Argentina has yet to discover any offshore oil. Norway’s national oil company Equinor (NYSE:EQNR) The exploration well, Argerich 1, the first offshore oil well drilled in Argentine waters, did not find any clear signs of hydrocarbon deposits, the company said.
Saudi Aramco Seeking More LNG. Saudi Arabia’s national oil company has signed a non-binding contract with a U.S. energy development company. Sempra (NYSE:SRE) The company has a contract to supply 5 million tonnes of LNG per year over 20 years and is preparing to make a 25% equity investment in the second phase of the Port Arthur LNG project.
TMX is in desperate need of spot shippers. Canada’s recently launched TMX pipeline could take several years to become profitable, as operators would need to fully utilize spot rates equivalent to 20% of nominal capacity to be capital profitable in 2026. In a worst-case scenario, it could take eight to nine years.
Trafigura seeks alternative to Glencore in Congo. Global trading giant Trafigura has signed a supply agreement with Kipushi zinc mine in the Democratic Republic of Congo. Ivanhoe Mines (TSE:IVN)It strengthened its position in zinc concentrate after rival Glencore refused to extend its exclusive purchasing rights.
Article by Michael Kahn of Oilprice.com
Other popular articles from Oilprice.com:
