Oil Market News, OPEC+, sanctions and price shocks

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Big Oil generated $613bn in cash on post-pandemic energy price surge​

The record profits and cash flows of the world's biggest oil companies have enabled shareholders to reap significant return while driving a rise in mergers and acquisitions activity, a report has said.

BP, Chevron, ExxonMobil, Shell and TotalEnergies, collectively known as Big Oil, generated a combined operating cash flow of $613 billion between January 2021 and September 2023, Moody’s said in a report last week.

Brent crude, the benchmark for two thirds of the world’s oil, soared to about $140 a barrel after Russia’s invasion of Ukraine last year.

Oil prices have since nearly halved amid demand concerns and an ease in supply restrictions.

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Big Oil generated $613bn in cash on post-pandemic energy price surge

The share buybacks of the world's biggest five crude companies hit a record $57 billion last year
www.thenationalnews.com
 

Ten predictions for energy in 2024​

A solar slowdown, relief for OPEC+, the rise of blue hydrogen, and other trends to watch out for in the year ahead

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Ten predictions for energy in 2024 | Wood Mackenzie

A solar slowdown, relief for OPEC+, the rise of blue hydrogen, and other trends to watch out for in the year ahead
www.woodmac.com
 

Oil Drillers Snap Up Gulf of Mexico Leases Ahead of Biden Pause​

(Bloomberg) -- Hess Corp. was the high bidder in a US auction for drilling rights in the Gulf of Mexico, which raised a total of $382 million from oil giants before the Biden administration imposes a two-year hiatus for future sales.

The sale, held by the Interior Department Wednesday, brought in more than any federal offshore oil and gas lease auction since 2015, according to the US Bureau of Ocean Energy Management.

It comes days after the US joined nearly 200 other nations at the COP28 UN climate summit in Dubai in a pledge to transition away from fossil fuels. While President Joe Biden had vowed during his campaign to stop new offshore drilling, the sale was mandated by Congress under last year’s climate law as a concession to Senator Joe Manchin, the West Virginia Democrat who provided the pivotal vote for the Inflation Reduction Act to pass.

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Oil Drillers Snap Up Gulf of Mexico Leases Ahead of Biden Pause

(Bloomberg) -- Hess Corp. was the high bidder in a US auction for drilling rights in the Gulf of Mexico, which raised a total of $382 million from oil giants before the Biden administration imposes a two-year hiatus for future sales.Most Read from BloombergS&P Logs Worst Day in Two Months, Bonds...
finance.yahoo.com
 

Oil Tumbles After Angola Announces It Is Leaving OPEC | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com
 

The Top 5 Oil Producers of 2023​

  • U.S. oil production reached a record high of over 13 million barrels per day in September, surpassing all other countries.
  • Despite a slight reduction in 2024 spending, U.S. production growth is expected to continue, driven by efficiency gains and technological advancements.
  • This surge in U.S. production is impacting global oil dynamics, with OPEC+ countries like Saudi Arabia and Russia facing challenges in managing market prices.
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The Top 5 Oil Producers of 2023 | OilPrice.com

The United States has significantly increased its crude oil production, surpassing earlier expectations and maintaining its position as the world's largest oil producer.
oilprice.com
 

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Angola’s OPEC exit highlights group tensions – but is unlikely to rattle the market

The market should not think "OPEC cohesion is falling apart, and there's going to be some kind of domino effect," one analyst said.
www.cnbc.com
 
  • Companies are diversifying their portfolios, with major oil and gas firms investing in renewable energy projects and clean technologies.
  • Notable deals include Tokyo Gas acquiring Rockcliff Energy, Brookfield selling renewable assets, and Carlos Slim's Grupo Carso acquiring stakes in Mexican oil fields.
  • Strategic international agreements are being formed, such as Adnoc's LNG deal with ENN Natural Gas and the green hydrogen project between Egypt and Saudi Arabia.

Energy Sector Sees Surge in Deal-Making as Year Ends | OilPrice.com

The energy sector is witnessing a significant increase in mergers and acquisitions, strategic partnerships, and investments in various projects as companies and countries adapt to the changing energy landscape.
oilprice.com
 

US buys 3 million barrels of oil for strategic reserve​

Dec 26 (Reuters) - The United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year, the U.S. Department of Energy said on Tuesday.

The department said it bought the oil, for delivery to a site in Big Spring, Texas, for an average of $77.31 a barrel, below the average of $95 a barrel that oil sold for in 2022.

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ConocoPhillips gets OK to continue North Slope oil project - ArcticToday

Construction is underway at the massive oil project even as the legal fight continues
www.arctictoday.com

Oilmen start building of underwater pipeline across the Yenisey - ArcticToday

The 5,8 km long pipeline is key component of Vostok Oil, the biggest industrial project currently unfolding in the Russian Arctic. According to Russian state oil company Rosneft and its subsidiary RN-Vankor, as many as 25 ships have in the course of summer 2023 taken part in dredging operations...
www.arctictoday.com
 

Oil prices set to end year 10% lower as demand concerns snap winning streak​

December 29, 20236:47 AM ESTUpdated 2 min ago

LONDON, Dec 29 (Reuters) - Oil prices are set to end 2023 about 10% lower after two years of gains as geopolitical concerns, production cuts and central bank measures to rein in inflation triggered wild fluctuations in prices.

On Friday, oil climbed after falling 3% the previous day as more shipping firms prepared to transit the Red Sea route. Major firms had stopped using Red Sea routes after Yemen's Houthi militant group began targeting vessels.

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Deadhorse / Prudhoe Bay, Arctic Alaska. Remote oilfield camp in winter, with lows below -40deg​

Mar 20, 2022

At the northern, far end of the infamous Dalton Highway (the haul road made famous by Ice Road Truckers) lies Deadhorse, or the Prudhoe Bay community. It's an oil facility build around the transient workers on the oilfield, and exploring the tundra in order to create new wells. Here, I show you around the public area of the unincorporated community in early February, during a near-record cold winter.

8:01

Future episodes will cover the haul road itself, Coldfoot camp, and what it's like out on the tundra. Feel free to ask any questions in the comments!

Channel: https://www.youtube.com/@AlexHibbertOriginals/videos
 

Oil steadies as Middle East tensions offset economy concerns​

January 10, 20246:07 AM EST Updated 18 min ago

  • Libya's 300,000 bpd of supply still offline
  • U.S. crude stocks fall by 5.2 million barrels, API reports
  • Euro zone facing possible recession, ECB VP says
  • U.S. oil output to touch a record high in 2024
  • Coming up: EIA supply report, 1530 GMT
LONDON, Jan 10 (Reuters) - Oil steadied on Wednesday, giving up most of its earlier gains, as Middle East supply concerns arising from the Israel-Hamas war and the shutdown of a top Libyan oilfield balanced rising U.S. output and worries about weak economic growth.

While the Organization of the Petroleum Exporting Countries and allies are cutting production to bolster the market, U.S. crude production will hit a record high in 2024, the Energy Information Administration said on Tuesday.

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Chesapeake aims for top US natgas producer spot with $7.4 bln deal for Southwestern​

January 11, 20246:53 AM EST Updated a few seconds ago

Jan 11 (Reuters) - Chesapeake Energy (CHK.O) said on Thursday it would buy smaller rival Southwestern Energy (SWN.N) in an all-stock transaction valued at $7.4 billion, a deal that would enable the second-largest U.S. natural gas producer to take the top spot.

The move extends a recent spate of multi-billion deals in the U.S. energy sector including Exxon Mobil's (XOM.N) $60-billion Pioneer Natural Resources (PXD.N) offer and Chevron's (CVX.N) $53-billion agreement for Hess (HES.N), as companies seek lucrative acreage to rebuild depleting assets.

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World to get more gassy despite energy transition momentum​

January 12, 20245:03 AM EST Updated 2 hours ago

LITTLETON, Colorado, Jan 11 (Reuters) - Nearly every major region is boosting investments in the infrastructure needed to increase the use of natural gas in power generation, despite global efforts to transition energy systems away from fossil fuels.

Globally, more than $720 billion is to be spent on gas pipelines under construction or planned, and an additional $190 billion is to be put on facilities to handle liquefied natural gas (LNG) imports, according to Global Energy Monitor (GEM).

The investment sums involved - which have been committed to projects that are underway or are planned for the near future - reveal the powerful momentum that remains in traditional fossil fuel industries even as clean energy supplies are deployed at an accelerating rate.

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Russia’s seaborne crude shipments shrugged off attacks on shipping in the southern Red Sea to register gains in the latest week, as Moscow failed to match export cuts that it pledged to its OPEC+ allies.
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Russian Crude Flows Defy Red Sea Chaos to Exceed OPEC+ Target

(Bloomberg) -- Russia’s seaborne crude shipments shrugged off attacks on shipping in the southern Red Sea to register gains in the latest week, as Moscow failed to match export cuts that it pledged to its OPEC+ allies.Most Read from BloombergTrump Scores Easy Win in Iowa With DeSantis a Distant...
news.yahoo.com

Russia is having to transport crude via ships since Europe (their main pipeline client) isn't buying any more. Russian ships need to travel through the Red Sea to reach Asian clients. In spite of the risk (and presumably, insurance premium), Russia is shipping more oil than what they pledged to OPEC+. It's not clear if this is an aberration or systemic issue, but it likely helps relieve pressure on oil prices as long as it lasts.
 

The De-Kastri Mystery​

Why has half a billion dollars of Sakhalin oil been turned away from India? And what does it portend for Russia’s shadow trade?​


Could Moscow’s shadow fleet be running into sanction headwinds? Recent developments suggest so. Consider, for example, the nine tankers transporting Sakhalin oil to India last month that unexpectedly failed to deliver their cargoes—for reasons that remain unclear. Weeks on, they remain adrift at sea, seemingly unable to secure new buyers. Then there are the seven shadow tankers sanctioned by OFAC between October and early December: none appears to have lifted or delivered a single cargo since getting “blocked.” Ships aside, Moscow has also seen a handful of its “under-the-radar” oil traders hit with sanctions by the U.S. and Britain. And then there’s state-owned Sovcomflot’s flag-of-convenience fiasco. During the first half of January, the company has been scrambling to reflag some fifty tankers after they were abruptly dropped by Liberia. But by letting most of its fleet fly Liberia’s U.S.-administered flag throughout 2023 while also sometimes transporting oil priced above the cap, the company likely caused some 75% of its tankers to violate sanctions rules, putting them at risk of OFAC action.

These setbacks—and others—are the direct result of a recent campaign by price-cap coalition countries to step up pressure on intermediaries in the shadow oil trade. The campaign has included a series of public enforcement actions against a small sampling of market players—shipowners, ship brokers and oil traders. It has also, reportedly, involved private overtures to a range of other entities—foreign banks, flag registries, insurers and the like—urging them to show greater diligence in their price-cap compliance. And some, like the Liberian registry, appear to have taken the message to heart.

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The De-Kastri Mystery

Why has half a billion dollars of Sakhalin oil been turned away from India? And what does it portend for Russia’s shadow trade?
navigatingrussia.substack.com
 
Shipping oil through troubled waters

Attacks on shipping in the Red Sea have had almost no impact on the oil price, despite the volume of oil shipped through the waterway surging 80% over the last two years because of the war in the Ukraine.

Markets more worried about a soft global economy and rising US and Brazilian oil production than by the prospect of interrupted oil flows, having already seen the global oil market adjust to the massive disruption caused by Russia’s invasion of its neighbour.

The oil market has fragmented over the last two years, with Russia now primarily supplying China and India while the Middle East and the United States have replaced Russia in Europe.

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Shipping oil through troubled waters | The Strategist

Attacks on shipping in the Red Sea have had almost no impact on the oil price, despite the volume of oil shipped through the waterway surging 80% over the last two years because of the ...
www.aspistrategist.org.au
 
FWIW................

A history of ‘unrealized’ peaks​

Article by HE Haitham Al Ghais, OPEC Secretary General.​

Wednesday, 17 January 2024​

The idea of oil supply peaking, or so-called peak oil, surfaced as early as the 1880s, with some predicting a looming exhaustion in the US due to the demise of the Pennsylvania oil fields. US and global oil production, however, was still increasing over 70 years later, when the ‘peak oil theory’ of geologist Marion King Hubbert gained traction in 1956.

Hubbert predicted a global peak in crude oil production around 2000 at a level of about 34 million barrels a day (mb/d). In reality, this level was reached in 1967 and global crude oil production was over 65 mb/d by the turn of the century.

 

As more tankers divert from Suez Canal, there’s a ‘sea change’ in way Europe is buying crude​

  • More LNG, crude oil and diesel tankers are diverting from the Red Sea and Suez Canal, taking the longer route around Africa, according to Kpler.
  • The diversion adds between 20-45 days to a journey which can increase tankers’ rates and delays in the arrival of the commodity, and a total tanker travel time of up to 90 days before it can be refilled.
  • U.S. and Brazilian diesel are the main beneficiaries, as more European buyers are turning to the Atlantic Basin Countries to supply the fuel.
Energy prices for Europe are expected to increase as more petroleum products and crude tankers are diverting away from the Rea Sea and Suez Canal. Longer trips for the Middle-Eastern barrels that replaced Russian flows to Europe introduce supply issues, and this is leading to a “sea change” in commodity purchases by Europe, and a boost for Atlantic Basin crude suppliers including the U.S. and Brazil.

According to global trade intelligence company Kpler, at least six crude tankers are currently taking the much longer route around Africa’s Cape of Good Hope rather than the Suez Canal, a diversion caused by the Houthi rebel attacks and which can add up to 45 days to the voyage.

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Oil rises $1 on US crude stock draw, Red Sea attack​

LONDON, Jan 25 (Reuters) - Oil prices rose on Thursday after data showed U.S. crude stockpiles fell more than expected last week and a fresh attack by Houthi forces on ships off Yemen's coast underscored the peril facing trade in a key global transit route.

Brent crude futures were up 98 cents, or 1.2%, to $81.02 a barrel at 1150 GMT, while U.S. West Texas Intermediate crude was up $1, or 1.3%, to $76.09 a barrel.

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Gas-Addicted Europe Trades One Energy Risk For Another​


Jan 27, 2024(Bloomberg) –Europe, long-reliant on Russian natural gas, has nearly severed its dependency on the Kremlin in less than two years. Its preferred replacement — gas from the US — is widely viewed as abundant, politically palatable and less likely to be choked off than pipelines from Siberia.

It’s also growing riskier by the day.

On Friday, the White House announced the polarizing decision to halt the approval of new export permits for liquefied natural gas, or LNG, amid a backlash from climate-minded voters. The pause, which won’t affect those plants already under construction or in operation, threatens to delay or even derail some of the massive projects expected to hit the market toward the end of the decade and beyond.

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Gas-Addicted Europe Trades One Energy Risk For Another

By Anna Shiryaevskaya, Ruth Liao and Stephen Stapczynski Jan 27, 2024(Bloomberg) –Europe, long-reliant on Russian natural gas, has nearly severed its dependency on the Kremlin in less than two years. Its...
gcaptain.com
 

China boasts bubbling crude discovery – oil that is, 107 million tonnes – in Henan province, adding fuel to energy-security drive​


  • Drilling finds what looks to be the foundation for a new oil-and-gas resource base in a central region, and it should help the world's biggest industrial producer reduce reliance on oil imports
  • Analysts say the 'important discovery' could account for nearly one-third of China's total oil and gas production
China has discovered what could amount to 107 million tonnes of crude oil in its central region - a quantity equivalent to more than half of the nation's production in 2023 - as authorities intensify efforts to enhance energy security and rely less on oil imports.

The presence of the abundant oilfield was verified while drilling in the Sanmenxia basin of Henan province, according to the state-run Henan Daily, which said the estimated size was announced by the China Geological Survey under the Ministry of Natural Resources.

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HOUSTON, Feb 6 (Reuters) – U.S. crude oil exports to Asia tumbled to 1 million barrels per day in January, the lowest in over two years as high freight rates and more competitively-priced Middle Eastern oils slashed shipments.

A surge in supertanker freight rates made it expensive to ship to Asia at the start of the month, particularly to China.

 
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