Oil prices rebound as Omicron fears fade – .

Oil prices rebound as Omicron fears fade – .

A flood of bullish factors pushed oil prices higher earlier in the week as concerns over Omicron faded following promising reports.

Graph of the week

– The purported goal of the US government’s decision to release 50 million barrels of crude in January-April 2022 – to bring gasoline prices down – appears to be slowly materializing.

– OPEC + ‘s decision to maintain the agreed production additions of 400,000 bpd helped further in outright terms, pushing WTI prices down to $ 70 per barrel, as crude prices heavily influence oil prices. gasoline.

– The seasonal drop in demand for gasoline could have lowered its price anyway, reinforced by the reintroduction of travel restrictions following the spread of Omicron boxes.

– NYMEX RBOB gasoline futures for the first month of January 2022 fell below the $ 2 per gallon level in early December, rebounding to their current level of $ 2.1 per gallon.

Market movers

– Following a presidential order from Russian President Putin, the state oil company Rosneft (MCX: ROSN) is now likely to be allowed to export 10 billion m3 of gas overseas under an agent agreement with Gazprom, which previously maintained a pipeline export monopoly.

– Under increasing pressure to demonstrate its ambition to reduce emissions, the American major ExxonMobil (NYSE : XOM) said it would aim to achieve zero greenhouse gas emissions from its assets in the Permian Basin by 2030.

– The Mexican oil company PEMEX will receive $ 3.5 billion in government assistance to stay afloat and issue new “money market securities” that are expected to further worsen its financial situation, with financial debt already amounting to $ 113 billion at the end of the third quarter of 2021.

Tuesday 07 December 2021

After last week’s oil crash, the oil market is now recovering thanks to growing bullish sentiment. Omicron concerns fade following medical reports showing milder-than-expected symptoms, causing demand fears to subside earlier this week. This bullish outlook has been corroborated by Saudi Arabia’s aggressive pricing policy for shipments to Asia for January 2022. With Iranian nuclear talks showing no real progress, crude oil prices have stabilized comfortably in the mid-1970s, ICE Brent was trading above $ 75 a barrel. and WTI hitting $ 72.5 a barrel Tuesday morning.

Chinese crude imports rebounded in November. According to data from the General Administration of Customs of China, imports of crude reached an average of 10.17 million barrels per day last month, up 14% from October levels, with independents increasing their purchases thanks to the new import quotas issued in October.

Brazil introduces an export tax on crude. In a long-standing struggle between the Brazilian government and its national oil company Petrobras (NYSE : PBR), the country’s Senate approved a bill that would introduce an oil export tax on crude output, simultaneously creating a fuel price stabilization fund.

India signs crude supply agreement with Russia. Indian state-owned oil refiner Indian Oil Company (NSE: IOC) signed a supply agreement with Russia Rosneft (MCX: ROSN) up to 2 million tonnes per year, with the aim of diversifying Indian crude imports from excessive dependence on flows from the Middle East.

The rise of Chinese imports arouses the windfall of metals. China’s iron ore imports hit their highest level since July 2020 (up 15% month-on-month) and copper imports also hit a six-month high, and although they were mostly triggered Through expedited customs clearance procedures, the news has bolstered global metals. actions.

Aramco will cash the pipeline loan / lease agreements. Saudi national oil company Saudi Aramco (TADAWUL:2222) signed a $ 15.5 billion agreement with its own subsidiary (Aramco Gas Pipelines, a joint venture between Aramco and a BlackRock / Hassana consortium) leasing the rights to use its own network of gas pipelines and re-letting them to Aramco over a period of 20 years.

Foreign bidders bid on the US SPR sale. Foreign refiners have actively bid on the next SPR swap release in the United States, according to Bloomberg reports, as domestic refiners subject to year-end crude inventory taxes have been somewhat dissuaded from doing so. bid.

Petrobras will start drilling the next oil frontier in 2022. Brazilian state oil company Petrobras (NYSE : PBR) is preparing to drill the first of 14 wells planned at South America’s new deep-water border, the equatorial margin located in the country’s northern offshore zone.

ThyssenKrupp is looking for ways to decarbonize lithium production. germany ThyssenKrupp (ETR: TKA) has partnered with Australian metal producer Infinity Lithium (INF) to develop scalable technologies for using green hydrogen to produce lithium, a critical component of electric vehicles.

Shell wins lawsuit in South Africa against environmentalists. A South African High Court has authorized Royal Dutch Shell (NYSE:RDS.A) to continue its exploration work in the waters off the country, believing that the allegations of irreparable damage to marine life, as presented by Greenpeace, are speculative.

Record heat in the United States is pushing gas prices down. With weather forecasts predicting that December will be the third hottest month since 1950, U.S. natural gas futures for delivery in January 2022 continued their downward movement to $ 3.65 per mmBtu, down from 40% since October.

Canada’s Trans Mountain pipeline is back on line. The 300,000 bpd Trans Mountain pipeline, the only pipeline connecting British Columbia to the oil-rich province of Alberta, restarted this week after a three-week shutdown caused by flooding, easing pressure on Canadian crude differentials.

Metal prices supported by the Central Bank of China. Metal prices have been backed by China’s central bank which has mandated it to reduce the amount of liquidity banks must hold as reserves, in a bid to spur economic growth, with copper prices exceeding $ 9,500 per metric ton.

Trinidad is offering 17 blocks of deepwater oil in a new auction. The government of Trinidad and Tobago launched its tender in 2021 for 17 deep water blocks off the country’s northern and eastern coasts, just as the country saw a new discovery of light oil with the well. Royston-1.

By Tom Kool for Oil Octobers

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