Brent flirts with $80 as recession fears ease

Oil prices are recovering slowly but surely after four straight weeks of declines, with Brent nearing $80 as geopolitical risk and demand optimism fuel bullish sentiment.

Friday, August 9, 2024

Recovering from Monday’s huge sell-off in stocks, oil prices are set for a much-needed weekly gain after four straight week-to-week losses, while ICE Brent flirts with the $80-barrel mark again . Fears of an impending economic recession were eased by stronger US jobs data, and with markets closely watching Iran’s retaliation against Israel, geopolitics also added an optimistic boost.

The intensity of attacks in the Red Sea is increasing by a high level. Attesting to the heightened tensions in the Middle East, the Hellenic-owned Delta Blue tanker carrying Iraqi oil to the Greek port of Corinth has been attacked four times in the past 24 hours, surviving two grenade attacks, a rocket strike and an attempted maritime drone strike. .

EIA downgrades 2024 US Natural Gas Outlook. The US Energy Information Administration has cut its forecast for US natural gas production this year, with the year-over-year decline now expected to be about 0.5 Bcf/d to 103.3 Bcf/d, from the cause of the production shutdown triggered by record low prices. .

Saudi Aramco buys its refinery. Saudi Aramco (TADAWUL:2222) signed an agreement to acquire an additional 22.5% stake in the country’s Petro Rabigh refinery from Japan’s Sumitomo for $702 million, becoming the largest shareholder in the 400,000 b/d capacity asset with an equity stake of 60%.

Decision to charge TMX no earlier than 2025. While Canadian shippers expect a speedy resolution of the TMX pipeline tariffs, oral hearings on the issue are scheduled to begin next May, with closing arguments to take place in the summer as incremental exports from Westridge remain limited to 350,000 b/d. .

Libya announces complete shutdown of key field. Libya’s state oil company NOC has declared force majeure over crude oil exports from the 300,000 bpd Sharara field in western Libya following what appears to be a military-orchestrated takeover by the son of Khalifa Haftar, the head of the Benghazi government.

Occidental closes CrownRock acquisition. American oil major Occidental Petroleum (NYSE:OXY) completed its $12 billion acquisition of CrownRock without the involvement Ecopetrol (NYSE:EC) after Colombia’s President Gustavo Petro rejected the deal for a 30% farm.

Oil Majors have left the Suriname offshore block. The major international oil companies ExxonMobil (NYSE:XOM) and Equinor (NYSE:EQNR) transferred their holdings in Suriname’s deepwater Block 59 to Hess Corp (NYSE:HES) in a “non-financial transaction” and the Norwegian NOC leaving Suriname altogether.

Glencore is flirting with delisting. After most investors supported Glencore’s (LON:GLEN) Coal Strategy Rumors began to circulate about the Swiss-based trader potentially seeking a US re-establishment, but CEO Gary Nagle downplayed it, saying the major was “comfortable” in London.

US SPR refueling extends to 2025. With WTI prices around $76-77 per barrel, the US Department of Energy announced a tender to buy 3.5 million barrels of oil for the Strategic Petroleum Reserve, to be delivered in January 2025 in the Bayou Choctaw and Bryan Mound storage sites.

Sudan’s civil war triggers investor exodus. After 14 years of operations in South Sudan, Malaysia’s national oil company Petronas is leaving the country after a planned $1.25 billion asset sale to Savannah Energy fell through, leaving the war-torn country with great need for new investors.

India’s largest refiner has secured Venezuela’s exemption. According to Reuters, India’s biggest refiner, Reliance Industries, has been exempted from US sanctions in Venezuela on the premise that it uses naphtha as part payment to PDVSA, to be used by the Venezuelan firm as a much-needed diluent.

European gas prices rise following risks from Russia. Europe’s benchmark TTF gas futures breached the €40 per MWh ($14 per mmBtu) mark on Thursday for the first time since December 2023 after reports emerged that Ukrainian forces had captured the Sudzha gas transit station of Gazprom.

Cargill Eyes Corporate Restructuring. Faced with four-year lows in commodity crop prices and processing margins, the largest private US firm, Cargill, will undergo more structural changes after missing earnings targets, with operations expected to be streamlined across three units in place of five.

By Michael Kern for Oilprcie.com

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