Oil prices have rallied over the past three weeks as geopolitical tensions have risen, although U.S. economic data could drag prices back down.
Friday, June 28, 2024
All eyes are on US inflation data as oil prices continued their hot streak and are set to end the week with a third weekly gain. Rising geopolitical tensions over Israel and Lebanon overshadowed weakening US economic data in May, with each day this week posting day-on-day gains and Brent expected to end the week at $87 a barrel.
Calcasieu Pass 2 Given the green light. The US Federal Energy Regulatory Commission voted 2-1 to allow construction and operation of the 20 mtpa Calcasieu Pass 2 liquefaction plant in Louisiana, paving the way for operator Venture Global to become the second largest US LNG exporter.
Not every M&A can impress oil investors. An upstream company focused on the Eagle Ford SM Energy (NYSE:SM) bought private equity-backed XCL Resources’ shale assets in Utah’s Uinta region for about $2 billion, its shares plunged a whopping 10% in Thursday’s trading session.
Hedge funds transform oil futures. Hedge funds and other money managers increased their exposure to Brent futures and options, buying the equivalent of 69 million barrels in the week ended June 18, the fourth-fastest weekly increase since 2013.
Nigerian refining dreams crushed by fire. Nigeria’s 650,000-barrel-a-day Dangote refinery caught fire this week as a sewage treatment plant sent dark plumes of smoke over the port of Lekki while gasoline deliveries from the refinery were delayed until at least July.
Norway to start seabed mining in 2025. Norway’s government said it will open up vast areas of its Arctic in its first seabed mining license round, which will take place in the first half of 2025, offering 386 blocks covering 280,000 km2, as two companies have already applied for licences.
The Dallas Fed sees little improvement in the U.S. upstream. A quarterly survey by the Federal Reserve Bank of Dallas showed that oil and gas activity in Texas, Louisiana and New Mexico rose only slightly in the second quarter, with most of the top managers surveyed expecting another sideways trend.
Russia monitors gas supplies from a pipeline to Iran. Russian gas giant Gazprom has signed a memorandum of understanding with Iran’s national gas company NIGC to supply pipeline gas to Iran, despite Tehran sitting on the world’s second-largest gas reserves after Russia.
European airlines start charging for clean fuel. Europe’s largest airline group Lufthansa (FRA:LHA) will introduce a surcharge of up to $77 per flight from early 2025 to cover the rising cost of alternative fuels, which coincides with the EU’s requirement to use at least 2% SAF from next year.
Alaskan Offshore Wanes Investment Challenge. Italian oil major ENI (BIT:ENI) agreed to sell its Alaskan oil operations to US producer Hilcorp for an undisclosed fee, boosting its output by 135,000 boe/d, two months after the Biden administration cut Alaska drilling.
Argentina has yet to find offshore oil. Norwegian state oil company Equinor (NYSE:EQNR) revealed that the first offshore well drilled in Argentina’s territorial waters, the Argerich-1 exploratory well, found no clear signs of hydrocarbon deposits.
Saudi Aramco is looking for more LNG. The National Oil Company of Saudi Arabia has signed a non-binding agreement with an American energy developer Sempra (NYSE:SRE) to supply 5 mtpa of LNG over 20 years and is preparing for a 25% equity investment in Phase 2 of the Port Arthur LNG project.
TMX is in desperate need of immediate shippers. The recently launched TMX pipeline in Canada may take years to turn a profit as the operator needs full utilization of the spot toll equivalent to 20% of rated capacity to become equity positive in 2026; at worst it can take 8-9 years.
Trafigura seeks Glencore Displacement in Congo. Global trading giant Trafigura has entered into a supply agreement with the Kipushi zinc mine in DR Congo, which it operates Ivanhoe Mines (TSE:IVN)consolidated its position in zinc concentrates after rival Glencore refused to extend its exclusive offtake rights.
Michael Kern for Oilprice.com
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