Brent Flirts With $80 as Recession Fears Ease
Oil prices are slowly but surely recovering after four consecutive weeks of declines, with Brent nearing $80 as geopolitical risk and demand optimism boost bullish sentiment.
Friday, August 9th, 2024
Recovering from Mondayâs giant stock selloff, oil prices are set for a much-needed weekly gain after four straight week-over-week losses as ICE Brent flirts with the $80 per barrel mark again. Fears of an impending economic recession were alleviated by stronger US jobs data and with markets closely following Iranâs retaliation vis-a-vis Israel, geopolitics have added some bullish impetus, too.
Intensity of Red Sea Attacks Turns Up a Notch. Attesting to tensions running high across the Middle East, the Greek-owned Delta Blue tanker carrying Iraqi oil to Greeceâs Corinth port has been attacked four times over the past 24 hours, surviving two grenade attacks, one missile strike, and a maritime drone ramming attempt.
EIA Downgrades 2024 US Natural Gas Outlook. The US Energy Information Administration lowered its forecast for US natural gas production this year, with the year-over-year decline now expected to be around 0.5 BCf per day to 103.3 Bcf/day, due to shut-in output triggered by record low prices.
Saudi Aramco Buys Back Its Refinery. Saudi Aramco (TADAWUL:2222) signed an agreement to acquire an additional 22.5% stake in the countryâs Petro Rabigh refinery from Japanâs Sumitomo for $702 million, becoming the largest shareholder of the 400,000 b/d capacity asset with an equity stake of 60%.
TMX Tolls Decision No Sooner Than 2025. Whilst Canadian shippers are expecting a swift resolution on TMX pipeline tariffs, the oral hearing on the issue is scheduled to start May next year with the final argument to take place in the summer, as incremental exports out of Westridge remain capped at 350,000 b/d.
Libya Announces Full Closure of Key Field. Libyaâs state-owned oil firm NOC declared force majeure on crude exports from the 300,000 b/d Sharara field in western Libya, following what seems to be a military-orchestrated takeover by the son of Khalifa Haftar, the head of the Benghazi government.
Occidental Closes CrownRock Acquisition. US oil major Occidental Petroleum (NYSE:OXY) has closed its $12 billion acquisition of CrownRock without the involvement of Ecopetrol (NYSE:EC) after allegedly Colombiaâs President Gustavo Petro rejected the deal for a 30% farm-in.
Oil Majors Quit Suriname Offshore Block. International oil majors ExxonMobil (NYSE:XOM) and Equinor (NYSE:EQNR) have transferred their stakes in the deepwater Block 59 in Suriname to Hess Corp (NYSE:HES) in a ânonfinancial transactionâ, with the Norwegian NOC quitting Suriname altogether.
Glencore Flirts with the Idea of Delisting. After a majority of investors supported Glencoreâs (LON:GLEN) coal strategy, rumors started circulating about the Swiss-based trader potentially seeking a relisting to the US, but CEO Gary Nagle played it down by saying the major is âcomfortableâ in London.
US SPR Replenishments Extend into 2025. With WTI prices trending 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 into the Bayou Choctaw and Bryan Mound storage sites.
Sudan Civil War Triggers Investorsâ Exodus. Following 14 years of operations in South Sudan, Malaysiaâs national oil firm Petronas is leaving the country after its planned $1.25 billion asset sale to Savannah Energy fell through, leaving the war-torn country in dire need of new investors.
Indiaâs Largest Refiner Clinches Venezuela Exemption. According to Reuters, Indiaâs largest refiner Reliance Industries was exempted from the USâ Venezuela sanctions on the premise that uses naphtha supplies as partial payment to PDVSA, to be used by the Venezuelan firm as a much-needed diluent.
European Gas Prices Soar on Russia Risks. Europeâs benchmark TTF gas futures contract surpassed the âŹ40 per MWh ($14 per mmBtu) threshold on Thursday for the first time since December 2023, after reports emerged that Ukrainian forces might have seized Gazpromâs Sudzha gas transit station.
Cargill Eyes Corporate Restructuring. Confronted with four-year lows for commodity crop prices and processing margins, the largest privately held US firm Cargill will undergo several structural changes after missing earnings goals, with operations expected to be streamlined into three units instead of five.
