BLOOMBERG
"Oil Up as Strong Market Negates Downturn Concerns"
by Bloomberg | Julia Fanzeres and Alex Longley
Tuesday, June 21, 2022
Oil climbed as financial markets recovered from last week’s rout, with traders confident that tight supplies will sustain higher prices even if the global economy contracts.
West Texas Intermediate August delivery rose to settle above $109 a barrel after plummeting before the US holiday weekend.
Top trader Vitol Group said Chinese demand is recovering in a market that’s struggling to increase supplies, meaning prices are unlikely to drop.
Under mounting political pressure to ease the strain on consumers, US President Joe Biden said he’s aiming to decide this week whether to suspend the federal gasoline tax.
Markets have been volatile amid moves by the Federal Reserve and other central banks to cool inflation, raising the specter of an economic slowdown.
The idea the US could see a recession within months has traders on edge, said Dennis Kissler, senior vice president of trading at BOK Financial.
“But it seems for now the latest sell off on crude may have been overplayed as near-term demand remains strong,” Kissler said.
The oil market has been vulnerable to any signs of disruption since Russia’s invasion of Ukraine almost four months ago upended global commodity markets.
Crude fell by several dollars on Friday on growing concern that the Fed’s pivot toward tighter monetary policy will lead to stunt economic growth.
Despite the dramatic dips, crude is still headed for a quarterly gain.
Prices:
The more actively traded contract, WTI August delivery, added $1.53 to settle at $109.52 a barrel in New York.
The July contract that expired Tuesday settled at $110.65
Brent for August settlement rose 52 cents to $114.65 a barrel.
The US Treasury Secretary said talks are continuing on how to cap the price of Russian oil, possibly through a plan that offers exceptions to a European Union insurance ban.
Asked whether such measures would be ready for the Group of Seven leaders meeting June 26-28, she said, “stay tuned.”
Potentially exacerbating disruptions on the supply side of crude markets, Petroecuador said Monday it may have to halt oil exports due to strikes, while Libya’s oil minister reported highly volatile production numbers.
Exxon Mobil Corp. said global oil markets may remain tight for another three to five years, largely because of a lack of investment since the pandemic began.
It’ll take time for oil firms to catch up on the investments needed to ensure there’s sufficient supply, CEO Darren Woods said in Qatar.
https://www.rigzone.com/news/wire/oil_u ... 8-article/
OIL, NATURAL GAS
Re: OIL, NATURAL GAS
RIGZONE
"Oil Drops with Global Recession Fears"
by Bloomberg | Julia Fanzeres
Wednesday, June 22, 2022
Oil fell to its lowest in over a month amid growing concerns that a global economic slowdown will ultimately hobble demand.
West Texas Intermediate slipped 3% to settle around $106 a barrel.
Federal Reserve Chair Jerome Powell made his most explicit acknowledgment to date in front of lawmakers Wednesday that steep rate hikes could tip the economy into recession.
Seperately, US President Joe Biden called on Congress to suspend the federal gasoline tax, a move that could bring mixed results.
Crude has whipped back and forth as the Fed’s commitment to taming inflation “has shaken the confidence of investors using crude as an inflation hedge,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
“Market liquidity is challenged as volatility has also taken its toll on traders and investors alike, leaving crude susceptible to massive swings.”
Oil’s price spike since Russia’s invasion of Ukraine in late February caused a liquidity crisis in the oil market as investors are required to put down more cash to cover their trades.
Futures holdings are at the lowest since 2016, leaving headline prices prone to outsized swings.
WTI fell below its 100-day moving average early on Wednesday for the first time since January, adding technical pressure to an already fragile market.
Prices:
WTI for August delivery fell $3.33 to settle at $106.19 a barrel in New York.
Brent for August settlement fell $2.91 to settle at $111.74 a barrel.
Wednesday’s slide comes alongside other commodities also losing ground, as well as some risk assets.
Copper and iron ore declined, as did equities.
An additional headwind for crude prices came from a rising dollar, which makes imports more costly for holders of other currencies.
Citigroup Inc. said that it expects further declines in oil into the end of the year, but added that it’s set to be a volatile downtrend.
“Investors should remember that Fed-induced slowdowns are simply a short-term abatement of the symptom -- inflation -- and not a cure for the problem -- underinvestment,” Goldman Sachs Group Inc. said in a note.
https://www.rigzone.com/news/wire/oil_d ... 6-article/
"Oil Drops with Global Recession Fears"
by Bloomberg | Julia Fanzeres
Wednesday, June 22, 2022
Oil fell to its lowest in over a month amid growing concerns that a global economic slowdown will ultimately hobble demand.
West Texas Intermediate slipped 3% to settle around $106 a barrel.
Federal Reserve Chair Jerome Powell made his most explicit acknowledgment to date in front of lawmakers Wednesday that steep rate hikes could tip the economy into recession.
Seperately, US President Joe Biden called on Congress to suspend the federal gasoline tax, a move that could bring mixed results.
Crude has whipped back and forth as the Fed’s commitment to taming inflation “has shaken the confidence of investors using crude as an inflation hedge,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
“Market liquidity is challenged as volatility has also taken its toll on traders and investors alike, leaving crude susceptible to massive swings.”
Oil’s price spike since Russia’s invasion of Ukraine in late February caused a liquidity crisis in the oil market as investors are required to put down more cash to cover their trades.
Futures holdings are at the lowest since 2016, leaving headline prices prone to outsized swings.
WTI fell below its 100-day moving average early on Wednesday for the first time since January, adding technical pressure to an already fragile market.
Prices:
WTI for August delivery fell $3.33 to settle at $106.19 a barrel in New York.
Brent for August settlement fell $2.91 to settle at $111.74 a barrel.
Wednesday’s slide comes alongside other commodities also losing ground, as well as some risk assets.
Copper and iron ore declined, as did equities.
An additional headwind for crude prices came from a rising dollar, which makes imports more costly for holders of other currencies.
Citigroup Inc. said that it expects further declines in oil into the end of the year, but added that it’s set to be a volatile downtrend.
“Investors should remember that Fed-induced slowdowns are simply a short-term abatement of the symptom -- inflation -- and not a cure for the problem -- underinvestment,” Goldman Sachs Group Inc. said in a note.
https://www.rigzone.com/news/wire/oil_d ... 6-article/
Re: OIL, NATURAL GAS
Investing.com
"Oil Inventory Unexpectedly Rose 5 Million Barrels: API"
Jun 22, 2022
Investing.com -- Oil stockpiles unexpectedly rose last week, according to the latest data from the American Petroleum Institute.
Crude inventory rose 5.6 million barrels, compared with the draw of 1.43 million barrels expected.
The data come a day before the government's own data on oil and refined products for the previous week.
Distillate stockpiles showed a draw of 1.656 million barrels, while gasoline stocks rose 1.216 million barrels.
Oil stored at the Cushing, Okla., facility declined by 0.390 million barrels.
The price of crude fell late Wednesday, with Crude Oil WTI Futures down more than 4%, to $104.44 a barrel.
Brent Oil Futures crude also fell 4%, to $110 a barrel.
https://www.investing.com/news/commodit ... pi-2839930
"Oil Inventory Unexpectedly Rose 5 Million Barrels: API"
Jun 22, 2022
Investing.com -- Oil stockpiles unexpectedly rose last week, according to the latest data from the American Petroleum Institute.
Crude inventory rose 5.6 million barrels, compared with the draw of 1.43 million barrels expected.
The data come a day before the government's own data on oil and refined products for the previous week.
Distillate stockpiles showed a draw of 1.656 million barrels, while gasoline stocks rose 1.216 million barrels.
Oil stored at the Cushing, Okla., facility declined by 0.390 million barrels.
The price of crude fell late Wednesday, with Crude Oil WTI Futures down more than 4%, to $104.44 a barrel.
Brent Oil Futures crude also fell 4%, to $110 a barrel.
https://www.investing.com/news/commodit ... pi-2839930
Re: OIL, NATURAL GAS
REUTERS
"Deep rift lies behind Biden's criticism of oil and gas industry"
By Nandita Bose, Jarrett Renshaw
JUNE 22, 2022
WASHINGTON (Reuters) - U.S. President Joe Biden has publicly criticized oil and gas executives for banking big profits from high gasoline prices but he has rarely spoken directly to the heads of energy companies or their representatives, White House records and interviews with industry sources show.
Biden said at a labor union event this month that Exxon Mobil Corp “made more money than God this year” and sent a letter to seven oil and gas companies calling on them to increase production to help ease the burden on consumers.
His actual engagement with energy company officials is rare, however, according to the industry sources and records, a marked contrast to Biden’s meetings with top executives in retail, logistics and agriculture, as the government grapples with inflation at a 40-year high and supply chain snarls.
Gas prices on average at the pump have not been as high for decades, including during the late 1970s energy crisis.
The Biden White House’s testy relationship with the fossil fuel industry has grown even more complicated as Russia’s invasion of Ukraine cut global energy supplies and sent crude oil and natural gas prices skyrocketing.
Biden, who campaigned on a promise to reduce dependence on fossil fuels which contribute carbon emissions linked to climate change, is leaning on the industry to curb inflation.
Oil and gas companies are reaping higher profits than they have in decades and mostly returning that windfall to shareholders in the form of buybacks.
Industry executives complain Biden isn’t asking for help in the right way.
“Your administration has largely sought to criticize, and at times vilify, our industry,” Chevron CEO Michael Wirth wrote in an open letter to Biden released on Tuesday.
“The outreach from the administration is lacking,” said Frank Macchiarola, a senior policy executive at the American Petroleum Institute trade body.
Asked about the Chevron CEO’s letter, Biden said “I didn’t know they’d get their feelings hurt that easily.”
CARROT-AND-STICK APPROACH
The Biden administration has forged a carrot-and-stick relationship with many companies, criticizing some corporate practices and egging on unions while offering some industry-friendly changes and hands-on support on issues like backed-up ports.
Last year, the White House held four meetings with chief executives to tackle a supply chain crisis that led to a shortage of goods around the Christmas holidays.
Biden participated in three of those, according to White House records; none involved oil and gas companies.
White House officials worked closely with tech companies to curb misinformation about COVID-19, executives involved told Reuters.
Biden met retailers and infant formula manufacturers as his administration tackled a shortage of baby formula.
However, he has met only once with chief executives of Exxon, Chevron and ConocoPhillips, as part of a larger briefing of energy, manufacturing, shipping and banking to discuss the Ukraine crisis, a March event hosted by the Business Roundtable.
This month, when Exxon and Chevron requested a White House meeting for their chief executives, they saw Brian Deese, who heads Biden’s National Economic Council.
When asked by Reuters on June 20, if he will sit down with oil and gas CEO’s, Biden said, “No ... because my team is going to do that.”
The White House said in a statement to Reuters that in addition to the many meetings with Cabinet secretaries, oil industry executives have met with White House officials on more than a dozen separate occasions over the past year.
A White House official did not offer a breakdown of when the meetings were conducted and who participated in them.
“President Biden has made clear that he is prepared to use all the tools available to him to reduce gas prices for the American people,” the official said.
The departure of Cedric Richmond, director of the Office of Public Engagement, has coincided with less contact in the White House, industry officials said.
Biden’s climate adviser Gina McCarthy, who has regularly met with oil and gas industry officials in the past is not taking such meetings.
Biden directed U.S. Energy Secretary Jennifer Granholm to convene an emergency meeting with industry officials, which is scheduled for Thursday.
GAS PRICES ARE POLITICAL
Western sanctions imposed on Russia for its invasion of Ukraine led to low supplies of fuel and oil in Europe, forcing European nations to compete for barrels with the United States.
Crude prices have doubled since Biden took office, and gasoline prices have jumped to an all-time record.
American voters’ worries about the economy are their top concern, opinion polls show, and are a major drag on Democrat Biden’s popularity.
Blaming energy companies is unlikely to encourage them to spend more on increasing supplies, especially when Democrats and investors have spent the last few years pushing for lower carbon emissions, industry experts said.
The industry has favored Republicans in U.S. elections for decades.
Ed Hirs, an energy economist at University of Houston, said Biden’s open vilification of the oil industry represented an “old playbook” that rarely works and only ensures the two sides refuse to talk.
“I have not seen this much vitriol since the 1970s,” Hirs said.
Reporting by Nandita Bose and Jarrett Renshaw in Washington; Editing by Heather Timmons, David Gaffen and Grant McCool
https://www.reuters.com/article/usa-bid ... SL4N2Y7281
"Deep rift lies behind Biden's criticism of oil and gas industry"
By Nandita Bose, Jarrett Renshaw
JUNE 22, 2022
WASHINGTON (Reuters) - U.S. President Joe Biden has publicly criticized oil and gas executives for banking big profits from high gasoline prices but he has rarely spoken directly to the heads of energy companies or their representatives, White House records and interviews with industry sources show.
Biden said at a labor union event this month that Exxon Mobil Corp “made more money than God this year” and sent a letter to seven oil and gas companies calling on them to increase production to help ease the burden on consumers.
His actual engagement with energy company officials is rare, however, according to the industry sources and records, a marked contrast to Biden’s meetings with top executives in retail, logistics and agriculture, as the government grapples with inflation at a 40-year high and supply chain snarls.
Gas prices on average at the pump have not been as high for decades, including during the late 1970s energy crisis.
The Biden White House’s testy relationship with the fossil fuel industry has grown even more complicated as Russia’s invasion of Ukraine cut global energy supplies and sent crude oil and natural gas prices skyrocketing.
Biden, who campaigned on a promise to reduce dependence on fossil fuels which contribute carbon emissions linked to climate change, is leaning on the industry to curb inflation.
Oil and gas companies are reaping higher profits than they have in decades and mostly returning that windfall to shareholders in the form of buybacks.
Industry executives complain Biden isn’t asking for help in the right way.
“Your administration has largely sought to criticize, and at times vilify, our industry,” Chevron CEO Michael Wirth wrote in an open letter to Biden released on Tuesday.
“The outreach from the administration is lacking,” said Frank Macchiarola, a senior policy executive at the American Petroleum Institute trade body.
Asked about the Chevron CEO’s letter, Biden said “I didn’t know they’d get their feelings hurt that easily.”
CARROT-AND-STICK APPROACH
The Biden administration has forged a carrot-and-stick relationship with many companies, criticizing some corporate practices and egging on unions while offering some industry-friendly changes and hands-on support on issues like backed-up ports.
Last year, the White House held four meetings with chief executives to tackle a supply chain crisis that led to a shortage of goods around the Christmas holidays.
Biden participated in three of those, according to White House records; none involved oil and gas companies.
White House officials worked closely with tech companies to curb misinformation about COVID-19, executives involved told Reuters.
Biden met retailers and infant formula manufacturers as his administration tackled a shortage of baby formula.
However, he has met only once with chief executives of Exxon, Chevron and ConocoPhillips, as part of a larger briefing of energy, manufacturing, shipping and banking to discuss the Ukraine crisis, a March event hosted by the Business Roundtable.
This month, when Exxon and Chevron requested a White House meeting for their chief executives, they saw Brian Deese, who heads Biden’s National Economic Council.
When asked by Reuters on June 20, if he will sit down with oil and gas CEO’s, Biden said, “No ... because my team is going to do that.”
The White House said in a statement to Reuters that in addition to the many meetings with Cabinet secretaries, oil industry executives have met with White House officials on more than a dozen separate occasions over the past year.
A White House official did not offer a breakdown of when the meetings were conducted and who participated in them.
“President Biden has made clear that he is prepared to use all the tools available to him to reduce gas prices for the American people,” the official said.
The departure of Cedric Richmond, director of the Office of Public Engagement, has coincided with less contact in the White House, industry officials said.
Biden’s climate adviser Gina McCarthy, who has regularly met with oil and gas industry officials in the past is not taking such meetings.
Biden directed U.S. Energy Secretary Jennifer Granholm to convene an emergency meeting with industry officials, which is scheduled for Thursday.
GAS PRICES ARE POLITICAL
Western sanctions imposed on Russia for its invasion of Ukraine led to low supplies of fuel and oil in Europe, forcing European nations to compete for barrels with the United States.
Crude prices have doubled since Biden took office, and gasoline prices have jumped to an all-time record.
American voters’ worries about the economy are their top concern, opinion polls show, and are a major drag on Democrat Biden’s popularity.
Blaming energy companies is unlikely to encourage them to spend more on increasing supplies, especially when Democrats and investors have spent the last few years pushing for lower carbon emissions, industry experts said.
The industry has favored Republicans in U.S. elections for decades.
Ed Hirs, an energy economist at University of Houston, said Biden’s open vilification of the oil industry represented an “old playbook” that rarely works and only ensures the two sides refuse to talk.
“I have not seen this much vitriol since the 1970s,” Hirs said.
Reporting by Nandita Bose and Jarrett Renshaw in Washington; Editing by Heather Timmons, David Gaffen and Grant McCool
https://www.reuters.com/article/usa-bid ... SL4N2Y7281
Re: OIL, NATURAL GAS
RIGZONE
"Oil Falls as Recession Fears Escalate"
by Bloomberg | Julia Fanzeres
Thursday, June 23, 2022
Oil dropped as Federal Reserve Chair Jerome Powell’s testimony before a House committee heightened concerns of an impending recession.
West Texas Intermediate dropped to near $104 a barrel, with prices having shed more than 10% in the last week.
Powell said his commitment to fight inflation is “unconditional.”
Warnings about a potential recession and economic slowdown have overshadowed oil market fundamentals that indicate a growing supply crunch.
Crude’s recent swings have been too volatile for many traders.
Open interest across the main futures contracts has fallen to the lowest since 2015 in recent days.
“Future demand destruction from a possible looming recession is countering near-term real demand that remains very strong,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“As long as the fear of a recession remains, the near-term strong demand is keeping crude choppy.”
Updated statistics on the state of US inventories won’t be released this week.
The Energy Information Administration’s stockpile report is delayed after a power disruption damaged some of the agency’s hardware.
As a result, markets will have to rely on a US industry report to parse out weekly inventory data.
The American Petroleum Institute reported crude holdings rose by 5.6 million barrels last week, while gasoline holdings also climbed, according to people familiar with the data.
Over the past two weeks, oil has been rapidly giving up gains in what’s been a volatile quarter as investors attempt to gauge the trajectory of the global economy and its impact on raw materials.
There’s about a 50% chance the world economy will succumb to a recession, according to Citigroup Inc. and Deutsche Bank AG.
Prices:
WTI August delivery fell $1.92 to settle at $104.27 in New York.
Brent for August settlement declined $1.69 to settle at $110.05 a barrel.
There’s still little consensus among major banks on the outlook for oil.
Goldman Sachs Group Inc. said in a note Tuesday that demand is still running ahead of supply, while warning that the Fed “cannot print commodities.”
Citi sees crude dropping through this year and beyond.
So far, there’s only been limited relief in refined product markets -- where bigger surges have occurred.
Diesel futures in Europe closed Wednesday at more than $57 a barrel higher than crude, a record in data since 2011.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_f ... 3-article/
"Oil Falls as Recession Fears Escalate"
by Bloomberg | Julia Fanzeres
Thursday, June 23, 2022
Oil dropped as Federal Reserve Chair Jerome Powell’s testimony before a House committee heightened concerns of an impending recession.
West Texas Intermediate dropped to near $104 a barrel, with prices having shed more than 10% in the last week.
Powell said his commitment to fight inflation is “unconditional.”
Warnings about a potential recession and economic slowdown have overshadowed oil market fundamentals that indicate a growing supply crunch.
Crude’s recent swings have been too volatile for many traders.
Open interest across the main futures contracts has fallen to the lowest since 2015 in recent days.
“Future demand destruction from a possible looming recession is countering near-term real demand that remains very strong,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“As long as the fear of a recession remains, the near-term strong demand is keeping crude choppy.”
Updated statistics on the state of US inventories won’t be released this week.
The Energy Information Administration’s stockpile report is delayed after a power disruption damaged some of the agency’s hardware.
As a result, markets will have to rely on a US industry report to parse out weekly inventory data.
The American Petroleum Institute reported crude holdings rose by 5.6 million barrels last week, while gasoline holdings also climbed, according to people familiar with the data.
Over the past two weeks, oil has been rapidly giving up gains in what’s been a volatile quarter as investors attempt to gauge the trajectory of the global economy and its impact on raw materials.
There’s about a 50% chance the world economy will succumb to a recession, according to Citigroup Inc. and Deutsche Bank AG.
Prices:
WTI August delivery fell $1.92 to settle at $104.27 in New York.
Brent for August settlement declined $1.69 to settle at $110.05 a barrel.
There’s still little consensus among major banks on the outlook for oil.
Goldman Sachs Group Inc. said in a note Tuesday that demand is still running ahead of supply, while warning that the Fed “cannot print commodities.”
Citi sees crude dropping through this year and beyond.
So far, there’s only been limited relief in refined product markets -- where bigger surges have occurred.
Diesel futures in Europe closed Wednesday at more than $57 a barrel higher than crude, a record in data since 2011.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_f ... 3-article/
Re: OIL, NATURAL GAS
RIGZONE
"Shipping Costs Soar"
by Bloomberg | Elizabeth Low
Thursday, June 23, 2022
The dislocation of global fuel markets after Russia’s invasion of Ukraine has boosted the cost of shipping products such as diesel by sea.
Rates to haul fuels such as gasoline and diesel, known in the industry as clean tanker freight, have more than doubled this year to the highest since April 2020, according to Baltic Exchange data.
On one key route in Asia, ship owners are now earning over $47,000 a day transporting products from South Korea to the distribution hub of Singapore, compared with $98 a day prior to the war.
The Russian invasion has exacerbated a tightening of energy markets, upending trade flows and forcing buyers to scour the world for alternative fuel supplies.
An initial surge in rates for hauling crude hasn’t been sustained, partly due to reduced demand from China, leading to some shipowners switching part of their fleet to haul fuels rather than oil, according to two tanker charterers.
Clean tanker freight rates were last at this elevated level in early 2020, after the pandemic decimated oil consumption and forced fuel producers to export as much product as possible to alleviate swelling storage tanks.
Demand for ships to haul fuels are expected to climb by 6% this year, underpinned by Europe, said Anoop Singh, head of tanker research at Braemar ACM Shipbroking.
“The European resolve to reduce reliance on Russian supplies will likely outlive the war in Ukraine and that will re-draw trade routes,” said Singh.
Russia was the single largest external supplier of diesel to Europe prior to the war.
Since the invasion in late February, more long-range class ships are being used to transport refined fuels, according to S&P Global Commodity Insights analysts Fotios Katsoulas and Krispen Atkinson.
Longer voyages are reducing the amount of available capacity on vessels and driving up freight rates, they said.
LR tankers are the most common and are used to carry both products and oil.
The surge in rates is being replicated across other regions.
Ship owners transporting fuel from the Middle East to Japan on a route known as TC-5 -- a key passage for naphtha -- were earning more than $50,000 a day on Wednesday, compared with as low as $61 a day in February, according to Baltic Exchange data.
The cost of shipping fuel from the US to Brazil on the TC-18 route was near $37,000 a day, up from $3,800 a day four months ago.
https://www.rigzone.com/news/wire/shipp ... 8-article/
"Shipping Costs Soar"
by Bloomberg | Elizabeth Low
Thursday, June 23, 2022
The dislocation of global fuel markets after Russia’s invasion of Ukraine has boosted the cost of shipping products such as diesel by sea.
Rates to haul fuels such as gasoline and diesel, known in the industry as clean tanker freight, have more than doubled this year to the highest since April 2020, according to Baltic Exchange data.
On one key route in Asia, ship owners are now earning over $47,000 a day transporting products from South Korea to the distribution hub of Singapore, compared with $98 a day prior to the war.
The Russian invasion has exacerbated a tightening of energy markets, upending trade flows and forcing buyers to scour the world for alternative fuel supplies.
An initial surge in rates for hauling crude hasn’t been sustained, partly due to reduced demand from China, leading to some shipowners switching part of their fleet to haul fuels rather than oil, according to two tanker charterers.
Clean tanker freight rates were last at this elevated level in early 2020, after the pandemic decimated oil consumption and forced fuel producers to export as much product as possible to alleviate swelling storage tanks.
Demand for ships to haul fuels are expected to climb by 6% this year, underpinned by Europe, said Anoop Singh, head of tanker research at Braemar ACM Shipbroking.
“The European resolve to reduce reliance on Russian supplies will likely outlive the war in Ukraine and that will re-draw trade routes,” said Singh.
Russia was the single largest external supplier of diesel to Europe prior to the war.
Since the invasion in late February, more long-range class ships are being used to transport refined fuels, according to S&P Global Commodity Insights analysts Fotios Katsoulas and Krispen Atkinson.
Longer voyages are reducing the amount of available capacity on vessels and driving up freight rates, they said.
LR tankers are the most common and are used to carry both products and oil.
The surge in rates is being replicated across other regions.
Ship owners transporting fuel from the Middle East to Japan on a route known as TC-5 -- a key passage for naphtha -- were earning more than $50,000 a day on Wednesday, compared with as low as $61 a day in February, according to Baltic Exchange data.
The cost of shipping fuel from the US to Brazil on the TC-18 route was near $37,000 a day, up from $3,800 a day four months ago.
https://www.rigzone.com/news/wire/shipp ... 8-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Posts Back to Back Weekly Loss on Recession Fears"
by Bloomberg | Julia Fanzeres
Friday, June 24, 2022
Oil posted its first back-to-back weekly loss since early April as fears of a demand-sapping global recession and tighter US monetary policy ripped through commodity markets to spur a broad sell-off.
West Texas Intermediate fell 1.7% for the week to settle at $107.62.
US Federal Reserve Chair Jerome Powell’s hawkish testimony to Congress earlier in the week overshadowed a fundamentally tight market.
Prices clawed back some of the week’s losses Friday as the University of Michigan’s final June reading of longer-term consumer inflation expectations settled back from an initially reported 14-year high, potentially reducing the urgency for steeper Federal Reserve interest-rate hikes.
“Wall Street remains optimistic that inflation will improve over the next year, and that is good news for risky assets, especially commodities,” said Ed Moya, senior market analyst at Oanda.
Oil’s rally since Russia’s invasion of Ukraine cooled earlier this month on escalating concern over a global slowdown as central banks, including the US Federal Reserve, boosted interest rates to quell raging inflation.
Prices have sunk despite signs that energy markets remain tight in the near term as the war in Ukraine drags on and supply risks persist.
Prices:
WTI for August delivery rose $3.35 to settle at $107.62 a barrel in New York.
Brent for August settlement added $2.93 to settle at $112.98 a barrel.
Despite declining headline prices, the market remains in backwardation, a bullish pattern in which near-term prices trade above longer-dated ones, has grown in recent days.
Brent’s prompt spread -- the difference between its two nearest contracts -- was $4.02 a barrel, compared with $2.73 a week ago.
That in part reflects still-strong demand for real-world barrels.
Cargoes for Asian buyers are fetching giant premiums to their benchmarks for August loading, signaling confidence in demand over the next few months.
In the Middle East, Murban crude was in a backwardation of more than $10 over its nearest two months, an unprecedented value that indicates major supply scarcity.
In Houston, physical barrels of WTI traded at $2.75 a barrel over futures, the strongest premium in two years, amid short-covering before rollover of July pipeline cycle Friday, according to people familiar with matter.
(with assistance from Sheela Tobben)
https://www.rigzone.com/news/wire/oil_p ... 8-article/
"Oil Posts Back to Back Weekly Loss on Recession Fears"
by Bloomberg | Julia Fanzeres
Friday, June 24, 2022
Oil posted its first back-to-back weekly loss since early April as fears of a demand-sapping global recession and tighter US monetary policy ripped through commodity markets to spur a broad sell-off.
West Texas Intermediate fell 1.7% for the week to settle at $107.62.
US Federal Reserve Chair Jerome Powell’s hawkish testimony to Congress earlier in the week overshadowed a fundamentally tight market.
Prices clawed back some of the week’s losses Friday as the University of Michigan’s final June reading of longer-term consumer inflation expectations settled back from an initially reported 14-year high, potentially reducing the urgency for steeper Federal Reserve interest-rate hikes.
“Wall Street remains optimistic that inflation will improve over the next year, and that is good news for risky assets, especially commodities,” said Ed Moya, senior market analyst at Oanda.
Oil’s rally since Russia’s invasion of Ukraine cooled earlier this month on escalating concern over a global slowdown as central banks, including the US Federal Reserve, boosted interest rates to quell raging inflation.
Prices have sunk despite signs that energy markets remain tight in the near term as the war in Ukraine drags on and supply risks persist.
Prices:
WTI for August delivery rose $3.35 to settle at $107.62 a barrel in New York.
Brent for August settlement added $2.93 to settle at $112.98 a barrel.
Despite declining headline prices, the market remains in backwardation, a bullish pattern in which near-term prices trade above longer-dated ones, has grown in recent days.
Brent’s prompt spread -- the difference between its two nearest contracts -- was $4.02 a barrel, compared with $2.73 a week ago.
That in part reflects still-strong demand for real-world barrels.
Cargoes for Asian buyers are fetching giant premiums to their benchmarks for August loading, signaling confidence in demand over the next few months.
In the Middle East, Murban crude was in a backwardation of more than $10 over its nearest two months, an unprecedented value that indicates major supply scarcity.
In Houston, physical barrels of WTI traded at $2.75 a barrel over futures, the strongest premium in two years, amid short-covering before rollover of July pipeline cycle Friday, according to people familiar with matter.
(with assistance from Sheela Tobben)
https://www.rigzone.com/news/wire/oil_p ... 8-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises Amid G7 Talks on Capping Russian Crude"
by Bloomberg | Julia Fanzeres
Monday, June 27, 2022
Oil climbed as investors monitored developments from the gathering of Group of Seven leaders, and two supplier countries flagged potential output cuts due to political unrest.
West Texas Intermediate rose to settle above $109 a barrel in a choppy session on Monday.
The G-7 is weighing a price cap on Russian crude.
Libya’s National Oil Corp. signaled a potential dent in supply due to a worsening political crisis.
Ecuador could halt oil production even quicker due to anti-government unrest, the energy ministry there said.
Meanwhile, OPEC+ will be meeting this week to discuss production increases.
“It seems most traders know more supply is coming but very near term demand remains stubbornly strong,” said Dennis Kissler, senior vice president of trading at BOK Financial.
With the OPEC+ meeting this week, discussing production increases, it’s “keeping the market in a nervous trade.”
Retail prices for gasoline and diesel haven’t fallen anywhere near as fast as crude, amid a recovery from Covid-19 and a shortage of refining capacity to make fuels.
Still, fears of a demand-sapping recession are keeping a lid on sustained price increases.
Oil is heading for its first monthly decline since November.
Meanwhile, the revival of the Iranian nuclear deal could mean that crude from the country will flow back onto global markets.
Iran’s chief nuclear negotiator and his US counterpart are heading to Qatar in the latest attempt to revive the deal.
G-7 leaders and officials have been discussing a potential price cap on Russian oil, but an agreement has yet to be reached, according to people with knowledge of the matter.
The proposed mechanism would work by imposing restrictions on insurance and shipping, they said.
Protests could force Libya’s national oil company to declare force majeure, a clause in contracts allowing shipments to be halted, within 72 hours, according to a statement on Monday.
Prices:
WTI for August delivery rose $1.95 to settle at $109.57 a barrel in New York.
Brent for August settlement increased $1.97 to settle at $115.09 a barrel.
Time-spreads that traders watch as supply-demand indicators also remained strong.
Second-to-third month spreads for both Brent and WTI are around the $3 a barrel mark, pointing to an urgent need for supply.
The US Energy Information Administration said the timeline of publication of its Petroleum Status report that was scheduled to come out last week is still unclear but will not be published Monday.
(with assistance from Paul Burkhardt)
https://www.rigzone.com/news/wire/oil_r ... 4-article/
"Oil Rises Amid G7 Talks on Capping Russian Crude"
by Bloomberg | Julia Fanzeres
Monday, June 27, 2022
Oil climbed as investors monitored developments from the gathering of Group of Seven leaders, and two supplier countries flagged potential output cuts due to political unrest.
West Texas Intermediate rose to settle above $109 a barrel in a choppy session on Monday.
The G-7 is weighing a price cap on Russian crude.
Libya’s National Oil Corp. signaled a potential dent in supply due to a worsening political crisis.
Ecuador could halt oil production even quicker due to anti-government unrest, the energy ministry there said.
Meanwhile, OPEC+ will be meeting this week to discuss production increases.
“It seems most traders know more supply is coming but very near term demand remains stubbornly strong,” said Dennis Kissler, senior vice president of trading at BOK Financial.
With the OPEC+ meeting this week, discussing production increases, it’s “keeping the market in a nervous trade.”
Retail prices for gasoline and diesel haven’t fallen anywhere near as fast as crude, amid a recovery from Covid-19 and a shortage of refining capacity to make fuels.
Still, fears of a demand-sapping recession are keeping a lid on sustained price increases.
Oil is heading for its first monthly decline since November.
Meanwhile, the revival of the Iranian nuclear deal could mean that crude from the country will flow back onto global markets.
Iran’s chief nuclear negotiator and his US counterpart are heading to Qatar in the latest attempt to revive the deal.
G-7 leaders and officials have been discussing a potential price cap on Russian oil, but an agreement has yet to be reached, according to people with knowledge of the matter.
The proposed mechanism would work by imposing restrictions on insurance and shipping, they said.
Protests could force Libya’s national oil company to declare force majeure, a clause in contracts allowing shipments to be halted, within 72 hours, according to a statement on Monday.
Prices:
WTI for August delivery rose $1.95 to settle at $109.57 a barrel in New York.
Brent for August settlement increased $1.97 to settle at $115.09 a barrel.
Time-spreads that traders watch as supply-demand indicators also remained strong.
Second-to-third month spreads for both Brent and WTI are around the $3 a barrel mark, pointing to an urgent need for supply.
The US Energy Information Administration said the timeline of publication of its Petroleum Status report that was scheduled to come out last week is still unclear but will not be published Monday.
(with assistance from Paul Burkhardt)
https://www.rigzone.com/news/wire/oil_r ... 4-article/
Re: OIL, NATURAL GAS
REUTERS
"Macron tells Biden that UAE, Saudi can barely raise oil output"
Reuters
June 27, 2022
GARMISCH-PARTENKIRCHEN, Germany, June 27 (Reuters) - Two top OPEC oil producers, Saudi Arabia and the United Arab Emirates, can barely increase oil production, French President Emmanuel Macron on Monday said he had been told by the UAE's president.
Saudi Arabia and the UAE have been perceived as the only two countries in the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity to boost global deliveries that could reduce prices.
"I had a call with MbZ," Macron was heard telling U.S. President Joe Biden on the sidelines of the G7 summit, using shorthand for UAE leader Sheikh Mohammed bin Zayed al-Nahyan.
"He told me two things."
"I'm at a maximum, maximum (production capacity)."
"This is what he claims."
"And then he said (the) Saudis can increase by 150 (thousands barrels per day)."
"Maybe a little bit more, but they don't have huge capacities before six months' time," Macron said.
The UAE's top energy official confirmed Macron's statement to the country's state news agency.
"In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline," said Energy Minister Suhail bin Mohammed Al Mazrouei.
World oil prices have been steadily rising in recent months due to a shortage of supply and rebound in demand from the worst of the coronavirus epidemic.
Prices have risen further since Moscow invaded Ukraine in late February.
On Monday, benchmark crude rose after Reuters reported Macron's comments.
Brent oil prices rose 1.7% to above $115 per barrel as the West seeks ways to reduce Russian oil imports to punish Moscow.
Saudi Arabia is producing 10.5 million bpd and has a nameplate capacity of 12.0 million-12.5 million bpd, which in theory shall allow it to raise production by 2 million.
The UAE is producing some 3 million bpd, has capacity of 3.4 million and has been working on raising it to 4 million bpd.
Europe is looking for ways to replace as much as 2 million bpd of Russian crude and some 2 million bpd of refined products it had been importing from Moscow before the Ukraine war.
Reporting by Reuters TV; Writing by Dmitry Zhdannikov; Editing by Jan Harvey and Grant McCool
https://www.reuters.com/world/macron-te ... 022-06-27/
"Macron tells Biden that UAE, Saudi can barely raise oil output"
Reuters
June 27, 2022
GARMISCH-PARTENKIRCHEN, Germany, June 27 (Reuters) - Two top OPEC oil producers, Saudi Arabia and the United Arab Emirates, can barely increase oil production, French President Emmanuel Macron on Monday said he had been told by the UAE's president.
Saudi Arabia and the UAE have been perceived as the only two countries in the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity to boost global deliveries that could reduce prices.
"I had a call with MbZ," Macron was heard telling U.S. President Joe Biden on the sidelines of the G7 summit, using shorthand for UAE leader Sheikh Mohammed bin Zayed al-Nahyan.
"He told me two things."
"I'm at a maximum, maximum (production capacity)."
"This is what he claims."
"And then he said (the) Saudis can increase by 150 (thousands barrels per day)."
"Maybe a little bit more, but they don't have huge capacities before six months' time," Macron said.
The UAE's top energy official confirmed Macron's statement to the country's state news agency.
"In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline," said Energy Minister Suhail bin Mohammed Al Mazrouei.
World oil prices have been steadily rising in recent months due to a shortage of supply and rebound in demand from the worst of the coronavirus epidemic.
Prices have risen further since Moscow invaded Ukraine in late February.
On Monday, benchmark crude rose after Reuters reported Macron's comments.
Brent oil prices rose 1.7% to above $115 per barrel as the West seeks ways to reduce Russian oil imports to punish Moscow.
Saudi Arabia is producing 10.5 million bpd and has a nameplate capacity of 12.0 million-12.5 million bpd, which in theory shall allow it to raise production by 2 million.
The UAE is producing some 3 million bpd, has capacity of 3.4 million and has been working on raising it to 4 million bpd.
Europe is looking for ways to replace as much as 2 million bpd of Russian crude and some 2 million bpd of refined products it had been importing from Moscow before the Ukraine war.
Reporting by Reuters TV; Writing by Dmitry Zhdannikov; Editing by Jan Harvey and Grant McCool
https://www.reuters.com/world/macron-te ... 022-06-27/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises as G7 Leaders Assess Capacity Limits"
by Bloomberg | Julia Fanzeres and Alex Longley
Tuesday, June 28, 2022
Oil rose for a third day as global output threats compound already red-hot markets for physical supplies, while the Group of Seven agreed to look into a price cap for Russian oil.
West Texas Intermediate futures rose to trade near $112 on Tuesday.
G-7 leaders said they want ministers to urgently examine how prices of Russian oil and gas can be curbed, a move that comes as government data shows that Urals has appreciated relative to Brent crude.
The most notable moves in recent days have been in more specialist market gauges.
A contract known as the Dated-to-Frontline swap -- an indicator of the strength in the key North Sea market underpinning much of the world’s crude pricing -- hit a record of more than $5 a barrel.
The rally comes amid growing supply outages in Libya and Ecuador, exacerbating ongoing market tightness.
“We’re in the crunch period, it’s hard to see any meaningful price relief for crude,” said John Kilduff.
There’s a lot of strength with China relaxing its Covid restrictions and starting its independent refiners, “we’re going to have another chunk of demand for crude oil,” as China relaxes its Covid-19 restrictions.
Oil is up about 50% this year, but the strength in physical markets has run contrary to a sharp slide in headline prices in recent weeks.
While fears of a global economic slowdown have weighed on futures, demand remains robust for now.
US retail gasoline prices remain near record highs, causing pain for consumers.
A recovery from Covid-19 and a shortage of refining capacity to make fuels continue to keep prices at record highs.
The tight supply situation in is revealing itself in the WTI-Brent spread, grew to $6.19, the widest in almost three months.
“European demand will remain robust, especially as natural gas supplies run out, while the North American demand for crude is weakening,” said Ed Moya, senior market analyst at Oanda.
Prices:
WTI for August delivery rose $2.19 to settle at $111.76 a barrel in New York.
Brent for August settlement gained $2.89 to $117.98 a barrel.
Oil also rose as broader sentiment was boosted by China’s move to halve the amount of time new arrivals must spend in isolation, the biggest shift yet in its pandemic policy.
Travelers to China must spend seven days in centralized quarantine, then monitor their health for another three days at home, according to a government protocol.
That compares with 14 days of hotel quarantine in many parts of China currently, and as many as 21 days of isolation in the past.
The prospect of additional supply from two of OPEC’s key producers also looks limited.
French President Emmanuel Macron told US President Joe Biden that the United Arab Emirates and Saudi Arabia already are pumping about as much as they can.
Macron was relaying a conversation he had with UAE ruler Sheikh Mohammed bin Zayed. OPEC+ ministers gather on Thursday.
https://www.rigzone.com/news/wire/oil_r ... 1-article/
"Oil Rises as G7 Leaders Assess Capacity Limits"
by Bloomberg | Julia Fanzeres and Alex Longley
Tuesday, June 28, 2022
Oil rose for a third day as global output threats compound already red-hot markets for physical supplies, while the Group of Seven agreed to look into a price cap for Russian oil.
West Texas Intermediate futures rose to trade near $112 on Tuesday.
G-7 leaders said they want ministers to urgently examine how prices of Russian oil and gas can be curbed, a move that comes as government data shows that Urals has appreciated relative to Brent crude.
The most notable moves in recent days have been in more specialist market gauges.
A contract known as the Dated-to-Frontline swap -- an indicator of the strength in the key North Sea market underpinning much of the world’s crude pricing -- hit a record of more than $5 a barrel.
The rally comes amid growing supply outages in Libya and Ecuador, exacerbating ongoing market tightness.
“We’re in the crunch period, it’s hard to see any meaningful price relief for crude,” said John Kilduff.
There’s a lot of strength with China relaxing its Covid restrictions and starting its independent refiners, “we’re going to have another chunk of demand for crude oil,” as China relaxes its Covid-19 restrictions.
Oil is up about 50% this year, but the strength in physical markets has run contrary to a sharp slide in headline prices in recent weeks.
While fears of a global economic slowdown have weighed on futures, demand remains robust for now.
US retail gasoline prices remain near record highs, causing pain for consumers.
A recovery from Covid-19 and a shortage of refining capacity to make fuels continue to keep prices at record highs.
The tight supply situation in is revealing itself in the WTI-Brent spread, grew to $6.19, the widest in almost three months.
“European demand will remain robust, especially as natural gas supplies run out, while the North American demand for crude is weakening,” said Ed Moya, senior market analyst at Oanda.
Prices:
WTI for August delivery rose $2.19 to settle at $111.76 a barrel in New York.
Brent for August settlement gained $2.89 to $117.98 a barrel.
Oil also rose as broader sentiment was boosted by China’s move to halve the amount of time new arrivals must spend in isolation, the biggest shift yet in its pandemic policy.
Travelers to China must spend seven days in centralized quarantine, then monitor their health for another three days at home, according to a government protocol.
That compares with 14 days of hotel quarantine in many parts of China currently, and as many as 21 days of isolation in the past.
The prospect of additional supply from two of OPEC’s key producers also looks limited.
French President Emmanuel Macron told US President Joe Biden that the United Arab Emirates and Saudi Arabia already are pumping about as much as they can.
Macron was relaying a conversation he had with UAE ruler Sheikh Mohammed bin Zayed. OPEC+ ministers gather on Thursday.
https://www.rigzone.com/news/wire/oil_r ... 1-article/