Oil Prices Climb But Bearish Sentiment Remains Strong

Source The Ghana Report

Oil prices were rising early on Friday morning but remain on course for a seventh consecutive weekly loss as demand concerns continue to drive bearish sentiment.

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Friday, December 8th, 2023

With Chinese oil demand slowing down into Q4, OPEC+ production cuts failing to impress the oil market, and non-OPEC supply continuing to grow – with Guyana starting its third FPSO this month – the immediate outlook for oil prices is far from rosy. Both WTI and Brent fell to their lowest readings since June, falling below $69 and $74 per barrel, respectively, before regaining some of those losses on Friday morning. It would require very positive macroeconomic news or a significant supply disruption to break the bearish spell of recent weeks.

Canada to Impose Limits on Oil Emissions. Canada’s Trudeau government unveiled regulations set to cap emissions from the country’s oil and gas sector by using a cap-and-trade system, putting a price on any emissions that go above Ottawa’s plan to curb 2030 emissions to 35-38% of 2019 levels.

Woodside-Santos Merger to Create Australia’s Giant. Australia’s two largest oil and gas companies, Woodside Energy (ASX:WDS) and Santos (ASX:STO), are reportedly in preliminary talks to create a $52 billion energy giant, hoping for joint synergies in funding and project development.

Chinese Oil Demand to Peak by 2030. The research unit of China’s national oil company CNPC announced it expects the Asian nation’s oil demand to peak by 2030 at 15.6-16 million b/d, with most of the growth coming from the petrochemical sector which is set to account for 30% of the industry then.

Guyana-Venezuela Conflict Raises Exxon Risks. Venezuela pledged to annex the disputed Essequibo region after its December 3 referendum, with President Maduro directing state-owned oil companies to explore the oil of the region, prompting the US to announce military drills with Guyana.

Shell Won’t Give Up on Nigeria. UK-based energy major Shell (LON:SHEL) might invest up to $6 billion after Nigeria’s President Bola Tinubu held talks with the company’s top representatives, most notably eyeing an “imminent” $5 billion investment in the offshore Bonga North oil project.

MPOG Oil Spill Continues to Hinder Output. The US Coast Guard found an oil sheen west of the clean-up area of the Main Pass Oil Gathering pipeline oil spill that shut in 3% of oil production in the Gulf of Mexico, raising risks of further leakage in the Mississippi River delta.

ExxonMobil and Chevron Ramp Up Project Spending. US major ExxonMobil (NYSE:XOM) upgraded its annual project spending target rate to $22-27 billion through 2027, rising 5% per year, whilst rival major Chevron (NYSE:CVX) upped its 2024 budget by 11% year-over-year to $18.5-19.5 billion.

Sale of TMX Pipeline Gets Delayed Further. This week’s regulatory ruling denying the use of a smaller diameter pipeline in a 1.4-mile section of the Trans Mountain Expansion pipeline in British Columbia might delay its launch by 60 days, postponing the government’s sale of the asset along the way.


Norway Oilmen Urge Government to Drill More. The Norwegian Petroleum Directorate called on oil companies to leave “no stone unturned” in developing the country’s vast gas resources, saying there’s at least 860 bcm of untapped tight-reservoir deposits that might require longer lead times.

Buyers Line Up for Shell’s Singapore Divestment. Energy major Shell (LON:SHEL) has shortlisted four companies including global trading house Vitol and China’s state-controlled CNOOC as well as two smaller Chinese chemical firms as bidders for its 237,000 b/d Bukom refinery in Singapore.

US Gasoline Price Plunge Before Christmas. US gasoline prices continue their decline as the national average dropped to $3.185 per gallon as of Friday, the lowest since January, and might fall below the $3 per gallon threshold by Christmas for the first time since 2021.

Nuclear Keeps on Losing Ground in 2023. The share of nuclear power generation declined 4% year-over-year in 2022, with the 2,546 TWh generation tally accounting for only 9.2% of global electricity output, the lowest figure since the early 1980s.

EU Allows Member States to Ban Russian Gas. According to the Financial Times, the European Union is considering giving member states the discretionary right to halt gas imports from Russia and Belarus, moving away from the idea of implementing an outright ban on Russian gas.

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