The recent oil price rally was held back this week by rising inventories and concerns that the Fed may postpone its interest rate cuts, but geopolitical risks could yet spark another upward movement.
Friday, April 12th 2024
Inventory builds in the US, red-hot inflation numbers that may postpone the Federal Reserve’s interest rate cuts, and Iran’s attempts to play down the risk of an attack on Israel helped to slow down the recent oil price rally. On Friday morning, Brent was trading above $90 per barrel and there is plenty of upside risk left in oil markets.
Trafigura to Buy France’s Fos Refinery. A consortium led by global trading house Trafigura has started exclusive negotiations to acquire ExxonMobil’s (NYSE:XOM) Fos-sur-Mer refinery in southern France as well as adjacent storage terminals, seeking to close the deal by the end of 2024.
DoJ Opens Investigation Into Nippon Steel. The US Department of Justice opened a comprehensive probe into Nippon Steel’s (TYO:5401) proposed $14.1 billion takeover of US Steel (NYSE:X), weeks after President Biden stated the US steelmaker “must remain domestically owned”.
Petrobras Hits Oil in Brazil’s Frontier Basin. Brazil’s state-controlled oil company Petrobras (NYSE:PBR) said it had discovered oil deposits in the ultra-deep waters of the Equatorial margin, the second discovery on record in the most promising frontier basin of the country.
For the First Time Ever, US Natgas Becomes Cheaper Than Coal. According to the EIA, US natural gas will be cheaper to burn than coal for the first time on record as its 2024 Henry Hub forecast averages only $2.15 per mmBtu compared to a $2.45 per mmBtu average for coal.
EU Opens Probe Into Chinese Wind Suppliers. The European Commission opened an investigation into subsidies received by Chinese suppliers of wind turbines destined for Europe, with China expressing its profound dissatisfaction after Brussels also launched an EV subsidy probe.
Chevron Relinquishes Myanmar Assets to Junta. US oil major Chevron (NYSE:CVX) relinquished its 41.1% stake in the Yadana natural gas field in Myanmar, two years after it signaled its intent to leave, with its stake redistributed to remaining shareholders PTT and Myanma Oil and Gas.
Hot US Inflation Stems Copper Price Rally. Hotter-than-expected US inflation data have stalled the copper price rally as the Federal Reserve would find it harder to justify rate cuts in June, with LME cash settlement prices falling back to $9,240 per metric tonne, down $120/mt from a 14-month peak reached earlier this week.
Colombia Wants to Clinch Venezuela Deals. Colombia’s President Gustavo Petro is working on a deal that would allow Ecopetrol (NYSE:EC) to develop high quality oil and gas assets in western Venezuela, in return exporting clean energy to its neighbor from the Caribbean coast.
Red Sea Crisis Hikes Shipping Emissions. Global shipping emissions are poised for a setback as the Red Sea shipping crisis led to an 8-10% increase in container ship usage due to longer routes, with container-related emissions potentially rising as high as 257 million tonnes of CO2 this year if the disruptions remain in place.
OPEC Lowers 2024 Supply Forecast. In its latest monthly report, OPEC kept its demand forecast for this year at 2.25 million b/d, however lowered non-OPEC liquids production growth in 2024 to 990,000 b/d, down 70,000 b/d from the previous month’s outlook.
Maduro Jails Former Venezuela Oil Minister. Venezuela has jailed former oil minister Tareck el Aissami on charges including treason and money laundering as part of an investigation into $23 billion missing government revenues that he allegedly funneled into cryptocurrencies.
China Builds Its Own Gas Pricing Index. China’s state-controlled pipeline giant PipeChina is developing the country’s first-ever proprietary natural gas price index as it wants to de-risk its own pricing from Asia’s benchmark Japan Korea Marker (JKM), saying it should better reflect its own supply/demand.
Texas Gas Prices Turn Negative Again. Depressed by continuously rising Permian basin oil output and higher associated gas flows, natural gas prices at the Waha hub in Texas slumped to a negative -$2 per mmBtu this week with most US gas production currently pricing below costs of production.