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Michael Kern

Michael Kern

Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, 

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Economic Fears Put Oil Prices Under Pressure


While oil prices rebounded slightly on Friday morning, they remain on course for a weekly decline. Worrying economic data in the U.S. and the expectation of another interest rate hike have added significant downward pressure to oil markets this week. While promising signs of oil demand in China and a report of inventories declining gave oil prices some support, bearish sentiment appears to be driving the market.

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Friday, April 21st, 2023

The number of Americans filing for unemployment benefits increased last week, suggesting that the labor market is cooling. Expectations of another interest rate hike from the Federal Reserve have only added to bearish sentiment in oil markets, with fears of weaker demand offsetting falling inventories. The next two weeks should be dominated by macroeconomics-related drivers still, in anticipation of the Fed and ECB meetings in early May.

White House Tries to Allay SPR Fears. The Biden administration said that concerns raised by Republican lawmakers that last year’s 180-million-barrel drawdown of strategic petroleum stocks damaged the SPR salt caverns were unfounded, despite both Bryan Mound and Bayou Choctaw seeing maintenance work until the fall. 

Chile Shocks Lithium Industry. Chile’s President Gabriel Boric announced this week that he would nationalize the country’s lithium industry, the second-largest producer globally, seeking in time to transfer control from lithium majors SQM (NYSE:SQM) and Albemarle (NYSE:ALB)

Canada to Reassess Oil Sands Growth. The Alberta Energy Regulator is now reconsidering its earlier decision from September 2022 to allow Suncor Energy (NYSE:SU) to extend the prolific Fort Hills oil sands project into nearby wetlands after a local environmental group warned of serious risks.  

Pressure Rises on Nigeria to Settle Disputes. Nigeria’s attorney general Abubakar Malami has called on outgoing President Muhammadu Buhari to end a multi-year dispute with oil majors Shell (LON:SHEL) and ENI (BIT:ENI) over bribes involved in the OPL 245 block, wary of “disappearing opportunities” to produce.   

Drought Caps Panama Canal Throughput. Declining water levels at lakes forming part of the Panama Canal have compelled the channel authorities to lower draft restrictions on the largest ships passing through it (neo-Panamax class) to 47.5ft, forcing them to transport less goods if they are to sail through.

US Majors Want Cleaner Gas Instead of EVs. The two largest oil companies in the US, ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) have been testing renewable gasoline blends that allegedly bring down emissions from fossil-fueled cars to levels compatible with EVs, up to 75% lower than currently.  

China Tells Coal Companies to Mine Smartly. The Chinese government has called on national coal companies to embrace smart technologies and replace human labor with remote-controlled unmanned mining vehicles to avoid human casualties, with the 2022 death toll reaching 245.  

Copper Industry Calls for Better Terms. Mining majors such as BHP (NYSE:BHP) and Antofagasta (LON:ANTO) have warned against Chile’s proposed royalty tax rate increase which would take the overall tax load of copper mining in the world’s No.1 producer to 48%, stymieing new projects. 


Argentina to Open Up Its Offshore for Drilling. Endowed with magnificent shale oil deposits onshore, the Argentinian government is mulling a new licensing round for offshore oil and gas blocks this year, to be held concurrently with the drilling of the first offshore well drilled in its waters, expected in H2 2023. 

Free Gas Before Turkey’s Contested Elections. Turkey’s President Tayyip Erdogan inaugurated the country’s largest natural gas field in the Black Sea, the 710 bcm Sakarya, promising free gas for all low-consumption households for the next month, just before the May 14 presidential election.

US Frac Fleet Coming Along. US frac fleet firm Liberty Energy (NYSE:LBRT) said service companies in the country have some 30 new frac fleets in development and roughly half of those will hit the market this year, adding to the 250 fleets currently available amidst an ongoing shortage of completion equipment.  

Mystery LNG Project Contracts Modules. The LNG market is in for a surprise after media reports surfaced that Chinese engineering company Wison (HKG:2236) won an EPC contract for a new LNG plant in Nigeria, but the project remains a mystery as there were no new projects in the pipeline. 

Japan Buys Into US Shale Assets. Japanese conglomerate Mitsui (TYO:8031) bought a 92% stake in a shale gas project in Texas, seeking to produce at least 200 MCf per day and increase the firm’s exposure to the US LNG market as natural gas is increasingly seen as the bridge fuel en route to net zero Japan. 

Biden’s Solar Panel Policy Might be Revoked. The House and Ways Committee of the US House of Representatives voted in favor of restoring tariffs on solar panels imported from four Asian countries, suspended by the White House last year to promote the proliferation of renewable energy.

By Michael Kern for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on April 21 2023 said:
    These are no more than temporary hiccups for oil prices. As long as the fundamentals haven’t changed from a week ago, prices are going to recoup thei recent losses and continue their surge.

    I am still projecting that Bent crude price will hit $90 a barrel during the first half of 2023 and touch $100 during the year.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

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