After falling for the first three days of the week, oil prices have started to recover after both the Federal Reserve and Bank of England decided not to hike interest rates.
Friday, November 3rd, 2023
Sometimes no action is the best action. That was certainly the case for oil markets this week when it came to interest rate hikes. After falling for three straight days, oil prices received some much-needed support from federal banks. With neither the Federal Reserve nor the Bank of England hiking interest rates this week, Brent jumped back to $87 per barrel, buoyed by the prospect of hitting peak monetary tightening.
US Oil Production Hits All-Time High. Crude and condensate production in the US climbed to a record 13.1 million b/d in August, surpassing the previous 13.0 million b/d record from November 2019, with EIA reporting a 955,000 b/d year-on-year surge in production from the Lower 48 states.
EU Prepares 12th Russia Sanctions Package. The European Union is in talks to adopt a 12th round of sanctions against Russia, potentially imposing restrictions on welding machines, chemicals, military technologies, and diamonds, targeting some $5.3 billion in trade but steering clear of oil.
Senators Call for US Megadeal Probe. US Senate Majority Leader Charles Schumer and 22 other Democratic senators called on the US Federal Trade Commission to investigate the Exxon-Pioneer and Chevron-Hess deals, claiming they could lead to higher retail prices for customers.
White House Sanctions Myanmar’s Oil. The US Treasury Department imposed sanctions on Myanma Oil and Gas Enterprise, Myanmar’s national oil company, banning US entities from providing financing and other services, however stopped short of including MOGE from its SDN list.
Pope to Attend COP28 Climate Summit. As the United Arab Emirates ratchet up support for the COP28 climate conference starting next month in Dubai, Pope Francis vowed to attend the summit, saying that a failure to set stringent emissions-cutting targets would be a “great disappointment”.
BP Laments US Wind Sector Is “Broken”. After this week’s Orsted mooted write-down of $5.6 billion, the renewables boss of BP said the US offshore wind market is fundamentally broken as power purchase agreements don’t reflect current prices and lack inflationary adjustment mechanisms.
China Eyes Russian Upstream Projects. China’s state oil company CNPC (HKG:0857) indicated it is in talks with Russia’s Rosneft, Gazprom, and Novatek to jointly develop oil and gas fields, as well as getting into new midstream opportunities such as building a new gas pipeline from Sakhalin.
Iran Boasts of Rising Production. Iran’s oil minister Javad Owji said the Middle Eastern country has increased its crude production to 3.4 million b/d and expects output to grow further over the upcoming months, marking a 100,000 b/d increase since the minister’s previous estimate in August.
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Vitol Takes Over Uganda Oil Supply. Uganda’s Energy Minister Ruth Nankabirwa announced the African country would hand over exclusive rights for the supply of all petroleum products to global energy trader Vitol, with 2022 central bank data pegging the deal’s worth at an annual $1.6 billion.
After Europe, US Starts to Shut Zinc Plants. Netherlands-based smelting giant Nyrstar (EBR:NYR) plans to temporarily close two zinc mines in the US state of Tennessee, a third shutdown of zinc operations in the country in recent months, citing weak prices and the impact of inflation.
Nigerian Refinery Readies for 2024 Start. Nigeria’s state-owned oil firm NNPC will supply the 650,000 b/d Dangote mega refinery with up to six cargoes of crude in December, to be used in preliminary test runs, as the African country eyes eliminating its dependence on imported fuels.
Canadian Crudes Suffer from TMX Delays. Delays in the commissioning of Canada’s Trans Mountain pipeline just as the country’s producers are ramping up production have been squeezing WCS differentials, with the Canadian grade falling to a $27 per barrel discount to WTI, the lowest in 2023.
Suriname Drilling Keeps Apace with Guyana. Malaysia’s state oil company Petronas discovered several oil-bearing layers offshore Suriname with its recently spudded Roystonea-1 exploration well, located in the same Block 52 that saw a natural gas discovery back in 2020.
By Michael Kern for Oilprice.com
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