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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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Uncertainty In Oil Markets As Sentiment Swings On Mixed Signals


Uncertainty remains rife within oil markets after production cuts from Saudi Arabia were countered by economic concerns in the U.S., China, and Europe. Rumors that a U.S.-Iran deal was back on the table sent prices tumbling on Thursday, but denials from both countries boosted prices again.

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Friday, June 9th, 2023

In yet another week of contradictions, the key market focus moved away from Saudi Arabia’s production cuts and week-on-week upticks in US product inventories, moving to a story that has been barely discussed in 2023 so far – the Iranian nuclear deal. Media reports that the US and Iran are close to a scaled-down nuclear deal were quickly refuted by both sides, leading to another seesaw motion in global oil benchmarks as Brent is set to finish the week around the $76 per barrel mark.

US, Iran Lower Expectations for New Deal. After a Middle East Eye report claimed that an interim nuclear deal with Iran was being discussed under which Iran would accept some limits on its program in return for partial sanctions relief, both Washington and Tehran vehemently denied the rumor and called it misleading. 

Cargill Suspends Biodiesel Spending Spree. Soaring feedstock costs and lack of skilled labor have prompted agriculture behemoth Cargill to suspend plans for a giant soybean processing plant with a production capacity of 62 mbu in Hayti, MO, a giant setback for US renewable diesel production. 

Offshore Explorers Discuss Combining Forces. The United Kingdom’s largest independent producer Harbour Energy (LON:HBR) is in talks with US offshore-focused producer Talos Energy (NYSE:TALO) to merge, listing at the New York exchange and confirming Harbour’s move away from the North Sea. 

EIA Warns of US Diesel Demand Decline. The US Energy Information Administration forecasts that diesel demand in the country would drop through 2024 despite economic growth, with distillate-weighted manufacturing declining by 1.1% even though they expect US GDP to grow by 1.3% in 2023. 

Ukraine Dam Blast Horrible News for Agriculture. Ukraine’s agriculture minister Mykola Solsky said the destruction of the Kakhovka dam would deprive of water supply to some 500,000 hectares of highly fertile land in three regions, requiring years to fully repair the damage to irrigation. 

Bangladesh Struggles Through Worst Crisis in Years. Battered by a currency crisis and repeated heatwaves, Bangladesh is going through its worst power supply crisis in 10 years, forcing the national grid operator to cut electricity every day in May with the power deficit rising to 15% of consumption. 

Shareholders Oppose Oneok-Magellan Merger. The fourth largest shareholder of Magellan Midstream (NYSE:MMG), the investment firm Energy Income Partners owning some 3% of the company, intends to vote against a mulled deal to merge with peer pipeline company Oneok for a total of $18.8 billion. 

Pipeline Blast Makes Extension of Black Sea Grain Deal Unlikely. The longest ammonia pipeline in the world connecting Russia’s Togliatti and Ukraine’s Odesa, a conduit that Moscow wanted to restart as part of the Black Sea grain deal has been damaged by bombing this week, greatly reducing the likelihood of a grain deal extension. 

Irving Oil to Launch Strategic Review. Canada’s largest oil refiner Irving Oil, operating the 320,000 b/d Saint John, NB refinery and the 75,000 b/d Whitegate refinery in Ireland, is reportedly launching a strategic re-evaluation of its operations that might lead to a full or partial sale.


UK Windfall Tax Set to Improve a Little. According to the Financial Times, the UK government is planning to introduce a price floor for the country’s 35% windfall tax, meaning the levy would be removed if oil prices sustainably drop below $71.40 per barrel and gas prices below $0.54 per therm.

Indonesia Lambasts EU “Imperalism” with Deforestation Law. After the European Union passed a law that bans EU imports of commodities linked to forest destruction, Indonesian exports of palm oil, cocoa or rubber have been heavily impacted, with Jakarta denouncing Brussels’ regulatory imperialism. 

Guyanese Courts Up the Ante for Exxon. A Guyana Appellate Court stayed a lower court’s order that requires US major ExxonMobil (NYSE:XOM) and its partners in the Stabroek block to provide an unlimited financial guarantee to cover potential oil spills, increasing the risks that Exxon might retaliate by cutting production. 

Argentina Approves Offshore Drilling Plan. The offshore Fenix project led by France’s oil major TotalEnergies (NYSE:TTE) has received the final approval from Argentina’s environment ministry, seeking to start natural gas production in 2025 and produce some 10 MMCm per day within a couple of years.

Namibia Bans Exports of Unprocessed Minerals. One of the world’s largest producers of uranium, diamonds, and lithium, the government of Namibia has banned the export of unprocessed minerals which are deemed critical for the domestic mining industry, despite an EU trade deal last year.

By Michael Kern for Oilprice.com

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