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

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Oil Markets Struggle To Shake Economic Doom And Gloom

Doom and gloom

While a rebound in oil prices on Friday morning may have stopped this from being one of the worst weeks for oil in recent memory, oil markets are struggling to shake the economic gloom and doom that is driving bearish sentiment.

Oilprice Alert: Whether you are new to the oil and gas industry or an energy market veteran, you will regret not signing up for Global Energy Alert. Oilprice.com's premium newsletter provides everything from geopolitical analysis to trading analysis, and all for less than a cup of coffee per week.

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Crude Oil





Friday, May 5th, 2023

This week was on track to go down as one of the worst for oil prices in recent history, with both ICE Brent and WTI shaving off some 10% week-on-week before a slight recovery on Friday morning. The bearish sentiment in markets has been driven by renewed fears of a US banking crisis contagion and lukewarm industrial figures from China. Hijacked tankers in the Strait of Hormuz, falling US inventories, and the lack of a deal to unlock Kurdish oil exports all failed to offset the macroeconomic doom and gloom.

Gold Prices Nearing All-Time Highs. The revival of US banking woes has prompted another investor flight towards gold, pushing spot prices as high as $2,072.19 per ounce, a couple of cents below the all-time record of $2,072.49/oz, with Asian regional prices already surpassing the previous records. 

OPEC+ to Hold June Meeting in Person. Reacting to the precipitous fall in oil prices this week, OPEC+ has confirmed that it would hold its upcoming June 4 policy meeting in person in Vienna, hinting at a further tightening of production targets as the previous pledges ran out of steam. 

Iran Seizes Second Oil Tanker in a Week. Only six days after the seizure of Advantage Sweet, a tanker chartered by Chevron (NYSE:CVX), Iran detained another oil tanker passing through the Strait of Hormuz even though it was empty, citing a judicial order following a complaint by an unnamed plaintiff.

Saudi Arabia Needs Higher Oil Prices. In its latest economic projections for the Middle East, the International Monetary Fund (IMF) pegged the fiscal breakeven price of Saudi Arabia at $80.90 per barrel, meaning that the current trajectory of prices would leave Riyadh with a budget deficit of 1.1% of GDP.

Iraq Vows to Restore Kurdish Exports in Two Weeks. According to Iraqi Energy Minister Hayan Abdel-Ghani, Baghdad expects to restart oil export flows through Turkey within two weeks, resuming 450,000 b/d of oil exports that have been shut in for more than a month already. 

China-Canada Slave Labour Row Turns Nasty. Recent comments made by Canada’s Prime Minister Justin Trudeau about China using slave labor to mine lithium has provoked a fierce backlash from Beijing warning of consequences, whilst Ottawa claimed it is mulling the expulsion of Chinese diplomats.

US to Boost NGL Export Capacity. US midstream firm Energy Transfer (NYSE:ET) will be adding a further 250,000 b/d of natural gas liquids (NGL) export capacity at its terminal in Nederland, TX, with the $1.25 billion project mainly driven by the company’s term contract with China’s Satellite Petrochemical. 

TotalEnergies Strikes Back at Greenpeace. French oil major TotalEnergies (NYSE:TTE) has decided to sue environmental activists Greenpeace and climate consulting firm Factor-X at the Paris judicial court over a report that claimed the company underestimated its 2019 greenhouse gas emissions by a whopping 75%.

Chevron Exports Pours Dollars into Venezuela. As US oil major Chevron (NYSE:CVX) has been ramping up production in Venezuela, lifting almost 150,000 b/d in April, it is inadvertently increasing the flow of US dollars into the embattled Latin American country as it needs to pay upstream taxes in the local bolivar. 

Norway Calls for More Arctic Drilling. Norway’s energy minister Terje Aasland called on oil and gas companies to fulfill their “social responsibility” and “leave no stone unturned” in their quest to drill the Arctic areas of the Barents Sea, brushing aside concerns of environmentalists. 

Brazil Mulls Higher Ethanol Blending Rates. Brazil’s Lula administration mulls the increase in the volume of anhydrous ethanol blended into the country’s gasoline to 30% within a couple of years, mirroring a similar tightening in biodiesel mandates that are set to grow from 10% last year to 15% by April 2026.

Investors Lament Mexico’s Mining Law. The mining industry has expressed its criticism of Mexico’s mining law reforms, fast-tracked through the Senate without opposition legislators present, which increase regulatory burdens, hike financial commitments paid to the government and shorten mining concessions to a maximum of 30 years

EU Carbon Prices Fall on Low Compliance Demand. As coal-to-gas switching is in full swing in Europe amidst relatively low natural gas prices ($12 per mmBtu), EU carbon prices have fallen more than 10% since early April and have been trading around €85 per mtCO2e, easing the pressure on the powergen industry. 

Russian Oil Firms Boost May Exports. According to Reuters, Russian oil companies are set to export as much as 2.42 million b/d from their western ports, the highest reading in four years, as seasonal maintenance and strong demand from Asian buyers are keeping flows of Russian oil steady.

By Michael Kern for Oilprice.com

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Leave a comment
  • Mike Lewicki on May 05 2023 said:
    not true.

    it was overdone.

Leave a comment

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