Bullish sentiment appeared to return to markets on Friday morning as a combination of supply disruptions and an apparent detente between the U.S. and China gave oil markets hope.
Oil Prices Today: Friday, September 10th, 2021
With three-quarters of crude production still shut in the Gulf of Mexico, Hurricane Ida remained one of the key factors determining price movements this week. In addition to tight US supplies, with the EIA reporting a 1.5 million b/d week-on-week drop in total production, Friday provided some additional bullish sentiment as the Xi-Biden phone call sparked hopes of a smoother US-China relationship, offsetting downside factors like the Chinese strategic stock auction. As of today, Brent traded around $73 per barrel, whilst WTI was just south of $70 per barrel.
China Releases Strategic Reserves of Crude.
For the first time ever, China’s Strategic Reserves Administration will hold an auction on SPR volumes to be provided to integrated refiners and chemical plants (i.e. state-owned firms) in a bid to tame increasing feedstock prices.
Related: 3 Bearish Catalysts For Oil This Fall
US Natgas Futures Hit $5/mmBtu For First Time Since 2014.
US natural gas futures soared this week as expectations of warmer-than-anticipated weather coincided with Hurricane Ida-induced production outages, with October delivery prices surpassing the $5 per mmBtu mark for the first time since February 2014.
Saudi Aramco Moves into Steel.
Moving beyond its traditional sphere of activity, the world’s largest oil producer Saudi Aramco (Tadawul:2222) signed a deal with Chinese steelmaker Baoshan (600019) to build a steel plate factory in Saudi Arabia, marking the second metals-related venture of the Saudi NOC.
Libyan Export Terminals Blocked by Protesters.
Libya’s Es Sider and Ras Lanuf terminals were blocked by protesters who forced vessels to halt loading operations as calls for the dismissal of NOC head Mustafa Sanalla gained strength, in what might trigger another prolonged period of infighting in the North African country.
Gazprom Waits for German Nod on Nord Stream 2.
Having completed the construction of the Nord Stream 2 gas pipeline, Russian gas giant Gazprom (MCX:GAZP) is now waiting for an approval from Germany’s regulator, a process that could take several months.
LyondellBasell Eyes Houston Refinery Exit.
US chemicals firm LyondellBasell (NYSE:LYB) is reportedly trying to sell its 265kbpd Houston Refinery as soon as possible. This is the second time LyondellBasell has attempted to sell after the 2016 talks with Saudi Aramco yielded no result.
Papua New Guinea Might Derail Santos Merger.
Fearing that the pending merger between Australian energy firms Santos (ASX:STO) and Oil Search (ASX:OSH)might give the company too much control over PNG oil and gas, the Papua New Guinea government is mulling its options to veto the deal.
India Expedites Ethanol Blending Target.
The Indian government brought forward its 2030 objective to see 20% ethanol blending in gasoline flows by five years to 2025, requiring an effective tripling of its ethanol production and breathing life into its grain-to-ethanol output which has been all but non-existent so far, relying primarily on sugarcane.
Nigeria’s NNPC Mulls IPO Options.
Nigeria’s state-owned oil company NNPC, which is to become a limited liability company under the country’s new oil code, could consider an initial public offering within three years, buoyed by news that the company recorded its first-ever profit last year, Reuters reports.
Exxon Tries Methane Integrity Grading.
Under increasing pressure from environmentalist groups, US major ExxonMobil (NYSE:XOM) will offer some of its gas assets in the Permian Basin for a third-party assessment on potential methane leaks from its production sites.
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Colombia Desperate for New Upstream Investment.
The Colombian government is pinning its hopes on a November licensing round that will see the national hydrocarbons agency offering 28 areas of potential interest, desperate to breathe new life into its declining production rates. Colombia’s oil reserves have fallen to the equivalent of 6 years’ production.
PEMEX Impacted by KMZ Explosion After All.
Despite PEMEX claiming to have fully recovered from the Ku-Maloob-Zaap platform explosion in late August, Mexico’s Finance Ministry revised its 2022 crude production estimate downwards by some 50,000 b/d to 1.826 million b/d. The draft version of Mexico’s 2022 budget also has PEMEX’s profit-sharing duty dropping from the current rate of 54% to 40%.
BHP Teams Up with Billionaire-Backed Firm.
Australian miner BHP (NYSE:BHP)signed a partnership deal with Kobold Metals, a recently launched AI exploration company that is backed by Bill Gates, Michael Bloomberg, and Jeff Bezos, in a bid to find more battery metals like copper and nickel in Australia.
Hyundai to Present Next-Gen Hydrogen Technology.
The South Korean carmaker Hyundai Motors (KRX:005380) pledged to present its new hydrogen drivetrain in 2023, with the aim of applying fuel cell systems to all commercial models by 2028, claiming overall costs would be some 50% lower than currently existing technologies.
Nickel Prices Soar Despite Chinese Stock Releases.
Nickel prices rose to their highest level in 7 years – going beyond $20,200 per metric ton - as continuously robust demand has started to reduce global stockpiles. Most notably Shanghai warehouse stocks have decreased by 80% year-on-year, standing at less than 6,000 tonnes.
By Tom Kool for Oilprice.com
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