Oil market sentiment is decidedly cautious this week as covid cases climb and U.S. crude inventories increase.
Friday, August 6th, 2021
Despite the Friday trading session recovering somewhat from this week’s aggregate declines, the overarching sentiment on the oil markets is still that of caution, seeing China and the United States confronting COVID-19 case surges. Whilst tensions in the Persian Gulf added a new layer of geopolitical upside risk for prices, this was largely counteracted by the week-on-week hike in US crude inventories.
Biden Administration Mandates 50% EV Goal by 2030. The White House put forward a non-binding executive order stipulating that half of cars and trucks sold in the United States by 2030 should be an EV, PHEV or a fuel cell vehicle. Simultaneously, fuel economy standards are expected to be twice as aggressive as they are now.
Petrobras Stock Surges on Surprise Results. Buoyed by rising gas sales and high Brent prices, Brazil’s national oil company Petrobras (BVMF:PETR4) posted better-than-anticipated Q2 results this week, with $6.15 billion earmarked for extraordinary dividend payments, sending its stocks flying.
TotalEnergies Wants Share of World’s Largest Wind Farm. In a bid to boost its renewables portfolio, the French major TotalEnergies (NYSE:TTE) wants to take a stake in the 3.6 GW Dogger Bank wind farm, the largest globally, that has been developed by SSE (LON:SSE) and Equinor (NYSE:EQNR). Related: Do Lithium Batteries Pose A Major Fire Hazard?
Mexico Investigates Vitol for Tax Evasion. Mexico’s government opened an investigation into alleged irregularities in the documentation of products supplied by top trader firm Vitol, claiming the company was unable to clear up the contentious issues and might face criminal charges for illegal trafficking.
Chinese Domestic Coal Prices Hit 10-Year High. Constrained by crimped domestic production capacity, China’s benchmark Qinhuangdao 5500kcal coal prices rose to their highest in more than 10 years, edging increasingly closer to the CNY 1100 per tonne mark (twice as high as the upper limit of the so-called “green zone”).
LNG Prices in Asia Hit 8-Year High. Amidst increasing demand coming from higher-than-average temperatures, spot LNG prices for September delivery have risen to almost $17 per mmBtu, marking an almost $1.50 per mmBtu week-on-week increase.
Venezuela Talks start Next Week amid Tacit Optimism. Negotiations between the Maduro-led government and Venezuelan opposition are set to start August 13, Reuters reports, kindling hopes that a more diplomacy-focused Biden administration might ease PDVSA sanctions.
ADNOC Sells First-Ever Blue Ammonia Cargo to Japan. The Emirati national oil company sold its first-ever cargo of blue ammonia produced from hydrogen to Japan’s Itochu (TYO:8001), making ADNOC a first mover in low-carbon ammonia fertilizers in the Middle East.
New Zealand Approves Refinery Closure. New Zealand will close its 135kbpd Marsden Point refinery as shareholders of the operator Refining NZ (NZE:NZR) voted in favor of converting it into a products import terminal. BP and ExxonMobil are assumed to supply the country beyond 2022.
Nord Stream 2 Likely to Start Later This Year. Russian gas giant Gazprom (MCX:GAZP) is finishing works on the feeder lines of Nord Stream 2, aiming to commission the final six compressor stations along the route later this year, making a 2021 launch of the entire pipeline even more realistic.
India’s IOC Plans Refinery Expansion. India’s state-owned refiner IOC (NSE:IOC) is seeking to expand its throughput capacity by some 350kbpd over the next four years amid prospective demand increases, to be carried out through a series of refinery expansions. India’s aggregate refining capacity is expected to grow 1mbpd by 2025, reaching 6mbpd. Related: Top U.S. Negotiator: Iran Nuclear Deal May Be Impossible
South Korea Doubles Rare Metals Stockpiles. The government of South Korea seeks to double its strategic stocks of cobalt, nickel, and other rare metals (to cover 100 days of consumption), in a sign that supply of these key feedstocks for electric vehicle batteries might become contentious in the future.
Oman Aims for Zero Upstream Emissions by 2050. Oman’s latest ambition is to reach zero emissions in its upstream sector, building on the Sultanate’s previous commitment to achieve zero routine flaring by 2030. A large part of the emissions-cutting drive should come from renewables supplanting crude burning (currently 65% of electricity generation).
Russia Might Ban Gasoline Exports. Confronted with a double whammy of increasing domestic demand and lower refinery production due to prolonged maintenance, Russia is mulling a three-month export ban on gasoline.
China ETS Fails to Impress. Ever since the launch of China's emissions trading scheme, weekly traded volumes have been falling, dropping to a mere 187 thousand of CO2 equivalent this week, a 75% decline week-on-week.
By Tom Kool for Oilprice.com
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