Oil prices have surged over the last three weeks as geopolitical tensions climbed,
 although concerning economic data in the U.S. could drag prices back down.

Friday, June 28, 2024

All eyes are fixed on US inflation data as crude oil prices have maintained their hot streak and are set to end this week with a third weekly gain. Surging geopolitical tensions around Israel and Lebanon have overshadowed slackening economic data from the US in May, with every single day this week posting a day-on-day increase and Brent set to finish the week at $87 per barrel.

Calcasieu Pass 2 Given the Green Light. The US Federal Energy Regulatory Commission voted 2-1 to allow the construction and operation of the 20 mtpa Calcasieu Pass 2 liquefaction plant in Louisiana, paving the way for operator Venture Global to become the second-largest US LNG exporter. 

Not Every M&A Can Impress Oil Investors. After Eagle Ford-focused upstream firm SM Energy (NYSE:SM) bought the shale assets of private equity-backed XCL Resources in the Uinta region of Utah for some $2 billion, its shares plunged by a whopping 10% in the Thursday trading session.

Hedge Funds Make U-Turn on Oil Futures. Hedge funds and other money managers have boosted their exposure in Brent futures and options, buying the equivalent of 69 million barrels in the week ending June 18, the fourth fastest week-on-week increase since 2013. 

Nigeria’s Refining Dreams Quashed by Fire. Nigeria’s 650,000 b/d Dangote refinery has caught fire this week with the effluent treatment plant sending dark plumes of smoke across the port of Lekki, whilst gasoline deliveries from the refinery were delayed at least until July. 

Norway to Launch Seabed Mining in 2025. The government of Norway said it would open vast areas of its Arctic in its first seabed mining licensing round, to be held in the first half of 2025, offering 386 blocks across 280,000 km2 as two companies have already applied for licenses. 

Dallas Fed Sees Little Improvement in US Upstream. The quarterly survey of the Federal Reserve Bank of Dallas has shown that oil and gas activity in Texas, Louisiana and New Mexico rose only modestly in Q2, with most polled upstream executives expecting a sideways trend further on.

Russia Eyes Pipeline Gas Deliveries to Iran. Russia’s natural gas giant Gazprom has signed a memorandum of understanding with the Iranian national gas firm NIGC to supply pipeline gas to Iran, despite Tehran sitting on the world’s second-largest gas reserves after Russia.

European Airlines Start Charging for Clean Fuel. Europe’s largest airline group Lufthansa (FRA:LHA) will introduce a surcharge of up to $77 per flight starting early 2025 to cover the rising costs of alternative fuels, coinciding with the EU’s requirement to use at least 2% SAF from next year. 

Investment Appeal of Alaska’s Offshore Wanes. Italy’s oil major ENI (BIT:ENI) has agreed to sell its upstream oil operations in Alaska to US producer Hilcorp for an undisclosed fee, boosting the latter’s 135,000 boe/d production, two months after the Biden administration limited Alaska drilling. 

Argentina Still Yet to Find Offshore Oil. Norway’s state oil company Equinor (NYSE:EQNR) disclosed that the first offshore well drilled in Argentina’s territorial waters, the Argerich-1 exploration well, failed to find any clear signs of hydrocarbon deposits. 

Saudi Aramco on the Lookout for More LNG. The national oil firm of Saudi Arabia has signed a non-binding deal with US energy developer Sempra (NYSE:SRE) for the supply of 5 mtpa LNG over 20 years and is preparing to make a 25% equity investment in phase 2 of the Port Arthur LNG project. 

TMX Desperately Needs Spot Shippers. The recently launched TMX pipeline in Canada might take years to break into profit as the operator needs full utilization of the spot toll, equivalent to 20% of nameplate capacity, for equity to turn positive in 2026; in a worst-case scenario, it might take 8-9 years. 

Trafigura Seeks Glencore Displacement in Congo. Global trading giant Trafigura has locked in a supply deal with the Kipushi zinc mine in DR Congo, operated by Ivanhoe Mines (TSE:IVN), cementing its position in zinc concentrates after rival Glencore refused to extend its exclusive offtake rights. 

Best Regards,
Michael Kern
Editor, Oilprice.com

 

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