Oil markets are on edge as Hurricane Beryl barrels toward Jamaica | OilPrice.com

Hurricane season is back and oil markets are on edge as the earliest Category 5 hurricane to form this time of year moves toward Jamaica.

– As commodity markets turned to politics after last week’s Biden-Trump debate, analysts are looking to gauge the impact of US gas prices on voter satisfaction.

– Gasoline prices nationwide are 3-4% lower year-over-year, with US gasoline consumption trending lower this year, gasoline cracks $10 per barrel lower than in 2023 and inventories about 12 million barrels higher.

– However, swing states like Arizona, Georgia or Nevada saw lower gasoline consumption than the US average, at 551 gallons a year compared to the federal average of 576 gallons, while tending to pay more since Biden took office duty ($1.12/USG vs. $1.06/USG nationally).

– Given that Trump-voting states tend to be more exposed to pump price volatility because they are more rural or have lower median disposable incomes, even lower gas prices could be a problem for President Biden.

Market movers

– The oilfield services giant SLB (NYSE:SLB) is shutting down operations in Libya from July 1 as more than a dozen oil companies owe about $240 million in unpaid debts.

– Spanish oil major Repsol (BME:REP) is considering selling up to a 49% interest in its assets in the Eagle Ford play in Texas, currently producing over 50,000 boe/d, hoping to raise at least $1 billion from the sale.

– Italy’s energy giant ENI (BIT:ENI) is planning to offload more than $4 billion in upstream assets, with projects in Indonesia and Cyprus among the most likely candidates following the recent sale of its Alaska assets.

Tuesday, July 02, 2024

Oil traders have all become professional meteorologists in July, with the market following a fast start to this year’s Atlantic hurricane season. Hurricane Beryl is threatening Jamaica as it moves toward the US-Mexico coast, the earliest Category 5 hurricane to form this time of year. Meanwhile, Israel-Lebanon tensions are keeping the geopolitical risk premium priced as well, lifting ICE Brent to $87 a barrel.

Saudi Arabia bets on natural gas. The national oil firm of Saudi Arabia Saudi Aramco (TADAWUL:2222) has signed contracts worth more than $25 billion for the second phase of the giant 229 TCf Jafurah gas field and the third phase of the main gas network expansion, seeking to use more gas in power generation.

US SPR recharge implementation returns. The Biden administration has not awarded any contracts in its latest request to buy an additional 6 million barrels of crude oil in the US SPR through the end of 2024, with no bids appearing to have fallen below the cap. of $79.99 per barrel.

Russia extends lifting of gasoline export ban. The Russian government has lifted its ban on gasoline exports for another month until July 31, saying fuel reserves are sufficient despite repeated attacks by Ukrainian jets on refineries, bringing about 150,000 barrels a day of fuel to markets.

China creates new tight oil driller. Beijing is creating a new state-controlled unit that will group current producers, combining CNPC, Sinopec, as well as steel and industrial equipment firms, to search for productive ultra-deep reservoirs and tackle tight oil deposits. .

Biden’s LNG pause is being challenged in court. A federal judge in Lake Charles, Louisiana ruled that the Biden administration’s approval ban on LNG terminals violated the US Natural Gas Act and was therefore unconstitutional, with the Energy Department evaluating its next steps .

The big deal comes to Africa. French energy directorate TotalEnergies (NYSE:TTE) has signed a deal to buy a 60% interest in Sao Tome and Principe’s Block STP02, strengthening its position offshore West Africa even as investment in neighboring Nigeria stalls.

Beijing bans publication of solar data. Attesting to the dire situation in China’s overcapacity-strained solar sector, Chinese authorities have banned the publication of data showing the extent to which power from solar and wind power plants is being wasted amid limited grids.

Air travel in the US still has room to grow. According to TSA statistics, passenger air travel in the US increased to 19.75 million passengers in the week ending June 29, marking the highest weekly reading ever and the second time this year that a higher level has been set. all times.

Hedge funds hoard cobalt as prices fall. Hedge funds such as Anchorage Capital and Squarepoint Capital have built physical positions in cobalt by buying the material, seeing broad contango and the ensuing opportunity for cash-and-carry trades in 2025.

Rio Tinto seeks to avoid Mongolian collapse. The global mining giant Rio Tinto (ASX:RIO) is in negotiations with workers at its Oyu Tolgoi mine in Mongolia, one of the world’s largest copper deposits, after the company cut wages there by up to 80%.

South Africa prepares for the Great Exodus. France’s oil giant TotalEnergies (NYSE:TTE) is considering divesting its offshore South African acreage after discovering 4.5 TCf of gas assets with the Luiperd and Brulpadda discoveries, however hampered by bureaucracy and government regulations.

AngloAmerican is in for a turbulent 2024. Mining degree shares Anglo American (LON:AAL) fell almost 6% this week after a methane explosion caused a fire at the metallurgical Grosvenor coal mine, which accounts for about 30% of the company’s annual coke production.

Chinese manufacturing presents a bleak picture. Factory activity in China contracted for a second straight month in June, with the PMI index coming in unchanged at 49.5, with trade tensions with the United States and Europe weighing on new export orders.

By Michael Kern for Oilprice.com

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