Chart of the week
Diesel cracks have never been so good
Confirming the unprecedented tightness of medium distillates around the world, low sulfur diesel continues to trade at a very high premium against Dated Brent, currently at around $ 38 a barrel.
While Asia’s narrow stocks may be mitigated in the long run by China’s lockdowns, US diesel stocks continue to plummet despite being already four-year low, leaving only India and the Middle East as potential sources of rising diesel supply.
– While Russian diesel exports fell by 100,000 barrels / day on a monthly basis in March, to around 650,000 barrels / day, outflows are still largely uninterrupted compared to expectations. – However, diesel stocks in NW Europe remain in recession, about half of what they were at 2021, and may continue to decline amid refinery maintenance in the region.
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The American oil company Chevron (NYSE: CVX) has increased its position in the shale game Vaca Murray of Argentina, signing the concession of Trapial Este as operator and sole owner of the block.
Chinese offshore oil producer CNOOC (HKG: 0883) says it expects to raise 32 billion yuan ($ 5 billion) in a Shanghai stock just six months after the company was expelled from the NYSE over suspicious links with the company. .
– French energy company TotalEnergies (NYSE: TTE) has said it will expand production to the Cameron LNG project in Louisiana run by Sempra, with the expansion coming in the form of a fourth train with a capacity of 6.75 mtpa.
Tuesday 12 April 2022
After falling last week, oil prices began to rise again with the backs of hopes for a speedy recovery in Chinese demand and OPEC warns that it would be impossible to replace 7 million b / d of Russian oil exports and products. Thus, the Brent CFDs have moved to the contango, while the ICE Brent futures curve maintains its usual backward shape, albeit narrower. All this shows that, while the SPEA version of the IEA has managed to allay fears of immediate tightness, the structural supply / demand deficit remains on the agenda in the oil markets.
China’s prolonged lockdowns have hit demand. Chinese refineries are cutting production as zero COVID-19 lockdowns continue to hamper product demand across the country, with Shanghai closed and Guangzhou in the southern city expected to follow suit soon.
US warns India again about Russian markets. US President Joe Biden has warned India that buying more oil from Russia is not in the “country’s interest”, as Indian refineries have been buying 16 million barrels of Urals since the start of the Russia-Ukraine war.
Iran Details JCPOA Return Conditions. A group of more than 250 Iranian lawmakers has set out a series of conditions for restoring the 2015 nuclear deal, including assurances that the United States will not withdraw from the deal, restrict Tehran’s freedom to sell its oil and repatriate revenue.
US gas reserves fall to a three-year low. Amid unprecedented high LNG exports from the United States, U.S. gas reserves closed in the winter at just 1.382 billion cubic feet on April 1, the lowest in three years, pushing Henry Hub prices up and up. regression along the futures curve.
The embargo on Russian oil is on the agenda for the next round of sanctions. According to media reports, the European Commission is drafting proposals for an EU oil embargo on Russia, although many governments oppose a total ban and may opt for a special duty.
Italy signs new supply agreement in Algeria. Italy has signed an agreement with the Algerian government to increase gas imports by 40%, with the country’s major oil ENI (NYSE: E) seeing gradually higher flows through the Transmed pipeline, reaching an additional 9 bcm per year of additional gas by 2023- 2024.
Ford concludes first public lithium deal. US carmaker Ford Motor Company (NYSE: F) has signed a preliminary agreement to buy lithium from Sydney-based Argentina’s Kachi direct mining project (ASX: LKE), the first company to publicly announce where it will be sourced from. the battery of the electric vehicle. metal.
OPEC cuts oil demand forecast for 2022. OPEC cut its forecast for oil demand growth this year, citing the impact of Russia’s invasion of Ukraine, expecting 2022 to rise to 3.67 million b / d. reduced by almost 500,000 b / d compared to the previous forecast.
The storm of the zinc market is picking up pace. Europe is facing an increasing shortage of zinc as high energy prices limit regional smelting production, with the LME contract trading at $ 4,300 per metric ton amid extremely tight stocks, with only 25 tonnes available on the market in LME warehouses.
Nigeria’s electricity grid collapses again. Nigeria’s national electricity grid has collapsed for the second time in a month, sparking fears that rising diesel prices will have an impact on the nationwide power supply used in the event of a power outage but not a complete power outage.
The Indian refining company is facing funding problems. Several Indian and foreign banks have stopped offering commercial credit for oil imports to Nayara Energy, a refinery that operates the Vadinar 400,000 b / d refinery and is a co-owner of Russian Rosneft (MCX: ROSN), forcing it to sell more products domestically.
New record wheat prices in Europe. With no end in sight to the Russia-Ukraine war so far, European wheat prices have reached another all-time high as supply from the Black Sea remains limited, with the December 22 futures contract exceeding the 350 mark. euros per metric ton.
NYMEX suspends Russian platinum and palladium trades. The New York Mercantile Exchange said it would stop trading platinum and palladium produced by Russia’s two refineries following a similar move from London markets, pushing palladium up 5% weekly.
By Tom Kool for Oilprice.com
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