Oil prices are set to post a weekly gain as geopolitical uncertainty remains a central focus of oil traders, but a strong dollar and a large U.S. inventory build are holding Brent and WTI back.
Friday, October 25th, 2024
The elevation of the Israel-Iran conflict into the main oil market narrative for October is by no means over, the closer we get to the US presidential elections the wilder speculation will get regarding future escalation scenarios. At the same time, Brent and WTI will only post minor week-over-week increases, trending around $75 and $71 per barrel respectively, as a stronger dollar and a larger-than-expected US inventory spike limited the upside.
ExxonMobil Gets 3-Year Extension for Golden Pass. The US Federal Energy Regulatory Commission has granted the ExxonMobil-QatarEnergy JV a 3-year extension to finish building their Golden Pass LNG plant, signaling further delays after the project was derailed by the bankruptcy of contractor Zachry.
Chevron’s Nigeria Find Disappoints Oil Enthusiasts. According to Nigerian media, the lauded Meji discovery of US oil major Chevron (NYSE:CVX) in Nigeria’s OML 90 block, boasting a 690-feet hydrocarbon pay, contains a disproportionately more natural gas than oil, potentially delaying its rollout.
UK’s Largest Oil Producer Eyes North Sea Exit. The largest oil producer in the UK North Sea, London-based Harbour Energy (LON:HBR) said it would seek to sell stakes in at least five UK offshore fields and has revived plans to list on the New York Stock Exchange to end its streak of undervaluation.
Offshore Drilling Firms Gear Up For Record Merger. The world’s leading offshore drilling companies, Transocean (NYSE:RIG) and Seadrill (NYSE:SDRL), are discussing a merger to improve synergies amidst a strong drilling outlook that didn’t improve their stock performance, down 35% and 26%, respectively.
Mexico Eyes Exploration Drive to Lift Reserves. According to internal Pemex communication, Mexico’s national oil firm aims to boost its hydrocarbon reserves and ensure their timely replenishment, particularly focusing on deepwater drilling, despite a recent 20% cut to its Q4 upstream budget.
Brazil to Finally Settle Brumadinho Catastrophe. Following years of litigation, Brazilian authorities signed a $30 billion compensation deal for the 2015 Mariana dam collapse with mining giants Vale (NYSE:VALE) and BHP (NYSE:BHP) on Friday, marking the end of one of iron mining’s worst catastrophes.
Industry Sees No New Permian Pipeline. Top executives of Enterprise Products (NYSE:EPD) and Plains All American (NASDAQ:PAA) stated that they will not be building any new crude oil pipelines out of the Permian shale play, believing optimization would be the next step for crude evacuation capacity.
Norway’s Largest Field to Start Declining Next Year. Norway’s largest oil field Johan Sverdrup, operated by the country’s state oil firm Equinor (NYSE:EQNR) will start to come off its production plateau as early as next year, currently pumping 756,000 b/d and accounting for 7% of Europe’s total oil consumption.
Zinc Prices Soar After Fire in Teck’s Smelter. Zinc prices soared to a 20-month high after one of the leading suppliers of the metal, Canada’s Teck Resources (NYSE:TECK), shut down part of its Trail smelting plant in British Columbia, sending three-month LME prices to $3,284 per metric tonne this week.
India Mulls Scrapping Windfall Taxes on Oil. Lowering regulatory pressure on India’s upstream producers, the Indian government has declared itself ready to scrap the windfall tax ($22 per metric tonne or $3 per barrel) as the levy no longer makes sense amidst ‘softened’ oil prices.
US Refining Giant Mulls California Shutdown. Less than a week after Phillips66 announced the closure of its LA refinery, the US’ leading downstream firm Valero Energy (NYSE:VLO) is reportedly considering shuttering some of its California capacity, currently operating the Benicia and Wilmington refineries.
China Expands Commodity Trade with Taliban. China will offer tariff-free access to its construction, energy, and consumer sectors to the Taliban, controlling Afghanistan since 2021, seeking to tap into the Central Asian country’s largely undeveloped copper, iron, lithium, and petroleum reserves.
Boeing Suffers Setback after Setback. US aircraft manufacturer Boeing (NYSE:BA) fell again this week after striking employees rejected a tentative labor deal negotiated by the company’s unions, promising a 35% wage increase spread over four years, with total strike-related losses already surpassing $4.5 billion.
By Michael Kern for Oilprice.com
