The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell
further, by $7.93 (-9.4%) to $76.44 per barrel in December. That decrease occurred
within the context of a noticeably weaker U.S. dollar (broad trade-weighted
index basis -- goods and services), the lagged impacts of October’s decrease of
55,000 barrels-per-day (BPD) in the amount of petroleum products
demanded/supplied (to 20.4 million BPD), and accumulated oil stocks that continued
along the bottom of the five-year average range (December 2022 average: 419 million
barrels).
Selected
highlights from the 29 December 2022 issue of OilPrice.com’s Oil &
Energy Insider include:
“Commodity trading in the festive week between Christmas and New Year has always been very light,” wrote editor Tom Kool, “however be it for oil markets or for metals at large, China continues to set the tone for overall sentiment. Soaring coronavirus cases (assumed but unreported) as well as the United States’ gradual recovery from the past week’s polar freeze have been marginally weighing on prices, bringing WTI below $80 per barrel again.”
U.S. Gas Output Takes Time to Recover. As swathes of gas-producing basins have cut
production by as much as 30% during the severe cold, prime amongst them the Appalachian
Basin, it seems the rebound to pre-freeze levels will take several weeks if
not months as U.S. production seasonally dips in the new year.
Russia Bans Oil Exports to Price Cap Coalition. Russia's President Vladimir Putin signed
a decree this week that bans the supply of oil and products for nations that
abide by the oil price cap, with the measure applying to all stages of supply
up to the end buyer and coming to effect 1 February 2023.
Quantitative Tightening Delays Wind Projects. The consortium of Shell, EDP Renewables and Engie
have asked
U.S. regulators for a delay in planning the 804 MW Mayflower Wind farm south of
Martha's Vineyard, saying spiking interest rates present significant challenges
to power purchase agreements.
China to Receive More U.S. LNG. U.S. LNG developer NextDecade said it will increase
the volume of liquefied gas provided under a term agreement with China's ENN
Natural Gas from 0.5mtpa to 2mtpa, to be sourced from the upcoming RGLNG
project.
Indian Coal Demand to Peak in 10 Years. Seeing coal consumption increase by 10% year-on-year so far to almost 1.2 billion tonnes, India's demand for the fossil fuel is expected to rise for the next ten years until it peaks at some point between 2030-2035, according to the Ministry of Coal and Mines.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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