The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell further in March, by $3.55 (-4.6%) to $73.28 per barrel. That decrease occurred within the context of a moderately stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of January’s uptick of 0.048 million barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 19.5 million BPD), and accumulated oil stocks that diverged downward from the top of the five-year average range (March 2023 average: 481 million barrels).
Selected
highlights from the 31 March 2023 issue of OilPrice.com’s Oil &
Energy Insider include:
“The ongoing tug-of-war over Kurdistan's oil exports continues to act as a major pricing upside for oil prices, with some 500,000 b/d of oil at risk of shut-ins after Iraq ordered a halt to all exports,” wrote editor Tom Kool. “The huge drop in US crude inventories, driven by stocks in the Gulf Coast, has buttressed the gradual return of ICE Brent to the $80 per barrel mark. New U.S. inflation data might derail that momentum today in a market that appears far more sensitive to sentiment than supply and demand fundamentals.”
Kurdish Oil Producers Cut Output After Pipeline Halt. Oil companies active in Iraqi Kurdistan have shut in
or reduced production
at several oilfields in the region after pipeline transportation to the Turkish
port of Ceyhan was halted over the weekend, impacting Norwegian producer and
Genel Energy.
Fed Drilling Survey Shows Drastic Drop. The US oil and gas activity survey published by the
Federal Reserve Bank of Dallas indicates
that activity stalled in Q1, with the index plummeting from 30.3 in the fourth
quarter of 2022 to 2.1 currently amidst rising field costs, higher interest,
and plunging gas prices.
California Approves Regulatory Cap on Refining Profits. The governor of California Gavin Newsom signed
into law state legislation that caps gross gasoline refining profit margins and
levies penalties for exceeding it, with Chevron warning the measure will make
fuel "less affordable".
Brussels Seeks End to Russian LNG. Several EU energy ministers suggested
new gas market rules within the union should provide governments with the
option to temporarily stop Russian gas exporters from bidding for LNG import
capacity, a way to ban Russian LNG without a unanimous vote.
Majors Dominate Latest GoM Lease Sale. The first oil leasing round since late 2021 and
presumably the last one under President Biden, this week's Lease Sale 259 in
the Gulf of Mexico saw
US majors Chevron and ExxonMobil take center stage as they won 75 and 69
offshore blocks, respectively.
US and Japan Sign EV Battery Strategic Deal. The US and Japan signed
a trade deal on EV battery metals that will grant Japanese carmakers access to
a $7,500 tax credit as per the IRA legislation, as the two countries see
increased cooperation on the issue as they way forward to reduce dependence on
China.
India Signs Up for More Russian Oil. India's state-controlled oil refiner IOC signed a term agreement with Russian oil major Rosneft to substantially increase oil deliveries into the South Asian country and diversify the oil grades delivered, securing India's spot as the leading buyer of Urals.
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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