The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil edged up by $2.25 (+3.1%) to $74.15/barrel in January. That advance occurred within the context of a marginally stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of November’s increase of 30,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.7 million b/d), and accumulated oil stocks that tipped seasonally lower -- (January 2024 average: 426 million barrels).
Selected
highlights from the 02 February 2024 issue of OilPrice.com’s Oil &
Energy Insider include:
“Speculation has overshadowed market fundamentals [during the last week of January], with unsubstantiated reports of an impending ceasefire between Israel and Palestine dragging Brent futures below $80 per barrel again,” wrote editor Michael Kern. “On the fundamental side, with OPEC+ rolling over its policy and refusing to change its pre-set course, unforeseen refinery outages in the United States might have an even more lasting impact on prices by weakening US demand even further.”
US Senate Seeks to Overturn Biden’s LNG Pause. The US House of Representatives will seek to overturn
the Biden administration’s halt on new LNG project approvals next month,
accusing the White House of appeasing radical climate activists, although it is
unlikely to get past the Senate.
OPEC+ Sticks to Course, Flags March Meeting. This week’s OPEC+ ministerial meeting made no changes
to the oil group’s production policy, with participating top officials
indicating they will meet again in early March to decide on an extension of the
2.2 million b/d cuts into Q2.
BP’s Whiting Refinery Shutdown Rattles Midwest. A transformer failure caused a plant-wide power
outage at BP’s Whiting refinery in Indiana, forcing
the UK oil major to halt all operations at the Midwest’s largest downstream
asset, boasting a capacity of 435,000 b/d.
Diverting Tankers Turn to Fast Steaming. Tankers that are diverting around the Cape of Good
Hope have been increasingly fast steaming, sailing above normal speeds, to cut
back on delivery delays, with container ships sailing at 22 knots, boosting
marine fuel demand in Africa further.
Shell Plays Down M&A Pressures. The CEO of Shell Wael Sawan indicated the UK-based
oil major is not tempted to join the US shale patch’s acquisition frenzy,
whilst its Q4 results surpassed analysts’ expectations at $7.3 billion despite
multi-billion impairments.
Qatar Seeks to Expand Oil Output. QatarEnergy awarded
service contracts worth $6.2 billion to develop the third phase of its key
oil-producing asset, the offshore Al Shaheen field overlying its vast gas
reserves in the sea, eyeing a production hike of about 100,000 b/d by
2027-2028.
India to See Coal Power Bonanza in 2024. India will commission an additional 13.9 GW of coal-powered generation capacity this year, marking the highest annual increase since 2019 and more than triple 2023 additions, as last year’s electricity demand surged 11% year-on-year.
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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