April 2024 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil climbed by $4.07 (+5.0%) to $85.35/barrel in April. That increase occurred within the context of a stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of February’s increase of 362,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 19.9 million b/d), and accumulated oil stocks that climbed seasonally higher on a monthly average basis -- (April 2024 average: 458 million barrels). 

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Selected highlights from the 3 May 2024 issue of OilPrice.com’s Oil & Energy Insider include:

“The disappointment of the money markets with yet another hotter-than-expected set of US inflation data, aggravated by higher crude inventories and slackening geopolitical risk, has triggered a notable drop in oil prices, with both WTI and Brent shedding more than $5 per barrel since last week,” OilPrice.com’s Michael Kern wrote. “Falling middle distillate and gasoline cracks have not boosted the sentiment either, so only a high-impact supply disruption could break the current bearish streak.”

TMX Starts Commercial Operations. After 12 years of waiting, Canada’s $23 billion Trans Mountain Expansion pipeline started operations this week, with the first-ever cargo to load at the Westridge Terminal in two weeks and deliver a Western Access Blend cargo to China.

EPA Rules Threaten US Power Grid Reliability. Peabody Energy, the US’ largest producer of coal, warned that the EPA has overstepped its authority with its target of cutting GHG emissions from coal by 90% by 2039, shortly after some power plants mulled a federal lawsuit.

Venezuela Exports Crack Under Pressure. Venezuela’s oil exports plunged a whopping 38% month-over-month to 545,000 b/d as demand subsided for the country’s heavy barrels on the heels of US sanctions, prompting at least six VLCCs to leave Venezuela empty in recent weeks.

US Senate Bans Russian Uranium Imports. The US Senate unanimously passed a bill banning the imports of Russian uranium, sending spot U308 uranium prices to $92 per pound again, also unlocking $2.7 billion in government support for domestic uranium mining in the United States.

Baltimore Bridge Repair to Cost $2 Billion. The Maryland Department of Transportation said the state expects the rebuild of the Francis Scott Key Bridge, wrecked after the Dali cargo ship crashed into it on March 26, to cost $1.7-1.9 billion, with completion anticipated by fall 2028.

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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.

March 2024 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil advanced by $4.03 (+5.2%) to $81.28/barrel in March. That increase occurred within the context of a marginally weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of January’s decline of 706,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 19.6 million b/d), and accumulated oil stocks that climbed seasonally higher -- (March 2024 average: 448 million barrels). 

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Selected highlights from the 29 March 2024 issue of OilPrice.com’s Oil & Energy Insider include:

“The oil markets are increasingly putting their trust into OPEC+ production cuts to remain in place throughout this year, a feat which combined with an improving macroeconomic outlook could bring $90 per barrel sooner than assumed,” wrote editor Michael Kern. “A better-than-expected Q4 for US GDP will most probably consolidate market expectations around a June interest rate cut, leaving behind the demand woes of early 2024.”

US SPR Replenishment Cost Increasingly More. The latest round of strategic petroleum stock replenishments in the US, totaling 2.8 million barrels in September, has seen the average price hit $81.32 per barrel, above the $79 per barrel threshold that the White House mandated for refilling crude SPRs.

Mexico's Crude Output Falls to Lowest Since 1979. Crude production of Mexico's state oil company Pemex fell to its lowest monthly level in 45 years this February, pumping 1.55 million b/d of oil, with the world's most indebted firm coming well below the government-set output target of 1.9 million b/d.

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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.

February 2024 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil advanced by $3.10 (+4.2%) to $77.25/barrel in February. That increase occurred within the context of a marginally stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of December’s decline of 417,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.3 million b/d), and accumulated oil stocks that climbed seasonally higher -- (February 2024 average: 439 million barrels). 

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Selected highlights from the 01 March 2024 issue of OilPrice.com’s Oil & Energy Insider include:

“Oil prices remained stubbornly rangebound in February as signs of a recovering U.S. economy were countered by weaker economic data in both Europe and China,” wrote editor Tom Kool. “Diverging macroeconomic news, with China and Europe continuing to struggle with below-expectations manufacturing activity while the United States is nearing the point of first interest rate cuts, failed to alter the trading patterns of February, keeping Brent around the $83 per barrel mark. The next big thing to happen to the oil markets will be OPEC+ announcing the scrapping or the extension of voluntary production cuts.” As expected, those cuts were extended into 2Q2024.

DoE Solicits Another 3 MMbbls SPR Refill. Having bought 2.95 million barrels of sour crude for an average price of 77.81 per barrel for June-delivery oil, the US Department of Energy announced a new solicitation for 3 million barrels to be delivered in July. 

US Natural Gas Output Hits All-Time High in December. Gross US natural gas production from the lower 48 states soared to a record high in December, reaching 118.2 BCf per day, up 7% year-on-year as the Permian, Marcellus, and Utica basins have all continued their steady rise.

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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.

January 2024 Monthly Average Crude Oil Price

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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). 

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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.

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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.

December 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell by $5.79 (-7.5%) to $71.90/barrel in December. That retreat occurred within the context of a weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of October’s increase of 588,000 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 -- staying near the midpoint of the five-year average range (December 2023 average: 439 million barrels). 

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Selected highlights from the 2 January 2024 issue of OilPrice.com‘s Intelligence Report include:

“The first U.S.-Yemen naval clash in the Red Sea, followed by the arrival of an Iranian warship into the Bab-el-Mandeb strait, has prompted an increase in geopolitical risks again, lifting Brent back to the $79 per barrel mark,” editor Tom Kool wrote. “China issuing its crude import quotas for 2024, coupled with product export allowances, will reinvigorate Chinese buying in the markets, so for the first time in several weeks, the immediate outlook seems more bullish than bearish.”

US Oil Output Starts to Decline. According to EIA figures, U.S. crude oil production fell to 13.248 million b/d in October, the first monthly decline since April even as the month-on-month change was a mere 4,000 b/d, with all tight oil plays posting increases except North Dakota. 

Maersk Halts Red Sea Transit, Again. The world's second-largest container line Moller-Maersk halted transit through the Red Sea less than a week after it had decided to resume navigation, with its Maersk Hangzhou tanker coming under attack by Houthi militias. 

China Coal Demand to Peak in 2025. China's state-owned energy company Sinopec expects the country's coal consumption to peak around 2025 at 4.37 billion metric tonnes, with oil hitting a plateau in 2026-2030 at 16 million b/d and natural gas reaching a climax only by 2040.

Russian Pipeline Gas Exports to Europe Collapse. Exports of Russian pipeline gas to Europe plunged by a further 56% year-on-year in 2023, coming in at a mere 28.3 billion cubic meters as Gazprom's options were narrowed down to TurkStream and one remaining pipeline via Ukraine.

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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.

November 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell by $7.95 (-9.3%) to $77.69/barrel in November. That retreat occurred within the context of a weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of August’s dec6rease of 789,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.1 million b/d), and accumulated oil stocks that continued an upward trend -- to near the midpoint of the five-year average range (November 2023 average: 443 million barrels). 

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Selected highlights from the 01 December 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“Oil markets were left both confused and underwhelmed by the OPEC+ decision to cut 2.2 million b/d in 1Q2024, with oil prices falling toward a weekly loss,” wrote editor Michael Kern. “Oil markets welcomed the new OPEC+ deal that pledged 2.2 million b/d in voluntary cuts for 1Q2024 in a very lukewarm manner, with Brent erasing all its earlier gains and dropping back to $81 per barrel. With even the most seasoned industry watchers starting to lose track of which country will be cutting what amount against which reference level, the production target confusion was aggravated by the fact that markets expected deeper cuts, going over and above what Saudi Arabia or Russia have already curbed from their output.

OPEC+ Cuts Production Further. Members of the OPEC+ oil group agreed to voluntary production cuts totaling 2.2 million b/d for Q1 2024 as the group’s de facto leader Saudi Arabia rolled over its current voluntary cut of 1 million b/d and Russia widened its pledge to 500,000 b/d.

Brazil to Become Member of OPEC+ Family. South America’s largest oil producer Brazil is set to officially become a member of OPEC+ [as an observer] from January 2024 even though it would not join the oil group’s ongoing round of production cuts, seeing output soar to all-time highs in recent months.

Referendum Raises the Specter of a Venezuela-Guyana War. Venezuela will carry out a referendum [since approved] on its territorial dispute with Guyana over the contested oil-rich Essequibo territory on December 3, leading to a notable uptick in military activities in the wider region.

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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.

October 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil decreased by $3.59 (-4.0%) to $85.84/barrel in October. That retreat occurred within the context of a somewhat stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of August’s increase of 757,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.9 million b/d), and accumulated oil stocks that trended marginally upward -- but still well below the midpoint of the five-year average range (October 2023 average: 422 million barrels). 

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Selected highlights from the 31 October 2023 issue of OilPrice.com‘s Intelligence Report include:

“Oil prices are once again under pressure due to uncertainty about China’s economy, with the latest manufacturing data reigniting demand fears,” wrote editor Tom Kool. “Bearish sentiment around China’s economy dropped away in recent months, but October’s manufacturing activity data will undoubtedly bring back the issue of weaker Chinese demand to the global crude agenda. Surprising virtually everyone, China’s manufacturing PMI index dropped to 49.5 from 50.2 in September, whilst non-manufacturing PMI indicated a slowdown in services growth. With Brent trending around $88 per barrel, it seems it would take a serious escalation in the Middle East to send oil prices spiking.”

BP Shares Drop After Lukewarm Q3 Result. Adversely impacted by a $540 million write-down on offshore wind projects in New York as well as weak natural gas results, BP reported third-quarter earnings of $3.3 billion, missing analysts’ $4 billion forecast and prompting a 5% share drop on Tuesday.

Venezuelan Refining Collapses. Just as Venezuela prepares to ramp up crude exports amidst a 6-month sanctions clearance, the country’s 955,000 b/d Paraguana refining complex saw the closure of two CDUs due to fires and lack of feedstock, lowering its utilization rate to as little as 10%.

Investors Start Shorting Crude Futures. Hedge funds and other money managers sold the equivalent of 14 million barrels in the six most important oil futures and options contracts in the week ending October 24, marking the fourth time in five weeks that funds were net sellers.

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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.

September 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil increased by $8.04 (+9.9%) to $89.43/barrel in September. That advance occurred within the context of a somewhat stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of July’s decrease of 592,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.1 million b/d), and accumulated oil stocks that continued trending downward below the midpoint of the five-year average range (September 2023 average: 417 million barrels). 

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Selected highlights from the 29 September 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“The expiry of November ICE Brent futures has seen backwardation between the expiring month and the December contract shoot up to a whopping $2 per barrel,” wrote OilPrice.com’s Michael Kern. “At the same time, despite some very bullish news this week, ranging from wafer-thin Cushing stocks to an improving macro outlook in China, oil prices have been rangebound lately as crude remains overbought and any surge above $95 per barrel triggers resistance. With OPEC+ meeting next week on October 4, focus will now move back to Saudi Arabia and the future of its production cuts.”

Strained Cushing Stocks Stoke Fears of Shortages. As crude inventories at the key US storage hub of Cushing, Oklahoma fell to their lowest since July 2022, at 22.0 million barrels, operators are fearing operational risks as oil becomes difficult to remove if tank storage holds less than 20 million barrels.

Biden’s 5-Year Offshore Plan Sees No Leases Next Year. The Biden administration’s five-year plan for offshore oil and gas leasing does not include any auctions to be held in 2024 and features only three in the subsequent years of 2025-2028, marking the lowest leasing activity since at least 1992.

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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.

August 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil increased by $5.32 (+7.0%) to $81.39/barrel in August. That advance occurred within the context of a somewhat stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of June’s increase of 320,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.7 million b/d), and accumulated oil stocks that continued trending downward below the midpoint of the five-year average range (August 2023 average: 435 million barrels). 

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Selected highlights from the 1 September 2023 issue of OilPrice.com’s Oil & Energy Insider include:

Continuous U.S. stock draws equivalent to a 1 million b/d decline over the past five weeks have led to an unusually tight oil market in the United States, adding upward pressure to oil prices despite economic woes. Widespread expectations of OPEC+ extending production and export cuts as well as recovering Chinese manufacturing activity have added to the bullish sentiment, with ICE Brent surpassing $87 per barrel.

Russia Flags OPEC+ Coordination on Track. Russia's deputy prime minister Alexander Novak announced that OPEC+ members have agreed on the main parameters of production over the upcoming months but would only announce it next week, indicating Riyadh's and Moscow's cuts are to continue.

Higher Interest Rates Prompt LNG Plants to Hike Fees. A string of US LNG developers, most notably NextDecade with its Rio Grande LNG project, adjusted term deals signed earlier and increased liquefaction fees to reflect rising interest rates and higher construction costs.

Japan Extends Oil Subsidies Until End-2023. Japan's Trade and Industry Ministry (METI) extended oil product subsidies until the end of December 2023 as retail gasoline prices soared to the highest readings ever this week, reaching $200 per barrel, boosted by higher oil prices and a weaker yen.

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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.

July 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil increased by $5.82 (+8.3%) to $76.07/barrel in July. That advance occurred within the context of a somewhat weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of May’s increase of 330,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.8 million b/d), and accumulated oil stocks that continued trending downward below the midpoint of the five-year average range (July 2023 average: 453 million barrels). 

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Selected highlights from the 28 July 2023 issue of OilPrice.com’s Oil & Energy Insider include:

Oil prices ended July on an “up” note, “fueled in part by supply concerns and in part by growing optimism about a 'soft landing' for the U.S. economy,” wrote OilPrice.com’s Michael Kern. “The strength of the U.S. economy has added fuel to the recent rally in oil prices, with the 2.4% quarter-on-quarter growth in Q2 prompting many to believe again in the possibility of a soft landing. Even though China's hoarding of crude does not necessarily look good for the upcoming months as Chinese refiners might suddenly start buying significantly less than they do now and start running down stocks, there's so far very little immediate downside” to oil pricing.

Greenpeace Picks Another Fight Against UK Oil. Environmental campaign group Greenpeace took the UK government to court over its holding of the 2022 exploration licensing round, saying the authorities failed to assess end-use emissions from future hydrocarbon production.

Chinese Oil Stockpiles Shoot Through the Roof. Boosted by all-time high imports of Russian crude and year-on-year doubling Iranian flows, China has amassed almost 1 billion barrels in crude inventories, the highest level of stocks in almost three years, potentially drawing from them in H2.

Court Decision Greenlights Key U.S. Pipeline. The U.S. Supreme Court granted the operator of the Mountain Valley Pipeline, a longtime-planned gas conduit running through Virginia, the right to build a 3.5-mile section through the Jefferson National Forest, dealing a blow to years of environmentalist protests.

Heat Sends U.S. Power Prices Soaring. As U.S. electricity prices soar amidst a crippling heatwave, taking PJM Western prices to the highest since February, the operator of the Midwest's power grid was forced to declare a level-one emergency in 13 states stretching from Illinois to New Jersey.

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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.

June 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil slipped further in June, by $1.33 (-1.9%) to $70.25/barrel. That retreat occurred within the context of a marginally weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of April’s decrease of 3,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (20.4 million b/d), and accumulated oil stocks that continued trending downward toward the midpoint of the five-year average range (June 2023 average: 459 million barrels). 

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Selected highlights from the 30 June 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“The almost 10-million-barrel US stock decline has provided a firm pricing floor for oil prices” during the last week of June, wrote OilPrice’s Michael Kern, “but the upside remains limited as a string of macroeconomic news -- most notably a still very robust U.S. labor market -- seem to be pushing the Federal Reserve to keep on hiking interest rates. As medium sour Mars is now trading a solid $1 per barrel above WTI, things look quite bleak for the U.S. benchmark as it is weak at a time when it historically should be showing strength, prime summer driving season.”

As OPEC Meets Again, Not Everyone Is Welcome. As OPEC members will be gathering in Vienna next week for a two-day deliberative forum called the OPEC Seminar, the organization has banned Thomson Reuters, Bloomberg, and the Wall Street Journal from attending the event.

Norway Approves $18 Billion Worth of New Investments. Norway’s government gave the green light for oil companies to develop 19 new oil and gas fields with investments exceeding $18.5 billion, with almost half of them being developed by Aker BP, a joint venture between BP and Aker ASA.

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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.

May 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell in May, by $7.87 (-9.9%) to $71.58/barrel. That retreat occurred within the context of a moderately stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of March’s increase of 0.452 million barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.4 million b/d), and accumulated oil stocks that continued diverging downward from the top of the five-year average range (May 2023 average: 461 million barrels). 

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Selected highlights from the 2 June 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“The lifting of the US debt ceiling, avoiding a government shutdown, has seen bullish sentiment return to the oil market, lifting Brent back above $75 per barrel and WTI above $71 per barrel,” wrote Michael Kern. “While rising U.S. crude inventories and the weak outlook of Chinese manufacturing are adding downward pressure to oil prices, the upcoming OPEC+ meeting this weekend might provide another boost for prices if the group decides to cut production.”

Europe Prepares 11th Russia Sanctions Package. The European Commission is expected to present its 11th package of Russia sanctions next week, targeting Chinese firms that shipped banned goods to Russia, banning Russian flows through the northern Druzhba pipeline and forbidding the transit of EU-bound goods through Russian territory.

Houston Refinery Shutdown Delayed. Buoyed by strong refinery margins, chemicals firm LyondellBasell said it would not shutter the 264,000 b/d Houston refinery by the end of this year and thanks to moderate maintenance spending it would extend operations till the end of the first quarter in 2025. 

Shareholders of US Oil Reject Stronger Climate Mandates. Shareholders of ExxonMobil and Chevron overwhelmingly rejected demands from climate activists that they set medium-term goals for reducing carbon emissions as Scope 3 targets, in a blow to environmentalists.

European Major Wants Synthetic Gas in the US. Indicating that the US might be gaining the upper hand against Europe in landing green energy deals, French oil major TotalEnergies announced its plans to build a large-scale $2 billion synthetic gas plant in the country, expecting it to benefit from IRA credits.

Leaks Force Halt of Norway’s LNG Terminal. A gas leak has prompted Norway’s oil company Equinor to shut down the Hammerfest LNG plant, the country's only liquefied natural gas export terminal, only several weeks after a compressor failure halted production in early May.

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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.

April 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil rose in April, by $6.17 (+8.4%) to $79.45/barrel. That advance occurred within the context of a moderately weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of February’s increase of 0.458 million barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.0 million b/d), and accumulated oil stocks that continued diverging downward from the top of the five-year average range (April 2023 average: 464 million barrels). 

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Selected highlights from the 28 April 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“Oil prices have stabilized around $78 per barrel for ICE Brent and $74 per barrel for WTI after Wednesday's double whammy of bad macroeconomic data,” wrote OilPrice.com’s Tom Kool. “The decline in U.S. capital goods spending confirmed fears that economic growth is slowing down in the United States, whilst refinery margins continued their descent this week as downstream players are finding it ever harder to stay profitable. As such, oil is set for its sixth straight monthly loss, despite the OPEC+ production cuts.” WTI’s spot price narrowly avoided that outcome, closing out April at $76.78/barrel, or $1.10/barrel above the March closing price.

OPEC Goes Against IEA. OPEC Secretary General Haitham al-Ghais warned the International Energy Agency (IEA) to be very careful about discouraging investment into oil and gas, arguing that advocating for such measures and finger-pointing at oil producers will lead to increased volatility in the future.

Ship Insurers Warn of Russia's Dark Fleet. Top executives from the shipping industry have warned that the oil price cap has made insurers even more wary of running afoul of U.S. or EU sanctions and that depriving the increasing fleet of shadow tankers of insurance raises navigation safety risks.

Suncor Doubles Down on Oil Sands. French oil major TotalEnergies sold its carbon-heavy Canadian oil sands assets to Suncor Energy for $4.1 billion with potential additional payments up to $450 million, equivalent to 135,000 b/d of net bitumen production capacity and 2.1 Bbbls of 2P reserves.

Iran Seizes Oil Tanker Again. A Turkish-owned and operated tanker carrying Kuwaiti crude for Chevron in the US has been detained by the Iranian Navy after reportedly hitting another Iranian vessel in the Gulf of Oman, drawing the ire of the US which accused Tehran of interfering with navigational rights.

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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.

March 2023 Monthly Average Crude Oil Price

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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). 

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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.

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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.

February 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil inched down, by $1.29 (-1.7%) to $76.83 per barrel in February. 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 December’s drop of 1.1 million barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 19.5 million BPD), and accumulated oil stocks that arced to near the top of the five-year average range (February 2023 average: 471 million barrels). 

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Selected highlights from the 24 February 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“Yet another build in U.S. crude inventories added to downward pressure on oil prices on [February 24],” wrote OilPrice.com editor Tom Kool. “The EIA's report weighed particularly heavily on WTI, opening an arbitrage window into both Europe and Asia. The market reaction to another 7.6-million-barrel build was originally subdued by speculation of a further production cut from Russia and rumors of Chinese demand returning. Ultimately, inflation fears and continued inventory builds pushed oil prices lower, with ICE Brent trending around the $81 per barrel mark.”

A Flotilla of US Oil Is Set to Sail to China. The relative weakness of WTI has prompted a revival in Chinese buying of US barrels as China’s state-owned Sinopec and Petrochina have fixed at least 10 VLCC tankers for March-loading cargoes out of the US Gulf Coast.

Russia Fixes Crude Discounts on Exports. Russia’s President Vladimir Putin signed a law that capped the maximum possible discounts on Urals crude as part of an ongoing oil taxation overhaul, with the maximum discount set at $34 per barrel in April and gradually declining to $25 per barrel in July.

Iraq to Drop US Dollar in China Exports. The Iraqi central bank announced this week that it had allowed trade from China to be settled directly in yuan rather than US dollar, a relief for the country’s energy sector as since 2022 the US Treasury has enforced stricter controls on transactions by Iraqi banks.

Tight Diesel Stocks Remain Inflation Risk. With middle distillate stocks below the 10-year average in each of the main trading regions and a whopping 40 million barrels lower in Europe, any swift uptick in manufacturing and industrial activity is poised to send diesel prices back into an upward spiral.

China Locks in Another US LNG Term Deal. China Gas Holdings, one of the largest independent gas distributors in China, signed two separate 20-year LNG deals with US exporter Venture Global for a total of 2 million tons LNG per year, adding to a flurry of similar deals recently.

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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.