Nothing But Bullish News As Oil Prices Soar
Reader Update: Biden has now officially announced a ban on Russian energy imports. With this in mind, our Global Energy Alert members just received an in-depth report on the best opportunities in the U.S. shale patch. Sign-up for Global Energy Alert and read the report today.
- Spot gas prices in Europe have reached unprecedented levels on fears that sanctions against Russia, accounting for 40% of total imports, might leave the continent’s natural gas demand without supply.
- Europe’s benchmark spot contract, the Dutch TTF, hit an all-time high of €335 per MWh in intraday trading on Monday, equivalent to $120 per mmBtu, before dropping back to $75/mmBtu, still twice as high as Asian spot prices.
- At the same time, Germany has already indicated it will not slap sanctions on Russia’s oil and gas, fearing that the repercussions of such a move would trigger wide ‘civil unrest’.
- Against the background of record gas prices, Gazprom (MCX:GAZP) has ramped up supplies to Europe, with March daily inflows averaging some 3000 GWh so far, up 30% compared to February.
Market Movers
- UK-based oil major Shell (LON:SHEL) apologized for buying Russian crude last week and pledged to withdraw completely from any involvement in Russian hydrocarbons.
- US shale oil and gas producers Oasis Petroleum (NASDAQ:OAS) and Whiting Petroleum (NYSE:WLL) announced they will merge in a $6 billion deal including debt, leaving the new entity with prime Williston Basin acreage of almost one million net acres.
- Global commodities trader Trafigura raised a $1.2 billion revolving credit facility from a consortium of Japanese, French, and Italian banks to manage its increasingly distressed financial exposure.
Tuesday, March 08, 2022
As the Russia-Ukraine war continues to shatter whatever hopes remained of Europe’s post-pandemic economic recovery, Brent prices are already trading near $130 per barrel. Biden's announcement of a ban on Russian energy imports, including oil, coal, and LNG, has only added to the upward pressure in oil markets. While European powers have made it clear they will not ban Russian energy imports, European natural gas prices are at all-time highs, dragging coal along to unprecedented levels as well. Moreover, with hopes of a quick Iranian deal cooling, there is no sign of relief for the current oil price rally.
The US Goes It Alone On Russian Energy Ban. In a speech on Tuesday morning, President Biden confirmed that the United States would ban Russian energy imports. In his speech, Biden confirmed that its European allies will not be joining the U.S. in this measure due to their relative lack of energy security. Oil prices and gasoline prices both climbed on the news.
Russia Warns of $300 per Barrel Oil If Imports Slapped. Russia’s deputy prime minister Alexander Novak has warned that if the United States and the European Union were to ban imports of oil from Russia, oil would move to $300 per barrel.
2021 Sees Record CO2 Emissions from Energy. According to the International Energy Agency, global energy-related emissions rose to an all-time high of 36.3 billion tonnes in 2021, up 6% year-on-year, as exorbitant gas prices rekindled interest in coal burning.
Political Pressure Is Now on Iran and the US. After Russia threatened to block the Iranian deal on guarantees that its trade with Iran will not be subject to any constraints, the top EU envoy Enrique Mora said that Teheran and Washington now have to make a political decision to act if they want to prevent the failure of talks.
Brazil Wants to Tamp Down Fuel Prices. Just as Petrobras (NYSE:PBR) executives suggested Brazil would need to raise transportation fuel prices amidst soaring crude prices globally, the Bolsonaro government is reportedly considering a fuel subsidy program that could potentially be funded by the Brazilian oil company’s dividends. Related: Gas Prices In Europe Skyrocket Again As Supply Risks Grow
Japan Mulls Nuclear Restarts to Avoid Energy Crunch. Wary of ramifications coming on the back of Russia’s invasion of Ukraine, the Japanese government is considering a quicker-than-anticipated re-licensing of idle nuclear reactors (more than 40 in total) that were shut down after the 2011 Fukushima disaster.
Palladium Prices Soar To Record Highs. Prices of palladium, a rare metal used in catalytic converters, 30% of which is mined in Russia, almost doubled over the past two weeks, touching a record high of $3,440 an ounce on Monday - with transportation from Russia essentially impossible, prices are expected to go higher still.
China Announces New Pollution-Curbing Measures. China is set to introduce new incentives aimed to cut pollution and reduce carbon emissions, in line with its pledge to have emissions peaking before 2030, coming on the back of all-time high coal production rates.
India Wants to Buy Venezuelan Crude. Indian oil company ONGC Videsh confirmed that there have been ongoing talks between India and the United States to allow the company to settle past debts worth some $420 million by trading Venezuelan oil cargoes.
Jet Fuel Surge Jeopardizes Fragile Flight Recovery. Surpassing the pace of even Brent’s rapid appreciation, jet fuel prices have soared to 14-year highs as the market struggles to keep up with demand, with Singapore jet prices hitting $150 per barrel.
Gold Nears All Time High On Russia Supply Chaos. Gold is climbing towards its all-time high as Russia's invasion of Ukraine continues to push investors towards safe-haven assets. While gold is now above $2000, assets do tend to pull back as they near their all-time highs as traders take profits.
Saudi Arabia Awards 1 GW in Solar Projects. Saudi Arabia awarded two solar projects with a capacity of 700MW and 300MW, respectively, signing 25-year power purchase agreements with Acwa Power and China’s Jinko Power.
LME Stops Nickel Trading Following Record Surge. The London Metal Exchange (LME) halted nickel trading after its benchmark three-month price surged some 60% on Monday and soared even higher today, fueled by fears of suspended Russian exports, trending around $100,000 per metric tonne at the time of closure.