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Oil output seen halved at Sakhalin-1 in 2022 -RIA cites regional governor

Oil production of 4.2 million tonnes this year is expected at the Sakhalin-1 oil and gas project in Russia’s Far East, down from a planned 8.9 million, the RIA state news agency said on Wednesday, citing regional governor Valery Limarenko. “There is a decline expected also in gas (production) due to the fact that the company suspended its production from Sept.16, 2022,” Limarenko said. Source: Reuters (Reporting in Melbourne by Lidia Kelly; Editing by Clarence Fernandez)

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The looming ban on Russian crude has the oil industry on tenterhooks

Crude oil prices are engaged in a tussle between fears of a recession-led demand decline and ongoing supply tightness, with risks to demand currently edging ahead. But many in the oil industry are concerned that supply tightness will make a comeback when the European Union ban on Russian crude imports comes into effect in December, and a similar measure on refined products in February 2023. The industry is holding its first major face-to-face gathering in Asia at S&P Global Commodity Insights APPEC 2022 event, and uncertainty over how the ban ...

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Shrinking global spare output capacity set to spark oil price rebound

The relentless fall in oil prices from more than $120 a barrel a few months ago to far below $90 could easily reverse as analysts argue that the fast depleting global spare oil production capacity and a resurgence in economies would trigger a quick rebound. Shrinking US strategic petroleum reserves (SPRs) and European Union’s move to severely limit its purchases of Russian oil are likely to aggravate the supply, leading to a sharp rebound in prices that hit the lowest in months on Friday. SPRs have shrunk to their lowest ...

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U.S. offshore oil output drops as Hurricane Ian takes aim

About 11% of oil production in the U.S. Gulf of Mexico was shut on Tuesday as a powerful Hurricane Ian forced oil companies to evacuate workers and the storm took aim at Florida. The hurricane entered the U.S. Gulf of Mexico on Tuesday and is forecast to become a dangerous, Category 4 storm over the warm waters of the Gulf, according to National Hurricane Center (NHC) forecaster Eric Blake. Ian weakened after crossing Cuba and was packing winds of 120 miles per hour (195 km per hour), the NHC said. ...

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The Fed’s Fight Against Inflation: Is WTI Crude Oil Recession Proof?

How quickly things have changed. Just a year ago, the Federal Open Market Committee (FOMC) gave a picturesque view of the economy. Any inflation was transitory and would likely fall to 2% in 2022. The federal funds rate would remain lower longer with little chance of a recession. At that same time, we had a different point of view. Given the weak U.S. dollar (USD), cheap money, and the U.S. Federal Reserve’s (the Fed) oversized balance sheet, it was inevitable that inflation would occur. Now, with the highest inflation rate ...

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Energy security, sustainability goals require collective action, financing

The interplay between energy transition and energy security has come into focus, with governments, national oil companies, IOCs and financial institutions required to play a pivotal role to collectively strike a balance between these objectives amid turbulent markets, industry experts said at the Asia Pacific Petroleum Conference 2022 organized by S&P Global Commodity Insights. “Right now, the world is in a perfect storm of crises,” VP Chief Sustainability Officer Petronas Charlotte Wolff-Bye said Sept. 26, noting that setbacks included nature-based crises, social inequality, supply chain issues, climate change disruptions and ...

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European Big Oil sales footprint to shrink as transition ramps up – JPMorgan

By 2025, the group’s total energy production is set to slip to 2.5% and total sales are set to decline to 7.9% of global energy demand. Within the mix, the share of renewables and low-carbon energy will grow to 5%, partially offsetting a decline in oil and gas production. JPMorgan analyst Christyan Malek said that while Big Oil firms will continue providing a significant part of the world’s energy, the supply will fall short of the expected growth in demand. “Over the long term their energy supply is below global ...

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East Texas basis markets crumble as flood of Permian Basin gas moves east

Discounted Permian Basin gas is putting pressure on the East Texas market in September as record West Texas production forces more supply eastbound, testing capacity on recently added intrastate pipelines. In recent trading, basis prices at Katy Hub and Houston Ship Channel have tumbled, settling in the week ending Sept. 23 at a nearly $1.50/MMBtu discount to the benchmark Henry Hub – down from an average discount closer to about 60 cents/MMBtu in August, data from S&P Global Commodity Insights shows. The price dislocations in East Texas come as Waha’s ...

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The Commodities Feed: Gas supply risks

Energy- gas supply risks grow Unsurprisingly, given the latest developments in the European natural gas market, TTF rallied yesterday, settling more than 7% higher on the day. Three leaks were detected along both the Nord Stream 1 & 2 pipelines, which appear to be due to sabotage. However, from a supply perspective, little has changed given that the Nord Stream 2 pipeline has never come into commercial operation, whilst flows along the Nord Stream 1 pipeline came to a complete halt in late August/early September. However, this latest incident suggests ...

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Oil prices fall more than 1% as dollar scales new peak

Oil prices fell more than 1% on Wednesday, pressured by a strengthening dollar and crude storage builds that offset support from U.S. production cuts caused by Hurricane Ian. Brent crude futures fell $1.02, or 1.2%, to $85.25 per barrel by 0630 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 97 cents, or 1.2%, at $77.53 per barrel. Both contracts had risen over 2% in the previous session. The dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed ...

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Russian Urals crude discounts shrink sharply, says India refinery exec

Discounts on the sale of Russian Urals crude have shrunk significantly from the $36/barrel seen soon after the Russia-Ukraine conflict, said an official from Indian refiner Bharat Petroleum Corp, indicating that Moscow is regaining pricing leverage in a tight energy market. The discounts on Urals sold on a free-on-board basis have reduced to the “teens,” Amit Bilolikar, deputy general manager for crude trading, said on the sidelines of the 38th Annual Asia Pacific Petroleum Conference (APPEC). India, which rarely used to buy Russian oil, has emerged as Moscow’s second-largest oil ...

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Fuel for Thought: Oil market ponders price floor amid demand destruction

Commodities show little sign of shaking the bearish momentum amid a slew of economic warnings across the globe. Whether the market wants to push oil much below $90/b amid potential OPEC output cuts, looming Russian sanctions, and the end of SPR releases is the big question. Demand destruction may be met by supply reduction. Prices are often a matter of perspective. On one level, the key S&P GSCI commodity index has fallen by more than 20% since peaking in June, but, from another angle, it is still three times higher ...

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The US to lead North America’s gas processing capacity additions by 2026, says GlobalData

The US is expected to account for the largest gas processing capacity addition projects by 2026, according to GlobalData. The leading data and analytics company notes that the US will account for 69% of the North America’s gas processing additions through new projects. GlobalData’s latest report, ‘Europe, North America and Former Soviet Union (FSU) Gas Processing Industry Installed Capacity and Capital Expenditure (CapEx) Forecast’, reveals that the US is set to have a planned gas processing capacity of 3,881 mmcfd (million cubic feet per day) and an announced gas processing ...

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U.S. crude oil inventories up: API

The American Petroleum Institute (API) on Tuesday reported an increase of 4.14 million barrels of crude oil in U.S. inventories for the week ending Sept. 23. Analysts had expected a hike of 0.333 million barrels for this week. The API reported a surge of 1.035 million barrels in the previous week. Oil prices rose on Tuesday after hitting their lowest levels since January in the prior session. The West Texas Intermediate for November delivery increased 1.79 U.S. dollars, or 2.3 percent, to settle at 78.5 dollars a barrel on the ...

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Global oil prices may stay under $100/bbl for rest of 2022 – Trafigura

Global oil prices may stay under $100 a barrel for the rest of the year as rate hikes from central banks have tightened credit and reduced investments in risk assets such as commodities, commodities trading major Trafigura said on Tuesday. “Given the macro headwinds, I think generally prices will struggle … despite imminent sanctions,” the trader’s chief economist Saad Rahim told Reuters on the sidelines of the 38th Asia Pacific Petroleum Conference (APPEC). Brent crude jumped to multi-year highs of about $139 a barrel in March following the Ukraine war, ...

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