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In oil markets, it’s back to 1998 crisis pricing

Brent oil futures may be trading at $27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s. Most are offloading their oil for below $20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets. While some crude grades typically sell at ...

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Asia Distillates-Jet fuel cracks post weekly drop, front-month spread widens

Asian refining margins for jet fuel climbed on Friday, while front-month spread for the aviation fuel widened its contango amid market concerns that demand would likely remain muted through the first half of 2020. Refining margins, also known as cracks for jet fuel, crawled up to $2.86 a barrel over Dubai crude during Asian trading hours, from $2.29 per barrel a day earlier. The cracks, however, slipped 3.7% this week, Refinitiv Eikon data showed. They had slumped over 61% in the week ended March 20, in their steepest decline in ...

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UK GAS-Prices fall on rising Norwegian supplies, wind power output

British wholesale gas prices fell on Friday morning as supplies from Norway rose, while gas demand for power generation was forecast lower due to higher wind power output. * The day-ahead contract was down 1.0 pence at 19.00 pence per therm by 0842 GMT. * “The oversupply is helped by higher Langeled flows (from Norway) and forecasts for lower gas (demand) for power,” Refinitiv gas analysts said. * Total LNG send-out is nominated at 64 million cubic metres (mcm) on Friday, up from 61 mcm the previous day, Refinitiv data ...

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Japanese refiners prepare to keep products supply steady amid talk of Tokyo lockdown

Japanese refiners are preparing to maintain their supply of oil products and refining operations even if Tokyo imposes a citywide lockdown to combat a spike in coronavirus cases, company and industry officials said Friday. The Japanese refiners’ readiness to ensure their stable oil products supply came to light after recent remarks by Tokyo Governor Yuriko Koike about a possibility of imposing tough quarantine measures, including a lockdown, amid a sharp rise in COVID-19 cases in Tokyo. Although it remains unclear how exactly the lockdown could be enforced, Japan’s top two ...

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PetroChina posts 23% wider net loss in imported gas business for 2019

State-owned integrated oil and gas giant PetroChina posted a 23% increase in losses in its imported natural gas segment for 2019 on the back of expensive oil-linked contracts, which could not be offset by its downstream prices. The trading losses underscore the impact of long-term contract pricing on national oil companies, and signal lesser price pressure in 2020 as the price spread between oil-linked and Platts JKM spot prices has narrowed due to the oil price collapse. PetroChina posted a net loss of Yuan 30.7 billion ($4.3 billion) in its ...

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Italy’s Eni to cut upstream oil, gas capex over next two years

Italian oil and gas company Eni is to cut capital and operational expenditure over the next two years due to sharp drops in commodity prices, following similar moves by a number of global energy majors. Eni will reduce capex by Eur2 billion ($2.2 billion) in 2020, equivalent to 25% of what it originally planned to spend, while opex will be Eur400 million less than intended. A bigger percentage of scheduled capital expenditure is set to be dropped in 2021, to the tune of Eur2.5 billion-3 billion, or 30%-35% of what ...

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Vietnam’s oil products, LPG demand and sales slide in Q1 on COVID-19 measures

Vietnam’s oil product and LPG demand has plummeted in the first quarter due to measures taken to contain the coronavirus outbreak, leading to bulging stockpiles and storage shortages, officials from state-run oil companies said. This has made it difficult for refiners Dung Quat and Nghi Son to sell fuel in the domestic market, as customers delay receiving cargoes, an official with Vietnam National Oil and Gas Group, or PetroVietnam, told S&P Global Platts recently. Retail stations are hesitant to stock up and buy transport fuels because they are waiting for ...

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US oil, gas rig count drops by 47 to 766 on week amid extreme activity cutbacks

The US oil and natural gas rig count dropped by 47 to 766 on the week, according to rig data provider Enverus, as exploration and production operators continued to steeply reduce capital budgets and activity for 2020 owing to both low oil demand and plunging crude prices due to the coronavirus pandemic. The drop was the largest single-week hit since the final week of December 2015, when the rig count fell 77 to 691 while oil prices were in the mid-$30s/b and falling. Crude prices are even lower now. Around ...

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Petronas sets April crude price factor at 10-month low

State oil firm Petronas has set the price factor for Malaysian Crude Oil (MCO) for April at $5.70 per barrel, down $3.60 from the previous month, the company said on Friday. * This is the lowest monthly price factor since May * The monthly price factor is added to the average of Platts’ dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP) * Petronas changed its OSP mechanism effective January 2017, basing its benchmark price on a basket of four Malaysian crude grades ...

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The world is running out of tanks to store oil as coronavirus and price war lead to flood of crude

A fast-rising tide of crude oil — courtesy of a plunge in demand due to the global COVID-19 pandemic and an ill-timed price war between Russia and Saudi Arabia — is filling up storage tanks around the world and putting a strain on the global refining system. Soaring storage costs will leave producers no choice but to sharply slash production, analysts said. IHS Markit estimated in a Thursday report that the global oil market is headed for a first-half 2020 surplus of 1.8 billion barrels, exceeding the top end of ...

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Russia’s Gazprom ‘optimistic’ for European gas market in Q3, Q4: CEO

Russian gas giant Gazprom is “optimistic” about the European market in Q3 and Q4, its CEO Alexei Miller told Russian President Vladimir Putin Friday, saying it was “too early” to draw conclusions about the state of the market from the first few months of the year. Russian gas exports to Europe have fallen sharply since the turn of the year, with supplies in January and February down by some 25% year on year to 20.4 Bcm, according to an analysis of S&P Global Platts Analytics data. The fall in supplies ...

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Russia calls for new enlarged OPEC deal to tackle oil demand collapse

A new OPEC+ deal to balance oil markets might be possible if other countries join in, Kirill Dmitriev, head of Russia’s sovereign wealth fund said, adding that countries should also cooperate to cushion the economic fallout from coronavirus. A pact between the Organization of the Petroleum Exporting Countries and other producers, including Russia (known as OPEC+), to curb oil production to support prices fell apart earlier this month, sending global oil prices into a tailspin. “Joint actions by countries are needed to restore the(global) economy… They (joint actions) are also ...

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GECF Expert Commentary – How Will the New Oil Price Environment Impact the Main Oil Producers

The beginning of the new decade has seen oil prices declining sharply. The ongoing coronavirus (Covid-19) pandemic has put a lid on oil demand growth. In fact, in its latest Monthly Oil Market Report, the Organization of the Petroleum Exporting Countries (OPEC), projects oil demand growth in 2020 at 60,000 barrel per day (b/d) from 2019. This growth compares to OPEC’s 2020 demand growth projection from a couple of months ago at more than 1 million barrel per day (mb/d). The marked slowdown of demand growth, coupled with the break-up ...

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Global oil refiners to deepen output cuts as coronavirus destroys demand

Oil refiners from Texas to Thailand are bracing for deeper output cuts, bruised by an unprecedented demand shock as more countries lock down and restrict travel to contain the spread of the coronavirus. Global fuel demand is set to drop by as much as 15% to 20% in the second quarter as a result of the coronavirus pandemic, which has killed more than 22,000 people, shut most worldwide air travel and has numerous countries imposing lockdowns keeping people at home and out of their cars. The sudden stoppage in activity, ...

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Saudi says no talks with Russia over more OPEC+ countries or joint pact

A Saudi Arabian energy ministry official said on Friday there had been no contact between the Saudi and Russian energy ministers over any increase in the number of OPEC+ countries, nor any discussion of a joint agreement to balance oil markets. The comments come after a senior Russian official said Moscow was in contact with Riyadh and a number of other countries to see if the number of OPEC+ members might increase, raising the possibility of a joint agreement to balance oil markets. Source: Reuters (Reporting by Rania El Gamal; ...

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