Commodities

Large tanker jam at the Bosphorus due to russian oil price cap

Published

6 months ago

December 6, 2022

The embargo on Russian oil shipments from Russia and the Russian oil price cap came into force on December 5. On December 5, an embargo on sea shipments of oil from Russia and Russian oil price cap came into force.

This is now the most relevant oil price cap news. Now ships carrying Russian crude will be able to access Western insurers only if the crude is sold at $60 a barrel or lower. According to four oil industry representatives, Turkey has demanded a new insurance confirmation because of the price cap.

According to ship brokers, oil traders and satellite tracking services, about 19 tankers carrying Crude Oil piled up in Turkish waters on Monday, Dec. 5. According to a ship broker, the first tanker arrived as early as Nov. 29. According to information from ship brokers and the tankertrackers.com service, most of the oil is of Kazakh origin.

Since December 5, price limits for Russian oil have come into force; the limit is $60 per barrel. The price ceiling was agreed by the G7 countries (USA, Great Britain, Germany, France, Canada, Italy and Japan), as well as Australia and the European Union. Besides, the European embargo on deliveries of Russian crude oil by sea became effective. As explained in the U.S. Treasury, now, Russia has two choices: to supply crude oil under the price ceiling, using the services of “best in class” companies of G7 countries, or to use the expensive services of “less reliable” companies outside the G7.

The Kremlin declined to acknowledge any limits. According to Russian presidential spokesperson Dmitry Peskov, a decision on retaliatory measures is “being prepared. He called the West’s actions “a step towards destabilizing world energy markets. The Russian side has repeatedly warned that it will stop supplying energy resources to countries that limit the price.

Earlier we reported that the G7 countries support limiting the price of Russian oil.

Commodities

Negative gas prices may form in Europe

Published

2 days ago

May 26, 2023

Negative gas prices may occur in Europe, according to top executives at major commodity market operators. The possibility of prices for short-term gas contracts turning negative this summer is being discussed, as reported by Bloomberg based on discussions at the annual E-World energy fair in Essen, Germany. The reason for potential negative prices would be an oversupply of gas not matching sluggish demand.

This scenario, where gas producers pay consumers to take their gas, is becoming more likely as prices have already approached pre-crisis levels. Recently, gas prices on the European exchange fell below $300 per thousand cubic meters for the first time in two years. During the May 26 auction, the cost of June futures on the TTF Hub in the Netherlands decreased by 0.3% to €25.38 per 1 MWh, approximately $286 per thousand cubic meters, considering the current exchange rate.

Peder Bjorland, vice president of gas trading and optimization at Norwegian oil company Equinor, mentioned that in certain regional gas markets in Europe, prices could go negative during hours or days with high renewable energy production. However, he cautioned that negative prices are still a distant possibility and many factors can influence the market.

Dyerd Varga, the CEO of Swiss trading firm MET International, also believes that the price of gas in Europe will fall below €10 per MWh (about $113 per thousand cubic meters).

“In the short term, within a few days, if the gas storage facilities are full, we could see prices below €10,” Varga stated, attributing the reason to a “bottleneck” caused by insufficient storage space.

Earlier we reported that oil prices rose after the statement by Saudi Arabia’s Energy Minister.

Commodities

Oil prices rose after the statement by Saudi Arabia’s Energy Minister

Published

4 days ago

May 24, 2023

According to trading data, global oil prices rose by more than 1.5% on Wednesday afternoon following the comments made by the Energy Minister of Saudi Arabia.

The price of July futures for Brent oil increased by 1.54% to $78.02 per barrel, and the price of July futures for WTI oil increased by 1.69% to $74.16.

The day before, Minister Prince Abdulaziz bin Salman criticized the International Energy Agency (IEA) for frequently making incorrect forecasts about the hydrocarbon market. Bin Salman also issued a warning to speculators in the oil market ahead of the OPEC+ meeting, stating, “I would just tell them to be careful.”

Representatives of OPEC+ member countries will meet on June 4 in Vienna to decide on their next steps.

According to Stephen Brennock, an analyst at PVM Oil Associates Ltd, cited by Bloomberg, the markets are evaluating the statements made by the Saudi energy minister.

Earlier we reported a decline in the number of oil rigs in the U.S.

Commodities

Baker Hughes reported a decline in the number of oil rigs in the U.S.

Published

6 days ago

May 22, 2023

During the reporting week, the number of active oil rigs in the U.S. decreased by 11, marking the largest weekly decline since September 2021. This information was provided by the oil services company, Baker Hughes, on Friday.

The decline in oil prices is influenced by the U.S. government debt situation.

In addition, the number of active gas drilling rigs also experienced a significant decrease of 17 units during the previous week, the most significant weekly decline since June 2020.

The cumulative number of active oil and gas rigs dropped by 11 units to a total of 720 during the week of May 13-19, which is the lowest level seen since May 2022.

According to Baker Hughes, this figure represents an 8-unit decline or a 1% decrease compared to the same period last year. It is the first decline of this kind since April 2021.

Specifically, the number of active oil rigs in the U.S. decreased by 11 units to 575, reaching its lowest point since June 2022. Meanwhile, the number of gas rigs remained unchanged at 141 units.

The most substantial decline occurred in Texas, where the total number of rigs fell by 9 units to reach 355 units during the reporting week, reaching the lowest level seen since May 2022.

In the Eagle Ford field, the number of rigs decreased by 3 units to 59, which is the lowest level observed since April 2022. Similarly, the Permian Basin experienced a decline of 4 units, reaching its lowest point since March, with a total of 349 units.

On a positive note, the rig count in New Mexico increased by 1 unit to 109, which is the highest level recorded since February.

Earlier we reported that oil prices were preparing to show their first weekly rise in a month.