China is gradually winding down its coronavirus-related restrictions, with the Asian country’s National Health Commission announcing it would end its quarantine requirements in January, providing yet another boost for oil demand across the country. Russia’s claim that it could cut production by 5-7% in 2023 and a winter storm devastating the U.S. both added to the bullish mood that pushed WTI past the $80 per barrel mark again, OilPrice said.

WTI open interest the lowest in 16 Years. According to CFTC numbers, open interest held in WTI NYMEX futures and options fell to its lowest since August 2006 over the week ended 20 December, coming in at a mere 1.82 million contracts, down 25% year-on-year. 

USGC refiners adapt to freeze. Most refiners in the US Gulf Coast have increased flaring over the past days as operations were disrupted amid equipment failures driven by freezing temperatures, despite not seeing any power outages that the eastern coast has seen. 

Winter storms trigger massive US outages. Over 700,000 homes and businesses experienced power outages in the US this weekend as winter storms battered the eastern half of the country, with the greatest number of them taking place in the New England region. The impact of the freeze was felt most markedly in North Dakota where 300-350,000 b/d of Bakken production remains idled, approximately a third of pre-storm readings.

Albertan crude can flow again. The US pipeline regulator PHMSA has approved TC Energy’s plan to restart the idled section of the Keystone pipeline from Steele City to Cushing, Oklahoma, without specifying the exact date and adding that works would still take “several days”. 

The pain is still felt in New England where the cold will be slower to subside, day-ahead prices at the Algonquin pricing hub are still above $20/mmBtu, after trading late last week at the level of Asian LNG. Day-ahead prices in Western Texas jumped to $9/mmBtu before the weekend, although with the south expected to warm up significantly on Tuesday spot prices are almost certain to decline from here onwards.  

US LNG producer Venture Global signed a 20-year deal with Japan’s Inpex to supply it with 1 million tons LNG per year, to be sourced from the upcoming Calcasieu Pass 2 facility. UK energy firm BP signed a 20-year extension to its production sharing contract for three fields in West Papua, Indonesia, feeding the Tangguh LNG plant, remaining operator of the fields until 2055. ENI’s Norway-focused offshoot Vaar Energi made a 57-132 MMboe gas discovery near the Goliat field in the Arctic Barents Sea, the largest discovery on the Norwegian Continental Shelf this year.