Oil prices are once again under pressure due to uncertainty about China’s economy, with the latest manufacturing data reigniting demand fears, OilPrice said.
Bearish sentiment around China’s economy dropped away in recent months, but October’s manufacturing activity data will undoubtedly bring back the issue of weaker Chinese demand to the global crude agenda. Surprising virtually everyone, China’s manufacturing PMI index dropped to 49.5 from 50.2 in September, whilst non-manufacturing PMI indicated a slowdown in services growth. With Brent trending around $88 per barrel, it seems it would take a serious escalation in the Middle East to send oil prices spiking. China braces for peak winter power usage.China’s National Energy Administration has warned that the country’s maximum power demand this winter might increase by 140 GW or 12% from last year’s 1,159 GW peak, warning of potential power shortages in Yunnan and Inner Mongolia.
Investors start shorting crude futures.Hedge funds and other money managers sold the equivalent of 14 million barrels in the six most important oil futures and options contracts in the week ending October 24, marking the fourth time in five weeks that funds were net sellers.
BP shares drop after lukewarm Q3 result. Adversely impacted by a $540 million write-down on offshore wind projects in New York as well as weak natural gas results, BPreported third-quarter earnings of $3.3 billion, missing analysts’ 4$ billion forecast and prompting a 5% share drop on Tuesday. Israel fast-tracks new exploration deals. Israel’s Energy Ministry awarded 12 offshore exploration licenses to six companies including the BP-Socar-NewMed consortium that will appraise areas to the north of the Leviathan gas field, whilst Eniwill explore waters west of the same field. UK oil major BPis seeking to form joint ventures with US energy companies to ramp up natural gas production around its assets, eyeing the Haynesville gas basin and Eagle Ford for potential positions.
FERC approves Venture Global LNG launch. The US Federal Energy Regulatory Commission approved a revised commissioning plan for the Calcasieu Pass LNG facility that has not yet seen full operation, arguing that 3 processing trains can be turned on while work on others continues.
Chevron settles Australia labor row.Workers at Chevron’s Wheatstone and Gorgon LNG terminals have endorsed a new trade union-backed pay deal brokered by Australia’s Fair Work Commission, eliminating the risk of further strikes this year to Europe’s great relief.
Exxon wants to expand Guyana clout. An Exxon-led consortium bid on the 1,707 km2 S8 shallow water block in Guyana’s first-ever competitive auction, seeking to expand its acreage in the country and joining ranks with a TotalEnergies-QatarEnergy-Petronas consortium that bid for the S4 block.
Mexico keeps on subsidizing Pemex. Mexico’s government statistics show that national oil company Pemex received $3.2 billion in October alone, via cash injections and tax cuts, to keep the company afloat, on top of a hefty $5.8 billion in aid received last month to launch the Dos Bocas refinery.
Panama’s protests halt copper mining.As widespread protests continue to rattle the streets of Panama, the country’s government pledged to reject all new mining projects in the country but keep First Quantum’s Cobre Panama deal extension intact, accounting for 5% of Panama’s GDP currently.
Argentina threatens to cut oil exports.Confronted with persistent fuel shortages that spiraled out of control ahead of Argentina’s second round of presidential elections, Economy Minister Sergio Massa warned the country might suspend exports of crude oil if fuel supply doesn’t normalize.
Venezuelan refining collapses.Just as Venezuela prepares to ramp up crude exports amidst a 6-month sanctions clearance, the country’s 955,000 b/d Paraguana refining complex saw the closure of two CDUs due to fires and lack of feedstock, lowering its utilization rate to as little as 10%.
Bailed-out German utility giantUniper posted a $10.4 billion net profit in January-September, a sea change compared to the $45 billion loss in the same period in 2022. Germany courts Nigeria for more gas.With chancellor Olaf Scholz visiting Nigeria, Germany has been expressing its readiness to invest in natural gas projects in the African country, with Berlin nudging German companies to consider funding pipeline projects and new LNG capacity.