Oil prices have recorded their first monthly gains since May, with ICE Brent finishing October just below the $95 per barrel mark. However, the relative strength recently has been tainted by China’s ongoing woes, with its October industrial and services activity seeing a huge month-on-month drop, highlighting the pain and insecurity that the zero-Covid policy continues to wreak in the country, OilPrice reports.

OPEC really believes in the oil markets.In its 2022 World Oil Outlook, OPEC raised its medium- and long-term oil demand forecasts, anticipating a further 8 million b/d of growth by 2030 to 108.3 million b/d, in stark contrast with the fossil-fuel-pessimistic forecast published last week by the IEA. 

Russia price cap remains an enigma. The US Treasury Department indicated that vessels of Russian petroleum loaded before and unloaded at their destination before January 19, 2023, will not be subject to the price cap, oddly enough easing the pressure on Russian cargoes this month.

With US East Coast diesel inventories half of what they normally should be at this time of year, retail prices in PADD1 (a huge heating oil demand hub) have soared above $6 per gallon recently, some $1.3/USG higher than retail prices in Texas. Even though the motion faces headwinds, Senate Democrats have already suggested institutionalizing a gasoline export ban whenever the national domestic price reaches at least $3.12 per US gallon over the prior seven days’ averages.  US President Joe Biden called on oil and gas companies to stop “war profiteering” and use their record profits to lower the cost of transportation fuels for Americans, implicitly threatening them with a windfall tax if they fail to do so.  

The five largest global oil companies have posted net income totaling almost 60 billion in Q3 2022 alone, increasing the risks of government intervention including a US windfall tax. As US oil majors such as ExxonMobil and Chevron see their stock prices hit all-time highs, soaring 75% and 52% in 2022 to date, the Biden administration might be increasingly tempted to squeeze them for funds. Chevron has already warned that increasing taxation on oil production will just reduce output, a risky development at a time when upstream investment is still more than 45% below the 2014 peak. 

US oil major ConocoPhillips will be the third and final international partner for Qatar’s 16 mtpa North Field South LNG project, having been handed a 6.25% stake (smaller than TotalEnergies’ and Shell’s 9.375% stake). Beating analysts’ forecasts, Saudi national oil company Saudi Aramco posted a net income of $42.4 billion in Q3, almost 40% higher year-on-year and slightly lower than the all-time high Q2 results. Market shares of Brazil’s state-controlled oil company Petrobras plummeted by almost 10% after Lula da Silva won the second round of the country’s presidential elections by a narrow margin.