Oil prices have stabilized after Monday’s drop-off, with traders expecting a draw in both U.S. crude and product inventories – expectations that will be confirmed later today, OilPrice said.
The resumption of Libya’s largest oil field El Sharara, Beijing posting weaker-than-anticipated Q2 GDP growth figures, and China’s 12% year-on-year drop in exports for June, the biggest drop since peak Covid impact in the summer of 2020, have soured the overwhelmingly bullish sentiment of the past days. Some of Monday’s losses were pared back on Tuesday morning as traders expect news of a draw U.S. inventories, keeping Brent steady within the $78-79 per barrel range.
Oil major BP and Azerbaijan’s national oil firm SOCAR have participated for the first time in Israel’s recent licensing round, jointly bidding for two offshore blocks alongside Israel’s NewMed Energy. Confirming our report from two weeks ago, Austria’sOMVadmitted it is in talks with the Emirates’ national oil firm ADNOC to combine their assets in Borealis and Borouge into a $20 billion chemicals giant. India’s JSW Steelis considering buying 20% of Canada’s Teck Resourcesmetallurgical coal business, with media reports suggesting the deal would be worth $2 billion.
A Saharan anticyclone called Charon is moving towards the Mediterranean and could lift temperatures in the region to all-time highs, with heatwaves aggravated by the first El Niño in four years, and testing the continent’s power generation capacities. Europe’s gas and power markets are gradually coming under strain as demand for air conditioning rose steeply over the past weeks and is set to soar more as Italy, Spain, Greece, and France are expected to see temperatures above 40° C.
Whilst photovoltaic solar generation remained steady on the month, gas-to-power demand rose by 34% and 24% on the month in Italy and Spain, respectively. Despite that rise in demand, TTF front-month prices continued their decline to €25 per MWh ($9 per mmBtu). Similarly to natural gas, Europe’s power prices have been edging lower across the region, with Italy’s baseload August prices dropping below €100 per MWh and Spain’s same-month contract falling to €72 per MWh, both down 20% month-on-month.
/OilPrice/