Weak Chinese demand weighs on oil prices. Oil prices fell slightly on Friday morning as one of the only consistently bearish factors in oil markets, weak demand from China due to Covid lockdowns, came into focus. Just as it seemed COVID-19 was disappearing from the energy agenda, the reimposition of lockdown restrictions in Shanghai and Beijing reminded the oil markets that pandemic-related demand losses were still a threat.
It is China’s failure to bounce back from Covid that has provided the main downward force on oil prices in recent months. In anticipation of economic activity returning to normal over June, China loaded up on oil and oil products in May, which may now lead to slower imports. China’s continuous demand blues are now weighing on oil prices, cooling down the gains made earlier this week, with ICE Brent falling back towards $120 per barrel on Friday.
Platts to include WTI Midland in Brent basket. Price reporting agency S&P Global Platts will include WTI Midland into its Brent price assessment starting from June 2023, arguing the inclusion bolsters physical volumes underpinning the benchmark even though the FOB equivalent of WTI will be derived from a CIF price.
Europe’s carbon market reform fails. In a major upset for Europe’s ambitious carbon plans, the European Parliament rejected this week a proposal to upgrade the EU carbon market, with lawmakers voicing concerns about hurting business with new stringent rules now, in a time of soaring energy costs and inflation.
White House steps up anti-oil rhetoric. Representatives of the Biden Administration have lambasted oil and gas companies for failing to quell soaring fuel prices, with Bharat Ramamurti claiming that the windfall tax is an option on the table, as US firms are expected to generate $834 billion in free cash flow this year.
Explosion rocks Freeport LNG, sending Henry Hub down.An explosion has disrupted operations at the 15 mtpa Freeport LNG liquefaction terminal in Texas, sending front-month Henry Hub US gas futures back below $9 per mmBtu as all liquefaction trains are expected to be out for three weeks.
The oil majors backing Qatar’s giant LNG expansion. Five leading oil majors – ExxonMobil, TotalEnergies, Shell, ConocoPhillips and Eni – were handpicked by Qatar to participate in the $30 billion expansion in the North Field, a 50mtpa ramp-up in Qatari production capacity across six new liquefaction trains.
Space scientists spot PEMEX massive methane leak.Scientists from the European Space Agency detected a massive methane leak coming from PEMEX’s offshore Zaap platform, stating that in December 2021 a 17-day ultra-emission event emitted 3% of Mexico’s total emissions last year.