Oil prices have rebounded slightly from last week’s crash, but the downside pressures are still very much present. The interest rate hikes from both the Bank of England and the ECB on Thursday halted the upward momentum in oil prices that had been building. The ongoing halt in Keystone deliveries, however, should provide some hope to bulls as it has brought supply tightness to a continent that has had a relatively secure year so far. With uncertainty remaining over China’s post-Covid reopening, we might see more of the traditional 2022 volatility in the remaining weeks of this year, OilPrice said.
Europe’s largest oilfield launches second phase. Norway’s Equinor has started production from the second phase of the Johan Sverdrup oil field, Europe’s largest producing asset which will see its total production increase to 720,000 b/d, some 6% of oil demand in Europe. IEA forecasts 2023 oil demand growth.The International Energy Agency believes next year will witness further oil demand growth of 1.7 million b/d, driven mostly by China rebounding from this year’s contraction and adding 1 million b/d, taking it to a new all-time high of 101.6 million b/d.
Central Bank hikes scare investors.Global stocks and bonds have dropped to a one-month low on Friday as the 0.5pp US Fed hike was followed through by central bank interest rate increases in the EU, UK, Switzerland, Mexico, Norway, and Taiwan (all in just one day), triggering a new whirlwind of bond/stock selling.
Dilbit bad news for Keystone cleanup. According to the US Environmental Protection Agency, the oil spilled from the ruptured Keystone pipeline operated by TC Energywas diluted bitumen which tends to sink in water, complicating efforts to clean the impacted water bodies, especially with a cold snap coming up.Earthquake risk caps Texas drilling. A mid-November magnitude 5.4 earthquake compelled Texas and Oklahoma authorities to limit how much wastewater can be injected into wells, particularly deep ones, by some 60-70%, which will inevitably hinder production growth coming from the US shale patch.