Tausi Insider

Oil tanks at the Volodarskaya LPDS production facility, in the village of Konstantinovo, Russia, on June 8. MAXIM SHEMETOV/Reuters Russian oil output is set to fall 1.4 million barrels per day (bpd) next year after a European Union ban on seaborne exports of Russian crude comes into effect, the International Energy Agency said on Tuesday. The move to deprive Moscow of revenue will create more uncertainty for oil markets and add to pressure on prices, including diesel, the Paris-based energy agency said in its monthly oil report. “The approaching EU embargoes on Russian crude and oil product imports and a ban on maritime services will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,” the IEA said. “A proposed oil price cap may help alleviate tensions, yet a myriad of uncertainties and logistical challenges remain … the range of uncertainty has never been so large.” The EU will ban Russian crude imports from Dec. 5 and Russ...

European refiners have found themselves oversupplied with crude as an expected shortage owing to the looming EU ban on Russian oil has yet to materialize. The front-month Brent crude futures spread narrowed sharply this week, reflecting better supply in the physical oil market as fears over the EU embargo on Russian crude begin to subside. Premiums on prompt prices to future prices – known as a backwardated market structure – usually indicate supply tightness. Traders cited Europe’s ability to replace Russian oil with grades from the Middle East, the United States and Latin America while Asia is asking for less crude because of an economic slowdown and increased use of Russian barrels. Brent futures prices have also slumped by about 7 per cent this week, weakening for a second week in a row. “There’s too much oil around,” one European crude trader said. “(European] refiners seem to have overbought in November and December, probably because of fears around Urals,” he said, adding that...

Benchmark Brent oil edged lower on Thursday while West Texas Intermediate (WTI) crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply. A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices. Brent crude futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96. Trading volumes were thin because of the Thanksgiving holiday in the United States. Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level. European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions c...

Oil tanks at the Volodarskaya LPDS production facility, in the Russian village of Konstantinovo, on June 8. MAXIM SHEMETOV/Reuters The global oil market is signaling a potential shift, as traders and analysts worry about reduced crude demand and an oversupplied market in the coming months. After months of strength, crude futures are flirting with lows not seen all year as top oil consumer China enters additional COVID-19 lockdowns while central banks hike interest rates to combat inflation. Front-month global oil prices in the last week have traded weaker than future-dated contracts, while prices for physical crude grades throughout the world have declined, market participants said. “Differentials are confirming what outright prices have been implying – there is a demand deficit and/or supply surplus,” said Tamas Varga of oil broker PVM. The murkier environment comes at a fraught time for the market. On Dec. 5, a European Union ban on Russian crude imports is set to start, along with...

European Union governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil - an idea of the Group of Seven (G7) nations - with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters. The agreement still needs to be approved by all EU governments in a written procedure by Friday. Poland, which had pushed for the cap to be as low as possible, had as of Thursday evening not confirmed if it would support the deal, an EU diplomat said. EU countries have wrangled for days over the details of the price cap, which aims to slash Russia’s income from selling oil. The initial G7 proposal last week was for a price cap of $65-$70 per barrel with no adjustment mechanism. Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of reducing Moscow’s ability to finance its war in Ukraine. “The price cap is set at $60 with...

Russia, the world's second largest oil exporter, will not sell oil that is subject to a Western price cap even if it has to cut production, President Vladimir Putin's point man on energy said. https://www.tausiinsider.com/russia-will-not-export-oil-subject-to-western-cap/?feed_id=330746&_unique_id=644e28396bf30

Oil prices edged lower on Thursday on the prospect of a major crude pipeline that shut after a leak resuming service, which would return a hefty amount of crude to the market at a time when global economic slowdowns are raising fuel demand fears. Brent crude lost 50 cents, or 0.7 per cent, to $76.67 a barrel by 1:37 p.m. EST (1837 GMT), while U.S. West Texas Intermediate (WTI) crude shed 16 cents, or 0.2 per cent, to $71.85. Canada’s TC Energy said it shut its 622,000 barrel-per-day Keystone pipeline, which is the primary line shipping heavy Canadian crude from Alberta to the U.S. Midwest and Gulf Coast, after a spill into a Kansas creek. Oil prices rose after the company announced the closure, which occurred at about 8 p.m. CT Wednesday (0200 GMT Thursday), but market sentiment has since shifted. “The concern about the Keystone situation is just not there anymore, and I think that will get back up and running in no time so it won’t be a material loss of crude...,” said John Kilduff,...

TC Energy TRP-T shut its Keystone pipeline in the United States after more than 14,000 barrels of crude oil spilled into a creek in Kansas, making it one of the largest crude spills in the United States in nearly a decade. The cause of the leak, which occurred in Kansas about 20 miles (32 km) south of a key junction in Steele City, Nebraska, is unknown. It is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010. The 622,000 barrel-per-day Keystone line is a critical artery shipping heavy Canadian crude from Alberta to refiners in the U.S. Midwest and the Gulf Coast. It is unclear how long the closure will last. There have been no effects on drinking water wells or the public, the U.S Environmental Protection Agency said in a statement, though surface water of Mill Creek was affected. Kellan Ashford, spokesperson for EPA Region 7, which includes Kansas, said the cause of the leak was still unclear on Thursday evening. TC had mobilized arou...

Emergency crews work to clean up the largest U.S. crude oil spill in nearly a decade, following the leak at the Keystone pipeline operated by TC Energy in rural Washington County, Kansas, on Dec. 9. DRONE BASE/Reuters Canada’s TC Energy TCP-T said on Sunday it has not yet determined the cause of the Keystone oil pipeline leak last week in the United States, while also not giving a timeline as to when the pipeline will resume operation. TC shut the pipeline after more than 14,000 barrels of crude oil spilled into a creek in Kansas on Wednesday, making it one of the largest U.S. crude spills in nearly a decade. “Our teams continue to actively investigate the cause of the incident. We have not confirmed a timeline for re-start and will only resume service when it is safe to do so, and with the approval of the regulator,” TC said in an update posted to its website. The pipeline operator said that it has more than 250 people working on the leak, including third-party environmental special...

Cleanup continues after an oil leak from the Keystone pipeline, in Washington County, Kan., on Dec. 9. The Associated Press Traders expressed worry on Monday about how long Canada’s TC Energy Corp TRP-T would take to clean up the largest U.S. crude oil spill in nearly a decade and restart its Keystone oil pipeline after more than 14,000 barrels of oil leaked last week. TC Energy shut the pipeline after the spill was discovered late last Wednesday in Kansas. The company told officials in Washington County, Kansas, on Monday that they have not yet determined the cause and that they started excavating around the pipeline. TC Energy and the county officials met briefly Monday to discuss efforts to contain and clean up the spill, a company official said. The meeting was “uneventful,” lasting 13 minutes, said Dan Thalmann, owner of the Washington County News. TC Energy provided no timeline on the cleanup, Thalmann said. The company told the county it was expanding efforts to vacuum oil fro...

Emergency crews work to clean up after a leak at the Keystone pipeline, in Washington County, Kan., on Dec. 9. DRONE BASE/Reuters Six days after TC Energy’s TRP-T Keystone pipeline shut following a 14,000-barrel spill into a creek in Kansas, traders are questioning whether there is enough oil in storage in key areas if the pipeline remains closed for a number of weeks. Here is the latest data on storage inventories, and other factors affecting cash prices in Canada and the United States: Western Canadian inventories As of the week ending Dec. 2, or the week before the spill, Canadian inventories were just below 29 million barrels, according to energy consultancy Wood Mackenzie, with about 16 million barrels of spare capacity available. On Tuesday, the latest data for the week ending Dec. 9 showed inventories rose 1.4 million barrels to around 30.4 million, according to a trader. Wood Mackenzie, which sends its inventory data to clients a day or two ahead of making it widely available...

Emergency crews work to clean up a spill from the Keystone pipeline, in Washington County, Kan., on Dec. 9. DRONE BASE/Reuters Cleanup of the biggest U.S. oil spill in nearly a decade will take at least weeks more, local officials in Kansas said on Tuesday, citing a recent meeting with Keystone pipeline owner TC Energy Corp TRP-T. TC closed the pipeline after the spill of roughly 14,000 barrels of crude was discovered on Wednesday in Washington County in Kansas. There is still no official timeline for a restart of the line, which will need approval from regulators. TC and county officials met briefly on Monday. “They told us they expected to be here for several more weeks,” said Randy Hubbard, Washington County’s emergency management co-ordinator. “They didn’t qualify what that is.” TC did not respond to questions, and the company and regulators have not yet identified a cause for the leak. Sabotage has been ruled out, Kansas State Representative Lisa Moser said in a post online Mond...

U.S. crude oil stockpiles rose by more than 10 million barrels last week, the most since March 2021, buoyed by releases from the Strategic Petroleum Reserve and as refiners reduced activity. Crude inventories increased by 10.2 million barrels in the week ended Dec. 9 to 424.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 3.6 million-barrel drop. The crude stockpile figure included a 2.26 million per day (bpd) adjustment. Kpler analyst Matt Smith attributed the adjustment to exports which were considerably lower on the U.S. Gulf last week than the EIA reported. The sharp crude build come as a recession threatens economies in the United States and Europe, worrying markets about demand for crude oil and petroleum products. SPR crude inventories fell by 4.7 million barrels in the week to 382.3 million, their lowest since January 1984, while stocks at the Cushing, Oklahoma, delivery hub for U.s futures rose by 426,000 barrels, the EIA said. Last week’s shut...

Canada’s TC Energy Corp TRP-T is resuming operations in a section of its Keystone pipeline a week after a leak of more than 14,000 barrels of oil in rural Kansas triggered the whole pipe’s shutdown. The company said in a statement on Wednesday that it had given notice to regulators and customers about the restart of pipeline sections unaffected by the incident. The segment of the pipeline where the incident occurred remains sealed off. “This restart facilitates safe transportation of the energy that customers and North Americans rely on and extends from Hardisty, Alberta, to Wood River/Patoka, Illinois,” TC Energy said. The 622,000 barrels per day (bpd) pipe has been shut since Dec. 7, when the leak was discovered. Oil sprayed nearby pastures and leaked into Mill Creek before being shut by operator TC Energy. More than 300 people are involved in the cleanup. The timeline for the full restart of the pipeline remained uncertain, and neither a root cause failure analysis nor a full rest...

Oil prices rose by more than $2 per barrel on Friday after Moscow said it could cut crude output in response to the G7 price cap on Russian exports, putting the market on track for a second week of gains. Brent crude was up by $2.72, or 3.4 per cent, to $83.70 a barrel at 1:24 p.m. EST (1824 GMT), while U.S. West Texas Intermediate (WTI) crude was at $79.77 a barrel, up $2.28, or 2.9 per cent. Russia may cut oil output by 5 per cent to 7 per cent in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday. Russia’s Baltic oil exports could fall by 20 per cent in December from the previous month after the European Union and G7 nations imposed sanctions and a price cap on Russian crude from Dec. 5, according to traders and Reuters calculations. “The potential cut from Russia could be giving the bulls more fuel,” said Eli Tesfaye, senior market strategist at RJO Futures. “If global demand continues at current pace, that...

An oil platform in the Baltic Sea, Russia, on Sept. 16, 2021. VITALY NEVAR/Reuters Russia may cut oil output by 5 per cent-7 per cent in early 2023, as it responds to price caps on its crude and refined products, and halt sales to the countries that support them, Deputy Prime Minister Alexander Novak told state television on Friday. Detailing for the first time the Russian response to the price caps introduced by the West over Moscow’s invasion of Ukraine, Novak said the cuts could reach 500,000-700,000 barrels per day (bpd). He also said that despite Europe’s efforts to cut reliance on Russian oil and gas, energy exports from Russia are in demand worldwide and Moscow has been diversifying its buyers. Novak said it would be difficult to provide for global economic development without Russian energy, and predicted possible gas shortages in Europe, which has introduced restrictions on gas prices, as well as on oil. On oil, the European Union, G7 nations and Australia introduced a $60 p...

Oil prices held near this year’s highs on Monday as easing COVID restrictions in China raised expectations for a demand recovery in the world’s top crude importer. Brent crude fell 38 cents, or 0.45 per cent, to $84.90 a barrel by 1012 GMT, while U.S. West Texas Intermediate crude was down 26 cents, or 0.33 per cent, at $79.60 a barrel, amid thin trade during Monday’s U.S. public holiday. Both contracts rose more than 8 per cent last week, the biggest weekly gains since October after China abandoned what remained of its zero-COVID policy by reopening its borders on Jan. 8. China’s crude imports rose 4 per cent year on year in December, while an expected resurgence in travel for the Lunar New Year holiday at the end of the week raised the outlook for demand for fuels used in transport. Traffic levels in China are rebounding from record lows after the easing of COVID-19 restrictions, resulting in stronger demand for crude and oil products, ANZ analysts said in a note. But new reports o...

Emergency crews work to clean up after a leak at the Keystone pipeline, in Washington County, Kan., on Dec. 9. DRONE BASE/Reuters Six days after TC Energy’s TRP-T Keystone pipeline shut following a 14,000-barrel spill into a creek in Kansas, traders are questioning whether there is enough oil in storage in key areas if the pipeline remains closed for a number of weeks. Here is the latest data on storage inventories, and other factors affecting cash prices in Canada and the United States: Western Canadian inventories As of the week ending Dec. 2, or the week before the spill, Canadian inventories were just below 29 million barrels, according to energy consultancy Wood Mackenzie, with about 16 million barrels of spare capacity available. On Tuesday, the latest data for the week ending Dec. 9 showed inventories rose 1.4 million barrels to around 30.4 million, according to a trader. Wood Mackenzie, which sends its inventory data to clients a day or two ahead of making it widely available...

Emergency crews work to clean up a spill from the Keystone pipeline, in Washington County, Kan., on Dec. 9. DRONE BASE/Reuters Cleanup of the biggest U.S. oil spill in nearly a decade will take at least weeks more, local officials in Kansas said on Tuesday, citing a recent meeting with Keystone pipeline owner TC Energy Corp TRP-T. TC closed the pipeline after the spill of roughly 14,000 barrels of crude was discovered on Wednesday in Washington County in Kansas. There is still no official timeline for a restart of the line, which will need approval from regulators. TC and county officials met briefly on Monday. “They told us they expected to be here for several more weeks,” said Randy Hubbard, Washington County’s emergency management co-ordinator. “They didn’t qualify what that is.” TC did not respond to questions, and the company and regulators have not yet identified a cause for the leak. Sabotage has been ruled out, Kansas State Representative Lisa Moser said in a post online Mond...

Canada’s TC Energy Corp TRP-T is resuming operations in a section of its Keystone pipeline a week after a leak of more than 14,000 barrels of oil in rural Kansas triggered the whole pipe’s shutdown. The company said in a statement on Wednesday that it had given notice to regulators and customers about the restart of pipeline sections unaffected by the incident. The segment of the pipeline where the incident occurred remains sealed off. “This restart facilitates safe transportation of the energy that customers and North Americans rely on and extends from Hardisty, Alberta, to Wood River/Patoka, Illinois,” TC Energy said. The 622,000 barrels per day (bpd) pipe has been shut since Dec. 7, when the leak was discovered. Oil sprayed nearby pastures and leaked into Mill Creek before being shut by operator TC Energy. More than 300 people are involved in the cleanup. The timeline for the full restart of the pipeline remained uncertain, and neither a root cause failure analysis nor a full rest...