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OPEC on Monday cut its forecast for 2022 global oil demand growth for a fifth time since April and also trimmed next year’s figure, citing mounting economic challenges including high inflation and rising interest rates. Oil demand in 2022 will increase by 2.55 million barrels per day (bpd), or 2.6 per cent, the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report, down 100,000 bpd from the previous forecast. “The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter of 2022,” OPEC said in the report. “Downside risks include high inflation, monetary tightening by major central banks, high sovereign debt levels in many regions, tightening labour markets and persisting supply chain constraints.” This report is the last before OPEC and its allies, together known as OPEC+, meet on Dec. 4 to set policy. The group, which recently cut production targets, will remain cautious, Saudi Arabia’s energy minister was q...

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...

An electricity pylon with high-voltage power lines in Dnipropetrovsk region, Ukraine, on Nov. 7. VALENTYN OGIRENKO/Reuters With Ukraine’s power grid coming under almost daily attack by Russian forces, the country’s main energy company has expressed interest in electrical equipment produced by a Canadian firm. Tower Solutions has factories in Granby, Que., and in Brechin, Ont., producing transmission towers that the company says could be exported to Ukraine and rapidly installed to restore power in the war-ravaged country. Ukrainian President Volodymyr Zelensky said recently Russia had damaged 40 per cent of his country’s energy infrastructure, and on Tuesday, Russian air strikes targeting energy and other facilities caused broad power blackouts. During a press briefing last month, a Tower Solutions representative pitched the company’s emergency replacement pylons to Maxim Timchenko, the president of DTEK, Ukraine’s largest private energy company. The representative noted the towers 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...

An Exxon gas station in Upper Darby, Pa., on April 26. Matt Rourke/The Associated Press Exxon Mobil Corp XOM-N on Thursday said it will lift capital spending next year by about 10%, to between $23 billion and $25 billion, and boost share buybacks. Exxon led rivals with record profits in the second and third quarters of this year, aided by its highly criticized decision during the COVID-19 pandemic to double down on fossil fuels as European competitors shifted to renewables. Wall Street on Thursday cheered the increase in buybacks. Exxon shares rose more than 1% even as most other oil stocks fell on weaker oil prices. Exxon is up 65% so far this year. Share buybacks will average $17.5 billion annually for the next two years, from $15 billion this year, the company said. Exxon is distributing more cash to shareholders than it is investing in new production – $30 billion between share buybacks and dividends this year. It kept unchanged its annual capital investment range of $20 billion-...

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...

A construction worker walks past the steam generating facility at the Cenovus Foster Creek SAGD oil sands operations near Cold Lake, Alta., in 2012. The company is part of Pathways, a group of six companies responsible for about 95 per cent of oil sands production. Todd Korol/Reuters A coalition of oil sands companies eyeing a massive new emissions-reduction project in northern Alberta will this winter begin exploratory drilling of underground reservoirs in which it hopes to store captured carbon, as part of its goal to produce net-zero oil by 2050. But Kendall Dilling, president of the Pathways Alliance, said there’s still another year or two of project development and applications for regulatory approvals before the planned carbon capture project hopefully gets the green light. The multibillion-dollar proposal includes a pipeline to gather captured carbon from more than 20 oil sands facilities and move it to an underground storage hub near Cold Lake, Alta. “We want to turn dirt and...

Submitted to Finance Canada by the government-appointed Sustainable Finance Action Council, the document could significantly shape global markets by serving as the most credible available protection against greenwashing Jeff McIntosh/The Canadian Press A federal advisory body is proposing to disqualify any new oil and gas projects from being classified as green, and award that designation only in a limited and qualified way to projects to reduce pollution from existing fossil-fuel production. The recommendations are included in a framework for a rulebook to define sustainable investments in this country, known as a green taxonomy, a copy of which was obtained by Tausi Insider. Submitted to Finance Canada this fall by the government-appointed Sustainable Finance Action Council (SFAC), the 77-page document received sign-off from all of that group’s members – including representatives of most major Canadian financial institutions, insurers and pension funds. But it has not yet been publ...

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...

Deloitte says energy prices will likely be volatile in the first quarter of 2023 as geopolitical uncertainty continues. The firm’s energy, oil and gas price forecast released Monday says global factors including the war in Ukraine and China’s rocky COVID reopening will continue to contribute to tension between supply and demand. After breaching the US$100 mark for the first time in close to a decade earlier in 2022, crude oil prices slid in the back half of the year as interest rates rose, then rallied briefly as China started moving away from its zero-COVID policy. Other major factors for oil prices have included OPEC-plus production cuts and moves to cap the price of Russian crude which Deloitte says could lead to disturbances in global supply, while natural gas prices have been influenced by regional weather forces and storage levels, especially in Europe. Report author Andrew Botterill says although a windfall from higher energy prices would normally lead companies to increase th...

Goldman Sachs GS-N expects that the growing ability of the Organization of the Petroleum Exporting Countries (OPEC) to raise prices without hurting demand too much will limit downside risks to its bullish oil forecast for 2023. The Wall Street investment bank sees global oil demand growth of 2.7 million barrels per day in 2023, pushing the market into deficit in the second half and lifting Brent prices to $105 per barrel by the fourth quarter. “This tightening, in turn, should allow OPEC to start unwinding its October production cut in H2,” analysts at Goldman said in a note dated Jan. 9. OPEC and allies including Russia, together called OPEC+, last month agreed to stick to their October plan to cut output by 2 million barrels per day from November through 2023. Brent futures were trading around $80 a barrel on Tuesday, while U.S. crude was above $75 per barrel. “However, if the market turned out to be softer, then OPEC could stick to its October cuts or cut production even further g...

Prime Minister Justin Trudeau meets with Prime Minister of Japan Kishida Fumio on Parliament Hill in Ottawa on Jan. 12. Sean Kilpatrick/The Canadian Press Japanese Prime Minister Fumio Kishida says Moscow’s invasion of Ukraine has caused a global energy crisis and he pressed Justin Trudeau on Thursday to supply reliable liquefied natural gas to Tokyo to replace Russian oil and gas. Mr. Trudeau and his Japanese counterpart, who met for three hours of talks in Ottawa, also agreed that China’s growing economic and military belligerence is one of the “central challenges” in the Indo-Pacific region. Mr. Kishida told reporters that the two countries would vigorously object to any efforts by Beijing to shift the balance of power in Asian waterways through which significant amounts of global trade pass. “We agreed that we would strongly oppose unilateral attempts to change the status quo by force in the East China Sea and the South China Sea,” he said. Japan’s PM Kishida and Trudeau to discu...

Bob Espey, President and Chief Executive Office of Parkland, at one of the company’s On the Run stores in Mississauga on Nov. 29, 2022. Fred Lum/Tausi Insider Last fall Bob Espey, the chief executive officer of Parkland Corp. PKI-T, stood near a maze of pipes at the company’s crude oil refinery in Burnaby, B.C., and explained how important the facility is to Parkland’s future. “The energy we produce and sell powers people’s lives every day,” he said. Later, while sampling a new chipotle grilled chicken BLT at the Mississauga test kitchen of M&M Food Market, which Calgary-based Parkland also owns, he detailed why that division was also critical to the company’s prospects. “M&M plays a central role in our diversification strategy,” he said. If hydrocarbons and hot sandwiches seem like a disjointed pairing, it speaks to the difficult position Parkland finds itself in today. For years, Parkland enjoyed a winning strategy of buying up fuel station and convenience store chains in C...