8/12: Oil falls 2% on expectations that U.S. Gulf supply disruption will ease

Oil falls 2% on expectations that U.S. Gulf supply disruption will ease (Reuters)

Oil prices plunged around 2% on Friday, on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.

Futures, however, were still on track for a weekly gain.

Brent crude futures fell $1.45, or 1.5%, to settle at $98.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.25, or 2.4%, to settle at $92.09 a barrel. Both contracts gained more than 2% on Thursday.

8/12: Oil, gas permits rising in Permian Basin

Oil, gas permits rising in Permian Basin (Houston Chronicle)

The number of drilling permits approved in the Permian Basin, the nation’s most productive oil field, continues to rebound from the pandemic downturn, analysts say, hitting a three-year high in July.

The number rose in July by 273 permits to 1,526, the highest number since 2019, according to investment banking advisory company Evercore and data firm Enverus. The figure represents permits across the entire Permian Basin, which spans West Texas and southeastern New Mexico.

Energy Crisis Driving Europe Toward Fuel Oil, Biomass

Amidst the energy crisis in Europe and high natural gas prices, countries in Europe, Asia, and the Middle East are increasingly turning to alternate fuel sources for power and heating needs. It's estimated that demand could rise by 1 MMb/d as countries switch to burning fuel oil for power - with about 300 Mb/d of that demand in Europe. 

Additionally, the wood-pellet market is going crazy recently as prices have been driven up in Europe. Though emissions-wise, wood is no cleaner than coal, it does count toward renewable-energy targets based on current European rules. 

8/11: Propane Prices Slightly Weaker

Crude oil markets continued in bearish territory over the past week, bouncing a dollar or two on either side of $90/bbl. WTI settled at $90.50/bbl on August 9, down about 4% for the week.  Propane prices were slightly weaker, with Mont Belvieu non-TET down about 5%, coming in at $106.7/gal on August 9.  

There was no material change to the propane-to-WTI ratio, which was 50% a week ago and at the same level today. That is significantly below the 64% recorded at this time last year. 

8/11: Diesel Supply Up; Prices Down

Gross refinery input was up 600 Mb/d to 16.92 MMb/d last week, which boosted capacity utilization by 3.3 percentage points to 94.3%. The boost in refinery input drove up distillate production by 200 Mb/d to 5.1 MMb/d as exports dropped, which helped add supply to the market. This, then led to a 2.2 MMbbl build in stocks, and when combined with falling crude prices, pulled down diesel prices to $4.99/gal last week.

8/11: Shell GOM Production Shut-in

Top U.S. Gulf of Mexico oil producer Shell said it had halted production at three of its U.S. Gulf of Mexico deepwater platforms after a leak shut pipelines connecting the platforms as reported by Reuters.  A failure at an onshore pipeline junction in Louisiana leaked about two barrels of oil, said Chett Chiasson, executive director of Greater Lafourche Port Commission. A fix is expected to take about a day, he added.

8/11: IEA sees OPEC+ as unlikely to supply more oil in coming months

IEA sees OPEC+ as unlikely to supply more oil in coming months (Bloomberg)

OPEC+ is unlikely to increase output in the coming months because of limited spare capacity, according to the International Energy Agency. 

Furthermore, the “largely symbolic” 100,000 barrel-a-day hike promised for September may actually turn into a cut as Russian production declines, the IEA said. 

8/11: Oil rises as IEA hikes 2022 demand growth forecast

Oil rises as IEA hikes 2022 demand growth forecast (Reuters)

Oil prices rose more than $2 on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring natural gas prices lead some consumers to switch to oil.

Brent crude futures gained $2.39, or 2.5%, to $99.79 a barrel by 1348 GMT, while U.S. West Texas Intermediate crude futures rose $2.65, or 2.9%, to $94.58 .