A larger-than-expected inventory draw and a major winter storm in the U.S. this week pushed oil prices higher, but fears of further monetary tightening hurting long-term demand are keeping oil prices in check.

Friday, December 23rd, 2022 
A supportive EIA weekly report and concerns about the big freeze forcing production shut-ins pushed oil prices higher this week, although news of better-than-expected Q3 performance in the U.S. has raised the prospect of further interest rate hikes. While fears of an economic slowdown added downward pressure to oil prices, both WTI and Brent rallied on Friday morning as bullish sentiment returned.
 
Keystone Spill Triggers Permitting Scrutiny. The US pipeline regulator has pledged to review all special permits that waive operating requirements for trunk pipelines, coming on the back of the Keystone oil spill in rural Kansas, the only US pipeline with a special permit to operate at a higher pressure.
 
Saudi Arabia Slams Politics in Oil. Saudi Arabia’s Energy Minister Abdulaziz bin Salman lashed out against the politicizing of statistics and forecasts aimed at discrediting OPEC+, criticizing the IEA’s recent market calls as sowing confusion and triggering misguided interpretations of the market.
 
US Gas Prices Spike Ahead of Freeze. With swathes of the US preparing for a cold spell, natural gas spot prices in the Northeast have soared to a five-year high with the benchmark Algonquin city-gates quote exceeding $30 per mmBtu, a whopping $22-23/mmBtu premium to Henry Hub.
 
Canada Blocks Glencore’s Coal Mine. The Canadian government has rejected Glencore’s (LON:GLEN) proposed Sukunka coal project in British Columbia, an open pit mine that was expected to be producing metallurgical coal for a period of at least 20 years, citing environmental concerns.
 
Prelude LNG Fire Raises Risks for Asian Supply. Energy major Shell (LON:SHEL) suspended operations at the Prelude LNG facility offshore Australia following a “small fire” at the liquefaction plant, tightening LNG supply to Asia and marking yet another setback for Prelude which has been on-and-off since 2019.
 
ADNOC Buys Into Austrian Oil Firm. The UAE’s national oil company ADNOC will buy 24.9% of Austria’s oil firm OMV (VIE:OMV) for an estimated price of $4 billion, buying the stake previously owned by sovereign fund Mubadala and marking another Middle Eastern investment into European refining.
 
US Allowed to Re-Export LNG from Mexico. The US Energy Department approved permits for Sempra Energy (NYSE:SRE) to pipe natural gas to western Mexico for re-exporting from the company’s planned Energy Costa Azul and Vista Pacifico LNG projects, aiming to gain market share in Asia.
 
New Cyprus Gas Find Boosts Med Hopes. Italy’s ENI (BIT:ENI) and its partner TotalEnergies (NYSE:TTE) have discovered a 2-3 TCf gas field with its Zeus-1 exploration well offshore Cyprus, the third consecutive gas find in the island country’s Block 6 that took the national aggregate to 25.5 TCf.
 
An Easing of Tensions Between China And Australia. Australia’s foreign minister Penny Wong met with her Chinese counterpart for the first formal talks between the two countries since 2018, agreeing to restart dialogue on trade and economy as Beijing still maintains a ban on Australian coal.
 
Shell Experiments with Hydrogen Tankers. A shipping consortium comprising UK energy major Shell (LON:SHEL) was awarded an EU grant to retrofit a handysize product tanker with a hydrogen fuel cell system, testing the viability of a potentially zero-carbon maritime fuel.
 
UK Refiner Starts 2023 With Strike. Inspired by France’s protracted refinery strikes this year, workers at ExxonMobil’s (NYSE:XOM) 270,000 b/d Fawley refinery in southern England will resume their strike action on January 09 as negotiations yielded no result.
 
China Covid Woes Sink Copper. Cooling down after a month-long price spike, copper prices have started to edge lower to $8,300 per metric tonne as China’s soaring coronavirus cases are disrupting business operations across the country and denting the rapid recovery of the property market.
 
Indonesia Sticks to Bauxite Export Ban. Indonesia’s President Joko Widodo confirmed the Southeast Asian country will go ahead with a full export ban on bauxite starting from June 2023, seeking to incentivize investors to process the ore domestically, three years after Jakarta banned exports of raw nickel.
 
China Launches Monster Hydro Dam. China’s $24 billion Baihetan mega dam, equipped with sixteen 1 GW turbines making it the second largest hydro object in China and the world, has been fully launched after the last generating unit was connected to the grid this week
 

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The post Oil Prices Climb Despite Fears of an Economic Slowdown first appeared in Oilprice.com on December 24, 2022