The selloff in oil continued on Friday, with WTI prices falling more than 5% as China reportedly asked the Saudis to ship less crude in December.
 
 

 
 

Friday, November 18th, 2022 
One could barely ask for a more action-packed week – the prospect of World War III kicking in, a drone missile attack on a tanker in the Middle East, market optimism coming from improving inflation data swiftly nipped in the bud by an ever-worsening coronavirus outlook in China. There, things have gotten so dire that Chinese refiners have reportedly asked Saudi Arabia to cut already nominated December volumes, simultaneously cutting back on other buying, too. China coming back was very much part and parcel of the recent upswing in prices, hence ICE Brent slipping below $90 per barrel again should not come as a surprise.
 
 SPR Caverns Need a Revamp. The White House asked Congress for $500 million to modernize the salt caverns that hold strategic petroleum stocks in the U.S., located across the Texas and Louisiana coasts, as SPR oil movements corrode the steel pumps and equipment due to the salts involved.
 
 Black Sea Grain Deal Extended for 4 Months. The UN-brokered deal to create a protected sea corridor for grain exports out of Ukraine was extended for 120 days without any changes, sending agriculture prices lower as the main downside factor in the market was temporarily cleared.
 
 Saudi Aramco Doubles Down on South Korea. S-Oil (KRX:010950), the South Korean refining subsidiary of Saudi Aramco (TADAWUL:2222) is set to invest $7 billion in an oil-to-petchem project, marking the first commercial use of a technology that the Saudi NOC co-developed with Lummus.  
 
 COP27 Destined for Failure. As the U.N. climate agency published a first draft of the presumed communique of the COP 27 climate summit in Egypt, calling for a „phase-down” of all fossil fuels instead of a full-blown phaseout, the reaction of climate activists has been of unabated frustration.
 
 U.S. to Ban Fossil Fuel Heavy-Duty Cars by 2040. Speaking at the COP27 climate summit in Egypt, U.S. energy secretary Jennifer Granholm stated the White House intends to sell only zero-emissions medium- and heavy-duty vehicles like buses, delivery vehicles, or trucks by 2040.
 
 Norway Platform Blaze Stokes Fears of Lower Supply. Production from the semi-submersible Asgard B platform that is operated by Equinor (NYSE:EQNR) in Norway’s continental shelf remains shut in after a fire broke out there last Sunday, cutting some 7% from the country’s 300 MMcmd of gas exports.  
 
 Mexico Seeks U.S. Investment into Lithium. Mexican President Lopez Obrador has called upon U.S. and Canadian companies to participate in the country’s incipient lithium market, however, that might be a stretch with all lithium being nationalized and investors being compelled to work alongside the national lithium company.
 
 Diamondback Boosts Permian Portfolio. U.S. oil producer Diamondback Energy (NYSE:FANG) has agreed to buy all leasehold interest and assets of Lario Permian for around $1.5 billion in cash in stock, adding some 25,000 acres in the Northern Midland Basin in Texas, equivalent to 18,000 b/d of extra output.  
 
 Returning Nuclear Cool French LNG Appetite. Following a year of reactor shutdowns and labor strikes, slowly returning French nuclear power generation, jumping 11% month-on-month in October to almost 40 TWh, has triggered a marked slowdown in French buying of LNG from the market.
 
 Environmentalists Go After Venture Global LNG. Three environmental groups have sued the Louisiana natural resources regulator for exempting the 13mtpa Plaquemines liquefaction capacity, one of the four LNG projects currently built, from needing an environmental permit to build the LNG terminal.
 
 Time for More Polymers in Texas. Chevron Phillips Chemical, a petchem-focused company co-owned by Chevron (NYSE:CVX) and Phillips 66 (NYSE:PSX), has reached a final investment decision to build a $8.5 billion polymer facility in Orange, TX, along with Qatar’s national oil and gas company QatarEnergy.
 
 Italy Insists on Windfall Tax Happening. An Italian administrative court rejected an appeal filed by energy companies against a government-mandated windfall tax of 25%, whilst the Meloni government acknowledged that the bill needs to be rewritten because revenues proved to be much lower than expected.
 
 Guyana-Venezuela Border Hearings Start. The International Court of Justice has started hearings this week to resolve a century-old maritime dispute between Venezuela and Guyana, covering almost 160,000 km2 of disputed territory in the Essequibo province that was last delineated in 1899.
 
 The Unexpected Utility of Discarded Platforms. Several of Chevron’s (NYSE:CVX) abandoned offshore platforms in the Gulf of Thailand now serve as artificial reefs for species spawning in a region that is heavily overfished, setting a new trend that goes counter the routine practice of decommissioning.
 Best Regards,
 
 
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The post Oil Rout Intensifies as China Cuts Oil Purchases first appeared in Oilprice.com on November 18, 2022