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Euphoria For Oil Companies As Earnings Exceed Expectations



In what is turning out to be a very impressive earnings season, nearly all the oil majors are beating expectations and rewarding shareholders with higher dividends and share buybacks, much to the chagrin of the White House.

Oilprice Alert: This week’s Global Energy Alert makes the case for oil prices heading back above $100, with signs of a bull market building. Meanwhile, a major geopolitical risk is rising in the Middle East. Sign up today, and if you aren’t enjoying it after the first month we’ll give you your money back.

Friday, October 28th, 2022 

Strong corporate earnings have breathed new life into the oil markets, with most oil majors sticking to their set policy of increasing dividends and ramping up share buybacks. This might not sit well with the White House ahead of the midterm elections as the flurry of optimism has supported oil prices well, with ICE Brent within touching distance of the $100 per barrel psychological barrier. The difficulties that sprang up earlier this week – widespread dumping of Chinese assets amidst Xi Jinping’s re-election, the ECB’s sullen interest rate increase, and many others – appear to have been forgotten, for now.

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IEA Casts a Long Shadow on Fossil Fuels. In its 2022 edition of the World Energy Outlook, the International Energy Agency (IEA) indicated that global demand for every fossil fuel will peak around 2030, which is especially surprising for natural gas, previously seen as the bridge fuel towards a greener future.

World Bank Projects Energy Price Decline. The World Bank announced it expects global energy prices to drop 11% in 2023 after a massive surge this year, putting Brent prices at $92 per barrel and expecting decreases in both natural gas and coal prices next year amidst weaker growth.

US Rail Strike Odds Increase Again. After the second rail workers’ trade union rejected the national tentative agreement reached in mid-September, the likelihood of seeing a railway strike in the US in December is rising again, potentially putting some 30% of US cargo shipments in jeopardy.

US Diesel Tops the Shortage Agenda. With US distillate inventories at the lowest level for this time of the year since the EIA started collecting weekly data in 1982, at 106 million barrels, diesel prices will have a massive upside in the winter months unless rates of diesel consumption decline.

UN: We Might Not be Able to Halt Global Warming. Ahead of the COP27 next month, the UN said it sees no “credible pathway” to limit the rise in global temperatures to 1.5° C above pre-industrial levels and that with the current course it is set to rise by 2.8° C.

High LNG Prices Bring Dual-Fuel Tankers Back. Confronted with exorbitantly high natural gas prices, with LNG JKM hitting $70/mmBtu this year, shipping companies have substantially increased their interest in dual-fuel tankers that can run on LNG or diesel as a means of hedging their bunkering costs. 

TotalEnergies Doubles Down on Lebanese Offshore. After Russia’s Novatek relinquished its 20% stake in Lebanon’s offshore block 09, French oil major TotalEnergies (NYSE:TTE) has been handed temporary majority control of the project, potentially also farming in Qatar Energy at a later stage.

Germans Don’t Appreciate Chinese Stake in Key Port. The German government allowed China’s state-run shipowner and operator Cosco to buy a 24.9% stake in a Hamburg port terminal, triggering widespread government dissent as the move is seen to strengthen Beijing’s sway over Germany.

US Government Wants to Mine its Own Uranium. With US nuclear firms still depending on Russian and Kazakh uranium, the Biden Administration is building up its own uranium strategy with a view to mining more domestically – the IRA already allocated $700 million for producing high-assay low enriched uranium.

The Guyanese Gift that Keeps on Giving. US oil major ExxonMobil (NYSE:XOM) recorded two further discoveries in Guyana’s Stabroek block with its Sailfin-1 and Yarrow-1 wildcats, which despite both encountering moderate net oil pays (23 m) will be tied to larger projects.

Namibia Considers Joining OPEC. Following news of at least two major discoveries in offshore Namibia, with TotalEnergies’ (NYSE:TTE) Venus and Shell’s (LON:SHEL) Graff both potentially being multi-billion-barrel finds, Namibia could consider joining OPEC in the years to come.

Venezuela Opens the Gate for JV Partners to Leave. Venezuela is allowing partners of its state oil company PDVSA to leave joint ventures if they forgo payment for past debts and unpaid dividends – by now the only majors that remain in the country are Chevron (NYSE:CVX), ENI (BIT:ENI), and Repsol (BME:REP).

President Biden Singles Out Shell. US President Joe Biden singled out UK-based energy major Shell (LON:SHEL) for funneling profits to shareholders instead of lowering gasoline prices, a reaction to the oil firm’s 15% dividend increase and continued share buyback program.

France’s Nuclear Generation Gets Hope for 2023. The government of France will require state-owned utility EDF (EPA:EDF), soon to be fully nationalized, to sell less of its nuclear power at mandated below-market prices (100 TWh instead of this year’s 120 TWh), sparking some hope this might improve the company’s balance sheet.

By Michael Kern for

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Keystone pipeline temporarily closed following Kansas oil spill – Al Jazeera English



The energy company in charge of the pipeline has not said what caused the spill or how much oil was released.

The Keystone pipeline has halted operations following an oil spill into a creek in the United States state of Kansas. The pipeline carries more than 600,000 barrels of oil from Canada to the Texas Gulf Coast each day.

Canada-based TC Energy said in a press release that it shut down the pipeline on Wednesday night in response to a drop in pipeline pressure. The company has yet to offer information on the scale and cause of the spill.

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“The system remains shut down as our crews actively respond and work to contain and recover the oil,” the release said.

The spill resulted in oil leaking into a creek in northeastern Kansas and the company has said they were using machinery to prevent the oil from moving further downstream. Pipelines have long spurred concerns about the destructive potential of oil spills.

Another pipeline previously proposed by TC, the Keystone XL pipeline, would have been 1,930 kilometres (1,200 miles) long and cut across US states such as Montana, South Dakota and Nebraska.

That proposal spurred strong opposition from advocates who said it would increase the chance of spills, undermine the rights of Indigenous communities and worsen climate change.

Former President Donald Trump approved a permit for the contentious project in 2017 but a court halted construction in 2018 before the permit was cancelled by President Joe Biden’s administration last year.

TC finally abandoned the effort in June 2021 but has since filed a claim seeking remuneration for losses it says it faced because of the cancellation.

The spill on Wednesday occurred several years after the Keystone pipeline leaked about 1.4m litres (383,000 gallons) of oil in eastern North Dakota in 2019.

As word of the shutdown spread on Wednesday, oil prices ticked upwards by about five percent.

“It’s something to keep an eye on, but not necessarily an immediate impact for now,” said Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks gasoline prices, according to the Associated Press. “It could eventually impact oil supplies to refiners, which could be severe if it lasts more than a few days.”

In their statement, Keystone said their primary focus was the “health and safety of onsite staff and personnel, the surrounding community, and mitigating risk to the environment through the deployment of booms downstream as we work to contain and prevent further migration of the release”.

Previous Keystone spills have resulted in stoppages that lasted up to two weeks. However, analysts have noted that the current stoppage could possibly last longer because it involves a body of water.

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Bank of Canada policy will ‘hit home’ in 2023: David Rosenberg



The Bank of Canada may be signalling a possible end to its months-long aggressive interest-rate hike cycle, but economist David Rosenberg said next year will see the lagging impact of 2022’s monetary policy “hit home” for Canadians.

“Next year is the payback,” Rosenberg, chief economist and strategist at Rosenberg Research and Associates Inc., said in an interview with BNN Bloomberg.

“2022 was the year of the sharp run-up in rates, 2023 will be the year where the policy lags from those rising rates hit home.”

He made the comments Thursday, a day after the Bank of Canada raised its overnight lending rate by 50 basis points to 4.25 per cent, as the central bank continued with its approach to bringing down inflation.

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Rosenberg predicted a “severe recession” for Canada next year based on the rate hike cycle, calling for a “triple whammy” with economic impacts compounded by high levels of household debt, a housing bubble and ripples in the global economy.

Possible spillover effects from the interest rate cycle could be felt, Rosenberg said, as banks may constrain the availability of credit and spending drops across various sectors.

Based on the latest rate increase, Rosenberg said he predicts at potentially one more rate hike from the bank before a pause. Once inflation starts to come down, Rosenberg said he thinks the central bank may start to cut rates, possibly in the second half of 2023.

“The next stage is going to be waiting for the inflation to come down, which I think it will, and the recession is going to catch a lot of people by surprise,” he said.

A similar pattern may play out in the U.S., but Rosenberg said Canadians are more exposed to higher interest rates through variable-rate mortgages and because more consumer credit is tied to short-term interest rates.

“As bad as it’s going to be in the U.S., and believe me, it’s not going to be a pretty picture there, I think the Canadian situation in the next year is going to be clouded at best,” he said.

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CRTC rejects Telus’ request to charge credit card processing fee for some services



The Canadian Radio-television and Telecommunications Commission ruled Thursday that Telus is not able to charge a credit card processing fee for regulated home telephone services.

This ruling applies to Alberta and B.C. services that are regulated by the CRTC, which are generally home telephone services in certain smaller communities.

Since Oct. 6, most Canadian businesses, except in Quebec, can charge their customers a fee for credit card transactions, following a class-action lawsuit filed by retailers against Visa, MasterCard and card-issuing banks.

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Quebec is not included in this decision due to the province’s Consumer Protection Act, which prohibits the application of such surcharges.

On Aug. 8, Telus filed an application with the CRTC to introduce a credit card processing fee of 1.5 per cent, plus taxes, for payments made with a credit card.

On. Oct. 17, Telus began to charge the fee to clients paying by credit card in areas where services are not regulated by the CRTC, which includes its wireless and internet customers outside of Quebec.

Telus does not need to ask for the CRTC’s approval to add the surcharge to its unregulated services but the organization said it is “very concerned” about this practice as it goes against affordability and consumer interest.

“We heard Canadians loud and clear: close to 4,000 of you told us that you should not be subjected to an additional fee based on the method you choose to pay your bill,” Ian Scott, chairperson and CEO of the CRTC, said in a statement. “We expect the telecommunications industry to treat Canadians with respect and do better.”

The CRTC said, with this ruling, it is sending a “clear message” to Telus and other telecommunications service providers that are thinking of imposing a fee like this one on their customers.

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