Business

Oil Markets Confused and Underwhelmed by OPEC Cuts

Published

11 months ago

December 1, 2023

Oil markets were left both confused and underwhelmed by the OPEC+ decision to cut 2.2 million bpd in the first quarter of 2024, with oil prices falling toward a weekly loss.Friday, December 1st, 2023

Oil markets welcomed the new OPEC+ deal that pledged 2.2 million b/d in voluntary cuts for the first quarter of 2024 in a very lukewarm manner, with Brent erasing all its earlier gains and dropping back to $81 per barrel. With even the most seasoned industry watchers starting to lose track of which country will be cutting what amount against which reference level, the production target confusion was aggravated by the fact that markets expected deeper cuts, going over and above what Saudi Arabia or Russia have already curbed from their output.

OPEC+ Cuts Production Further. Members of the OPEC+ oil group agreed to voluntary production cuts totalling 2.2 million b/d for Q1 2024 as the group’s de facto leader Saudi Arabia rolled over its current voluntary cut of 1 million b/d and Russia widened its pledge to 500,000 b/d.

Brazil to Become Member of OPEC+ Family. South America’s largest oil producer Brazil is set to officially become a member of OPEC+ from January 2024 even though it would not join the oil group’s ongoing round of production cuts, seeing output soar to all-time highs in recent months.

Gold to Hit All-Time Highs Soon. With market sentiment shifting back to a US hard landing in Q1 2024, prices of gold have been moving closer to their record high recorded in August 2020 at $2,063 per metric tonne and rallied more than 11% since October.

LME Reinvigorated by End of Nickel Trading Scandal. The London Metal Exchange won a legal case against hedge funds Elliott Associates and Jane Street Global Trading that demanded $472 million in compensation for canceled nickel trades worth billions of dollars, allowing LME to recoup some reputation.

Oxy Might Be the Next M&A Champion. US oil major Occidental Petroleum (NYSE:OXY) is closing in on a deal with shale Permian company CrownRock with a bid of more than $10 billion, potentially outbidding ConocoPhillips and taking over some 86,000 net acres of shale patches in the Midland.

Activist Investors Go After Phillips 66. Only 2 years after its spat with ExxonMobil, activist investor Elliott Investment took a $1 billion stake in US refiner Phillips 66 (NYSE: PSX) and is now demanding that the downstream firm revamp its board due to weaker performance that kept market share subdued.

Norwegian Major to Quit Nigeria. Norway’s state-owned oil company Equinor (NYSE:EQNR) had agreed to sell its onshore Nigerian business, including the almost condensate-like Agbami field, to a local upstream firm Chappal Energies, ending 30 years of Norwegian presence in the African country.

India Demands Generators to Maximize Coal. India’s government is prompting power generators across the country to add some 17 GW of coal-fuelled capacity to avert electricity outages amidst soaring demand for power, up 10% year-on-year, also unfreezing 38 idled coal plant projects.

Iran Sets Ambitious 2024-2025 Targets. Iran’s government is set to base its 2024-2025 budget on an oil price of $71 per barrel as well as crude and condensate exports of 1.35 million b/d, a notable downgrade compared to last year’s $85 per barrel breakeven cost.

Referendum Raises the Specter of a Venezuela-Guyana War. Venezuela will carry out a referendum on its territorial dispute with Guyana over the contested oil-rich Essequibo territory on December 3, leading to a notable uptick in military activities in the wider region.

TMX Sorts Out Tolling Issues. Canada’s energy regulator CER approved preliminary interim tolls for the Trans Mountain Pipeline system, clearing the largest obstacle to commissioning now as shippers would need to commit to a $11.46 per barrel toll, to be signed under a 15-year pipeline deal.

Lithium Prices Might Still Fall Lower. Analysts are predicting even further pricing downside to lithium carbonate prices as surging supply has been outpacing the rise in demand, with a Reuters survey indicating the trough might be as low ¥80,000 per metric tonne ($11,300/mt) next year.

European Windfall Taxes Hurt Refiners. Poland’s national oil company PKN Orlen (WSE:PKN) saw its shares plunge some 10% this week after the newly elected government introduced a windfall tax on revenues from natural gas production, expecting a revenue loss of $1.5-1.6 billion.

By Michael Kern for Oilprice.com

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Business

Carry On Canadian Business. Carry On!

Published

7 hours ago

October 22, 2024

Steven Kaszab

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

Business

Imperial to cut prices in NWT community after low river prevented resupply by barges

Published

10 hours ago

October 22, 2024

Anne Joseph

NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

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Business

U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

Published

10 hours ago

October 22, 2024

Anne Joseph

TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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