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The First Major Oil Supply Disruption Of 2023

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In what is set to be the first major supply disruption of 2023, Russia has announced a 500,000 bpd voluntary production cut due to growing pressure from price caps and embargoes.

 

Friday, February 10th, 2023

After months of macro-driven price swings, the introduction of the oil products price cap has awakened the spirit of the oil market and brought fundamentals back into the spotlight. Russia’s announcement that it would curb output as a reaction to sanctions is arguably the first major supply disruption of 2023 as protests in Colombia failed to trigger any notable market reaction. Nigerian presidential elections are only three weeks away, so Russia’s production cuts might be the first of many to come.

Russia to Cut Oil Production in March 2023. According to Russia’s deputy prime minister Alexander Novak, Russia will cut oil production by 500,000 b/d in March 2023 as a reaction to the recently introduced product price cap and EU import ban, pledging not to sell its exports to members of the price cap coalition.

Did the US Blow up Nord Stream Pipelines? Veteran investigative journalist Seymour Hersh, the one to break the stories of the My Lai massacre and Abu Ghraib prison abuse, published a report saying the Nord Stream explosions last September were carried out at the direction of US President Biden.

US Treasury Targets Iranian Petrochemicals. The United States slapped another round of sanctions on companies active in the production, sale, and shipment of Iranian petrochemicals, specifically six Iran-based companies and three firms in Malaysia and Singapore, wary that higher crude exports might soon be matched by higher product outflows, too.

Pipeline Stress Main Reason Behind Keystone Oil Spill. Pipeline operator TC Energy (NYSE:TRP) said the Keystone pipeline oil leak in early December was caused by a weld flaw that was exacerbated by bending stress over time, with total remediation costs coming in at $480 million.

Bakken Holds Down US Supply Growth. The EIA cut its 2024 US production forecast to 12.65 million b/d from an earlier projection of 12.8 million b/d, citing the overall maturation of Bakken shale as the main reason, with wells in North Dakota increasingly producing natural gas instead of oil.

China Locks Up Omani LNG. As Chinese state-owned energy companies on spot LNG purchases, trading firm Unipec signed a supply deal with Oman LNG that would see the latter providing the Chinese side with 1 million tons of LNG for four years starting 2025, the first term deal between Oman and China.

Major Utility Firms to Benefit Biden’s IRA Funds. According to Reuters, it will be leading electric utility firms with renewable projects in the pipeline such as Duke Energy (NYSE:DUK) or Dominion (NYSE:D) that will benefit the most from the Biden Administration’s $430 billion IRA tax credits and payments.

Namibia Superfind Too Good Not to Fast-Track. The French energy company TotalEnergies (NYSE:TTE) will be spending half of its 2023 exploration budget on offshore Namibia after the 6-billion-barrel Venus discovery last year, the largest in 2022, propelled the frontier region to global limelight.

Tesla Sets End of Master Plan Trilogy for March 1. Following two previous Master Plan vision statements in 2006 and 2016, the CEO of Tesla (NASDAQ:TSLA) Elon Musk said the third part of the company’s Master Plan for a sustainable energy future for Earth will be held on March 1.

Seepage Woes Hinder Imperial Oil. The Alberta Energy Regulator (AER) in Canada issued an environmental protection order to Imperial Oil (TSE:IMO), giving it a week to fix industrial wastewater seepage from tailing ponds, including dissolved iron and arsenic, at its Kearl oil sands project.

Trafigura to Take $577 Million Loss on Nickel Fraud. The Geneva-based trading powerhouse Trafigura will take a $577 million loss in the first half of 2023 after several nickel cargoes delivered by India’s UD Trading Group didn’t contain nickel at all, despite the two sides interacting since at least 2015.

Germany’s Gas Consumption Drops But not Enough. The German energy regulator BNetzA said the country’s gas consumption remains in the “critical” range for the third consecutive week with temperature-adjusted demand only 12% lower than the 2018-2021 average, whilst Berlin mandates a 20% cut.

India Finds Lithium, In the Wrong Place. As the global hunt for lithium deposits intensifies, the Geological Survey of India announced that it found lithium deposits for the first time in the country, though the 5.9 million tonnes of inferred resources were found in Jammu-Kashmir, a territory disputed by Pakistan.

Coal Prices Crater Despite Australia Rains. Squeezed by lower European and Chinese demand as well as the fire-sale of coal by the beleaguered Adani Group, coal prices have fallen to their lowest in a year with the March ’23 ICE Newcastle contract already trading below $200/mt and Europe’s API 2 benchmark down at $125/mt.

By Michael Kern for Oilprice.com

 

 

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Carry On Canadian Business. Carry On!

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October 22, 2024

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business to start in Canada

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

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

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October 22, 2024

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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.

The Canadian Press. All rights reserved.

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

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October 22, 2024

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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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