Energy Market Scan - June 21st 2022

Sri Lanka may be compelled to buy more oil from Russia

Posted on Jun 21, 2022 by Prakash Kini (PK)

Geopolitics and War 

Sri Lanka may be compelled to buy more oil from Russia as the island nation hunts desperately for fuel amid an unprecedented economic crisis, the newly appointed Prime Minister said. 

Prime Minister Ranil Wickremesinghe said he would first look to other sources but would be open to buying more crude from Moscow. Western nations largely have cut off energy imports from Russia in line with sanctions over its war on Ukraine. 

He acknowledged that Sri Lanka's current crisis was of its own making. 

South Africa may resort to buying Russian oil 

South Africa may resort to buying Russian oil as higher prices bite

Force Majeure 

The force majeure at Freeport LNG might continue till Sept 

The force majeure at Freeport LNG has left a dozen tankers waiting amid a tight global market.

This might help with US domestic supply but European and Asian buyers will have a tough time, with a resolution only seen early 2023.

Statistics 

Natural Gas prices reversed direction after GANN set up 

Natural Gas prices reversed direction after GANN setup was completed 

Read more at: Natural Gas

In India, Jet fuel (ATF) prices were hiked by 16.3% 

Jet fuel (ATF) price hiked by 16.3% to an all-time high of ₹1.41 lk/kL in India. The ATF price has nearly doubled in 2022, up 91% in the last six months. 

Supply & Demand 

Qatar is almost doubling its LNG capacity 

Qatar's North Field expansion includes six LNG trains that will ramp up Qatar's liquefaction capacity from 77 million tons per annum (mtpa) to 126 mtpa by 2027, consolidating its status as the world's largest producer of LNG.

US Crude Oil imports +800,000 bpd vs previous week 

U.S. crude oil imports averaged 7.0 mln bpd last week, +800,000 bpd vs the previous week; last 4 weeks crude oil imports averaged 6.5 mln bpd, +2.2% vs year-ago period. 

This could be to meet summer demand and also to replenish the strategic reserves. 

OPEC expects oil demand growth to slow significantly next year 

OPEC expects the pace of oil demand growth to halve next year as inflation and conflict grip the global economy. 

US releases 45 million barrels of crude oil from the SPR

The Biden administration announced the release of another 45 million barrels of crude oil from the Strategic Petroleum Reserve. US Reserves have now drained to a 35-year-low. US has been increasing production as well as imports to replenish this gap. 

Sustainability

Mumbai airport launches renewable hybrid power generation project 

The Mumbai airport said that it has become India’s first airport to launch a renewable hybrid power generation project involving wind & solar energy.

Called ‘Vertical Axis Wind Turbine’, the unit along with a photovoltaic solar hybrid (solar mill) was installed under a pilot programme.

The airport said it plans to meet its ‘Net Zero’ carbon emission target by 2029.

Merchant Economics 

US shale earnings could nearly triple this year

US shale earnings could nearly triple this year.

Oil rig counts up 6 from last week to 580 and slated to reach 640 by the end of 2022. Overall, US Crude Oil production rose to 12 million bpd which is the highest level since April 2020.

Read more at: Investing in Oil Wells

In Other News 

What % of Canadian oil sands is actually Canadian owned

This graph shows what % of Canadian oil sands is actually Canadian-owned, now that BP has exited its assets in Alberta.