TL;DR news on Oil price at June 14, 2023
The gap between OPEC+ output and its target levels surged to as much as 900,000 bpd in January, the IEA said in its Oil Market Report for February. But any disruptions to oil flows from Russia in a context of low spare capacity in other regions could easily send oil prices to $120 bbl. From US $150 a ton in early February, the crackdown on speculative trading led a price decline to about US $120 per ton, on negative investor sentiment. Sanctions against its mining industry would, in all likelihood, lead to even higher commodity prices. With results like that you would expect them to be flush with cash, and sporting a resilient and rising stock price. You would be wrong, at least as regards the stock price. Whether it is slow wind speeds, supply chain woes, or low installed price limits that keep costs from being passed on to project managers, the result is the industry is not prospering at present. However, increasing demand for solar products globally has resulted in a worldwide supply shortage, which has sent polysilicon prices rising. Saudi Arabia Boosts Oil Production Capacity While the supermajors and U.S. A boon for renewables? Although high oil prices have the potential to incentivise new investment in oil and gas projects, renewables could ultimately benefit from the current situation. Soaring oil and gas prices are driven overwhelmingly by robust global demand and also tightening market and a shrinking global oil production capacity. Will It Work? Biden Just Put A Floor Under Oil. gas prices may keep on rising, President Joe Biden warned on Tuesday, after the American President sanctioned Russian assets. The rig count is rising, for sure, but it is not rising anywhere near fast enough to dampen retail fuel prices. Despite accusations of still spending too much money on oil and gas rather than renewables from environmentalists, Big Oil, and smaller companies, too, appear to not be spending enough on oil and gas. Bunker prices climbed close to a record high earlier this month, with the average for very low sulfur fuel oil prices rising by 55 percent over 12 months to hit $731.50 per metric ton. Slow steaming to mitigate the impact from high fuel prices only makes financial sense if you have excess capacity, which was the case in 2012. Who wants to invest in wells when demand is waning despite rapid economic growth and when OPEC can easily force prices to drop overnight. In particular after the 10's of billions in bankruptcies from US shale in 2018 and 2019 when oil prices were nearer $60 a barrel. Scarcity, price, and human rights concerns have made the elimination of cobalt from EV batteries critical to the EV transition. In contango markets, having a cargo that prices in sooner would be a boon for the buyer, however, we have been seeing the steepest backwardation in the markets since at least 1993. Domestic customers will also be protected by the energy price cap when being switched to a new supplier. It is set to roll to financial stress tests to encourage hedging, and wants to review the price cap every three months rather than just twice a year as it currently does. However, in the aftermath of the enduring low prices and economic damage that hit Saudi Arabia as a result of the Second Oil Price War it instigated in the first half of 2020 against the U.S. Deal Valuations Will Not Jump Yet, deal valuations are not expected to surge in lockstep with higher oil prices and deal activity, according to WoodMac. Unlike the 2021 China steel price rollercoaster ride, experts have expressed confidence in more stability. The total rig count now has now reached 645 as the price of crude slipped for its first weekly decline in nine weeks. Around 87 percent want a quicker reaction from the federal government to reduce the burdens associated with the high electricity prices.