Page 6 - LatAmOil Week 22

LatAmOil COMMENTARY LatAmOil

West Texas Intermediate (WTI) for July deliv- next 10 trading sessions.
ery fell as much as 3.4% Monday to $34.27, after
advancing 5.3% on Friday. The US benchmark Chinese resurgence
crude pared losses to trade at $34.85 as of 10:25 As Chinese oil demand rises to near pre-corona-
a.m. in New York. Global benchmark Brent virus (COVID-19) levels, more and more tank-
crude for August slipped 10 cents to $37.74. ers are shipping crude to the Asian nation from
An earlier OPEC+ meeting would give the almost everywhere.
producer group more flexibility to change its While OPEC has helped global oil markets
current production limits, as members usually recover from the coronavirus crisis, the group
decide on their plans for shipping oil for July in will soon face a new challenge: the mountain
the first week of June. of unwanted crude that piled up during the
The group’s preference is to take short-term pandemic.
measures on cuts, as the situation is changing Falling fuel exports from China are provid-
quickly, the delegate said. The coalition – which ing a much-needed buffer for refiners elsewhere
includes OPEC’s 13 members plus another 10 in Asia that are still grappling with lower con-
exporters – has achieved 92% compliance, sumption and poor margins.
according to an estimate by data analytics firm Meanwhile, commodities trader Trafigura
Kpler. Group is being investigated by US authorities
Meanwhile, the US Oil Fund ETF will begin for alleged corruption and market manipulation
its monthly roll of futures contracts on Monday. related to oil trading, the Guardian reported.
The fund plans to sell its July holdings and buy The company is particularly involved in South
more November and January futures over the America and Africa. ™

NEWSBASE GLOBAL ROUNDUP
NRG: Momentum, but also restraint

Although oil prices have remained relatively stable, global demand is still weak

COMMENTARY Welcome to the fourth edition of NewsBase’s investors. The DPR hopes to wrap up the bidding
Roundup Global (NRG), in which our team of process before the end of the year.
international editors provide you with a snap- In Uganda, Tullow Oil (UK/Ireland) has taken
shot of some of the key issues affecting their another step towards finalising the sale of its stakes
regional beats. Get the NRG Oil & Gas Editor’s in several blocks near Lake Albert to Total (France).
Picks to your inbox every week for free. Just sign The company reported last week that China
up here. National Offshore Oil Corp. (CNOOC), the other
Crude prices have remained relatively stable shareholder in the blocks, had decided against exer-
over the past week, with both Brent and West Texas cising its right to buy half of the stakes in question
Intermediate (WTI) staying above $30 per barrel, on the same terms as Total. This decision clears the
and Brent even edging closer to $40 per barrel. way for Tullow to concentrate on finalising a bind-
However, this relative stability comes as a result of ing tax agreement with Ugandan authorities.
extensive cuts to supply, and all eyes will be on this In other news, Algeria’s national oil company
week’s OPEC+ meeting, where the group will con- (NOC) Sonatrach has become the majority share-
sider extending its cuts into July or August. holder in the Medgaz pipeline via a transaction that
In the meantime, there is still plenty of news of allowed it to acquire 8.0% of equity from Spain’s
weak demand, earnings losses and the scaling back CEPSA. Ownership of the pipeline is now divided
of activity in response to market conditions. Some between Sonatrach, with 51%, and Naturgy
signs of forward momentum are emerging, but (Spain), with 49%. The parties hope to expand the
such steps are being taken with caution. system’s capacity by nearly a quarter to 10.2bn cubic
metres per year in 2021.
African countries moving ahead Meanwhile, Nigerian National Petroleum Corp.
Two African countries have taken a step this (NNPC) is talking about bringing its production
week towards launching long-delayed invest- costs down to $10 per barrel on average by 2021.
ment initiatives. Mele Kyari, NNPC’s group managing director,
In Nigeria, the Department of Petroleum noted that costs were running as high as $35.97 per
Resources (DPR) has launched a new licensing barrel at some fields.
round for marginal fields after a delay of more than
10 years. The auctions will cover 57 fields in the If you’d like to read more about the key events shaping
onshore, swamp and shallow-water offshore zones, Africa’s oil and gas sector then please click here for
and they will be open to both domestic and foreign NewsBase’s AfrOil Monitor.

P6 www. NEWSBASE .com Week 22 04•June•2020