Market Close: April 26, Diesel Up 38 cents, Gas Up 10 cents
Apr 26th, 2022 by loren
The extreme volatility in crude prices has kept the oil market fixed to the $100 per barrel mark, with alternating news of further Chinese lock downs effectively offsetting Europe’s attempts to find a consensus solution on Russian oil sanctions. Largely thanks to the 180 million barrel SPR release, the US seems to be better positioned to withstand the upcoming turbulence and further bouts of tightness – decreasing net positions in NYMEX/ICE WTI taking place concurrently to marginal increases in net Brent contracts indicate a longer-term structural weakness in Europe.
US Shale Growth Marred by Frac Fleet Shortage. The shortage of frac fleets (equipment to perform hydraulic fracturing) has become one of the main impediments to US crude production this year, with the current number of frac spreads deployed (270) being well below pandemic levels (360-370).
Iran Signals Talks Might be Revived Soon. Top Iranian officials have indicated that the current hiatus in the nuclear talks is not in the interest of either side and that a restart of negotiations, coming to an abrupt halt in early March, might be imminent.
Libya Skirmishes Damage Only Refinery. Continuous armed clashes around the 120,000 b/d Zawiya refinery have reportedly damaged Libya’s only refinery and the adjacent storage tank farm, coming on the back of simultaneous efforts of the two rival governments to appease the protesters.
Canada Drilling Heats Up to Unseen Highs. Drilling activity has risen to the highest level on record in Canada, with the latest available January data showing 617 active wells in Alberta, surpassing the previous high set in October 2011.
CPC Terminal Comes Back to Full Capacity. Following a month-long disruption caused by a storm in late March that wiped some 600,000 b/d off the market, the CPC loading terminal in southern Russia return to full capacity operation, easing the pressure on the world’s largest light sweet stream.China Keeps Lockdown Impact in the dark. China-watchers are having an increasingly difficult time gauging the impact of COVID-19 lockdowns in the country as Beijing restricts the release of industry-relevant real-time data such as commodity inventories or cargo traffic data.
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