Summary30 Aug 2022 20:42
- With the euro zone already in recession territory and most governments mulling the possibility of blackouts, the economic prospects of Germany are worsening by the day amid plunging German stocks.
- Germany’s largest gas importer Uniper (ETR:UN01) requested an additional €4 billion of bailout money from the German government, having already fully drawn down an additional €9 billion credit line from state lender KfW.
- Soaring energy costs have resulted in Germany recording its first monthly trade deficit since 1991 this June, with the German economy becoming more dependent on China in H1 2022 amidst increasing investments, despite political pressure on Berlin to pivot away from Beijing.
- Seeking to halt runaway power prices, the idea of implementing a Europe-wide gas price cap is increasingly gaining traction, with rumors circulating that the September 09 emergency meeting of EU countries is aiming to do just that.
Market Movers
- U.S. oil major ExxonMobil (NYSE:XOM) sold its Fayetteville shale assets in Arkansas to Flywheel Energy, an Oklahoma-based exploration company, for an undisclosed sum as part of its $15 billion divestment goal.
- China’s largest oil refiner, the state-owned Sinopec (SHA:600028), reported an all-time high net profit of $5.8 billion in H2 2022, prompting it to start share buybacks for the first time on record.
- Norwegian oil firm Equinor (NYSE:EQNR) has hired U.S. investment bank Houlihan Lokey to advise on the sale of its 28% stake in the legacy Statfjord field, in production for more than 40 years, for up to $0.5 billion.
Tuesday, August 30, 2022
The recent oil price surge triggered by rumors of an impending OPEC+ production cut has hit a ceiling and even though the meeting is just a week away, focus has shifted towards aggravating macroeconomic environment, dragging ICE Brent down to $100 per barrel. Inflation has roared back into public debate, however, this time around it is not the United States in the limelight but Europe. With almost every single major country seeing double-digit inflation and still not yet seeing the peak, the European Central Bank is already testing the idea of a steeper-than-expected interest rate hike of 75 basis points. And this might still be far from the end.
OPEC+ Supply Cuts Getting Real. With most of OPEC+ heavyweights continuing to bemoan the alleged disconnect between paper and physical oil markets, with the United Arab Emirates and Nigeria joining the ranks of such countries, the chances of seeing a concerted production cut are increasingly higher.
IEA Eyes More SPR Releases. With the 180-million-barrel U.S. SPR release coming to an end in November, the head of IEA Fatih Birol advocated more strategic stock releases, saying that members should consider them whenever the prospect of supply disruption emerges.
Canada Invokes 1977 Pipeline Treaty with U.S. With Michigan governor Gretchen Whitmer seeking to shut down the Enbridge-operated
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