IIR Weekly Market Scorecard: Uncertain Times Ahead for Energy Sector

Researched by Industrial Info Resources (Sugar Land, Texas)--Stay current with geopolitical events, and more importantly, connect to how these events may impact you and your business strategies. See below for IIR's Market Scorecard for the week ending January 7.

Event	MarCon*	IIR Comment	Outlet	IIR News
Unrest in Kazakhstan and Libya a factor to watch for oil this week		The risk of supply disruptions as civil unrest grips two major oil producers, Kazakhstan and Libya, could push crude prices higher this week. Crude oil prices started the first trading week of 2022 in bullish territory, despite reports last week that national job growth in December was weaker than expected and (gasoline) inventories climbed by more than 10 million barrels - which would suggest lower demand and prices. But concerns over Kazakhstan, where violent, anti-government protests have consumed the Central Asia nation, and Libya, where the years-long civil war has flared up again, drove crude higher last week. Flirting with $80 per barrel during intra-day trading last week, West Texas Intermediate, the U.S. benchmark, closed Friday at $78.90 per barrel, up 4.9% on the week. Kazakhstan is home to the Kashagan oil field. With at least 9 billion barrels of recoverable oil, it is one of the largest discoveries in recent years. Protests over a sharp increase in fuel prices left at least 160 people dead, mostly in the largest city, Almaty, where demonstrators set government buildings on fire and briefly occupied the main airport. Libya, meanwhile, is in the throes of political violence as the country tries yet again to hold national elections. Coupled with pipeline maintenance, the OPEC member is producing around 750,000 barrels per day, down from the November peak of 1.1 million barrels per day.	Houston Chronicle	Libya to Increase Oil Production Over Next Four Years
The EU Is Scrambling To Deescalate Conflict In Ukraine		The European Commission chief and the EU's new French leadership have stressed the need for European involvement as Russia and the West continue to square off diplomatically over the possible threat of escalated conflict in Ukraine. Commission President Ursula von der Leyen said on January 7 that "one thing is clear: no solution without Europe. Whatever the solution, Europe has to be involved." The United States and its EU partners have stepped up warnings of major consequences if Russia invades Ukraine as Moscow amasses troops near their shared border and presses demands for security guarantees against NATO expanding eastward. Von der Leyen said the European Union is "very present" in Ukraine, including through giving billions in financial assistance to Kyiv and the bloc's reliance on Russian natural gas shipments via Ukraine. Speaking alongside von der Leyen, French President Emmanuel Macron welcomed direct U.S.-Russian talks slated for next week but stressed that "European security architecture" is "up to us to build."	OilPrice	Russia Completes Nord Stream 2 Pipeline
India's COVID Cases Double as Omicron Threatens Economic Rebound		India has tightened its COVID-19 restrictions as a surge of infections threatens the country's robust economic rebound from last year's devastating outbreak of the delta variant. The country's daily new infections have more than doubled in three days to 117,100 as of Friday morning, while the number of active cases has soared nearly 73% to 371,363. The surge followed a busy period of social occasions in India, including important religious festivals and holidays and the country's wedding season. The capital New Delhi and several states have imposed night and weekend curfews and restricted capacity at hotels, restaurants, malls and cinemas. But authorities have backed off from introducing measures as onerous as during previous lockdowns in the belief the omicron variant is less life-threatening. "Corona poses challenges, but it cannot stall the growth process," Prime Minister Narendra Modi declared in his first speech of the year.	Financial Times	Omicron Variant Threatens Oil & Gas Demand
The Energy Crisis Is Sending Shockwaves Through The U.K. Economy		A wave of concern over the swelling cost of living is sweeping across Britain. While households are bracing for higher tax bills and are already being stung by food prices leaping, it is swelling energy costs that will hit hardest in 2022. The U.K.'s benchmark gas prices have quintupled since January 2021, leaping from £54 per therm to £245 per therm in December 2021. While tensions between Putin and the West might seem like distant political intrigue found in a tepid spy novel sold at an airport, the reality remains that domestic energy costs are beholden to European political stability. Britain imports a large proportion of its gas supplies from the Continent who, in turn, rely on Russia for around 35% of their own natural gas flows. When relations between Moscow and Brussels break down - just as they are now - the UK's energy market often enters a period of volatility. Britain is making gains in domesticating its energy supplies to solve this issue. The U.K. is expanding into a diversified range of energy sources such as hydrogen and nuclear power in its drive to reach net-zero by 2050 and flex its green credentials after hosting COP26.	OilPrice	Europe's Gas Crisis Deepens
Feds Deny Oklo's Application to Build an Advanced Nuclear Reactor in Idaho		Federal regulators have denied the application from Silicon Valley nuclear power startup Oklo to build and operate its advanced nuclear reactor, dubbed Aurora, in Idaho. The Nuclear Regulatory Commission filed the decision on Thursday and cited lack of sufficient information about potential accidents and safety measures. Oklo may re-apply. "Oklo's application continues to contain significant information gaps in its description of Aurora's potential accidents as well as its classification of safety systems and components," said the NRC's Andrea Veil, in a written statement. "These gaps prevent further review activities. We are prepared to re-engage with Oklo if they submit a revised application that provides the information we need for a thorough and timely review," Veil said.	CNBC	Anger Sparks at EU Plan to Grant Nuclear and Gas Projects 'Green' Status
Weekly Recap: 1/1-1/8		Uncertain Times. The world was already avidly watching the tension on the Russia-Ukraine border; now more flashpoints are arising in both Kazakhstan and Libya with yet more to come - think China's machinations in the South China sea - throughout the world. And, still one cannot discount omicron and its impact - even if most market pundits speak to a muted impact - on hydrocarbon demand. Not to mention the EU and Asia continue to wrestle with the unfolding energy crunch and crisis especially in regars to natural gas pricing and what this will entail for their respective economies. 2022 will see further inroads to the energy transition with technologies such as nuclear, albeit technologies which will have to adhere to policies and regulations around energy security and community safety. Just one thing we know for certain is uncertain times lie ahead...
*MarCon (Market Condition 1-5, with 5 being the highest impact) indicates directional bias or price effect for the relevant commodity (Oil, Natural Gas, Chemicals, etc.) and is graded by our team of experts here at IIR.

IIR's Market Scorecard gives you the breaking news headlines from around the world, along with the directional impact to commodities, with expert indicators, and live links to IIR key research so you instantly have the details you need and make the right decisions.

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