IIR Market Scorecard: Geopolitical Risks Support Oil Prices

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 21.

Event	MarCon*	IIR Comment	Outlet	IIR News
Geopolitical risk to keep floor under oil prices for now		Geopolitical tensions affecting major oil suppliers in Eastern Europe and the Middle East should continue to support crude oil prices, although analysts questioned for how long. Moscow on Sunday argued against claims from London that the Kremlin was working to replace the government in Ukraine with a pro-Russian administration, similar to that of former Ukrainian President Viktor Yanukovych, who was ousted during a pro-Western revolution in 2014. Russia is wary of what it sees as Western meddling in former Soviet territory, while Western powers are concerned about infringements upon the sovereignty of Ukraine, which has tilted further away from Russia since the 2014 revolution. That revolution saw Russia annex Ukraine's Crimean Peninsula. Ukraine hosts a vast network of Soviet-era pipelines, including sections of the Druzhba crude oil pipeline, the longest in the world. That highlights the risk these tensions have on energy markets. The U.S. economy, meanwhile, is heavily dependent on refined petroleum products from Russia such as fuel oil, complicating some of the sanction scenarios for Western powers. Those tensions, coupled with recent outages in Kazakhstan, war-torn Libya and bombings in the oil-rich United Arab Emirates, helped push the price of crude oil to new heights. West Texas Intermediate, the U.S. benchmark for the price of oil, ended trading Friday above $85 a barrel.	Houston Chronicle	IEA Blames Russia for Europe's Gas Crisis
Oil caps fifth weekly gain after touching its highest since 2014		Oil capped its fifth week of gains on continued signs of robust demand and strained crude supplies that have taken prices to seven-year highs. Futures in New York edged lower on Friday, just above $85 a barrel, but were still up 1.6% for the week. Oil neared $88 earlier this week for its highest level since 2014 as geopolitical tensions threatened greater supply outages alongside strong demand numbers, despite the omicron variant. As prices rise, much of Wall Street has been growing steadily more bullish. Morgan Stanley has joined Goldman Sachs Group Inc. in forecasting $100 oil later this year, and Bank of America reiterated that it expects oil to hit $120 a barrel by the summer. Citigroup Inc. cautioned that sticking to a bullish view could be dangerous after this quarter.	Bloomberg	OPEC Economic Growth Estimate Static Amid Commodity Bull Run
Oil prices are at a 7-year high, but ExxonMobil CEO Darren Woods is confident they will trend lower		Oil prices rose to a seven-year high Tuesday amid ongoing supply concerns and escalating tensions in the Middle East, but Exxon Mobil CEO Darren Woods is confident they will trend lower. In the immediate future, however, the oil executive said the market should expect volatile prices as the industry's recovery from COVID-19 continues. "As you get supply and demand tighter, events that happen around the world ... lead to a lot more volatility because there's less of a buffer, and I think we're going to see that for some time now," he said Tuesday on CNBC's "Squawk Box." "Until industry begins to ramp up productions and increase the level of supply to meet this growing demand, or in turn demand starts to come down a little bit ... you're going to see a lot more volatility until we get better stability." Woods added that it's hard to predict when the market might balance out given the many players involved. .....But Woods said he doesn't get "overly enamored" with today's high prices. When looking at new investments the company focuses on ensuring operations can be competitive across a wide range of price environments, he said. "[W]e anticipated higher prices. We also anticipate a lot of volatility. And frankly we're anticipating lower prices as we go forward," he said. ExxonMobil said Tuesday it's targeting net-zero greenhouse gas emissions for its operated assets by 2050. The announcement follows similar targets from competitors, and comes as the company faces board pressure to act on climate change.	CNBC	Is a Glut Coming to Oil Markets?
House panel broadens probe into climate disinformation by Big Oil		The House Committee on Oversight and Reform has broadened its investigation into the role of fossil fuel companies in misleading the public about climate change, asking members of the boards of directors of ExxonMobil, BP, Chevron and Shell Oil to testify before Congress next month about their firms' commitments to curbing global warming. The move by the powerful Oversight Committee comes as Senate Democrats struggle to pass sweeping climate and social spending legislation. President Biden acknowledged Wednesday that further cuts to his Build Back Better proposal may be necessary, and climate-fueled extreme weather events are intensifying around the country. Oversight panel members previously grilled the CEOs of the four oil and gas companies, as well as two trade associations they fund, at a historic six-hour hearing in October. The proceedings grew heated at times as Democrats argued that the oil industry has deceived the public for decades about the perils of burning fossil fuels, which releases large quantities of carbon dioxide and other greenhouse gases that are dangerously warming Earth.	Washington Post	Biden Plan Would Green the Economy, Starting with the Federal Government
World's first hydrogen tanker to ship test cargo to Japan from Australia		A Japanese-Australian venture producing hydrogen from brown coal was set to start loading its maiden cargo on the world's first liquid hydrogen carrier on Friday, in a test delayed by nearly a year because of the COVID-19 pandemic. The Suiso Frontier, built by Japan's Kawasaki Heavy Industries (KHI), arrived in Australia last week from Kobe, following a longer trip than the expected 16 days as the ship dodged bad weather and rough seas, said a spokesperson for the Hydrogen Energy Supply Chain (HESC) venture. The ship is scheduled to head back to Japan in about a week. Led by KHI, HESC is a A$500 million ($360 million) coal-to-hydrogen project backed by Japan and Australia as a way to switch to cleaner energy and cut carbon emissions. Hydrogen, seen as a path to decarbonising industries that rely on coal, gas and oil, is key to Japan's goal to achieving net-zero emissions by 2050. Australia aims to become a major exporter of the fuel.	Reuters	Thyssenkrupp to Build Shell's Green Hydrogen Plant in Netherlands
Weekly Recap: 1/15-1/22		What's next for Mr. Market? The banks are saying $100 oil is in our future - maybe even higher. Well, not Citigroup who cautions against being bullish. Also, the ExxonMobil CEO says, "..frankly we are anticipating lower prices as we go forward." This as the oil majors are being brought back before Congress next month to testify about their firm's commitment to the energy transition. Hhhmm, maybe this is why ExxonMobil is one of the last majors to state they too are targeting net-zero greenhouse gas emissions by 2050. It seems what's next is more volatility.
*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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