Released December 28, 2022 | SUGAR LAND
en
Editorial by Geoffrey Lakings for Industrial Info.
December 28, 2022--Researched by Industrial Info Resources (Sugar Land, Texas)-- Hope all are well during these 2022 Holidaze as Russia announced they are in Ukraine for the "..long haul..". And, with recent G7 sanctions applied onto the Russian barrel it means in the New Year the world's oil markets will have to prepare for even fewer Russian barrels and of course Russian refined products. What the world has been trying to adapt to for much of this past year; however Russian crude oil & clean product exports have been resilient -- to say the least.
As Russia could conceivably cut output in response to these G7 Sanctions.
FXEmpire(Dec. 23): Oil rises $3/bbl after Russia signals output cut due to price cap
Russia may cut oil output by 5% to 7% in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday.
Russia's Baltic oil exports could fall by 20% in December from the previous month after the European Union and G7 nations imposed sanctions and a price cap on Russian crude from Dec. 5, according to traders and Reuters calculations.
Which is already being reflected in the Brent price.
With an expectation that oil prices could return to $100 in 2023 OilPrice (Dec 21): $100 Oil To Return In 2023
Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners LP, has told the Financial Post that oil prices will return to $100 per barrel in 2023. According to the analysts, many of the headwinds that have cut short the oil price rally this year including China's zero-Covid policy and the coordinated SPR releases by several governments, will no longer be there in 2023. Coupled with sanctions on Russia's oil and gas, this should elevate oil prices. He has also predicted that the energy sector will continue to outperform other market sectors due to high demand in oil and gas stocks.
Although not yet reflected in the Brent forward curve.
And, though Europe is already embroiled in an "..energy crunch & crisis.." it is being reported Europe will have to learn to deal with less Russian refined products.
OilPrice(Dec. 26): Russia Says Europe Will Struggle To Replace Its Oil Products
The EU embargo on Russian crude oil came into effect on December 5th and its embargo on oil products will come into effect on February 5th. Alexander Novak, Russia's deputy prime minister, believes Europe will struggle to replace Russian fuel and will probably ask for exemptions. The IEA has forecast intense competition for non-Russian diesel barrels and says that product flows from Russia to Europe have surged.
CREA(Oct 4): September update on Russian fossil fuels: EU imports cross EUR 100 billion since the beginning of the invasion
And one wonders if from a U.S. administration perspective if limiting energy exports of crude, refined products and even natural gas to Europe still remains on the proverbial table. One hopes that reason and sound common sense will ultimately prevail. But is common sense common anymore?
Forbes(Oct 2): Why Limiting U.S. Energy Exports Would Only Worsen Domestic Supply Problems
Another active week in the energy space ended with the Wall Street Journal reporting that the CEO of ExxonMobilXOM +1%, Darren Woods, was having to waste his time arguing with officials at the U.S. Department of Energy about their apparent ongoing desire to limit U.S. exports of crude oil and other fuels, even liquefied natural gas (LNG).
Quoting from a letter Mr. Woods sent to DOE, the CEO said that "Continuing current Gulf Coast exports is essential to efficiently rebalance markets--particularly with diverted Russian supplies. Reducing global supply by limiting U.S. exports to build region-specific inventory will only aggravate the global supply shortfall."
For one knows from the varied Energy Market Outlooks that we are stepping into the New Year with tight/constrained supplies with the possibility of increasing demand as China further opens. Hence why the Bulls feel they will be running out of the gate in 2023...
Economist: Energy outlook 2023
Global energy consumption will grow by just 1.3% in 2023, amid a slowing economy and high energy prices. Waning gas supplies and extreme weather events will force many countries to fall back on fossil fuels, delaying the green energy transition.
However, the world economy still remains of grave concern and whether we are or will tip into a global recession.
El Pais: What's in store for the global economy in 2023?
The key question for the year ahead is whether central banks will be able to curb inflation without cratering economies in an environment of high volatility and geopolitical tension.
Economists have had a poor track record of predicting recessions since the 1970s, unlike the markets themselves. But once again, there is widespread agreement among economists that the combination of inflation, interest rate hikes, weakness in the Chinese economy and geopolitical uncertainty has a high probability (over 60%) of leading to a global recession. This is why contrarians say that if economists are predicting a recession, it most likely won't happen.
What one knows for certain is that Russian's President Putin; the US Administration; and news out of Europe and MENA will continue to dominate the headlines for these energy markets as we step into the New Year.
WSJ(Dec 27) Kremlin Bans Sales of Russian Oil to Countries That Impose Price Cap Action to take effect Feb. 1 and run through July 1, 2023
Russian President Vladimir Putin banned the supply of Russian oil and oil products to countries that impose a price cap, allowing deliveries to those nations only on the basis of a special permission from the Kremlin leader.
The European Union and the U.K. earlier this month banned the import of seaborne Russian crude, while the Group of Seven nations put a ceiling on other sales by barring Western companies from insuring, financing or shipping Russian crude at above $60 a barrel.
..Therefore let IIR Energy's Dedicated Market Research place the world at your fingertips.. Tomorrow's News Today.. Ask us! We have Answers!!
As your feedback is very important to us. Please let us know if we may provide additional color or answer any other market questions you may have by replying to this note.
Additional IIR Resources:
December 28, 2022--Researched by Industrial Info Resources (Sugar Land, Texas)-- Hope all are well during these 2022 Holidaze as Russia announced they are in Ukraine for the "..long haul..". And, with recent G7 sanctions applied onto the Russian barrel it means in the New Year the world's oil markets will have to prepare for even fewer Russian barrels and of course Russian refined products. What the world has been trying to adapt to for much of this past year; however Russian crude oil & clean product exports have been resilient -- to say the least.
As Russia could conceivably cut output in response to these G7 Sanctions.
FXEmpire(Dec. 23): Oil rises $3/bbl after Russia signals output cut due to price cap
Russia may cut oil output by 5% to 7% in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday.
Russia's Baltic oil exports could fall by 20% in December from the previous month after the European Union and G7 nations imposed sanctions and a price cap on Russian crude from Dec. 5, according to traders and Reuters calculations.
Which is already being reflected in the Brent price.
With an expectation that oil prices could return to $100 in 2023 OilPrice (Dec 21): $100 Oil To Return In 2023
Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners LP, has told the Financial Post that oil prices will return to $100 per barrel in 2023. According to the analysts, many of the headwinds that have cut short the oil price rally this year including China's zero-Covid policy and the coordinated SPR releases by several governments, will no longer be there in 2023. Coupled with sanctions on Russia's oil and gas, this should elevate oil prices. He has also predicted that the energy sector will continue to outperform other market sectors due to high demand in oil and gas stocks.
Although not yet reflected in the Brent forward curve.
And, though Europe is already embroiled in an "..energy crunch & crisis.." it is being reported Europe will have to learn to deal with less Russian refined products.
OilPrice(Dec. 26): Russia Says Europe Will Struggle To Replace Its Oil Products
The EU embargo on Russian crude oil came into effect on December 5th and its embargo on oil products will come into effect on February 5th. Alexander Novak, Russia's deputy prime minister, believes Europe will struggle to replace Russian fuel and will probably ask for exemptions. The IEA has forecast intense competition for non-Russian diesel barrels and says that product flows from Russia to Europe have surged.
CREA(Oct 4): September update on Russian fossil fuels: EU imports cross EUR 100 billion since the beginning of the invasion
And one wonders if from a U.S. administration perspective if limiting energy exports of crude, refined products and even natural gas to Europe still remains on the proverbial table. One hopes that reason and sound common sense will ultimately prevail. But is common sense common anymore?
Forbes(Oct 2): Why Limiting U.S. Energy Exports Would Only Worsen Domestic Supply Problems
Another active week in the energy space ended with the Wall Street Journal reporting that the CEO of ExxonMobilXOM +1%, Darren Woods, was having to waste his time arguing with officials at the U.S. Department of Energy about their apparent ongoing desire to limit U.S. exports of crude oil and other fuels, even liquefied natural gas (LNG).
Quoting from a letter Mr. Woods sent to DOE, the CEO said that "Continuing current Gulf Coast exports is essential to efficiently rebalance markets--particularly with diverted Russian supplies. Reducing global supply by limiting U.S. exports to build region-specific inventory will only aggravate the global supply shortfall."
For one knows from the varied Energy Market Outlooks that we are stepping into the New Year with tight/constrained supplies with the possibility of increasing demand as China further opens. Hence why the Bulls feel they will be running out of the gate in 2023...
Economist: Energy outlook 2023
Global energy consumption will grow by just 1.3% in 2023, amid a slowing economy and high energy prices. Waning gas supplies and extreme weather events will force many countries to fall back on fossil fuels, delaying the green energy transition.
However, the world economy still remains of grave concern and whether we are or will tip into a global recession.
El Pais: What's in store for the global economy in 2023?
The key question for the year ahead is whether central banks will be able to curb inflation without cratering economies in an environment of high volatility and geopolitical tension.
Economists have had a poor track record of predicting recessions since the 1970s, unlike the markets themselves. But once again, there is widespread agreement among economists that the combination of inflation, interest rate hikes, weakness in the Chinese economy and geopolitical uncertainty has a high probability (over 60%) of leading to a global recession. This is why contrarians say that if economists are predicting a recession, it most likely won't happen.
What one knows for certain is that Russian's President Putin; the US Administration; and news out of Europe and MENA will continue to dominate the headlines for these energy markets as we step into the New Year.
WSJ(Dec 27) Kremlin Bans Sales of Russian Oil to Countries That Impose Price Cap Action to take effect Feb. 1 and run through July 1, 2023
Russian President Vladimir Putin banned the supply of Russian oil and oil products to countries that impose a price cap, allowing deliveries to those nations only on the basis of a special permission from the Kremlin leader.
The European Union and the U.K. earlier this month banned the import of seaborne Russian crude, while the Group of Seven nations put a ceiling on other sales by barring Western companies from insuring, financing or shipping Russian crude at above $60 a barrel.
..Therefore let IIR Energy's Dedicated Market Research place the world at your fingertips.. Tomorrow's News Today.. Ask us! We have Answers!!
As your feedback is very important to us. Please let us know if we may provide additional color or answer any other market questions you may have by replying to this note.
Additional IIR Resources:
- IIR Team Email: iirteam@iirenergy.com iirteam@iirenergy.com
- Latest IIR Crude & Products Market Scorecard
