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China has launched 1,100 km section of China-Russia East gas pipeline. Operations have already started in the middle portion of the pipeline. This will facilitate smog-prone Beijing-Tianjin-Hebei region in northern China with the natural gas from the Power of Siberia system. The line is expected to be complete by 2025 and could transport 38 bcm per annum of gas.
OPEC+ fears the second wave of COVID-19. The cartel is particularly troubled due to the jump in Libyan output. On Thursday, the Joint Technical Committee held a virtual meeting to discuss the issues. "In particular, a resurgence of COVID-19 cases across the world and prospects for partial lockdowns in the coming winter months could compound the risks to economic and oil demand recovery," said the panel.
Russian oil pipeline monopoly, Transneft yesterday reported a 13% jump in the first-quarter net earnings Y/Y to 56.7 billion roubles ($822 million). The firm climbed on the back of higher sales to register a 1.3% jump in net revenue to 263.3 billion roubles. Transneft has also paid oil suppliers a whopping sum of $71 million for the April oil contamination.
Polish President Andrzej Duda has informed that the construction of Baltic, a new pipeline, will commence soon. This major gas pipeline from Norway will mark the independence of Poland from Russian gas. Its capacity is said to be 10 billion cubic meters of gas per year. Italian oilfield services major, Saipem who will take care of pipeline's construction said that the contract is worth $307 million.
Energy major Shell denied Russian Arctic oil JV with Gazprom, Meretoyakha Neftegaz. This decision has been taken keeping in mind the falling investment in the energy sector projects and fragile crude demand. Shell said, "Due to challenging external environment Shell will not pursue the completion of the deal to create a joint venture on the basis of Meretoyakha Neftegaz".
Following Mexico's refusal, OPEC+ on Easter Sunday agreed upon 9.7mn bpd of production cut. “These production adjustments are historic. They are largest in volume and the longest in duration, as they are planned to last for two years", said OPEC's Secretary-General. This decision has brought hope for the African oil producers giving them a financial boost. NJ Ayuk welcomed the decision declaring it a home run by OPEC.
US President Donald Trump has appreciated the efforts of OPEC and its allies to slash the output. "The big Oil Deal with OPEC Plus is done. This will save hundreds of thousands of energy jobs in the United States", tweeted the President. According to Federal Reserve Bank of Kansas City, if the prices remain $30 a barrel, 40% of US oil and gas producers might face insolvency within the year.
After more than nine hours meeting on Thursday, OPEC and its allies have settled for historic agreement with an exception. The group has decided to take 10 million barrels per day off the market to which Mexico hasn't given the consent. The statement by OPEC read "agreed by all the OPEC and non-OPEC oil-producing countries participating in the Declaration of Cooperation, the agreement is conditional on the consent of Mexico".
Oil prices plummeted in the international market on Friday, as markets largely remained worried about plunging demand due to the coronavirus outbreak. Brent crude slipped by 2%, to $32.55 a barrel. US WTI crude dropped 2.1%, to $30.84 a barrel. After OPEC+ meeting fell apart last week, Saudi Arabia and the UAE have opened the flood gates of low-priced oil into the market further intensifying the pressure on prices.
Oil prices toppled in the international market today, slumping over 25% on the looming concerns of a potential price war between Saudi Arabia and Russia. Brent crude plummeted 25%, to $33.96 a barrel. US WTI crude sunk by 26%, to $30.55 a barrel. Sources say that Saudi Arabia is looking to boost its crude output above 10 million bpd in an attempt to punish Russia for not supporting the production cuts.
The oil cartel, OPEC yesterday agreed to deepen output cuts by an additional 1.5 million barrels per day (bpd) in the second quarter of 2020 to regulate fuel prices amidst coronavirus outbreak. The cartel has, however, made its action conditional on Russia and others chipping in. The oil demand outlook has tumbled as countries take stringent measures to contain coronavirus spread, pushing OPEC to consider its deepest cut since 2008.
Washington on Tuesday imposed sanctions on the trading arm of Russia's Rosneft. This has created a difficult situation for Reliance Industries, a key buyer of Venezuelan oil. The Indian refiner said, "Reliance will continue its direct communications with the US Government to ensure that Reliance's purchases of Venezuelan oil after the RTSA sanctions are both compliant with US sanctions and consistent with US policies regarding Venezuelan oil sector".
The international market felt a sign of relief after Russia backed OPEC's recommendation to deepen output cuts. The coronavirus epidemic in China has led to a steep decline in the demand for crude. On Friday, oil prices rose on the back of Russia's support. Brent increased by 0.6% and was traded at $55.27 a barrel. WTI went up by 0.5% and was traded at $51.23 a barrel.
According to the sources, Rosneft has shown interest to bid for the acquisition of Bharat Petroleum Corp Ltd (BPCL). Under India's biggest privatisation plan, the country is selling all of its 53% stakes in the firm. In a meeting between Rosneft's CEO Sechin and Pradhan, the former was keen to expand in the world's third largest energy market.
Energy Ministry of Kazakhstan, KazTransOil has informed that it has reduced its exports to China and is changing the supply schedules to domestic refineries. Organic chloride contamination was found earlier this month in crude supplied by a Kazakh. This step has been taken to restrict the spread of contaminated oil. According to sources, oil transit via Russia has also been brought down by 100,000 tonnes for February.
While addressing a gathering of Russia's top businessmen on Wednesday, Putin said that Russia has a “pipe-laying vessel” to complete the construction of the Nord Stream 2. Russian President also informed that the construction of the pipeline will be delayed due to the sanctions. Pipe-laying vessel, Academic Cherskiy was bought by Gazprom to use if European companies denied service for Nord Stream 2.
Oil prices rose in the international market on Tuesday, pushed up by comments from Russian energy minister towards OPEC-led supply cut. Brent crude LCOc1 climbed to $66.44 a barrel. U.S. WTI CLc1 was traded higher at $60.53 a barrel. Russian energy minister, in an interview on Monday, said that cooperation with the Organization of the Petroleum Exporting Countries (OPEC) would continue “until the market requires it”.
Russian news agencies reported on Saturday that Gazprom will pay $2.9 billion to Ukrainian energy firm, Naftogaz to put an end to a long-running dispute over transit fees for gas transferred to Europe. CEO, Gazprom said that in return for the payment Naftogaz had agreed to drop all other legal action. The existing transit contract between the two ex-Soviet nations elapses at the end of the year.