Oil prices dip with all eyes on U.S. debt talks

Oil prices dip with all eyes on U.S. debt talks

MOSCOW (MRC) -- Oil prices dipped as traders warily watched for signs of progress on talks to raise the U.S. debt ceiling, after surging in the previous session on optimism over U.S. fuel demand, said Hydrocarbonprocessing.

Brent crude futures slipped 76 cents, or 1%, to USD76.20 a barrel by 1333 GMT. U.S. West Texas Intermediate crude was down 66 cents, or 0.9%, at USD72.17 a barrel. A sharp plunge in U.S. gasoline inventories due to demand surging to the highest levels since 2021, and optimism surrounding negotiations over the U.S. debt ceiling, helped the main crude benchmarks settle more than USD2 higher.

European equities were up and the U.S. dollar hit a new seven-week peak on Thursday, making oil more expensive for holders of other currencies.

President Joe Biden and top U.S. congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal to raise the federal government's USD31.4-T debt ceiling and avoid an economically catastrophic default.

A debt agreement needs to be reached before the government runs out of money to pay its bills, which could be as soon as June 1.

Also weighing on prices was the increased possibility of another interest rate hike by the U.S. Federal Reserve, which closely watches the number of Americans filing new claims for jobs benefits. Data on Thursday showed they fell more than expected last week, suggesting the labor market remains tight.

Traders are pricing in around a 20% chance the Fed will raise rates at its June meeting, whereas a month ago, traders were pricing in around a 20% chance of a cut.

The strength of April U.S. economic data, in addition to optimism about the debt ceiling negotiations and the health of regional banking stocks overnight have strengthened market expectations of a further hike, ANZ Research said in a note on Thursday.

We remnd, India's oil imports from Russia rose to a fresh record high in April, further reducing the share of Middle Eastern and African grades to their lowest level in at least 22 years. Refiners in India, the world's third-biggest oil importer and consumer, are on a Russian oil-buying binge after some countries shunned purchases from Moscow over its invasion of Ukraine in February last year.


Berkshire Hathaway boosts stake in Occidental Petroleum to 24.4%

Berkshire Hathaway boosts stake in Occidental Petroleum to 24.4%

MOSCOW (MRC) -- Berkshire Hathaway Inc said it had acquired more shares of Occidental Petroleum Corp, boosting its stake in the oil company to 24.4%, said Reuters.

In a regulatory filing, the conglomerate controlled by billionaire Warren Buffett said it paid about USD201 MM for 3.46 million Occidental shares between May 16 and 18. Berkshire has bought Occidental shares on each of the last six trading days, paying about USD327 MM for 5.62 million shares.

It now owns about 217.3 million Occidental shares worth about USD12.7 B. Berkshire also owns approximately USD9.5 B of Occidental preferred stock carrying an 8% annual dividend, plus warrants to buy USD5 B of Occidental common shares at USD59.62 each.

Occidental's share price closed down 67 cents at USD58.25. Berkshire acquired the preferred stock and warrants in 2019 when it helped finance Houston-based Occidental's purchase of Anadarko Petroleum Corp.

It began buying common shares early last year, around when Russia invaded Ukraine and as oil prices rose. At Berkshire's annual shareholder meeting on May 6, Buffett pointed out Occidental's presence in the Permian Basin, which accounts for a significant amount of U.S. crude production and called Occidental CEO Vicki Hollub an "extraordinary manager."

He also tried to end speculation that Berkshire might buy Occidental and further diversify its own energy portfolio. "We're not going to buy control," he said. "We've got the right management running it... we wouldn't know what to do with it."

Berkshire had amassed a 22.6% stake in the BNSF railroad before paying USD26.5 B for the remainder in 2010. Buffett, 92, has run Berkshire since 1965.

The Omaha, Nebraska-based company owns dozens of businesses, including Geico car insurance and many retail and manufacturing companies, as well as stocks such as Apple Inc.

We remind, Occidental said its first large-scale direct-air-capture (DAC) plant will be postponed to mid-2025, after previously targeting a late 2024 commencement. The announcement was made during its 2022 Q4 earnings call on 27 February. In October 2022, Occidental and its subsidiary signed a lease agreement in south Texas that would allow it to build enough DAC plants to extract up to 3bn tonnes of carbon dioxide (CO2) from the atmosphere, the US-based energy producer said.


Maire Tecnimont wins deal to design PP plant in Vietnam

Maire Tecnimont wins deal to design PP plant in Vietnam

MOSCOW (MRC) -- Vietnam's Stavian Quang Yen Petrochemical JSC said it had awarded a contract to design a USD1.5-B polypropylene plant in the country to Italian engineering group Maire Tecnimont, said Hydrocarbonprocessing.

The 10-month Front End Engineering Design contract signed on the same day in Hanoi was for the development of the plant to be built in the northern province of Quang Ninh, Stavian said in a statement.

Stavian said earlier the plant would start commercial operations from the fourth quarter of 2026 and would produce 600,000 tons of polypropylene annually to supply manufacturers of home appliances, automobiles, electronics and medical equipment.

Vietnam's demand for plastic raw materials, estimated at eight million tons last year, is forecast to increase 6.6% a year from now through 2025, Stavian chairman Dinh Duc Thang said.

"Domestic supply is limited, leaving significant room for development," Thang said in the statement.

We remind, Maire Tecnimont S.p.A. (Milan, Italy) announced that its Sustainable Technology Solutions subsidiary NextChem has been awarded a new contract by Storengy to carry out a further advanced basic engineering study for the gasification of the waste wood and the purification system of the syngas to produce biomethane.


India plans to fill Mangalore SPR with 5.5 mln barrels of oil

India plans to fill Mangalore SPR with 5.5 mln barrels of oil

MOSCOW (MRC) -- India plans to import about 5.5 million barrels of crude oil after October to fill part of its Mangalore strategic petroleum reserve in southern Karnataka state and may change the crude grade at another facility, said Hydrocarbonprocessing.

The oil imports are needed because one of the Mangalore reserve tanks is currently empty. India, the world's third-biggest oil importer and consumer, has built strategic storage at three locations - Mangalore, Padur and Vizag - in southern India to store up to 5 million tons of crude (37 million barrels) that could be tapped on in case of supply disruption.

Indian Strategic Petroleum Reserves Ltd (ISPRL), the government-owned company mandated to manage the SPRs, has been selling from the caverns to local refiners after a change in the government rules in 2021.

The Mangalore SPR facility has two equal size compartments of about 5.5 million barrels each. One of those that had previously contained Saudi oil is empty, the source said.

This compartment would be filled after the single point mooring (SPM) facility at the Mangalore port resumes operations in October, the source said.

The SPM, used by very large crude carriers for discharging oil, is typically shut during the monsoon season. The second compartment at the Mangalore SPR has been leased to UAE's Abu Dhabi National Oil Co.

The Indian government has allocated $611.40 MM for its strategic oil purchases this fiscal year to March 31, 2024. Overall, India will need to import about 13 million barrels of oil for the SPR as later this year another SPR would be empty, the source said.

India had released oil from its strategic reserves as part of the U.S.-coordinated program to calm global oil prices in 2021. ISPRL plans to sell a second batch of 300,000 tons of Iraqi Basra crude from the 1.03 million ton Vizag SPR in southern Andhra Pradesh state, according to its website.

The company plans to sell the remaining oil by end-2023 or early 2024 and refill it with possibly another crude grade, the source said. "ISPRL might fill Vizag SPR with a new grade depending on pricing," the source said. ISPRL did not respond to a request seeking comment.

We remind, Reliance Industries Limited (RIL) unveiled India’s first Hydrogen Internal Combustion Engine technology solution for heavy duty trucks flagged off by Honourable Prime Minister Narendra Modi at the India Energy Week in Bangalore. The Hydrogen Internal Combustion Engine (H2ICE) powered trucks will emit near zero emissions, deliver performance on par with conventional diesel trucks and reduce noise and with projected reductions in operating costs thus redefining the future of Green Mobility.


Shell reports 'operational upset' at unit in Singapore complex

Shell reports 'operational upset' at unit in Singapore complex

MOSCOW (MRC) -- A unit at Shell's Pulau Bukom refinery and petrochemical complex in Singapore experienced an "operational upset" on Tuesday, said Reuters.

The incident took place at about 10:15 pm local time (1415 GMT) on Tuesday and resulted in flaring, Shell said in a statement on Wednesday.

Shell declined to name the unit and the impact on its production for commercial reasons. The issue had occurred at the company's cracker, people familiar with the matter said, adding that the unit is running at a reduced rate after the incident.

Shell operates a refinery and 1 million tpy cracker on Pulau Bukom, a small island in the Southeast Asian city-state and home to the company's only energy and chemicals park in Asia.

We remind, Shell's Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to the market.