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The Barrel Blog

Oil market right to be nervous of second wave: Fuel for Thought

Oil markets are recovering quickly, but may have hit the buffers. Deep production cuts from West Siberia to West Texas and resurgent gasoline demand have helped revive prices, however, a huge stock overhang and fears of further economic lockdowns to counter a second wave of the coronavirus pandemic remain significant risks to a full recovery. “We see 4 million b/d of new demand coming on each month through to August as the world recovers from the lockdowns,” said Chris Midgley, global...

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Bland LNG contracts need a bit of seasoning

The LNG market has clung tenaciously to traditional contracting structures, but so many of the justifications – the rationale for oil indexation, limited LNG supply, and lack of spot gas trade or benchmark – no longer pass the sniff test in 2020 and beyond. The LNG market needs different options. Sellers still need some long-term commitments to provide financial security to shareholders, and buyers still need some security of supply to assuage regulatory concerns regarding economic...

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Commodity Tracker: 4 charts to watch this week

The outlook for global oil demand and key trends in gas and LNG markets are in the sights of S&P Global Platts news editors this week, amid a stuttering recovery from the coronavirus pandemic continues. 1. Oil demand recovery in spotlight as IEA suggests tighter market in 2021   What’s happening? The global oil market is set to tighten next year with demand recovering from the coronavirus pandemic at a faster pace than supply, according to the International Energy Agency, giving...

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Middle East crude benchmarks provide lessons on valuing oil in volatile markets

The crude oil market has witnessed some of the highest volatility in living memory in recent months, casting a spotlight on the evolving role of global crude benchmarks. In the Middle East and key consuming regions such as Asia, it follows that the market is keen to understand what the tradable value of Middle Eastern crude is amid recent demand and supply shocks. Typically the value of a grade of crude oil is defined by the underlying value of the products that are produced when it is...

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Insight Conversation: Marco Dunand, CEO and co-founder, Mercuria

Mercuria’s Marco Dunand talked to S&P Global Platts about the challenges, implications, and opportunities that the coronavirus pandemic presents across all the key commodity classes in a time of unprecedented volatility in the global markets. Founded in 2004, Mercuria Energy Trading is one of the world’s biggest independent energy traders with a turnover of $116 billion last year. Operating in more than 50 countries, Mercuria trades oil, petrochemicals, biofuels, natural gas and...

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Commodity Tracker: 4 charts to watch this week

Global recovery from the coronavirus pandemic is proving patchy, and demands a close look at oil demand signals – the first stop in this week’s roundup of energy and raw material trends. S&P Global Platts editors also look at prospects for US crude exports to Asia, Ukraine’s importance to the European gas market this summer, and the impact of reduced French nuclear availability on power markets. 1. Global oil demand set for uneven recovery as coronavirus battle continues   What’s...

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Latin American crude exports to USGC see small gains amid coronavirus upheaval

Latin American countries, excluding Venezuela and Argentina, have slightly increased crude exports to the US Gulf Coast market in 2020 to date, despite fierce competition from Canadian and Middle East producers. In the first five months of 2020, Mexico, Colombia, Ecuador, Brazil and Guyana exported a total of 148 million barrels of crude to refineries located in the US Gulf Coast, US Customs Bureau and S&P Global Platts Analytics data showed. That was up 1.3% from 146 million barrels...

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Insight from Washington: Trump uses oil diplomacy, executive orders to aid US producers

A day after US light crude futures took an unprecedented dive into negative territory, President Donald Trump promised to deliver federal relief to domestic oil and gas producers just like the US Congress had approved for airlines and a host of other industries as the pandemic wreaked havoc on the US economy. “We will never let the great US Oil & Gas Industry down,” Trump said April 21 on Twitter. “I have instructed the Secretary of Energy and Secretary of the Treasury...

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Commodity Tracker: 4 charts to watch this week

A recovery in Chinese independent refiners’ oil imports tops this week’s pick of trends in energy and raw materials markets. EU carbon markets, the relationship between US rig counts and tubular steel prices, and LNG supply to Europe are also on the agenda. 1. Saudi crude supply to Chinese independent refiners soars in May   What’s happening? China’s independent refiners ratcheted up crude imports in May by 71.1% on the year to a record high 4.42 million b/d, sending...

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Insight Conversation: Christopher LaFemina, Jefferies LLC

Christopher LaFemina is managing director, global metals and mining equities research at Jefferies LLC, a global investment bank and financial services company. He talked to Diana Kinch and Paul Hickin about metals market trends as the COVID-19 crisis gradually eases, and how the industry might develop in the longer term. Christoper LaFemina, Jefferies LLC Metals prices have been on a rollercoaster since the beginning of the COVID-19 crisis. Many metals have now moved into a surplus, which...

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