Oil Prices Rally on OPEC Outlook
Newsletter No. 53
Hello,
It is Thursday, February 15, 2024. There is plenty of exciting news in the oil and gas industry this week. So, I am going to jump right into some of the main highlights.
This Week's Headlines
Russia's Exports to Europe Plunge 68% Due to Slumping Oil and Gas Sales
Kazakhstan Commits to OPEC+ Cuts Despite January Overproduction
Oil Prices Rally on OPEC Outlook Amid Global Tensions
Incredible Experience at NAPE Expo
Acquisition to Watch: Enbridge Advances in $14 Billion Acquisition of U.S. Gas Utilities from Dominion
Global Oil & Gas News
Russia's Exports to Europe Plunge 68% Due to Slumping Oil and Gas Sales
Russia's exports to Europe saw a sharp 68% decline in 2023, dropping to $84.9 billion, mainly because the EU imported significantly less oil and gas. Russia stopped providing detailed trade data since the Ukraine invasion. On the flip side, Russia-China trade hit a record $240 billion in 2023. With Europe banning Russian oil, Russia turned to China and India, with China now taking 45-50% of Russia's oil exports, and India about 40%.
Gazprom's natural gas exports to Europe fell by 55.6% in 2023 after Russia cut supplies to some EU countries, and Nord Stream was damaged. Daily gas volumes to Europe went from 174.8 million cubic meters in 2022 to 77.6 million in 2023. Russia is adapting to new trade dynamics as Europe reduces imports, and China and India become crucial trade partners.
Kazakhstan Commits to OPEC+ Cuts Despite January Overproduction
Kazakhstan, a non-OPEC oil producer, has pledged to compensate for its lack of compliance with the OPEC+ voluntary cuts in January. The country's Ministry of Energy stated its continued support for OPEC+ initiatives, emphasizing its commitment to adhere to production adjustments. Kazakhstan, along with other OPEC and non-OPEC nations, had pledged additional voluntary cuts of 2.2 million barrels per day for Q1 2024. Despite exceeding its quota in January, Kazakhstan assures it will offset the overproduction over the next four months to fulfill its obligations under the OPEC+ agreement. The move echoes broader challenges in OPEC, with some members, notably Iraq, falling short of pledged production cuts in January.
Oil Prices Rally on OPEC Outlook Amid Global Tensions
Oil prices climbed as OPEC maintained a positive demand forecast. Brent oil reached $83.52, up 0.9%, and West Texas Intermediate rose 1.1% to $78.72. Geopolitical tensions in the Middle East and Russia supported prices, but concerns about U.S. inflation and a significant 8.5 million barrel increase in crude inventories tempered gains. Stay tuned for the IEA report and keep an eye on global developments.
KOC News
Incredible Experience at NAPE Expo
I am thrilled to share the incredible experience I had at the NAPE Expo in Houston, where I had the honor of interviewing two outstanding individuals in the oil and gas industry for the Jay Young Show. Steve Reese, of Reese Energy Consulting, and Rhett Bennett, CEO of Black Mountain Oil and Gas, provided valuable insights into the dynamic landscape of the energy sector. You can subscribe to The Jay Young Show on Apple or Spotify, and you can watch it on YouTube.
The NAPE Expo also served as a hub for connecting with remarkable professionals in oil and gas. Great conversations and forming meaningful connections were at the heart of this experience. I look forward to continuing these relationships in the future.
Thank you, NAPE Expo, for an unforgettable experience. Here's to the exciting prospects and collaborations that will undoubtedly emerge from the connections forged during this amazing event.
Acquisition to Watch
Enbridge Advances in $14 Billion Acquisition of U.S. Gas Utilities from Dominion
Enbridge Inc. is making significant regulatory strides toward its $14 billion acquisition of three U.S. gas utility companies from Dominion Energy Inc. The waiting periods for fair competition reviews have concluded, and Enbridge received final clearance from the interagency Committee on Foreign Investment. Regulatory teams are now actively working on securing necessary U.S. federal and state approvals to finalize the acquisitions, positioning Enbridge to become the largest natural gas utility in the U.S.
If you'd like to talk to someone about King and are an accredited investor, you can fill out your information here or schedule a Zoom conversation with one of our SVPs here and someone will reach out.
Also, please let us know how we are doing at King Operating Corporation. Leave a review here.
Recommended Reads
Trump Can't Stop Energy Transition: Kerry
Shell Sees LNG Replacing Coal in Asia
China, US-led global refill of depleted oil stocks seen buoying demand
Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don't hesitate to reach out.
All the best,
Jay
