Oil Markets Enter May on the Back Foot

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02-05-2025

Crude oil futures tumbled over the past week, falling more than 6% as concerns over weakening global demand and a resurgent supply outlook weighed on sentiment.
Friday, May 02, 2025
China, preparing for a week-long lull in trading activity, has nevertheless given the oil markets a much-needed carrot after a month-long stick treatment, saying that Beijing is evaluating a Trump administration proposal to hold negotiations over tariffs. As US-Iran nuclear talks have seemingly hit a temporary impasse, ICE Brent is set to start May trading with a second consecutive weekly decline, trading slightly above $61 per barrel.
Saudi Arabia Wants Lower Oil Prices. Seemingly intent on regaining lost market share and stymying non-OPEC+ production growth, Saudi Arabia has been signalling that it will continue unwinding its output cuts and that Riyadh is ready to handle a prolonged period of lower prices after 5 years of OPEC+ cuts.
Texas LNG Project Sapped by Deadly Incident. Port Arthur LNG, the 13 mtpa gas liquefaction project developed by Sempra (NYSE:SRE), saw all construction work suspended after three people were killed and two others injured in a scaffolding accident that took place at 2am, according to contractor Bechtel.
Pemex Sinks Even Lower. The world's most indebted oil company, the Mexican state oil firm Pemex, posted another quarterly loss after its Q1 performance showed a $2.1 billion shortfall, attributing the disappointing results to falling production from mature wells and delays in new well completions.US Ethane Might Be Out of the Woods. Chinese petrochemical producers have been allegedly informed that ethane will be exempted from Beijing's 125% tariff on all US goods, providing some relief as the US accounts for 99% of global ethane trade and has sent some 5.3 million tonnes to China last year.
Scotland No Longer Has a Refinery. Scotland's only refinery, the 150,000 b/d Grangemouth plant operated by a tandem of Petrochina and Ineos, ceased all crude oil processing this week, to be refurbished into an import terminal as plans for a biorefinery never really took off.
Ukraine Signs Long-Delayed US Minerals Pact. Kyiv signed the oft-mulled minerals deal with the Trump administration following two months of hesitation, giving the US preferential access to its energy resources, including rare earth metals but also iron, uranium and natural gas.
Spain Mulls Nationalization of Grid Operator. Alerted by the possibility of another nationwide blackout, Spain's deputy Prime Minister has suggested that Madrid fully take over the Mediterranean country's power grid operator REE, currently 20% owned by the state with the rest held in private hands.
Refiners Warn of California Gasoline Shortages. PBF Energy chief executive Matthew Lucey warned that the closure of P66's Los Angeles refinery and Valero's Benicia plant would create a gasoline short in California that could be as big as 250,000 b/d, causing the state to lose 17% of its current capacity.
China Courts Europe as Its Next UCO Market. As Trump's 145% tariff on China has killed any market economics in supply used cooking oil to the US, Chinese producers of the increasingly popular biofuel now target Europe to maintain steady export flows, after a meagre 0.6 million tonnes exported in 2024.
Chevron-Exxon Arbitration Set to Begin Soon. The Paris-based International Chamber of Commerce has scheduled the first hearing of ExxonMobil's (NYSE:XOM) arbitration dispute against US peer Chevron (NYSE:CVX), claiming it has right of first refusal over Hess' Guyanese assets, part of the latter's buyout.
Malaysia Turns Against Petronas. Malaysia's Sarawak state warned the country's national oil firm Petronas that its Miri crude oil terminal operates without a regulatory license and questioned its distribution rights, endangering Petronas' revenues as the state is home to 60% of the country's reserves.
Asia Starts to Pull LNG Cargoes Away from Europe. According to media reports, four LNG carriers that were en route to Europe changed course to Asia over the past week as the decline in European gas prices and the return of Asia's gas premium led sellers of US LNG to look eastward again.
Shell Plays Down Talk of BP Takeover. Wael Sawan, chief executive of UK-based energy major Shell (LON:SHEL) said that he would rather ramp up the company's share buyback than launch a takeover bid over peer major BP (NYSE:BP), coming on the back of Q1 net profit falling 28% year-over-year to $5.6 billion.
By Tom Kool for Oilprice.com
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