Chinese resuming Russian crude buyers: link here. Not violating the terms of the price cap mechanism:
State oil refining giants PetroChina and Sinopec are back on the market for Urals and are buying it at deep discounts via trading companies that handle the payments to Russian oil exporters and arrange the shipping and insurance services, according to Reuters’ sources.
The top state refiners in China are not violating the terms of the price cap mechanism and are not using Western tankers or insurance, either, the sources added.Such trades are beneficial for the Chinese refiners as they import crude at much lower prices than on the international markets, raising their profits from processing cheap crude at a time when China’s oil demand is set for a recovery after the end of the zero-Covid policy in the world’s largest crude oil importer. The trade is beneficial for Russia, to an extent, too—Moscow has a new major outlet for Urals, which used to go mostly to the European market prior to the Russian invasion of Ukraine and the Western sanctions on Russia’s crude oil exports.
However, the much cheaper Urals compared to a year ago is reducing Russia’s budget revenues, to which oil is a major contributor. See next data point / link.
Russian economy: update.
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Back to the Bakken
Active rigs: 47.
Peter Zeihan newsletter.
WTI: $78.17.
Natural gas: $2.536.
Thursday, February 16, 2023: 42 for the month; 112 for the quarter, 112 for the year
38883, conf, WPX, Palo Pinto 20-17-8HY,
39006, conf, CLR, Rhonda 4-28H1,
38882, conf, WPX, Palo Pinto 20-17HB,
38430, conf, Whiting, Lindley 41-7-2H,
38425, conf, Hess, HA-Dahl-LE-152-95-0706H-1,
RBN Energy: British Columbia's Montney gas play revived with new First Nations agreement. Archived. Montney is tracked here.
Natural gas production in Western Canada has been enjoying a steady revival in recent years, heavily assisted by enormous growth in the unconventional Montney gas formation. A sizable portion of this formation lies in the westernmost province of British Columbia, but also underlies a large contiguous land area in that province which has been the subject of land access and development issues with the province’s First Nations residents. As a result of a legal decision made in June 2021, future natural gas production growth was thrown into question as new well licenses, crucial for future gas well development, were placed on hold until a new agreement could be reached. In the nick of time, a new agreement was announced last month. In today’s RBN blog, we discuss the implications on future natural gas drilling and production.
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