News Stream – Oil and Energy

Canada's main stock index extended losses on Wednesday, with the energy stocks leading the declines, while data showing an unexpected rebound in quarterly economic growth sparked fresh fears of the Bank of Canada resuming monetary tightening. A Statscan report showed that the country's economy grew unexpectedly at an annualized rate of 3.1% in the first quarter, raising bets among market participants for a 25-basis point rate hike by the BoC next month. "The run of sturdy data undoubtedly raises the odds that the Bank of Canada needs to go back to the well of rate hikes," Douglas Porter, chief economist at BMO Capital Markets wrote in a note.

U.S. natural gas futures rose about 2% to a one-week high on Wednesday on forecasts for warmer than normal weather in mid June that should boost air conditioning demand. Front-month gas futures for July delivery on the New York Mercantile Exchange rose 3.5 cents, or 1.5%, to $2.362 per million British thermal units (mmBtu) at 8:57 a.m. EDT (1257 GMT), putting the contract on track for its highest close since May 24. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 101.7 billion cubic feet per day (bcfd) so far in May, which would top April's monthly record of 101.4 bcfd.

Brazil's economy likely surged back to growth in the first quarter of the year, powered by record-breaking crops and solid crude oil output that more than offset the drag of subdued manufacturing activity, a Reuters poll of economists showed. Strong exports by commodities-producing sectors were seen adding to resilient private consumption in lifting gross domestic product (GDP), despite the negative effects of high interest rates and a worrying rise in government debt.

Tanzania's government said on Wednesday it had completed negotiations with the investors of its $42 billion liquefied natural gas (LNG) project, with the agreements set to be reviewed for approval next month. Energy minister January Makamba said the agreements for the approval of the long-delayed project - aimed at unlocking the country's vast but remote offshore gas resources - would be presented to the government's cabinet before they are signed. While Makamba did not provide a time frame in his address to parliament, the ministry of energy's budget speech for 2023/24 published on its website showed the LNG investors and the government are expected to sign an amended production sharing agreement in June.

Crude prices fell again, putting the oil market on track for its biggest monthly decline since September and raising pressure on OPEC+ to deepen output cuts when the cartel meets this weekend. The slide is a symptom of slowing global growth as central banks press ahead with interest-rates increases and [China stumbles out of Covid-19 lockdowns](https://www.

Warren Buffett bought 4.66 million OXY shares for about $275 million over May 25-30. Berkshire Hathaway now owns 24.9% Occidental Petroleum.

Global shares fell on Wednesday ahead of a crucial vote in Washington on the U.S. debt ceiling, while commodities and the Chinese yuan came under pressure after data highlighted faltering growth in the world’s second-largest economy. Data showed China's manufacturing activity fell more than expected in May, while services growth -- which has been one of the few bright spots in its patchy recovery -- slackened to its slowest pace in four months. For any investors hoping for a sustained bounce in Chinese growth after the elimination of stringent COVID restrictions late last year, the figures offered more evidence that the economy is losing steam, further dimming the global outlook.

The energy world has for decades looked to oil rigs 100 miles off the coast of Scotland’s northernmost islands to help set the price of global crude. All eyes are now turning to Texas instead. Starting with deliveries that arrive Thursday, a type of [U.

Oil prices dropped on Wednesday as weak Chinese manufacturing data concentrated fears over future demand from the world’s largest crude oil importer. Brent crude, the international standard, fell 2.2% to $72.

Oil prices will creep up from current levels as major producer group OPEC+ maintains restrictions on supplies, but economic headwinds will keep them below $90 a barrel this year, a Reuters poll showed on Wednesday. Most analysts expect oil to trade around the $80-level per barrel this year, with data and analytics firm Kpler noting that "macroeconomic concerns are a major driver of crude prices this year, overshadowing relatively tight fundamentals." West Texas Intermediate (WTI) U.S. crude is expected to average $79.20 a barrel in 2023, down from the previous month's $82.23 consensus.

The energy world has for decades looked to oil rigs 100 miles off the coast of Scotland’s northernmost islands to help set the price of global crude. All eyes are now turning to Texas instead. Starting with deliveries that arrive Thursday, a type of U.S. oil will factor into calculations for the price of Brent crude.

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With the U.S. debt ceiling saga nearly over, the state of the global economy hoves back into view - with contrasting interest rate pictures that saw the dollar climb across the board. A deepening contraction of Chinese factory activity this month casts more doubt over the spluttering recovery of the world's second largest economy, while Europe saw some inflation relief as French and German readouts for May mirrored the surprising drop in Spanish inflation seen earlier this week. China's official manufacturing purchasing managers' index unexpectedly fell to 48.8 from 49.2 in April, staying below the 50-point mark that separates expansion from contraction and below a forecast of 49.4.

The offshore Aphrodite natural gas field being developed in Cypriot waters will be connected to an existing processing and production facility in Egypt via a subsea pipeline, one of the partners in the project said on Wednesday. NewMed Energy said it had submitted with partners Chevron and Shell a development plan for Cypriot government approval. "The updated plan is expected to accelerate and reduce the cost of development," NewMed said.

Oil prices fell sharply Wednesday after weak manufacturing data from China, the world’s largest crude importer, raised fears about demand growth in the second half of the year. Activity data released earlier Wednesday showed that China’s manufacturing sector, an important regional growth driver, shrank for a second straight month in May. Oil is down over 16% this year as China’s lackluster economic recovery and tighter monetary policy from the Federal Reserve weighed on the demand outlook.

The new CEO of Venezuelan state-run PDVSA is targeting endemic corruption at the financially troubled oil company while hoping to win over its 95,000 workers, a move critical to securing much needed cash for the country, home to the world's largest crude reserves. Pedro Tellechea, a 47-year-old mechanical engineer, took command of PDVSA in January and quickly suspended the OPEC country's exports and reviewed sales that had left $21.2 billion in income uncollected. Two months later, President Nicolas Maduro disclosed an anti-corruption investigation that since has led to the arrests of over 60 officials and businessmen and the resignation of the once-powerful oil minister.

Global shares fell on Wednesday ahead of a crucial vote in Washington on the U.S. debt ceiling, while commodities and the Chinese yuan came under pressure after data highlighted faltering growth in the world’s second-largest economy. Data showed China's manufacturing activity fell more than expected in May, while services growth -- which has been one of the few bright spots in its patchy recovery -- slackened to its slowest pace in four months. For any investors hoping for a sustained bounce in Chinese growth after the elimination of stringent COVID restrictions late last year, the figures offered more evidence that the economy is losing steam, further dimming the global outlook.

Investors are anticipating the outcome of US debt vote and digesting the latest economic data from China.

First-quarter net profit of Russia's largest oil producer Rosneft rose by 45.5% from the previous three months to 323 billion roubles ($4 billion) on the back of rising output, the company said on Wednesday, exceeding expectations. Rosneft, headed by Igor Sechin, a long-standing ally of President Vladimir Putin, has shown resilience in the face of Western sanctions by redirecting its oil flows from Europe to Asia amid a wider political fallout.