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Oil Updates – Crude Rises Slightly; Japan Increases Gasoline Subsidy; Venezuela helps rebuild damaged Cuban port

RIYADH: Oil prices rose on Wednesday, rebounding from six-month lows hit the day before, as a bigger-than-expected drop in U.S. oil and gasoline inventories reminded investors that demand remains firm, even if it is overshadowed by the prospect of a global recession.

Brent crude futures rose 56 cents, or 0.6%, to $92.90 a barrel at 0415 GMT.

West Texas Intermediate crude futures rose 62 cents, or 0.7%, to $87.15 a barrel.

Contracts fell about 3% on Tuesday as weak U.S. housing starts data raised concerns of a possible global recession.

Japan increases gasoline subsidy for petroleum distributors

Japan increased its gasoline subsidy for petroleum distributors to 33.8 yen (25.2 cents) a liter for the seven days from Thursday, from 31.4 yen a week earlier, it said on Wednesday. the Ministry of Industry.

The temporary subsidy program was adopted in January to cushion the blow of high crude prices due to tight global supply, while the conflict in Ukraine which started on February 24 added further pressure.

Venezuela to support reconstruction of Cuban port damaged by oil fire

Venezuelan President Nicolas Maduro said on Tuesday that Venezuela would support Cuba in rebuilding its only supertanker port in Matanzas, which was partially destroyed by fire after lightning struck one of its crude oil tanks.

Cuba has long relied on the 2.4 million barrel terminal in Matanzas, about 130 km from Havana, for most imports and storage of crude oil and heavy fuel oil.

Maduro ordered the Venezuelan oil minister and the president of the public company PDVSA to contact the corresponding Cuban authorities “to begin the design of the reconstruction of the supertanker’s yard”, he said in a speech in the honor of the Venezuelan firefighters sent to fight the fire. .

Mexico also sent personnel to put out the fire.

“We will design where it will be built, where the loading yard will be and start construction,” Maduro said.

Australian Santos approves $2.6 billion oil project in Alaska

Santos Ltd. announced on Wednesday that it would pursue development of a $2.6 billion oil project in Alaska, a surprise move for the market that sent its shares tumbling despite the Australian energy producer posting a profit record in the first half.

The company also said it was in advanced talks with the shortlisted parties to sell a 5% stake in its prized asset, PNG LNG in Papua New Guinea, and raise approximately $1.5 billion, which it said analysts, will be used to finance the Pikka project in Alaska. .

Santos CEO Kevin Gallagher said Pikka, co-owned by Spain’s Repsol SA, was “the right project at the right time in the right place”, predicting a high internal rate of return of 19% based on a oil price of $60 a barrel.

“Low-carbon oil projects like Pikka Phase 1 meet new demand for OECD supply and are essential for global and American energy security that has been in evidence since the Russian invasion of Ukraine. “, Gallagher said in a statement.

Analysts believed Santos would sell its 51% stake in Pikka rather than move forward with the 80,000 barrel per day project, as it has its hands full of work on a major gas project and potential development of the oil in Australia.

However, Santos said on Wednesday that Australia’s Dorado oil development would not proceed this year due to inflationary pressures and supply chain uncertainty.

Shell to shut down Gulf of Mexico crude pipelines for 2 weeks

Shell on Tuesday announced plans to shut down a key oil pipeline in the Gulf of Mexico that supplies refineries in Louisiana for two weeks in September.

The Odyssey and Delta crude pipelines in September will be closed for scheduled maintenance from early to mid-September, Shell said in a statement.

The pipelines carry Heavy Louisiana Sweet crude from offshore oil fields and switching to other pipelines is not an option, Shell added.

The Odyssey pipeline in the eastern Gulf of Mexico has a capacity of 220,000 barrels per day and connects to the Delta pipeline with deliveries to terminals in Louisiana and Shell’s Norco refinery, according to the company’s website.

(Contributed by Reuters)

About Donnie R. Losey

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