RIYADH: Oil fell on Tuesday after a two-day rally as concerns over weaker demand returned along with the prospect of further interest rate hikes, outweighing support for the Organization of Exporting Countries of oil and its allies, the first production target reduction since 2020.
New COVID-19 shutdowns in China have added to fears that high inflation and rate hikes will hurt demand. The European Central Bank is expected to raise rates sharply at its meeting on Thursday.
Brent was down $2.33, or 2.4%, at $93.41 at 0940 GMT.
US West Texas Intermediate fell from Monday’s trading to $87.02, up 15 cents from Friday’s close. There was no settlement on Monday, the Labor Day holiday in the United States.
Shell and Exxon launch sale of major Dutch gas company: document
Shell and Exxon Mobil have put one of Europe’s biggest and oldest natural gas companies up for sale, betting on soaring energy prices amid tensions with Russia to attract buyers , according to a document and industry sources, Reuters reported.
The two major Western energy giants could raise more than $1 billion from the sale of the 50-50 NAM joint venture in the Netherlands, two industry sources said.
It would be part of both companies’ efforts to get rid of aging assets that are no longer core to their operations.
Shell and Exxon recently began the process of selling NAM’s offshore gas operations, which include dozens of fields and about 20 offshore platforms, as well as a network of pipelines and three processing plants, according to the document and the sources.
NAM began producing natural gas in 1963 following the discovery of the giant Groningen field and has been a major source of gas for the Netherlands and Europe for decades.
Its production has nevertheless been in constant decline since 2014 and is expected to fall further in the years to come after the Dutch government decided to close Groningen in order to limit the seismic risk in the region.
The field is expected to close in 2023 or 2024, but its life could be extended, the government said.
Capricorn lowers production outlook on Egypt drilling delays
Oil and gas producer Capricorn Energy lowered its full-year production outlook on Tuesday as it drilled fewer wells in Egypt in the first half due to commissioning delays and logistical problems.
The group now plans to produce 33,000 to 36,000 barrels per day over the year. It also posted an operating loss of $37.3 million for the six months ended June 30, compared to a loss of $47.4 million the previous year.
Russia to respond to oil price cap by shipping more to Asia: minister
Russia will respond to the Russian oil price cap by shipping more supplies to Asia, its Energy Minister Nikolai Shulginov told reporters at the Eastern Economic Forum in Vladivostok on Tuesday.
“Any action to impose a price cap will lead to a deficit in (the originator countries’) own markets and increase price volatility,” he said.
Finance ministers from the United States, Germany, Italy, Japan, Britain, France and Canada gave the green light last week to the idea of capping the price of Russian crude for reduce Moscow’s revenue in response to its invasion of Ukraine.
(Contributed by Reuters)