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Oct 28 - By Liz Hampton
U.S. Energy Markets Editor
Hello Power Up readers! Oil prices are down nearly $5 a barrel today after Israel's retaliatory strike on Iran over the weekend bypassed energy infrastructure. This comes after both benchmarks gained 4% last week as the market awaited the attack and on uncertainty around the U.S. election.
Both futures contracts are at their lowest since Oct. 1 today, with Brent crude off 6.3% to $71.25 and West Texas Intermediate crude trading at $67 a barrel, down 6.7%. Henry Hub natural gas futures are down 8.2%, trading at $2.347 per million British thermal unit.
Oil prices plunge nearly $5 a barrel as supply concerns abate
Israeli jets completed three waves of strikes early Saturday morning against missile factories and other sites in Tehran and western Iran. The attack, which was expected by the market, was in response to an Iranian missile attack on Oct. 1.
Iran on Saturday played down the attack, saying it caused only limited damage.
Oil is plunging now as the geopolitical risk premium has come off. Some major banks and analysts are lowering their forecast for prices.
Citi lowered its Brent target price for the next three months to $70 a barrel, versus $74 previously. Tudor Pickering Holt & Co on Monday said it sees WTI averaging $65 a barrel next year, with potential downside of under $50 a barrel if OPEC turns up production.
Turning to Russia, energy firm Novatek shut down commercial operations at the only operational train of its Arctic LNG 2 project with no plans to restart it during the winter, Reuters reported. The project was set to become one of Russia's largest LNG facilities, but has been hurt by Western sanctions.
Exports from Russia's three main western ports will drop by 13% in November, compared with the prior month, as refinery maintenance comes to an end.
Loadings from Russian ports are expected to be about 2.25 million barrels per day in October. Throughput at refineries is also expected to increase next month.
Finally, in the United States, an offshore wind conference is getting underway this week in Atlantic City where some of the biggest players in the industry will be presenting. The U.S. offshore wind industry is a key part of President Joe Biden's climate goals, but has been hit by project cancellations and other problems. Reuters reporter Shariq Khan will be there covering the event.
Essential reading:
U.S. nuclear regulators began a hearing to consider Constellation Energy's unprecedented plan to restart the retired Three Mile Island plant on Friday. In case you missed it, Reuters reporter Laila Kearney toured the plant this month and wrote this fascinating report on the nuts and bolts of restarting the facility.
Private equity firm Blackstone is in talks to acquire a minority stake in interstate natural gas pipelines owned by EQT Corp for roughly $3.5 billion, David French exclusively reported on Friday. EQT earlier this year said it would sell stakes as part of a plan to reduce debt.
The U.S. oil and gas rig count was unchanged last week, but in Pennsylvania it fell to a 17-year low, energy services firm Baker Hughes reported on Friday. The rig count held steady at 585, down 6% from a year ago.
Brazil signed a $30 billion compensation agreement with miners BHP, Vale and Samarco for the Mariana dam collapse in 2015, one of the country's worst environmental disasters that killed 19 people, left hundreds homeless and flooded forests.
U.S. regulators on Thursday gave a joint venture between Exxon Mobil and Qatar Energy LNG a three-year extension to finish building the Golden Pass liquefied natural gas export facility. The extension was given following delays after lead construction contractor Zachary Holdings filed for bankruptcy in March.
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(Editing by Marguerita Choy)
((liz.hampton@thomsonreuters.com))
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