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RIYADH: Oil prices extended gains on Wednesday amid simmering geopolitical tensions as Russia cut gas supplies to Bulgaria and Poland, while hopes of Chinese economic stimulus buoyed the demand outlook.

Brent crude futures rose 67 cents, or 0.6 percent, to $105.66 a barrel by 0636 GMT. 

US West Texas Intermediate crude futures gained 44 cents, or 0.4 percent, to $102.14 a barrel.

Crude prices settled about 3 percent higher on Tuesday in volatile trade as the market is torn between supply and demand concerns over Russian oil and gas disruption and a worsening global economic outlook.

Oil firm Vaar Energi raises dividend as Q1 profit soars

Norway’s Vaar Energi raised its annual dividend and posted a sharp rise in first-quarter profit on Wednesday, aided by a surge in oil and gas prices following Russia’s invasion of Ukraine.

Vaar, majority-owned by Italy’s Eni, reported a pretax profit of $1.65 billion for the January-March quarter, up from $1.12 billion a year earlier.

The company said under current market conditions, it plans to pay a dividend of $1 billion for 2022, up from $800 million planned earlier.

“The current commodity price environment reflects the significant uncertainties created by Russia’s invasion of Ukraine in February,” CEO Torger Roed said in a statement.

Cash flow from operations rose by 135 percent year-on-year in the first quarter to an “exceptional” $2.2 billion, Vaar said.

First-quarter dividend will amount to $225 million, or 9 cents a share, and it will be increased to $260 million for the second quarter, Vaar said.

Temasek-backed oil rig builders unveil transformative deal

Singapore’s Sembcorp Marine has agreed to combine with local conglomerate Keppel Corp’s larger offshore and marine unit, a year after the Temasek-backed firms started deal talks to cope with an industry downturn.

“The combined entity will be well-positioned to capture opportunities arising from decarbonization in the oil & gas sector and from the global energy transition toward renewables, particularly in the areas of offshore wind, and new energy sources,” the companies said in a joint statement on Wednesday.

Sembmarine and Keppel Offshore & Marine, one of the world’s largest offshore oil rig builders, have suffered from a prolonged and severe sector downturn over many years.

A surge in oil prices has partly improved the industry outlook.

Once the merger is completed, Keppel and its shareholders will own 56 percent of the combined entity, while Sembcorp Marine’s shareholders will own the rest. Keppel will distribute in-specie 46 percent of the merged entity’s shares to its shareholders and retain a 10 percent stake.

Singapore state investor Temasek, Sembmarine’s majority shareholder, will become the largest shareholder in the combined company with a 33.5 percent stake.

US lawmakers ask ConocoPhillips about gas leak in Alaska

Three Democratic US lawmakers asked the head of ConocoPhillips for more information about a month-old natural gas leak from an oilfield in northern Alaska and implications for its nearby project on public lands.

US Representative Raul Grijalva, the chairman of the House Committee on Natural Resources, and two other Democrats sent a letter to Ryan Lance, the chairman and chief executive of ConocoPhillips, asking why it took a month to identify the leak at its Alpine field and control it.

More than 7.2 million cubic feet of natural gas, the main component of which is the potent greenhouse gas methane, escaped from the oilfield, the company and regulators said this month.

The leak temporarily cut oil production at Alpine, one of the largest conventional onshore oil fields developed in North America in the past 25 years, by about a third. Trace amounts of gas may continue to escape from the site, ConocoPhillips said in a video.

The lawmakers also asked why the company temporarily evacuated about 300 of its own personnel even as it publicly denied the leak was a threat to human health and safety.

Europe’s Russian diesel imports drop

European diesel imports from Russia are set to fall in April but will still exceed those from other regions, highlighting the challenge European governments face as they contemplate new sanctions on Russian oil, Reuters reports. 

Diesel deliveries from Asia, the Middle East and the US are set to hit their highest in almost three years in April, data from oil analytics firm Vortexa showed, as traders scramble to replenish dwindling stocks and gradually curb the region’s dependence on Russian oil.

Although European Union sanctions have so far avoided targeting oil from Russia, its biggest supplier, many traders and refiners have opted to reduce purchases of Russian crude and refined products in recent months. 

The concerns over Russian supplies have led to a sharp draw in European diesel inventories in recent weeks. Stocks in the Amsterdam-Rotterdam-Antwerp hub are at their lowest since 2008, data from Dutch consultancy Insights Global showed.

(With inputs from Reuters)