Oil Updates — Oil climbs after falling 9%; Lotos backtracks on TotalEnergies’ Leuna comments; $144m needed to offload Yemen tanker

RIYADH: Oil rose on Wednesday, following a 9 percent drop over the previous two sessions, on supply concerns as the EU worked on gaining support for a ban on Russian oil and major producers warned they may struggle to fill the gap when demand improves.

Brent crude rose $1.42, or 1.4 percent, to $103.88 a barrel at 0232 GMT, while US West Texas Intermediate crude climbed $1.23, or 1.2 percent, to $100.99 a barrel. Both contracts fell more than $1 in early trade.

Oil prices have slumped with commodities and share markets this week, on worries about the hit to economic activity from prolonged COVID curbs in China and sharp interest rate hikes in the US.

Lotos says it is not processing oil for Germany’s Leuna

Poland’s Grupa Lotos said on Tuesday it is not processing oil for TotalEnergies’ Leuna refinery in Germany, referring to a statement by the Polish climate minister that this was the case as a “slip of the tongue.”

Poland’s Climate Minister Anna Moskwa said on Friday the Gdansk refinery owned by Lotos was processing oil for the Leuna refinery.

“The statement that the Gdansk refinery is processing oil for TotalEnergies Leuna refinery in Germany should be treated as a slip of the tongue,” a Lotos spokesperson said in an emailed statement.

Colombia had 7.6 years of proven oil reserves, says government

Colombia’s proven oil reserves closed 2021 at 2.04 billion barrels of oil, higher than the previous year and equivalent to 7.6 years’ worth of consumption, the government said on Tuesday.

The Andean country’s proven oil reserves — also known as 1P reserves — at the end of 2020 stood at 1.82 billion barrels, equivalent to 6.3 years of consumption.

Colombia’s oil and gas industry is a major source of income and foreign exchange for Latin America’s fourth-largest economy.

“Each barrel produced last year was replenished and replaced by 1.8 barrels,” Minister of Mines and Energy Diego Mesa said at a news conference held by the National Hydrocarbons Agency.

UN seeks $144 million to offload decaying Yemen oil tanker

The UN will launch a $144 million appeal on Wednesday for an operation to offload a million barrels of crude oil from a tanker stranded off the coast of war-torn Yemen for years which threatens a major environmental disaster.

David Gressly, the UN Resident and Humanitarian Coordinator for Yemen, said he hoped a donors conference held with the support of Netherlands in the Hague would quickly mobilize funds to avert a catastrophe on the Red Sea coast and its region.

He told Reuters the amount they were looking to raise was low “compared to the potential impact of a spill that would be catastrophic. It would cost $20 billion to clean it up.”

The Safer has been stranded off Yemen’s oil terminal of Ras Issa since 2015, and UN officials have warned it could leak four times as much oil as spilled during the 1989 Exxon Valdez disaster off Alaska.

(With input from Reuters)