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Oil Updates — Crude inches up; Chevron CEO says high fuel prices could slow down energy transition; Repsol may sell 25% of oil and gas unit to EIG

RIYADH: Oil prices edged up on Wednesday ahead of data on US oil inventories, with crude futures supported by tight supplies and recovering fuel demand as China’s top cities relax COVID-19 curbs.

Brent crude futures for August rose 22 cents, or 0.2 percent, to $120.79 a barrel by 0012 GMT after closing at the highest since May 31 on Tuesday.

US West Texas Intermediate crude for July was at $119.65 a barrel, up 24 cents, or 0.2 percent, after reaching its highest settlement since March 8 on Tuesday.

High fuel prices could erode public support for energy transition: Chevron CEO

Europe’s plan to double down on renewable fuels in response to rising fuel costs could have the unintended short-term effect of increasing prices and slowing down the energy transition, Chevron Corp. CEO Michael Wirth said on Tuesday.

“That can erode the public support that will be necessary for the energy transition,” Wirth said. “There is a bit of a paradox that I observe.”

Fuel prices have been soaring around the world amid declining investments in fossil fuel projects. Prices have accelerated since sanctions were imposed this year against energy exporter Russia following its invasion of Ukraine.

Gasoline and diesel prices are a top electoral topic in different countries of the world, including US Congressional elections and a Brazil presidential run, both later this year.

A persistent period of US diesel at $6 per gallon and natural gas prices nearing $10 per million British thermal units could have political implications for policymakers, Wirth said.

“One of the things I worry the most about is a period of high prices that voters begin to identify with energy transition ambitions,” Wirth said.

Repsol in talks to sell 25 percent of oil and gas unit to EIG

EIG is in early discussions with Repsol to buy a slice of the Spanish company’s oil and gas exploration and production business, three sources with knowledge of the matter told Reuters.

The US fund is seeking to purchase up to 25 percent of Repsol’s so-called upstream business, the sources said, in a deal that would give the Spanish group cash for its plans to build clean energy capacity such as solar plants and wind farms.

The sources did not give a value for any deal, but analysts have said the upstream business is worth between 14 billion and 18 billion euros ($15 billion and $19 billion), including debt.

The companies began talks after EIG made an unsolicited offer, said the sources, who declined to be identified because the discussions were private. They said talks could take months and there was no guarantee a deal would be reached.

(With input from Reuters)

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