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Oil Updates — Crude falls; Canada consults oil emissions cap; White House expects OPEC+’s production hike
RIYADH: Oil prices fell on Tuesday, taking a breather after surging more than $5 a barrel in the previous session as a plunging dollar supported buying interest on expectations the US Federal Reserve’s interest rate hike may be less than thought.
Brent crude futures for September settlement fell 69 cents to $105.58 a barrel by 0036 GMT. The contract rose 5.1 percent on Monday, the biggest percentage gain since April 12.
WTI crude futures for August delivery fell 65 cents to $101.95 a barrel. The contract climbed 5.1 percent on Monday and was the largest percentage gain since May 11.
Canada launches consultations on oil and gas emissions cap
Canada on Monday launched consultations on a plan to cap and cut greenhouse gases from the oil and gas sector, its largest and fastest-growing source of emissions, outlining two options to help achieve Prime Minister Justin Trudeau’s climate promises.
But the proposal faced immediate backlash from Alberta, Canada’s main oil-producing province, which said the federal government cannot act unilaterally to meet emissions targets.
“Alberta will not accept any plan from the federal government that seeks to interfere in our constitutionally protected ability to develop our resources,” the provincial government said in a joint statement from its energy and environment ministers.
Canada’s Liberal government is aiming to cut emissions 40 percent to 45 percent below 2005 levels by 2030, and targeting net-zero emissions by 2050. To achieve this, policymakers need to enforce a sharp reduction in pollution from the oil and gas sector, responsible for 27 percent of the country’s emissions.
Canada is considering either a cap-and-trade system that sets regulated limits on emissions from the sector, or modifying — and potentially raising — the carbon price for heavy industrial emitters to create price incentives to drive down emissions, according to the discussion paper released on Monday.
White House expects OPEC+ oil production hike
The White House said Monday it anticipates major oil producers in the OPEC+ alliance to increase crude production following President Joe Biden’s trip to the Middle East.
“We will measure success in the next couple of weeks,” said White House spokesperson Karine Jean-Pierre at a press briefing. “We anticipate [it] to be an increase in production, but it’s going to take the next couple of weeks, and that will be up to OPEC+.”
Biden traveled to Saudi Arabia last week where he met with that country’s leadership and other members of the Gulf Cooperation Council in the oil-rich Middle East.
The Biden administration has come under pressure to cut gas prices and other consumer costs ahead of the Nov. 8 mid-term elections where his Democratic Party is seeking to retain control of Congress.
OPEC+, which includes both Saudi Arabia and Russia, meets next on Aug. 3.
Congo to offer 30 oil and gas blocks for licensing
The Democratic Republic of Congo will offer 27 oil blocks and three gas blocks, nearly double as many as previously planned, in a licensing round next week, the hydrocarbons ministry said on Monday.
The blocks to be put up for auction on July 28 include three in the coastal basin of Kongo Central province, nine in the Cuvette Centrale, 11 near Lake Tanganyika and four near Lake Albert. The three gas blocks are on Lake Kivu.
Congo had initially planned to auction 16 oil blocks, nine of which overlapped with protected areas. The ministry said in its statement on Monday that it had decided to auction 30 now to maximize opportunities for the country.
(With input from Reuters)
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