OREANDA-NEWS. April 01, 2016.

Oil
-  From the middle of February, oil prices enjoyed a month-long rally with Brent rising above \\$42 per barrel, a high-point in 2016. Every reason one could think of was thrown at it – short-covering, prospects of production freezes, a weaker dollar, stock draws, rig count down – though there was no clear consensus on the key drivers.

-  And then, in a sign that confidence is as fragile as a Ming vase, the rally ended – Brent is currently trading around \\$39 per barrel. Crude stocks in the US built again, the rig count is back up, a Kuwaiti oilfield is re-opening and the reality is the market still has to absorb between 1-2 million barrels of oversupply. Most damningly, the IEA has pooh-poohed any agreement on production freezes at the forthcoming meeting at Doha as ‘meaningless’.

-  All eyes are now on the forthcoming meeting in Doha on 17 April, with representatives from 12 countries having confirmed attendance including Saudi Arabia and Russia though, significantly, excluding Libya and Iran. A post-sanctions Iran is determined to ramp up production by at least 500,000 barrels a day before the end of the year.


LNG
-  The benchmark FOB Singapore SLInG index hit a new low of \\$4.065/mmBtu in the last week of March. New supplies hitting the market from the US and Australia and possibly Angola in the coming weeks will be balanced against tenders issued by countries as varied as Taiwan, India, Argentina and Egypt.

-  It was a tale of two cities for Australia in March. Chevron finally shipped its first cargo from the Gorgon LNG project on the Asia Excellence bound for Chubu Electric in Japan. On the other hand, Woodside and partners including Shell and BP decided to shelve plans to develop the \\$40bn Browse floating LNG project citing ‘extremely challenging’ market conditions.

-  With memories of Petronet’s successful renegotiation with RasGas still fresh in the mind, China National Petroleum Corp’s Chairman Wang Yilin announced his company’s desire to also pursue renegotiations with QatarGas on their long term supply contract. It seems highly unlikely that this will be the last such announcement in the LNG world in the coming months.