Oil recovers after the largest decline

Oil recovered more than 2% on Thursday after posting the largest two-day loss for the start of a year in three decades, but gains were constrained by economic concerns.

Sharp declines in the previous two days were caused by worries about a global recession, particularly because the two biggest oil consumers in the world—the United States and China—appeared to be experiencing a slowdown in their short-term economic indicators.  Brent crude oil was up $1.63, or 2.1%, to $79.47 per barrel, while West Texas Intermediate crude was up $1.41, or 1.9%, to $74.25.

The American Petroleum Institute’s inventory figures, which showed an increase in U.S. crude and gasoline stocks, also weighed.

The Energy Information Administration releases official inventory data at 1530 GMT.

Norway will continue to export gas at record levels

Norway plans to export roughly 122 billion cubic meters (bcm) of natural gas in 2023, on par with last year’s volume, and to maintain this level for the following four to five years, according to Petroleum and Energy Minister Terje Aasland. The previously unknown output for 2022 increased by 8% from 2021, in line with an earlier government forecast, and was comparable to the record-breaking output of 122.37 bcm set in 2017. Norway, Europe’s top supplier, primarily pipes its gas to receiving terminals in the United Kingdom, Germany, France, and Belgium. It plans to open a new pipeline to Poland via Denmark in late 2022.

The Nordic nation also increased its tanker shipments of liquefied natural gas from its Arctic Hammerfest plant, which reopened in May after being closed in 2020 due to a fire.

Equinor and other Norwegian petroleum companies have sought to increase their gas production as the Ukraine conflict has caused an energy shortage and skyrocketing prices in Europe.

Russia is sending more crude oil produced in the Arctic region to China and India at steeper discounts after Europe closed the door on Russian supplies last month. Arco, Arco/Novy Port, and Varandey are Arctic grades that rarely travel east. However, after the European Union, the G7, and Australia set a price cap on Russian oil in December and an EU embargo on Russian crude by sea, they are now looking for new homes elsewhere.