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Oil Updates — Crude Oil Rises; Oil companies end lawsuit against NNPC; Algeria says the oil price volatility is not due to market fundamentals
RIYADH: Oil prices rose on Thursday on growing concerns about supply tightening amid disruptions to Russian exports, the potential for major producers to cut output and the partial shutdown of a US refinery.
Brent crude was up 59 cents, or 0.6 percent, at $101.81 a barrel by 0400 GMT, while US West Texas Intermediate crude was up 42 cents, or 0.4 percent, at $95.31 a barrel.
Exxon, Shell and Chevron end lawsuit against NNPC
Four major oil companies have agreed to end US lawsuits that jointly sought to enforce multibillion-dollar arbitration awards against Nigeria’s state-owned oil company, after reaching new agreements to share deepwater oil production.
Two federal judges on Aug. 22 granted requests by Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp. and Norway’s state-owned Equinor ASA to file a lawsuit against Nigerian National Petroleum Co. on hold so that the agreements could enter into force, probably late October.
The companies said they expect to end the lawsuit afterward.
NNPC renewed its agreements with the four companies and France’s TotalEnergies on August 12.
Those deals covered five deepwater blocks that officials said could produce as many as 10 billion barrels over 20 years.
Exxon and Shell had sought to enforce a $1.8 billion arbitration award against NNPC from 2011, while Chevron and Equinor sought to enforce a $995 million award from 2015.
Both stemmed from allegations that the NNPC drew more oil than allowed under contracts dating back to 1993, which were designed to encourage oil companies to invest billions of dollars for exploration and development.
The prices have since grown in size, and together they were recently worth close to $4 billion, court papers show.
High oil price volatility not driven by market fundamentals: Algeria
Algerian Energy Minister Mohamed Arkab believes that increased oil price volatility in recent weeks has been driven by fears of an economic downturn rather than fundamental factors in the oil market, he said in a statement on Wednesday.
The statement comes ahead of a September 5 meeting of the OPEC+ producer alliance to set oil policy.
The Arzew project in Algeria will continue: TotalEnergies
TotalEnergies said on Wednesday that the construction project related to a petrochemical plant in Arzew, Algeria, would go ahead, denying a media report earlier this week that said the French oil major could pull out of the investment.
French President Emmanuel Macron will travel to the North African country on Thursday for an official visit.
(With input from Reuters)
