Oil Updates — Crude rises; Oil firms end lawsuits against NNPC; Algeria says oil price volatility not due to market fundamentals
RIYADH: Oil prices rose on Thursday on mounting supply tightness concerns amid disruptions to Russian exports, the potential for major producers to cut output, and the partial shutdown of a US refinery.
Brent crude rose 59 cents, or 0.6 percent, to $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 lawsuits against NNPC
Four major oil companies have agreed to end US lawsuits that together sought to enforce multi-billion dollar arbitration awards against Nigeria’s state-owned oil company, after reaching new deepwater oil production sharing agreements.
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 put lawsuits against Nigerian National Petroleum Co. on hold so the agreements could take effect, likely by late October.
The companies said they expect to terminate the litigation thereafter.
NNPC renewed its agreements with the four companies and France’s TotalEnergies on Aug. 12.
Those agreements concerned five deepwater blocks that officials said could produce as many as 10 billion barrels over 20 years.
Exxon and Shell had been seeking 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 accusations that NNPC drew more oil than permitted under contracts that dated from 1993, and which were designed to encourage oil companies to invest billions of dollars for exploration and development.
The awards have since grown in size, and together were recently worth closer to $4 billion, court papers show.
High oil price volatility not driven by market fundamentals: Algeria
Algerian energy minister Mohamed Arkab believes that elevated oil price volatility in recent weeks is driven by fears of an economic slowdown rather than oil market fundamentals, he said in a statement on Wednesday.
The statement comes ahead of a Sept. 5 meeting of the OPEC+ producer alliance to set its oil policy.
Arzew project in Algeria to continue: TotalEnergies
TotalEnergies on Wednesday said its construction project linked to a petrochemical plant in Arzew, Algeria would continue, denying a media report earlier this week that said the French oil major could pull out of the investment.
French President Emmanuel Macron is due to travel to the North African country on Thursday for an official visit.
(With input from Reuters)
