RIYADH: Oil prices were steady in Asian trade on Tuesday, supported by hopes a solid economic rebound in China will drive up fuel demand, offsetting worries about further US interest rate hikes potentially hurting demand in the world’s biggest economy.
Brent crude futures for April, due to expire on Tuesday, gained 56 cents or 67 percent to $83.00 per barrel by 10.50 a.m. Saudi time. The more active May contract firmed 17 cents to $82.21 per barrel.
US West Texas Intermediate crude futures rose 61 cents or 81 percent to $76.29 a barrel.
IEF Secretary General highlights energy security threat
During the Japan Energy Summit, Joseph McMonigle, secretary general of the International Energy Forum said that energy security is one of the top-most priorities for many governments worldwide.
"Energy security has re-emerged as an urgent priority for many governments, as they seek to secure reliable and affordable energy in this unsettling new geopolitical era," said McMonigle.
He added: "We are witnessing an unexpected and radical realignment of global energy flows unlike anything seen since the 1970s… Japan's presidency of the G7 will strengthen the world's focus on energy security as a top global priority."
During the talk, McMonigle also highlighted the necessity of increased investments in the energy sector.
"Through high prices and volatility, global energy markets are sending us a signal to increase investment. We ignore these market signals at our peril," he said.
Occidental raises spending budget, delays direct air capture launch
US oil producer Occidental Petroleum Corp. on Monday said it would sharply raise spending this year, including on its direct air capture carbon-reduction project, which has been delayed to 2025.
The Houston-based company posted fourth-quarter profit below Wall Street estimates on lower energy prices and higher costs. The direct air capture project is closely watched by investors as a potential moneymaker.
Occidental, of which investor Warren Buffett’s Berkshire Hathaway is a top shareholder, raised its quarterly dividend 38 percent to 18 cents per share and disclosed a $3 billion share buyback program.
The company had said it would prioritize debt payments and shareholder distribution over oil production growth. Last year, it paid off $10.5 billion in debt, or more than a third of the outstanding principal.
Occidental said it will raise capital spending this year to up to $6.2 billion, from $4.5 billion last year. The company said it is facing higher costs across its oil, chemicals and new energy business.
Spending on lower-carbon projects will at least double to $200 million this year and could hit $600 million depending on how much of its own cash will be required to finance a new business dedicated to capturing carbon dioxide from the air and burying it underground.
Occidental plans to build dozens of DAC plants. The first large-scale DAC plant will be postponed to mid-2025, from late 2024 previously. The project is followed closely by the market as a test of the commercial viability of technology seen as key to combating global warming.
(With input from Reuters)
