Oil & Gas

Oil prices saw their biggest percentage climb since early October last week, while natural gas futures reached their highest level in about a year. The sector was bolstered by bullish sentiment driven by developments with European energy giants like Equinor ASA and Shell. Equinor made a significant hydrocarbon discovery in the Norwegian North Sea, and Shell announced its exit from Ukraine, selling a majority stake in its gas station network to Ukrnafta. Additional news from Petrobras, TC Energy, and BP PLC also grabbed market attention.

West Texas Intermediate (WTI) crude futures jumped 6.4% to close at $71.24 per barrel, with natural gas prices soaring 10.8% to end at $3.13 per million British thermal units (MMBtu). The crude price surge was largely a result of heightened geopolitical tensions, particularly in Ukraine, where Russia’s missile attacks and the ongoing conflict caused supply concerns. Natural gas, on the other hand, reaped the benefits of colder weather forecasts, a surge in liquefied natural gas (LNG) exports, and a surprisingly low U.S. gas inventory drawdown.

Equinor’s exploration success in the Rhombi prospect in the Norwegian North Sea made headlines. The discovery of oil and gas in the Sognefjord and Fensfjord formations adds estimated reserves of 13-28 million barrels of oil equivalent, half of which is gas. This is the first discovery of 2024 in the region, with Equinor acting as the operator of Production License 090. This new find is a significant contribution to Equinor’s expanding presence in the North Sea, particularly with partners Vår Energi and INPEX Idemitsu Norge.

Shell, meanwhile, completed a deal to sell 51% of its gas station network in Ukraine to Ukrnafta. With 118 stations in operation, the sale marks Shell’s exit from Ukraine amid the ongoing Russian invasion. The deal included provisions to retain all 1,550 employees and complete the rebranding within a year. The sale will also contribute dividends to Ukraine’s national budget. In addition to the Ukraine exit, Shell continues to navigate a complicated geopolitical environment in Europe, where many energy companies have been reevaluating their presence.