Good morning; here's what the Oilman has for you today:

• Oil Rebound around the Corner. But at What Cost?

• French Power Problems

• Tweet of the Day

Oil Rebound around the Corner. But at What Cost?

It’s been a tough week for oil traders with banks collapsing, central bankers flourishing more rate hikes, and the economic outlook predominantly grim.

But a change could be right around the corner thanks to China. Wood Mackenzie analysts just forecast much higher oil prices later this year, prompted by its reopening.

Just when you thought it couldn’t get any worse, it’s about to get better

Quantum Energy Partners warned this week that U.S. shale drillers could this year see a 20% drop in drilling activity because of low oil prices.

OPEC+ signaled it was sticking to current arrangements, deepening the depression gripping oil traders and producers.

JP Morgan’s head of commodity research said the oil market was about to swing into a surplus, but apparently, she forgot about China.

According to Wood Mac, in a base-case scenario, Chinese oil demand will jump by 1 million bpd this year.

In a high-growth scenario, China could see its demand surge by 1.4 million bpd.

A China-centric oil industry 

While some analysts play the doomsayers, warning Brent could plunge to $40, others besides Wood Mac are a lot more upbeat, and it’s all because of China.

Wood Mac predicted Brent rebounding to $89 a barrel, which means WTI will also likely move above $80.

Pierre Andurand, despite his recent losses, sees Brent hitting $140 by the end of the year.

Energy Aspects remains confident the global oil market will tighten in the supply department in the second half of the year.

All of these cite China as the main driver of those forecasts. The question forces itself: is the global oil industry overly dependent on China for its fortunes?

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French Power Problems

Millions of French people have been taking to their streets for over two weeks now.

The protest problem has turned into a power problem. Disruptions of operations have occurred at French refineries, LNG Terminals, and nuclear reactors.

The right to strike

French President Emmanuel Macron has forced a plan through to raise the retirement age from 62 to 64.

This has made les Français very angry. Like, “burn historic Bordeaux wine country buildings down” angry:

Four refineries owned by TotalEnergies have been affected, while 37% of their operational teams were taking part in the protests.

Esso’s Fos refinery, Elengy’s three LNG terminals, and the Dunkirk LNG terminal have all had operations halted.

The situation is a ticking time bomb

Eleven nuclear reactors did not have scheduled maintenance performed.

That doesn’t sound good to the ol’ Oilman.

The French energy minister said, "I say it forcefully: if the strike is a fundamental constitutional right, blocking (infrastructure) is not one.”

But the French people aren’t thinking about modern energy infrastructure.

They’re thinking about early retirement and a nice pension…

…while expressing 18th-century methods of revolution.

Around the Digital Patch

🇹🇭 Valeura Energy acquires Thai production.
🇵🇭 Malaysian Petronas to partner in Philippines exploration.
🇹🇩 Chad nationalizes ExxonMobil’s assets.

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