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RIYADH: Oil prices fell on Tuesday as the market digested weak economic data from China and braced itself for another US interest rate hike.
Brent crude fell by $0.26 to $79.05 a barrel at 11:50 a.m. Saudi time, while US West Texas Intermediate crude dropped $0.33 to $75.33. Both benchmarks fell by more than $1 last session.
China’s manufacturing activity unexpectedly fell in April, the first contraction since December in the manufacturing purchasing managers’ index.
China’s industrial and economic recovery from the coronavirus pandemic was expected to boost demand this year.
Meanwhile, the US Federal Reserve, which meets on Tuesday and Wednesday, is expected to increase interest rates by another 25 basis points, Reuters reported.
Kazakhstan’s oil export revenues up despite fall in volume sold
Kazakhstan’s oil export revenues rose 50 percent in 2022 as crude prices surged, although volumes slipped, data from the country’s Bureau of National Statistics showed.
According to the BNS data, the value of Kazakhstan’s oil exports increased to $46.8 billion in 2022 generated by exports of 65 million tons, versus $31 billion and 65.5 million tons respectively in 2021.
The increase in 2022 revenues was driven by the rise in oil prices as the central Asian country’s average annual oil export price jumped to $720 per ton last year, from $473 per ton in 2021.
With no direct access to offshore oil hubs, Kazakhstan depends on transporting its oil through Russia which has been hit by Western sanctions over what Moscow calls a special military operation in Ukraine.
More than 90 percent of Kazakhstan’s oil reaches export markets via the Caspian Pipeline Consortium and the network of Moscow-controlled oil pipeline operator Transneft. Unlike Russian oil, Kazakhstan’s oil is not under Western sanctions.
Brazilian oil-export tax a concerning development: Shell chief
The head of oil major Shell’s Brazilian operations on Monday said a temporary oil-export tax established in March was a concerning development that could hurt the country’s investment attractiveness.
Brazil’s government insists the temporary, four-month levy would compensate for its decision to partially maintain a tax exemption on fuels for consumers, and help meet the country’s fiscal targets.
“This is a concerning precedent, but hopefully a temporary and isolated one to keep Brazil as a competitive province in the long term,” said Cristiano Pinto da Costa in remarks at the Offshore Technology Conference in Houston.
Brazil should not add a “tax burden to an industry that is already exposed,” he added. Shell has 17 floating platforms currently producing oil and gas in Brazil and is the largest producer in the country after state-controlled Petrobras.
Oil giants including Shell, TotalEnergies and Equinor filed an injunction against the tax in March.
(With input from Reuters)