Oil rallied as signs the US-China trade war may ease outweighed concerns about increased OPEC+ crude output. West Texas Intermediate rose 0.8% to settle above $63 a barrel after China’s official news agency reported that Presidents Donald Trump and Xi Jinping spoke over the phone. The conversation is injecting optimism that the leaders will find an off-ramp to a trade dispute that has threatened economic growth and fuel demand.  “A meeting between Xi and Trump is supportive of risk assets and crude oil as it raises the prospect of progress on tariff negotiations,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “Tariff uncertainty has been a key overhang for crude markets, with unresolved tensions prompting downward revisions to demand forecasts.” Still, animosity between the world’s two largest economies is adding to unease about the US shale patch. China avoided buying American crude for a second straight month, the longest run since the pandemic, a negative for American producers that partly depend on overseas demand. Traders are also bracing for potential near-term crude supply crunch. Wildfires in Canada have disrupted almost 350,000 barrels of daily oil output from the country, potentially limiting flows to the storage hub at Cushing, Oklahoma, and export terminals on the US Gulf Coast. In the US, crude inventories fell by 4.3 million barrels last week, the most since November, data from the Energy Information Administration showed. Limiting crude’s gains, Saudi Arabia wants the Organization of the Petroleum Exporting Countries and its allies to continue to add at least 411,000 barrels a day of output in August and potentially September, according to people familiar with the matter. Yet rising fuel demand during the summer could help the market absorb those extra barrels. Crude has fallen about 12% this year on fears a US-led trade war will sap economic growth and energy demand. Earlier

Petronas, Malaysia’s state-owned oil and gas company, will cut about 10% of its workforce in a firm-wide restructuring as it looks to reduce costs due to falling crude prices.  The company will reduce headcount by more than 5,000 people, and all those affected will be informed in stages through next year, Chief Executive Officer Muhammad Taufik said in a briefing in Kuala Lumpur on Thursday. It will also freeze hiring until December 2026, he said. “The margins are shrinking, the fields are getting smaller,” Taufik said. “It will be challenging to meet dividend targets” with current oil prices, he said.  The oil price slump — coupled with declining output from its older assets — will pose a challenge for Malaysia’s government, which derived 10% of its revenue from Petroliam Nasional Bhd., the full name of the company, in 2024. The energy producer not only anchors the nation’s energy sector, but also plays a key role in funding infrastructure, education, and social programs through dividends and taxes. Petronas sets its budget based on the Brent oil at around $75 to $80 per barrel, Taufik said. The global benchmark is currently trading near $65, down about 13% this year, as trade tensions threaten global growth, and OPEC+ restores production. Petronas’ net income slid 32% in 2024, following a 21% drop in 2023.  WHAT DO YOU THINK? Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Large load tariffs have a problem. Clean transition tariffs are the solution. | Utility Dive Skip to main content An article from Opinion These tariffs were designed to offer large loads access to renewable energy, but they could be expanded to baseload generation to remove at-risk generation from the utility’s books. Published June 5, 2025 By Ben Hertz-Shargel Construction of Amazon’s Mid-Atlantic Region data center in Loudon County, Virginia, progresses on Feb. 10, 2024. Gerville via Getty Images Ben Hertz-Shargel is global head of grid edge at Wood Mackenzie. The obligation to satisfy an unprecedented number of large load requests, while at the same supporting corporate and state clean energy goals, has presented an enormous ratemaking challenge to utilities. They have responded by developing two types of tariffs to deal with large loads: Clean transition tariffs, which allow large load customers to contract directly with renewable developers, and large load tariffs, designed to protect utility shareholders and other customers from the cost and stranded asset risk of large load-caused infrastructure. We recently completed an analysis of 20 large load tariffs at varying stages of maturity — from recent proposals to updates of longstanding large commercial and industrial tariffs — and have concluded that these tariffs cannot protect both shareholders and other customers. One of the primary mechanisms that large load tariffs use to ensure utility cost recovery is to set long minimum contract terms for customers, with penalties for early exit. But the minimum terms are nearly always 12 years or less, with customers able to exit as soon as five years in nearly all cases. These periods are far shorter than the greater than 20-year recovery time for a new power plant. In the vast majority of cases, exit penalties amount to 3 to 5 years of minimum monthly

Venezuela’s state-run oil company has signed at least nine new deals with foreign service providers, including two Chinese firms, in an effort to keep dollars flowing into the economy after US sanctions forced Chevron Corp. to end production, according to people familiar with the agreements. The contracts call for the companies to operate wells that already have been drilled and grant the exclusive right to sell the output, a departure from long-standing practice in the country where state-controlled Petroleos de Venezuela SA has always maintained exclusive trading rights, the people said, asking not to be identified discussing private contracts. At least one of the companies has decided not to go forward because it couldn’t get a US license to operate there, according to one of the people. The accords illuminate President Nicolas Maduro’s strategy for shoring up the economy and filling the void left by Chevron and other Western majors after President Donald Trump’s administration refused to extend licenses that allowed them to operate in the country despite sanctions. Chevron accounted for almost a quarter of Venezuela’s oil production, the country’s most important industry and biggest source of foreign currency.  Chevron’s license allowing it to produce and export crude to the US ended in early April and the company was allowed until May 27 to wrap up work. Permits for US service providers Halliburton Co., Schlumberger NV, Baker Hughes Co. and Weatherford International Plc expired in early May. “PDVSA has a plan to keep producing oil despite the US’s unilateral coercive measures,” Vice President and Oil Minister Delcy Rodriguez said May 29. PDVSA and Venezuela’s oil ministry didn’t reply to a request for comment. The new agreements call for each of the foreign companies to get control over at least one block of land in either Zulia state or the Orinoco Belt area, the two richest oil producing regions,

U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 4.3 million barrels from the week ending May 23 to the week ending May 30, the U.S. Energy Information Administration (EIA) highlighted in its latest weekly petroleum status report. That report was released on June 4 and included data for the week ending May 30. It showed that crude oil stocks, not including the SPR, stood at 436.1 million barrels on May 30, 440.4 million barrels on May 23, and 455.9 million barrels on May 31, 2024. Crude oil in the SPR stood at 401.8 million barrels on May 30, 401.3 million barrels on May 23, and 370.2 million barrels on May 31, 2024, the report revealed. Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.637 billion barrels on May 30, the report highlighted. Total petroleum stocks were up 13.4 million barrels week on week and down 9.7 million barrels year on year, the report showed. “At 436.1 million barrels, U.S. crude oil inventories are about seven percent below the five year average for this time of year,” the EIA noted in its latest weekly petroleum status report. “Total motor gasoline inventories increased by 5.2 million barrels from last week and are about one percent below the five year average for this time of year. Both finished gasoline inventories and blending components inventories increased last week,” it added. “Distillate fuel inventories increased by 4.2 million barrels last week and are about 16 percent below the five year average for this time of year. Propane/propylene inventories increased by 6.8 million barrels from last week and are two percent above the five year average for this

Grid operators around the country face rapidly changing and highly particular resource adequacy challenges that mean a one-sized approach to reliability is not feasible, they told the Federal Energy Regulatory Commission on Wednesday. They were speaking at a two-day, commissioner-led conference to discuss issues related to resource adequacy constructs. The first panel featured the heads of regional transmission organizations and independent system operators, as well as the North American Electric Reliability Corp., which oversees them. NERC has been conducting seasonal and longer-term resource adequacy assessments for decades, but for most of the reliability watchdog’s history “these were some of the dullest reports we ever created,” President and CEO Jim Robb told regulators. “They weren’t particularly interesting because everything looked pretty good.” But then in 2018, NERC’s long-term resource adequacy assessment showed a material expectation of unserved energy, Robb said. And in August of 2020, California experienced a significant load shed event. “Since then, our analyses have shown a growing risk of unserved energy across the continent,” Robb said. “There are a number of interrelated factors that account for that degradation and risk.” “Disorderly generator retirements” have led NERC’s list of resource adequacy concerns for several years, Robb said. And while several ISO and RTO areas appear to be resource adequate “through the narrow lens of capacity,” he noted that future energy shortfalls “are looming because the resource mix is not supported with the right levels of dispatchable generation with secure fuel to balance supply and demand fluctuations.” Since 2020, the California ISO has added about 25 GW of new generation capacity, including approximately 7 GW last year. The new capacity includes over 12 GW of battery storage, CAISO President and CEO Elliot Mainzer said. “We now have a diverse portfolio of solar, wind, natural gas, hydro electric, geothermal, nuclear and energy storage resources,