US Daily Oil Summary: Chevron Acquires Producer Hess

Chevron earlier agreed a deal for US producer Hess in a $53bn all-stock transaction it said today in a move for US onshore, Gulf of Mexico and Guyana assets. The deal highlights US oil’s consolidation efforts following Exxon’s recent acquisition of Pioneer as well as the desire to produce more energy security in the Atlantic Basin following rising energy security instability of late.

• Despite the US easing sanctions on Venezuelan oil, a lack of investment in Venezuela’s oil sector will result in sanctions relief only adding another 200k bpd to the country’s crude production by the end of 2024 according to the EIA.
• Notwithstanding the current infrastructure issues, oil service firm SLB is planning a quick return to Venezuela's oilfields after the easing of US sanctions according to the CEO on Friday last week via Reuters.
• Meanwhile, Venezuela’s Houston based Citgo Petroleum will end up in the hands of one or more of the largest refiners operating in the US according to Reuters sources as creditors seek to have long-standing debts repaid by the company.
• Looking at US product demand, GasBuddy places US gasoline demand at 8.7mn bpd last week, falling 1.8% from the week prior and 0.2% below the four-week average.
• Wires carrying comments from the Pentagon stating that the, "US has not seen a direct order from Iran for its proxies to increase attacks against US troops in the middle east." Any Crude headlines of de-escalation in the Middle East at present are having a bearish effect on WTI.
• USD: Lower long-end yields in the US and the firm recovery for equities steadily weighed on the greenback throughout Monday’s US session. The USD index has dropped over half a percent with Euro outperformance most notable in G10.
• Ahead of this Thursday's advance Q3 GDP release, sell-side broadly see the consumer solidly supporting growth across the quarter, drawing further from excess savings to do so. There are a handful of out-of-consensus calls (Danske at the lower-end, RBC at the upper-end), but most look for growth to weaken into year-end and through 2024.
• This week is likely the last chance for House Republicans to reach consensus before a plan B is pursued by moderate Republicans and Democrats.