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TotalEnergies and Exxon hit by refinery strikes: What impact on oil prices?

By Angela Barnes

14:14, 5 October 2022

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In this article:
XOM
Exxon Mobil
109.93 USD
-1.07 -0.970%
TTEF
TotalEnergies SE
58.970 USD
-0.435 -0.730%
Oil - Crude
Crude Oil
80.34 USD
-1.07 -1.310%
Natural Gas
Natural Gas
6.212 USD
-0.611 -8.960%

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​​Signs which read in French as
The impact of the shutdown has seen a small uptick in the share price of Exxon and TotalEnergies – Photo: Getty

TotalEnergies (TTEF) and Exxon Mobil (XOM) continued to have oil production disruptions at their refinery sites in France on Wednesday because of a dispute with employees over pay.

TotalEnergies (TTEF) price chart

Strike action began on 27 September and as a result, more than 60% of France's refining capacity, or 740,000 oil barrels per day (bpd), has gone offline. 

Exxon Mobil has temporarily shut down its two French facilities and limited the supply of refined petroleum products to its customers, while three TotalEnergies’ refineries also halted sending fuel. 

At the time of writing on Wednesday, shares in TotalEnergies traded up 0.47%% to €51.01 – while shares in Exxon were up 3.64% to trade at $95.27.

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Exxon Mobil (XOM) price chart

“The impact of the shutdown has seen a small uptick in the share price of these refineries because this has put further pressure on supply which was already seeing tightness. But due to the planned and controlled nature of the strikes (despite being unpredictable to some extent), the impact is likely to be short-lived, and the longer-term price structure will continue to be determined by the moves in crude oil, mostly with regard to developments in the Ukraine-Russia war and concerns about recession and slowing demand,” Daniela Hathorn, Capital.com market analyst, said.

Crude oil price volatility

The disruption at the French refineries adds to supply woes as the global energy crisis, particularly in Europe, continues to deepen.

Oil - Crude

80.34 Price
-1.310% 1D Chg, %
Long position overnight fee -0.0024%
Short position overnight fee -0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.03

Oil - Brent

86.01 Price
-1.240% 1D Chg, %
Long position overnight fee 0.0007%
Short position overnight fee -0.0149%
Overnight fee time 22:00 (UTC)
Spread 0.04

Natural Gas

6.21 Price
-8.960% 1D Chg, %
Long position overnight fee 0.0408%
Short position overnight fee -0.0658%
Overnight fee time 22:00 (UTC)
Spread 0.005

Silver

23.18 Price
+1.770% 1D Chg, %
Long position overnight fee -0.0182%
Short position overnight fee 0.0065%
Overnight fee time 22:00 (UTC)
Spread 0.040

Europe has been scrambling to source alternative natural gas and crude oil away from Russia since its invasion of Ukraine in February. Russia has responded to sanctions by limiting flows of natural gas to the bloc. However, member states have been weaning themselves off it regardless and a complete EU embargo on crude imports from Russia by sea is also approaching.

Brent crude oil price chart

The supply pressures have caused volatility in commodities markets with traders finding both natural gas and crude oil markets difficult to trade, at times, as geopolitical factors continue to cause price swings. 

US crude oil (WTI) price chart 

Whilst the oil refinery strikes will add to short-term supply woes within Europe, analysts do not expect the reduced production in France to have any greater wider impact on the oil market as France has strategic reserves.

The main market event for oil prices on Wednesday will be the OPEC+ meeting. Members and allies of the group are expected to announce deep output cuts, which could send oil prices back up over the $100 mark.

 

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