Home » Posts tagged 'oilprice.com' (Page 11)

Tag Archives: oilprice.com

First, it was a demand slump across pretty much every manufacturing industry because of the pandemic. Then a surge in demand for electronics caused a shortage of microchips, which hit the automotive industry particularly hard. Now, the Texas Freeze has caused a global shortage of plastics. The Wall Street Journal reported this week that the cold spell that shut down oil fields and refineries in Texas is still affecting operations, with several petrochemical plants on the Gulf Coast remaining closed a month after the end of the crisis. This creates a shortage of essential raw materials for a range of industries, from car making to medical consumables and even house building.

The WSJ report mentions carmakers Honda and Toyota as two companies that would need to start cutting output because of the plastics shortage, which came on top of an already pressing shortage of microchips. Ford, meanwhile, is cutting shifts because of the chip shortage and building some models only partially. GM, on the other hand, has started building some pickup trucks without a fuel management module because of the shortages, which will affect the fuel economy performance of these cars.

Yet, the automaking industry is just one victim of the abnormal circumstances on the planet and the Gulf Coast. Another is the construction industry. The WSJ reports, citing industry insiders, that following the petrochemical shutdowns, builders are bracing for shortages of everything from siding to insulation.

More than 60 percent of polyvinyl chloride (PVC) production capacity in the United States is still out of operation a month after the Texas Freeze, Bloomberg reported earlier this month….

…click on the above link to read the rest of the article…

Oil Flirts With $70 After The OPEC+ Surprise

March 6, 2021

Oil Flirts With $70 After The OPEC+ Surprise

Brent is now flirting with the $70 mark after OPEC+ shocked markets once again by refusing to bring more oil production online.

In this week’s Global Energy Alert, our trading team delves into how an inflationary environment will impact oil stocks. Sign up today to get breaking news, expert analysis, and trading tips.

Friday, March 5th, 2021

Oil skyrocketed on Thursday after OPEC+ decided to hold off on easing production cuts for another month, surprising the oil market. WTI and Brent shot up more than 4%. During early trading on Friday, Brent surpassed $69 per barrel,

OPEC+ extends cuts, surprising market. OPEC+ extended the cuts through April, aside from a slight increase allowed for Russia and Kazakhstan, due to seasonal consumption patterns. Even Saudi Arabia decided to keep its 1 mb/d of voluntary cuts in place. The surprise news led to a price surge. “One of the reasons the market is continuing to react positively today could be that OPEC’s own balances suggest very steep draws,” Rystad Energy said in a statement.

Oil majors expect record cash flow. Big Oil is looking at 2021 with increased optimism, mostly because oil prices have rallied in recent weeks. Moreover, the ultra-conservative capital spending plans and the huge cost cuts have allowed international oil companies (IOCs) to materially lower their cash flow breakevens. These factors are set to result in a record cash flow for the biggest oil firms this year if oil prices average $55 per barrel, Wood Mackenzie said in new research.

Oil majors going green? Speaking from the annual CERAWeek by IHS Markit energy conference, Big Oil chief executives from Exxon Mobil (NYSE:XOM), Chevron Corp.(NYSE:CVX), Occidental Petroleum (NYSE:OXY) and ConocoPhillips (NYSE:COP)have all spoken about the industry’s transition to a lower-carbon world, with OXY even branding itself a ‘carbon management’ company that wants to set the industry standard for the production of net-zero carbon oil…

…click on the above link to read the rest of the article…

Bank Of America Expects Fastest Oil Price Rise In 30 Years

February 26, 2021

Bank Of America Expects Fastest Oil Price Rise In 30 Years

Oil prices are set to rise by the fastest rate since the 1970s over the next three years, Bank of America said in a new report, joining the growing group of analysts forecasting a return of oil to three-digit territory.

The average price of Brent over the next five years, however, will be between $50 and $70 per barrel, according to the bank, as quoted by The National.

The bank also said OPEC+ might decide to reverse its production cuts now that Brent is trending above $60, but added that a slow return of U.S. shale to international markets might lead to an extension of the production cut agreement to make sure prices stay higher.

“We believe that slower shale growth and oil price stability will likely require a continuation of Opec+’s market management beyond April 2022,” the bank’s analysts said.

OPEC+ is meeting next week to discuss the progress of its agreement in an environment of much tighter supply, and expectations are that some members may push for a production increase. The increase, however, will be moderate, at 500,000 bpd, according to reports.

The last Joint Ministerial Monitoring Committee of OPEC+ met in the first week of February, and the meeting ended without many surprises. For the month of February, another 75,000 bpd was added to the quotas—65,000 bpd to Russia and 10,000 bpd to Kazakhstan. For the month of March, production quotas were eased again by the same amount, with the same distribution of the additions.

Russia is one of the extended cartel’s members that will likely call for a further increase in production. Moscow has a tradition of budgeting for pessimistic oil prices, which increases the benefits from each additional dollar benchmarks gain. Saudi Arabia, on the other hand, might like to see much higher prices as its breakeven level, despite the lowest production costs in the world, remains quite high.

Who’s To Blame For The Texas Power Crisis?

February 19, 2021

Who’s To Blame For The Texas Power Crisis?

Our last report focused on the uniqueness of the Texas wholesale electricity market, ERCOT, and how it was specifically designed to evade federal utility regulation. And as if he were our paid spokesperson, former Texas governor Rick Perry stated publicly that Texans were happy to suffer blackouts and other hardships if it meant evading federal regulatory scrutiny. Whether the good (and shivering) citizens of the Lone Star State agree is another matter. But today, instead of dealing with politics, we’ll take a closer look at ERCOT as a state planning agency.

First the good news. One of the hardest parts of every planning agency’s job is correctly estimating future demand. This is doubly hard in a dynamic, fast growing economy like Texas. Consequently we were surprised at how good their planning estimate was for this winter’s electrical load of about 67,000 megawatts. Because of the blackouts we can’t precisely know what peak electrical demand in Texas would’ve been given the extreme winter demands from home heating and the like. But the shadow estimates published by ERCOT suggested about 72,000 megawatts of peak demand.

In total, ERCOT has the ability to supply electrical capacity of about 80,000 megawatts. This amount of available electric power generation should have been adequate to meet demand this week. Not by a wide margin but adequate. Barely. As an aside we should point out that ERCOT runs “light” in terms of electric system reserve capacity with reserves typically about 8%. This compares with other US grids where targeted reserve margins are about 15%. Lower reserve margins are cheaper but mean less back up for emergencies.

Our first tentative conclusion is that Texas would have withstood this recent snowstorm and polar vortex event in pretty good shape from a grid perspective IF thermal plants were available to meet skyrocketing demand.

…click on the above link to read the rest of the article…

Oil Major Total Sees 10 Million Bpd Supply Gap In 2025

February 10, 2021

Oil Major Total Sees 10 Million Bpd Supply Gap In 2025

France’s supermajor Total is warning that the world could find itself with a shortfall of supply of 10 million barrels per day (bpd) between now and 2025, due to continued underinvestment in the industry, the OPEC+ pact, and cracks in the U.S. shale business model.

“There is a risk of supply crunch in the mid-term,” Helle Kristoffersen, President, Strategy and Innovation at Total, said on the company’s Q4 earnings call this week.

“We have seen in 2020 how OPEC managed to bring back market discipline. We’ve seen the cracks in the US shale model, and we’ve seen a continued underinvestments in the oil industry as a whole,” Kristoffersen said.

The market needs new oil projects, considering the fact that many producing oilfields will see natural declines in production, the executive said.

“And that’s true, even if you take very cautious view on short-term demand recovery and on future demand levels,” Kristoffersen added, noting that “a 10 million barrels per day gap in supply between now and 2025, that’s a massive shortfall of supply to cover in just a very few number of years.”

Last year, the coronavirus accelerated a structural decline in upstream oil investments as all E&P firms, oil supermajors, U.S. shale producers, and national oil companies alike, slashed capital expenditures in the wake of the price crash.

Investments in new oil supply have now slumped to a more-than-a-decade low.

OPEC+ currently has a lot of spare capacity that could come on stream when demand recovers. But sustained investments in oil and gas will be needed to meet global consumption of oil, which the world will continue to need, peak demand or not, analysts and forecasters warn.

“The world may be sleepwalking into a supply crunch, albeit beyond 2021. A recovery in oil demand back to over 100 million b/d by late 2022 increases risk of a material supply gap later this decade, triggering an upward spike in price,” says Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie.

Game-changing Iranian Pipeline Set To Launch In March

January 28, 2021

Game-changing Iranian Pipeline Set To Launch In March

The geopolitically game-changing Goreh-Jask pipeline project saw a major advance last week with the commencement last week of offshore pipe-laying operations. The implementation of this operation markets the first stage of the offshore development of the Jask Oil Terminal and, according to the Pars Oil and Gas Company, this offshore section of the early-production phase of the project will be completed with the construction of two 36-inch offshore pipelines running for around 12 kilometres and a single buoy mooring with ancillary equipment. Overall, the company added, the early-production phase of the Jask Oil Terminal Development Project is 70 per cent complete, allowing the project to come online by late March.

After the completion of this first phase of offshore pipeline laying, the Goreh-Jask pipeline will begin full pumping tests aimed at ascertaining its capacity to transfer 350,000 barrels per day (bpd) of light, heavy, and ultra-heavy crude oil through the 1,100 km-long, 46 inch diameter pipeline that runs from the Goreh oil terminal in the north-west Bushehr Province to Mobarak Mount in the western Jask region along the Sea of Oman. This will involve the construction and deployment of 83 42-inch valves relating to the gate, control and emergency shut-off functions in the pipeline project, six smaller pipelines, five pump houses, three stations for receiving and sending pipeline pigs, 10 power stations, 400 kilometres of transmission lines, three single point moorings, subsea pipelines, and a stilling basin.

The initial focus of the oil-transfer chain across the Goreh-Jask pipeline will be the huge oil fields cluster in the West Karoun region, which are the current focus of plans between Iran and China to boost short-term oil production as part of the two countries’ 25-year plan…

…click on the above link to read the rest of the article…

The Real Crisis For Oil Is Yet To Come

January 8, 2021

The Real Crisis For Oil Is Yet To Come

Italian energy major, Eni, described 2020 as a “year of war”, regarding the energy crisis experienced in the face of a global pandemic. But it may be too soon to see the issues faced last year as a thing of the past. Eni is committing to lower the price of oil at which the company breaks even going into 2021, as a means of tackling the uncertainty of the oil economy in the coming months. Francesco Gattei, CFO at Eni, stated that “Volatility is growing every year.”, highlighting the need to be prepared for the energy demand of the future.

In 2020, global fuel demand decreased by 30% on average. While demand appears to be steadily increasing as Covid-19 restrictions are relaxed, the worry is that this need may not increase to pre-pandemic levels anytime soon.

Oil giants BP Plc and Total SE published forecasts which hypothesized that oil demand was at its peak in 2019, and is therefore now in decline. This comes as the production of oil and liquid fuels at the global level peaked at 94.25 million bpd in 2020, down from 100.61 million bpd in 2019. According to the Energy Information Administration, this figure is expected to increase to just 97.42 million bpd in 2021.

2020 therefore proved the perfect time for environmentalists to campaign for a shift towards renewables; as oil demand and prices plummeted in April last year. As dozens of countries agreed to Paris Agreement objectives in December, with such promises as net-zero emissions over the next 30 years, many governments and investors have also put pressure on energy companies to develop renewable strategies.

The decrease in oil demand over the last year has already forced refineries in Asia and North America to close or curb output, particularly along the U.S. Gulf Coast as companies worry demand losses might never return.

…click on the above link to read the rest of the article…

Crude Oil Flow From Saudi Arabia To U.S. Falls To Zero

January 7, 2021

Crude Oil Flow From Saudi Arabia To U.S. Falls To Zero

For the first time in 35 years, no oil flowed from Saudi Arabia to the United States last week, according to EIA data, in a show that the United States—at least for now—isn’t as reliant on oil from the Middle East like it used to be.

In October, according to the EIA, the United States imported 8.544 million barrels. In June, that figure was more than 36 million, although that figure was a bit of an anomaly as Saudi Arabia threatened to flood the U.S. market with crude oil.

In much of the early 2000s, the United States imported more than 45 million barrels of Saudi crude oil on a monthly basis.

Source: EIA

On a weekly basis, that figure has now fallen to zero.

Source: EIA

And the U.S. imports of crude oil are not just falling from Saudi Arabia. Through October, the United States imported significantly less crude oil from the Persian Gulf region.

In the early 2000s, the United States was importing more than 3 million barrels of crude oil per day from the Persian Gulf region. In October 2020, the United States imported less than a half a million barrels per day—and that figure isn’t an anomaly, it’s a clear trend. The United States is relying less and less on foreign oil, and particularly less and less on oil from the Persian Gulf.

Source: EIA

The data comes just as Saudi Arabia announced a voluntary million-barrel-per-day cut to its oil production as the OPEC+ group sat down to the negotiating table to hatch a plan to react to the oil market and the lack of demand.

It also comes on the same day that Saudi Arabia announced a crude oil price increase for the United States for February by $0Mor.20 per barrel.

The Most Outrageous 2020 Oil Predictions

January 3, 2021

The Most Outrageous 2020 Oil Predictions

As we approach the close of 2020, we’re reminded of one statistical certainty when it comes to oil price predictions. If you set anything other than a range, you will be proven wrong. And even for the forecasters and predictors that do set a range, the likelihood that the actual price will fall within the chosen range is about as sure as a range of prices selected by throwing a dart at a number on the wall. That has never stopped oil price forecasters from giving it a go.

We’ve rounded up some of our favorite oil price predictions from this year. And while you’re thinking that this might not be a fair exercise given the black swan event such as the coronavirus pandemic, we will remind you that the predictions made even in the middle of the pandemic were quite suspect.

The U.S. Energy Information Administration (EIA) has the unfortunate position on our list of going first. Its January prediction for 2020 oil prices for both WTI and Brent would later prove to be high–not unsurprisingly given the events that were about to unfold. While there were reports that an outbreak was brewing as early as the first few days of January 2020, it wouldn’t be until January 13 that the first Covid-19 case was known to have escaped China’s borders. But when the EIA published its STEO on January 14, cratering oil demand due to the future pandemic wasn’t even on its radar. What was on its radar? Tensions between the United States and Iran, and the corresponding fear that there would be some oil supply disruption in the Middle East.

…click on the above link to read the rest of the article…

Merger Mania Is Transforming Canada’s Oil Scene

January 1, 2021

Merger Mania Is Transforming Canada’s Oil Scene

Canada’s oil landscape looks encouraging for 2021 as Whitecap Resources Inc. acquires two oil and gas companies in addition to mergers between other energy companies, with anticipated growth through the coming year as demand for energy steadily increases. In November, Whitecap Resources announced a plan to acquire rival company TORC Oil & Gas through an all-stock transaction of $704.12m equivalent. The deal is expected to go through by 25 February 2021, providing an encouraging outlook for the first quarter of next year.

This merger would mean an estimated 100,000 bpd equivalent in production making it one of Canada’s major players. The expected value of the combined company is around $3.13 billion.

Since demand for energy has steadily increased since the slump in early 2020, so has Whitecap’s share price, going from C$2.29 ($1.80) in early July to C$4.96 ($3.89) in December, with a market cap of C$2.025 billion ($1.58bn) on the Toronto stock exchange.

Whitecap CEO Grant Fagerheim stated of the acquisition, “We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared towards generating sustainable long-term returns for shareholders while prioritising responsible Canadian energy development’”.

The TORC acquisition comes just months after Whitecap announced its plan to buy NAL Resources for nearly $119 million in August. Manulife, an insurance and financial company, will have a 12.5 percent stake in the combined company as Whitecap issues it with 58.3 million shares. The move to acquire both companies drives forward Whitecap’s aim to increase its Alberta and Saskatchewan assets and operations.

Smaller energy companies across Canada have been showing interest in mergers throughout 2020 as a means to bolster their portfolios, in response to the volatile oil market this year.

…click on the above link to read the rest of the article…

IHS Markit: Oil Demand Won’t Fully Recover Until 2022

December 28, 2020

IHS Markit: Oil Demand Won’t Fully Recover Until 2022

Global oil demand will likely take another year or so to return to pre-pandemic levels—by late 2021 or early 2022, energy expert and IHS Markit vice chairman Daniel Yergin told Al Arabiya English in a video interview on Monday.

Yergin’s expectations for oil demand are roughly in line with the forecasts by the International Energy Agency (IEA) and OPEC, which don’t expect annual oil demand to return to the pre-COVID levels next year, despite the projected rise compared to this year’s slump.

Continued low demand for jet fuel will account for 80 percent of next year’s 3.1-million-bpd gap in oil demand compared to pre-pandemic levels, the IEA said in its monthly Oil Market Report earlier this month. OPEC also revised down its oil demand projections for this year and next in its Monthly Oil Market Report for December, expecting 2021 oil demand at 95.89 million bpd, down 410,000 bpd from its projection of 96.3 million bpd from November.

IHS Markit’s Yergin doesn’t see the biggest disruption on the oil market as either bringing forward or delaying peak oil demand.

“At the end of the day, it won’t have much impact on peak oil demand, which I still think will be around 2030 or so,” Yergin told Al Arabiya English.

The Pulitzer-Prize winning energy author also discussed the U.S. shale patch and the chances of it returning to the rapid growth in production in the years just before the 2020 price crash.

“Let me give you a very simple answer, the answer is no,” Yergin told Al Arabiya English when asked if U.S. oil production could return to 1.5-million-bpd annual growth.

According to IHS Markit, shale production will stay relatively unchanged at around 11 million bpd until late 2021, before it starts rising, but it will increase at a much more moderate pace.

“So that 1.5 million barrels per day, that two million barrels per day that was so disruptive for the oil market, that’s history,” Yergin told Al Arabiya English.

The Great Reset: BlackRock Is Fueling A $120 Trillion Transformation On Wall St.

December 28, 2020

The Great Reset: BlackRock Is Fueling A $120 Trillion Transformation On Wall St.

Big money is turning its back on companies that aren’t conforming to one simple idea…

Sustainability.

And it’s fueling one of the biggest transfers of capital the world has ever seen.

In fact, within a year, 77% of institutional investors will stop buying into companies that aren’t, in some way, sustainable.

And the new King of Wall Street is leading the charge.

BlackRock, with over $7 trillion in assets under management, says its clients will double their ESG investments in just five years…

Money managers on the Street are saying climate change is their top concern…

And a ‘leading criteria’ when determining where they put their money to work.

Sustainable assets already account for $17.1 trillion…

But there could be as much as $120 trillion up for grabs.

And that’s exactly why sustainable stocks are outperforming the market.

They are the new go-to investment but could be far better than gold. This sector is a safe haven in that the road to sustainability is long. AND it’s not just Big Money’s downside protection against ESG-related risks, many are money-makers.

While Big Money is busy scrambling for somewhere to park this $120 trillion that’s up for grabs, it could be looking for something like Facedrive (TSX.V:FD, OTCMKTS:FDVRF) -a tech-driven, multi-vertical, next-gen company with an ESG-focused portfolio that just pulled off a major coup with the acquisition of Washington, DC-based Steer–a high-end EV subscription service that plans to get even more EVs on the road, and even to upend the way we think about car ownership altogether.

And this isn’t the only vertical that ties Facedrive into a multi-billion-dollar industry …

It’s tied to the $5-trillion global transportation industry, the $9 trillion healthcare industry, the $850-billion airline industry, the $600-billion major league sports industry and the $26-billion food delivery segment …

…click on the above link to read the rest of the article…

The Very Real Possibility Of Peak Oil Supply

December 28, 2020

The Very Real Possibility Of Peak Oil Supply

Three months ago, British oil giant BP Plc. (NYSE:BP) sent shockwaves through the oil and gas sector after it declared that Peak Oil demand was already behind us. In the company’s 2020 Energy Outlook, chief executive Bernard Looney pledged that BP would increase its renewables spending twentyfold to $5 billion a year by 2030 and ‘‘… not enter any new countries for oil and gas exploration.’’ That announcement came as a bit of a shocker given how aggressive BP has been in exploring new oil and gas frontiers.

The investing universe appears to concur with BP’s sentiments, with the oil and gas sector consistently emerging as the worst performer over the past decade. The sector suffered yet another blow after the largest investor-owned oil company in the world, ExxonMobil (NYSE:XOM), was kicked out of the Dow Jones Industrial Average in August, leaving Chevron (NYSE:CVX) as the sector’s sole representative in the index.

Meanwhile, oil prices appear stuck in the mid-40s with little prospects of climbing to the mid-50s that most shale producers need to drill profitably.

Delving deeper into the global oil and gas outlook suggests that it’s peak oil supply, not peak oil demand, that’s likely to start dominating headlines as the quarters roll on.

Source: Bloomberg

Peak Oil Demand

When many analysts talk about Peak Oil, they are usually referring to that point in time when global oil demand will enter a phase of terminal and irreversible decline.

According to BP, this point has already come and gone, with oil demand slated to fall by at least 10% in the current decade and by as much as 50% over the next two. BP notes that historically, energy demand has risen steadily in tandem with global economic growth with few interruptions; however, the COVID-19 crisis and increased climate action might have permanently altered that playbook.

…click on the above link to read the rest of the article…

China Restricts Electricity Use Amid Coal Shortage

December 22, 2020

China Restricts Electricity Use Amid Coal Shortage

Despite the swift industrial recovery from the pandemic, factories in areas in China are working only part-time, and residents in several provinces are asked to save electricity, while authorities are turning off street lights and billboards, warning of coal shortages this winter.

In at least three provinces in China, authorities have ordered limits on electricity use, saying there could be shortages of coal, The New York Times reports.

At the same time, Chinese authorities vehemently deny that the potential shortages have had anything to do with the diplomatic spat with Australia, which has turned into a true energy trade war, with China banning imports of coal from one of its major suppliers.

Still, China has admitted there is a problem with electricity supply in parts of the country, just ahead of the winter season when Chinese industrial activity has been recovering very well from the COVID-related economic slump earlier this year.

“At the moment, some provinces temporarily do not have enough electricity. This is an objective fact,” the NYT quoted the Chinese authority overseeing state-held firms as saying during the weekend.

As a result of the power shortages with a reduced supply of thermal coal, some factories are cutting working hours and are operational only two or three days a week, while office workers in some cities have had to climb 20 flights of stairs to reach their workplaces because elevators have been shut down to save electricity.

“We are not living a normal life when our factory can only work two days a week and the streets are dark at night,” Mike Li, who owns a plastic flower factory in the city of Yiwu, eastern China, told the Financial Times.

…click on the above link to read the rest of the article…

The Oil Refinery Crisis Will Worsen This Winter

December 16, 2020

The Oil Refinery Crisis Will Worsen This Winter

It was only to be expected that many of the world’s refiners would be pinched between low demand for finished products and rising inventories as the pandemic lockdowns continue to stifle activity. But the warm December that is expected this year is also threatening finished products demand. And it’s possible that many of the older, small refiners won’t survive at all.

According to HIS Markit, eleven U.S. refiners are scheduled to close.

The largest refinery in the United States, Royal Dutch Shell’s Convent, Louisiana refinery has shut down after it was unable to find an interested buyer. But the Dutch oil major is closing six more refineries according to Reuters, because it cannot sell those refineries either.

Then, the largest U.S. refiner, Marathon Petroleum, is set to close several refineries, including its Gallup, New Mexico, refinery and its refinery in Martinez, California.

Japan’s Eneos Corp has shut its Osaka refinery, too, but the real pain is in Australia.

BP announced back at the end of October that it was shutting down its aging 65-year-old Kwinana refinery in Perth, because it was simply “no longer economically viable.” Instead, the refinery will be turned into an import terminal. After this closure, BP has only three refineries left in Australia.

PBF Energy shut 85,000 bpd of its Paulsboro, NJ, refinery down. Phillips 66 shut its Alliance refinery down in the runup to Hurricane Sally, but just left it shut while it waits for better days.

Other refineries that are not shutting down are simply extending maintenance or bringing maintenance forward.

Australia’s Caltex is a prime example of this, when in early April it brought forward—and extended—maintenance on its only refinery, Lytton. Caltex vaguely said that it would restart the refinery when conditions recover.

…click on the above link to read the rest of the article…

Tag Archives: oilprice.com

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

The Great Reset: BlackRock Is Fueling A $120 Trillion Transformation On Wall St.

Post navigation

Latest Posts