Despite a strong US dollar, there is undeniably optimistic sentiment in the oil markets as demand comes back online and the roll-out of vaccines continues.
In this week Worldwide energy alertour trade team examines how an inflationary climate will affect oil stocks. Sign up today for the latest news, expert analysis and trading tips.
Friday, March 12, 2021
Oil prices gained ground towards the end of the week as tight supplies force a global depletion of supplies. “Overall, we are optimistic about oil demand continuing its upward trend in conjunction with vaccine programs and the resumption of economic activity,” Rystad Energy’s Bjornar Tonhaugen said in a statement.
OPEC is lowering the demand forecast. OPEC lowered its demand forecast for the next two quarters, with demand in the second quarter falling 690,000 bpd compared to a previous forecast. “Ongoing lockdown measures, voluntary social distancing and other pandemic-related developments” continue to weigh on economic activity, OPEC said in its monthly report.
Saudi voluntary cut smaller than stated. Saudi Arabia pledged to cut its production by a further 1 mb / d voluntarily in February and March, but new data suggests the cuts were smaller than expected. “According to the Petro-Logistics assessment, and after discussions with sources and contacts in the market, our estimate for Saudi delivery in February is a decrease of about 600,000 bpd per month,” Daniel Gerber, CEO of Petro-Logistics, told Reuters. .
Analysts warn that OPEC + is pulling too tight. US shale drills promised restraint, but prices have soared so high they could be tempted from the sidelines. Analysts warn OPEC + that they are playing with fire. “Withholding barrels as a means of sustaining the price increase will work,” Bill Farren-Price, a director at research firm Enverus, told Bloomberg. “But that sets the table for a party where the American short-term operator will be the guest of honor.”
Related: Europe can’t keep up with battery metal demand
BP and Shell make billions in trade. BP (NYSE: BP) made nearly $ 4 billion from its energy trading unit in 2020, cushioning the blow to the pandemic’s revenues.Royal Dutch Shell (NYSE: RDS.A) said its trading profits doubled to $ 2.6 billion.
Iran’s oil exports to China are on the rise. China’s imports of Iranian oil are on track and will more than double in March from February. Iran’s oil is sold at a discount of $ 3 to $ 5 a barrel against Brent due to sanctions. At the same time, Saudi Arabia’s exports to Asian buyers will decline by 15% for April.
US refinery gas flaring at an 18-month high. Natural gas flaring at US non-upstream onshore oil and gas facilities peaked in 18 months in February, at 180.9 million cubic feet per day (MMcfd), a report from Rystad Energy found.
Biden administrator approves drilling permits. After an initial pause, the Home Office approved 200 drilling permits over the past two weeks, mostly in Wyoming and North Dakota. While leases have been temporarily suspended on federal lands, drilling permits approval appears to be resuming.
Biden rent report in the summer; Congress is looking at reforms. The Biden government said it would publish an interim report by the summer on the suspension of lease sales on federal lands. At the same time, a bipartisan group of senators is looking at reforms to increase royalty rates for oil, gas and mining companies.
Shell names mijnexec as the new chairman. Royal Dutch Shell (NYSE: RDS.A)appointed Andrew Mackenzie as the new chairman. Mackenzie is the former CEO of BHP Group Ltd. and replaces outgoing Shell chairman Chad Holliday.
India is looking for alternatives at high prices. India called on OPEC + to increase production to dampen crude oil prices. Indian oil minister Dharmendra Pradhan said his country would like to diversify away from the Middle East as a source of supply.
BP is leaving Kazakh oil projects. BP (NYSE: BP) exited three oil projects in Kazakhstan amid a strategy shift to focus on renewable energy sources.
Why are investors turning against fossil fuels? Over the next five years, oil and gas companies will certainly see less investment as the world’s largest institutional investors increasingly look to the environmental friendliness of the companies in their portfolios.
US Senate to lift methane tax. Three Democratic senators support a bill that would tax methane emissions.
Vaca Muerta was ready for a comeback. Last year, drilling activity in Argentina’s Vaca Muerta collapsed, but rose to a 17-month high in January 2021. Higher prices and government subsidies help bring the Dead Cow back to life. Related: How Oil Could Go To $ 100 A Barrel
Biden’s DOE secretary tells the oil industry to adapt or die. “I’m not going to soften how difficult transitions are,” new US Secretary of Energy Jennifer Granholm said at the CERAWeek conference. “The bottom line is that this extraordinary clean energy growth and carbon reduction represents a tremendous opportunity and I’m extending a hand from the partnership,” said Granholm.
US air travel is starting to soar. Aviation will be the last sector to recover from the pandemic, but evidence suggests it is picking up. The number of passengers traveling through airports is now flirting with the highest levels since the pandemic started.
Canoo, EV startup, is competing in an all-electric pick-up race. Canoo, a US EV startup, said it plans to launch an all-electric pod-style pickup truck in 2023, adding to a fast-growing choice of electric vehicles available to US buyers.
By Josh Owens for Oilprice.com
More Top Reads from Oilprice.com: