Saudi Arabia’s surprising cuts following the OPEC + rally have given oil bulls a significant boost, pushing Brent above $ 55.
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Friday, January 8, 2021
Brent hit $ 55 a barrel at the end of the week as Saudi Arabia’s pledge to cut deeper has built a solid rally. Other forces also play a role, including monetary stimulus, the prospect of deeper fiscal stimulus in the US and vaccine optimism. “The past 10 weeks of trading have seen only one weekly decline, which has been relatively small,” said Carsten Fritsch, analyst at Commerzbank AG. “This is testament to the strength of the oil market over the past 2 1/2 months.”
Cold winter collects coal and gas. Thermal coal prices in China are skyrocketing and JKM’s LNG prices are skyrocketing. Spot prices for the supply of liquefied natural gas (LNG) in Asia rose to their highest point in six years. A cold winter in the Northern Hemisphere is contributing to price increases. Javier Blas from Bloomberg notes that at least one LNG spot cargo sold for $ 33- $ 36 / MMBtu, which would be a historically high price.
3 reasons to go all-in on lithium. Shares of major lithium producers and explorers, including Sociedad Quimica y Minera de Chile (NYSE: SQM), Albemarle Corp. (NYSE: ALB), and Orocobre Ltd (ASX: ORE) took a hefty blow after Morgan Stanley predicted that Chilean cheap brine producers could add as much as 200 kt per year by 2025, while the expansion of the bluestone mines in China and Australia could pump an additional half a million tons over time. But there are three main reasons for going all-in on lithium.
US LNG exports hit a record high in December. US LNG exports set a new record in December after a record-breaking November 2020, averaging 9.8 billion cubic feet per day (Bcf / d).
Pioneer outlines bleak outlook for shale. The immediate future of US shale remains bleak despite Saudi Arabia’s pledge to cut an additional 1 million barrels per day in production to keep prices up. “I really don’t see much increase in the Permian basin or the American shale in the coming years,” says Scott Sheffield of Pioneer Natural Resources (NYSE: PXD) said this week. I never expect more than 5% growth under any circumstances … Even if the oil went to $ 100 a barrel and the world was short. ” Related: How to Play the First Oil Rally of 2021
Shale promises restraint. Devon Energy (NYSE: DVN) said it won’t start drilling aggressively even with higher oil prices. “I find it difficult to see that US manufacturers will have to grow double digits again in the coming years,” new CEO Rick Muncrief told Bloomberg. “For this management team, if we’re really thinking about 2021, let’s keep it flat.”
2020 tied for hottest year on record, disaster costs double. According to new data, 2020 was the same as 2016 for the hottest year on record. The cost of natural disasters in the US was more than $ 95 billion last year, doubling from the year before.
Musk becomes the richest person in the world. Elon Musk caught up with Jeff Bezos to become the richest person in the world, driven by the wild surge in Tesla’s stock price (NASDAQ: TSLA). Musk’s net worth is estimated at $ 195 billion.
Saudi Arabia wants to build bridges with Biden. Saudi Crown Prince Mohammed bin Salman this week called off a multi-year blockade of Qatar, also saying it would voluntarily cut 1 MB / d in oil production. The new tone, some analysts say, is at least partially aimed at promoting goodwill in the upcoming Biden administration.
Exxon releases greenhouse gas data for the first time. ExxonMobil (NYSE: XOM) has released emissions data for its Scope 3 emissions for the first time – those burned by end users. Exxon’s sales in 2019 equaled 730 million tons of carbon dioxide, about the same as the entire country of Canada. It is also the highest of all Western oil companies.
ANWR sale an ‘epic failure’. The much-anticipated first lease in the Arctic National Wildlife Refuge (ANWR) was a massive failure. Only 50% of the acreage offered received bids, and the sale generated just $ 14 million in sales, a fraction predicted in recent years. To make matters worse, the state of Alaska was the main player in the successful bids, and only two small private companies – Buckling Arm Services LLC and Restore Alaska Inc. – tracts obtained. Environmental groups called the sale an “epic failure.”
Banks are criticizing rules forcing lending. Wall Street banks have overturned a rule proposed by the Trump administration that would force them to lend money to energy and firearms companies.
Rivian nearly $ 25 billion valuation. Rivian Automotive Inc., the electric truck startup supported by Amazon.com Inc. and Ford Motor Co., is about to raise a new round of funding worth approximately $ 25 billion.
Biden wants to build an international coalition to counter China. Notwithstanding the Trump administration’s go-it-alone approach, the Biden administration will strive to build an international coalition to confront China on multiple fronts, including trade, the WSJ said. Related: Rising LNG Prices Welcome News for US Exporters
Canada’s oil sands are growing. Oil sands production in Canada hit a record high of 3.16 mb / d in November.
Norway’s electric cars reach 54%. Electric vehicle sales in Norway reached 54% market share in 2020, overtaking gasoline and diesel vehicles for the first time.
Races in the Georgia Senate open up more aggressive plans from Biden. The twins win in Georgia over two Democrats who have reversed control of the senate. This offers the Biden administration many more options in the field of energy and climate initiatives. S&P Global Platts provides an overview.
Army Corps Completes Pipeline Permit Program. The Army Corps of Engineers completed its Nationwide Permit Program (NWP), a technically complex program that allows rapid permits for pipelines. However, Biden’s administration could suspend the program.
By Tom Kool for Oilprice.com
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