December 21, 2019 /05:30AM / By Tom Kool of
Oilprice.com / Header Image Credit: Oilprice.com
With positive economic sentiment and a recent
drawdown in U.S. crude inventories, oil markets are cautiously bullish about
the coming year.
Oil didn't move a lot this week, but it may have consolidated gains achieved
earlier this month. The trade talks continue on a positive trajectory, and
economic sentiment is slightly upbeat. The U.S. reported a drawdown in crude
inventories, although there was a surprising jump in refined product stocks. "A
sense of cautious bullishness is developing as we head into 2020," Stephen
Brennock, an analyst at PVM Oil Associates Ltd. in London, told Bloomberg. "Supply-side and demand-side factors are
singing from the same supportive hymn sheet." Shipping
industry proposes $5 billion in research on emissions. Several
shipping associations representing the global maritime shipping industry
have proposed creating a $5 billion research fund
to help the industry develop technologies to slash emissions. The fund would be
setup via a $2 per ton fee on fuel used by ships. The shipping industry
accounts for 2.2 percent of total global CO2 emissions, and the IMO wants the
industry to cut emissions by 50 percent by 2050.
takes $2.3 billion write down. Royal Dutch
Shell (NYSE: RDS.A) said that it would take a $2.3 billion
impairment in the fourth quarter, due to weaker market conditions and an
expected slowdown in sales.
gas prices remain depressed. Natural gas prices could fall even further unless there is a serious cold snap
in the U.S. this winter. Investors have staked out the most net-bearish
position on gas futures in a decade.
gives up on Nord Stream 2. The U.S. appears to be
giving up on its effort to block the construction of the Nord Stream 2
pipeline, according to Bloomberg. U.S. sanctions are not expected to
derail the project, something that U.S. government officials now privately
civil war tilts towards Haftar. The months-long civil
war has largely been a stalemate, but oil deals suggest that multinationals are
betting on Khalifa Haftar, and outside powers are also helping the Libyan
National Army. Fortune seems to have swung in the favor of Haftar and the LNA.
number of CEOs toppled. A record number of corporate
CEOs left their posts in 2019, either voluntarily or because they were
dumps LNG in Asia. The glut of LNG is so bad that
China is offering rock-bottom prices for cargoes in
Energy Services shuts fracking unit. Superior Energy
Services will shut its hydraulic fracturing unit due to
slower activity in the shale patch in West Texas, becoming the second supplier
just this month that is closing shop. Around 150 hydraulic fracturing spreads,
used to complete oil wells, have been taken off the market since April,
according to Reuters.
SEC to propose disclosure rules for oil and gas companies. The
SEC will once again try to impose disclosure rules for
oil and gas companies, a decade after the Dodd-Frank bill was signed into law.
The SEC has twice tried to adopt such rules, which would require companies to
disclose payments made to foreign governments, but those rules have been
blocked by courts and overturned by the Trump administration.
refineries interrupted by strike. A strike is affecting refining operations at
several refineries in France.
U.S. states introduce cap-and-trade for transportation. The
eastern and northeastern states that are members of the Regional Greenhouse Gas
Initiative (RGGI) proposed a cap-and-trade style program for
emissions from cars and trucks. More than a fifth of the U.S. population lives
in these states, although New Hampshire decided not to participate. The program
would cap emissions from fuel suppliers, with allowances able to be bought and
sold. The costs would likely be passed onto motorists.
paid no UK corporate income tax in 2018. The FT reported that Royal Dutch Shell (NYSE:
RDS.A) paid no corporate income tax last year in the UK,
despite earning profits of $731 million.
lost 8,100 jobs this year. Texas lost 8,100 jobs in the "mining" sector
through October of this year, according to the Dallas Federal Reserve, a
classification that includes oil and gas. That is twice what the Dallas Fed
controversial clean energy decision. The U.S. Federal
Energy Regulatory Commission issued a controversial rule on Thursday,
directing the PJM grid in the mid-Atlantic to raise the minimum bid
requirements for subsidized solar and wind. Renewables groups said the decision
was a blatantly politicized decision to favor fossil fuels.
admin moves forward with biofuels proposal. The Trump
administration is moving forward with the EPA proposal on biofuels
for 2020, a plan that angered farmers in the Midwest because of the leniency it
granted to oil refiners.
Congress passes $1.4 trillion appropriations, with tax credits for wind. As
part of a massive spending package, the U.S. House passed a suite of tax credits that would favor wind, but the bill did not
extend tax credits for EVs.
oil-by-rail shipments to surge in 2020. Canada's oil-by-rail capacity could rise to as much as 550,000 bpd as Alberta
relaxes mandatory production cuts. Meanwhile, as the need for rail capacity
rises, new projects are moving forward.
approves new regulations, increasing inspections on oil and gas. New
regulations from Colorado will increase inspections of well sites intended to find and
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