Bullish Sentiment Takes Over Oil Markets - OIR 090221

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Tuesday, February 09, 2021 / 8:22AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice


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Today, we will take a quick look at some of the critical figures and data in the energy markets this week. 

We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.


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Chart of the Week


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  • The EIA sees U.S. oil production returning to 2019 levels by 2023 and then remaining between 13 and 14 mb/d through 2050.
  • The agency sees Brent prices rising from an average of $42 per barrel in 2020 to as high as $73 per barrel by 2030 and $95 per barrel by 2050.
  • The Permian remains the dominant source of new production in the years ahead. 


Market Movers

  • ExxonMobil (NYSE: XOM) cut production in Guyana due to a gas compressor failure.
  • A federal court rejected a bid from Indigenous tribes to halt the construction of Enbridge's (NYSE: ENB) Line 3 pipeline.
  • Cenovus Energy (NYSE: CVE) reported a $153 million fourth-quarter loss. 


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Tuesday, February 9, 2021 


Brent topped $60 per barrel on Monday, hitting a fresh high. OPEC+ cuts combined with enhanced expectations of U.S. economic stimulus pushed crude oil up. The market continues to tighten. "Support seems robust and the narrative sees the oil market swiftly burning through the remaining crisis-surplus, potentially running into tightness later this year," Norbert Rucker, an analyst at Swiss bank Julius Baer, told
Reuters

Could oil hit $100? Oil prices could go as high as
$100 a barrel next year on the back of "very easy monetary policy" and reflation trade, Amrita Sen, chief oil analyst at Energy Aspects, told Bloomberg in an interview.

Oil majors pay up for wind. BP (NYSE: BP) and Total (NYSE: TOT) won a majority of contracts to build offshore wind in the UK in a recent auction, and they paid a premium. "These huge upfront costs will put up barriers to entry for utilities and oil and gas companies without very deep pockets," Barclays Plc analysts led by Dominic Nash
said in a note.

Algeria's oil exports shrink. Years of mismanagement and lack of investment are undercutting Algeria's oil industry. A top government official
said the country could cease to be an oil exporter within a decade.

Total earns $1.3 billion, ups clean energy spending. Total (NYSE: TOT)
posted $1.3 billion in earnings for the fourth quarter, outpacing its rivals who reported large losses. Total also increased its capex on clean energy by 20% to $2.4 billion, out of a total spending plan of $12 billion. Total also said it would rebrand itself as TotalEnergies.

Marathon cuts executive pay and seeks to cut emissions. Marathon Oil (NYSE: MRO)
cut CEO pay by 25% and also aims to cut greenhouse gas emissions on a unit-of-production basis by half by 2025.

Tesla buys $1.5 billion in bitcoin. Tesla (NASDAQ: TSLA)
announced that it has purchased $1.5 billion worth of bitcoin. The company also said it would accept bitcoin for its sales. 

Commodities swept up in broader reflation trade. Fiscal and monetary stimulus and expectations of rising inflation are pushing prices of commodities up. "It's hard to resist this reflation trade at the moment," 
said Christoph Rieger, head of fixed-rate strategy at Commerzbank AG. "With policy all one-way and U.S. refunding coming up this week, we may require some more concessions."

Trading houses shift away from fossil fuels. Japanese trading houses are accelerating a shift away from coal and fossil fuel trading, according to
Reuters. For example, Itochu said on Thursday it will offload its stake in a Colombian coal mine, and Mitsui is withdrawing from a coal mine in Mozambique.

Imperial takes write-down, no big projects in years ahead. Imperial Oil (NYSE: IMO)
said that the company would not take on any big projects in the coming years. The company wrote down $1.1 billion related to a decision not to develop shale gas assets in Canada.

ConocoPhillips' Alaska project halted. A court
blocked winter construction at ConocoPhillips' (NYSE: COP) project on Alaska's North Slope, ruling that the company failed to consider wildlife and climate change impacts. 

Natural gas prices higher on cold weather. Natural gas prices
shot higher as cold weather swept over much of North America. 

NOCs have $414 billion at risk from transition. National oil companies are on
track to spend $414 billion over the next decade on projects that could become stranded due to the energy transition. Put another way, they only pay off if the world blows past climate targets.

Pipe laying on Nord Stream 2 resumes. Construction on the Nord Stream 2 pipeline
resumed in Danish waters, the last leg of the mostly-completed project that has been stalled due to U.S. sanctions.

Trafigura sees more upside to oil. Oil trader Trafigura said that oil prices have more room to run because refiners will begin ramping up processing, further draining inventories. "The refiners will come for the oil," Ben Luckock, Trafigura's co-head of oil trading, told
Bloomberg. "Come summer, we will be through $60 a barrel for sure, the question is whether we make it to $70."

IEA: India to be largest energy demand growth in 2040. India will
account for the largest share of energy demand growth over the next two decades, representing 25% of all demand growth, according to the IEA.

Oil may not be Chevron's main business in 2040. While oil and gas will certainly be needed for decades to come, the oil and gas division may not be Chevron's (NYSE: CVX) top business in 20 years, although it will still be a very big part of the U.S. supermajor's operations, chief executive Michael Wirth
told CNN.


Qatar signs LNG megadeal. Qatar Petroleum, the world's largest LNG exporter,
signed a contract on Monday for a massive expansion, which could result in a 40% increase by 2026. It is the single largest LNG project ever to go ahead.

 

Credit:

The post Bullish Sentiment Takes Over Oil Markets first appeared in Oilprice.com on February 09, 2021.

 


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Related News - Previous Oilprice Intelligence Report 

1.        Brent Crude Surges Towards $60 - OIR 050221

2.       Oil Prices Hit 1-Year High - OIR 020221

3.      Oil Prices Hit 1-Year High - OIR 020221

4.      New Vaccine Hopes Boost Oil Prices - OIR 260121

5.      Oil Price Rally Paused By Chinese COVID Concerns - OIR 260121

6.      Energy Shares Plunge as Oil Rally Halts - OIR 220121

7.      Oil Demand Fears Continue to Weigh on Markets - OIR 190121

8.     OPEC Predicts a Rebound in U.S. Shale - OIR 150121

9.      Oil Prices Jump on Weak Dollar - OIR 120121

10.  The Oil Bulls Are Back - OIR 080121

11.   Oil Surges on OPECplus Restraint- OIR 050121

12.  Oil Prices Climb on Stimulus Hopes - OIR 291220

 

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