January 08, 2020 /08:18 AM / By Tom Kool of
Oilprice.com / Header Image By: Oil Price
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.
Chart of the Week
- The energy portion of the S&P Goldman Sachs Commodity Index
(GSCI) rose more than other
commodities in 2019, climbing by 22 percent.
- WTI closed out the year up 31 percent and Brent gained 20
- Natural gas was the only energy commodity to drop last
year, with NYMEX prices falling by 26 percent.
- Amazon (NASDAQ: AMZN), ExxonMobil
(NYSE: XOM) and Fiserv (NASDAQ: FISV) announced the launch of a
new voice experience for pumping gas, letting drivers use Alexa to pay at the
- Occidental (NYSE: OXY) is partnering with Total SA
(NYSE: TOT) on a carbon capture project in Colorado, using the
captured CO2 for enhanced oil recovery.
- Laredo Petroleum (NYSE: LPI) jumped
by 5 percent on Monday after it said that its production in
2019 exceeded its guidance.
Tuesday, January 7, 2020
Oil prices fell back late Monday and in early trading on Tuesday. Goldman Sachs
had predicted that the rally following the prospect of war in the Middle East
would be temporary unless oil supplies were actually disrupted. Traders
apparently are taking note, selling off oil at the start of the week. However,
events are fluid and developing quickly.
cuts nuclear commitment. Iran said that it would abandon
limits on uranium enrichment following the assassination of General Qassem
Soleimani. The U.S. withdrew from the 2015 nuclear agreement in 2018, and Iran
has gradually ratcheted back its commitments in response. Iran said its moves
were reversible upon U.S. returning to the nuclear deal.
mulls Iraq sanctions. Some reports suggest the Trump
administration is drawing up sanctions on Iraq as revenge for the Iraqi parliament
pushing for a U.S. troop withdrawal.
Moody's: "Protracted" Iran conflict could hit global economy. "A
lasting conflict would have wide-ranging implications through broad economic
and financial shock that significantly worsen operating and financing
conditions," Moody's said Monday. "A protracted
conflict would potentially have global repercussions, in particular through its
effect on oil prices."
pulls staff out of Iraq. Chevron (NYSE: CVX)
withdrew its expatriate
staff from Kuridstan, the company said, but left behind local workers to keep
operations uninterrupted. The oil majors are on edge, and BP (NYSE: BP) and
Dutch Shell (NYSE: RDS.A) have not disclosed details yet.
invests in low-carbon "unicorns." BP (NYSE: BP) has
created a subsidiary that aims to stand up five $1 billion businesses by 2025
that produce low-carbon energy. "We are trying to build unicorns in the energy
business," said Stephen Cook, managing partner of Launchpad and chief
commercial officer in BP's technology division, according to the FT.
Permian takeover targets. The U.S. energy sector saw $39
billion in M&A deals last year, excluding the massive $57-billion purchase
of Anadarko by Occidental Petroleum. But the pace of deal-making could increase in 2020,
with much of the focus on the Permian. With the sector arguably bottoming out,
the majors could be on the hunt for acquisitions. Top targets include Laredo
Petroleum (NYSE: LPI), Centennial Resource Development (NASDAQ: CDEV),
Resources (NYSE:MTDR), QEP Resources (NYSE:QEP), SM Energy
(NYSE:SM), WPX Energy (NYSE:WPX) and Halcon
Resources (privately held).
to cut emissions by 40 percent. Norwegian oil giant Equinor (NYSE:
EQNR) plans on cutting greenhouse
gas emissions from its domestic operations by 40 percent this decade, with an
aim to hit zero emissions by 2050.
to miss clean energy targets. Royal Dutch
Shell (NYSE: RDS.A) could fall short of investing $6 billion in
clean energy between 2016 and 2020 as promised. The company has only spent $2
billion to date, according to The Guardian.
warned of poor Q4 results. In a regulatory filing, ExxonMobil
(NYSE: XOM) said that its fourth-quarter operating results
would be hit by weakness in chemicals and refining, although that could be
offset by asset sales. The update "is like Groundhog's day - once again
chemicals and downstream weakness will drag down overall earnings," Jennifer
Rowland, analyst at Edward Jones, told Reuters. "The asset sale
proceeds will help cover the dividend, but that's not a sustainable strategy," she said.
hands over control to foreign companies. A former
Venezuelan oil minister said that because PDVSA has deteriorated due to a lack
of cash and a worker exodus, the company has essentially handed over control to
foreign partners. "PDVSA is no longer producing. It's signing contracts for
others to produce in a de facto privatization," Ramirez told Reuters. Ramirez singled
out Rosneft and CNPC as the main beneficiaries.
seizes Sirte. The Libyan National Army (LNA) has taken control of Sirte, a
blow to the internationally-recognized Government of National Accord (GNA).
It's unclear what the effect on the country's oil sector will be. The civil war
has become a larger proxy war between the UAE, Egypt and Russia, which are supporting
Khalifa Haftar and the LNA on the one hand, and Turkey and the GNA in Tripoli
on the other.
count falls below 800. The U.S. oil and gas rig count is
down below 800 for the first time since the spring of 2017. The shale industry
continues to shed rigs, as pressure from investors grows.
Decade of energy storage. Declining battery costs are
setting up the 2020s to be the decade of energy storage.
Energy storage installations across the world are expected to soar to 1,095GW,
or 2,850GWh, by 2040, compared to a modest deployment of just 9GW/17GWh as of
2018, according to BNEF's forecasts.
Tech backing Big Oil. Tech giants are growing their business ties
with the oil industry, despite increasing scrutiny on fossil fuels.
president seeks reroute for gas pipeline. The Mexican
government will request a gas pipeline be rerouted to avoid indigenous lands.
The Tuxpan-Tula pipeline is being developed by TC Energy (NYSE: TRP). "Even if we have to pay, the gas pipeline will not go through the sacred
hills," Mexican President Andres Manuel Lopez Obrador said.
considers more Venezuela sanctions. The U.S. may finally let the sanctions waiver
(NYSE: CVX) expire later this month in order to increase
pressure on the Venezuelan government. Chevron and top oilfield service
companies play an important role in keeping around 200,000 bpd online in the
support pushes Port Arthur LNG forward. Sempra Energy
(NYSE: SRE) and Saudi Aramco announced the signing of an
interim project participation agreement, a pre-FID agreement that inches a
major LNG export terminal forward.
and Total announce Suriname discovery. Apache Corp.
(NYSE: APA) and Total SA (NYSE: TOT) announced a "significant" oil discovery in offshore Suriname.
The Wait is
Over: Uganda's Long Road to First Oil
Hostilities: Global Crude Oil Prices Trend Upwards
Is This The Next
Great Oil Frontier?
Prospect Of War
Pushes Oil To Seven Month High - OIR 030120
US Attack on
General Soleimani: 3 Things To Watch
Oil Enters 2020
With Bullish Trend
A Bullish End To
The Year For Oil Markets - OIR 271219
NLNG Takes Final
Decision To Achieve Train 7 Project
Sentiment Keeps Oil Above $60 - OIR 241219
Governors Forum Laud Dangote On Petrochemical Refinery Project
Sentiment Remains Despite Oil Price Dip - OIR 201219
12. Oil Prices Head
Higher Despite OPEC Skepticism - OIR 171219
13. Average Prices
Of PMS, AGO, HHK and Cooking Gas - November 2019
14. The Oil Bulls
Are Back Despite Bearish Fundamentals - OIR 131219