Wednesday, December 16, 2020 / 12.07AM / By Tom Kool
of Oilprice.com / Header Image Credit: The Economic Times
Brent rose above $50 per barrel in recent days and has
held there at the start of this week. The beginning of widespread vaccinations
in Western Europe and North America has led to a surge of optimism. At the same
time, the Covid-19 wave is at its worst.
"Brent is continuing to defy all the negative news," said Carsten Fritsch, an analyst at
Commerzbank. "More and more countries in Europe and states in the U.S. are
tightening the corona restrictions over Christmas and the new year, which is
likely to weigh on demand."
Key
Highlights:
Chart of the Week
Market Movers
The Oil & Gas Market @ Tuesday,
December 15, 2020
IEA cuts 2021 forecast. The IEA cut its 2021 demand forecast by 170,000
bpd, largely due to a downgrade in jet fuel demand.
Oil tanker attacked in Jeddah. An "explosive-laden" boat struck a fuel tanker
at the Saudi port of Jeddah. There were no casualties and no disruptions to
fuel supplies, the Saudi government said.
LNG prices skyrocket. Spot LNG prices in Asia - JKM - fell below $2/MMBtu
earlier this year, but have recently spiked as demand picks up. Prices spiked
above $12/MMBtu.
Venezuela's environmental nightmare. Venezuela's oil industry has collapsed and as
Bloomberg Green reports, it is resulting in an environmental disaster.
Exxon's Guyana venture is paying off. The growing oil boom in the offshore Guyana-Suriname
Basin continues to gain pace. Exxon's latest discovery in neighboring Suriname
adds even more momentum.
Exxon announces a carbon-intensity plan. ExxonMobil (NYSE: XOM) is
not exactly willing to cut emissions on an absolute basis, but under withering
pressure from investors, activists, and civil society, the oil major announced
plans to lower carbon intensity. Exxon said it would cut emissions per production 15%
to 20% below 2016 levels.
But emissions
could still rise if production rises. The move comes weeks after several
European buyers balked at U.S. LNG shipments over concerns about methane
emissions from U.S. shale.
Exxon cuts 700 jobs. ExxonMobil (NYSE: XOM) cut 700 jobs in its Houston office.
Bombshell report pours cold water on global LNG. Wood Mackenzie is warning that global energy transition goals could
threaten more than two-thirds of the world's supply of liquefied natural gas,
leaving trillions of cubic meters of gas in resources stranded.
Parsley Energy lays off workers ahead of Pioneer merger. Parsley Energy (NYSE: PE) will lay off most of its workforce in Austin as part of its
sale to Pioneer Natural Resources (NYSE: PXD).
Canada to hike carbon price to $170/tonne by 2030. Canada will put a carbon price of as much as $170 per tonne by 2030, up from
$30 currently. The tax will rise by around $15 per year to reach that higher
threshold at the end of the decade. The result could be gasoline prices that
are 37 cents per gallon higher by 2030.
Canada's oil sands back in favor. Morgan Stanley and Goldman Sachs each issued notes to
clients highlighting Canadian oil sands producers for their ability to generate
cash flow. They singled out Suncor Energy (NYSE: SU), Canadian Natural
Resources (NYSE: CNQ) and MEG Energy
Corp. (TSE: MEG). The eight largest oil sands
producers generated $1.4 billion combined in free cash flow in the
third quarter.
UK to end fossil fuel financing overseas. The UK said it would halt all financing for overseas fossil
fuel projects as part of its latest climate initiative.
Germany aims for 65% renewables by 2030. Germany tightened its energy law, hiking its
renewables goal to 65% by 2030.
Tesla hikes output amid rising demand. Tesla (NASDAQ: TSLA) said
demand for its vehicles is so high that it would try to ramp up production this
month. "We are fortunate to have the high-class problem of demand being quite a
bit higher than production this quarter," Elon Musk wrote in an email to staff.
Australia to subsidize refineries. Australia will pay a subsidy to struggling refineries to keep them
open.
European heavy-duty trucks to phase out ICE engine. Heavy-duty truck makers in Europe announced
plans to phase out the internal combustion engine by 2040.
EV sales to grow by 50% in 2021. Global sales of EVs could rise by as much as 50% next year, with ICE sales
growing by just 2% to 5% (although from a much larger base), according to
Morgan Stanley. 2021 "is shaping up to be a critical year for EV adoption and
(internal combustion engine) de-adoption that will dictate the pace of multiple
expansion, contraction, consolidation, and proliferation" among the stocks,
Morgan Stanley analyst Adam Jonas said in the note.
Forest Service approves Mountain Valley Pipeline. The U.S. Forest Service issued an environmental impact statement supporting the
Mountain Valley Pipeline's route through the Jefferson National Forest. The
document allows the pipeline to clear a key hurdle in the project's completion.
Bakken no growth through at least 2022. North Dakota officials do not see any production growth from the Bakken through 2022 as companies reel
from the latest downturn.
China hopes to boost shale gas. China is looking to attract investments in shale gas developments by easing restrictions
on foreign entities and subsidizing costs in a bid to boost its natural gas
production while its demand continues to grow.
Scotiabank rules out Arctic oil. Scotiabank became the fifth major Canadian bank to prohibit
financing oil in Alaska's Arctic National Wildlife Refuge. Most major banks in
both the U.S. and Canada have now blocked financing in ANWR, but the Trump
administration is hoping to finalize a lease sale before January 20.
Clean energy provisions tucked into spending bill. U.S. House and Senate leaders have agreed to include some clean energy innovation measures
into a major omnibus spending bill. The bipartisan measures promote nuclear
power, energy storage, carbon capture, and direct air capture.
EV models to triple in three years. The number of electric vehicle models available to
consumers is expected to more than triple in the next three years, from roughly
40 to 127 in the United States.
Solar installations soaring 43%. U.S. solar installations shot up 43% this year to over 19 GW, shrugging off the
pandemic.
Credit:
The post Oil Bulls Are Back Despite New COVID Lockdowns first appeared in the Oilprice.com Newsletter issued on December 15, 2020. In the most recent Intelligent Investor column for Global Energy Alert members, Oilprice.com's trading team breaks down the very best investments in natural gas at the moment.
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