Wednesday, January 22, 2020 / 06:07AM / By Tom Kool, News Editor, Oilprice.com / Header Image Credit: Oilprics/PNL
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.
Chart of the Week
Market Movers
Tuesday, January 14, 2020
Oil prices pared gains in early trading on Tuesday, as a new virus in China
raised fears of an economic slowdown. Even substantial oil supply disruptions
in Libya couldn't keep prices up.
Libya
outage pushes oil up. Libya's oil operations
were disrupted at the El Feel and Sharara fields as well as
the Zawiya export terminal. Other ports also declared force majeure, including Brega,
Ras Lanuf, Hariga, Zueitina and Sidra. Together, the outages may total as much
as 800,000 bpd. Libya's civil war has raged since last April, but the oil
outages open up a dangerous new phase. Oil prices originally moved higher on
the news but fears of the coronavirus slowing down economic growth have
countered that at least temporarily.
Chevron
waiver in Venezuela extended. The U.S.
government extended a waiver for Chevron (NYSE:
CVX) for another three months, allowing the company to
continue to operate in Venezuela despite sweeping American sanctions on the
country. Venezuela's oil production has stabilized at lower levels - at a
little over 700,000 bpd - despite the ongoing sanctions.
Natural
gas drops below $2. Nymex natural gas prices have
plunged below $2/MMBtu, a level not seen in years. Prices continued to decline
in early trading on Tuesday. Shale gas stocks were deep in the red as a result.
For instance, Range Resources (NYSE: RRC) was off by more than
7 percent on Tuesday, Antero Resources (NYSE: AR) was
down by more than 5 percent. The gas-focused drillers in the Marcellus shale
are under particular pressure because they don't have
crude oil to offset the losses. The gas plunge is also squeezing coal-fired power plants.
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BP pulls out of Kurdistan. BP (NYSE: BP) is withdrawing from Iraqi Kurdistan after its $100
million contract expired at the end of 2019. The move is a blow to Iraq's oil
sector goals and comes as the country has been rattled by unrest.
IEA:
Oil industry at risk of energy transition. The oil
industry is not investing enough in clean energy, and companies are at risk as
the world moves on from fossil fuels, the IEA warned in a new report. But large
oil and gas companies could play a constructive role in accelerating the
deployment of clean energy, the agency said.
Oil
major dividends unsustainable. A new IEEFA report finds that the shareholder payouts from the
five largest oil majors are unsustainable. The payouts to shareholders exceeded
free cash flow by $207 billion over the past decade. The majors took on debt
and sold assets to bridge the gap, raising questions about the sustainability
of such a strategy.
China
to phase out single-use plastics. China is rolling out
a ban on plastic bags in all majors cities by the end of
2020 and banned in cities and towns by 2022. "The timely implementation of such
an initiative stands to have a sizeable impact on our petchem demand growth
outlook, with China accounting on average for around 50% of global growth in
our current base case over the next decade," JBC Energy wrote in a note. "Moreover, this follows a raft of similar bans announced elsewhere in the world with the EU and Canada two particularly prominent examples - and highlights
the growing risk to the petchem demand outlook as a whole."
Hedge
funds sell oil on economic concerns. Renewed concerns
about the global economy have led to a selloff in oil futures by hedge funds and other money
managers.
Radioactive
risk from oil and gas waste. A new investigation from Rolling Stone finds that handling
fracking waste carries risk of radioactive contamination.
U.S.
offshore wind revolution. By 2030, the U.S. could have
20 GW of offshore wind online, with investment exceeding $15 billion by the
mid-2020s, according to Rystad Energy. That means that spending on offshore
wind could exceed that of offshore oil and gas in the next few years. "Assuming
continued support from the regulators, many more projects will be sanctioned in
the coming years and we expect to see yearly investments in the sector exceed
$15 billion by the middle of the decade," says Tim Bjerkelund, Head of
Consulting New York at Rystad Energy. "That would certainly signal an energy
revolution and offshore suppliers should take note."
Saudi
growth forecast cut by IMF. The IMF lowered its forecast for Saudi Arabia's GDP due to the
OPEC+ cuts, cutting it to 1.9 percent this year from 2.2 percent. Meanwhile,
there have been conflicting reports about when the OPEC+ coalition would meet
next. As of now, the cuts expire at the end of March.
1. The Single
Biggest Factor In Oil This Week - OIR 170120
2.
Oil Traders
Obsess Over Weak Demand and Oversupply - OIR140120
3.
Oil Bears Return
With A Bang - OIR 100120
4.
Is The Oil Price
Rally Already Over? - OIR 080120
5.
Prospect Of War
Pushes Oil To Seven Month High - OIR 030120
6.
A Bullish End To
The Year For Oil Markets - OIR 271219
7.
Bullish
Sentiment Keeps Oil Above $60 - OIR 241219
8.
Bullish
Sentiment Remains Despite Oil Price Dip - OIR 201219
9.
Oil Prices Head
Higher Despite OPEC Skepticism - OIR 171219
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