Saturday, February 01, 2020 /08:00
AM / By Tom Kool of Oilprice.com / Header Image Credit: Oilprice
Oil posted its largest monthly loss since May
2019, as fears of the coronavirus continue to rise.
Friday, January 31, 2020
Oil posted its largest monthly loss since May 2019, as fears of the coronavirus
continue to rise. The 15 percent price decline is also the worst January
performance since 1991, according to Bloomberg. The oil market is "troubled by
both rising demand worries and rising fuel stocks," said Ole Sloth
Hansen, head of commodities strategy at Saxo Bank A/S in Copenhagen. "It's
going to take a firm commitment by OPEC+, or rising geopolitical tensions, to
achieve a sustained recovery."
Chinese oil demand growth at just 100,000 bpd. China's
oil demand could grow at
just 100,000 bpd this year due to the coronavirus, according to Bernstein. That
would make it the slowest expansion in consumption in nearly 20 years. The firm
previously predicted 350,000 bpd of growth.
GDP slowed to 2.1 percent in fourth quarter. U.S. GDP
growth slowed to 2.1 percent
in the fourth quarter, and 2.3 percent for the full-year in 2019. It was the
slowest expansion in three years.
margins shrink. Fourth quarter earnings from the oil
majors deteriorated, in part because of narrower chemical margins. New Gulf
Coast chemical capacity has dragged
earnings from Exxon and Chevron. ExxonMobil
(NYSE: XOM) and Chevron (NYSE: CVX) both
reportedly slightly disappointing earnings Friday morning. Exxon earned $5.69
billion in the fourth quarter, down from $6 billion a year earlier. But that
number was made better by a one-time $3.7 billion divestment in Norway.
Notably, Exxon's Permian production appears to have stalled at the end of the
year, even as operations in Guyana started up. Meanwhile, Chevron reported its
largest quarterly loss in a decade after writing down $10.4 billion, largely
related to its Appalachian shale gas assets.
warn industry not to move on Trump's deregulation. A
group of 58 companies, including institutional investors, representing around
$113 billion in assets, warned the energy,
timber and mining industries not to move aggressively to take advantage of the
Trump administration's wide-ranging deregulatory campaign. The investors said
that doing so would put investors at "significant risk of public backlash and
stranded assets, should these actions be legally challenged or protections be
restored by the courts or by future administrations."
earnings fall by half. Royal Dutch Shell (NYSE:
RDS.A) saw its fourth quarter earnings fall in half from a
year earlier, weighed down by lower oil and gas prices, as well as weaker
refining and chemical margins. "All macroeconomic indicators are working
against us," Shell CEO Ben van Beurden said. The disappointing results could
slow the pace of share buybacks and result in more asset sales. Shell's reserve
life declined for the
sixth year in a row, now only sitting on eight years' worth of reserves.
shares surge on earnings beat. Tesla (NASDAQ:
TSLA) saw its stock surge past $600
per share this week, having gained 80 percent in the last three months.
Chesapeake Energy survive? Natural gas prices are well
below $2/MMBtu, putting Chesapeake Energy's (NYSE: CHK) future
in doubt. It's not clear that the company can financially engineer its
way out of the mess. Meanwhile, a contractor was killed at a
Chesapeake drilling site this week.
cut back on insurance. Refiners and petrochemical
facilities have cut back on insurance because it has become too costly, which
is the result of a string of explosions and accidents in recent years. Running
without insurance puts them at risk of tens of millions of dollars of
liabilities. In some cases, insurance rates have increased 100 percent,
according to Reuters.
and Iowa record wind installations in 2019. Texas and
Iowa are the largest states in terms of wind power in the United States, and
last year was a record year for
installations in both. Texas added 4 GW and Iowa added 1.9 GW.
lays claim to Talos discovery. Mexico's state-owned
Pemex is laying claim to the country's largest private oil discovery, the Zama
field. Pemex says the discovery, recorded by Talos Energy
(NYSE: TALO) is mostly the property of Pemex. "In Pemex's
analysis, we consider that we have the largest portion of the field," Pemex CEO
Octavio Romero Oropeza said. "Independently of
who has what, Pemex will drill exploratory wells to confirm this information."
to buy 100,000 electric trucks. UPS (NYSE:
UPS) said it would
purchase 100,000 electric trucks from UK-based Arrival. The deal would be worth
$440 million over five years.
Shell buy Schlumberger's stake in Vaca Muerta. Equinor (NYSE:
EQNR) and its partner Royal Dutch Shell (NYSE:
RDS.A) each paid $177.5 million
to jointly acquire Schlumberger's (NYSE: SLB) 49
percent stake in a Vaca Muerta project in Argentina.
turns to Saudi Arabian oil. China's imports of oil
from Saudi Arabia shot up by 47 percent in 2019,
while imports from the U.S. fell in half.
- OPEC Halts
Slide In Oil Prices - OIR 280120
"Twin Threats" Facing Big Oil
- OPEC Mulls
Extending Oil Production Cuts Through End-2020
- Oil Bears
Are Back As Demand Fears Go Viral
Promising Oil Trends To Watch In 2020; Nigeria Giving Majors Some Pushback
- Oil Falls
Despite Major Outage In Libya - 210120
- The Single
Biggest Factor In Oil This Week - OIR 170120
Prices Of PMS, AGO, HHK and Cooking Gas - December 2019
Oil Production Slips for the Third Consecutive Month
- Oil Prices
Trade Close to $70pb, Thanks to Rising Geopolitical Tensions
- Oil Traders
Obsess Over Weak Demand and Oversupply - OIR140120
- Oil Bears
Return With A Bang - OIR 100120
- US, Iran
Hostilities: Chevron Pulls Out Staff From Iraq As Crude Oil Price Drops