October 25, 2019 /08:07PM / By Tom Kool of Oilprice.com
/ Header Image Credit: Oilprice.com
While a surprise inventory draw, positive noises
from OPEC and geopolitical uncertainty have driven oil prices up this week,
bullish sentiment has been largely smothered by growing fears of a global
Oil was down at the start of trading on Friday, but was poised to close out the
week with modest gains on the back of EIA inventory drawdowns and rumors of
talks eye turning back the clock. Top U.S. and Chinese
trade negotiators have discussed a plan in which China would buy more
farm products in exchange for the U.S. removing some tariffs, according to
Reuters. The outlines of the partial deal are striking since they would
essentially attempt to take the trading relationship back to where it was
before the trade war, without touching the hot button issues of intellectual
property. Even still, there is a long way to go - for now, President Trump has
only agreed to cancel the October 15 tariff increase on $250 billion worth of
goods. China is offering more purchases, but also wants the planned December
tariffs scrapped. Offshore
oil companies use loophole to save $18 billion. A new
government report found that a loophole has allowed
offshore oil drillers to avoid paying a combined $18 billion in royalties to
the U.S. government over the past few decades.
refined product exports barely grew in 1H2019. Exports
of gasoline, diesel and other refined products have soared over the past
decade, but growth came to a halt in the first half of 2019. Exports averaged
5.47 mb/d, according to the EIA, up by a paltry 19,000 bpd (0.3 percent) from the same period in 2018.
The agency said the sudden slowdown is likely due to lower refinery runs and a
switches from dollars to euros. Russia's Rosneft has
entirely switched the currency of its oil contracts
from dollars to euros, a move intended to avoid U.S. sanctions. It is part of a
broader de-dollarisation plan by the Russian government.
stockpiles growing. With the implementation of the IMO
rules on marine fuels just two months away, stockpiles of low-sulfur fuels held
in floating storage around the key storage hub of Singapore are growing.
Roughly 32 supertankers are anchored in Malaysian waters near Singapore,
according to Reuters.
Offshore wind a "game-changer." A new report from the
IEA explores the "game-changing" potential of offshore wind. Costs for the
technology are forecasted to fall by 40 percent by 2030. The IEA said the
magnitude of the potential is on par with two other energy revolutions of the
past decade - fracking for shale and the explosive growth of solar. "Looking at
the future of offshore wind...it has the potential to join the ranks of shale
[gas] and solar photovoltaics in terms of steep cost reductions," IEA executive
director Fatih Birol said. Total investment in the offshore wind
sector could reach $840 billion over the next two decades.
sees the end of U.S. shale. Russia's energy minister
Alexander Novak said that U.S. oil production growth
leveling off. "In the near future, if forecasts turn out correct, we will see a
plateau in production," Novak said.
moves to protect Citgo. The Trump administration blocked required bond payments by Citgo to creditors.
The U.S.-based Venezuelan refining company faced imminent breakup due to a $913
million bond payment, but the Trump administration views the company has
crucial to the opposition leader Juan GuaidÃ³. The move gives Citgo a 90-day
sides with refiners on biofuel dispute. Biofuel groups
revolted after the latest proposal by the EPA to increase demand for ethanol
disappointed, and Bloomberg reports that the White House essentially
sided with the EPA and refiners over the objections of the Department of
Agriculture and biofuels groups.
beats short sellers. Tesla (NASDAQ: TSLA) posted
a surprise profit in the third quarter, and the company's stock price jumped by
20 percent, burning short sellers.
litigation week. ExxonMobil (NYSE: XOM) went
on trial this week for allegedly defrauding investors over its climate risk.
However, several other cases also inched forward. On Tuesday, the U.S. Supreme
Court rejected a request by more than two dozen oil
companies to block a state court lawsuit brought by the city of Baltimore. The
industry wants the case in federal court, not state court. Baltimore is suing
for damages related to climate change. Separately, the Attorney General of
Massachusetts sued ExxonMobil on Thursday for
defrauding investors, mirroring the case in New York.
sees Permian boom continuing. Chevron (NYSE:
CVX) dismissed rising concerns about the longevity of the
shale boom. "We see a long, healthy pace of activity in the Permian and Texas
for decades to come," Steve Green, president of Chevron's North American
business, said at a forum sponsored by the Texas
Oil & Gas Association.
could limit oil production on climate concerns. Kuwait
may cut its long-term oil plans due to climate change, a move that would raise
eye-brows since most state-owned companies have not waded into such waters.
Bloomberg reports that a source with knowledge of
internal discussions said that Kuwait Petroleum Corp. could cut its plans to
reach 4 mb/d of capacity by 2020 to 3.125 mb/d instead. It would also lower its
2040 target to 4 mb/d instead of 4.75 mb/d.
profits disappoint. Equinor (NYSE: EQNR) reported a larger-than-expected decline in
profits for the third quarter, due to a decline in natural gas prices and
production. Earnings fell to $2.59 billion, down from $4.84 billion a year
considers electric truck mandate. California air
regulators are exploring mandates to require half of all
medium and heavy trucks to be zero-emission by 2030, which would be the first
of its kind. A final vote is expected by mid-2020.
proposes EV bill. Senate Minority Leader Chuck Schumer
is proposing a $450 billion "cash for carbon" bill, a major initiative that would aim to replace a fifth of the U.S. auto
fleet with EVs within 10 years. Senator Schumer said that the proposal would be
part of climate change legislation if the Democrats retake the majority after
the 2020 election.
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Nigeria's Oil Production Quota by 80,000bpd
Rebounds On Rare Market Optimism - OIR 221019
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Critical Decision As Oil Drops Again - OIR 181019
Prices Of PMS, AGO, HHK and Cooking Gas - September 2019
- Oil Markets
Bearish Despite Rising Geopolitical Risk - OIR 151019
- A Long-Term
Crisis Looms For Oil
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Rise On Trade War Optimism And Tanker Attack - OIR 111019
Closures May Only Offer Temporary Subsidy Reprieve
- The Impact
Of Impeachment On Trade War Talks - OIR 081019
- A Crisis
Looms Over U.S. LNG
Markets: Everything Is About Weak Demand
Optimism In Oil Won't Last - OIR 011019
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As Middle East Tensions Fade - OIR 270919
Aramco Ramps Up IPO Preparations Despite Weakened Demand Outlook