Wednesday, October 16, 2019
/08:56 AM / By Tom Kool of Oilprice.com / Header Image
Credit: 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.
- The API gravity of the U.S. oil mix has lightened significantly
over the past decade, with booming light oil production from major shale
- Oil with API gravity above 38 degrees is considered light, while
crudes with gravity of 22 degrees or lower is considered heavy.
- Along the Gulf Coast, the average gravity of the crude
slate has lightened from 30 degrees in 2011 to 32.6 degrees in 2018, according
to the EIA.
- Whiting Petroleum (NYSE: WLL) is
in deal talks with the smaller
Petroleum (NASDAQ: AXAS), although details have not been
disclosed, according to Reuters.
- Parsley Energy (NYSE: PE) is set
to acquire Jagged Peak
Energy (NYSE: JAG) in an all-stock deal valued at $2.27
billion. Parsley's share price fell 10 percent on the news.
- ProPetro (NYSE: PUMP) laid off 150 workers this
month, according to Reuters. The move comes after Halliburton
(NYSE: HAL) last week announced that it would cut staff by
Tuesday October 15, 2019
Oil prices fell more than 2 percent on Monday on diminished excitement
surrounding the partial trade agreement between the U.S. and China. Following
last week's jolt, investors grew skeptical of the agreement as it became clear
that Washington and Beijing had different interpretations of the outcome of
last week's talks. "Its clearly a market that is very macro-focused right
now," said Ole Sloth Hansen, head
of commodities strategy at Saxo Bank A/S in Copenhagen. "Speculators have been
quite aggressive sellers during the past couple of weeks."
drillers cutting back. Natural gas production in the
Marcellus and Utica shales continues to inch higher, but production could begin
to slow as drillers cut back in the face of
weak prices. EQT (NYSE: EQT) announced last month that it would lay
off nearly a quarter of its workforce.
Labour Party proposes ban on ICE engines by 2030. The
Labour Party in the UK proposed to ban sales of
the internal combustion engine by 2030.
Fracking "dead" in UK. Cuadrilla has begun removing equipment from its
only testing area following the last round of earthquakes in August. There are
no plans to resume fracking in the area, and local residents and opponents of
the company say that fracking in the UK is now dead.
President reverses on fuel subsidies. After the uproar and
massive resistance to the proposed cut in fuel subsidies, Ecuador's President
Lenin Moreno reversed course, agreeing
to scrap the proposal. Indigenous groups cheered and called an end to protests
following the decision. But Ecuador now won't be able to realize the budgetary
savings from reduced subsidies, raising questions about how it will undertake
exits Northern Australia. ConocoPhillips (NYSE: COP) agreed to sell its northern
Australian assets to Santos (ASX: STO) for $1.39
billion. Conoco will exit the Darwin LNG plant.
bans fossil fuel infrastructure on public land. California passed legislation that
bars any California leasing authority from allowing pipelines or other oil and
gas infrastructure on state land. The legislation comes in response to the
Trump administration's aggressive leasing of public lands for mining and
Arabia denies role in Iran tanker attack. Saudi Arabia denied any role in the
attack on an Iranian tanker in the Red Sea last week. Iran said that it has obtained evidence to prove
that the attack was carried about by rockets, and that a government was
involved. Iran also vowed to take revenge.
Justice Department investigating Pemex. The Wall Street
Journal reports that the U.S.
Justice Department and the SEC are investigating Pemex for a widespread bribery
scheme. At issue was the 2018 bankruptcy of Oro Negro. The company says that it
was driven into bankruptcy by Pemex after refusing to pay bribes. Oro Negro is
seeking $700 million in damages in a lawsuit submitted to a NAFTA arbitration
SA's $600 million bet on India. Total SA
(NYSE: TOT) is spending $600 million to
purchase a 37.4 stake in India's Adani Gas Ltd.
oil production could plunge on Chevron decision. The Trump
administration could drive down Venezuela's oil output by another 300,000 bpd
if it decides to deny Chevron (NYSE: CVX) a waiver
allowing the company to continue operating in the country, according to S&P Global Platts.
Currently, Venezuela is producing about 600,000 bpd, but the forced exit of
Chevron would damage joint ventures with PDVSA. "I think you'd see it go certainly
to under 300,000 b/d within a month" if Chevron had to pull out, said Neil
Bhatiya, an associate fellow with the Center for a New American Security, told
Platts. The waiver expires next week.
energy minister says production to reach pre-attack levels. Saudi
energy minister Prince Abdulaziz bin Salman said that the country's oil
production will surpass levels seen prior to the Abqaiq attack as soon as this
month. He said production will likely average 9.86 mb/d in October and
November. Production fell by 660,000 bpd to 9.13 mb/d in September.
Arabia to approve IPO this week. Saudi Arabia is expected
to give official approval to the IPO of Saudi Aramco this week. "Aramco's IPO
will take place sooner than you think," Yasir al-Rumayyan, chairman of Aramco,
told the FT. The plans involve a
public offering of 3 percent of the company on the domestic exchange as soon as
to expand ethane pipeline. Enterprise Products Partners
(NYSE: EPD) is moving forward with plans to expand its ATEX
ethane pipeline from Appalachia to Southeast Texas. "The expansion of ATEX will
facilitate growing production from the Marcellus/Utica Basin and will provide
access to attractive markets on the Gulf Coast through Enterprise's integrated
midstream network," the company said in a statement.
Investment Bank postpones gas lending decision. The
European Investment Bank was set to consider a vote on Tuesday that would have
cut off natural gas projects from lending eligibility, but it postponed the
decision. Germany has reservations about the vote, but a top EIB official told Reuters that the vote is likely
crackdown hits oil and gas. Reuters reports that some oil and
gas companies in the Permian basin are having trouble finding enough workers
because of the immigration crackdown by the Trump administration.
- A Long-Term
Crisis Looms For Oil
- Oil Prices
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
- Oil Slides
As Middle East Tensions Fade - OIR 270919
Aramco Ramps Up IPO Preparations Despite Weakened Demand Outlook
Maritime Organization 2020 Deadline Fast Approaching
- Where Has
The Risk Premium Gone For Oil? - OIR 240919