Saturday, April 18, 2020 / 08:00 AM / By Tom
Kool of Oilprice.com / Header Image Credit: Oilprice
Fears of global crude
storage hitting capacity are now dominating markets, sending oil prices falling
even further as analysts search for a bottom.
Oil prices are nearing $15 as fears of global crude
storage filling up hit new highs this week, but there are still trades to be
Friday, April 17th, 2020
WTI fell below $18 per barrel in early trading on Friday, as a deepening gloom
swept over the market. China reported a contraction in GDP of 6.8 percent for the
first quarter. OPEC affirmed in its Oil Market Report that demand would fall by
6.9 mb/d this year. Storage fears are now beginning to dominate market
DOE considers paying drillers not to drill. In the
latest scheme to prop up indebted shale drillers, the U.S. Department of Energy
is reportedly considering
paying oil and gas companies to keep their reserves undrilled. The idea seems
farfetched, and is based on the notion that undeveloped projects would act as "storage." The reserves could be drilled later and sold later, with proceeds
going to the government. The proposal would require appropriations from
of layoffs hit oil field this week. Chesapeake
Energy (NYSE: CHK) laid off 200 workers in Oklahoma on Wednesday, half in the Oklahoma City
headquarters and half in the oil field. Baker Hughes (NYSE: BKR) laid
off 234 employees and Halliburton (NYSE: HAL) laid
off 33. Baker Hughes said it would take a $15 billion non-cash
impairment in the first quarter.
shuts down shallow water rigs, also battles coronavirus offshore. There
have been 126 cases of coronavirus among offshore oil workers in Brazil,
according to Reuters.
Meanwhile, Petrobras (NYSE: PBR) halted operations
at 62 platforms in shallow water offshore because of low prices, curtailing
sells Azerbaijan assets for $1.57 billion. Chevron (NYSE:
CVX) completed the
sale of its interests in oil assets in Azerbaijan as part of its divestment
cuts 225,000 bpd. ConocoPhillips (NYSE: COP) curtailed 225,000
bpd, including 125,000 bpd in U.S. Lower 48. The company will also suspend its
share buyback program and cut spending from $6.6 to $4.3 billion.
set aside billions for losses. Souring loans have
forced major Wall Street banks to set aside billions of dollars in losses. Bank of
America's (NYSE: BAC) profit fell 45 percent.
opens pipeline to Cushing. Enterprise
Products Partners LP (NYSE: EPD) said it
would allow oil companies to send oil on its Seaway pipeline from the Gulf
Coast to Cushing, utilizing a section of unused pipe to allow more oil to reach
in the U.S. West. A climate change-induced megadrought has
swept across much of the Western United States.
fuel demand could take years to rebound. Jet
fuel demand could
fall by 2.1 mb/d in 2020, a 26 percent decline. "Jet fuel consumption will be
impacted for a longer time and maybe not recover fully even next year, as
travellers remain concerned about long-haul vacations, and businesses get used
to online meetings," said Per
Magnus Nysveen, head of analysis at Rystad Energy.
car sales suffer record decline. European car
sales fell 52
percent year-on-year in March, falling to the lowest level since at least
Arabia issues new debt. Saudi Arabia sold $7
billion in bonds on Wednesday in order to raise cash.
oil prices lower than benchmarks. North Sea oil is
trading at $6 per barrel below Brent, the largest discount in a decade. Bakken
oil is trading below $10 per barrel. Prices for physical cargoes have dropped below headline benchmark prices as regional grades overwhelm
to pay Warren Buffet in stock, not cash. Occidental
Petroleum (NYSE: OXY) chose to pay a
quarterly $200 million payment to Berkshire Hathaway in stock rather than cash,
fresh evidence of the financial strain facing Occidental.
Oil demand to fall by 29 mb/d in April. The IEA said that
oil demand would fall by 29 mb/d in April and by nearly 10 mb/d for the entire
crude storage 65 percent full. At over 503 million
barrels, U.S. commercial stocks are 65 percent full.
energy shed 106,000 jobs. The U.S. clean energy
sector lost 106,000
jobs last month as economies shut down.
of Bakken wells idled. An estimated 4,600 wells in
North Dakota have been idled, shutting in roughly 260,000 bpd, according to
Sachs: Own EV stocks. Goldman Sachs recommended
owning Tesla (NASDAQ: TSLA) and other companies exposed
to electric vehicles. EVs are cheaper than gasoline vehicles on a total cost of
ownership basis, even with gasoline selling for less than $2 per gallon.
However, EV sales could contract by
43 percent this year.
traders make money shorting oil. A bunch of petroleum
engineers and traders, banded under the Energy FinTwit (#EFT) hashtag
have made money shorting oil and energy stocks this year.
blocked Keystone XL permit. In the latest setback
to TC Energy's (NYSE: TRP) Keystone XL pipeline, a
Montana judge blocked a key permit, ordering the
Army Corps of Engineers to revisit the project's impact on endangered
want ethanol waiver. Governors of five U.S. states
have asked the
Trump administration for a nationwide waiver for refiners to get out of ethanol
mandates. The proposal would reignite a war between refining and ethanol
struggles to find buyers of oil cargoes. 50 million
barrels of Nigerian oil for late-April and May have still not been sold,
according to S&P Global Platts. Some is being held in floating storage.
Bargain Hunters Are Stucking Up On Ultra Cheap Crude Oil
Deal Reduces Downside Risks, Surplus Not Eliminated
Must Deregulate Its Petroleum Sector Post COVID-19 - Boniface Chizea
- IEA: Huge
Oil Build Threatens To Fill Up Global Storage Within Weeks
- Oil Hits
$20 for WTI and $30 for Brent After API Reports Mega Crude Inventory Build
- Oil Falls
As Saudi Arabia Launches New Price War With Record Discounts
- Oil Prices
Plunge On Grim IMF Economic Forecast
Powerless As Oil Prices Near $30
- Oil Supply
Deal: Market Stability Desired
Production Cuts: Implications for Nigeria
Sachs: Don't Expect Oil Prices To Rise On Historic Oil Deal
- Trump Wants
OPECplus To Double Its Production Cut