Wednesday, April 14, 2021 / 09:25 AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice
newsletter, 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.
Chart of the Week
- U.S. CO2 emissions declined by 11% last
- Within the power sector,
coal emissions dropped by 19%, and natural gas emissions declined by 3%.
- Power generation from wind
and solar increased by 17%.
- Jeffries upgraded ExxonMobil
(NYSE: XOM) to hold from underperform and upgraded Eni (NYSE: E) to
buy from hold, both due to an improving oil price environment.
- BP (NYSE:
BP) discovered oil near its
Mad Dog deepwater field in the Gulf of Mexico.
Resources (NYSE: CLR) said its
first-quarter production was roughly 6,000 boe/d lower than expected due to the
Texas grid crisis.
Tuesday Aril 13, 2021
prices are still bouncing around depending on the news cycle, but with little
definitive direction. In the words of Rystad Energy, "Prices are still locked
in a sideways limbo, as bearish Covid-19 developments in some countries compete
against bullish economic data and spending projections going forward in US and
300 corporations call for 50% GHG cut. In a letter to President Biden, more than 300
companies called on the U.S. to double its greenhouse gas
reduction target to 50% by 2030. "I think this signals a major shift in the
corporate community's understanding of the urgency of climate change as a
systemic financial risk," Anne Kelly of Ceres told the NYT. The Biden
administration is expected to announce an emissions target before a climate
summit next week.
Permian pipeline glut. Nearly half of the Permian pipeline capacity
could be unused by the end of the year, the result of a
building spree from several years ago that assumed pre-pandemic levels of oil
production. Wood Mackenzie sees utilization rates falling to 57% - the prior
low point during the 2016 bust was 70%.
Falling oil reserves a big IOC problem. In the coming years, the power structure of
global oil markets is set for a major shakeup if the reserve life of International Oil
Companies (IOCs) continues to decline.
Morgan Stanley: Oil prices stuck at $60. Oil prices will likely be stuck in the $65-$70 range
this summer, Morgan Stanley says in a new note, tempering its previous forecast
for $70 oil with temporary overshoots because of rising U.S. drilling activity
and the potential return of Iranian exports.
LG Chem and SKI reach an 11th-hour deal. LG Chem had sued SK Innovation for theft of trade
secrets, and the suit endangered a $2.6 billion battery plant in the state of
Georgia from moving forward. But the two South Korean companies reached a last-minute deal that paves the way for more battery
production in the U.S.
Iran Natanz facility attacked. Iran accused Israel of sabotaging its uranium enrichment plant in Natanz
over the weekend.
Dakota Access decision delayed by 10 days. The Army Corps of Engineers - now under President
Biden - declined to take a stance on the Dakota Access
pipeline in federal court on Friday, despite the pipeline operating without a
federal permit. The judge gave Dakota Access 10 days to come up with new
information, after which the court may take action.
Exxon considers shutting Norway refinery. ExxonMobil (NYSE: XOM) is considering closing its 116,000-bpd Slagen refinery in
Norway, converting the site into an import terminal.
Total signs Uganda deal for $3.5 billion. Total (NYSE: TOT) and CNOOC signed deals with Uganda and Tanzania for the
construction of a $3.5 billion oil pipeline to ship crude from Uganda to the
coast in Tanzania.
California considers setback distances, fracking ban. The California legislature is considering a bill that would eliminate fracking
statewide and implement mandatory 2,500-foot setback distances for
New York pension fund divests from oil sands. New York state's pensions fund is restricting investment in six Canadian oil sands
companies over their lack of an energy transition plan. The companies
include Imperial Oil (TSE: IMO), Canadian Natural
Resources (TSE: CNQ), MEG Energy Corp. (TSE: MEG), Athabasca Oil
Corp. (TSE: ATH), Japan Petroleum Exploration (TYO: 1662),
and Cenovus Energy (TSE: CVE), along with Husky Energy,
which was recently acquired by Cenovus.
DUCs may never be completed. The big backlog of drilled but uncompleted wells
might be overstated. The United States' true DUC count could be
much lower, given that many of the wells included in the EIA's DUC count are
dead in the water and many years old, likely never to be completed.
Investors see growing risks from Big Oil's bet on
plastics. A new report finds that the oil industry's big foray
into petrochemicals carries financial risks. â€œInvestors are likely to find that
companies' reliance on plastics to recoup lost demand for fossil-based energy
is problematic,â€ the report said.
Will shale trigger another price crash? A year after the pandemic and the disagreement
within OPEC+ over supply management crushed oil prices, the industry finds
itself at an all-too-familiar crossroads: Will OPEC's bet that U.S. shale's "drill,
baby, drill" is gone forever be right this time?
TC Energy eyes wind for its pipelines. TC
Energy (NYSE: TRP) said it
may invest as much as $1 billion in wind power to
help decarbonize its oil pipeline system in the U.S.
Oil buyers look to Asia. Brent's premium to Dubai is at its highest level in 16
months. "There's much cheaper crude, and a lot of it coming from the Middle
East," Grayson Lim, a senior oil analyst at FGE told Bloomberg. "Those Brent-linked cargoes will need to be
offered at a huge discount for buyers in the region to snap up the barrels."
India's oil demand in question with quiet streets. Visuals of empty streets in normally teeming Indian cities
has raised doubts about the country's oil demand.
The post Oil Prices Rangebound As The Industry Battles To Recover first appeared in Oilprice.com on April 13, 2021.
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