Oil Prices Rebound After Major Collapse - OIR 210521

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Saturday, May 22, 2021   /07:00 AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice.com

 


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Oil prices are on course for the largest weekly drop since March, although prices began to bounce back on Friday morning as optimism slowly returned to markets.


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Friday, May 21st, 2021


Oil is heading for the biggest weekly drop since March, following three consecutive days of huge losses. Still, oil recouped some losses on Friday, edging up after getting sucked down with a broader selloff in commodities. 

IEA says no new fossil fuels. The IEA's Net-Zero report dropped like a bombshell midweek. The IEA said that to reach net zero, there should be no new oil, gas, and coal projects. There was no shortage of proponents and critics, but either way, the report could 
influence how investors think about oil.

Asia snubs IEA report. "The report provides one suggestion as to how the world can reduce greenhouse gas emissions to net zero by 2050, but it is not necessarily in line with the Japanese government's policy," a Japanese official told 
Reuters. Officials in the Philippines also said no new fossil fuel investment would be a setback.

OPEC warns against IEA report. "The claim that no new oil and gas investments are needed post-2021 stands in stark contrast with conclusions often expressed in other IEA reports and could be the source of potential instability in oil markets if followed by some investors," OPEC 
said.

U.S. and Iran near deal. The U.S. and Iran have sketched out the broad outlines of a deal to restore adherence to the 2015 nuclear agreement, which would 
include lifting sanctions. "We can now say that we have reached a framework or structure of an agreement," said Iran's deputy foreign minister Abbas Araqchi, according to Argus. Oil prices dropped by more than 2% on the news. 

Qatar cornering LNG market. Qatar is ramping up LNG supply and dropping prices, boxing out LNG projects elsewhere. "Qatar's expansion plan is so huge that there are questions on the need for other supply options," Julien Hoarau, head of EnergyScan, told 
Bloomberg. "It's still the number one, but the U.S. has never been so close, so Qatar needed to move if it wanted to keep its leading position." Qatar has the lowest cost LNG in the world. Bloomberg estimates that 10 U.S. LNG projects may struggle to secure financing.

Another year of canceled LNG projects. Reuters 
reports that 2021 is shaping up to be another year in which many LNG projects are postponed or canceled. 

Europe oil demand rising. European traffic is 
nearing pre-pandemic levels as vaccinations improve and the latest Covid-19 wave recedes. 

India asking LNG suppliers to delay deliveries. Slammed by Covid-19, India's LNG 
importers are asking suppliers to defer deliveries scheduled for May and June. In addition, India's disappearance from the spot market - due to the glut of supply in the country - could drag down spot prices for LNG.

Ford's electric F-150. Ford (NYSE: F) announced details about the new electric F-150. The pickup truck has been the nation's bestselling vehicle for decades, so an all-electric version will be highly anticipated. The new F-150 "Lightning" has a price starting at $40,000, a 230-mile range or 300-mile option. More notable is the fact that the battery can provide backup power to homes in the event of a power outage for as long as three days. Ford secured 
20,000 deposits from interested buyers in less than 12 hours.

Shell sells stake in Philippines gas field. Royal Dutch Shell (NYSE: RDS.A) is 
selling its 45% stake in the Malampaya gas field in the Philippines for $460 million. 

Large methane plume found in Canadian shale. Satellites have 
detected a large methane plume over Canada's Duverney shale basin, adding to growing concerns about methane pollution from oil and gas operations. 

Colonial CEO explains ransom decision. Colonial Pipeline 
paid a $4.4 million ransom to hackers. The company's CEO explained his decision. 

BP hiring spree for offshore wind. In a sign that BP (NYSE: BP) is taking offshore wind seriously, it is aiming to hire 100 people in the UK, and that figure will double by the end of the year. "This is the first step in terms of building our capability in this space," a BP official 
said.

Biden waives penalties on Nord Stream 2 sanctions. The Biden administration 
said that blocking the Nord Stream 2 pipeline, which is over 95% complete, is a long shot. The U.S. waived penalties on sanctions on the project in order to avoid burning goodwill with Germany. The pipeline is expected to be completed later this year. "It is a good moment not only for Nord Stream 2 but also for the U.S.-Germany and the U.S.-Russia relationship," said Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies.

BP and Eni look at merging in Angola. BP (NYSE: BP) and Eni (NYSE: E) are in talks to 
merge their oil and gas operations in Angola. 

Executive order on climate financial risk. A highly-anticipated 
executive order by President Biden was signed on Thursday, directing financial regulators across multiple agencies to begin plans for assessing financial risk from climate change. 

U.S. shale sticking with restraint. An Energy Intelligence 
analysis finds that U.S. shale drillers are staying true to their word to maintain spending restraint, even in the face of higher oil prices. The 20 leading shale firms totaled $4.4 billion in free cash flow as a result. 

California to require Uber and Lyft go electric. California regulators 
adopted rules on Thursday to mandate that 90% of ride-hailing miles come from EVs by 2030.

 

Credit:

The post Oil Prices Rebound After Major Collapse first appeared in Oilprice.com on May 21, 2021.


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Related News - Previous Oilprice Intelligence Report 

1.      IEA Drops Bombshell Report On Oil And Gas - 180521

2.     Oil Prices Rebound as Global Oil Glut Drains - 140521

3.     Panic Buying Sparks Gasoline Shortages - 110521

4.     Oil Markets Optimistic After Brent Flirts With $70 - 070521

5.     Oil Prices Hit 7-Week High on Demand Optimism - 040521

6.     Oil Prices Pull Back After A Big Week - 300421

7.     OPECplus Buoys Oil Despite India Concerns - 270421

8.     Bullish Oil News Offset By New Lockdowns In India - 230421

9.     Oil Prices Down Despite Libya Outage - 200421

10.  Oil Demand Is Finally Bouncing Back - 160421


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