October 11, 2019 /07:54PM / By Tom Kool of Oilprice.com
/ Header Image Credit: Oilprice.com
Oil prices spiked on Friday morning as trade war negotiations
appeared to take a positive turn while Iran reported an oil tanker attack as
tensions in the Middle East soar.
Friday, October 11, 2019
Oil prices rose in early trading on Friday on hopes that the U.S.-China trade
negotiations might result in a limited breakthrough. President Trump said that
talks on Thursday went well, and the two sides resume negotiations on Friday.
An attack on an Iranian tanker (more below) also bolstered oil prices.
cuts demand forecast. The IEA cut its demand forecast once
again to just 1 mb/d in 2019 and 1.2 mb/d in 2020, a cut of 100,000 bpd for
both. The agency also raised its forecast for supply growth from non-OPEC
sources by 400,000 bpd.
says tanker was attacked. Two missiles apparently struck an Iranian oil tanker traveling through the Red
Sea off the coast of Saudi Arabia on Friday. Oil leaked into the Red Sea. The
incident could rachet up tensions once again between Iran and Saudi Arabia.
Natural Resources upgraded, Continental downgraded. Pioneer
Natural Resources (NYSE: PXD) rose by more than 2 percent on Thursday after Mizuho upgraded the
company to Buy. Mizuho analyst Paul Sankey said the company has shifted its
strategic focus to free cash flow. Meanwhile, Mizuho downgraded Continental
Resources (NYSE: CLR) to Neutral over spending concerns and
long-term quality of acreage.
SA wins big in Brazil auction. Total SA
(NYSE: TOT) and partners won an offshore block in a Brazilian offshore auction, agreeing to
pay $978 million.
could freeze energy tariffs. Argentina's front-runner for
president Alberto Fernandez is under pressure from his party to freeze natural
gas and power tariffs, and also to peg oil product prices to pesos instead of
dollars. Some economists warn that doing so would deter investment in the Vaca
Muerta shale. The number of frac stages have already fallen by 25 percent since
current President Mauricio Macri implemented temporary price freezes, according
to S&P Global Platts.
awards $13 billion to three companies for Mozambique. ExxonMobil
(NYSE: XOM) awarded $13 billion to three companies as it seeks to
develop its LNG project in Mozambique.
Aramco to publish prospectus by end-October. Saudi Aramco
plans to offer 1 or 2 percent of the company and could publish a prospectus as soon as October 25.
unrest disrupts oil. Ecuador's President Lenin Moreno is
fending off nationwide protests after his decision to remove fuel subsidies. He
moved his government out of Quito, temporarily decamping to Guayaquil.
Protestors seized some oil installations, disrupting 165,000 bpd, or nearly a third of production. On
Wednesday, Ecuador's state-owned oil company declared force majeure on trading operations. The cuts
came as part of IMF prescriptions in conjunction with $4.2 billion in loans.
U.S. West coast refiners are most exposed to the disruption, such as Marathon's
(NYSE: MPC) refineries in L.A. and San Francisco.
boss likes Texas. Chevron CEO (NYSE: CVX) Mike
Wirth had disparaging words for his company's home state of California, while
praising Texas. "The policies in California have become pretty restrictive on a
lot of business fronts, not just the environment," Wirth said. "I don't know
there's a better place in the world for us to do business than" Texas and the
Gulf Coast, he said at an event in Houston. Chevron's home may be in
California, but its largest office is in Houston, which continues to grow with
the company's increased focus on the Permian Basin. Wirth also said that
Chevron will cut flaring rates.
slashes jobs. Halliburton (NYSE: HAL) announced that it would cut 650 jobs across four U.S.
states this week. The oilfield services company blamed the slowdown in shale
50 largest oil companies to increase supply by 7 mb/d. The
world's 50 largest oil companies have plans to increase oil production by 7
mb/d over the next decade, according to The Guardian. The research suggests that the
companies could add 35 percent more between 2018 and 2030 compared to the
previous 12 years. The Guardian notes that these plans stand in direct contradiction
to greenhouse gas emissions reductions required to avoid the climate
gains higher OPEC quota. OPEC granted Nigeria a larger production quota as part of the
curtailment agreement with non-OPEC countries. Nigeria has been allocated 1.774
mb/d, up from 1.685 mb/d previously.
oil traders bearish on prices. Vitol Group and Trafigura,
two of the world's largest oil traders, see oil prices languishing in the $50s next year. â€œWithout some resolutions to the trade wars then we
remain a little bit bearish, a five handle for us,â€ said Russell Hardy, chief
executive officer at Vitol.
Reliance to resume Venezuela oil loadings. Indian refiner
Reliance Industries Ltd. is set to resume purchasing oil from Venezuela in October
after a four-month pause, according to Reuters.
McMurray goes bust. Fort McMurray in Alberta was once the
booming capital of Canada's oil sands industry. Now it has gone bust.
blackout; Tesla tells car owners to charge up. PG&E
(NYSE: PCG) issued a historic pre-planned blackout of nearly a
million people in northern California in order to head off fire risk. Tesla (NASDAQ:
TSLA) sent a message to owners of its vehicles to charge up ahead of
the blackout in order to ensure they can still drive. PG&E's share price
fell nearly 30 percent on Thursday.
on Chinese shipper interrupts LNG. U.S. sanctions on
Chinese shipping company COSCSO could interrupt LNG shipments from Southeast
Asia to China, according to S&P Global Platts. Shipping rates have also gone
through the roof in the wake of the sanctions.
- 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
- Saudi 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
- Fear Of An
Iran War Sends Oil Prices Up - OIR 200919
- The Biggest
Day For Oil In 50 Years - OIR 170919
Prices Of PMS, AGO, HHK and Cooking Gas - August 2019
- Platts: Oil
Could Test $80 After Attacks In Saudi Arabia