Wednesday, November 20, 2019
/07:26 AM / By Tom Kool of Oilprice.com / Header Image
Credit: Oil Price
Today, 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
- The Trump administration has dramatically increased the
number of waivers given to small oil refiners, allowing them to get out of
ethanol blending requirements.
- The waivers resulted in a much larger portion of renewable
fuel supply being exempted from federal mandates. The EPA prior to 2016 only exempted between 1 and 2
percent of the mandated supply. That rose to a peak of 9.4 percent in 2017.
- The exemptions wrecked the market for renewable identification
numbers (RINs), the credits that refiners buy and sell to meet federal
requirements. Lower prices and weaker demand for ethanol have also forced some
ethanol producers out of business.
- The energy sector plunged on Monday on lower oil and
natural gas prices. A mild weather forecast hit gas producers especially hard.
Some of the worst performers included Callon Petroleum (NYSE:CPE) -9.8%; Chesapeake
Energy (NYSE: CHK) -8.5%, Southwestern Energy (NYSE: SWN) -8.3%; Range
Resources (NYSE: RRC) -10.6%; EQT (NYSE: EQT) -6.6%; and Antero Resources
(NYSE: AR) -9.7%.
- Teekay Tankers (NYSE: TNK) received a double upgrade
from Bank of America Merrill Lynch, with analysts arguing crude tanker markets
are currently in the "early stages of a robust recovery."
- Gulfport Energy (NASDAQ: GPOR) said
it was suspending its stock buyback program and slashing its workforce by 13
Tuesday, November 19, 2019
Oil prices fell at the start of the week on fears of ongoing oversupply and a
more pessimistic outlook on the trade war. The trade negotiations continue to
drive market sentiment and an agreement is looking increasingly unlikely.
shale drillers to slash spending. U.S. shale drillers are
set to cut spending by around 13
percent next year, according to an estimate from Cowen & Co. Stubbornly low
prices, financial stress and pressure from shareholders for cash flow are
forcing shale E&Ps to cut capex and lay off workers.
rocked by protests over fuel hike. Iran was rocked by protests after the
government announced fuel price increases. The price increases come as U.S.
sanctions have crippled Iran's oil production and exports.
gas prices plunge on warmer weather. Natural gas prices
fell by 4.5 percent on Monday, and dipped at the start of trading on Tuesday,
due to forecasts for mild
temperatures. "The lack of significant cold in the upcoming period is bad news
for a market dependent on continual, stronger-than-normal heating demand to
keep oversupply at bay this winter," wrote analysts at Gelber & Associates
in a Monday note.
Arabia narrows IPO to domestic-only offering. Saudi Aramco
will proceed with a
domestic-only IPO, selling 1.5 percent of the company and aiming for a valuation
between $1.6 and $1.7 trillion. The IPO will now depend on local investors, and
lending standards have been loosened so that investors can borrow money in
order to buy into the IPO. "Institutional investors are unlikely to find this
valuation range attractive," analysts at Sanford C. Bernstein said in a
research note Sunday.
launches electric mustang SUV. To much fanfare, Ford (NYSE: F)
debuted an electric SUV under the Mustang brand. The Mustang Mach E will go on
sale next year. "We've pushed all our chips to the middle of the table," the
company's chairman, William C. Ford Jr., said in an interview with the New York Times. "I hope
this will show we are now deadly serious about electrification."
administration suspends production on 130 plots of land.
Following challenges by environmentalists, the U.S. Bureau of Land Management
in late September suspended drilling
operations on 117 plots of leased land in Utah while also restricting the sale
of another 130 tracts due to litigation. The issue hinges on whether or not BLM
adequately considered greenhouse gas emissions. The issue could be just the tip
of the iceberg. "It is potentially a BLM-wide issue," Jayni Hein, natural
resources director at the Institute for Policy Integrity at NYU School of Law,
told InsideClimate News. "It could have the effect of suspending even more
leases across the West, and not just for oil and gas, for coal as well."
slump hits economy. The slowdown in U.S. shale drilling is dragging down other parts
of the manufacturing sector. Industries in which drillers are customers, such
as steel, are feeling the impacts of the slower pace of drilling. U.S. Steel
(NYSE: X) saw its sale of steel pipes decline by 17 percent in
the third quarter, year-on-year.
to invest 4 billion euros in Berlin factor. Tesla (NASDAQ:
TSLA) announced that it would
spend 4 billion euros to build a new factory in Berlin, a facility capable of
producing 150,000 cars annually. But that plan is a small fraction of the 60
billion euros that Volkswagen said it would spend on EVs over the next five
African oil company makes large discovery. The first
independent African oil company announced a major deepwater discovery in
Ghana, despite no history of exploration. The Springfield Group said it made
two discoveries totaling 1.2 billion barrels of oil, making it bigger than the
famed Jubilee field discovered more than a decade ago.
in Iraq affect Basra. Protests in Iraq blocked roads leading to
the country's largest port in Basra, from which much of Iraq's oil is exported.
They also blocked roads leading to the Zubair oil field, a 400,000 field
operated by Eni (NYSE: E).
Street banks miss Aramco bonanza. Major Wall Street banks
including Goldman Sachs (NYSE: GS) and Morgan Stanley
(NYSE: MS) are set to miss out the tens of
millions of dollars of promised fees from helping launch the Aramco IPO. Now
that the company will only be offered on a domestic Saudi exchange, Saudi banks
will likely be the only beneficiaries.
leak affected 10x area originally thought. The spill of the
Keystone pipeline has impacted almost 10 times the amount of land
as first reported.
Prices Of PMS, AGO, HHK and Cooking Gas - October 2019
- Five (5)
Steps To Subscribing To Saudi Aramco Initial Public Offer; Sets A
Valuation of $1.7trn
- Why Isn't
Winter Pushing LNG Prices Higher?
- Oil Markets
Ignore Worrying OPEC Projections
Litres of PMS Imported Into Nigeria in Q3 2019 - NBS
- The EIA Is
Grossly Overestimating U.S. Shale
- The One
Factor Driving Today's Oil Markets
- Why 2020
Could Be A Crisis Year For Refiners
- Can Saudi
Arabia Hold OPEC Together?
Markets: Deja Vu As The Trade War Talks Flatter To Deceive
Suspends Petroleum Products Supply To Filling Stations Within 20
Kilometers To All Borders