May 31, 2019 07:00 PM / By Tom Kool Editor, Oilprice.com
Oil prices continued to
plunge on Friday morning after U.S. President Trump announced new tariffs
against Mexico, forcing its southern neighbor to take harsher measures against
Friday, May 31st, 2019
Oil prices are on track for their largest monthly decline in six months. The
Trump administration exacerbated the selloff with another threat of trade
Trump threatens Mexico with 5 percent tariffs. President
Trump threatened to slap a 5 percent tariff on all goods imported from Mexico
beginning on June 10. In a tweet, he said that the tariff would gradually
increase over time unless illegal immigration stopped. The announcement is also
a serious blow to attempts to pass the NAFTA 2.0 agreement, which needs be
ratified in the national legislatures of Mexico, the U.S. and Canada. “The
decision, understandably, is sending shivers down investors’ spines,” PVM said in a note. “U.S. refiners import roughly 680,000 barrels per day
of Mexican crude. The 5% tariff adds an extra $2 million to the cost of their
Fed under pressure to cut rates. The
escalating trade war, which may now include Mexico, has led bond investors to
bet that the U.S. Federal Reserve will cut interest rates. If the trade war is
not resolved soon, “the patience needed to keep from easing will be severely
tested sometime in the months ahead,” Steven Blitz, chief U.S. economist at TS
Lombard, told the Wall Street Journal. For now, the central bank is not making any
Trump to lift summer E15 ban. The Trump
administration has approved the sale of higher concentrations of ethanol in summer months, a
move that will be welcomed by ethanol producers and American farmers, already
battered by the trade war. Until now, the 15 percent ethanol mix was only
allowed to be sold eight months out of the year over concerns about smog in
summer months. The oil and refining industries oppose the move and will likely
launch legal challenges.
OPEC output falls by 60,000 bpd in May. A
Reuters survey puts OPEC’s production at 30.17 million barrels per day in May,
down 60,000 bpd from April and the lowest figure in nearly four years. Saudi
Arabia increased output by 200,000 bpd, but Iran lost 400,000 bpd.
U.S. delays petrochemical sanctions on Iran. In
what is being interpreted as an attempt to dial back tensions, the Trump
administration has delayed sanctions on Iran’s petrochemical sector.
Oil majors won’t bailout struggling Permian drillers. The
oil majors have said that they will not overpay for indebted and struggling
drillers in the Permian. There is “not always alignment among buyers and
sellers,” ExxonMobil (NYSE: XOM) CEO Darren Woods said Wednesday, a diplomatic way of saying that smaller companies are
demanding too much. He suggested that these companies will be squeezed over
time and will lower their expectations.
U.S. cities aiming for 100% renewables could quadruple. The
number of people living in cities that have 100 percent renewable energy is set
to quadruple this year.
U.S. aims for Arctic lease sale this year. The
U.S. Department of Interior said that it is determined to sell oil leases for
the first time in the Arctic National Wildlife Refuge this year. Interior is
trying to move quickly through the process. But environmental groups promise
legal challenges. “If they really stick with that timeline, then they’re likely
going to be violating several environmental laws,” said Adam Kolton, executive
director of the Alaska Wilderness League, according to Reuters. “This is being rushed faster than any area we’ve ever seen in the
American Arctic and almost any area in the United States. It’s about meeting a
Exxon and Chevron shareholders reject climate resolutions. Shareholders
of ExxonMobil (NYSE: XOM) and Chevron
(NYSE: CVX) rejected resolutions at their annual general meetings that would call for
more climate change oversight as well as corporate governance changes.
to buy U.S. LNG. Bulgaria has agreed to buy LNG from the U.S. for the first time.
Democratic candidates take no fossil fuel money pledge. A growing number of Democratic candidates for
president are pledging to take no money from fossil fuel companies.
U.S. CO2 emissions grew by 2.7 percent in 2018. U.S.
CO2 emissions jumped by 2.7 percent last year, the second largest annual increase since
2000. The increase shows how U.S. climate efforts are falling short.
The top 10 energy companies plan $1 trillion in investment. The
top 10 energy companies are planning $1 trillion in investment through 2030,
according to Bloomberg. Some of those investments could be at risk as governments tighten the
screws on climate policy.
Devon Energy to sells off Canadian assets. Devon Energy
(NYSE: DVN) sold offits $2.8 billion Canadian portfolio to Canadian
Natural Resources Ltd. (NYSE: CNQ).
Renewable energy to beat most fossil fuels on price. Onshore
wind and solar PV will be consistently cheaper than from any fossil fuel source as soon
as 2020, even without subsidies.
Chevron sells North Sea stakes. Chevron
(NYSE: CVX) is largely pulling out of the North Sea in order to focus on U.S. shale. The oil major
agreed to sell most of its North Sea assets to Delek for $2 billion.
White Star Petroleum to file for bankruptcy. White
Star Petroleum will file for bankruptcy protection. The latest casualty in the shale patch fell
victim to the oil price collapse in late 2018, forcing it to stop drilling new
wells this year.
ExxonMobil to return staff to Iraq. After
evacuated staff from southern Iraq a few weeks ago, ExxonMobil
(NYSE: XOM) said it would return workers to the field following security
1. OPEC plus Has
Capacity to Offset Iran Crude Supply Cuts
2. Déjà Vu: Oil
Prices Stuck Once Again – OIR 280519
3. The Silver
Lining Of An Oil Price Crash – OIR 240519
4. 4.87bn Litres of
PMS Imported in Q1 2019 - NBS
5. Oil Markets In
Limbo After OPEC plus Meeting – OIR 210519
East Tensions Put Oil Markets On Edge – OIR 170519
7. 4 Geopolitical
Trends To Watch In 2019 - Oilprice.com
8. Sahara Energy,
Brooge Petroleum Partner To Build Up To 250,000bpd Refinery In Fujairah
9. Oil Jumps On
Middle East Tensions - OilPrice Intelligence Report
10. Average Prices
of PMS, AGO, HHK and Cooking Gas – April 2019
11. Shell Docked As
Nigerian Oil Community Wins Court Judgment in The UK
12. Oil Supply
Shortages Countered By Trade War – OIR 100519
13. Saudi Exports
Send Oil Prices Falling – OIR 070519