Wednesday, January 15, 2020 / 07:07AM / By Tom Kool, News Editor, Oilprice.com / Header Image Credit: Oilprice
In
today's 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.
Chart of the Week
The EIA expects 42 gigawatts of new electricity capacity to
come online in 2020, with solar and wind accounting for nearly 32 GW of that
total, or 76 percent.
Oil prices erased all of the gains accrued after the U.S.-Iran clash, and
prices have even fallen below levels seen prior to the Soleimani assassination.
With war apparently off the table, at least for now, the market has shifted its
sights back to weak demand and oversupply. The IEA and OPEC will provide
updated data later this week that could offer more clues into the state of the
market.
Nord
Stream 2 could be pushed off until 2021. U.S. sanctions
could delay the Nord Stream 2 gas pipeline until next year,
Russian President Vladimir Putin said over the weekend. However, he insisted it
would be completed.
Coal
plants shuttering at fast clip. U.S. coal plants shut down at the second-fastest rate on record in 2019,
even as the Trump administration tries to prop up the industry. The U.S. saw 15
GW of shuttered coal plants last year, second only to the 19.3 GW shut down in
2015.
Weak
Chinese demand could drag down oil. China's oil demand may
only grow by 2.4 percent this year, down from 5.2 percent in 2019. The slowdown
coincides with economic deceleration. Some analysts see oil prices falling as the year wears on.
Dry bulk shipping rates at 3-year low. The
global dry bulk freight market is surprisingly weak, with rates at a 3-year
low. "The weakness in the market now is something unlike we have ever seen," a
market participant told S&P Global Platts.
Exxon
considering sale of Equatorial Guinea assets. ExxonMobil
(NYSE: XOM) is considering a sale of its oil assets in
Equatorial Guinea, and it could be replaced by a Russian company, according to the WSJ.
EQT
to write down $1.8 billion. EQT (NYSE: EQT),
the largest natural gas producer in the U.S., said that it would write down $1.8 billion in assets in the Marcellus shale.
Oversupply and weak prices are ravaging Appalachian gas producers. Recently, Range
Resources (NYSE: RRC), another Marcellus-focused driller,
scrapped its dividend. Moody's downgraded EQT's credit rating to junk.
Trump admin threatens Iraq not to kick out troops. The
U.S. government is threatening Baghdad not to kick out American troops from the
country. The State Department threatened to shut down Iraq's access to its own bank
account held at the Federal Reserve Bank of New York, a move that could cripple
Iraq's financial system.
U.S.
shale sector set for consolidation. A new report from
Enervus predicts an active year for M&A in the shale sector. "Investors who
funded the shale revolution over the last decade have become vocal in
advocating for payouts and cut back on providing new capital. That flowed
through to limited M&A and a negative reaction to deals for much of the
year," said Andrew Dittmar, Enverus senior M&A analyst. "However, we saw an uptick in December in the pace of deals and more positive
investor reactions to acquisitions. That should bode well for M&A in 2020."
China
won't cut EV support again. China said that it would not continue to pare back support for
EVs this year, as had been expected. EV sales slowed dramatically in China last year, but the entire auto
market contracted as well.
GM
to electrify the hummer. GM (NYSE: GM) said it would bring back the hummer, but in an electrified
version. The EV hummer is expected to go on sale in 2022, but it will likely
only be sold in small volumes.
Germany's
EV shift puts 400,000 jobs at risk. More than 400,000 jobs are at risk in Germany as major automakers plan a massive
transformation to focus on EVs. EVs require fewer parts, and many could be
imported.
Trump
admin to approve LNG-trains. The Trump administration is
set to approve the shipment of LNG by freight train. The move
would allow gas drillers to move more gas, as pipelines face bottlenecks.
Flaring
doubles in Permian. The rate of flaring has more than doubled in the Permian since 2017.
Renewables
spending needs to double. Investment in renewable energy
needs to double over the next decade in order to hit climate
targets, according to the International Renewable Energy Agency. "Renewable
energy solutions are affordable, readily available and deployable at scale," Irena Director-General Francesco La Camera said in the statement.
Suriname
oil rush. A new oil discovery in Suriname by Apache (NYSE:
APA) and Total SA (NYSE: TOT) could set off a scramble for the country's oil.
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