January 04, 2020 /07:00AM / By Tom Kool of
Oilprice.com / Header Image Credit: Oilprice
Oil prices rose on Friday morning following the
assassination of a top Iranian official by the United States on Iraq
Oil prices spiked immediately after the U.S. killed Iranian General
Qassem Soleimani on Thursday. Soleimani, as head of the Quds force of the
Revolutionary Guard, was a very powerful Iranian official, often likened to a
shadow foreign minister. Iran promised "severe retaliation," and many analysts
fear a broader regional war. At a minimum, attacks on U.S. military
installations in the Middle East are expected. Brent prices shot up by more
than 3 percent.
oil workers leaving Iraq. Dozens of workers in the southern oil
fields in Iraq are leaving the country and the American embassy urged all U.S. citizens to
leave the country immediately. Iraqi officials said production would not be
risks? The big question at this point is how Iran might
respond. Rapidan Energy said that the vessels and oil facilities are at risk. "[T]he risk of another major attack against Gulf oil vessels or facilities is
now above 50%," the firm said.
markets sink on attack. Equity markets fell after the attack on
Soleimani, interrupting the bullish mood for stocks. The conflict could "dash
market hopes for a rebound of the global economy that is still to emerge from
under the cloud of the U.S.-China trade war," Valentin Marinov, head of G-10
currency research at Credit Agricole SA, told Bloomberg. "Risk sentiment should remain fragile also because central
banks may be slow to respond or simply no longer have the arsenal to respond in
an adequate way."
billion in shale debt due in next four years. Roughly $200
billion in North American oil and gas debt will mature in the next four years,
according to the Wall Street Journal, which includes $41 billion due this
year. More than 200 companies have already filed for bankruptcy since 2015, but
that number will continue to rise as drillers struggle amid the crushing weight
of debt. The huge obligations will force drillers to cut spending, potentially
bringing the shale boom to a halt.
oil production hits post-Soviet record. Russia appears to be
defying the OPEC+ deal, ramping up production to a new post-Soviet record high last year. According
to Bloomberg, output exceeded its agreed upon limit in 9 out of 12 months in
production declines. OPEC production declined in December to
29.55 mb/d, according to Bloomberg, down 90,000 bpd from a month earlier.
Israel and Cyprus agree on gas pipeline. Greece, Cyprus and
Israel signed a deal to build
a 1,180-mile subsea pipeline that will move natural gas from the Eastern
Mediterranean to Europe. The agreement aims to have a final investment decision
by 2022, with the pipeline aiming for completion by 2025. The project is
opposed by Turkey, however.
with new IMO compliant fuel. Reuters reports that some routine tests have turned up problems with new
low-sulfur fuels. The new IMO rules took effect on January 1, requiring lower
sulfur concentrations. The rules are expected to cut 77 percent of sulfur oxide emissions from the
sector. But the implementation could be a bit rocky at first. Marine fuel
suppliers "are struggling with sediments," a specialist told Reuters.
to import 90 U.S. LNG cargoes. India's state-owned utility
GAIL plans on importing 90 LNG cargoes in FY 2020-2021, double the volumes from
the current fiscal year, according to S&P Global Platts.
Oil falls again on bad Guyana result. Tullow
Oil (LON: TLW) briefly plunged by 20 percent after it
reported disappointing drilling results in Guyana, before seeing its share
price rebound to post just a 6 percent loss on Thursday. "Expectations were
high going into this," David Round, an analyst at BMO Capital Markets, told Bloomberg. "There will be a level of disappointment about the size." The bad result comes just weeks after Tullow lowered its forecast for its Ghana
operations, sending its share price careening down. Tullow is now trading at
about $60 per share, down by more than two-thirds from over $200 per share as
recently as November.
Big Oil the next Big Tobacco? Scrutiny on fossil fuels
amid a worsening climate crisis could make oil as toxic as Big Tobacco. But there are lessons to be learned from the tobacco
industry's reckoning, such as spending cuts and an increase in investor
best 2019 performer. Hess (NYSE: HES) was
the best performer in the S&P 5000 Energy Index last year, rising by
65 percent. This is largely due to its success as a partner of ExxonMobil
(NYSE: XOM) in Guyana. The first phase of production came
online in December.
in Norway reach 42 percent. EVs captured 42 percent of the market in Norway last year, up from 31 percent
the year before. Norway was already the world's largest EV market per capita,
and the country aims to have zero emissions cars make up all new sales by 2025.
pipeline glut. Five new oil pipelines are set to open in the
Permian in the next two years, which could add as much as 3.5 mb/d in midstream
capacity on top of the current 6 mb/d, way above upstream production, which currently
stands at 4.72 mb/d. Pipeline companies are in cutthroat competition, cutting
rates to attract interest. "There is a chance that some of the projects would
get canceled or consolidated and that would depend on shipper commitment," Sandy Fielden, director of research for Morningstar Inc., told Bloomberg.
delivers record 112,000 cars, meets sales goal. Tesla (NASDAQ:
TSLA) delivered 112,000 vehicles globally in the fourth quarter,
topping Wall Street estimates. That allowed the company to meet its sales goal
of 360,000-400,000 for the year.
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