May 07, 2019 06:45 PM / By Tom Kool Editor, Oilprice.com
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.
- The number of drilled but uncompleted wells (DUCs) has
continued to increase, rising to 8,504 as of February 2019, roughly 25 percent
higher than a year earlier.
The completion process includes “casing, cementing,
perforating, hydraulic fracturing, and other procedures required to produce
crude oil or natural gas,” as the EIA
Lion Point Capital, a hedge fund, disclosed a 6.3 percent active stake in Carrizo Oil
& Gas (NASDAQ: CRZO) and said that shareholders of the
E&P would benefit from a merger. BP (NYSE: BP) approved an expansion of its Thunder Horse project, which will add
50,000 barrels of oil equivalent per day by 2021.
Kosmos Energy (NYSE: KOS) said it would sell down its interest in offshore Mauritania and Senegal to
10 percent. Its share price rose by 5 percent on the news.
Tuesday May 7, 2019
Oil prices seesawed at the start of the week, falling initially on Monday after
President Trump reignited the trade war, only to rebound on fears of rising
U.S.-Iran tensions. Oil dropped sharply again in early trading on Tuesday,
following news that Saudi Arabia would send more oil to Asia.
Trump threatens new tariffs on China. The oil
markets are on edge after Trump issued a threat to hike tariffs at the end of this week. He blamed China
for slow-walking trade talks, and said that the 10 percent tariffs on $250
billion worth of goods would rise to 25 percent, while a 25 percent tariff on a
further $350 billion worth of goods would also go into effect.
Iran to restart part of nuclear program. Iran will
restart parts of its nuclear program in response to relentless
pressure from the U.S. and the Trump administration’s own withdrawal from the
2015 nuclear accord. President Hassan Rouhani said that Iran would reduce some
of its “minor and general” commitments. Iran also said it would take “reciprocal
actions” to the U.S. withdrawal from the agreement. The development comes
shortly after the U.S. sent warships to the region as a “message” to
Saudi Arabia said it would step up shipments to Asia. Oil
fell after Saudi Arabia said that it would increase shipments to Asia to offset declines from Iran.
Sources told Bloomberg that India may see an additional 200,000 bpd from Saudi
Nigeria oil outage. Oil facilities in Nigeria’s
Nembe region have been temporarily shut down due to protests. Leaks along the Nembe Creek Trunkline,
one of two major pipelines for Bonny light, had previously forced a shut down.
The latest outage will keep Bonny light under force majeure.
Anadarko switches to Occidental offer. In an
effort to beat out Chevron (NYSE: CVX) in its
pursuit for Anadarko Petroleum (NYSE: APC), Occidental
Petroleum (NYSE: OXY) sweetened its offer by offering more cash
instead of stock. The revised offer of $76 per share will breakdown to
$59-per-share in cash. That offer comes on top of the promise by Berkshire
Hathaway to invest $10 billion into the combined company, as well as the agreement between Occidental and Total SA (NYSE: TOT)
for the French oil company to buy up Anadarko’s African assets for $8.8
billion. On Monday, Anadarko said it was convinced, and announced that the Occidental offer was the
“superior proposal.” It is unclear if Chevron will up the ante.
Barclays under pressure from investors over fossil fuel financing. Asset
managers including Hermes Investment Management, Sarasin & Partners,
EdenTree and Folksam sent a letter to Barclays CEO Jes Staley, calling on the
bank to reduce lending to fossil fuel companies, according to the Wall Street Journal. The letter specifically calls for an end of financing for
new coal and oil sands projects.
IEA: Renewables investment flattened out last year. The
IEA said that investment in renewables stagnated last year. “After nearly two
decades of strong annual growth, renewables around the world added as much net
capacity in 2018 as they did in 2017, an unexpected flattening of growth trends
that raises concerns about meeting long-term climate goals,” the IEA wrote. Last year, the world added 180 GW of renewable energy,
the same increase as the year before and the first time since 2001 that net
capacity additions did not expand year-on-year. The IEA said that level of
growth is only about 60 percent of what is needed for the world to hit its
climate targets in the long run.
Utilities could profit from Green New Deal. While
much of the fossil fuel industry opposes the Green New Deal, the utility
industry could profit from a major policy push towards renewables. Solar and
wind are “great for utility credit quality” because they offer a fixed return
on the assets, according to the analysts led by Andy DeVries, as reported by Bloomberg. Also, any Green New Deal legislation would likely result
in faster deployment of electric vehicles, which could offer a growth market
Keystone XL construction delayed for another year. TransCanada
(NYSE: TRP) said that recent legal setbacks in U.S. courts meant that the company missed
the construction window on the project for this year. TransCanada also said
that it was changing its name to TC Energy Corp.
Jordan Cove LNG hits roadblock. Regulators in
Oregon denied Jordan Cove LNG a water quality permit, which puts the
project in limbo. The project is one of a few proposed LNG export projects for
the Pacific Coast.
Pioneer beats estimates. Pioneer
Natural Resources (NYSE: PXD) beat first quarter earnings estimates, while also announcing that it had sold
its Eagle Ford assets in order to become a pure-play Permian producer.
Pioneer’s share price jumped nearly 2.5 percent on the news.
Turkey to drill in Mediterranean. The U.S. and the
EU have expressed concerns about Turkey’s plans to drill in an area claimed
by Cyprus. A string of major natural gas discoveries over the past decade has
led to a flare up in tensions between Cyprus and Turkey.
Trump to put tariffs on China’s EVs. The Trump
administration is expected to target China’s electric vehicles with tariffs,
and some analysts think the levies will stick around. “I expect that President
Trump will keep tariffs on electric cars as high as he possibly can,” Michael
Dunne, CEO of consultancy ZoZo Go, said at an industry event, according to Bloomberg. “He can see all this
capacity gathering in China, and they’re bound to want to export to the U.S.,
so ‘let’s not make that easy.’”
Has The Oil
Rally Reached Its Limit? - OIR 030519
2. Oil Rebounds On
Saudi Reassurances - OIR 300419
3. Oil Prices Crash
As OPEC Prepares To Boost Supply - OIR 260419
4. Oil Hits 2019
High On Iran Sanctions – OIR 230419
5. Can Saudi Arabia
Still Sway The Oil Market?
6. The Firm Floor
Under Oil Prices - OIR 190419
7. Oil Bulls
Undaunted By OPEC Fears - OIR 160419
8. Average Prices
of PMS, AGO, HHK and Cooking Gas – March 2019
9. Oil Climbs For
Sixth Straight Week - OIR 120419
10. GACN Issues Gas
Purchase Order to Axxela and NGMC Joint Mini LNG Project
11. Smart Money Is
Piling Into Oil
12. Brent Breaks $70
On Libya Violence - OIR 090419
13. Oil Hits $70 On
Libya Unrest, Crisis In Venezuela – OIR 050419
14. Sahara Group
Canvasses Intra-Africa Solution for Petroleum Sector Challenges
15. Axxela Now 100
Percent Owned by Helios
16. 5.32bn Litres of
PMS Imported Into Nigeria in Q4 2018 - NBS
17. Oil Hits 2019
High On Shale Slowdown - OIR 020419
18. Oil Breaks $60
As Bullish News Mounts - OIR 290319
19. Sahara Group
Advocates Adoption of Uniform Petroleum Products Standards in Africa
20. The World's
Largest Oil Company And Petrochemical Company Merge