May 05, 2020 / 8:54 PM / by Tom Kool of Oilprice.com / Header
Image Credit: Pulse News Mexico
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
U.S. refinery runs have collapsed as demand has
declined sharply. Refinery runs fell to 12.8 mb/d in the week ending on April
17, rebounding to 13.2 mb/d on April 24, but still 21 percent lower than the
five-year average for this time of year.
Motor gasoline has been hit hardest. Gas demand fell to 5.1
mb/d in early April, a thirty-year low.
Jet fuel production from refineries declined to 800,000 bpd
for the week ending on April 24, down 51 percent from the five-year
Parsley Energy (NYSE: PE) suspended
all new drilling and fracking. First quarter production was up 57 percent
year-on-year. Parsley cut spending for the full year to below $700 million,
with more than half of that already spent.
Marathon Petroleum (NYSE: MPC)
posted a net loss of $9.2 billion in the
first quarter. Diamondback Energy (NASDAQ: FANG) said it would curtail
production by 10 to 15 percent in May.
Tuesday May 5, 2020
Oil prices shot up on Tuesday on signs
of rebounding demand and supply shut ins. President Donald Trump was notably
excited by the news, tweeting the demand was returning. But it may not only be
demand that is driving oil prices higher. DNB analyst Helge Andre Martinsen highlighted that "We are
currently seeing accelerating oil-production curtailments outside the OPEC+
countries,". He went on to suggest that the supply side of global oil markets "is about to change quite quickly."
output down 400,000 bpd. Roughly a third of North Dakota's
oil production has been shut in so far, down 400,000 bpd since March. The
Bakken has some of the highest costs out of all U.S. shale, with an average
breakeven price of about $46, according to Reuters and Deutsche
easing boosts demand. Data is still scarce, but the
loosening of stay-at-home orders across the world are thought to be boosting
demand. Marco Dunand, the co-founder of oil trader Mercuria said that the oil
market has "turned a corner," according to the FT. "But if we have a
second wave of pandemic then all bets are off," he added.
maintains dividend. Total (NYSE: TOT) kept its dividend stable
despite a 35 percent decline in profit. Earnings fell to $1.78 billion, which
still beat analysts' estimates. The company's production is expected to decline
by 5 percent in 2020. Total also said that it plans on shifting to net zero emissions
cuts LNG outlook. Cheniere Energy (NYSEAMERICAN: LNG) said
that it expects global LNG investment to slump this year and next year. The
company reiterated its earnings, a positive sign. "We're seeing one of the
worst LNG markets test Cheniere's cash flow durability and so far its proving
to be as resilient as designed," analysts at Credit Suisse said.
oil prices rally on supply shut ins. Canadian oil producers
were quick to curtail production several weeks ago and the price of Western
Canada Select rallied to $19 per barrel
as of Tuesday, sharply narrowing its discount to WTI. Imperial Oil
(TSE: IMO) cut production at its Kearl mine from 220,000 bpd to
150,000 bpd, for instance.
kills off oil production cuts. After weeks of speculation,
the Texas Railroad Commission will not vote to order
mandatory production cuts. Two of the three commissioners opposed the
signs large battery deal. Southern California Edison completed a deal to provide
770 megawatts of battery storage capacity, the largest battery contract on record.
shut ins raise questions. "We are on the precipice of
forced well shut-ins totaling 15 to 20 million barrels of oil per day," Clay
Williams, chief executive officer for National Oilwell Varco Inc., told
Bloomberg. However, there are lots of variables regarding
the strategy and the economics of widespread shut ins, including how much
production will be lost, which wells to shut, which to bring online, and wells
may be damaged in the process.
renewables beat coal for 40 days. For a record 40 straight
days, renewable energy has generated more electricity
than coal in the United States. Renewables may surpass coal on an annual basis
this year for the first time ever.
posts loss, maintains dividend. In a sign of the diverging strategies
between some oil majors, ExxonMobil (NYSE: XOM) kept its
dividend intact despite rising financial pressure. The supermajor posted its
first loss in three decades. The decision comes even as Royal Dutch
Shell (NYSE: RDS.A) and Equinor (NYSE: EQNR) cut their
dividends. "I don't look to what Shell is doing to decide our dividend policy," Exxon's Darren Woods defensively on an earnings call.
Buffet regrets $10 billion Occidental deal. Warren Buffet
said he regretted the $10 billion that Berkshire Hathaway put into Occidental
Petroleum (NYSE: OXY). "If you're an [Occidental] shareholder
or any shareholder in any oil-producing company, you join me in having made a
mistake," he said.
foreign reserves fall. Saudi Arabia's foreign reserves fell by $24 billion in
March, the largest single-month decline in at least 20 years. Investors are
betting that the financial pressure on several Persian Gulf countries will weaken their currency
XL could be delayed by a year. A recent court ruling could
delay the Keystone XL pipeline by another year. The court decision could also affect pipelines across the
Related News - Previous Oilprice Intelligence Report
- A Rare Week
of Optimism For Oil Markets - OIR 010520
Season Will Be A Bloodbath For Oil Producers - OIR 280420
- A Very
Brief Oil Price Rebound - OIR 240420
- Oil Price
Mayhem - Is The Market Broken? - OIR 210420
- Oil Prices
Fall Towards $15 for WTI and $25 for Brent As Storage Nears Capacity - OIR
- Oil Prices Crash Towards $30 Despite Historic Cuts - OIR 100420
- Have Oil Bulls Got It Wrong? - OIR 070420
- Global Oil Production Is Set To Collapse - OIR 310320
- Oil Tumbles Towards $20 As Glut Grows - OIR 270320
- The Oil
Price Rebound Won't Last - OIR 240320
Related News - Oil and Gas
Oil Majors Could Adapt to Low Prices
- Low Oil
Prices, Record Volatility Will Hasten US Energy Defaults
- Oil Price Crash
and Nigeria's Economy: Unlocking the Opportunity in Crisis
- Softness of
The Oil Market Today and Impact on Nigeria
- Ahead of
Tomorrow On WebTV: Discussions on COVID 19: Implications for The Nigerian
Prices of PMS, AGO, HHK and Cooking Gas - March 2020
- A Massive
Wave Of Shut-Ins Fails To Halt Oil Price Crash
- Oil Prices
Hit $26.45 for Brent Crude
Bargain Hunters Are Stocking Up On Ultra Cheap Crude Oil
Deal Reduces Downside Risks, Surplus Not Eliminated
Must Deregulate Its Petroleum Sector Post COVID-19 - Boniface Chizea
- IEA: Huge
Oil Build Threatens To Fill Up Global Storage Within Weeks
- Oil Hits
$20 for WTI and $30 for Brent After API Reports Mega Crude Inventory Build
- Oil Falls
As Saudi Arabia Launches New Price War With Record Discounts
- Oil Prices
Plunge On Grim IMF Economic Forecast