Tuesday, February 25, 2020 /10:45
PM / By Tom Kool of Oilprice.com / Header Image Credit: The Economic Time
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 EIA forecasts that the U.S.
will end the 2019-2020 winter heating season with 1,935 billion cubic feet
(Bcf) of natural gas in storage, or 12 percent higher than the five-year
- The EIA attributes the inventory build to a mild winter
season and strong production.
- The agency says that in the upcoming "injection season" (April through October), gas inventories could rise to 4,029 Bcf, which will be
a record high.
- Canadian police dismantled a blockade at a Canadian
National Railway (NYSE: CNI) site outside of Toronto. TC Energy's
(NYSE: TRP) Coastal GasLink pipeline has sparked protests
across the country.
- Petrofac (LON: PFC) warned that revenues would
continue to decline this year as it failed to win new orders in Saudi Arabia
and Iraq, two key markets.
- Equinor (NYSE: EQNR) scrapped plans for an oil
project in the Great Australian Bight, a pristine part of Australia's southern
coastline. The Norwegian oil company said the project is "not commercially
Tuesday, February 25, 2020
Oil prices fell again in early trading on Tuesday, following a meltdown a day
earlier. The spread of the coronavirus to several other countries has reignited
fears of a global economic slowdown while
OPEC+ seem reluctant to increase production cuts.
Oil demand could fall further. The IEA said that its oil
demand forecast is at its lowest in a decade, and it could fall further. "We
certainly see the lowest oil demand growth in the last 10 years and we may need
to revise it ...downwards," IEA executive director Fatih Birol told Reuters at an energy
conference in London. The agency sees demand rising by 825,000 bpd in 2020,
although suffering an outright contraction of 435,000 bpd in the first quarter.
Resources scraps $15 oil sands project; could be Canadaâ€™s last.
Resources (TSE: TECK.A) pulled the plug on its $15.5 billion
oil sands project, citing a combination of headwinds, including the lack of
pipelines, low oil prices and the prospect of weak demand in the long run. It
could also mean that no new greenfield oil sands projects move forward again.
"This may be the nail in the coffin," Laura Lau, an asset manager at Brompton
Corp. in Toronto, told Bloomberg. "I would expect
some smaller projects would have a better chance going through."
Italy and South Korea hit by virus. The number of cases in
South Korea neared 1,000 overnight, and the U.S. warned against non-essential
travel to that country. Korea has emerged as a larger buyer
of U.S. crude oil this year. In 2019, South Korea bought 375,000 bpd from the
United States. The Iranian government is struggling with credibility
in its response as the number of cases rise. In Italy, several small towns were
considers canceling LNG contract. In a sign of a worsening
global LNG glut, Pakistan is considering canceling two long-term
contracts because spot prices are so much cheaper. State-owned Pakistan LNG
Ltd. has two contracts with Eni (NYSE: E)
hits 15-year low. ExxonMobil (NYSE: XOM) saw its
share price fall to its lowest level in 15 years on Monday, falling below $57
per share. Next week, CEO Darren Woods is scheduled to present the oil major's
long-term strategic plan to investors.
outlines climate initiatives. JPMorgan Chase announced a range of
climate initiatives on Tuesday, including restrictions on financing for coal
mining, Arctic drilling as well as $200 billion in financing for sustainable
projects. Environmental groups said the moves are welcome, but insufficient.
JPMorgan is one of the largest financiers of fossil fuel projects.
retreat from energy sector. U.S. energy stocks have
underperformed the S&P 500 by the largest margin since the Pearl Harbor
attack in 1941, the FT reports. The Wall
Street Journal also reported on the phenomenon,
noting that the energy sector has been the worst-performing sector of the
S&P500 for the past decade. "Valuations are telling us that investors are
losing confidence in the oil and gas sector," Nick Stansbury, head of commodity
research at the U.K.'s largest asset manager Legal & General Investment
Management, told the WSJ.
could be worse than thought. The oil and gas industry could
be responsible for a far larger share of methane emissions than previously
thought, according to new research. Methane emissions
from fossil fuels could actually be 25 to 40 percent higher.
U.S. shale to slow. U.S. shale production growth could slow
to 600,000 to 700,000 bpd this year and grow by just 200,000 bpd in 2021,
according to Schlumberger (NYSE: SLB). Notably, he does not see the
growth rate picking up again. "Shale production growth will go to a new normal
... unless technology helps us crack the code," Olivier Le Peuch told Reuters.
to invest $110 billion in shale gas. Saudi Aramco said that it would invest
$110 billion in the Jafurah gas field, which could hold as much as 200 trillion
cubic feet of unconventional gas.
Supreme Court heard arguments on Atlantic Coast Pipeline. The
Supreme Court heard arguments on Dominion Energy's (NYSE: D) Atlantic
Coast Pipeline, which would carry Marcellus shale gas to the U.S. southeast.
The case hinges on permits granted to the project that would allow it to cross
the Appalachian Trail. The justices seemed inclined to favor
reserves decline. Chevron (NYSE: CVX) replaced just 44 percent of
the oil and gas it produced last year, according to a regulatory filing. That
was the worst performance in replacing reserves since 2010 for the oil
- OPECplus Is In No Rush To Rescue
Oil Markets - OIR 210220
- Uncertainty Brings An End To The
Oil Price Rebound - OIR 180220
- Average Prices Of PMS, AGO, HHK
and Cooking Gas - January 2020
- Gas Flaring: A Never-Ending Dark
- Oil Markets Bounce Back As
Coronavirus Fears Fade
- The Metal Trump Wants More Than
- OPECplus Concludes Its Joint
Technical Committee Meeting: Any Rescue for the Oil Market?
- OPEC Production Declined By
510,000bpd in January 2020
- Oil Up Despite Demand Fears -
- Oil Falls Again As OPECplus Hits
- Nigeria to Draft Petroleum
Industry Bill from Scratch
- The Most Exciting Oil Plays Of
- Can OPEC Stop Oil Prices From
- Coronavirus Could Push Global
Oil Market into Surplus
- Oil Market Falls Deeper Into
Abyss - OIR 310120
- OPEC Halts Slide In Oil Prices -
- The "Twin Threats"
Facing Big Oil
- OPEC Mulls Extending Oil
Production Cuts Through End-2020
- Oil Bears Are Back As Demand
Fears Go Viral
- Four Promising Oil Trends To
Watch In 2020; Nigeria Giving Majors Some Pushback