Tuesday, November 03, 2020 /10:18 PM / by Josh Owens of
Oilprice.com / Header Image Credit: 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.
Chart of the Week
- OPEC is on track to earn $323 billion in net oil export revenues this
year, the lowest in 18 years.
- In 2019, OPEC earned $595 billion in export revenues. Back
in 2012, the group took in $1.2 trillion.
- Brent averaged $71 per barrel in 2018, $64 in 2019, and is
on track to average $41 in 2020.
- Chevron (NYSE: CVX) again delayed the restart of its Train 2 at its Gorgon LNG
project in Australia, which has been offline since May for maintenance.
- ExxonMobil (NYSE: XOM) wants
Australia to give more aid to refineries after BP (NYSE: BP) said
it would shut its refinery in the country.
- ConocoPhillips (NYSE: COP) was upgraded to Buy from Neutral with a $44 price target
by Bank of America, citing "attractive risk/reward."
Tuesday, November 3, 2020
The world is holding its breath as American voters head to the polls. The oil
market, however, likely won't see much influence on prices either way, at least
not immediately. Near-term price movements will be much more influenced by
COVID-19 and other market fundamentals. Prices sank over the past week due to
renewed lockdown orders in Europe, although crude rebounded rather strongly in
early trading on Tuesday on hopes of OPEC+ action.
industry sees opening with Biden. Former Vice President
Joe Biden is ahead in the polls, and the oil industry is maneuvering to prepare
for more regulation. Biden recently said that he wants to U.S. to transition
away from oil, but the American Petroleum Institute, the industry's most
powerful lobby, said it would "seek to engage a Biden transition team." Two
areas of potential opportunities include tax credits for carbon capture
technologies, and easing trade tensions with China, which would boost oil and
and gas industry hope for continuity. If Biden wins,
energy analysts say that there may not be dramatic changes affecting oil and
gas drilling. Biden has pledged not to ban fracking, except on new drilling on
federal lands, a comparatively small slice of the industry. Other analysts
suggest Biden could be bullish for oil prices - federal stimulus and a renewed
trade focus could be beneficial. CNBC looks at other areas of potential change or
continuity. Meanwhile, if Trump defies the polls and wins reelection, analysts
say the industry will see more of the same: deregulation, a push for maximum
production, friendly treatment, but uncertainty on trade.
and gas to be "decoupled"? Under a Biden administration,
oil could get tougher treatment, while natural gas could find a home in the transition under Biden.
rises on potential OPEC+ delay. OPEC+ signaled a potential
willingness to postpone the easing of the production cuts. "This big selloff
last week was a wake-up call to the OPEC+ group," said John Kilduff, a partner at Again Capital LLC.
"The renewed shoulder-to-the-wheel type of action that appears to be emerging
is helping to support prices."
to consider deeper cuts? Saudi Arabia and other OPEC
members are considering deepening oil production cuts amid rising Covid-19
cases in the West and fresh economic lockdowns in Europe that could curb oil
demand further, according to the Wall Street Journal.
trajectory worsening. The UK recently announced a partial nationwide
lockdown, becoming the latest European nation to impose new restrictions.
Traders say oil demand could fall 1 or 2 mb/d for November in Europe.
to subsidize Vaca Muerta. The Argentine government
recently announced a plan to subsidize oil and gas in the Vaca Muerta shale on
the order of $5.1 billion over four years. The basin has struggled to attract
investment despite lots of hype. The government hopes that the new supports
will spark a drilling boom, which would help the country's ailing economy.
Covid accelerates peak demand. Global oil demand
will peak at 102 million barrels per day (bpd) in 2028,
Rystad Energy said on Monday, noting that the push to low-carbon energy and the
coronavirus pandemic will speed up the peak oil demand timeline to 2028 from
2030 previously expected.
upgraded. Cowen upgraded shares to Outperform from Market Perform with
a $31 price target, after Shell "introduced lower CAPEX guidance from
refocusing its Upstream portfolio, setting a trajectory to materially improve
free cash flow with potential acceleration of shareholder returns by early
starts up Permian pipeline. MPLX (NYSE:
MPLX) says the main segment of its Wink-to-Webster pipeline in Texas
started operations in October and will be available for shippers in the fourth
quarter. The pipeline has a capacity of more than 1 mb/d.
drillers outperforming oil drillers. Over much of the past
decade, oil-focused drillers performed better than their gas-focused peers. Now
the situation has reversed. Natural gas prices have climbed sharply in recent
months while crude remains in the doldrums. The market cap of the six largest gas companies has increased
by 18% since the start of the year, while the 25 largest oil companies plunged
by 53% over the same period.
maintains dividend. Saudi Aramco (TADAWUL: 2222) said
it would maintain its $18.75 billion quarterly dividend.
energy vehicles to capture 20% in China by 2025. EVs and
hydrogen-vehicles could make up 20% of new car sales in China by 2025,
according to the Chinese government.
production rises above 100,000 bpd. Crude production from ExxonMobil's (NYSE: XOM) Stabroek
block off Guyana has climbed to 105,000 b/d.
production could hit 1 mb/d by February. According to
Rystad Energy, Libya could boost oil production to 1 mb/d by February 2021. The
firm says Libya probably averaged 375,000 bpd in October.
Oil Exports Continue To Plunge. Venezuela's crude oil
exports last month fell further, to a low of 359,000 bpd, Reuters
reported, citing official data.
The post Why Oil Markets Aren't
Focused On The Election first appeared in Oilprice.com on
November 03, 2020.
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