Tuesday, June 09, 2020 /07:30
PM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice
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.
- Canada is the largest source of U.S.
energy imports and the second-largest destination for U.S. energy exports.
- Energy imported into the U.S. from Canada accounted for $85
billion of value, or about 27 percent of all Canada-to-U.S. trade.
- Roughly 56 percent of oil imported into the U.S. came from
Petroleum (NYSE: OXY) surged 33 percent on Friday, reaching a
three-month high. It was the largest percentage increase in OXY's
- Whiting Petroleum (NYSE: WLL) fell by more than 30
percent on Tuesday, ending a brief surge in the company's share price. The company
declared bankruptcy on April 1.
- Chesapeake Energy's (NYSE: CHK) shares were
halted on reports that the company was preparing to file for bankruptcy. The
company was once worth $37.5 billion at its peak.
June 9, 2020
OPEC+ agreed to extend the production cuts for another month, but with the
extension mostly baked into market expectations, it has done little for oil
prices at the start of the week. Meanwhile, the U.S. officially entered an
economic recession in February.
ends extra cuts. Even as OPEC+ agreed to extend the
production cuts for another month, Saudi Arabia said that it would end the
extra supply cuts that it had imposed in the second quarter. "The voluntary
cuts served their purpose and we are moving on," Prince Abdulaziz said in a press briefing on
Monday. Revenues from Saudi oil
exports plunged by nearly 22 percent in the second quarter, a decline of $11
Arabia hikes oil prices. Saudi Arabia increased the official
selling price for its oil by the most in two decades, with Saudi Aramco raising
prices of Arab Light to Asia by $6.10 per barrel. The move is a sign that Saudi
Arabia wants to continue to boost the oil market by erasing all the discounts
it offered at the start of the price war several months ago.
margins could kill oil recovery. Weak refining margins
could kill the oil price recovery, according to a new report from Goldman
Sachs. If refiners pull back on processing, crude will pile up, pushing down
prices. Other analysts see the same trend. "One word of caution is if we look
at the rally we've seen in crude oil prices, it's been amazing, but the big
uncertainty is if you look at refinery margins, they are very weak across the
board across all regions," Warren Patterson, head of commodities strategy at
ING, told CNBC.
to return 300,000 bpd, maybe. The retreat of the Libyan
National Army from the siege on Tripoli could pave the way for more Libyan oil
to hit the global market. On Saturday, Libya restarted production at its
largest oil field, the Sharara, which could bring 300,000 bpd back online. But
a day later, the field shutdown after an armed
group stormed the facility.
third of offshore oil production shut-in. Tropical
Depression Cristobal forced 34 percent of U.S. offshore oil production to be
temporarily taken offline.
plans shift to renewable energy. Enbridge
(NYSE: ENB), North America's largest pipeline company, plans to shift its asset
mix towards natural gas and renewable energy over time.
to require EV recharging stations. Germany said that it
will require all petrol refueling stations to install electric car recharging
infrastructure. "We know that 97% of the reason why they're not buying electric
cars is range anxiety. The German move is a way to try and fix this range
anxiety since it means you know a petrol station is always open," Diego Biasi,
chairman and co-founder in Quercus Real Assets, told Reuters. As part of the
130-billion-euro economic recovery plan, the initiative will also subsidize the
purchase of EVs by about 6,000 euros.
AG probes natural gas phase-out. The attorney general of
Massachusetts asked the state's public
utilities regulator to investigate the potential phase-out of natural gas from
the state. That would make it the third state to explore the transition, after
California and New York.
to cut 10,000 jobs. BP (NYSE: BP) plans on slashing 10,000 jobs, or 14 percent
of its workforce. The move follows similar-sized cuts at Chevron (NYSE:
CVX). Royal Dutch Shell (NYSE: RDS.A)
is doing voluntary layoffs. "We are spending much, much more than we make -- I
am talking millions of dollars, every day," BP's CEO Bernard Looney wrote.
output rebounding. U.S. shale drillers continue to bring
shuttered production back online. "We're seeing production coming back in
pretty much all of the basins," Kelcy Warren, chief executive of pipeline giant
Transfer (NYSE: ET), told the WSJ. "It's been a
steady recovery since the first week of May." But U.S. production is still
expected to continue to decline, perhaps closing out the year around 10 mb/d,
according to IHS Markit.
shale revival unlikely. The oil market has tightened and
prices have rebounded, but the frenzied pace of drilling in U.S. shale won't come back for the
foreseeable future. "Producers broadly characterized teens production growth as
more an upside case than a base case," Goldman analysts wrote in a note.
diesel spill in Russia due to climate change. The leak of
150,000 barrels of diesel in Russia's Far North was due to melting permafrost.
Coast petrochemicals at immediate risk from climate change.
Three large petrochemical facilities in Houston are "highly vulnerable" to
extreme flooding caused by climate change, according to a new report from Jupiter Intelligence.
The entire Gulf Coast petrochemical sector faces an "imminent challenge" from
Resources to file for bankruptcy. California
Resources (NYSE: CRC) skipped an interest payment and could
file for bankruptcy next week, according to the WSJ. CRC is primarily a
conventional oil driller based in Los Angeles.
Trump's "emergency" pipeline order to face legal challenges.
President Trump signed an executive order that waives bedrock environmental
protections from the permitting process for new pipelines. But the order likely
faces a series of legal obstacles.
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