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.
Chart
of the Week
Market
Movers
Oil prices were off a bit in early trading on Tuesday, but are nonetheless
trading close to more than one-year highs after soaring on Monday. The price hike comes shortly
after Goldman Sachs forecast that oil prices would climb into the $70s over the
next few months and after it became clear that U.S. oil production and
refineries will take a bit of time to resume their normal level of output after
the Texas Freeze knocked out oil refineries and oil production.
Texas
refineries restarting. Motiva, the U.S.' largest oil
refinery, began to restart operations in
Port Arthur, TX after a weeklong shutdown. A handful of other large refineries
announced a return of operations. Still, a full recovery could be weeks away,
which could push up gasoline prices.
Texas
crisis was historic. Gas traders said the volatility was
historic. "I've been through a lot: The '98 and '99 power spikes in the
Midwest, the California crisis" of 2000-2001, Cody Moore, head of gas and power
trading at Mercuria Energy America, told Bloomberg. "Nothing was
as broadly shocking as this week." Some traders likened it to a Lehman Brothers
moment.
Texas
blackouts leave winners and losers. Some high-profile
companies, such as Comstock Resources (NYSE: CRK), saw a windfall for their
natural gas when Texas market prices went haywire last week. But buyers of gas
were slammed. Atmos Energy (NYSE: ATO), a distributor of gas, said it
needs to raise cash after spending $3.5 billion to secure fuel during last
week's crisis. Canada-based Just Energy Group (NYSE: JE) lost $250 million
and may have trouble continuing as a going concern. Its shares were down by
nearly 25%.
Texas
oil production restart could take weeks. It could take at
least two weeks to restart the more than 2 mb/d of Texas oil production shut-in
from last week's cold snap. "With three-quarters of fracking crews standing
down, the likelihood of a fast resumption is low," ANZ Research said in a note. "I
think it will be a while before things get better out in the field," one
executive at a Permian producer told Reuters.
Diamondback
says it lost 4-5 days of production. Diamondback
Energy (NASDAQ: FANG) said that it lost
four to five days' worth of total production from the Texas blackouts, sending
its shares down 4% in late trading on Monday. Cimarex (NYSE: XEC)
said it could lose up to 7% of its first-quarter production.
OPEC
cuts U.S. shale forecast. OPEC downgraded its
assessment of U.S. shale production for 2021, expecting a contraction of
140,000 bpd, a bit deeper than what the EIA foresees. The lack of shale growth
gives OPEC+ more room and leverage to unwind production cuts and regain market
share.
Bullish
forecasts start to multiply. Several investment banks came
out with bullish crude oil forecasts. Goldman sees Brent averaging $70 in the
second quarter and $75 in the third quarter. Morgan Stanley sees $70 by the
third quarter. Socar Trading SA says oil could hit
$80 this year.
Saudi
and Russia disagree on strategy. OPEC+ will soon decide on
the next steps regarding their massive production cuts, and Riyadh and Moscow disagree on the
strategy. The Saudis want to mostly stay the course and allow prices to rise,
while Russia is keen to increase production. At the same time, Saudi Arabia
suggested it would reverse the 1 mb/d of voluntary cuts it announced in
January.
Eni
aims for net-zero by 2050. Eni (NYSE: E) said it would
fully decarbonize by 2050, but will still increase oil and gas production
through the mid-2020s.
Exxon
pressured to announce net-zero goal. Activist investor
Engine No. 1 called on ExxonMobil
(NYSE: XOM) to revamp its board and announce a net-zero goal.
"This is not just a climate issue but a fundamental investor issue-no different
than capital allocation or management compensation-given the immense risk to
Exxon Mobil's current business model in a rapidly changing world," San
Francisco-based Engine No. 1 wrote in a letter sent to the company.
Petrobras
sinks after Bolsonaro sacks CEO. Brazilian President Jair
Bolsonaro fired the chief executive of state-owned Petrobras (NYSE:
PBR), scapegoating him for rising domestic fuel prices.
Investors did not like the move - Petrobras' stock was down more than 22% as
markets opened on Monday. Investors are interpreting the move as
an abandonment of the market-based stewardship of Petrobras.
Is
another LNG glut looming? A tight LNG market could prompt a
new wave of an investment super-cycle in LNG projects. However, a possible new
wave of strong investment in LNG could create a massive glut later this
decade if most of the planned or proposed projects move forward.
Occidental
posts large loss. Occidental Petroleum (NYSE: OXY) reported a $731
million loss for the fourth quarter, compared to a $269 million loss from a
year earlier. Its shares fell 4% in after-hours trading.
Credit:
The post Oil Holds Gains Above
$60 first appeared in Oilprice.com on February 23, 2021.
Related News - Previous Oilprice Intelligence Report
1.
Brent Crude Oil Price Falls Back Below $64 - OIR 190221
2.
How
Much Higher Can Oil Prices Go? - OIR 120221
3.
Bullish
Sentiment Takes Over Oil Markets - OIR 090221
4.
Brent Crude Surges Towards $60 - OIR 050221
5.
Oil Prices Hit 1-Year High - OIR 020221
6.
Oil
Prices Hit 1-Year High - OIR 020221
7.
New Vaccine Hopes Boost
Oil Prices - OIR 260121
8.
Oil
Price Rally Paused By Chinese COVID Concerns - OIR 260121
9.
Energy Shares Plunge as
Oil Rally Halts - OIR 220121
10. Oil Demand Fears Continue to Weigh on Markets - OIR 190121
Related News - Oil and
Gas
1.
Average
Prices of PMS, AGO, HHK and Cooking Gas - January 2021
2.
Possible
Increase in PMS Price, Stakeholders Call for Fixing of the Non-Functional
Refineries
3.
Axxela Accorded Favourable Issuer Ratings of BBB plus
(NG) and A2(NG) by GCR
4.
Morgan Stanley:
Gasoline Industry is About to Become Totally Worthless
5.
Nigerian Gas
Association (NGA) Announces the 2021 Industry Multilogue 2
6.
NNRC Encourages NASS to
Prioritize The PIB
7.
Oil Spills in the Niger-Delta
8.
AGPC Raises $260m to
Complete ANOH Project and Drive Energy Transition in Nigeria
9.
2021: FX Stability Crucial to the Nigerian Oil and Gas Industry -
Tominiyi Owolabi
10.
Inside Nigeria's 2020
Petroleum Industry Bill