Saturday, October 17, 2020 /06:00
AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice
Yet another oil price rally has been cut short by COVID, with cases
climbing in both the U.S. and across Europe as hopes of speedy oil demand
October 16th, 2020
Oil prices retreated once again on concerns about a second wave in Europe and a
third wave in the U.S. France reported more than 30,000 positive cases on
Thursday. Many countries in Europe are reporting cases far higher than the
peaks they saw during the first wave. Also on Thursday, the U.S. reported more
than 60,000 cases for the first time in more than two months.
will guard against a price decline. OPEC+ wonâ€™t let oil prices
crash again, according to OPECâ€™s Secretary-General Mohammad Barkindo. "I want
to assure you that the OPEC, non-OPEC partnership will continue to do what it
knows best, by ensuring that we donâ€™t relapse into this almost historic plunge
that we saw," Barkindo said.
cohesion is beginning to fray. OPECâ€™s top official says the
group will guard against another price slide, but tensions within the
cartel are mounting. OPEC production cuts compliance is still around 100
percent, but the coming months will see that figure fall.
Market stabilized but fragile. In its latest Oil Market Report,
the IEA said that the oil market has stabilized, with stocks drawing 0.9 mb/d
in the third quarter, but that the outlook is fragile. The rising cases of
covid-19 in many parts of the world "surely raises doubts about the robustness
of the anticipated economic recovery and thus the prospects for oil demand
growth," the agency said.
considers binding methane emissions standards. The European
Union is considering methane limits on natural
gas that is consumed or imported into the bloc. As a result, it could
negatively impact demand for gas from around the world, including the United
U.S. oil output has peaked. Occidental Petroleum (NYSE: OXY)
CEO Vicki Hollub said that the U.S. won't see production return to pre-pandemic
levels. "It's just going to be too difficult to replace the 2 million barrels a
day of production that we've lost, and then to further grow beyond that," Vicki
Hollub said Wednesday at
the Energy Intelligence Forum.
looks to acquire Concho Resources. ConocoPhillips
(NYSE: COP) is in talks to purchase Concho
Resources (NYSE: CXO). Concho's shares rose 15 percent on the
news. If successful, the acquisition will be the second major M&A deal
after Chevron's (NYSE: CVX) purchase of Noble Energy.
greenlights DAPL expansion. Illinois regulators approved an expansion
of the Dakota Access pipeline, even as the pipeline system faces legal hurdles
to its continued operation. Energy Transfer (NYSE: ET) is
aiming to expand the pipeline's capacity to 1.1 mb/d.
and Exxon increase donations to Democrats. Chevron (NYSE:
CVX) and ExxonMobil (NYSE: XOM) have
increased political donations to Democrats this year, according to Reuters. With
Democratic candidate Joe Biden leading in the polls, contentious issues over
environmental regulations and fracking loom.
may cut 2021 drilling. Russian oilfield service providers see drilling activity
falling by as much as 20 percent next year.
Investors want a greener industry. A Boston Consulting Group survey of energy
investors finds that investors want oil and gas companies to cut their
emissions. Simultaneously, investors are souring on the oil and gas sector. 80
percent of investors want companies to cut their emissions, and only
one-quarter see oil and gas stocks playing a larger role in their investment
portfolios going forward.
solar company launches IPO. Array Technologies (NASDAQ: ARRY)
went public on Thursday, initially surging by more than 60
percent, but falling back close to its IPO price. Solar stocks have recently
hit all-time highs ahead of the presidential election, riding a wave of bullish
IMO regulations are seen as weak. A set of proposed regulations
on maritime shipping would do very little in the coming
decade to cut emissions. The rules offer minor tweaks, such as cutting engine
idling and would not phase in until 2030.
to establish limits on positions. The Commodity Futures Trading
Commission voted on Thursday
to adopt position limits for the first time on 16 agricultural, metal, and
energy commodities. The rule aims to prevent speculators from contributing to
violent price swings that have little to do with underlying fundamentals.
to cut 10,000 jobs. BP (NYSE: BP) is set to cut 10,000 jobs,
only 2,500 of which will be voluntary.
Airborne radioactivity downwind of fracking. Harvard scientists
have detected heightened
levels of radioactive particles downwind of fracking sites. The same
radioactivity is not detected with conventional drilling because the
radioactive source is found in rocks that are blasted apart from hydraulic
will provide a massive investment boom. Bank of America says we have
reached the tipping point of harnessing this element effectively and
economically and predicts the hydrogen marketplace to reach a staggering $11
trillion by 2050. It will also boost other renewables. Chief sustainability
strategist at BNP Paribas Asset Management says that the development of green
energy will create the biggest investment opportunities for renewables and not
hydrogen infrastructure as we might be tempted to think.
oil jobs not coming back. More than 100,000 oil and gas jobs in
the U.S. were eliminated between March
and August of this year, and 70 percent of those will not return, according to
a new study by Deloitte.
The post COVID Kills Another Oil Rally first appeared in Oilprice.com on October 16, 2020.
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