December 10, 2019 /07:32 PM / By Tom Kool of
Oilprice.com / Header Image Credit: Inside Arabia
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
- The volume of natural gas that was vented or flared in the
U.S. reached a record high 1.28 billion
cubic feet per day (Bcf/d) in 2018.
- That rate is equivalent to 1.25 percent of gross
withdrawals of natural gas, up from 0.84 percent in 2017.
- North Dakota and Texas alone accounted for 82 percent of
all gas flared or vented.
- The pace of flaring surged by even more this year.
- Oil executives have referred to this problem as a "black
eye" for the industry.
- Laredo Petroleum (NYSE: LPI) says
it has closed a bolt-on acquisition of 4.475
contiguous net acres in Glasscock County, TX, for $65 million. LPI says the
acquired acreage is located "in an area of high oil productivity with relevant
offset wells indicating first year oil production 37% higher than expectations
for legacy Laredo Wolfcamp drilling."
- Kosmos Energy (NYSE: KOS) fell
sharply on Monday, dragged down by the meltdown of Tullow Oil
(LON: TLW). Tullow fell by 70 percent on Monday after reporting
lower production guidance. Kosmos partners with Tullow in Ghana.
- Marathon Petroleum (NYSE: MPC)
US (NYSE: DK) were downgraded by JPMorgan to Neutral and
Tuesday December 10, 2019
Oil prices held onto the modest gains following the OPEC+ deal at the start of
this week. The next move for crude benchmarks likely depends on the outcome of
the U.S.-China trade negotiations, which appear to be moving in the right
direction after the U.S. agreed to delay China tariffs.
to delay China tariffs. At the time of this writing, press
reports indicated that the U.S. and
China were still haggling over phase one of the trade deal, but were close
enough to warrant a delay in the scheduled December 15 tariff hike. The Trump
administration is insisting on hefty purchases of American farm goods from
China, but Beijing is balking at the volumes demanded.
reactions are mixed. The reaction from oil market watchers
to the OPEC+ deal was mixed, ranging from bullish
to indifference. Bank of America said Brent could hit $70 this year, while
Raymond James was more bullish on 2021, seeing Brent averaging $80. Others
noted that the OPEC+ deal may not be all that significant since the cartel was
Congress reaches deal on Nord Stream 2. The U.S. House and
Senate armed services committees reached an agreement on
language within the defense bill that would force the Trump administration to
sanction companies working on the Nord Stream 2 pipeline. Senator Ted Cruz
(R-TX) said the provision would prevent "Putin from leveraging billions of
dollars that could be used to fuel Russian aggression".
Oil plunges. Tullow Oil (LON: TLW) saw its
shares plunge by roughly 70
percent on Monday after its CEO Paul McDade stepped down, the company scrapped
its dividend, and it lowered its production targets. The main reason is
weaker-than-expected production results from its main assets in Ghana. Tullow
has seen delays and technical problems at its Jubilee and TEN fields. Tullow
said its output will fall steadily over the next few years.
imports record level of oil. China imported 11.13 mb/d in
November, a record high. But some of that oil could be the result of
stockpiling. "Crude oil imports in the first eleven months combined totaled a
good 10 million barrels per day, which puts them 10.4% up on the previous
year," Commerzbank said in a note.
deficit balloons. Saudi Arabia said that its budget deficit
will rise to $50 billion
next year due to low oil prices and production cuts. That will be $15 billion
larger than this year. The Saudi budget requires oil prices in the mid-$80s for
it to break even.
investors pile back into energy. The FT reports that some
high-profile investors, including Warren Buffet and Carl Icahn, are making bets
on battered energy stocks, hoping for a rebound. "Thereâ€™s been a relatively
quiet, strategic movement into energy by a group of billionaires," Thomas Hayes,
chairman of New York-based hedge fund, Great Hill Capital, told the FT.
train derails and explodes. A Canadian Pacific oil train derailed in Saskatchewan on
Monday and exploded.
declares force majeure on El-Feel. The Libyan National Oil
Corp. declared force majeure on
crude loadings after the 73,000-bpd El-Feel field was shut down last
Energy forms deal with Dow on STACK play. In a creative way
to tap new financing, Devon Energy (NYSE: DVN) entered into an agreement
with Dow (NYSE: DOW) to jointly develop a part of the
companyâ€™s STACK assets. Devon will sell half of its interest in 133 undrilled
locations in exchange for $100 million. Devon calls the arrangement "innovative," but it arguably is also a reflection of the restricted capital
tells oil drillers to hold off. Israelâ€™s Energy Minister told three companies - Noble Energy
(NYSE: NBL), Royal Dutch Shell (NYSE: RDS.A) and
Drilling not to start work on the Aphrodite gas field off the
coast of Cyprus until the two countries resolve territorial disputes.
gas prices sink on mild weather. Natural gas prices fell further on Monday on
forecasts for warmer weather. Prices fell to $2.232/MMBtu, down 4.4 percent.
Prices are now down by roughly 50 percent from a year ago.
to drill amid climate crisis. Brazil said it would continue
to expand pre-salt drilling despite concerns about climate change. Brazilâ€™s
Mines and Energy Minister Bento Albuquerque said Brazil as a developing country "could not release its grip on hydrocarbons," according to Reuters. Brazil aims to
re-auction blocks that went unsold in a recent offering.
tries to resell LNG. In a sign of how oversupplied the
market for LNG has become, China is looking to resell cargos on the spot
market. A slowing economy and full inventories mean that some LNG cargoes have
nowhere to go.
emits more CO2 than coal. With natural gas production and
consumption soaring, emissions from gas now exceed that of coal in Europe and
the United States. New data shows that the rise of gas is also
offsetting the gains made from shutting down coal, undercutting its case as a "bridge fuel."
to unveil green new deal. Europe is set to unveil its version
of the Green New Deal this week, a roadmap for net zero emissions by 2050.
Shares Plummet 70% After Group Cuts Production Outlook
- Oil Jumps
On Saudi Surprise - OIR 061219
- How Much
Crude Oil Do You Unknowingly Eat?
- Oil Markets
Remain Hopeful Of OPEC Cuts - OIR 031219
- Oil Inches
Higher As OPEC Optimism Returns To Markets - OIR 261119
- IMO 2020
Fuel Sulphur Regulation Comes Into Effect From Jan 01, 2020
- Oil Bounces
Back On New Round Of OPEC Rumors - OIR 220919
- The Worst
Is Over For Oil Markets
- Oil Sinks
As Sentiment Turns Sour - OIR 190919
Prices Of PMS, AGO, HHK and Cooking Gas - October 2019
- Five (5)
Steps To Subscribing To Saudi Aramco Initial Public Offer; Sets A
Valuation of $1.7trn
- Why Isn't
Winter Pushing LNG Prices Higher?
- Oil Markets
Ignore Worrying OPEC Projections
Litres of PMS Imported Into Nigeria in Q3 2019 - NBS
- The EIA Is
Grossly Overestimating U.S. Shale