Saturday, April 17, 2021
/06:00 AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice.com
Oil demand is finally bouncing back despite the fact that
Covid cases are rising and additional travel restrictions have been put in
Friday, April 16th, 2021
Oil prices moved higher this week after the demand outlook improved.
While Covid cases are up significantly from a few weeks ago, and travel
restrictions have proliferated, demand still looks strong and on the
raises oil demand forecast. The IEA raised its oil
demand forecast for 2021 by 230,000 bpd, citing improving vaccination efforts
and U.S. stimulus.
spends huge sums to defeat proxy moves. ExxonMobil
(NYSE: XOM) is spending above
$35 million to block proxy votes by activist shareholder Engine No. 1, and
could spend as much as $100 million, according to Reuters, although Exxon
disputes that figure. Analysts say it could become one of the biggest proxy
fights in history.
Zealand becomes first country to require climate disclosure. New
Zealand became the first
country to require banks, insurers and investment managers to report the
impacts of climate change on their businesses. The law affects banks and
insurers with assets over NZ$1 billion, and all equity and debt issuers listed
on the country's stock exchange.
majors' struggle to sell $110 billion in assets. Large
oil and gas companies are looking to sell off a combined $110 billion in assets
to raise cash and pay down debt. But they may struggle to find buyers,
according to Reuters. "This is not a very
good time to sell assets," Total (NYSE: TOT) CEO Patrick
fracking ban dies in state legislature. A proposal
to ban fracking
statewide in California fell short in the state legislature this week.
power consumption jumped 66-fold since 2015. Energy consumption for
Bitcoin mining is up 66 times and the associated emissions are destined to
receive greater scrutiny, Citigroup warned. Bitcoin uses more energy than the
entire country of Argentina. The New York Times also did a deep dive on
invests in offshore wind for first time. Chevron's (NYSE:
CVX) venture capital unit invested in Ocergy Inc.'s
floating offshore wind turbines. "To my knowledge, this is the first investment
by a U.S. oil major in offshore wind," said Anthony Logan, a
senior analyst at Wood Mackenzie Ltd.
cuts Guyana production due to compressor problem. ExxonMobil
(NYSE: XOM) cut its Guyana oil
production by 75% down to 30,000 bpd due to a problem with a compressor on its
halts production at Shetlands oil field. BP (NYSE:
BP) suspended production
indefinitely at its Foinaven crude oil field west of Shetland.
warns of price war if shale moves too fast. Pioneer Natural
Resources (NYSE: PXD) CEO Scott Sheffield warned that
OPEC+ would engage in a price war if U.S. shale grew production too quickly. "If we grow another million barrels a day next year, we're going to have
another price war in my opinion going into '23," he said.
may exit Iraq's West Qurna 1. Iraq's oil
ministry said that ExxonMobil
(NYSE: XOM) may exit the West Qurna 1 oil field. The
ministry said it is looking for buyers. Exxon operates the massive 500,000-bpd
around the globe looking for ESG. More than 80% of
affluent investors in Hong Kong, China, Singapore and the UK say that
environmental and ethical issues matter, and only a third have their
investments tied to ESG factors, according to HSBC Asset Management. The data suggests there
is an appetite for ESG investments.
Global energy transition to result in $10 Brent by 2050. Stricter
climate policy could accelerate the
energy transition, and a steep drop in demand could begin by 2023, according to
Wood Mackenzie. Demand could fall to 35 mb/d by 2050, with Brent averaging
between $10 and $18.
Sachs: Oil demand to peak by 2026. Goldman has been
bullish on oil demand in the short run, but expects "anemic" demand
after 2025 and a peak by 2026.
expected to propose 50% cut in GHG. The U.S. is
hosting a virtual climate summit next week, and ahead of that meeting, the
Biden administration is expected to
announce a 2030 greenhouse gas reduction target of 50%.
2035 100% EVs is possible. A new report shows that, with
the right policy, it is technically and economically feasible for all new car
and truck sales to be electric by 2035.
opposes climate proxy vote. Royal Dutch
Shell (NYSE: RDS.A) is pushing shareholders to oppose a climate
resolution filed by activist investor Follow This.
warns of stranded assets. Royal Dutch
Shell (NYSE: RDS.A) says that it will
have produced 75% of its proved oil and gas reserves by 2030, and will produce
only 5% after 2040.
American oil bankruptcies hit 5-year high. Oil and
gas bankruptcies in
North America hit their highest first-quarter level since 2016, according to
Haynes and Boone. There were eight bankruptcies in the first quarter.
largest U.S. gas driller wants methane regulations. EQT (NYSE: EQT),
the largest natural gas driller in the U.S., called for stricter limits on
methane. The Pittsburgh-based company supports Congressional
efforts to repeal the Trump-era rollback on methane limits.
pipeline crisis. A few years ago, Permian drillers
suffered price discounts due to inadequate pipeline capacity. Now they have
the opposite problem: too many pipelines and not enough oil.
The post Oil Demand Is Finally
Bouncing Back first appeared in Oilprice.com on April 16, 2021.
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