December 07, 2019 /04:46AM / By Tom Kool of Oilprice.com
/ Header Image Credit: Oilprice.com
Oil prices rose on Friday morning, fueled by optimism about the
new OPEC+ deal and the Saudi promise to, once again, overcomply with their
Friday, December 6th, 2019
jumped because of news from Vienna. OPEC+ agreed to cut
500,000 bpd more than the current arrangement, a figure that initially raised
questions on Thursday. However, on Friday, Saudi officials said they would
maintain their unilateral cuts beyond what is required in order to defend oil
prices. The markets responded with a bounce.
agrees to cut by another 500,000 bpd. OPEC+ agreed to cut production by an additional 500,000 bpd,
with the cuts to last until March. But because the group is already producing
below its current limit, there were questions about whether the "cuts" were in fact consequential. "If we were to have an
outcome of an extension of cuts with only the official quota of the OPEC+ group
being reviewed lower (the 500,000 bpd), rather than actual production, then the
change in supply policy would be cosmetic (given below target production in
some countries, notably Saudi Arabia and Angola)," said Harry Tchilinguirian, global oil strategist at BNP Paribas.
promises to maintain unilateral cut. "We will continue the
voluntary cut of 400,000" barrels a day, Energy Minister Prince Abdulaziz bin Salman
said, sending oil prices much higher. With those cuts in hand and full
compliance from other members â€“ if it can be achieved â€“ the cuts could end up
being substantially deeper.
becomes net petroleum exporter. In September, the U.S. exported 89,000 barrels of crude and petroleum products,
the first month since 1973 that its overall petroleum balance was net positive.
A decade ago, the U.S. was importing 10 million barrels per day on a net
IPO priced at $8.53 per share. Saudi Aramco will be priced
at 32 riyals, or $8.53 per share. The IPO will raise $25.6 billion and value
the company at $1.7 trillion.
and LG Chem to build $2.3 billion battery plant. GM (NYSE: GM)
Chem (KRX: 051910) said that they would spend $2.3 billion to build an EV battery plant
in Ohio, close to the shuttered Lordestown car factory. It will be one of the
world's largest battery plants with 30 GW of capacity and will employ 1,100
moving towards confronting Iran. After trying to protect
Iran through a variety of complicated financing mechanisms, the patience of the
European Union is running thin. Iran has gradually rolled back compliance with
the 2015 nuclear deal in response to aggressive moves from the U.S., including
sanctions. But the EU may soon decide to trigger a dispute mechanism, which
could lead to sanctions.
fuel prices surge. Margins for very low sulfur fuel oil
(VLSFO) are soaring as shipowners begin to stock up on fuels that will comply
with new IMO rules beginning in January. Refining margins for VLSFO rose above
$20 per barrel this month, according to Reuters.
shale could grow even with low prices. U.S. shale is expected to continue to grow through 2020, even in a
scenario of lower oil prices, according to Rystad Energy. But the industry
would need higher prices beyond 2020 for growth to continue.
to issue final biofuels rule. EPA administrator Andrew
Wheeler said that the agency would issue its final biofuels rule for 2020 by
oil producers cut spending. Canadian oil companies are cutting spending in the face of bottlenecks and price
discounts for their oil. Husky Energy (OTCMKTS: HUSKF) said it would cut
spending by US$379 million.
car market shrinks faster than financial crisis. The global
car market is set to shrink at a much faster pace in 2019 than it did during
the depths of the financial crisis a decade ago. Last week, Volkswagen and
Daimler cut 20,000 jobs. The car market may not return to the 2017 peak for
considers state-backed lithium development. Chile's mining
minister told Reuters that its state-backed copper company Codelco will
push forward with major lithium development. "It seems to me, to say the least,
a sin that companies with lithium holdings like this are not even working
them," said Chile's mining minister, Baldo Prokurica. "What has been missing
here is the will to move forward." Chile has the world's largest lithium
U.S. jobs report, worrying figures elsewhere. The U.S.
posted a surprisingly strong jobs report, aided by the end of the GM strike.
But elsewhere, the figures are more concerning. German industrial orders fell
unexpectedly in October by 0.4 percent compared to a month earlier. "The German
industry is still stuck in the vale of tears," VP Bank economist Thomas Gitzel said.
Rubio blocks Interior official nomination on offshore drilling concerns. Florida
Republican Senator Marco Rubio held up the nomination of an official at the
Interior Department due to his opposition to offshore drilling in Florida. "When it comes to offshore drilling and exploration, the Florida delegation is
united in opposition to allowing our shores to be subjected to new leases," Rubio spokesman Nick Iacovella told Reuters by e-mail.
companies commit to climate targets. A group of 285
companies committed to the science-based targets on lowering
greenhouse gas emissions, a move that could funnel $18 billion into climate
gets a lifeline. Chesapeake Energy (NYSE: CHK)
managed to clear up its "going concern" warning by securing $1.5 billion in
loans from a group of banks, while also buying back $700 million in notes due
in 2025 at a discount. But it doesn't change their poor business model. "I'm
not sure that it solves their problems," James Spicer at TD Securities told Bloomberg. "The underlying issue is generating free cash
flow. The company is saying it can, but I think it's very much a show-me story
plans 31-well campaign in Guyana. ExxonMobil
(NYSE: XOM) is planning to drill 31 wells across 3 blocks in offshore
Guyana. Exxon aims to start production soon, at about 120,000 bpd, and ramp up
to 750,000 bpd by 2025.
Aramco Makes Historic IPO, Raises $25.6bn
- 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