Saturday, May 08, 2021
/07:00 AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice.com
There was a slight
pullback in oil prices following Wednesday's highs, but the rally is still very
much on and bullish sentiment is palpable as summer driving season nears.
Friday, May 7th, 2021
tested $70 per barrel on Wednesday but fell back on Thursday. Oil "had a great
run, but it got a little bit ahead of itself," Phil Streible, chief market
strategist at Blue Line Futures LLC in Chicago, told Bloomberg. "We've hit
resistance and prices pulled back," but it's hard to see a summer demand boost "being derailed," he said. Oil is still set to close out the week with another
to delay Port Arthur LNG. Sempra Energy
(NYSE: SRE) said on Wednesday
that it would delay its proposed Port Arthur LNG project until 2022 instead of
this year, citing global energy markets and a focus on greenhouse gas
to take $200 million charge related to job cuts. ExxonMobil
(NYSE: XOM) expects a $200 million
charge related to severance costs for laid-off workers.
hits record high. Copper price hit a record high on Thursday as
Chinese investors unleashed fresh demand following a five-day holiday.
says consolidation needed. Pioneer Natural
Resources (NYSE: PXD) CEO Scott Sheffield said that the shale
industry needs even more consolidation. "I hope other privates are taken out
that are growing too much," Sheffield told investors on an earnings call," Sheffield said.
costs rise due to the commodity boom. The rising cost of
steel is forcing Vestas (CHP: VWS) to hike its
prices for wind turbines.
and Chevron cautious in Permian. Neither ExxonMobil
(NYSE: XOM) nor Chevron (NYSE: CVX) are rushing to boost production in
the biggest American shale play, the Permian, despite the oil price rally this
year that has sent WTI prices to above $60 per barrel.
of Texas freeze. Among the biggest winners of the Texas
crisis in February were commodity trading major Vitol, pipeline operators
including Kinder Morgan, Enterprise Products Partners, and Energy transfer, and
lenders including Goldman Sachs, Bank of America, and Macquarie Group.
Transfer made $2.4 billion in Texas crisis. Energy Transfer
(NYSE: ETP) took in $2.4 billion from the Texas grid crisis, and the stock jumped
nearly 5% on Thursday.
to import more Saudi oil. After Saudi Aramco cut oil
prices for June, Indian state refiners added more orders.
LNG? The viability of LNG import terminals in Europe
has dimmed and utilities are looking for alternative uses, according to Bloomberg. Last month, for
example, Uniper SE said waning demand for new LNG led it to switch a project to
a hydrogen hub. In Ireland, another project has been transformed into an
offshore wind project.
market to see deficit. Rystad Energy said that the
global LNG market could see a supply deficit in the coming years due to
inadequate investment, made worse by the delays in Total's (NYSE:
TOT) massive LNG project in Mozambique.
boom adds inflation risk. Tight inventories for a long
list of commodities are pushing up prices, which is increasing the
odds of rising inflation. U.S. Treasury Secretary Janet Yellen rattled markets on
Tuesday when she said that interest rates might need to rise.
metals shortage poses transition risk. The IEA came
out with a new report warning that a shortage of critical minerals used in
green technologies could slow the pace of energy transition and make it more
expensive. The agency urged faster investment in new mining projects.
shale pre-hedge revenue hits record high. If WTI
futures continue their strong run and average at $60 per barrel this year and
natural gas and NGL prices remain steady, producers can expect a record-high hydrocarbon
revenue of $195 billion before factoring in hedges, a Rystad Energy analysis
shows. The previous record of $191 billion was set in 2019.
World needs to cut 40-45% methane. A new report from the UN
finds that the global increase in methane emissions since 2010 is "primarily
attributable" to the surge in oil and gas drilling - i.e., the U.S. shale boom.
The report said cuts to methane emissions are actually inexpensive and achievable.
Oil returns to Oklahoma drilling. Marathon Oil
(NYSE: MRO) is returning to limited
operations in Oklahoma and the Permian Basin's western Delaware Basin in New
Mexico before ramping up next year.
May 12 deadline for Line 5. Michigan has ordered Enbridge's
(NYSE: ENB) Line 5 pipeline shut down by May 12 - next
week - but the company said it would defy the order.
Energy takes $1.8 billion impairment on KXL. TC Energy (NYSE:
TRP) announced a C$2.2 billion
($1.8 billion) impairment related to the suspension of the Keystone XL
of Equinor's profits came from renewables. Equinor (NYSE:
EQNR) reported $2.6 billion in
first-quarter earnings, and 49% came from renewables.
majors earn more than oil majors. The top five iron
ore miners are on track to earn $65 billion this year, or about 13% more than
the top five oil majors, according to Bloomberg. A big reason for
this is the soaring price of iron ore, which has climbed to around $200 per
ton, a record set a decade ago.
to buy Alta Resources for $3 billion. EQT (NYSE:
EQT) said it would
purchase Appalachian rival Alta Resources for $2.93 billion in cash and stock.
EQT is already the nation's largest natural gas producer, and a giant in
Appalachia, but the acquisition expands its footprint.
accelerates climate targets. In the wake of a court
decision ordering tougher action, the German government increased its 2030
emissions reduction target from 55% to 65% and moved up its net-zero target by
five years to 2045.
admin considers nuclear subsidy. The White House
is considering a subsidy to
keep existing nuclear power plants online to avoid a setback in its
decarbonization goals if nuclear plants were to shut down.
The post Oil Markets Optimistic
After Brent Flirts With $70 first appeared in Oilprice.com on May 07, 2021.
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