Friday, August 23, 2019
/05:54PM / By Tom Kool of Oilprice.com / Header Image
Oil prices plunged on Friday morning as
China announced new tariffs on U.S. crude oil, the first time that U.S. oil
exports have been brought into the trade war.
August 23rd, 2019
Oil plunged on Friday after China announced new tariffs on U.S. goods,
including crude oil. The move reignited fears of economic recession. Meanwhile,
global financial markets are closely watching the Jackson Hole symposium, an
elite financial summit that may provide some clues into the thinking of the
U.S. Federal Reserve.
extends production curtailments through 2020. Alberta extended the authority
of its production cuts through the end of 2020 due to pipeline uncertainty. The
move comes after the delay of the Line 3 replacement, which means midstream
bottlenecks are likely to persist.
producers battle pipelines over tariff surcharge. Plains All
American Pipeline (NYSE: PAA) has slapped a surcharge on oil
producers using its new Cactus II pipeline to offset the higher costs of steel
due to U.S. tariffs. But ConocoPhillips (NYSE: COP) and Encana (NYSE:
ECA) have requested that U.S.
regulators shoot down the pipeline fee.
petrochemical expansion threatens others. A rapid increase
in petrochemical production capacity in China could force producers in Japan
and South Korea to cut production in the second quarter of 2020, according to Reuters. China is set
to add 10 million tonnes of paraxylene capacity between March 2019 and March
says Iran exports fall below 100,000 bpd. U.S. State
Department special representative for Iran, Brian Hook, said that Iran's oil
exports have plunged below 100,000 bpd, although independent assessments from S&P Global Platts puts the figure closer to 450,000 bpd. "We have effectively zeroed out
Iran's export of oil," Hook said during a press briefing in New York. "I can't
overstate the significance of this accomplishment."
to add 61% of all new oil and gas. Over the next decade,
the U.S. will account for 61 percent of all new oil and gas output in the
world. The added output is set to â€œdrown the world in oil," Global Witness said in a
gas hits 10-year low in Europe. Natural gas prices in
Europe fell to a 10-year
low as cheap LNG washes over the continent. Gas storage in many European
countries is significantly higher than the five-year average.
in Indiaâ€™s car industry. According to Reuters, declining
auto sales is leading to worker layoffs and idling production in India. Auto
sales have slumped for nine consecutive months in India, a sign of a worsening
unveils $75 billion in tariffs. China said that it would
retaliate if the U.S. moves forward with the additional 10 percent tariff on
$300 billion worth of goods, and on Friday announced plans for new
tariffs on $75 billion worth of U.S. imports. The plans include an additional 5
percent on American soybeans and crude oil, which will go into effect in
September, while a 25 percent tariff on cars will take effect in December.
becomes oil trader for PDVSA. Russia's Rosneft has become
the main trader of Venezuelan
oil, moving it to buyers in India and China, according to Reuters. The move
comes as traditional oil traders are steering clear of Venezuela because of
U.S. sanctions. Rosneft took 40 percent of PDVSA's oil in July and 66 percent
to trade in euros. Rosneft has notified customers that
future tender contracts will be conducted in euros, not dollars.
warns China away from Vietnam's oil. The U.S. warned China on
Thursday against interfering with Vietnamâ€™s oil and gas exploration,
highlighting the longstanding tension over territory in the South China Sea.
to buy Kinder Morgan's Canadian assets for $3.3 billion. Pembina
Pipeline Corp. (NYSE: PBA) has agreed to purchase the remaining
Canadian assets owned by Kinder Morgan (NYSE: KMI) for
$3.3 billion. The deal gives Pembina
a large source of oil storage in Edmonton and marks a major bet on the future
of Canadaâ€™s oil sands. Kinder Morganâ€™s exit is another in a long line of
divestitures by international oil companies from Canada.
Mountain pipeline restarts construction. Now under the
control of a government-owned entity, construction has restarted on the Trans
Mountain expansion. The pipeline is scheduled to come online in mid-2022
barring more delays.
OPEC's market share falls to 30 percent. OPEC's market share is at its
lowest point in years, even as the group stares down a supply glut in 2020,
which may prompt even further cuts.
to sell 10 million barrels from SPR. The U.S. Department of
Energy will sell 10 million
barrels of oil from its SPR for delivery in October and November. The sale
stems from previously passed legislation by the U.S. Congress.
development can increase shale drilling returns. New research from Wood
Mackenzie finds that cube development - drilling an entire section rather than
individual wells - can increase present value (PV) by 30 percent in the
Wolfcamp and Bone Spring. "Cubes won't work for every company. That said, they
offer big benefits if executed to plan," Ryan Duman, principal analyst at
WoodMac, said. But the approach also carries risk. "Investors need to be aware
that the cube approach concentrates geographic and subsurface risk. And it
doesn't completely eliminate the risk of child wells," Duman said. "Producing
wells simultaneously can actually be more costly on a unit basis if the wells
are not as productive as expected from overly dense spacing."
wants to privatize Petrobras. The Brazilian government
wants to fully privatize
Petrobras by 2022. Meanwhile, Petrobras CEO Roberto Castello Branco suggested that the
company should end the use of production-sharing contracts, and instead shift
to a concession model.
1. U.S. To Drown
The World In Oil
2. Saudi Aramco
Posts Strong Cash Flows, Boosting M and A Prospects
3. Oil Markets On
Edge Over Trade War Uncertainty OIR 200819
4. U.S. Oil Data
Brightens A â€˜Dark Economic Universeâ€™ â€“ OIR 160819
5. Average Prices
of PMS, AGO, HHK and Cooking Gas â€“ July 2019
6. Oil Soars As The
U.S. Delays Trade War Tariffs
7. Oil Price Risk
Has Shifted To The Downside
8. Oil Markets On
Edge Despite Price Bounce â€“ OIR 090819
9. OPEC Production
Slumps To 5-Year Low
10. Oil Struggles As
Markets Rocked By Trade War â€“ OIR 060819
11. 5.61bn Litres of
PMS Imported into Nigeria in Q2 2019 - NBS
12. Sahara Group
Lauds Investment Opportunities in Angolaâ€™s Downstream Sector