Wednesday, March 20,
2019 07:11AM / By Tom Kool, News Editor, Oilprice.com
In this Midweek Intelligence Report, 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.
Market
Movers
Tuesday
March 19, 2019
Oil prices held
onto gains at the start of the week, keeping WTI and Brent at four-month highs.
OPEC’s assurances that cuts will remain in place for the next few months –
including potentially over-compliance – firmed up prices.
OPEC delays decision on
cuts. When OPEC announced the production cuts last December, it said that it
would review the next steps at a meeting in April. Now, it appears that the
group will push off a decision until the June meeting, at which point there
will be more clarity on the Iran sanctions waivers and the impact of the
production declines in Venezuela.
U.S. says oil market can
deal with no Iranian oil. American officials said that the global oil market
can withstand the removal of all Iranian oil exports this year, according to Bloomberg. No decisions have been made on waivers yet.
Refiners are trimming plans
for maintenance. Refining margins have been poor for gasoline, but strong for
distillates. That trend will continue ahead of the IMO regulations in 2020 that
will reduce sulfur content in marine fuels, raising demand for distillates.
Bloomberg reports that refiners are likely going to reduce planned maintenance
periods, or front-load them in the first half of 2019, in anticipation of a
strong period leading up to implementation of the IMO rules.
Trump-Xi meeting delayed
until June. A potential meeting between Trump and Xi Jingping that could put an
end to the trade war has been pushed off until June, back from a proposed
meeting later this month or for April.
Fires hit two refineries.
ExxonMobil’s (NYSE: XOM) Baytown refinery caught fire over the weekend. The
facility’s gasoline hydrofiner, which removes sulfur from fuel, caught fire and
was billowing smoke. Separately, Phillips 66’s (NYSE: PSX) shut a crude unit on
Friday near Los Angeles after it caught fire. The incidents could put pressure on gasoline stocks and prices. The Phillips 66 unit could have a bigger impact
since California does not have interconnections with the rest of the country’s
refining system. The impact on petrochemical production is so far unclear.
Keystone XL loses another
court battle. A U.S. court had previously ordered TransCanada (NYSE: TRP) to
halt construction on the Keystone XL pipeline while an environmental review
played out. TransCanada appealed the decision but last week lost that appeal in
a subsequent court ruling.
Environmental assessment
could delay major oil export terminal. The Carlyle Group is hoping to build a
$1 billion crude oil export terminal in Corpus Christi, Texas, which would
vastly expand the U.S.’ capacity to export oil. As of now, there is only one
deepwater port in the U.S. capable of loading onto supertankers. The Carlyle
Group’s project, however, could face a lengthier delay after the U.S. Army
Corps of Engineers recommended a full environmental impact statement before it
can proceed, a process that could take 18 months. Trafigura is racing to build
a rival project that would be subjected to less regulatory scrutiny because it
would not require dredging.
Equinor (NYSE: EQNR) is exploring the sale of its Eagle Ford Shale assets. The company originally paid
$1.3 billion for the joint venture in the Eagle Ford with Talisman Energy Inc.,
which was later purchased by Repsol. Equinor is reportedly looking for more
natural gas deals as it exits the Eagle Ford. Notably, the company has avoided
the Permian because acreage has become “too expensive.”
Carrizo explores deal with
SM Energy. Carrizo Oil & Gas Inc. (NASDAQ: CRZO) is exploring a merger with
SM Energy (NYSE: SM), although no decisions have been made. Carrizo’s shares
increased 4.9 percent on the news, while SM Energy’s shares jumped by 2.5
percent. The talks come as U.S. shale drillers are under pressure to
demonstrate profitability at a time when the oil majors are scaling up operations
in the Permian and other shale basins.
Libya’s oil production
rises on Sharara restart. The restart of Libya’s largest oil field, the
Sharara, has helped boost the country’s output. “Three weeks ago, production
was around 900,000 barrels a day. Now we’re in the range of 1.2 million barrels
a day,” Chairman of Libya’s National Oil Corp. Mustafa Sanalla told Bloomberg Television.
Alberta to lift production
limits. Alberta will raise the limit on production by 25,000 bpd in May,
followed by another 25,000-bpd increase in June.
Pemex to triple drilling
rate. Pemex plans to triple the number of wells that it drills this year in an
effort to stop its long-term slide in output. The company will drill 506 new
wells across 20 oil fields, the company’s CEO said, which should yield 300,000
bpd in new output by 2022.
Battery startups introduce
non-lithium batteries. The future of electric vehicles was thought to hinge on
lithium, but newer battery designs promise to
Shipping industry bets on
LNG tankers. The global fleet of LNG tankers could grow by a third in the next
few years as the gas trade continues to boom. Each vessel costs about $175
million to build.
Colorado State Senate
passes energy overhaul bill. Colorado’s State Senate passed a major piece of
legislation that grants more local authority in the regulation of oil and gas
drilling in the state. The bill also reforms the primary mission of state
regulators to one of environmental protection, rather than promoting the growth
of oil and gas development. The industry has opposed the measure, warning that
it could impede production. The bill passed the Senate and now goes to the
House, where odds of derailing it are even slimmer.
Most Recent Articles
1.
“Perfect Storm” Drives Oil Prices Higher
2.
Why Canadian Oil Giants Won’t Expand Production Capacity
3.
LNG Sector Dangerously Dependent On Chinese Demand
4.
Markets Brace For U.S. Decision On Iran Sanction Waivers
OIR Related Updates
1.
Oil
Prices Surge To Multi-Month Highs - OIR 150319
2.
Oil
Prices Inch Higher On Venezuelan Crude Crisis – OIR 120319
3.
Oil
Prices Sink On Negative Economic Data – OIR 090319
4.
Bulls
Battle Bears As Oil Prices Stall – OIR 050319
5.
The
$32 Trillion Push To Disrupt The Entire Oil Industry
6.
Oil
Inches Higher Ahead Of Inventory Data - OIR 260219
7.
Oil
Prices Up On Trade Optimism - OIR 220219
8.
Oil
Markets Poised For A Breakout - OIR 190219
9.
OPEC
Cuts Oil Production, U.S.-China Trade Deal Looks Positive - OIR 150219
10. Oil
Market Tightens On OPEC Cuts– OIR 120219
11.
What
Is Keeping Oil Prices Subdued? – OIR 080219
12. Oil
Rally Halts On Economic Concerns – OIR 050219
13. What’s
Driving Oil Prices Down? – OIR 220119
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