February 21, 2018/ 07.46 AM/ Oilprice.com
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Chart of the Week
- The price of solar modules continues to fall, having dropped more than 40 percent since 2012.
- The average module price in the U.S. stood at about $1.15 per watt in 2012, a figure that declined to $0.72/W by 2016, according to the EIA.
- By the end of 2017, the global spot price for monocrystalline solar modules fell to just $0.45/W.
• ExxonMobil (NYSE: XOM), Total SA (NYSE: TOT), and Oil Search (OTCPK: OISHF) are poised to greenlight more than $6 billion towards and LNG export project in Papua New Guinea.
• Eni’s (NYSE: E) profit surged in the fourth quarter, and 2017 production surged to a high of 1.82 million barrels of oil equivalent per day. Quarterly profits jumped to 2 billion euros, up from 1.3 billion euros a year earlier.
• Hi-Crush Partners (NYSE: HCLP) reported earnings per share of $0.47, fourth quarter revenue of $216.5 million on sales of 2.985 million tons of frac sand. That compares to revenues of $167.6 million on sales of 2.456 million tons of sand a year earlier.
Tuesday February 20, 2018
Hedge funds slash bullish bets. Hedge funds and other money managers reduced their bullish bets on crude oil in the second week of February, which coincided with a dip in oil prices. After building up a near record bullish position, investors “cut their combined net long position in the six most important petroleum futures and options contracts by the equivalent of 152 million barrels in the week to Feb. 13.,” according to Reuters. It was the largest reduction in nine months. With the retreat in prices and the liquidation of some of the long bets, there is now a more balanced positioning from hedge funds and other money managers, reducing the risk of a further price correction.
U.S. exports rise…so does WTI. WTI is receiving a boost relative to other benchmarks because of a spike in U.S. exports over the past year. New pipelines have better connected oil from Texas shale fields to the Gulf Coast, allowing more cargo to be shipped overseas. That, in turn, has helped drain stockpiles in Cushing, OK, helping to push up WTI. The American benchmark recently traded at a premium to the Dubai benchmark for the first time in over a year. Exports are likely to pick up after the start of operations at the LOOP export facility in Louisiana, which can handle very large crude carriers (VLCCs).
Oil majors diversify into electricity. As the FT reports, several European oil majors are laying the groundwork to build up their portfolios in electricity generation, diversifying just a bit away from oil and gas as they prepare for a low-carbon future. Royal Dutch Shell (NYSE: RDS.A) announced plans to purchase First Utility, based in the UK. Shell also purchased Silicon Ranch Corp. last month, a U.S. solar company. Total (NYSE: TOT) is building up electricity generating assets in France. “Any piece of energy demand that can be electrified, needs to be electrified,” Maarten Wetselaar, head of Shell’s “new energy” strategy, told the FT.
UAE energy minister says OPEC to discuss long-term cooperation. Coming on the heels of reports last week that OPEC was looking into a more permanent cooperative arrangement with Russia and other non-OPEC countries, the energy minister from the UAE said that those negotiations could be held at OPEC’s official meeting in June. “I think the potential is huge for cooperation, whether it is focused on the oil sector, or the broader energy sector,” Suhail al-Mazroui, UAE energy minister and current OPEC president, told Reuters. “We look forward to put something to the ministers hopefully the next time we see the whole group getting together…hopefully in June.”
Israel and Egypt move forward on gas deal. After months of talks, a deal is inching forward that would see Israel export natural gas to Egypt. Noble Energy (NYSE: NBL) and Delek Drilling (TLV: TMRP) said they will export 64 billion cubic meters of natural gas over 10 years to Dolphinus Holdings Ltd. of Egypt. The deal bolsters the export position of both countries, allowing Israeli gas to head to Egypt and also strengthening the case for Egypt to become a gas hub. Egypt as idle LNG export facilities that could be brought back into operation and it also is benefitting from the recent startup of Eni’s (NYSE: E) Zohr gas field.