Saturday, May 15 , 2021
/06:40 AM / by Tom Kool of Oilprice.com / Header Image Credit: Oilprice.com
Oil prices rebounded
on Friday morning as inflation fears fade and the global supply glut slowly drains,
although the IEA did revise its demand projection downward.
Friday, May 14th,
prices rebounded on Friday after a midweek selloff. Neither the bullish nor
bearish narratives are taking hold at the moment, and Brent crude is trading in
pipeline restarts. The Colonial Pipeline restarted
product flows on Wednesday, although localized shortages will take time to
ease. The company reportedly paid the ransom, but the operator of the ransomware
group Darkside said on Friday it had lost control of its servers
and some of the money it had made through ransom payments.
ratchets up Guyana production. ExxonMobil
(NYSE: XOM) has boosted its 2025
forecast for oil production in Guyana to 800,000 bpd, with plans for a fourth
project in the Stabroek block. "Production is expected to begin at year end
2025 with an expected field life of at least 20 years," Exxon told Guyana
presses banks on climate risk. The U.S. Federal
Reserve has asked lenders to start providing information on the measures they
are taking to mitigate climate change-related risks to their balance sheets,
according to Reuters.
to partner with China on LNG. Qatar is in talks with Chinese
firms to make them partners in its LNG expansion.
runs Line 5 despite shutdown order. Enbridge (NYSE:
ENB) continues to operate the
oil pipeline through the Great Lakes, reiterating that it is up to the U.S.
federal government to say if the pipeline should continue operations. Michigan
revoked Enbridge's easement for the operation of the twin Line 5 pipeline last
November, citing repeated violations of the easement and the need to protect
the Great Lakes.
prices drop. Oil prices fell on Thursday as concerns
about rising inflation filtered through to market expectations. "Oil's getting
sucked into the inflation fear scenario," said Bob Yawger, head of the futures
division at Mizuho Securities, according to Bloomberg. Inflation tends to
drive up crude, but knock-on concerns about weaker growth can drag down
commodities. Similarly, expectations of interest rate increases can undercut
rising prices. By Friday, oil was regaining ground.
Glut cleared, demand revised down. The IEA said that the global
oil supply glut that resulted from the pandemic has disappeared, due to a steep
drop in supply, aided by the OPEC+ production cuts. Inventories have drained
off. But the agency also revised down its oil demand forecast for 2021 by
270,000 bpd, due to lower consumption levels in Europe, OECD Americas, and
proposes oil sales via Saudi Arabia. Iran is looking
to persuade its regional
rival Saudi Arabia to help it to sell Iranian crude oil on international
markets in exchange for limiting attacks from the Iran-aligned Houthi rebels in
Yemen on Saudi oil infrastructure.
sees stock fall after 1st quarter results. Occidental
Petroleum (NYSE: OXY) saw its stock fall by 8% on
Tuesday after reporting a net loss of $300 million in the first quarter, but a
strong $1.6 billion in free cash flow. Higher Permian production and strong earnings
from its chemicals unit boosted cash flow. But the company's incremental cash
flow will be dedicated to whittling away at its $30 billion debt pile.
cuts supply forecast. The EIA cut its supply forecast
slightly for U.S. oil production for 2022 due to the ongoing spending restraint
from E&Ps, lowering its expected output by 20,000 bpd to 11.84 mb/d.
bubble bursts. Clean energy has so far been the worst-performing sector, with
investors yanking cash from the sector at the fastest pace in a year. The
iShares Global Clean Energy ETF (ICLN), a catch-all bet on clean energy, has
sunk 26.7% in the year-to-date while the market's only pure-play solar ETF,
Solar Invesco ETF (NYSEARCA:TAN), has cratered 32.7% over the timeframe.
$2.5 Trillion Infrastructure Plan Could Send These EV Stocks Soaring. A
massive $2.5-trillion infrastructure plan could send EV companies--and many of
their tie-ins--to record new heights. And some investors are getting ready to
pile in like never before as the "green tidal wave" prepares to
reach tsunami proportions.
puts Jordan Cove on pause. Pembina (NYSE: PBA) "paused" its Jordan Cove LNG
export project in Oregon, a project that has been on and off the drawing board
for 15 years, but has been hit by repeated permit denials.
looks at renewables credits. Tesla (NASDAQ:
TSLA) is looking to enter the multi-billion dollar U.S.
renewable energy credit market. The EPA is looking at qualifying
EVs earning tradable credits under the Renewable Fuel Standard.
faces an uncertain future in Europe. With carbon
prices hitting record highs and EU climate policy turning the screws on carbon
emissions, coal is on the way out in Europe, but natural gas is also under
increased scrutiny. "The window for (building) conventional gas generation does
seem to be narrowing. We have the feeling you have to get material gas
investments done by the mid-decade unless pairing it with CCS or doing
something creative with hydrogen," Murray Douglas, research director at
consultancy Wood Mackenzie, told Reuters.
post record first quarter. The U.S. added 2.5 GW of wind
and 1.2 GW of utility-scale solar in the first quarter, the best start to a
year on record.
The post Oil Prices Rebound As
Global Oil Glut Drains first appeared in Oilprice.com on May 14, 2021.
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