Saturday, August 14, 2021
/06:00 AM / by Michael Kern of Oilprice.com / Header Image
Despite growing demand fears due to new outbreaks of covid
across Asia, oil prices have remained resilient this week.
Friday, August 13th, 2021
Crude prices have pulled off a noteworthy
performance this week, with Brent remaining above the $70 per barrel mark
despite mounting COVID fears in China and the U.S. While President Biden called
on OPEC+ to drill more in order to counter rising gasoline prices, the IEA
downgraded its demand forecast for the remaining months of 2021, wary that
Asia's Covid recovery might not be as swift as previously thought.
Sachs Still Sees $80 per Barrel Crude. The
ever-bullish U.S. investment bank Goldman Sachs (NYSE:GS) forecasts
crude prices to average $80 per barrel in Q4 2021, arguing that demand weakness
brought about by the Delta variant will be short-lived, keeping the global balances
Quits The Gambia Without Drilling a Well. The UK
major BP (NYSE:BP) agreed to pay an outstanding fee of
$29 million to cancel its drilling commitments in the Gambia, leaving the country
without having drilled a single well. BP reportedly argues that offshore Gambia
was incompatible with its low-carbon strategies.
Majors Want Renewables without Costly Upgrades. U.S.
oil majors ExxonMobil (NYSE:XOM) and Chevron
(NYSE:CVX) are looking into ways to
utilize their current production facilities for renewable fuel production.
Chevron has already set an end-2021 deadline for co-processing bio feedstocks
in its fluid catalytic crackers (FCC).
Clinches Offshore Angola Deal. French oil major TotalEnergies
(NYSE:TTE) signed a production
sharing contract with Angola's oil regulator ANPG for offshore block 29 in the
yet-untapped frontier Namibe Basin, to the south of the prolific Kwanza Basin.
Italian major ENI (NYSE:E) signed up for adjacent blocks 27 and
28 last month.
Buys into Haynesville Shale. In a first
major move since its bankruptcy earlier this year, U.S. oil firm Chesapeake
Energy (NASDAQ:CHK) agreed to acquire shale
gas-focused Vine Energy through a $2.2 billion cash and stock transaction,
boosting Chesapeake's Haynesville shale acreage by additional 123,00
Takes On US EV Market. Chinese tech firm Foxconn
(TPE:2354) seeks to build electric
vehicles in the U.S. and Thailand, potentially also eyeing the European market.
Mass production is expected to start in 2023 in both countries, with Foxconn
teaming up with Thai oil major PTT and US EV-manufacturer Fisker
(NASDAQ:FSR) for the task.
Quintuples Y-o-Y Profit. Russian state oil
company Rosneft (MCX:ROSN) reported a
fivefold increase in Q2 net profits, cashing in $3.1 billion on the back of
higher outright oil prices. Rosneft's crude production averaged 3.9mbpd, up 4%
Government Turns Back on New Projects. Scotland's
first minister Nicola Sturgeon penned a letter to the UK Prime Minister Boris
Johnson, asking to "reconsider" all new offshore projects given their
environmental impact. Cambo, the largest one in the project pipeline, is set to
be commissioned in 2025.
Turbine Maker Vestas Worsens 2021 Outlook. The world's
largest wind turbine maker Vestas (CPH:VWS) cut its 2021
outlook, citing higher feedstock costs and surging transportation expenses as
the main reason for doing so. The Danish firm's operating profit margins
dropped to 5-7%, a far cry from its long-term target of 10%, Reuters writes.
Prices Continue Soaring. Front-year 2022 ICE coal
futures have surged past the $100
per metric ton threshold, marking the first time since 2012 that the market saw
such higher futures prices. Exorbitantly high LNG prices keep on heating up
coal demand in Europe.
Surges Amid Supply Concerns. Shanghai nickel prices
gained 5% on Thursday, rising to almost $22,800 per metric tonne, as latest
data from China show domestic nickel output falling by 15.7% year-on-year and
global nickel inventories dropping to their lowest since early 2020 just as EV
demand for the metal keeps on increasing.
Averted at Escondida Mine. The BHP (NYSE:BHP) operated
Escondida copper mine in Chile (the largest in the world) has seen a
long-standing corporate row come to an end after the 2,300-strong labor union
accepted a new contract. A failure to do so would have sent copper prices
Sticks to Oil Production. Despite increasing pressure
on oil-producing nations, Norway remains committed to oil and gas
production according to
the country's Energy Ministry. Against prospects of seeing its output fall to a
mere 500kbpd by 2040, Norway still entertains hopes of replenishing reserves
with prospective Arctic discoveries.
to Pay $111 Million to Nigeria. The Anglo-Dutch
major Shell (NYSE:RDS) agreed to pay 111
million to Nigeria's Ejama-Ebubu community in a bid to settle a long-standing
case over an oil spill that took place during the 1967-70 Biafran War. Shell
has been seeking to divest its onshore Nigerian assets, partially due to the
array of lawsuits it faces.
Lowers Global Wheat Supply. The U.S. Department of Agriculture
lowered its global wheat supply forecast for the 2021-22 season, with Russia,
Canada, and the United States all seeing lower production, dropping by more
than 20 million tons compared to the previous forecast. Wheat prices have been
on the rise since mid-July, getting increasingly closer
to multi-year highs.
The post Oil Prices
Resilient Despite Demand Doubts first appeared in Oilprice.com on August 13, 2021.
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