Wednesday, May 12, 2021
/07:00 AM / by Tom Kool of Oilprice.com / Header Image Credit: France24
Today, 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.
We hope you enjoy.
Chart of the Week
- U.S. natural gas production
posted the largest monthly decline on record in February, according to
recent EIA data.
- Production averaged 104.8
Bcf/d, an 8.1 Bcf/d decline (7%) from January.
- Texas accounted for a
4.3-Bcf/d decline, the largest on record.
- The UK's largest asset
manager, Legal & General, said that it would
back the activist hedge fund's slate in the ExxonMobil
(NYSE: XOM) shareholder meeting later this month.
Enterprises cut production at
its refinery by 45% because of the Colonial Pipeline outage. Total (NYSE:
TOT) reduced output by 25% at its Port Arthur
- EQT (NYSE: EQT) announced the sale of $1
billion in debt to finance its takeover of Alta Resources Development.
Tuesday, May 11, 2021
Oil prices eased on Tuesday as some resolution
to the Colonial pipeline outage came within sight. "As most operational service
is expected to be restored by the end of this week, traders have removed
yesterday's price premiums, realizing there are enough commercial gasoline
stocks to tide over the currently expected duration of the crisis," Rystad
Energy said in a statement. But gasoline shortages were starting to emerge due to
Colonial Pipeline outage fallout. The Colonial Pipeline carries gasoline from Texas to
the Northeast, delivering 45% of the East Coast's gasoline supply. The
ransomware outage has left the
pipeline offline for days. The Biden administration declared an emergency,
which opened up a few paths to ease the
bottleneck. "Colonial Pipeline is ultimately the jugular of the U.S.
pipeline system. It's the most significant, successful attack on energy
infrastructure we know of in the United States."
Colonial outage and rerouted gasoline flows. A record-high amount of gasoline from the Mideast is
being rerouted to the U.S.,
and European gasoline is also likely heading for the
East Coast. "With the loss of Colonial's roughly 1.5 million b/d plus
of gasoline, inventories will reach 5-year lows (52.4 million barrels seen in
October 2017) after 8 days of outages," Platts Analytics said, referring to
Atlantic Coast inventories.
Gas stations running out of fuel. Some gasoline stations on the East Coast are starting to run
out of fuel. An estimated 7 percent of gas stations in Virginia were out
of fuel as of late Monday, according to GasBuddy analyst Patrick DeHaan.
Oil industry adds jobs. In March, the U.S. oil and gas industry added 12,000 jobs,
the largest monthly gain in 30 years.
OPEC's production increases. OPEC's crude oil production is estimated to have
increased to a three-month high of 24.96 million barrels per day (bpd) in
April, thanks to a major jump in Iran's output.
China shuns Australian LNG. At least two Chinese importers of LNG were told
by the government to stop importing gas
from Australia, another casualty in the two countries' worsening trade
Colorado drillers merge. Bonanza Creek Energy (NYSE: BCEI) and Extraction Oil
& Gas (NASDAQ: XOG) announced plans to combine
into a company valued at around $2.3 billion. The two companies will together
become the largest pure-play driller in Colorado's Denver-Julesburg Basin. The
combined company will be renamed Civitas Resources Inc.
Dutch government grants $2.4 billion in subsidies for carbon
capture. The Dutch
government has granted a consortium
that includes Royal Dutch Shell (NYSE: RDS.A) and ExxonMobil
(NYSE: XOM) $2.4 billion in subsidies for what is set to
become one of the largest carbon capture and storage projects in the world.
Rystad: Oil majors run out of reserves in 15 years. The proven reserves of the oil majors declined
by 15% last year, and the remaining reserves are on track to run out in 15
years, according to Rystad Energy. "The task is
becoming more and more challenging as investments in exploration shrink and
success rates slump," Rystad said.
Indian refiners cut output. Due to the drop in demand from the pandemic, India's
refiners have trimmed processing. Indian Oil Corp, the country's largest
refiner, reduced runs to about 85-88% capacity. "We do not anticipate that
our crude processing would be reduced to last year's level of 65%-70% as
inter-state vehicle movement is still there... (the) economy is
functioning," a company official told Reuters.
Jet fuel demand remains down. Long-haul flights are not returning anytime
soon, so jet fuel demand could average
around 5.8 mb/d in 2021, up 30% from 2020, but down from 8 mb/d in 2019,
according to FGE.
Shell announces Gulf of Mexico discovery. Royal Dutch Shell (NYSE: RDS.A) announced a deepwater
discovery in the Gulf of Mexico.
Gas flaring declined by 5%. Gas flaring worldwide decreased by 5 percent
last year due to lower demand for oil and a knock-on decline in drilling.
IEA: Renewables surging. In a new report, the IEA said that
renewable installations soared to 280 GW globally last year, up 45% from 2019.
The strong additions are set to become the "new normal," the agency said, with
renewables accounting for 90% of global electric capacity installations in 2021
Vitol's carbon trading surged. Vitol Group's carbon emissions trading soared by 61% last
year, a sign that oil traders are pivoting into carbon trading.
Shell to get half of energy from clean sources within a
decade. Royal Dutch Shell (NYSE:
RDS.A) CEO Ben van
Beurden said that half of
the company's portfolio will come from clean energy "somewhere in the next
EVs to be cheaper in every segment in the coming years. EV cars will be cheaper than gasoline
and diesel vehicles by 2027, and larger electrified SUVs will be cheaper by
2026, according to BNEF.
$1.7 trillion in mining needed for energy transition. The mining industry needs to invest $1.7
trillion over the next 15 years to develop enough copper, cobalt, nickel,
lithium, and other metals to fuel the energy transition.
S-curve for renewables. A new report argues that renewable
energy is about to enter the steep portion of an S-curve adoption scenario.
That is, solar and wind are on the cusp of rapid growth as costs decline and
coal gets phased out.
Qatar plans to dominate LNG. Qatar really means business when it comes
to leveraging this cost
advantage in global markets. Qatar has put other mid-decade FID's on notice,
that without rock-bottom cost economics their projects may not be competitive.
Vineyard Wind approval expected. The Biden administration is set to give
the final approval to the U.S.' first large-scale offshore wind farm, an 800-megawatt project off the coast of
Massachusetts. The project could come online in 2023.
The post Panic Buying Sparks Gasoline
Shortages first appeared in Oilprice.com on May 11, 2021.
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