Wednesday, November 13, 2019
/08:32 AM / By Tom Kool of Oilprice.com / Header Image
Credit: Oil Price
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
- Natural gas inventories have surged this year, rising
from a low point of 1,155 billion cubic feet (Bcf) in April to 3,724 Bcf at the
end of October.
- Natural gas stocks are now 37 Bcf above the five-year
- The U.S. is entering the winter season with ample supplies,
which has weighed on natural gas prices and puts somewhat of a cap on any
rally. Gas drillers are struggling financially as a result.
- Occidental Petroleum (NYSE: OXY)
is looking to sell oil and gas assets in
Wyoming and Colorado, assets that were acquired when the company bought
- Chevron (NYSE: CVX) has completed a $2 billion sale
of North Sea assets to Israel's Delek Group (OTCPK: DLKGF).
- TC Energy's (NYSE: TRP) Keystone
pipeline was partially returned to service
after a major spill in North Dakota late last month. It will operate the
pipeline at reduced pressure.
Tuesday November 12, 2019
Oil continues to seesaw on every rumor (positive or negative) regarding the
U.S.-China trade war. As a result, a lot of attention will be paid to President
Trump's speech today at the New York Economic Club, where he may provide more
clues into what to expect next. Markets are betting on an easing of
Arabia raised production in October to 10.3 mb/d. Saudi
Arabia ratcheted up oil production
to 10.3 mb/d in October, although it supplied 9.89 mb/d to the market, with the
rest diverted into storage in order to rebuild inventories after the Abqaiq
and others stop oil exploration in Bolivia. Bolivian
President Evo Morales stepped down (or was ousted in a coup, depending on one's
point of view), and is seeking exile in Mexico. The political turmoil could
descend into deeper violence. Royal Dutch Shell (NYSE: RDS.A), Total SA
(NYSE: TOT), and Respol (BME: REP) "have all
stopped or severely limited drilling on exploration wells," Bloomberg reported. There isn't
evidence that existing production has been affected, but new drilling has been
suspended for now.
gas prices sink on weather forecast. A warmer-than-expected
weather forecast for the U.S. winter from the National Oceanic and Atmospheric
Administration led to a selloff in U.S. natural gas
prices. As a result, share prices of major shale gas producers fell sharply. EQT (NYSE:
EQT), the largest gas producer in the U.S., saw its share price
plunge by 9 percent on Monday. The forecast comes even as freezing temperatures
have swept over much of the continent. Low prices are hitting the entire gas
announces major oil discovery. Iran said that it has discovered a giant oil
field in the country's south, a field that may hold as much as 50 billion
barrels of oil. That is almost as big as all of the reserves held in the U.S.,
which stands at around 61 billion barrels.
releases prospectus. Saudi Aramco released a
highly-anticipated prospectus ahead of its IPO. In the document, the company acknowledged several risks
to its business, including an admission that "terrorism and armed conflict may
materially and adversely affect" its operations. The company also acknowledged the threat of
peak oil demand. Aramco did not reveal the percentage of the company that it
plans on offering at the IPO in December.
majors team up to launch Abu Dhabi futures contract. Abu
Dhabi National Oil Company (ADNOC) and nine of the world's biggest energy
traders are partnering to launch a
crude oil futures exchange in Abu Dhabi.
sand miners squeezed by drilling slowdown. Frac sand
supplier Carbo Ceramics (NYSE: CRR) issued a "going concern" warning on Friday, admitting that it may not be able to survive the shale
drilling slowdown. On Monday, the company's share price plunged by almost 48
percent. While shale drillers cut drilling to reduce expenses, all of the
ancillary services related to fracking are bearing the brunt. "If you look at
Permian frack sand prices, we estimate they are down about 80% from the peak," Joseph Triepke, president of consultancy Infill Thinking, told Reuters.
his Pemex. A cyber-attack hit Pemex computer servers that halted administrative work
at the company on Monday.
splits into two companies. SunPower (NASDAQ: SPWR) announced
plans to split into two,
with one company focused on the U.S. distributed solar market, and another
focused on overseas PV manufacturing. China's Tianjin Zhonghuan Semiconductor
will invest nearly $300 million in the manufacturing company.
CEO never believed in shale. Total SA
(NYSE: TOT) CEO Patrick Pouyanne said he his company stayed
away from shale, and that he "never believed in flexible short-term capex," he said, adding that "it's not
true." He said that companies in shale have to commit a "quite heavy" capex
program, and despite the gold rush mentality, profits have been elusive. Total,
on the other hand, is focusing on LNG and deepwater.
Shale's struggles are bullish. Goldman Sachs is out with a
note arguing that "what's bad for the micro is good for the macro," meaning
that the individual struggles by an array of shale companies will translate
into slower production growth, which will sow the seeds of an oil price rally
in a year or two. After third quarter earnings, the investment bank said that
it's clear that capital is becoming scarce, discipline from companies is
apparent, and productivity data is mixed. Goldman reiterated Buy ratings for EOG Resources
(NYSE: EOG), Pioneer Natural Resources (NYSE: PXD)
(NYSE: COP), and Sell ratings for Chesapeake
Energy (NYSE: CHK) and Southwestern Energy (NYSE: SWN).
Vaca Muerta at risk. Oil companies in Argentina are nervous that an economic
crisis could kill off the recent surge in Vaca Muerta production. Drilling
activity has fallen by half since the August primary, which sparked a selloff
in the currency and forced the government to freeze fuel prices. The price
freeze meant that companies were selling oil at a loss, so they all but halted
drilling. The price freeze is set to expire within days, although it's unclear
what the new incoming president will do.
- Why 2020
Could Be A Crisis Year For Refiners
- Can Saudi
Arabia Hold OPEC Together?
Markets: Deja Vu As The Trade War Talks Flatter To Deceive
Suspends Petroleum Products Supply To Filling Stations Within 20
Kilometers To All Borders
Oil Companies Scale Down On Nigeria Operations
- The Bulls
Are Back As Oil Heads Towards $60
Lawmakers Vote to Increase Deepwater Royalties
Arabian CMA Announces the Approval of The IPO of The Saudi Arabian Oil
Markets: A Rare Bullish Bounce In Oil Markets
- FG Urged to
Pay Greater Attention to Oil Producing Communities
- Is OPEC
Doing Enough To Counter The Looming Oil Glut? - OIR 291019
Rated BBB plus Long-Term (NG), A2 Short-Term (NG)- GCR; Outlook Stable
Markets: Oil Bulls Broken By Economic Fears - OIR 251019