Tuesday, July 30, 2019 /07:20PM / By Tom Kool of Oilprice.com / Header Image Credit:CNBC
Today, we will take a
quick look at some of the critical figures and data in the energy markets this
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. exports of LNG hit a new record high at 4.7 billion cubic
feet per day in May 2019. The U.S. is now the world’s third largest LNG
- Four new LNG trains with a combined capacity of 2.4 Bcf/d
have come online since November 2018, including Sabine Pass Train 5, Corpus Christi
Trains 1 and 2, and Cameron Train 1.
- Europe has accounted for much of the increase in shipments.
In the first five months of 2019, roughly 40 percent of U.S. LNG exports went
to Europe, and in January, Europe surpassed Asia as a buyer of U.S. LNG for the
- Transocean (NYSE: RIG) reported a net loss of $208 million, or $0.34 per share,
roughly in-line with consensus estimates. “Despite some continued uncertainty
around oil prices, offshore project economics remain compelling, driving
increases in floater contracting and increasing dayrates in both the harsh
environment and ultra-deepwater markets,” the company said.
- BP (NYSE: BP) saw its share price rise by more
than 1.5 percent in early trading on Tuesday after the company posted a replacement cost profit of $2.8 billion, which
exceeded expectations. BP benefited from a significant increase in
- National Oilwell Varco (NYSE: NOV) saw
its share price jump by nearly 8 percent in early trading, despite reporting a
$5.39 billion loss in the second quarter, which included a major impairment
Tuesday July 30, 2019
Oil prices seem trapped between supply outages on the one hand, and fears
of weak demand on the other. WTI and Brent moved up slightly in early trading
majors’ earnings week. The oil majors will report earnings
this week. Total (NYSE: TOT) and Equinor (NYSE: EQNR) started
things off a few days ago, reporting disappointing results. However, BP (NYSE: BP) beat
analysts’ expectations on Tuesday. Royal Dutch Shell (NYSE: RDS.A)
reports on Thursday, while Chevron (NYSE: CVX) and ExxonMobil
(NYSE: XOM) report on Friday. As the Wall Street Journal reports, “The overriding challenge for large oil companies
this period—and into the foreseeable future—will be how well they negotiate the
transition to cleaner forms of energy and future-proof their businesses against
changing public sentiment and policies that could add a surcharge on carbon
floating storage on the rise. As sanctions cut into Iranian
oil exports, more oil is diverted into both onshore and floating storage.
According to Kpler, storage has climbed above 110 million barrels.
proposes new regulations on oil and gas. Colorado
Department of Public Health and Environment proposed new regulations on air
pollution from the oil and gas industry. The rules would require mandatory
inspections on leaks, close a loophole that allows companies to begin drilling
without air permits, and an array of other regulations on emissions from
pipelines, storage tanks and truck unloadings. “We’re going to reduce statewide
emissions by 80% by 2030,” John Putnam, the state health department’s
environmental programs director, said at a public meeting. “We’re still trying to figure out
exactly how to get there. We cannot do it without regulating this oil and gas
step up spending amid shift away from coal. U.S. electric
utilities are set to increase capital expenditures as they shut down coal and
turn to other forms of generation, according to CFRA Equity Research. Spending
for the S&P 1500 Electric Utilities Index could grow by 5.5 percent in 2019
and 4.5 percent in 2020.
expected to cut rates. The U.S. Federal Reserve is widely
expected to cut rates this week, which could keep the economic
expansion going for a little while longer. Rate cuts are helping to put some
upward pressure on crude.
could lose Citgo. A U.S. appeals court ruled in favor of Crystallex International Corp. as it
sought compensation for nationalized gold assets. The ruling could allow
Crystallex to auction off shares in Citgo as a form of repayment. As a result,
the U.S.-based refiner could be severed from PDVSA and Venezuela. However, to
complicate matters, Citgo is pivotal to the strategy of Juan Guaidó in his
attempt to take over power in Venezuela and rebuild the economy.
trims production curtailments. The provincial government in
Alberta has loosened the mandatory production limits imposed earlier
this year by another 25,000 bpd, the sixth consecutive month in which the
limits have been lifted by that amount. WCS prices have strengthened this year.
Increased rail traffic is helping ease the bottleneck.
might not need more pipelines. The CEO of Tallgrass
Energy (NYSE: TGE) questioned whether the Bakken’s growth
prospects warrant more pipeline additions. “I think the question everyone has
to ask themselves is ... long-term, at $50/b-$60/b oil, will the Bakken become
that 2 million-plus b/d market it needs to be, to support everything that is
being talked about but not yet built?” David Dehaemers said, according to S&P Global Platts. “I don't think we've seen the answer
to that.” North Dakota saw production rise to 1.39 mb/d in May, but production
increases have slowed dramatically.
Boone Pickens ETF switches from oil to renewables. BP
Capital Fund Advisors, a spinoff of a former hedge fund run by T. Boone
Pickens, is shifting its focus from oil to renewables by mid-August, according
to Bloomberg. BP Capital’s ETF, which has traded under the
ticker BOON, has lost 20 percent over the last year, while the WilderHill Clean
Energy Index – an index of large solar companies – has gained 19 percent, for
instance. BP Capital’s ETF will soon trade under a new ticker, RENW, and will
be made up companies that derive “significant revenue” from renewables.
emissions may peak as soon as 2021. China’s greenhouse gas
emissions may peak as soon as 2021, much sooner than the 2030 target China
agreed to as part of the Paris Climate agreement. That is according to a new peer-reviewed paper, and if it comes to pass, it would
have global implications since China is the largest emitter in the world.
Drones could save oil industry $50 billion. A new report
from Barclays estimates that the oil and gas industry could save $50 billion in
costs from the expanded use of drones over the next five years.
funding in U.S. Senate bill. A massive $287 billion
bipartisan transportation bill working its way through the U.S. Senate includes $3.5
billion in funding for projects that reduce emissions, including for EV
could spike $15-$20 if Hormuz blocked. According to Rapidan
Energy, Brent could spike by $15 to $20 per barrel if the Strait of Hormuz were
blocked under for seven days. “We do believe that Iran has the capability to
meaningfully disrupt tanker traffic for Hormuz for a significant period of time
— days to weeks. And we believe that this is much longer than what the market
sees at the moment,” Rapidan analyst Fernando Ferreira told S&P Global Platts’ Capitol Crude podcast.
gas prices continue to fall. Natural gas prices in the U.S.
have fallen to multi-year lows, putting the screws on shale gas
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