12 outside the box energy predictions for 2019 (30 December 2018): As a tumultuous year in energy closes, 2019 is set to be another as technology, markets, politics and macroeconomics collide. Here’s what I predict. The year opens with sunshine, as January’s World Future Energy Summit in Abu Dhabi features numerous clean energy highlights. During the year, Dubai achieves another world record for the lowest concentrated solar power price and the largest plant, as bidders go far beyond the requested 300 megawatt scope. Meanwhile, Abu Dhabi, Oman and Saudi Arabia beat the once unthinkable level of 2 US cents per kilowatt-hour for solar photovoltaic projects. In February, an Arabian Gulf national oil company (NOC) makes ... (Source: The National (UAE))
Hedge funds are optimistic on oil rally next year as tumultuous 2018 ends (29 December 2018): They boosted wagers on rising Brent prices for a third straight week amid expectations that Opec and allies will follow through on a deal to reduce output. The vote of confidence comes against a backdrop of turmoil in financial markets that saw one measure of oil-price volatility jump the most on record in November and head for its highest year-end level in a decade. “There is a little more optimism and neutrality coming into markets and we’re getting some positive signs,” said Ashley Petersen, an oil analyst at Stratas Advisors in New York. “It’s not as if demand is tanking tomorrow and supply is going to triple. We’re seeing a little more rationale enter markets, a little more of a wait-and-see mode.” (Source: The National (UAE))
Oil Watchers See $70 a Barrel in 2019 as Recession Fears Fade (28 December 2018): The Brent benchmark will average $70 (Dh257) a barrel in 2019, almost a third higher than its price on Thursday, according to a Bloomberg survey of oil analysts. Futures in London and New York plunged this quarter, with volatility soaring in its final week as crude tracked gyrations in equity markets. Despite plans by OPEC and its allies to limit production next year to prevent a glut from forming, oil’s fortunes have increasingly been driven by moves in financial assets and concerns about the global economy. However, analysts expect markets are about to tighten as growth stays strong, OPEC’s supply cuts kick in, and unintended losses in Venezuela and Iran escalate. (Source: The National (UAE))
Testing times to continue as Opec heads into uncharted territory in 2019 (27 December 2018): The past 12 months have been rough for the oil markets and for one of its biggest influencers, Opec, which has weathered periods of highs and lows, forged plans for a super-group and dealt with the exit of Qatar. Next year is unlikely to be easy either. US oil production is at a record high, Brent oil prices have crashed by 40 per cent since early October and the global economy is in a slowdown mode. Opec has reacted swiftly to the developments, convening in December in Vienna, where the group is based. After a lengthy and protracted discussion, Opec+, the alliance that includes the exporter-group and allies led by Russia, decided unanimously to cut 1.2 million barrels per day from January for six months. (Source: The National (UAE))
Next year promises a tug of war between US shale and Opec+ (26 December 2018): All bets are off as US shale producers look set to take an aggressive stance towards production in 2019. After years of strategic spending to boost production and market share, US shale producers have made strong strides in returning healthy profits. New algorithms and drilling techniques are revolutionising the cost, efficiency and speed at which oil can be extracted. This modern-day gold rush is already turning ambitious engineers in west Texas into multi-millionaires. Next year looks set to power the shale revolution even more. Increasing productivity, lower tax rates and access to low-cost funding will drive the cost of fracking ever lower. (Source: The National (UAE))
Lessons From The Oil Markets In 2018 (23 December 2018): By Martin Tillier - Looking back over a period as long as a year may, to many traders, seem like a pointless exercise. One of the psychological traits needed if you are to trade regularly and stay sane is a poor, or at least selective, memory. Wrong calls and mistakes are inevitable. Dwelling on them only produces fear and trepidation, neither of which are conducive to making good decisions. However, I frequently stress the importance of setting and sticking to stop losses and if you have done that, looking back can be informative. It shows the importance of being disciplined in that regard and enables you to learn from both successes and failures. With that in mind, let’s look back at the last twelve months. (Source: Oil Price)
Falling Oil Prices Threaten Saudi Economic Growth (22 December 2018): By Oxford Business Group - In October the IMF revised its forecast for Saudi economic growth in 2018 and 2019, predicting GDP would increase by 2.2 percent and 2.4 percent, respectively, up on the 1.9 percent previously projected for both years and a considerable increase on a contraction of 0.9 percent in 2017. The fund said the recovery was driven by higher energy prices, which improved external balances, along with reforms undertaken by the government to increase domestic labour participation and strengthen the business environment. (Source: Oil Price)
UBS: Expect $80 Brent Next Year (21 December 2018): By Irina Slav - Unlike some investment banks that were quick to revise down their forecast for crude oil benchmarks next year, Swiss UBS is rather bullish: its head of asset allocation for APAC, Adrian Zuercher, says Brent crude could rebound to US$70 and even US$80 a barrel over the next 12 months. Speaking to CNBC, Zuercher noted that while supply of crude oil was still abundant, this could soon change as the OPEC+ production cuts enter into effect. While the recent oil price drop suggests many don’t believe these cuts will be as effective as the first ones in 2017, Zuercher noted a report by the Wall Street Journal that Saudi Arabia plans to cut more than initially expected, and the fact that Venezuela’s production would likely continue downwards as would Iran’s under the weight of U.S. sanctions. (Source: Oil Price)
Oil price volatility is spurring short-term investments, mainly in the US (20 December 2018): Oil producers are invariably in it for the long haul. Investing billions of dollars to find and develop new resources entails an almost clairvoyant understanding of future demand cycles. However, volatile prices and uncertainty over global growth may see more short-term thinking in 2019. This change in mindset has already happened in the US, now the world’s largest producer. The Permian shale oil basin is the world’s epicenter for so called short-cycle investment -- where capital employed drilling wells can be recouped over a briefer period than in conventional fields. (Source: The National (UAE))
Saudi Oil Minister: Crude Stocks Should Drop Very Soon (19 December 2018): By Tsvetana Paraskova - A day after oil prices plummeted again amid global market sell-offs and fears of oversupply, Saudi Energy Minister Khalid al-Falih said that he expects global oil inventories to drop by the end of the first quarter next year. The oil market is vulnerable to political and economic factors and market speculation, al-Falih told reporters in Riyadh on Wednesday. OPEC and its Russia-led non-OPEC partners in the production cut deal are committed to drawing down the global oversupply, the energy minister of OPEC’s largest producer Saudi Arabia said. (Source: Oil Price)
Kuwait considers new refinery in south (17 December 2018): By Robert Brelsford - OGJ Downstream Technology Editor - State-run Kuwait Petroleum Corp. (KPC) subsidiary Kuwait National Petroleum Co. (KNPC) is considering construction of a new refinery in the south of the country. Mohammed al-Mutairi, KNPC’s chief executive officer, said the proposed refinery comes as part of the country’s plan to expand its current crude processing capacity to achieve the country’s long-term sustainability goals, according to a Dec. 16 release from Kuwait’s Ministry of Oil.
New oil, gas projects to accelerate next year: report (17 December 2018): LONDON (Reuters) - The number of new oil and gas projects will rise five-fold next year from a 2015 trough but overall spending is still unlikely to be enough to meet future demand, consultancy Wood Mackenzie said in a report. Shaken by a sharp drop in oil prices in recent months, boards are generally expected to stick to spending discipline imposed following the 2014 price crash. Global investment in oil and gas production, known as upstream, is expected to reach around $425 billion next year, according to WoodMac analyst Angus Rodger. (Source: Gas Processing)
Should Investors Rethink Long-Term Investing In Fossil Fuels? (16 December 2018): By Martin Tillier - I have been lucky enough in my life to have lived and worked in multiple countries around the world. That taught me many things, but one that always surprised me was how people’s views on things vary depending on where they live. Climate change is a case in point. In the U.S., where I now live, the conversation is still influenced by some debate as to whether it is real, or at the very least whether it is man-made. In the rest of the world though, those things are taken as given and the conversation is entirely around how best to deal with it. That has become clear this week at the U.N. climate summit in Katowice, Poland, and understanding the global view has implications for investors that could easily be missed by those living here. (Source: Oil Price)
Chinese-Venezuelan Joint Venture Doubles Oil Production (14 December 2018): By Irina Slav - A joint venture between troubled Venezuelan state oil company PDVSA and China’s CNPC in the South American country has doubled its oil production in the past seven months, Reuters reported today, quoting a unit of PDVSA, CVP. The joint venture, Sinovensa, accounts for about a tenth of Venezuela’s oil production, which has been falling inexorably over the past few years under the triple burden of the oil price collapse, years of mismanagement and corruption, and U.S. sanctions. CVP said in a Facebook post production at the Sinovensa project, in the Orinoco belt, totaled 130,000 bpd to date. That’s up from just 69,400 bpd in April. The project is the second-largest that involves a foreign company. (Source: Oil Price)
Oil producers have to contend with oversupply in 2019, IEA says (13 December 2018): Dania Saadi - Oil producers may have to contend with a “significant” oversupply even as Opec and its allies led by Russia cut output in the first half of 2019 to balance the market, the International Energy Agency said. Opec+, as the 24-member alliance is known, agreed in December to trim global output by 1.2 million barrels per day, with 800,000 bpd coming from Opec members. Brent oil prices have failed to rally even after the agreement was announced. Prices are hovering at $60 a barrel, a 30 per cent drop from the $86 a barrel reached in early October. (Source: The National (UAE))
Nuclear Power Becomes Critical To Arctic Dominance (11 December 2018): By Victor Nian - For many, the Northeast Passage through the Arctic could one day be a ‘Northern Suez Canal’. While icy waters have frozen such dreams, recent advances in nuclear technology might finally unlock the full economic potential of the once-daunting Arctic waters. There is no shortage of interest in the High North. In October, the Trump administration in the U.S. approved a project to extract oil from beneath the Beaufort Sea, though melting ice has since forced changes to those plans. That same melting ice, while raising major environmental concerns, simultaneously creates other possibilities: among them, the prospect of dramatically shortened sea routes between Europe and Asia which could cut transit times by two weeks compared to the Suez Canal passage. Those reduced travel times translate to savings of 40% on both fuel and shipping costs, while lowering CO2 emissions by 52%. (Source: Oil Price)
Iran Widens Discount For Crude To Asia (11 December 2018): By Irina Slav - Iran is going to offer its crude to Asian buyers, to be delivered in January, at US$1 per barrel less than this month, Reuters reports, citing a pricing document. The official selling price of Iranian Light crude was set at US$0.30 above the Platts Dubai/Oman average for January. This makes Iranian Light US$0.30 a barrel cheaper than Saudi Arab Light, with Iranian Heavy costing US$1.25 less per barrel than the Kingdom’s Arab Medium grade, Reuters calculates. The biggest buyers of both Iranian and Saudi crude are India and China, and now both countries are expected to boost their intake of Iranian oil after they were granted U.S. sanction relief for six months following the reimposition of sanctions on November 5. (Source: Oil Price)
2019: A Pivotal Year For OPEC (10 December 2018): By Cyril Widdershoven - OPEC’s rollercoaster ride in Vienna highlights the growing divide within the oil cartel. Many oil analysts and financial gurus have fallen for the oldest media trick in the world, and a growing rift in the organization shows a new era is coming. The so-called unexpected production cut, which was presented by OPEC’s media genius and Saudi Minister of Energy Khalid Al Falih, was not enough to curtail the current uncertainty in oil markets. After first indicating only a 800,000-1 million bpd production cut, which crashed prices straight away, Al Falih, in cooperation with his Russian colleague Novak, surprised the market 24 hours later by reporting a 1.2 million bpd production cut agreement. (Source: Oil Price)
Adnoc pilots blockchain programme across value chain with IBM (9 December 2018): Jennifer Gnana - State-owned Abu Dhabi National Oil Company is piloting a blockchain-based automated system with IBM to integrate oil and gas production across its entire value chain. The collaboration with the US multinational will provide a secure platform for tracking, validating and execution of transactions at all stages, right from the production well to the end customer, Adnoc said in a statement on Sunday. Blockchain is best known in relation to the cryptocurrency Bitcoin, which it underpins by providing a transparent, secure and de-centralised system for transactions. The technology has seen an increasing adoption by oil and gas companies globally. Adnoc said its collaboration is expected to lower costs and increase efficiency. (Source: The National (UAE))