The Dark Outlook For Non-OPEC Oil (30 June 2019): By Nawar Alsaadi - The period from 2010 to 2014 witnessed the highest sustained oil price environment in recent memory, with Brent averaging $110 a barrel and WTI $95 a barrel. This high oil price era ushered a period of unprecedented capital investment in oil and gas extraction, as global capital investments rose from $500B in 2010 to $700B by 2014 (do note some of the increase is due to cost inflation, hence, the magnitude of the capital spending increase, and its subsequent decease, is tampered to some extent by changes in unit cost). (Source: Oil Price)
Economic Conditions Snapshot, June 2019: McKinsey Global Survey results
Executives’ sentiments on the global economy are the lowest in years, amid growing concerns over trade conflicts. Meanwhile, their expectations about conditions at home remain more negative than positive. Executives’ views of the global economy are more downbeat than they have been in years, and few expect improvements in the months ahead, according to McKinsey’s latest survey on economic conditions. In fact, in every region, respondents are more likely to say conditions in the global economy and their home countries have declined in recent months. ...
Survey: Oil Experts See WTI In $50-70 Range This Summer (28 June 2019): By Tsvetana Paraskova - The vast majority of 22 oil experts surveyed by CNBC this week expects WTI Crude to trade between $50 and $70 a barrel at the end of August, and most analysts see demand and trade disputes as the biggest driver of oil prices right now, despite escalating tension between the U.S. and Iran. According to the CNBC Oil Survey conducted between June 21 and 26, fifty percent of experts polled expect WTI Crude to be between $60 and $69.99 at the end of August, a range that is just above the current WTI price of $59. Another 41 percent expect WTI in the $50-60 range—the range in which the U.S. benchmark has traded since January this year. (Source: Oil Price)
Is Hydrogen The New LNG? (27 June 2019): By Alan Mammoser - The International Energy Agency released a comprehensive new report last week entitled “The Future of Hydrogen.” In it, the IEA casts light on the possibilities – and significant challenges – facing a form of energy that is gaining increasing interest worldwide. Can hydrogen, the smallest of molecules and a colorless, odorless gas whose vapors are lighter than air, become a major part of a future clean energy system? Many researchers are beginning to think so. It ignites easily and burns with an almost invisible flame. It is clean burning producing no CO2. When combined with oxygen in a fuel cell, hydrogen produces heat and electricity with only water vapor as a by-product. (Source: Oil Price)
Failing Trade Talks Could Send Oil To $30 (26 June 2019): By Nick Cunningham - The U.S. and China appear to be making progress on trade talks ahead of the G20 meeting, but should they fail, the fallout for the oil market could be significant. If the U.S. and China cannot come to an agreement and the trade fight escalates, oil prices could plunge to $30 per barrel, according to Bank of America Merrill Lynch. That is because the Trump administration has threatened to impose tariffs on $300 billion worth of Chinese imports, which would cover just about every Chinese ... (Source: Oil Price)
Expert: Chances Of U.S.-Iran War Are At Least 50% (25 June 2019): By Tsvetana Paraskova - There’s at least a 50-percent chance that the rising tension between the United States and Iran could escalate into a conflict that would disrupt supplies, Fereidun Fesharaki, a former energy advisor in Iran in the 1970s and now chairman at consultancy Facts Global Energy, told CNBC. Earlier this month two oil tankers were attacked in the Gulf of Oman, just outside the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the open seas. (Source: Oil Price)
Hedge Funds Halt Selloff In Oil As Mid-East Tensions Spike (24 June 2019): By Tsvetana Paraskova - Hedge funds essentially stopped the sell-off in oil futures contracts last week as the rising tension between the United States and Iran overtook fears of a global economic slowdown. According to exchange data compiled by Reuters columnist John Kemp, hedge funds and other money managers were net sellers of a total of 3 million barrels in the six most important petroleum futures contracts in the week ending June 18. Although portfolio managers sold petroleum futures for yet another week, last week’s net sale was the smallest in the past eight weeks. (Source: Oil Price)
Shipping rates soar as maritime insurers factor in war risk premium (23 June 2019): Escalating war rhetoric, attacks on tankers and the downing of a US drone have increased the cost of shipping crude from the Middle East as geopolitical risks force high insurance premiums on maritime companies operating through the Strait of Hormuz. "War risk underwriters are charging additional premiums for calls to the Arabian Gulf/Gulf of Oman,” Bimco, the world’s largest shipping association said in a statement to its members. In contrast to earlier tepid reaction to rising tensions, oil prices rallied past $65 per barrel for Brent, with shipping underwriters charging a flat rate for all tonnage operating in the region, while others were levying on the basis of cargo, the vessel’s flag as well as port of call. (Source: The National (UAE))
Can Artificial Intelligence Save The Nuclear Industry? (22 June 2019): By Haley Zaremba - Attitudes about nuclear energy are changing, with pundits on both sides of the aisle touting its benefits for extremely efficient and relatively clean energy. Despite an ever more positive public opinion, the nuclear industry in the United States, the largest in the world, is currently experiencing a downturn, even going so far as to need government subsidies to keep afloat. (Source: Oil Price)
Massive explosion at Philadelphia refinery (21 June 2019): Firefighters are battling a massive fire at Philadelphia Energy Solutions’ refinery in Philadelphia that has resulted in several explosions but caused no significant injuries, the company said on Friday. The fire began early Friday morning in a butane vat at the 335,000 barrel-per-day refinery, according to the Philadelphia Fire Department’s twitter feed and a company statement. Video footage shows a later explosion that sent a massive fireball into the sky, engulfing the refinery and the surrounding area in smoke. (Source: Hydrocarbon Processing)
Oil rises towards $65 as Donald Trump warns Iran that US strikes are imminent (21 June 2019): Oil prices rallied towards $65 per barrel on fears of a US military attack on Iran that would disrupt flows from the Middle East, which provides more than 20 per cent of the world's oil output. "Crude prices are spiking on increased Middle East tensions after Iran shot down a US drone in what the US claims is international airspace," said Jason Gammel from Jefferies, a New York-based financial services company. Iran said it had shot the drone over its territorial waters. (Source: Oil Price)
A $1 Trillion Energy Opportunity The U.S. Can’t Afford To Miss (20 June 2019): By Irina Slav - India is the fastest-growing energy market in the world as demand for energy on the subcontinent booms. On this, analysts are unanimous. They are also unanimous that the energy reform begun by PM Narendra Modi during his first term in office offers a host of lucrative opportunities for foreign energy and infrastructure companies. Now that Modi has won a second term, these opportunities remain. Yet a brewing tariff spat with the United States might end up closing some doors for U.S. companies. (Source: Oil Price)
OPEC Aims For $60-$70 Oil (18 June 2019): By Irina Slav - OPEC members are happy with crude oil prices between US$60 and US$70 per barrel, Equatorial Guinea’s oil minister Gabriel Mbaga Obiang Lima told S&P Global Platts in an interview, contrary to earlier reports saying that the cartel’s leader, Saudi Arabia, alone needs oil quote a bit higher than that, at over US$80 per barrel if it is to avoid another budget deficit this year. (Source: Oil Price)
Oil Price Could Fall To $30 If Global Deal Not Extended (16 June 2019): Russian Energy Minister Alexander Novak said on Monday he could not rule out a scenario in which oil prices could fall to $30 per barrel if the global oil deal was not extended. Novak said there were big risks of oversupply on the market and that Moscow needed to monitor the oil market more in order to be able to take a balanced decision in July. Saudi Energy Minister Khalid al-Falih, who was in Moscow for talks with his Russian counterpart, said steps were being taken to prevent a sharp fall in oil prices. (Source: Oil Price)
IEA cuts 2019 estimate for oil demand growth on global economy worries (14 June 2019): The outlook for oil demand growth in 2019 has dimmed due to worsening prospects for world trade, the International Energy Agency (IEA) said, although stimulus packages and developing countries should boost growth going into 2020. The Paris-based IEA revised down its 2019 demand growth estimate by 100,000 barrels to 1.2 million barrels per day (bpd), but said it would climb to 1.4 million bpd for 2020. "The main focus is on oil demand as economic sentiment weakens ... The consequences for oil demand are becoming apparent," the IEA said in its monthly oil report. (Reporting by Noah Browning; Editing by Mark Potter) (Source: Hydrocarbon)
Oil Markets Shrug Off Gulf Of Oman Tanker Attacks (14 June 2019): By Nick Cunningham - Tensions are soaring again the Middle East after two oil tankers were attacked in the Gulf of Oman. The U.S. released a video that purportedly shows Iranian patrol boats removing an unexploded mine from one of the tankers. Secretary of State Mike Pompeo asserted that Iran was definitively behind the attacks. But some experts say it is too early to jump to conclusions. “I don’t think there is any conclusive evidence that Iran was to blame,” ... (Source: Oil Price)
Shale Boom Boosts Gas Flaring In 2018: World Bank (13 June 2019): By Irina Slav - Rising shale oil production in the United States that drove gas flaring up 48 percent in 2018 also pushed up the global total by 3 percent to 145 billion cubic meters, the World Bank’s Global Gas Flaring Reduction partnership reported. The agency cited satellite imagery that showed the most active locations of gas flaring were concentrated in the Bakken shale play in North Dakota, and the Permian and the Eagle Ford formations in Texas and New Mexico. Oil production, the World Bank said, increased by as much as 40 percent in the Permian, 29 percent in the Bakken, and 15 percent in the Eagle Ford. (Source: Oil Price)
The $200 Billion Push In Offshore Oil & Gas (12 June): By Rystad Energy - As the oil and gas industry comes out of the recent downturn, E&P companies are tempted to chase the rewards of higher oil prices by accelerating the sanctioning of new projects. However, hasty sanctioning can lead to less certainty of what the ultimate cost of any given project will be. Projects with high levels of so-called engineering definition are generally expected to remain within about 20% of the initial cost estimates, according to Rystad Energy.
Natural gas price plunge signals greener start for 2019 in U.S. and EU (11 June 2019): By MATHEW CARR AND VANESSA DEZEM - LONDON and FRANKFURT (Bloomberg) -- Tumbling natural gas prices have set the power generation industries in the U.S. and Europe off to a greener start this year. Triggering the latest decline was a mild winter in Europe and China, which curbed demand at the same time as supplies were abundant, pushing contracts for the fuel near their lowest in three years. That, along with higher costs on pollution coming from both regulations and a surge in carbon emission allowances in Europe, has pushed utilities to burn more gas instead of coal.
A New Trend In The Middle East? Oman Taxes Energy Drinks As Oil Income Falls (10 June 2019): By Irina Slav – In a bid to reduce its reliance on crude oil revenues, the sultanate of Oman has announced a slew of new taxes on products ranging from tobacco and alcohol to port and energy drinks, Bloomberg reports, citing Oman’s Secretariat General of Taxation. Beginning June 15th, pork meat, tobacco, and alcohol as well as energy drinks will be subject to a 100-percent tax, with carbonated drinks subject to a 50-percent levy. Last November, a senior Oman government official said the taxes could generate around US$260 million in annual revenues. (Source: Oil Price)
Chinese gas demand to slow by 2024, says IEA (9 June 2019): Demand for natural gas, particularly from big consumers such as China, will cool over the next five years because of slower economic growth, according to the IEA. China, the world’s largest importer of natural gas, will see its demand growth slow to 8 per cent in 2024, from 18 per cent in 2018, according to the Gas 2019 report by the agency. Global demand for gas is expected to rise by more than 10 per cent over the next five years, reaching above 4.3 trillion cubic metres in 2024, the Paris-headquartered ... (Source: The National (UAE))
Saudis: OPEC Close To Extending Output Cut Deal (7 June 2019): By Tsvetana Paraskova - OPEC is close to reaching an agreement to extend the production cut deal beyond its current expiry date at the end of June, Khalid al-Falih, the energy minister of OPEC’s largest producer and de facto leader, Saudi Arabia, said on Friday. “On the OPEC side, a rollover is almost in the bag. The question is to calibrate with non-OPEC,” Reuters quoted al-Falih as saying at the St. Petersburg International Economic Forum in Russia today. (Source: Oil Price)
China’s Demand For Gas “Almost Infinite” (6 June 2019): By Haley Zaremba - Last year, the buzz term in the natural gas world was the alarmist cry of “stranded assets”, with headlines shouting that overproduction of shale oil and gas in North America would leave markets oversaturated with product and infrastructure soon to become obsolete thanks to the rise of more affordable wind and solar. Since then, there have been just as many think pieces and reports tempering the stranded asset panic with assurances that natural gas is here to stay. (Source: Oil Price)
UK's Ineos to spend $2bn on chemicals plants in Saudi Arabia agreement with Aramco and Total (5 June 2019): British chemicals company Ineos will spend $2 billion (Dh7.3bn) building three petrochemicals plants in collaboration with Saudi Aramco and Total in the industrial city of Jubail in the eastern province of Saudi Arabia. The agreement marks the first investment in the Middle East by the company, which is owned by British billionaire Jim Ratcliffe. The private chemicals operator, founded in 1998, is the world's fifth-largest chemical producer by chemical sales behind Saudi Arabia's Sabic. As part of the agreement, Ineos will build a 425,000-tonne acrylonitrile plant, which is set for a start-up in 2025. (Source: The National (UAE))
Oil Prices Drop As Demand Concerns Weigh On Markets (4 June 2019): By Tsvetana Paraskova - Oil prices were down early on Tuesday, with Brent Crude hitting its lowest level since January and WTI Crude at its lowest since February as trade disputes continued to weigh on the outlook on global economic and oil demand growth. As of 09:56 a.m. EDT on Tuesday, WTI Crude was down 0.28 percent at $53.10, trading at its lowest levels since the middle of February, while Brent Crude was down 0.49 percent at $60.98—breaking below $61 a barrel and slumping earlier in the day to its lowest level since January this year. (Source: Oil Price)
Oil Resilient Despite Trade Talk Failure (3 June 2019): By Irina Slav - Reports of a new policy paper published by the Chinese government pushed oil prices lower in Asian trade this morning, dragging benchmarks downward. Prices quickly rebounded, however, on Saudi reassurances that OPEC + would continue to manage crude oil supplies. S&P Global Platts cited reports from other media saying the policy paper held U.S. President Trump responsible for the recent breakdown ... (Source: Oil Price)
Energy prices drop in Europe as cheaper renewable energy fights for market share (2 June 2019): Gas and coal prices are plunging in Europe, hurt by the relentless threat of ever-cheaper clean energy that’s gaining market share and pushing out the fossil fuels in the process. Both energy commodities had their fourth weekly decline, with benchmark Dutch gas posting the biggest first-half slump in a decade. That’s exacerbated by a glut of liquefied natural gas cargoes arriving in Europe. Prices have fallen far enough that gas-fired power stations in Germany are making more money than those burning coal, which usually is the more profitable fuel. (Source: The National (UAE))
The OPEC Outcast Fighting For LNG Dominance (1 June 2019): By Oxford Business Group - For over a decade Qatar has been the world’s leading supplier of liquefied natural gas (LNG), and by 2024 the country aims to strengthen its share in the market and boost output by 43%, from 77 million to 110 million tonnes per year. While much of Qatar’s growth in the decades after independence in 1971 was fuelled by crude, natural gas gained prominence in the 1990s. In 2018 Qatar announced it would leave the Organisation of Petroleum Exporting Countries (OPEC), which it joined as one of the first members in 1961, in order to focus on gas. (Source: Oil Price)