U.S. Gasoline Demand Climbs Above 2020 Levels (31 March 2021): By Felicity Bradstock - Gasoline sales in the U.S. exceeded 2020 levels for the first time this March after a tough year of decreased demand. Same-store sales of U.S. gasoline in gallons for the week ending March 20, 2021, were just over 10 percent higher than 2020 according to an Oil Price Information Service (OPIS) survey by IHS Markit of over 25,000 gas stations countrywide. Brian Norris, executive director of retail fuels at OPIS stated of the change, “The year-on-year increase in fuel demand from March 2020 is certainly welcome news for the recovery of the economy and the beginning of the return to normal life for the American people”. However, a return to pre-pandemic levels of demand still appears a long way off. On average, until this positive rise in demand, gas volumes have remained between 15 and 18 percent lower than 2020 levels since the beginning of the year. While the increase looks promising, it marks the one-year anniversary of Covid-19 restrictions being implemented across the U.S., causing a significant drop in demand that resulted in a 27 percent decrease in oil consumption in April 2020. (Source: Oil Price)
Wind Power Industry Set To Install 1 TW New Capacity This Decade (30 March 2021): By Charles Kennedy - The world’s wind energy industry could be on track to install nearly 1 terawatt (TW) of new capacity between 2021 and 2030, driven by surging installations in China, Europe, and the United States, energy consultancy Wood Mackenzie said in new research. China’s targets of wind and solar energy installations this decade, the European Union’s decarbonization plans, and the extension of the production tax credit (PTC) in the United States are all set to incentivize high volumes of wind power capacity installations this decade, according to Wood Mackenzie. “China’s 1,200 GW target of wind and solar by 2030 will result in 408 GW of new wind capacity from 2021 to 2030, representing 41% of global build. Offshore capacity in the country will grow by 73 GW during this period, an 800% increase in installed capacity in this sector,” said Luke Lewandowski, Wood Mackenzie Research Director. The EU’s green policies and plans are expected to motivate 248 GW of new wind capacity installations within the next ten years, Lewandowski noted. (Source: Oil Price)
Canada Could Become A Superpower In The Global Battery Market (29 March 2021): By MINING.com - “Canada has great potential to become a leader in the global Li-ion battery market,” a new analysis by Roskill states. The research firm published the insight following the announcement by Lion Electric, a manufacturer of all-electric trucks and buses, of the construction of a C$185-million battery manufacturing plant and innovation center in Quebec. The project is expected to receive a joint C$100-million investment from the federal and provincial governments and it is planned to begin operations in early 2023. According to Lion, the factory will produce battery packs and modules made from lithium-ion cells, which should translate into a considerable reduction in the cost of its vehicle manufacturing, with a particular impact on the development of heavy-duty electric transportation. Yearly production capacity is forecast to be 5 gigawatt-hours in battery storage, which means that the company will be able to electrify approximately 14,000 medium and heavy-duty vehicles annually. (Source: Oil Price)
The Biofuel Boom Could Threaten Food Security (28 March 2021): By Irina Slav - Sustainable aviation fuels seem to be the future of air travel, according to industry insiders seeking to reduce the industry’s carbon print. Refiners are on board, just as they are on board with a planned major boost in biofuels production during the Biden administration. Farmers are certainly on board. And the prices of vegetable oils are already rising to multi-year highs, driving up prices of other foodstuffs to the highest since 2014. Reuters’ Naveen Thukral and Gavin Maguire earlier this month wrote that vegetable oil prices have risen to near-record highs since President Biden made clear that a substantial increase in the production of biofuels will be an important part of his energy transition agenda. This, they noted, pushed the UN food index to the highest in seven years. What this means is that food is becoming more expensive for poorer people in developing economies such as India and many African countries. (Source: Oil Price)
Indonesia Dreams Of Becoming An EV Nation (27 March 2021): By Tatiana Serova - Indonesia is doubling down on its efforts to become an electric vehicle powerhouse just as the global demand for lithium batteries is predicted to jump to 777GWh, four times its current level. The country plans to focus on technology and foreign partnerships in order to grow its EV footprint. Following in the footsteps of China, Singapore, and South Korea, Indonesia has set the ambitious target of phasing-out diesel vehicle sales by 2040. The country is even organizing an international event dedicated to electric vehicles at the end of March 2021. It has also pledged to increase its new and renewable energy mix to 23% by 2025. Achieving these goals is going to be a serious challenge as the country’s energy mix is largely dominated by coal. (Source: Oil Price)
Oil Tanker Rates Surge As Suez Canal Blockage Continues (26 March 2021): By Tsvetana Paraskova - Oil product tanker rates have surged almost double since a giant container ship ran aground the Suez Canal on Tuesday, blocking traffic on the vital shipping lane. The rates for shipping oil products in the Mediterranean region have almost doubled, while shipping companies have started to divert tankers bound for Asia away from the Suez Canal to the longer route around the Cape of Good Hope in Africa. While efforts continue to dislodge the huge ship the length of the Empire State Building from the Suez Canal, it could be weeks until traffic returns to normal, while nearly three dozen tankers are waiting on either side of the canal to pass through. The lower availability of tankers has sent rates surging. The rates for smaller tankers for shipping in the Mediterranean region jumped first, Braemar ACM Shipbroking told Reuters. (Source: Oil Price)
China Overtakes U.S. As World’s Largest Refiner (25 March 2021): By Felicity Bradstock - As the shift in oil demand from Covid-19 turned the tables of regional levels of fuel production and exports, China succeeded in overtaking the USA as the world’s biggest oil refiner in 2020. As China began to ramp up its refining capacity throughout the pandemic, the US Energy Information Administration (EIA) published data showing that China processed more crude oil than the U.S. for much of 2020. While the USA suffered from a drop in demand throughout 2020, leading to a decrease in all oil-related activities, China benefited from this international shift. In contrast to the U.S., when oil prices fall, the Chinese government pays refiners to increase production levels. China currently has at least four major new refineries under construction, most of which are expected to produce plastic feedstocks, such as ethylene and propylene. While the U.S. is likely to once again overtake China as the world’s biggest oil refiner by the end of 2021, long-term demand predictions mean it's probable that this trend will be short-lived, as oil needs across Asia continue to rise. (Source: Oil Price)
UK Vows To Protect North Sea Oil Jobs (24 March 2021): By Irina Slav - The UK government has vowed to protect up to 40,000 oil and gas jobs in the North Sea during the country’s transition to a net-zero economy, which will involve shrinking oil and gas production. The oil and gas industry has, in turn, vowed to reduce emissions from its activities by 10 percent over the next five years and by 25 percent by 2027. By 2030, emissions should be reduced by 50 percent. This will involve an investment of some $22 billion (16 billion pounds), which will be shared by the industry and the government. The investment will comprise replacing fossil fuel-derived offshore platform power supplies with power from renewable sources, carbon capture and storage, and hydrogen production. (Source: Oil Price)
Kazakhstan Is Eager To Abandon The OPEC+ Deal (23 March 2021): By Viktor Katona - Kazakhstan meticulously studied the lessons of the 2014/2015 oil slump and has so far survived the last 12 months’ market depression with legislative and executive poise. Though still heavily dependent on oil revenues, the Kazakh authorities have seen the tenge depreciate over the course of 2020, digesting most of the COVID-triggered domestic shocks. Thanks to a traditionally low level of indebtedness (around 19% before COVID hit in, currently around 24% of GDP) and substantial international reserves, Astana still has a lot of leeway to restart economic growth in 2021. Pinning its hopes on the pandemic’s soonest end, Kazakhstan will be seeking to leave the production-curbing period of its OPEC+ participation behind and maximize output from its Kashagan-Tengiz-Karachaganak trio to the highest extent possible. All the while Kazakhstan’s short-to-mid term production prospects look staggering, its long-term ambitions remain mired in doubt and speculation. (Source: Oil Price)
Can South Korea Overcome Its Coal Dependence? (22 March 2021): Viktor Katona - South Korea remains the weakest performer within OECD in terms of renewables’ penetration into the national energy matrix, merely 5% of its electricity generation boils down to green energy. Apart from Seoul’s post-Fukushima travails with its nuclear fleet, the Asian nation has traditionally depended on coal to satisfy its ever-increasing energy needs, to the extent that in the 2010s South Korea was the fourth-largest coal importer globally, behind China, India, and Japan. Considering that South Korea has minimal domestic production capacities, importing coal has developed a strong interconnectedness with LNG prices, coal’s main competitor for domestic generation capacities. It is all the more peculiar that today, in the midst of Seoul’s renewables drive, coal has almost bounced back to its pre-COVID heights. (Source: Oil Price)
Texas Freeze Creates Global Plastics Shortage (21 March 2021): By Irina Slav - First, it was a demand slump across pretty much every manufacturing industry because of the pandemic. Then a surge in demand for electronics caused a shortage of microchips, which hit the automotive industry particularly hard. Now, the Texas Freeze has caused a global shortage of plastics. The Wall Street Journal reported this week that the cold spell that shut down oil fields and refineries in Texas is still affecting operations, with several petrochemical plants on the Gulf Coast remaining closed a month after the end of the crisis. This creates a shortage of essential raw materials for a range of industries, from carmaking to medical consumables and even house building. The WSJ report mentions carmakers Honda and Toyota as two companies that would need to start cutting output because of the plastics shortage, which came on top of an already pressing shortage of microchips. Ford, meanwhile, is cutting shifts because of the chip shortage and building some models only partially. GM, on the other hand, has started building some pickup trucks without a fuel management module because of the shortages, which will affect the fuel economy performance of these cars. (Source: Oil Price)
The Oil Price Rally Is Officially Over (19 March 2021): By Tom Kool - Crude oil plunged by more than 7% on Thursday, the worst single-day loss since April 2020, and is set to close out the week down by the most since October. The decline is the result of a combination of bearish factors – profit-taking by overly long speculators, a stronger dollar, and diminished hopes surrounding vaccinations in Europe. “There have been some bearish headlines over the last two weeks,” Helge Andre Martinsen, senior oil analyst at DNB Bank ASA, told Bloomberg. “But it’s surprising that it happened in just one day.”
Nuclear Overtakes Coal Fired Power Generation In Historic Move (19 March 2021): By Charles Kennedy - Coal-fired electricity generation in the United States was lower than power generation from natural gas and nuclear plants in 2020, with coal dropping out of the top two electricity sources for the first time since at least 1949, the Energy Information Administration (EIA) said on Thursday. A nearly 30-percent reduction in coal-fired generating capacity and lower utilization of the remaining power plants since 2008 resulted in lower coal-fired electricity generation, which in 2020 was lower than nuclear, the EIA said. Last year, natural gas-fired power plants generated the largest volume of U.S. electricity, 1.6 billion megawatthours (MWh), while nuclear-powered generation came in second at 790 million MWh. Coal-fired electricity was third, generating 774 million MWh, data from EIA’s Electric Power Monthly showed. According to EIA data, U.S. coal production and consumption have been on a decline since peaking in 2008 and 2007, respectively. In 2019, for example, U.S. coal production hit its lowest level since 1978, while coal consumption dropped to the lowest since 1975. (Source: Oil Price)
IEA: Asia To Account For 90% Of Global Oil Demand Growth Through 2025 (18 March 2021): By Felicity Bradstock - Despite speculation that oil demand peaked in 2019, before the global pandemic hit the industry hard, a new IEA report suggests this assumption may have been overstated as demand is set to continue increasing until 2026. Innovations in renewable energy and the decreased demand in response to the Covid-19 pandemic made experts believe the oil era was slowly losing momentum. However, as the Asian market grows and many countries return to pre-pandemic demand levels, this may not be true. According to the new IEA report, demand for oil could hit pre-pandemic levels within the next two years. By 2023, oil production could exceed 100m bpd if world demand, driven significantly by Asia, continues at its current growth rate. While oil demand may not return to pre-pandemic levels in most developed countries, due to travel and work changes that have driven demand down over the last year and look set to stay as well as greater uptake of electric vehicles and other renewable options, demand across the developing world as well as major consumers like China could be the main drivers of this demand. (Source: Oil Price)
Three Commodities Set To Boom As The Global Economy Recovers (17 March 2021): By Alex Kimani - Despite the ongoing vaccine rollout snafu, including supply chain constraints, delayed approvals and—more worryingly—dozens of countries banning the cheapest and most widely available Covid-19 vaccine, there’s growing optimism that the global economy is gradually marching towards a full reopening. A year after the WHO declared the Covid crisis a pandemic, all the world’s biggest economies are on a rebound trajectory and slated to record significant growth in the current year after major slumps in 2020. After shrinking by the largest amount in 74 years, the United States could emerge from the health crisis with its strongest growth in decades. Goldman Sachs says the economy could expand at a brisk annual rate of 7%, the fastest clip ever since Ronald Reagan proclaimed “morning again in America” in 1984. The world’s second largest economy, China, is expected to post 8.4% annualized GDP growth in 2021, rebounding from a much slower 2.3% growth last year. Meanwhile, the EU is expected to post 3.8% growth after nearly crawling to a standstill in 2020. (Source: Oil Price)
Biden's Solar Energy Plan Has A Major Space Problem (16 March 2021): By Rystad Energy - US President Joe Biden clinched the top role last November on the back of a campaign promise to launch the Clean Energy Revolution in the country, with a chief aim of achieving net-zero emissions by 2050. Rystad Energy estimates that the significant utility solar PV installed capacity required to meet the target would occupy around 13,412 square miles of land, equivalent to 0.43% of the total land area in the lower 48 states, or roughly 50 times the size of Austin, Texas. Land scarcity is often cited as a key barrier to ramping up solar and wind energy capacity in the US, thus undermining the country’s revitalized decarbonization ambitions for the next 30 years. Solar farms, in particular, require a lot of real estate and, unlike wind farms, could take land away from agriculture or other uses. “Although building all these solar farms is no easy task, with the right choice of unoccupied land and with sufficient investments in infrastructure, it can be done. Not every state is a good fit for large-scale solar plants, but certain southern states could take on larger gigawatts-scale projects than others,” says Felix Tan, senior analyst at Rystad Energy. (Source: Oil Price)
U.S. LNG Exports To Asia Surged By 67% In 2020 (15 March 2021): By Tsvetana Paraskova - U.S. exports of liquefied natural gas to Asia surged by 67 percent in 2020 as total LNG exports out of the United States jumped by 32 percent despite the record-low demand and prices last summer due to the pandemic, the Energy Information Administration (EIA) said on Monday. The relatively high export levels from January to May and the rebound in exports in the latter part of last year more than offset the record low export volumes from the summer of 2020, when global demand and global LNG prices were very low. In two consecutive months, November and December 2020, the U.S. set new records of LNG export volumes. The U.S. exported 9.4 billion cubic feet per day (Bcf/d) of LNG in November 2020 and then smashed that record in the following month when LNG exports averaged 9.8 billion Bcf/d in December, EIA data has shown. (Source: Oil Price)
Is A Renewable Energy Boom Coming To The Middle East? (14 March 2021): By Oxford Business Group - The coronavirus pandemic has raised awareness among GCC countries of the importance of environmental, social and corporate governance (ESG) standards. If current trends continue, then ESG could become a valuable element of the region’s recovery from Covid-19. ESG standards are used by investors to evaluate potential investments, as well as enabling business leaders to formulate responsible and sustainable corporate strategies. Environmental criteria take into account a company’s environmental footprint, as well as the actions it takes to offset it. Social criteria evaluate how it manages relationships with its various internal and external stakeholders. Lastly, governance criteria evaluate the inner mechanisms of a company's management and operations. Demand for investments that are ethical and sustainable has been increasing in recent years. Globally, more and more investors are turning to businesses that embrace ESG, and this tendency has been boosted by Covid-19. As phrased in a report published by S&P Global in April last year, “strong ESG performers with stakeholder-focused and adaptive-governance structures are likely to remain resilient amid these rapidly changing dynamics”. (Source: Oil Price)
Cooking Oil Could Fuel Your Next Flight (13 March 2021): By Irina Slav - The idea of flying on a plane fueled by cooking oil waste would have been ridiculous a decade ago. Now, this is reality. Sustainable aviation fuels, according to some, are the only way air travel can decarbonize meaningfully. Sustainable aviation fuels have the potential to reduce the industry’s carbon footprint by as much as 34 percent. That’s what the managing director of Airlines for Europe, a trade organization representing 70 percent of the industry, told Argus recently in an interview. “SAFs are a huge chunk, 34pc, of the entire emissions reduction potential by 2050,” Thomas Reynaert said. “This excludes some 10pc in carbon offsets. The biggest emission reduction share comes from improved aircraft technology with 37pc.” (Source: Oil Price)
Can Carbon Capture Make Clean Oil Production A Reality? (12 March 2021): By Felicity Bradstock - As governments and regulators push for a lower carbon future, the race is on to develop carbon capture technology. Even Elon Musk has joined the race, launching a $100 million carbon capture competition. Exxon Mobil has stated this week that there could be a $2 trillion market for carbon capture by 2040. This comes as the company announces a $3 billion investment in carbon capture as well as carbon storage projects over the next five years. Recent investments in new carbon capture technologies by European majors, including BP and Shell, have gained praise from the media and environmental organizations who believe it is a step towards greater sustainability for the oil and gas sector. Oil companies acknowledge that they will be pumping oil and gas for decades to come. However, they are looking for ways to reduce carbon emissions to ensure that production is less harmful to the environment, while also investing in renewable energy research and development. (Source: Oil Price)
OPEC Sees Strong Oil Demand In The Second Half Of 2021 (11 March 2021): By Tsvetana Paraskova - Global oil demand is set to benefit from stronger economic recovery and vaccinations in the second half of this year, OPEC said on Thursday, adjusting higher its outlook for the second half of 2021 and raising slightly its full-year oil demand forecast. The cartel, however, revised down in its Monthly Oil Market Report (MOMR) its estimates for global oil demand for the first half of the year due to extended lockdowns in major economies in Europe and high unemployment rates in the United States slowing the recovery. In hindsight, the OPEC+ group’s decision from last week not to lift collective crude oil production from April, leaving only small exemptions to Russia and Kazakhstan, seems not so surprising after all, as the cartel sees now oil demand in the first and second quarters of 2021 lower than in last month’s assessment. In this month’s report, OPEC cut its oil demand estimate for Q1 by 180,000 bpd, and for Q2 by 310,000 bpd compared to the February outlook. (Source: Oil Price)
Biden Shocks Environmentalists, Supports Gas Pipeline In Supreme Court Case (10 March 2021): By Charles Kennedy - The Biden Administration is backing a natural gas pipeline project in a legal fight about eminent domain that ended up in the Supreme Court, a move that shocked environmentalists who had hoped the Administration would not support any oil and gas pipeline projects. The Department of Justice, however, backed the PennEast natural gas pipeline project in a lawsuit the Supreme Court agreed last week to hear. PennEast is a pipeline project of 120 miles to carry natural gas from Pennsylvania to New Jersey and will meet growing energy demand in New Jersey and Pennsylvania, one of the project shareholders, Enbridge, says. The PennEast Pipeline Company is looking to overturn a federal appeals court ruling from 2019, which said that PennEast could not use eminent domain to seize land owned by the state of New Jersey for pipeline construction. The federal appeals court argued in 2019 that taking the New Jersey-owned land went against the 11th Amendment, which protects states from certain lawsuits. (Source: Oil Price)
Is South Korea’s Monster Wind Farm Feasible? (9 March 2021): By Viktor Katona - South Korea might be reputed for its state-of-the-art condensate splitters or for its massive LNG appetite that has propelled it to the ranks of the world’s third-largest importer, yet from now on it might be closely associated with wind energy. In February 2021 the South Korean government announced that it intends to build the world’s largest wind farm in the Sinan region (South Jeolla), the 8.2 GW capacity of which will surpass the largest wind plant currently in operation (Hornsea off the English coast, 1.2 GW) by a factor of seven. The monster wind project brings together most South Korean private energy companies, encompassing all relevant segments – turbine producers, plant operators and utility firms – yet even so, is it feasible at all? The slated capacity of the monster wind park will not come onstream at once, its commissioning is split into 3 phases. Phase I is assumed to start straightaway in 2021 and end in 2025, bringing 4.1GW into South Korea’s electricity production matrix. Phase II (2022-2027) and Phase III (2024-2030) both wield a 2.1GW capacity. The ceremonial signing of the project’s project charter was attended by all leading South Korean energy companies, ranging from generation companies (KEPCO, SK) to wind turbine producers (CS Wind, Doosan Heavy Industries). Seemingly, some companies will take on larger roles than others, for instance Hanwha will not only be part of the tripartite project development but will also supervise procurement and construction. In total 33 companies have signed up to the preliminary agreement and will provide 98% of project financing. (Source: Oil Price)
Biden’s Energy Secretary To Oil Industry: Adapt Or Die (8 March 2021): By Haley Zaremba - “I’m not going to sugarcoat how hard transitions are,” new United States Energy Secretary Jennifer Granholm stated on Wednesday. Her comment, made during IHS Markit’s annual CERAWeek conference, was in reference to the clean energy transition that serves as one of the cornerstones of President Biden’s platform, but she could just as easily be talking, in grander terms, about the administrative changeover that she is part of. The new presidential administration has hit the ground running on climate change, with a demonstrative focus on bringing the United States up to speed with the rest of the developed world in terms of leaning into the global green energy transition. While this proactive approach has been lauded as essential and far overdue in some circles, it also has its fair share of critics. Biden’s relatively tough stance on the United States’ massive shale oil and gas industry has stirred up a groundswell of anxiety in many parts of the country that depend on fossil fuel to keep their economies running. (Source: Oil Price)
Global Energy Perspective 2021 (Mckinsey): After a decade of rapid technological and policy shifts in energy sectors, 2020 has brought unprecedented disruption across the energy landscape. In our Reference Case, a rebound to pre-COVID-19 demand levels takes one to four years for power and oil and gas, whereas coal demand does not return to 2019 levels. As a result of COVID-19, government policies are more important in the energy transition. Given the unparalleled size of many economic-recovery packages, the focus of the stimulus measures plays a key role in shaping energy systems in the decades to come. (Source: Mckinsey)
The Largest Oil Lobby In America Is Now Backing A Carbon Tax (5 March 2021): By Leonard Hyman & William Tilles - The American Petroleum Institute (API) now advocates a carbon tax? We had to read the API’s press release twice to make sure we were reading correctly. Whatever else this accomplished we believe at the very least they pulled off a public relations coup designed to delay carbon suppression behind a smokescreen of reasonableness. There is no shortage of informed opinion on this issue. Like any broad public policy it has advocates and detractors. Proponents hail its economic efficiency and that it pushes the government further away from the energy industry’s decision making. Detractors, which interestingly hail from both sides of the US political aisle, claim this policy only leads to incremental, non-systemic decisions and a piecemeal approach to a serious environmental issue. Rather than get embroiled in this debate, we would rather acknowledge it as an issue but instead look at two key bread and butter issues. (Source: Oil Price)
Oil Flirts With $70 After The OPEC+ Surprise (5 March 2021): By Josh Owens - Brent is now flirting with the $70 mark after OPEC+ shocked markets once again by refusing to bring more oil production online. Oil skyrocketed on Thursday after OPEC+ decided to hold off on easing production cuts for another month, surprising the oil market. WTI and Brent shot up more than 4%. During early trading on Friday, Brent surpassed $69 per barrel, OPEC+ extends cuts, surprising market. OPEC+ extended the cuts through April, aside from a slight increase allowed for Russia and Kazakhstan, due to seasonal consumption patterns. Even Saudi Arabia decided to keep its 1 mb/d of voluntary cuts in place. The surprise news led to a price surge. “One of the reasons the market is continuing to react positively today could be that OPEC’s own balances suggest very steep draws,” Rystad Energy said in a statement.
The Pentagon Successfully Tests Solar Panel In Space (4 March 2021): By Tsvetana Paraskova - The Pentagon has successfully tested a solar panel in low-earth orbit as a prototype of potential future power-generating systems capturing light from the Sun and beaming it back as energy to earth. In May 2020, engineers at the U.S. Naval Research Laboratory launched the Photovoltaic Radio-frequency Antenna Module (PRAM) aboard an Air Force X-37B Orbital Test Vehicle, as part of a study into prospective terrestrial use of solar energy captured in space. The tile module the size of a pizza box was designed to test the ability to harvest power from its solar panel and transform the energy to a radio frequency microwave, the U.S. Naval Research Laboratory said at the time. The system is attached to a Pentagon unmanned drone looping the Earth every 90 minutes. The panel’s position in orbit makes it more powerful in capturing the light of the Sun than solar systems capturing sunlight that reaches the surface of the earth, the developers of the project tell CNN. (Source: Oil Price)
Wall Streets Sees 2,000% Growth For Booming EV Market (3 March 2021): By Alex Kimani - To say that 2020 was an unusual year in markets would be a vast understatement. The last year not only went on record for the quickest and deepest bear market decline in history but also saw an unprecedented level of global stimulus, the highest volatility (VIX) on record, negative oil prices, and, thankfully, the fastest recovery from a bear market. But, perhaps, the biggest megatrend of them all: ESG Investing finally came of age in 2020. A recent report by clean energy watchdog Bloomberg New Energy Finance (BNEF) proves that the renewable energy sector has remained largely immune to the ravages of Covid-19, with global energy transition investments in 2020 clocking in at a record $501.3 billion, good for 9% Y/Y growth. Yet, digging deeper into that report reveals that the clean energy boom is heavily lopsided in favor of a single segment: Electric vehicles or EVs. BNEF analysis shows that both public and private investments in renewable energy capacity came to $303.5 billion in 2020, up 2% on the year, thanks mainly to the biggest-ever build-out of solar projects as well as a $50 billion surge for offshore wind. (Source: Oil Price)
Deep Oil Cuts Put Africa At Serious Risk (1 March 2021): By Alex Kimani - About two decades ago, The Economist [infamously] dubbed Africa as the “Hopeless Continent”, claiming that the new millennium had brought more disaster than hope to Africa with threats of famine in Ethiopia (again); floods in Mozambique; mass murder in Uganda and the implosion of Sierra Leone. A decade later, the magazine did a 180-degree and changed its tune to “Africa Rising” thanks to major improvements in labor productivity; dropping inflation and booming economies. But alas, the upbeat narrative was not to last for long, with the 2014 oil price crash devastating some of the continent’s most promising economies. And now, it’s happening all over again, with some of the continent’s leading oil producers in dire straits after the 2020 oil price crash. To wit, Angola has gone from being Africa’s top crude producer just five years ago to barely pumping more than war-torn Libya while Nigeria--another key OPEC member--is in grave danger of suffering Angola’s fate as Big Oil makes yet another round of deep capex cuts. (Source: Oil Price)
Energy Transition Could Cut Oil Prices By $10 Per Barrel (1 March 2021): By Rystad Energy - The back-to-back downturns that exploration and production companies (E&Ps) have faced during the past decade have accelerated the energy transition, adding to growing social and regulatory demands for greener energy solutions. This is putting the resilience of global upstream portfolios under pressure. Energy transition experts on Rystad Energy’s upstream team have now quantified the long-term risk of this change to oil prices and to the net present value (NPV) of global oil and gas portfolios. In an analysis marathon that has generated a series of three commentaries and a report to its clients, Rystad Energy has assessed the way E&Ps are navigating the energy transition, based on energy diversification, portfolio resilience and decarbonization. While the full in-depth findings are not going to be made public outside our client portal, in this press release we are offering a glimpse of our portfolio resilience findings. The downside risk that the energy transition can bring to oil prices is calculated to as much as $10 per barrel in the long term, meaning oil prices could end up $10 lower in the future than they otherwise would if the transition to cleaner energy speeds up. (Source: Oil Price)