May 2018

The Energy Model That Can Predict Gold Prices (31 May 2018): By Safehaven.com - “Everything should be made as simple as possible, but not simpler.”--Albert Einstein. When trying to predict gold prices, investors usually look at one or several drivers: interest rates, U.S. dollar fluctuations, above-ground gold stocks, equities, bonds, commodity prices and even debt levels. But on their own, how reliable is each for predicting either short-or-long-term medium gold price movements? (Source: Oil Price)

IEA: EVs Could Cut Oil Demand By 2.5 Million Bpd By 2030 (30 May 2018): By Tsvetana Paraskova - Electric vehicles (EVs) are expected to displace 2.5 million bpd of oil demand by 2030, as supportive policies and cost reductions will likely lead to constantly growing EV sales, according to a senior analyst at the International Energy Agency (IEA). “In the report, we refer to 2.5 million b/d in the case of 2030,” Platts quoted Pierpaolo Cazzola, senior energy and transport analyst at the IEA, as saying on Wednesday in Tokyo, where the agency presented its Global EV Outlook 2018. (Source: Oil Price)

The Biggest Challenge For U.S. Oil Exports (29 May 2018): By Tim Daiss - As Saudi Arabia and Russia grapple with both the geopolitics and economics of continuing or stopping their one and a half year long oil production cut reached between OPEC and non-OPEC members in early 2017, U.S. oil exports are slowly making their way into Asia. American companies will export some 2.3 million barrels per day (bpd) of oil next month and over half of that (1.3 million bpd) will find their way to Asian markets, Reuters said, citing a key executive with an U.S. oil exporter. This follows a record 2.6 million bpd of oil that the U.S. exported just two weeks ago. (Source: Oil Price)

Are We About To See Another Correction In Oil Prices? (28 May 2018): By ZeroHedge - The last four days have seen WTI Crude prices plunge almost 10% from their cycle peak near $73 to a $65 handle overnight. This is the longest run of losses in almost four months as Saudi Arabia and Russia said they are discussing raising output to ease consumer anxiety after prices jumped to levels last seen in 2014. Saudi Arabia and Russia signaled they’ll restore some of the output they cut as part of a deal between OPEC and its allies that took effect in January last year. Potential opposition from several producers could complicate the group’s effort to reach a consensus when it meets next month in Vienna. (Source: Oil Price)

EIA: U.S. remains the world’s top producer of petroleum and natural gas hydrocarbons (22 May 2018): WASHINGTON, D.C. -- The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2017, reaching a record high. The United States has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia’s. Since 2008, U.S. petroleum and natural gas production has increased by nearly 60%. (Source: World Oil)

$80 Oil Could Kill Smaller Airlines (21 May 2018): By Tsvetana Paraskova - The airline industry is heading for rising fuel costs as crude oil prices surge, and the weakest of the European airlines may not make it through the winter, Michael O’Leary, chief executive at Europe’s largest budget carrier Ryanair, said on Monday. “Spot prices close to $80 a barrel are going to lead to a significant shakeout in the industry as early as this winter,” O’Leary told Bloomberg Television, after Ryanair reported earlier today a 10-percent increase in its FY 2017/2018 profit. (Source: Oil Price)

Total CEO: Short-term problems must not derail long-term strategy (17 May 2018): By Nick Snow - OGJ Washington Editor - Total SA Chief Executive Officer Patrick Pouyanne confirmed that the French multinational oil company is concerned about possible consequences on its operations if the US follows through with plans to reimpose sanctions on Iran where the company is involved in a major natural gas development project. “As soon as the US decides to reimpose sanctions, Total will lose access to US banks, which is vital. We could lose US shareholders and it could affect our US assets,” he said on May 17.

EU Could Switch To Euros In Oil Trade With Iran (16 May 2018); By Tsvetana Paraskova - The European Union (EU) is considering switching to euros instead of U.S. dollars in the oil trade with Iran, Sputnik reported on Wednesday, quoting a diplomatic source. Europe—collectively one of Iran’s biggest oil customers after China and India—is trying to salvage the Iran nuclear deal after President Donald Trump withdrew the U.S. from the pact and paved the way to renewed sanctions on Iran, including on its energy sector and crude oil sales. (Source: Oil Price)

Basra Oil lets contract for Majnoon development (14 May 2018): By OGJ editors - Basra Oil Co. (BOC) has let a contract to KBR Inc., Houston, for the development of the Majnoon oil field in Basra, Iraq. KBR will provide overall project management, multi-discipline engineering support, procurement and construction management services under a two plus one-year extendable service contract. Majnoon, which lies in southern Iraq 70 km north of Basra City, is one of the world's largest oil fields with 38 billion bbl of oil in place, according to the Iraqi government. The field produces about 220,000 b/d of oil.

Adnoc to invest Dh165bn with partners in downstream (13 May 2018): Jennifer Gnana - Abu Dhabi National Oil Company will invest Dh165 billion in downstream operations in partnership with global players over the next five years as the company looks to build the world’s largest integrated refining and petrochemicals facility, with plans under way to create a manufacturing ecosystem at Ruwais. State-owned Adnoc will increase its current refining capacity of 922,000 barrels per day – already the world’s fourth largest – by the addition of a new 600,000 bpd refinery that will boost its total capacity to process crude and condensate to 1.5 million bpd, making it the largest such facility in the world. (Source: The National (UAE))

U.S. Rig Count Increases Sharply Amid Rising Crude Output (11 May 2018): By Julianne Geiger - US drillers added 13 rigs to the number of oil and gas rigs this week, according to Baker Hughes, adding 10 active oil rigs and 3 active gas rigs. The oil and gas rig count now stands at 1,045—up 160 from this time last year. Meanwhile, neighboring Canada lost 7 rigs for the week—the latest in a string of losses. Gas rigs in Canada are now fewer in number than they were a year ago. (Source: Oil Price)

Bank Of America: Oil Prices Could Hit $100 Next Year (10 May 2018): By Tsvetana Paraskova - Strong global oil demand growth, quickly falling inventories, and geopolitical issues from Iran to Venezuela could push oil prices to as high as $100 a barrel in 2019, Bank of America Merrill Lynch says. Brent Crude is expected to average $70 a barrel this year and $75 in 2019, BofA’s commodity strategists led by Francisco Blanch said in a note, as carried by Business Insider. At 12:27 p.m. EDT on Thursday, oil prices were flat on the day, with Brent Crude at $77.17 and WTI Crude at $71.14. (Source: Oil Price)

Crude prices continue to surge as dollar steams ahead (10 May 2018): Reuters - Crude oil prices jumped back to three and a half year highs on Wednesday after US President Donald Trump pulled the United States out of an international nuclear deal with Iran, while the dollar continued its tireless ascent and world stocks held steady. Mr Trump’s move sparked worries about fresh tension in the Middle East and uncertainty over global oil supplies. Demand for safe-haven assets remained limited, however, as the price of gold retreated and bond yields fell. The US 10-year Treasury breached the key 3 per cent level once more and was last at 3.0080 per cent, a two-week high, supported by expectations of higher interest rates.

Trump decision puts Iran's $200-billion energy wish-list at risk (8 May 2018): By MOHAMMED ALY SERGIE - DUBAI (Bloomberg) -- With Donald Trump set to announce a decision today on whether to re-impose U.S. sanctions on OPEC member Iran, $200 billion in potential energy deals hang in the balance. That’s the investment Iran needs in oil, natural gas and petrochemicals, Oil Minister Bijan Namdar Zanganeh has said. Since sanctions were eased as of January 2016, France’s Total SA has been the only Western energy major to invest in Iran, pledging to spend $1 billion at the giant South Pars gas field. CEO Patrick Pouyanne says Total will withdraw from the project if it doesn’t get a waiver. Total would argue that the gas is for local consumption rather than for exports. (Source: World Oil)

WTI Breaches $70 On Iran, Venezuela Fears (7 May 2018): By Irina Slav - A deepening economic crisis in Venezuela and the approaching deadline for President Trump’s decision on the Iran nuclear deal combined to push West Texas Intermediate above US$70 for the first time in years. At the time of writing, the U.S. benchmark traded at US$70.45 a barrel, up by 1.05 percent from Friday’s close, with Brent crude at US$75.69 a barrel, up by 1.10 percent. President Trump is due to announce his decision on the Iran nuclear deal by this Saturday with the majority of observers expecting him to pull out of the deal and reimpose sanctions on Tehran. This would push oil prices higher, however, which Trump doesn’t want, if we are to judge by a recent tweet, in which the President scolded OPEC for manipulating prices higher. (Source: Oil Price)

Shanghai crude trading's early success may not reflect future reality (5 May 2018): Clyde Russell - The new Shanghai crude oil futures have been trading for six weeks and have so far managed to build up reasonably strong volumes, but this success may only mask some wider concerns. The yuan-denominated contracts were launched on March 26 by the Shanghai International Energy Exchange (INE) and are enjoying trading volumes averaging around 80,000 a day, with the open interest around 16,000. The INE contract offers seven grades of Middle East and domestic crude for delivery to various locations in China, the world's largest oil importer. While the contract is well-designed to match China's crude buying, it is structured so that delivery is for several months ahead, making it difficult to compare to other crude oil benchmarks, such as Brent, West Texas Intermediate (WTI) and the Dubai Mercantile Exchange's (DME) Oman. (Source: The National (UAE))

Qatar steps in to buy Rosneft stake as China deal collapses (4 May 2018): By JAVIER BLAS AND ELENA MAZNEVA - LONDON and MOSCOW (Bloomberg) -- Qatar emerged as a major shareholder in Rosneft PJSC on Friday after a $9-billion deal to sell a stake in Russia’s state-run oil producer to China’s troubled CEFC Energy Co. collapsed. Qatar Investment Authority stepped in after the sellers -- a consortium of QIA itself and mining giant Glencore Plc -- told CEFC it wouldn’t proceed with the original deal announced in October. A statement issued by Glencore didn’t explain why they were canceling the sale, but CEFC has been struggling with debt. (Source: World Oil)

How US sanctions on Iran may impact energy markets (3 May 2018): Jennifer Gnana - The possibility of US sanctions over Iran could push oil markets over the edge short-term, with prices rising up to $80 per barrel but the real impact on Iranian crude supplies to the market may be felt six months after the May 12 deadline on the Iran nuclear deal, according to analysts. The US administration under President Donald Trump is widely expected to walk away from the 2015 pact with Iran and European powers to rein in Tehran’s capabilities to develop nuclear weapons. Known as the Joint Comprehensive Plan of Action (JCPOA), the agreement allowed Iran in principle to develop its ageing energy infrastructure with foreign investment and facilitate slow integration of its long-embargoed ... (Source: The National (UAE))

Could Oil Actually Hit $300? (2 May 2018): By Irina Slav - Speculating on the price of oil is a favorite pastime in certain circles, and these include hedge funds. One prominent member of the hedge fund crowd this week said crude could rise to US$300 a barrel if current prices fail to rise further—and soon—to stimulate investments in new production. Pierre Andurand, head of Andurand Capital Management LLP, wrote in a series of tweets that were later deleted that "If oil prices do not rise fast enough, $300 oil in a few years is not impossible," as quoted by Bloomberg. (Source: Oil Price)

Iran’s Oil Exports Hit Record High As Sanctions Loom (1 May 2018): By Tsvetana Paraskova - Iran’s crude oil exports reached a record 2.617 million bpd in April, according to its oil ministry’s news service Shana - the highest level since Iran signed the nuclear deal with global powers that now hangs in the balance as U.S. President Donald Trump threatens to pull out of the agreement. Iran exported record-high volumes of crude oil and condensate of 2.877 million bpd to Asian and European markets, Shana reported. The largest traditional oil customers of Iran - China, India, South Korea, and Japan - purchased more than 60 percent of the Iranian oil export cargoes last month. China and India alone imported around 1.4 million bpd of Iranian oil in April, according to Shana. (Source: Oil Price)