May 2019

OPEC Oil Output Set For Drop Despite Saudi Production Boost (31 May 2019): By Tsvetana Paraskova - OPEC’s oil production dropped to a 2015 low of 30.17 million bpd in May, as a major 200,000-bpd increase in Saudi Arabia’s production was unable to offset an even larger production decline in Iran after the U.S. removed all sanction waivers for Iranian buyers, a Reuters survey showed on Friday. After the U.S. choked off more Iranian supply with the end of the waivers, Saudi Arabia appears to have lifted its oil supply by 200,000 bpd to 10.05 million bpd, ... (Source: Oil Price)

Saudis Raise Oil Prices To Asia As Demand Spikes (30 May 2019): By Tsvetana Paraskova - Emboldened by strong prompt demand amid tighter oil supply due to the U.S. sanctions on Venezuela and Iran, the world’s top oil exporter Saudi Arabia is expected to raise the prices of the crude grades it sells on its premium market, Asia, for July, trade sources told Reuters on Thursday. If the Saudis do raise next week the official selling prices (OSPs) of all their crude oil gradesselling in Asia, this would be the third consecutive month in which Saudi Arabia would have increased the prices of its oil for Asian customers. (Source: Oil Price)

Oil Prices Plunge On U.S.-China Trade War Escalation (29 May 2019): By Tsvetana Paraskova - Oil prices tanked on Wednesday morning after China upped the ante in the trade war, hinting at stifling rare earth minerals exports to the United States - a move that rekindled concern about the global economy and had investors flee risk assets. As of 09:15 a.m. EDT on Wednesday, WTI Crude was plunging 3.08 percent at $57.32, while Brent Crude was plummeting 2.52 percent at $66.94. (Source: Oil Price)

The Single Biggest Challenge For The Oil & Gas Industry (28 May 2018): By Irina Slav - The string of new oil discoveries off the coast of Guyana has lifted spirits recently, creating the impression that the energy industry is back on its feet and making more and more discoveries. However, this may not be the case. According to a report from Westwood Global Energy Group released earlier this month, for example, the success rate of exploration activity has fallen in the past five years, and it has fallen by a lot. (Source: Oil Price)

Saudi Oil Exports To China See Spectacular Jump (27 May 2019): By Irina Slav - Saudi crude oil exports to China rose 43 percent on the year in April to an average 1.53 million bpd versus 1.07 million bpd in April 2018 as independent refiners continued buying more. At 6.3 million tons for the full month, Saudi oil made up the largest share of crude imports into China, displacing Russian oil, whose intake during the reporting period was 6.12 million tons or 1.49 million bpd. Still, Russian oil imports also marked an increase: in April 2018 these averaged 1.35 million bpd. (Source: Oil Price)

The Next $4 Trillion Democratic Party Climate Change Plan (24 May 2019): By Irina Slav - Former Maryland Congressman John Delaney has become the latest in a growing list of Democratic presidential candidates pledging trillions in climate change fighting initiatives, CNN reports, citing Delaney’s US$4-trillion plan to cut carbon emissions by up to 90 percent by 2050. The plan focuses on a carbon tax for polluters with the money collected this way to be then distributed among the general population. (Source: Oil Price)

U.S. Energy Storage Capacity Set To Double This Year (23 May 2019): By Irina Slav - U.S. grid-connected energy storage capacity this year is set for a twofold increase to 712 MW from 376 MW last year. What’s more, between 2019 and 2024, storage capacity will soar to almost 5 GW, of which 90 percent will be battery storage, IHS Markit said in a new report. This will make the United States the country with the most energy storage capacity connected to the grid, ahead of the current global leader in this area, South Korea. (Source: Oil Price)

Aramco Takes Bite Out Of Massive US LNG Project (22 May 2019): By Irina Slav - Saudi Aramco struck a deal with U.S. Sempra Energy to buy 5 million tons of liquefied natural gas annually from Sempra’s Port Arthur LNG plant, Reuters reports, citing the two companies, which confirmed an earlier report in the Wall Street Journal. The Port Arthur facility has yet to be built and Aramco has also negotiated a 25-percent stake purchase in its first phase of development. The project includes the construction of two liquefaction trains along with up to three storage tanks and the relevant infrastructure. (Source: Oil Price)

War With Iran Could Send Oil To $250 (20 May 2019): By Vincent Lauerman - There has been much talk of an Iran War in recent weeks, but the likelihood of a war, whether intentional or accidental, is relatively small for the simple reason that the leaders of Iran and the U.S. don’t want one. President Donald Trump, who has been remarkably faithful to his campaign promises, to the chagrin of many, doesn’t want another Iraq-like war – with a quick victory followed by a long defeat. Ayatollah Ali Khamenei, Supreme Leader of Iran, doesn’t want his revolution and country crushed by the massive military might of America. (Source: Oil Price)

Oil climbs as Opec and its allies indicate continued production cuts (20 May 2019): Oil started the week strongly after Saudi Arabia and other Opec+ members signaled intentions to keep supplies constrained for the rest of the year, while US tensions with Iran ratcheted up as President Donald Trump threatened the country in a tweet. Futures in New York rose as much as 1.7 per cent, following a 1.8 per cent gain last week. Saudi Energy Minister Khalid Al Falih urged members of the alliance meeting in Jeddah to “stay the course” on output cuts. Meanwhile, just weeks after the US increased sanctions pressure on Iranian crude exports, Mr Trump tweeted “If Iran wants to fight, that will be the official end of Iran.” (Source: The National (UAE))

The World’s Last Coal Plant Will Be Constructed Soon (19 May 2019): By Irina Slav – In its latest energy investment report, the International Energy Agency said energy companies continued investing in coal as demand for electricity continued growing fast and renewable and nuclear capacity additions couldn’t keep up. But, the agency said, “decisions to invest in coal-fired power plants declined to their lowest level this century and retirements rose.” When something happens for the first time in a century, it’s definitely worth mentioning, … (Source: Oil Price)

Foreign oil companies in Iraq facing tense security situation for staff (17 May 2018): International oil and gas companies operating in Iraq are monitoring a tense security situation for their people working in the country amid heightened US-Iran tensions in the region. Shell, BP, Exxon Mobil, Russia's Lukoil and Italy's Eni are among foreign companies working in the south of the country. On Wednesday the US State Department ordered that all non-emergency government employees must leave... (Source: The National (UAE))

International Energy Agency dims crude demand forecast but market is 'well managed' (16 May 2019): Iran's oil supply coming off the market as well as other uncertainties are "being managed" by major crude producers, the International Energy Agency said. "There have been clear and, in the IEA’s view, very welcome signals from other producers that they will step in to replace Iran’s barrels, albeit gradually in response to requests from customers," it said in its latest oil market report. The Paris-headquartered agency also pared down its headline demand forecast for 2019 by 90,000 barrels per day to 1.3 million bpd, due to weaker growth expected from Brazil, China, Japan, Korea and Nigeria. (Source: The International (UAE))

Bearish EIA Report Keeps Oil Prices Down (15 May 2019): By Irina Slav - The Energy Information Administration reported a crude oil inventory build of 5.4 million barrels for the week to May 10. This follows a 4-million-barrel draw a week earlier. Analysts expected an inventory increase of about 3 million barrels for the week to May 10, while the American Petroleum Institute estimated inventories had risen by 8.6 million barrels. In gasoline, the EIA reported a draw of 1.1 million barrels, versus a decline of 600,000 bpd a week earlier, with production at 9.9 million bpd. This compares with 10.1 million bpd in average daily production for the first week of May. (Source: Oil Price)

Oil prices rise as US-China trade tensions escalate (14 May 2019): Oil edged higher as investors weighed an escalating US-China trade war that’s jeopardising the demand outlook against the risk that geopolitical tension in the Middle East will disrupt crude flows. Futures in New York rose as much as 0.4 per cent after closing down 1 per cent on Monday. The US released a list of about $300 billion of Chinese goods that it’s threatened to hit with a 25 per cent tariff after Beijing announced retaliatory levies on about $60bn of US imports. Volatility in oil prices has jumped this month as crude is buffeted by the spectre of a full-blown trade war on the demand side, ... (Source: The National (UAE))

Oil rises on supply concerns despite worries over global economy (13 May 2019): Oil futures rose on Monday on increasing concerns about supply disruptions in the Middle East even as investors and traders fretted over global economic growth prospects amid a standoff in the Sino-US trade talks. Brent crude futures were at $71.71 a barrel by 09.12 GMT, up $1.09. US West Texas Intermediate (WTI) futures were at $62.45 per barrel, up 79 cents. Saudi Arabia said on Monday that two Saudi oil tankers were among vessels targeted by a "sabotage attack" off the coast of the UAE, condemning it as an attempt to undermine the security of global crude supplies, Reuters reported. (Source: The National (UAE))

How hydrogen can change the energy landscape (12 May 2019): In 1964, the Methane Princess tanker made the first ever delivery of liquefied natural gas (LNG), from Algeria to the UK, sparking what is now a $100 billion (Dh367.31bn) industry. This February, Dubai began constructing a “green hydrogen” pilot plant to fuel vehicles at the Expo. Can the “hydrogen economy” learn from the experience of LNG? The lightest and most abundant element in the universe, elemental hydrogen does not occur in significant quantities on Earth. It is chemically combined in water, biological materials and other substances. (Source: The National (UAE))

Libya’s $60 Billion Push To Double Oil Production (10 May 2019): By Tsvetana Paraskova - Mustafa Sanalla, chairman of Libya’s internationally recognized National Oil Corporation (NOC), held meetings with U.S. companies at the Offshore Technology Conference (OTC) in Houston this week, to discuss US$60 billion worth of procurement contracts necessary to more than double Libyan oil production by 2023. Libya, which currently pumps around 1 million bpd in a fragile security situation, plans to have its crude oil production grow to 2.1 million bpd by 2023. Sanalla met this week with the top executives of several U.S. companies to “discuss the technology and expertise needed to achieve the corporation’s stated production target,” NOC says. (Source: Oil Price)

Iran's announced withdrawal from the nuclear deal is yet another form of political blackmail (9 May 2019): It is a familiar ploy of the Iranian regime that, whenever it wants to cause problems for its adversaries, it simply resorts to the age-old tactic of blackmail. The regime’s most obvious use of blackmail came shortly after the 1979 revolution, when Iran held 52 American diplomats and citizens hostage for a total of 444 days, to pressure the US into extraditing the exiled shah. This prompted a political crisis that effectively ended then US president Jimmy Carter’s chances of being re-elected as president. (Source: The National (UAE))

STEO: Brent To Average $70 This Year (8 May 2019): By Irina Slav - The Energy Information Administration expects Brent crude prices this year to average US$70 a barrel, falling to US$67 a barrel in 2020, the authority said in the latest edition of its Short-Term Energy Outlook. Both forecast figures are about US$5 higher than what the EIA had projected in the March edition of the monthly report, reflecting the steady rise in benchmark prices since March. For reference, the EIA noted the average price of Brent crude for 2018 was US$71 per barrel. (Source: Oil Price)

There’s Tremendous Room For Growth In Offshore Oil & Gas (7 May 2019): By Rystad Energy - The Offshore Technology Conference (OTC) in Houston, Texas celebrates its 50th birthday this week, begging the question – what will the next 50 years hold for the offshore market? Luckily, the data can provide some clues. Rystad Energy has analyzed the historic investments and oilfield service purchases of the world’s 50,000 oil and gas fields. While the forecast is uncertain, our analysis paints a fascinating picture of how offshore could contribute to the future of the service industry.

How the US war of attrition with Iran is playing out on the oil market (6 May 2019): “The best strategy is always to be very strong, first generally, then at the decisive point,” as the 19th Century Prussian military thinker Carl von Clausewitz observed. In the US-Iran oil confrontation, four powers really matter. Each have their strengths and weaknesses, but is any strong enough for a decisive victory? The struggle between the US and its oil-exporting Gulf Arab allies on one side, Iran on the other, its key customer China and various other concerned players is waged on numerous battlegrounds: diplomatic; cyber; covert; and (albeit not head-on) military. ... (Source: The National (UAE))

Ramadan 2019: Fasting expected to begin on Monday (5 May 2019): Ramadan 2019 is likely to start on Sunday night, with the first day of fast falling on Monday. Several countries have announced the holy month will begin on May 6, including Australia and Turkey. Saudi Arabia and the UAE are among the Muslim nations whose Moon sighting committees are looking to spot the new Moon. The UAE's committee will convene on Sunday evening. Ramadan is the ninth month in the Islamic, or Hijri calendar, and the holy month for Muslims, who believe it is when the Quran was revealed to the Prophet Mohammed. (Source: The National (UAE))

German chemicals giant BASF sees profit slump 24pc in Q1 (4 May 2019): BASF's first-quarter operating profit dropped 24 percent as the firm's basic chemicals business was hit by a slump in prices for precursor materials used in polyurethane foams. Operating profit, or earnings before interest and tax (EBIT) adjusted for one-off items, came in at 1.73 billion euros ($1.93 billion), slightly below an average analyst estimate of 1.75 billion posted on the company's website. In a statement on Friday, the German chemicals giant also affirmed a forecast for 2019 adjusted EBIT to grow at the lower end of a 1-10 percent range, up from 6.35 billion euros in 2018. (Source: The National (UAE))

US LNG export to the European Union could double by 2023 (3 May 2019): BRUSSELS, (Reuters) - The European Union will seek to double imports of liquefied natural gas (LNG) from the United States by 2023, as part of its efforts to ease transatlantic trade tensions and reduce its reliance on Russian gas. The European Commission, which coordinates trade policy for the 28-nation bloc, said on Thursday it plans to increase imports to 8 billion cubic metres (bcm) per year, more than double the level of 2018. U.S. President Donald Trump agreed with European Commission chief Jean-Claude Juncker last July not to impose tariffs on EU cars as the two sides sought to improve economic ties, including a drive to increase imports of U.S. LNG.

Dem Presidential Hopeful Shames Oil Workers, Refuses Oil-Related Campaign Money (2 May 2019): By Irina Slav - Beto O’Rourke, a Democratic presidential candidate, has signed a pledge to not accept any campaign donations from the oil and gas industry, and to return donations received since the start of his campaign that do not fit in with the requirements of the pledge. The Hill quotes the initiators of the pledge, a youth climate group, Sunrise Movement, as urging candidates and other politicians to "reject contributions from fossil fuel executives, lobbyists and their front groups and protect our health, climate, and democracy instead." (Source: Oil Price)

IMF Has Bad News For The Middle East And Oil Is To Blame (1 May 2019): By Irina Slav - Heightened volatility in oil prices as well as political instability will combine to pressure economic growth in the Middle East, the International Monetary Fund warned in the latest edition of its Regional Economic Outlook Update for the region. Inflation in the Middle East will remain high, at about 10 percent, according to the report, with economic growth declining from some 2 percent last year to 1.5 percent this year. Yet these are the average figures. In reality, the countries in the Middle East face rather different challenges. (Source: Oil Price)