Nov 2018

Natural Gas Prices Fall Below Zero In Texas (28 November 2018): By Nick Cunningham - Surging U.S. oil production in the Permian basin has helped crash oil prices. But the Permian is also home to skyrocketing natural gas production, and output is growing so fast that drillers are trying to give it away for free. When they can’t, they just burn it off into the atmosphere. Unlike in the Marcellus shale, where natural gas is the main target, drilling in the Permian is focused entirely on crude oil. Natural gas is a nice bonus that comes along with the oil. But the drilling frenzy in West Texas and New Mexico has resulted in a glut of this associated natural gas. There is a pipeline bottleneck for crude oil, but there is also a shortage of pipeline space for natural gas. (Source: Oil Price)

Petroleum Economist announces 2018 award winners (28 November 2018): LONDON, Nov. 28, 2018 / -- Honouring the global energy industry's most successful firms, projects and innovations, Petroleum Economist announced the winners of its 2018 Petroleum Economist Awards in 18 categories. Additionally, five awards were given to outstanding individuals for their industry contributions. Wellington Moreira Franco, Brazil’s minster of mines and energy, scooped the Minister of the Year award, while Mohammad Ghazi Al-Mutairi of Kuwait National Petroleum Company was honoured as CEO of the Year. (Source: Hydrocarbon Processing)

Saudi-Russia oil alliance faces big test as prices crash (27 November 2018): By GRANT SMITH AND DINA KHRENNIKOVA - LONDON and MOSCOW (Bloomberg) -- The most powerful partnership in the global oil market, which rescued the industry from a deep slump, faces its toughest test yet. Crude has collapsed by more than 30% and Saudi Arabia is urging Russia to collaborate in cutting production again. Their alliance successfully revived markets two years ago, but it’s unclear if Moscow is on board this time. Russia’s government is feeling less pain than kingdom from falling prices, while its companies are enjoying near-record output and cash flow. (Source: Oil Price)

Could Oil Prices Fall To $40? (26 November 2018): Crude market volatility has soared in the second half of 2018, with prices touching a four year high before entering their longest losing streak in three decades. Analysts were calling for $100 oil but now seem to think prices will head as low as $40. While inventory build-ups and oil traders continue to impact prices in short term, it is the KSA’s (Kingdom of Saudi Arabia) actions in December, a potential hike in U.S. interest rates and a rumbling trade war between China and the U.S. that will really move the market. Between them, these three factors have the potential to drive oil prices in the $40s. (Source: Oil Price)

Slide in oil prices unlikely to last (26 November 2018): Robin Mills - As oil prices tumble, Opec countries meet in Vienna on December 6. Before that, Russian President Vladimir Putin, Crown Prince Mohammed bin Salman of Saudi Arabia, and US President Donald Trump will meet at the G20 gathering in Argentina next week, along with Saudi energy supremo Khalid Al Falih and Russian oil czar Alexander Novak. The two key influencers will be elsewhere: supply and demand. The current slump should not come as a shock. In the past two decades, something like this drop, down 30 per cent in less than 40 days, has happened six times before. As oil prices were ascending above $86 per barrel in early October, they were already beginning to look unsustainable. Brent crude fell below $60 on Friday. (Source: The National (UAE))

Saudi Aramco attracts 400 companies to localise supply chain content (24 November 2018): Sarah Townsend - Saudi Aramco, the world’s biggest oil producing company, has signed up more than 400 companies for its national supply chain initiative – part of efforts to increase use of locally produced goods and services. Bakers Hughes, part of General Electric, Schlumberger, AZR Technologies and the Arabian Drilling Company are among companies that are part of Aramco’s In-Kingdom Total Value Add (IKTVA) programme, the company said in a statement. The initiative aims to locally source Aramco’s supply chain by incentivising international and local providers to invest within the kingdom. (Source: The National (UAE))

Oil Plunges On Black Friday As Glut Fears Persist (23 November 2018): By Tsvetana Paraskova - Crude oil prices plummeted early on Friday to the lowest in a year, dragged down by continued concern about global oversupply, despite hints from OPEC that it would be discussing a new oil production cut to prevent a glut. At 10:20 a.m. EST on Friday, WTI Crude was plunging 6.39 percent at $51.14, while Brent Crude was down 5.44 percent at $59.46. Oil prices are currently on course to post in November their biggest one-month drop since 2014, as supply from the United States continues to grow and as OPEC and Russia opened the spigots in the summer to pump more crude to offset expected steep losses from Iran when U.S. sanctions return. (Source: Oil Price)

JP Morgan Cuts Its Oil Price Outlook For 2019 (22 November 2018): By Irina Slav - JP Morgan has revising its outlook on Brent crude to US$73 per barrel on average, CNBC reports. The bank’s earlier forecast was for an average Brent crude price of US$83.50 a barrel. The head of the bank’s Asia-Pacific oil and gas operations, Scott Darling, told CONB analysts had factored in the increase in supply in North America that will occur in the second half of 2019 and will eventually pressure prices even lower in 2020, to an average US$64 in that year. (Source: Oil Price)

Alberta To Fight “Air Barrels” As Prices Continue To Plunge (20 November 2018): By Irina Slav - Albertan oil producers need to become warier of overbooking already filled to capacity oil pipelines creating what’s commonly called “air barrels” as these contribute to the huge discount Canadian crude is trading at to WTI and other benchmarks. This is the message from Alberta’s Premier Rachel Notley, as reported by the Calgary Herald. The oil industry in Alberta has been scrambling to find a way out of the discount that has eaten deeply into producers’ bottom lines. Since new pipelines are far from likely to come into operation in the foreseeable future, other options are being considered, including, most recently, deliberately cutting production, OPEC-style, to prop up prices. (Source: Oil price)

Fire shuts unit at Moscow oil refinery (18 November 2018): MOSCOW (Reuters) - A fire broke out in an oil refinery in Moscow on Saturday morning, shutting down a unit that Thomson Reuters data said produced more than half the plant’s gasoline output. Fire crews battled for more than three hours before extinguishing the blaze at the refinery in the capital’s Kapotnya district, the emergency ministry said. The plant’s owner - Gazprom Neft, the oil arm of Russian gas giant Gazprom - said the refinery was back working as usual apart from a catalytic cracking unit which was offline. (Source: Hydrocarbon Processing)

Oil Prices May Have Reached A Bottom (18 November 2018): By Robert Rapier - Last Friday, oil prices fell for the 10th consecutive day. According to CNBC, this marked the longest losing streak for crude oil in 34 years. I have covered the factors behind this drop in the previous two articles. To recap, the loss of China as an export market for U.S. oil producers has caused crude inventories in the U.S. to swell, and the Trump Administration’s weakening of imminent sanctions on Iran have both been large factors in the decline. (Source: Oil Price)

Global Project Data: Energy Web Atlas is tracking more than 215 active LNG projects around the world. These projects include grassroots projects and brownfield expansions of existing LNG export and import terminals, floating vessels (FLNG) and storage facilities. As host to nearly 40% of active LNG projects, the Asia-Pacific region (primarily China and India) is investing heavily to build up its LNG import capacity to meet increasing demand for natural gas. Additional natural gas imports will help Asia-Pacific nations provide cleaner-burning fuel for power generation, cooking, etc. At nearly 20%, the US has the second-highest amount of active LNG projects. The region continues to invest in its LNG export capacity buildout. (Source: Gas Processing)

Linde awarded contract for largest LNG plant in China (16 November 2018): Munich - The technology company The Linde Group has been awarded a contract from Chinese chemical and energy company Inner Mongolia Huineng Coal Chemical Co Ltd to supply a mid-scale LNG plant near Beinichuan in Inner Mongolia. This will be Linde's seventh and largest LNG plant to date in China and is in response to growing demand from customers in China. Linde's Engineering Division will be responsible for engineering, procurement and site services for the LNG plant with a nameplate capacity of 750,000 tons of liquefied natural gas per annum. The plant's technology is based on Linde's proprietary LIMUM^(R) process, a multi-stage mixed refrigerant process that provides best-in-class energy efficiency, and proprietary core cryogenic heat exchangers. (Source: Hydrocarbon Processing)

Significant Crude Build Weighs On Oil Markets (15 November 2018): By Irina Slav - The Energy Information Administration reported a huge crude oil inventory build for the week to November 9 of 10.3 million barrels, arresting an improvement in oil prices that started yesterday after a sharp drop earlier this week. Amid growing concern about a weakening in global oil demand and rising production from OPEC and outside it, notably in the United States, the EIA also reported a 1.4-million-barrel decline in gasoline inventories and another one, of 3.6 million barrels, in distillate fuel inventories. (Source: Oil Price)

Oil Rebounds After Biggest Daily Loss In 3 Years (14 November 2018): By Irina Slav - Crude oil prices crashed yesterday, losing 7 percent in just one day, which was the biggest daily loss in three years and today continued down in early trading as headwinds overwhelmed any bullish factors. After a rather rocky start to Wednesday trading, oil prices managed to tick upward, with WTI trading at 2.32% by 10:14am EST. Brent had rallied 2.63% to trade at $67.19 at the time of writing, despite pressure by a vicious combination of demand outlook, oversupply concerns and a couple of other factors such as President Trump’s call on OPEC to keep production at current levels. (Source: Oil Price)

Brexit divorce deal text agreed by EU and UK, May's ministers to meet (13 November 2018): Guy Faulconbridge, Elizabeth Piper - LONDON (Reuters) - The European Union and Britain have agreed a draft text of a Brexit withdrawal agreement and Prime Minister Theresa May will present it to her senior ministers on Wednesday. While officials choreograph the first withdrawal of a sovereign state from the EU, it remains unclear whether May can get any deal approved by the British parliament. “Cabinet will meet at 2 p.m. tomorrow to consider the draft agreement the negotiating teams have reached in Brussels, and to decide on next steps,” a spokesman at May’s Downing Street office said.

Oil Prices Rise As Saudis Cut Exports (12 November 2018): By Irina Slav - Less than two months after Khalid al-Falih’s assurances that Saudi Arabia will produce and export enough oil to keep prices steady, the Kingdom’s Energy Minister has said that exports would be cut by as much as 500,000 bpd this month and next on a bid to prop up prices. At the same time, the Associated Press reports, discussions have started with Russia to curb the global supply of crude seeing as Iran sanctions failed to lift prices. Al-Falih’s Russian counterpart, Alexander Novak, said Moscow wouldn’t mind cutting production as long as the move had the support of OPEC as a whole. (Source: Oil Price)

Opec will fill supply gaps from Iran sanctions: UAE Energy Minister (11 November 2018): Jennifer Gnana - Opec will “work together to fill any gaps” in the market as a result of US sanctions on Iran, even as it works to ensure there is no oversupply in the market, the UAE Energy Minister said on Sunday. "Iran is a member and we will cater for whatever happened and whatever happens to any member state," Suhail Al Mazrouei, who holds Opec's presidency, said ahead of the organisation's Joint Ministerial Monitoring Committee session in Abu Dhabi. "We are responsible as a group now as it could happen to any state, whether it’s sanctions, or anything, we will work together to fill in any gap.” (Source: Oil Price)

Opec to convene in Abu Dhabi amid worries over surging US crude supplies (10 November 2018): Jennifer Gnana - Opec, which meets on Sunday for its Joint Monitoring Ministerial Committee meeting in Abu Dhabi, will look to reinvent itself as it finds itself outpaced by surging US oil supply and a tighter spare capacity environment. Data from the US Energy Information Administration showed US supply had swung up to 11.6 million barrels per day last week, eclipsing Saudi Arabia’s 10.7 million bpd and Russia’s own 11.4 million bpd. The added oil barrels and uncertainty have plunged the markets into bearish territory, with Brent falling to $69 per barrel on Friday. (Source: The National (UAE))

Saudis Study Potential OPEC Collapse (9 November 2018): By Irina Slav - Saudi Arabia is studying the theoretical dissolution of OPEC, the Wall Street Journal reports, citing sources from government think-tank King Abdullah Petroleum Studies and Research Center, which is in charge of the study. The cartel has gone through a turbulent couple of years after the 2014 price collapse, when its pump-to-the-max strategy failed to bring down U.S. shale producers and only caused a glut that hurt OPEC members themselves. Now, its largest member and natural pack leader is struggling with a backlash from investors following the murder of dissident Jamal Khashoggi and falling demand for crude. (Source: Oil Price)

OPEC Fears Another Downturn In Oil (8 November 2018): By Nick Cunningham - Oil prices have fallen so far in the past month that OPEC is clearly growing concerned about a downturn. Saudi Arabia and Russia will explore the possibility of a production cut for 2019, a move intended to head off a renewed supply glut. Surging U.S. shale production, plus higher output from Russia, Saudi Arabia, the UAE, Iraq and Libya, has more than offset the declines from Iran, at least so far. Inventories have climbed sharply in the U.S., and shale production in recent months has exceeded expectations. (Source: Oil Price)

Exxon says it's big enough to take on any deal (7 November 2018): Bloomberg - The world’s biggest public energy company doesn’t worry about size when it comes to potential deal-making. The driver of any acquisition for ExxonMobil isn’t the scope of the target, it’s whether the company finds more value in it than the market does, Darren Woods, chief executive of the Texas-based firm, said at the New Economy Forum in Singapore. The explorer is looking for opportunities to purchase assets even as it plans to expand output at existing fields from West Texas to Mozambique. “We have the capacity to do any size opportunity that can come about, so it’s really a function of looking at the value that ExxonMobil can extract, and how we would integrate that into our portfolio,” Mr Woods said, while declining to comment on any specific targets.

China Ready For Trade Talks (6 November 2018): By Irina Slav - China is ready to negotiate a trade deal with the United States as both economies stand to lose from a prolonged trade war, Vice President Wang Qishan said today as quoted by Bloomberg. Wang was speaking at the Bloomberg New Economy Forum in Singapore, and added that trade was the “anchor and propeller of China-U.S. relations.” However, President Xi’s number-two as Bloomberg called him, also warned against “right-leaning populism” and “unilateralism.” The trade war saw US crude oil shipments to China stop completely in October, and China slapped a 10% tariff on LNG in September. (Source: Oil Price)

ADNOC plans oil-production capacity hike (5 November 2018): By OGJ editors - Abu Dhabi targets self-sufficiency in natural gas and expansion of oil-production capacity to 5 million b/d by 2030 under an expanded budget approved Nov. 4 by the Supreme Petroleum Council (SPC). Announcing capital investment growth of $132.33 billion during 2019-23, the SPC reported recent indicated discoveries of 1 tcf of natural gas in place and 1 billion bbl of oil in place. The emirate is raising oil-production capacity this year to 3.5 million b/d and in its new budget sets an interim target of 4 million b/d by 2020.

Abu Dhabi discovers large reserves as it targets gas self-sufficiency (4 November 2018): Jennifer Gnana - Abu Dhabi National Oil Company has discovered large hydrocarbon deposits equivalent to a one per cent increase to existing oil reserves and a 7.1 per cent addition to proven gas reserves as it raises investment spend to boost crude output capacity to 5 million barrels per day by 2030. The discoveries, the largest in recent years for gas, could end the UAE’s dependence on pipeline imports and transform the country into a net exporter of the fuel. Adnoc said it had found 15 trillion cubic feet of gas and a billion barrels of oil. The UAE had 97.8 billion barrels of proven reserves of oil - 5.8 per cent of world total - as well as 209.7 trillion cubic feet of gas at the end of 2017, according to the latest BP Statistical Review of World Energy. (Source: The National (UAE))

US to grant waivers to eight buyers of Iranian crude (2 November 2018): The US has agreed to let eight countries -- including Japan, India and South Korea -- keep buying Iranian oil after it reimposes sanctions on the Opec producer on November 5, a senior administration official said. While the Trump administration’s goal remains to choke off revenue to Iran’s economy, waivers are being granted in exchange for continued import cuts so as not to drive up oil prices, said the official, who asked not to be identified before Secretary of State Michael Pompeo announces the number of exemptions later on Friday. (Source: The National (UAE))

OPEC output climbs to highest since 2016 on Saudi, Libyan gains (1 November 2018): By GRANT SMITH - LONDON (Bloomberg) -- OPEC’s crude production in climbed to the highest level since 2016 as increases by Saudi Arabia and Libya offset losses stemming from impending U.S. sanctions on Iran. The group’s 15 members boosted output by 430,000 bpd to 33.33 MMbpd in October, according to a Bloomberg survey of officials, analysts and ship-tracking data. That’s the highest since November 2016, just before the Organization of Petroleum Exporting Countries implemented production cuts to clear a global glut. (Source: World Oil)