Despite the strong US dollar, there is an unmistakably bullish sentiment in the oil markets as demand is back in line and vaccine deployment continues.
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Friday, March 12, 2021
Oil prices regained lost ground over the weekend as tight supplies forced a global drain on inventories. “Overall, we are optimizing oil demand which continues its upward trajectory along with vaccine programs and the resumption of economic activities,” Bjornar Tonhaugen of Rystad Energy said in a statement.
OPEC lowers demand forecast. OPEC cut its demand forecast for the next two quarters, with second-quarter demand of 690,000 bpd compared to a previous forecast. “Ongoing closure measures, voluntary social distancing and other pandemic-related developments” continue to weigh on economic activity, OPEC said in its monthly report.
The Saudi voluntary cut is smaller than indicated. Saudi Arabia has pledged to voluntarily cut its production by an additional $ 1 million in February and March, but new data suggests cuts were smaller than expected. “According to Petro-Logistics’ assessment and after discussions with market sources and contacts, our estimate of Saudi supply in February is a reduction of around 600,000 bpd each month,” Daniel Gerber, head of Reuters, told Reuters. Petro-Logistics executive. .
Analysts warn that OPEC + is losing weight too much. American shale drillers promised moderation, but prices have risen to such an extent that they may be tempted off the margin line. Analysts warn OPEC + that they are playing with fire. “Barrel retention as a means to keep the price up will work,” Bill Farren-Price, director of research firm Enverus, told Bloomberg. “But in doing so, the table is set for a party in which the U.S. short-cycle operator will be the guest of honor.”
Related: Europe cannot keep up with the demand for battery metals
BP and Shell earn billions in trading. BP (NYSE: BP) it earned about $ 4 billion with its energy trading unit in 2020, which cushioned the blow of the pandemic’s profits.Royal Dutch Shell (NYSE: RDS.A) he said its trade profits doubled to $ 2.6 billion.
Iran’s oil exports to China are on the rise. Iranian oil imports from China are on track to double in March, compared to February. Iranian oil is being sold at a discount of $ 3 to $ 5 per barrel relative to Brent, due to the sanctions. At the same time, Saudi Arabia’s exports to Asian buyers in April will fall by 15%.
US refinery gas rose to a 18-month high. A Rystad Energy report shows that natural gas produced at oil and ground gas facilities not above the United States peaked at 18 months in February, at 180.9 million cubic feet per day (MMcfd ).
The Biden administrator approves drilling permissions. After an initial hiatus, the Department of the Interior approved 200 drilling permits in the past two weeks, mostly in Wyoming and North Dakota. Although leases on federal land have been temporarily suspended, drilling permit approval appears to be resuming.
Biden Lease Report for Summer; Congress examines reforms. The Biden administration said it would release an interim report on its suspension of federal land lease sales for the summer. At the same time, a bipartisan group of senators is studying reforms to increase royalty rates paid by oil, gas and mining companies.
Shell touches the mining executive as the new president. Royal Dutch Shell (NYSE: RDS.A)appointed Andrew Mackenzie as the new president. Mackenzie is the former CEO of BHP Group Ltd. and replaces Shell’s outgoing president, Chad Holliday.
India is looking at alternatives amid high prices. India called on OPEC + to increase production to lower crude oil prices. India’s oil minister Dharmendra Pradhan said his country would try to diversify away from the Middle East as a source of supply.
BP comes out of Kazakh oil projects. BP (NYSE: BP) abandoned three oil projects in Kazakhstan amid a change in strategy to focus on renewable energy.
Why do investors turn against fossil fuels? Over the next five years, oil and gas companies will definitely see less investment, as the world’s largest institutional investors are increasingly seeing companies ’environmental credentials in their portfolios.
The U.S. Senate floats the methane tax. Three Democratic senators support a bill that would tax methane emissions.
Dead Cow is about to return. Drilling activity collapsed in the Argentine Dead Cow last year, but rose to a 17-month high in January 2021. Higher prices and government subsidies help restore the life of the dead cow . Related: how oil could reach $ 100 a barrel
Biden’s DOE secretary tells the oil industry to adapt or die. “I’m not going to sugar how hard the transitions are,” U.S. Secretary of Energy Jennifer Granholm told CERAWeek at the conference. “The bottom line is that this particular clean energy growth and carbon reduction provides a great opportunity and I extend a collaboration,” Granholm said.
US air travel is starting to increase. Aviation will be the last sector to bounce back from the pandemic, but there is some evidence to suggest that it is recovering. The volume of passengers passing through airports is now flirting with the higher levels since the pandemic began.
Canoo, startup EV, joins an all-electric pickup race. Canoo, a U.S. electric vehicle startup, said it plans to launch an all-electric, van-like pickup truck in 2023, adding to a quick choice of electric vehicles available to American buyers.
By Josh Owens for Oilprice.com
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