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oil stocks

5 Oil Stocks That Yielded 100% Returns In 2021

U.S. crude oil futures slipped below $72/bbl on Friday but managed to close with a fourth straight weekly gain thanks in large part to the slow recovery in production following two hurricanes in the U.S. Gulf of Mexico.

Oil markets have, however, kicked off the new week on a losing note, with WTI trading at $70.40/bbl after pulling back from a seven-week high of $72.86/bbl that it hit on Wednesday. Natural gas prices have also pulled back from a seven-year high of $5.460/MMBtu, also set on Wednesday, to trade at $4.99/MMBtu as demand concerns have resurfaced following China reporting a new Covid-19 outbreak in Fujian province while Japan has extended stricter Covid-19 lockdown measures.

IHS Markit’s Marshall Steeves says oil prices could face near-term weakness as Gulf output recovers; however, he says oil prices in the longer term will mainly be dictated by demand growth.

That said, the stock market bull run shows no signs of slowing down. According to Michael Hartnett, BofA chief investment strategist, the market is seeing a “monster reallocation of cash-to-stocks as tax redistribution threat recedes & Fed expected to remain Wall St-friendly (liquidity easiest since Jul’ 07).”

Last week saw the largest inflow into U.S. large-cap funds ever at $28.3B, more than 4x the inflows of $6.9B for U.S. growth funds, $4.2B for small-cap funds, and $1.6B for value stocks. Among large-caps, the Technology Select Sector SPDR ETF (NYSEARCA:XLK) attracted the largest inflows at $3.2B while the Energy Select Sector SPDR ETF (NYSEARCA:XLE) saw the fourth highest inflows at $1B.

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Source: Oil Price

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U.S oil Biden

What Are Biden’s Real Priorities For U.S. Oil?

Americans are paying the most expensive Labor Day weekend gasoline prices since 2014. This is amid constrained stock levels and high benchmark crude oil prices.

The end of the U.S. driving season comes in just a few days. This is after OPEC+ ignored the Biden Administration’s call for higher-than-planned increases in the alliance’s oil production. This is in order to ease high gasoline prices and continue supporting the economic recovery.

“President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump,”.

This is what National Security Advisor Jake Sullivan said last month. He notes that the OPEC+ plan to ease the cuts by 400,000 bpd each month “is simply not enough.”

OPEC+, however, signaled this week that the planned monthly increases are just enough to meet the accelerating recovery despite concerns about COVID variants surging in many economies.

One of the shortest—and most uneventful—meetings of the group in recent months noted that “while the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates.”

The White House welcomed the group’s decision.

OPEC+ left its production cuts easing plan unchanged.

“We’re glad that OPEC is continuing gradual increases in oil production, just like they agreed to increase production in July,” a White House spokesperson said, as carried by Reuters, adding that the U.S. continues to engage with OPEC+ on the importance of “doing more to support the recovery.”

Yet, average U.S. gasoline prices at $3.183 a gallon as of September 2 were nearly a dollar higher than last year’s average price at this time, $2.234.

The Biden Administration, like all other U.S. Administrations before that, fears high gasoline prices, which impact consumers’ purchasing power. Those consumers are also voters, who could easily punish an administration with an emotional vote. As early as in next year’s mid-term elections, in which the Democrats have slim majorities in Congress to defend.

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Source: Oil Price

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Demand for Oil

World’s Third-Largest Oil Importer Sees Rebound In Demand

World’s Third Largest Oil Importer, India, and their crude oil demand have been on the mend since mid-summer. It is likely to continue along this same vein for quite a while. This is with at least one refiner planning to boost refining capacity considerably.

India, the world’s third-largest oil importer, has become a key factor in oil prices. This is because of its overwhelming dependence on imported crude. During the latest wave of Covid-19 infections in the country, oil demand suffered an expected slump. But now things are looking up.

Reuters reported last month that in July, Indian refiners increased run rates to the highest in three months. This is in response to strong fuel demand. It actually followed the relaxation of movement restrictions after the worst of the wave.

The outlook for demand remains upbeat, too. Gasoline demand in the country is expected to hit a record high during the current fiscal year. This is because of the pandemic. As in other places, people in India are shunning public transport in favor of personal vehicles. The goal is to reduce their risk of infection.

Sales of passenger vehicles in India soared by as much as 45 percent on the year in July. This is according to a Reuters report from earlier this month. The report attributed the boom to pent-up demand. Still, it must have also had something to do with the shift to personal transportation. This move is at the expense of public transportation.

The resulting surge in gasoline demand could be so strong as to require additional imports. Boosting local gasoline production was not an option. Mainly, Indian refiners were drowning in unsold diesel. They had no space for throughput increases until these inventories went down.

The diesel problem is not confined to India, by the way. Asian refiners are struggling with an inventory overhang seen at 600,000 bpd as of August, per a recent Bloomberg report. Despite lower diesel exports from China, margins for the fuel remain slim, the report said, quoting an Energy Aspects analyst, and prices remain subdued, which is “really telling of how bearish the situation is.”

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Source: Oil Price

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Hurricane Ida Oil Effect

Hurricane Ida Shuts In 95% Of U.S. Gulf Coast Oil Output

As much as 95 percent of oil production in the U.S. section of the Gulf of Mexico has been shut-in. That is the Hurricane Ida Oil Effect. As hurricane Ida passed through it before making landfall in Louisiana earlier today.

What is the latest data from the Bureau of Safety and Environmental Enforcement? Some 288 production platforms in the Gulf of Mexico have been evacuated. This is more than half of the manned platforms in the Gulf.

This meant that about 1.74 million barrels in daily production is 95.65 percent. The total produced in the Gulf was shut-in. Along with 2.09 billion cu ft of natural gas production daily. Meaning 93.75 percent of the total, the BSEE reported.

Refiners along the Gulf Coast also shut down their facilities. According to a CNN report from earlier today that quoted Lipow Oil Associates President Andy Lipow, as of Ida’s landfall, six refineries in the New Orleans area were shut down, including facilities managed by PBF, Phillips 66, Shell, Marathon, and Valero.

“It’s now a waiting game to assess whatever wind and flooding damage will be caused as the hurricane passes through the area,” Lipow said.

According to an earlier Bloomberg report, the shut-in refining capacity totaled 2.11 million BPD, or about 12 percent of the national total. The figure also includes refineries operating at reduced rates because of the hurricane.

Ida is the ninth named storm in the hurricane season in the Atlantic this year. Gulf of Mexico producers had evacuated staff ahead of a storm in June, too. Occidental Petroleum and Chevron Corp were among companies evacuating staff from platforms.

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Source: Oil Price

oil price rise - rig

Oil’s Comeback Is Lifting Commodity Prices

After taking a beating over the past few weeks, oil price rise surging on rising demand optimism. This is a major production outage in Mexico. Also the first full U.S. regulatory approval of a COVID-19 vaccine.

October crude and Brent were up 3% to $67.47/bbl and $70.83/bbl, respectively. A day after a 5% surge by both benchmarks snapped a seven-day losing streak. This is after China claimed to have brought its coronavirus cases down to zero and opened up the Ningbo port. This is one of the busiest in the world, after a two-week shutdown.

About two weeks ago, China—once the epicenter of the virus—took an uncompromising approach by imposing widespread travel restrictions. This inclueds new lockdowns. Authorities in Beijing curtailed public transport and taxi services in 144 of the worst-hit areas nationwide, including train service and subway usage in Beijing.

That seemed like overkill, with less than 1,000 cases of the delta virus reported nationwide and a good 61% of the population already fully vaccinated. However, Beijing opted to employ its tried-and-tested method of targeted lockdown that has been successful in stopping no less than 30 Covid-19 flare-ups in the past. The capital city of Beijing implemented a two-week quarantine for visitors from high-risk areas, halted the use of community spaces for entertainment, and also limited the number of visitors allowed at parks and scenic areas.

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Source: Oil Price

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Hottest Oil Play

5 Things You Need To Know About The World’s Hottest Oil Play

The game is afoot with 2D seismic and a 6-well exploration drilling campaign. This is with evidence of an active petroleum system now confirmed after two test wells in Namibia’s 6.3-million-acre Kavango Basin. That hopes to put this final frontier nation definitively on the commercial oil map.

Recon Africa (TSXV:RECO, OTC:RECAF), the junior explorer behind the new play, and its JV partner NAMCOR, Namibia’s state oil company, think they might have drilled into a reservoir in their first test well, and they are very excited about what comes next.

So, let’s drill down here to better understand exactly where we stand with exploration in the Kavango Basin. Learn why many of us are so excited about it.

Here are 5 key details that are very important to understand:

#1 Exactly what did Recon Africa find in its first two test wells?

Key Takeaway: They’ve found light oil showings and evidence of an active petroleum system, helping to de-risk the 8.5-million-acre position in the Kavango Basin. The company’s expectations are that much more is to come, and now full-blown exploration begins.

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Source: Oil Price

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wall street oil prices fell

Wall Street Bullish On Oil Despite Losing Streak

Oil prices fell on Friday but still managed to eke out a slight weekly gain at $68.44/bbl. This is as investors continued to weigh a bullishly tight global market. Mainly against the worrying spread of the coronavirus delta variant.

Oil prices have been highly volatile over the past few weeks. With the International Energy Agency (IEA) warning that the spread of the delta variant would slow.

Now, the global oil demand recovery in its latest report “Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil-consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the IEA wrote in its monthly oil report.

According to the IEA, last month’s demand slump clocked in at 120K bbl/day, and has forecast that growth would drop by ~500K bbl/day during the second half of the year compared to the group’s previous estimate.

The good news: The IEA has raised its oil price outlook for 2022.

Global oil demand is now seen rising 5.3 mb/d on average, to 96.2 mb/d in 2021, and by a further 3.2 mb/d in 2022. The IEA is also predicting that we could start to see a comeback of U.S. shale in the coming year, with supply from non-OPEC producers expected to rise by 1.7 mb/d in 2022, with the US accounting for 60% of the growth. Baker Hughes’ latest weekly survey found that the number of active, oil-targeted rigs in the U.S. jumped by 10 to a 16-month high 397 rigs.

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Source: Oil Price

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cheap natural gas

Cheap Natural Gas Is A Thing Of The Past

The era of cheap natural gas might be gone for good. U.S. natural gas futures climbed to a 31-month high of 4.16/MMBtu on Thursday thanks to forecasts for hotter weather over the next two weeks and soaring global gas prices ensuring that U.S. liquefied natural gas (LNG) exports will remain at record highs.

Refinitiv has projected that average gas demand, including exports, will climb from 90.9 bcfd in the current week to 94.5 bcfd next week as cooling demand keeps rising. Next week’s forecast is actually lower than anticipated because some power generators will be forced to burn coal instead due to increasingly high natural gas prices.

But that won’t be on a big enough scale to stop the natural gas march. Cheap natural gas is fading!

And that’s great news for U.S. LNG. Between January and June 2021, U.S. LNG exports made a jump by 42% Y/Y to an average of 9.6 billion cubic feet per day (Bcf/d). This is comparable with the first half of 2020. Asia is still the top buyer of U.S. LNG, accounting for 46 percent of exports through the end of May.

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Source: Oil Price

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Offshore Oil and Gas

2021 Has Been A Blockbuster Year For Offshore Oil and Gas

For an industry in trouble, the offshore oil and gas industry is doing pretty well. This is especially in terms of discoveries and final investment decisions.

So far this year, 21 new offshore projects have received a final investment decision. This is according to Westwood Global Energy Group. At the same time, there are a number of discoveries, tapping billions in new oil reserves. The Middle East and Latin America are the leaders in final investment decisions. The tune of a $20 billion, Offshore magazine reports, citing Westwood analyst Joe Killen.

In the Middle East, one of the highlights is the Farzad B natural gas field offshore Iran. Initially discovered by Indian state major ONGC Videsh, the field will now be developed by Iranian Petropars as U.S. sanctions made international participation in Iran’s oil and gas industry problematic.

Farzad B is estimated to hold some 22 trillion cubic feet of natural gas, with 16 trillion cubic feet of recoverable gas. It should produce about 1 billion cubic feet daily five years from now, according to the developer. The contract Iran’s government has signed with Petropars for Farzad B is worth $1.78 billion.

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Source: Oil Price

Image Credit: Wikipedia Commons

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new mexico oil production

New Mexico Breaks Oil Production Record

New Mexico broke an oil production record in May, pumping an average of 1.22 million barrels daily as the Permian Basin returned to output growth again.

Bloomberg reports, citing government data, that New Mexico produced more oil than North Dakota, and it did so for three months in a row to May.

New Mexico also recently reported record oil and revenues for the fiscal year 2021. According to the New Mexico State Land Office, it had received some $1.26 billion in total revenues in the latest fiscal year, of which $1.25 billion or 96 percent came from oil and gas royalties.

Since the start of this year, revenues have strengthened further, averaging some $100 million per month and rising to a record $135 million for June, according to preliminary data.

State Land Commissioner Stephanie Garcia Richard said, as quoted by the Carlsbad Current-Argus, that oil and gas production in New Mexico rebounded quickly thanks to relief granted by the state. The relief consisted of drillers keeping their leases despite well closure during the worst of the demand crisis last year.

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Source: Oil Price

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