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oil demand growth

BP CEO: Strong Oil Demand Growth Is Here To Stay

Global oil demand is set to rebound and remain robust for some time. BP’s chief executive Bernard Looney told Bloomberg News on the sidelines of an economic forum in Russia. It is reiterating views expressed by most forecasters and analysts. Here’s the detailed statement about oil demand growth.

“There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney told Bloomberg News at the St. Petersburg International Economic Forum. “I think that the situation we’re in at the moment could last like this for a while,” the top executive of one of the world’s largest oil companies said.

Looney’s assessment of the oil market is similar to the views recently expressed by investment banks such as Goldman Sachs and Barclays, as well as OPEC and the International Energy Agency (IEA).

Goldman Sachs continues to see oil hitting $80 this year, despite the possible return of Iranian oil to the market.

Barclays, for its part, said two weeks ago that global oil demand was recovering with major economies reopening amid a cautious supply approach from OPEC+ and restraint in U.S. shale.

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Source: Oil Price

Image Credit: Public domain/Flickr

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oil-demand IEA

IEA Backpeddles, Says Oil Demand Will Soon Reach Pre-Crisis Levels

Oil demand is recovering faster than previously expected, and unless OPEC+ puts additional barrels on the market on top of the plans to restore 2 million barrels per day (bpd) by July, oil prices will be heading higher as the gap will widen, the Executive Director of the International Energy Agency, Fatih Birol, told Bloomberg Television in an interview on Tuesday.

According to Birol, global oil demand could return to the pre-crisis levels of 2019 as soon as in a year’s time.

“Demand in one year or so may well come back to the levels of before the crisis,” Birol told Bloomberg, noting the strong demand in the United States, Europe, and China.

This most recent proclamation regarding oil demand is in stark contrast to its forecast three months ago, when the IEA said in its annual Oil 2021 report with projections through 2026 that global oil demand would take until 2023 to return to the pre-pandemic levels of 100 million bpd. Back then, the Paris-based agency warned that COVID-19 would change parts of consumer behavior forever, with global gasoline demand likely past its peak already.

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Source: Oil Price

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oil-gas-news

Why Oil and Gas Exploration is Still Important

Do we still need to explore for oil and gas? One conclusion in our Horizons scenario analysis is that if the world gets onto a 2 °C pathway, there’s enough oil in existing discoveries to meet future oil demand. It’s a view the IEA NZE concurs with.

Dr Andrew Latham, Huang Tra Ho and Julie Wilson have just published their analysis of the Majors’ exploration performance for 2011-2020. In that tumultuous decade, exploration lost its way economically, before a pivot to value that got returns back to respectable levels – even at US$50/bbl. I asked them where exploration goes from here.

Is exploration still relevant?

It will still play a role in upstream. Even if we do get onto a 2 °C pathway, exploration can deliver new resource into the supply stack that’s lower cost and less carbon-intensive than existing resources. We also think the focus of exploration will progressively shift towards gas, for which demand will be more resilient through the transition.

There is still a likelihood that oil and gas demand holds up for some years. In that case, we’ll want exploration to find new resource to offset the natural decline in production from existing fields.

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Source: Hellenic Shipping News Worldwide

oil-well

Secret Meeting Between Saudi Arabia And Iran May Trigger Major Policy Change

A number of peculiar things have happened in the Middle East in the past few weeks involving the U.S., Saudi Arabia, and the UAE, all with some sort of focus on Iran. To begin with, at the end of April, the U.S’s designated main man in Saudi Arabia – Crown Prince Mohammed bin Salman – stated very publically that he seeks “a good and special relationship with Iran…We do not want Iran’s situation to be difficult, on the contrary, we want Iran to grow… and to push the region and the world towards prosperity.”

Such sentiments are in direct contrast to what might be expected from the effective ruler of Saudi Arabia, the historical archenemy of which is Iran. Bin Salman has previously launched numerous tirades against Iran accusing it of being the prime mover of instability and terrorism across the region. Stranger still, though, is the fact that these comments followed a secret meeting in Baghdad between senior figures from the Saudi and Iranian regimes, brokered by Iraq Prime Minister, Mustafa al-Kadhimi. These talks were subsequently confirmed by an Iraqi government official through various news services, although neither Riyadh nor Tehran formally acknowledged them.

The positive comments towards Iran from bin Salman came at around the same time as Saudi Arabia’s flagship oil and gas company, Aramco, let it be known that it is in the process of broadening and deepening its relationship with China, which is not only Iran’s chief sponsor via the 25-year deal signed back in 2019 but also the country most intent on replacing the U.S. as the key superpower in the Middle East.

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Source: Oil Price

oil-gas

The U.S. Oil And Gas Infrastructure Crisis May Be Worse Than Thought

As the U.S. oil and gas industry slowly appears to be getting back on track, ramping up production in line with demand, the effects of the Texas storm earlier this year appear to have hit production levels harder than originally thought according to new figures.

Aging infrastructure is the reason for President Biden’s new national infrastructure plan. However, this comes after years of neglect which has cost the oil and gas sector billions of dollars, as well as wreaking havoc on both the environment and communities relying on vital energy supplies.

Every year, extreme weather hinders energy distribution across the U.S. During California’s hot summers we see wildfires halting energy production from the state’s aging electrical infrastructure. This is largely because it is common practice to wait until a component fails within the system for it to be replaced, rather than preemptively investing in better structures.

This February, the electrical grid shut down and refineries halted production as Texas was hit hard by a winter storm which saw freezing pipes and no energy supply for heat and water to many houses across the state. Many were left to rely on generators to heat their houses to escape freezing temperatures for up to a week.

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Source: Oil Price

Oil And Gas Stocks

3 Strong Oil And Gas Stocks For The Summer

For years, people are searching for potentially rewarding oil and gas stocks. The ongoing energy crisis has pretty much felt like dumpster diving. The energy sector has been deeply out of favor over the past few years. Take note that the Covid-19 pandemic only serves to make an already bad situation much worse.

The worst appears to be in the rearview mirror as the energy sector continues to stage an impressive rebound. This is as the global economy recovers from the ravages of the pandemic.

The energy sector is just coming off a bumper earnings season whereby it posted the biggest earnings beat of all 11 sectors of the U.S. economy.

With impressive bottom-line growth, many top energy names are returning more capital to shareholders in the form of share buybacks and dividends. Companies usually repurchase shares when they believe they are undervalued, a big positive for oil and gas bulls.

Meanwhile, Crude oil futures have rallied to their highest finish in months, with WTI price climbing above $65 for the first time in two months after OPEC+ stuck with plans to gradually ease production curbs, signaling confidence in the demand outlook.

With summertime fast approaching, here are 3 energy picks, with two being natural gas/LNG stocks bearing in mind that natural gas demand in the United States peaks in the wintertime, with a lesser peak during the summer.

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Source: Oil Price

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trinidad and tobago USA

Could Trinidad And Tobago USA Become A Hotspot For Oil In The Caribbean?

BHP has commenced oil production in Trinidad and Tobago USA in the next big energy development in the Caribbean. There is a recent success in Guyana and Suriname’s energy sectors. Australian firm BHP has begun production on its $500m Ruby Project. It is located in shallow water in Block 3(a) within the Greater Angostura Field.

The project will see gas and oil production from the Ruby and Delaware reservoirs. This is via five production wells offshore Trinidad and Tobago USA. Several more wells are expected to be drilled in the area by the end of the year.

There is an expectation of Peak production levels that is around 16,000 BPD of oil.

Additionally, 2.26mn m³/d of gas, upon completion of the development.

Geraldine Slattery, President of BHP, stated “The start-up of Ruby represents the continued development of BHP’s oil and gas production facilities in Trinidad and Tobago, re-enforces the quality of the resource and its investment competitiveness.”

BHP will operate the Ruby development holding a 68.46 percent stake, with the National Gas Company of Trinidad and Tobago (NGC) holding a 31.54 percent stake.

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Source: Oil Price

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Gasoline Pipeline

Gasoline Pipeline in the U.S Shuts Down by Cyberattack

A cyberattack during the weekend caused the shutdown of the Colonial pipeline. It currently carries some 45 percent of the gasoline and diesel fuel the East Coast of the U.S. consumes. This is what the media have reported. It denotes the attack could threaten the security of the gasoline supply and push up prices.

Gasoline futures immediately jumped on the news of the attack, adding 2 percent.

Colonial Pipeline Co. learned on Friday that it had become the target of a cyberattack. This is according to the Wall Street Journal. They said, “it took certain systems offline to contain the threat, which has temporarily halted all pipeline operations.”

The New York Times reported that Colonial Pipeline Co. had declined to say when it will reopen the pipeline, fueling fears about the supply of gasoline on the East Coast.

Reuters cited experts as saying the outage will not have an impact on prices at the pump unless the Colonial pipeline remained shut for more than three days.

The Colonial pipeline is the biggest pipeline infrastructure in the United States, running 5,500 miles from Houston to Linden, New Jersey, carrying some 2.5 million barrels of gasoline and diesel daily.

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Source: Oil Price

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M and A

M and A – Activity In Oil And Gas Drops In March

M and A in U.S. oil and gas fell by 1.49 percent below the 12-month average last month, according to GlobalData. The biggest deal by far for the month was Chevron’s acquisition of Noble Midstream Partners, which fetched $1.32 billion.

The Noble Midstream Partners deal represented about a fifth of the total value of March deals, Offshore Technology reports, citing GlobalData figures, with the total standing at $5.14 billion across 66 deals. The number of deals in March was in line with the 12-month average, which stood at 67 deals.

In terms of types of deals, mergers and acquisitions were by far the most. These accounted for 66.7 percent of all dealmaking in March and 44 of the 66 deals. Venture capital funding came in second, accounting for 19 deals, and private equity financing came in third with barely three deals.

M&A activity in the U.S. oil and gas industry was slow to take off during the pandemic as everyone retrenched and waited to see how the situation developed before going on the hunt for discount assets. The second half of 2020 saw, however, some huge deals.

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Source: Oil Price

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Untapped Oil Play

Africa’s Most Interesting Untapped Oil Play

Writing the article on this year’s Top Oil Wildcats! And guess what? It is not because the prospect turned out to be sub-commercial. It remains one of Africa’s most interesting untapped plays. Potentially opening up a new country with no previous exposure to the world of energy. Senegal and Mauritania started to break their way onto the energy maps of Western Africa. Guinea Bissau has remained a relative outlier. The lack of official recognition of discoveries does not necessarily mean a lack of hydrocarbons. As can be attested by the Atum prospect. Atum remains one of the hottest plays in offshore Africa, an overlooked gem that would only need a little bit of political stability to shine. Learn More about Africa’s Most Interesting Untapped Oil Play here.

There are recent big discoveries in Senegal’s offshore. This includes FAN-1 and SNE (the latter being the largest oil discovery globally in 2014). Shortly after that, there are new plays in Mauritania’s offshore. To mention some are such as Orca, have unearthed an untapped frontier area that is rich in both oil and gas.

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Source: Oil Price

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