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Why Oil Will Keep Rising In 2021

We have seen strong moves higher in the key crude oil benchmarks-WTI, and Brent, in the last several months. This was initiated by the advent of positive news on the Covid front that the vaccines in development were extremely efficacious, promising an endpoint to the spread of the virus. This upward trend in crude was boosted by the gradual decline in U.S. shale production and inventories over the same period.

Finally, the move in early January, by OPEC+ to restrain output into mid-2021, and an extra “gift” from Saudi Arabia to remove another 1-million BOPD from the market, provided the impetus for WTI to rise firmly into the $50s. In this article, we will discuss key reasons that we think the upward trend for crude will continue this year. Why

Demand will return

In spite of the current lockdowns which inhibit demand, the trend is higher. As implementation of the vaccines increases the pool of the virus-immune population, business activity will resume creating demand for refined petroleum products. The graph below shows the EIA’s, Energy Information Agency, forecast of the trend for refined products over the next couple of years.

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Source: Oil Price

Best 3 Stocks to Buy Now

Best 3 Stocks to Buy Now As Oil Prices Rise Above $50

As oil prices continue to maintain the latest trajectory above the psychologically significant $50/barrel level, investors are increasingly recalibrating their investment prisms for beaten-down oil and gas companies. So what are the Best 3 Stocks to Buy Now?

WTI has rallied 12.8% over the past 30 days to trade at $53.02 per barrel while Brent is up 12.3% to $56.49, levels they last touched nearly a year ago thanks to a revamped OPEC-plus deal as well as an unexpected bonanza after Saudi Arabia announced plans to unilaterally cut its oil production by another 1M barrels.

Enter Shale 3.0.

For a sector that was supposed to be on its deathbed, U.S. shale might be the biggest beneficiary yet of the oil rally as higher crude prices offer a much-needed reprieve to strained balance sheets. The U.S. shale patch bears some of the highest production costs in the world, with most companies in the sector needing oil prices between $50 and $55 per barrel to break even.

That’s highly significant because it implies that another 5-10% climb in oil prices from here could mean the difference between bleeding cash and gushing profits for the shale sector.

But not all oil and gas companies need such high oil prices to break even, with a handful solidly in the green even at current prices.

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Source: Oil Price

If you have further questions aside from the Best 3 Stocks to Buy Now above, feel free to reach out to us here.

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What Were the Top Oil and Gas Trends in 2020?

2020 has been an extraordinary year for the oil and gas industry. When Rigzone asked several informed industry-watchers what they considered the biggest oil and gas trends during such a momentous year, their responses focused largely on two areas: digitalization and consolidation. Read on for their insights.

Bob Benstead, Vice President, Strategic Planning with business cloud software firm Infor: One of the biggest trends I’ve seen in oil and gas in 2020 has been a reduction in operating costs through fewer full-time equivalents (FTEs) and the deferral of capital projects. Another is the growing desire for companies to take on digital initiatives hat require them to look outside of their traditional industry.

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Source: Rigzone

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These U.S. Oil States Are Holding Lease Sales In January

Several U.S. states will hold oil and gas lease sales via EnergyNet in January, with most of the bids due before January 20 when President-elect Joe Biden is scheduled to take office.

Biden’s energy plan favors renewables development and promises a ban on new oil and gas leases on federal lands.

Alaska, New Mexico, Texas, and North Dakota plan oil and gas lease sales this month, according to the EnergyNet schedule.

The Alaska Department of Natural Resources will be offering 284 tracts covering an estimated 867,841 acres in the Beaufort Sea area, in an online sealed bidding that ends on January 7. Alaska DNR is also offering oil and gas lease sales in the North Slope area, with bidding ending on January 7.

BLM is holding on January 14 an online sale of 37 parcels covering 6,850.72 acres in New Mexico, Texas, Oklahoma, and Kansas.

The Texas General Land Office will hold on January 19 an oil and gas lease sale, offering 66 Tracts covering 22,500.607 net mineral acres available for lease.

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Source: Oil Price

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Merger Mania Is Transforming Canada’s Oil Scene

Canada’s oil landscape looks encouraging for 2021 as Whitecap Resources Inc. acquires two oil and gas companies in addition to merger mania between other energy companies, with anticipated growth through the coming year as demand for energy steadily increases. In November, Whitecap Resources announced a plan to acquire rival company TORC Oil & Gas through an all-stock transaction of $704.12m equivalent. The deal is expected to go through by 25 February 2021, providing an encouraging outlook for the first quarter of next year.

This merger would mean an estimated 100,000 bpd equivalent in production making it one of Canada’s major players. The expected value of the combined company is around $3.13 billion.

Since demand for energy has steadily increased since the slump in early 2020, so has Whitecap’s share price, going from C$2.29 ($1.80) in early July to C$4.96 ($3.89) in December, with a market cap of C$2.025 billion ($1.58bn) on the Toronto stock exchange.

Whitecap CEO Grant Fagerheim stated of the acquisition, “We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared towards generating sustainable long-term returns for shareholders while prioritizing responsible Canadian energy development’”.

The TORC acquisition comes just months after Whitecap announced its plan to buy NAL Resources for nearly $119 million in August. Manulife, an insurance and financial company, will have a 12.5 percent stake in the combined company as Whitecap issues it with 58.3 million shares. The move to acquire both companies drives forward Whitecap’s aim to increase its Alberta and Saskatchewan assets and operations.

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Source: Oil Price

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Three Energy Stocks Set To Win Big In 2021

The energy sector has been one of the hardest hit by the Covid-19 pandemic, mostly due to widespread lockdowns and the resultant collapse in fuel demand. However, one corner of the energy market has actually been thriving: Clean energy. The sector’s favorite benchmark, iShares Global Clean Energy ETF (ICLN), has returned 124% YTD vs. 24% by the S&P 500. Those impressive returns appear well-deserved, though.

The International Energy Agency’s (IEA) 2020 Outlook points to the highest-ever share of newly built generation capacity for renewables. According to the energy watchdog, 200 gigawatts of renewable power have been added in the current year, with renewables expected to account for 95% of the net increase in global power capacity through 2025. The agency has projected that installed wind and solar capacity will surpass natural gas and coal in 2023 and 2024, respectively.

That said, one renewable energy entity has been on a winning streak that stretches back long before Covid-19 reared its ugly head: NextEra Energy Inc. (NYSE:NEE).

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Source: Oil Price

conocophillips

ConocoPhillips Makes Large Oil Discovery Offshore Norway

ConocoPhillips has made a large oil discovery in the Norwegian Sea close to a producing oilfield. This is what the U.S. oil and gas company said on Tuesday.

Preliminary estimates point to the field containing between 75 million barrels and 200 million barrels of recoverable oil equivalent. ConocoPhillips said, adding that additional appraisal would determine the flow rates and the ultimate resource discovery. This includes as well as a potential plan for development.

The new discovery on the Slagugle prospect is just 14 miles north-northeast of the Heidrun Field. This is a discovery by Conoco in 1985 when it was the operator for the exploration and development phase. Heidrun has been producing oil and gas since 1995.

ConocoPhillips, the operator of the license containing the latest oil discovery on the Slagugle prospect, will now assess the find alongside other nearby prospects with a view toward future delineation of the discovery and potential tie-in to existing infrastructure in the area, the Norwegian Petroleum Directorate said.

“This discovery marks our fourth successful exploration well on the Norwegian Continental Shelf in the last 16 months,” Matt Fox, ConocoPhillips’s executive vice president and chief operating officer, said in a statement.

“All four discoveries have been made in well-documented parts of the North Sea and the Norwegian Sea and offer very low cost of supply resource additions that can extend our more than 50-year legacy in Norway,” Fox added.

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Source: Oil Price

If you have further questions about ConocoPhillips oil discovery, feel free to reach out to us here. 

goldman sachs oil

Goldman Turns Bullish On Oil: Sees $65 Brent In 2021

Structural underinvestment in oil and gas will put upward pressure on oil prices. Goldman Sachs’ commodities chief Jeffrey Currie told CNBC this week and gave comments on commodity markets.

All markets except wheat, Currie noted, are in a deficit, and this is certainly bullish for prices. But what he calls structural underinvestment also has its part to play in the future of prices. This is particularly true for oil, where the underinvestment is not just by the price rout. It is by the shift toward renewable energy investments.

This shift, however, may stimulate short-term demand for oil, Currie also noted, expecting it to rise over the next few years as so-called green infrastructure is being built. Afterward, as this infrastructure starts operating, there will be a negative impact on oil demand and, likely, prices.

Oil started this week again as the United States began vaccinating its frontline workers, but by the end of trade, prices were on the decline again as worry about excessive supply outweighed the positive news about the vaccines.

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Source: Oil Price

If you have further questions about the topic related to Goldman Sachs Oil, feel free to reach out to us here.

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Oil Prices Rise As U.S. Vaccinations Begin

Oil prices rose early on Monday after the U.S. FDA approved the Pfizer-BioNTech vaccine for emergency use and shipments of batches of vaccine vials began this weekend, with first vaccinations expected as early as on Monday.

As of 9:04 a.m. ET today, WTI Crude prices had gained 1.67 percent at $47.34, and Brent Crude was trading at above the $50 a barrel mark, at $50.69, up by 1.48 percent on the day.

Last Thursday, Brent Crude hit $50 a barrel for the first time since oil prices had crashed in early March, as hopes of swifter-than-thought vaccine rollout fueled bullish expectations of strengthening oil demand early next year.

The U.S. approval of the Pfizer-BioNTech vaccine further strengthened bullish sentiment on Monday that fuel demand could rise with mass vaccination. The U.S. Food and Drug Administration (FDA) issued on Friday the first emergency use authorization for a vaccine against COVID-19. The authorization allowed the vaccine to be distributed in the United States.

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Source: Oil Price

Was Buffett Right About Energy In 2020?

Every time Berkshire Hathaway founder and CEO Warren Buffett buys or sells a stock, the investing world tends to sit up and take notice. That’s mainly because the Oracle of Omaha has a better investing track record than your average hedge fund, managing to outperform the S&P 500 in 37 of the past 55 years, or about two-thirds of the time.

Buffett made his foray into the energy sector 18 years ago when Berkshire bought a $500 million stake in PetroChina Co. (NYSE:PTR) before selling it five years later for a $3.5B profit.

His energy track record after PetroChina has, however, been a mixed bag. His next big purchase, ConocoPhillips (NYSE:COP) in 2008, ended up losing Berkshire Hathaway Inc. (NYSE:BRK.B) several billions of dollars.

His biggest hit so far has been his 2009 investment in Burlington Northern Railroad for $44 billion. BNSF is a railroad behemoth that used to transport crude from the Bakken to refiners and still transports enough coal to generate 10% of the electricity consumed in the United States since the purchase. Berkshire has collected nearly $20 billion dollars in dividends from Burlington Northern Railroad, annual revenues have increased by 80%, and earnings have more than doubled.

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Source; Oil Price /

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