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refinery

The Two Crucial Factors For Global Oil Demand Recovery

Market sentiment has been generally bullish over the last week supported by (i) supply disruption caused by Hurricane Sally in the Gulf of Mexico (ii) a draw in commercial crude oil inventories by 4.4 million barrels w/w and (iii) strong language coming from OPEC+ during the JMMC meeting last Thursday, during which Saudi Arabia pressured members to boost compliance to output cuts.

The supply disruption in the Gulf of Mexico reached around 497 thousand bbl/d. Yet, it is reported that supply will soon return as the hurricane has passed the oil production area while being downgraded from category 2 to a tropical storm. Next to the production outages, fuel demand in the affected areas is likely to have been disrupted, at least for a couple of days. Gulf of Mexico drillers, however, are already preparing for a new storm as Beta is approaching fast, potentially leading to another supply outage in the Gulf.

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Source: Oil Price

oil-and-gas

Oil and Gas is a Partner — Not Adversary — in Meeting Our Economic and Environmental Goals

The majority of the news this week is on the Supreme Court talking about if oil and gas is a partner. There are a number of energy and environmental actions under discussion in the legislative branch. The Senate Committee on Environment & Public Works legislative hearing on Chairman John Barrasso’s (R-Wyo.). “The Endangered Species Act Amendments of 2020”, and Rep. Garrett Graves (R-La.) introduction of a bill to codify much of the Council on Environmental Quality (CEQ’s) National Environmental Policy Act (NEPA) rulemaking.

These legislative actions are crucial because they recognize that our nation needs affordable, reliable energy and modern infrastructure to rebuild our economy, grow our workforce, and lead the world’s transition to a lower carbon future.

There is an inextricable link between a healthy and robust economy and a reliable and affordable energy source. Real, lasting climate solutions are driven by innovation and technological breakthroughs that enhance our way of life and reduce emissions.

That’s the message that we plan to deliver this week. This is as men and women of the oil and gas industry will virtually meet with congressional offices. Energy is not a partisan issue.

Economically, the U.S. Shale industry is credited with driving 10 percent of U.S. GDP growth from 2010-2015 — a time that was vital to our ability to emerge from the housing crisis and last recession. We also provide good-paying American jobs – about 1 million direct upstream onshore jobs.

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Source: The Hill

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colombia oil

Colombia’s Oil Major Plans To Drill 100 Wells In The Permian

Colombia’s state-held oil firm Ecopetrol has a strategic alliance with Occidental Petroleum. It is to develop acreage in the Permian. There are plans to have drilled as many as 100 wells in the most prolific U.S. shale basin. It is by the end of 2021. Ecopetrol’s CEO Felipe Bayon told a conference on Monday. Continue reading about Colombia oil production below.

“By the end of next year, we should have over a hundred wells,” Bayon said at a virtual conference, as carried by Reuters.

Last year, Ecopetrol and Occidental Petroleum Corp agreed to set up a strategic joint venture to develop unconventional reservoirs in approximately 97,000 acres of the Permian Basin in West Texas.

This deal was part of Ecopetrol’s strategic priorities to develop more unconventional resources and have more operations outside Colombia, the company said in November 2019.

Between November last year and June this year, Ecopetrol drilled 22 wells. However, oil production has slowed because of the oil demand and price crash in the pandemic, according to Bayon.

Despite the current low oil prices, Ecopetrol expects to have 100 wells drilled in the Permian by the end of next year, said the company’s executive.

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Source: Oil Price

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hurricane

Oil Prices Rise On Hurricane Outages

Oil prices rose on Tuesday afternoon, ahead of the weekly crude inventory data releases, but traders remain concerned about the pace of the recovery in global oil markets.

After a sobering OPEC report on Monday, the IEA published its updated demand forecast for 2020, revising its previous outlook downward by 200,000 bpd to 91.7 bpd, slightly more optimistic than OPEC’s 90.2 million bpd forecast.

After a few months of quick demand recovery, the International Energy Agency now sees headwinds for further recovery of crude demand, expecting the pace of recovery to slow down significantly as most of the ‘’easy gains’’ are already achieved.

While most analysts and energy executives remain concerned about the slowing demand for road fuels as driving season in North America comes to an end, it’s jet fuels that represent the largest mid to long-term threat for oil markets.

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Source: Oil Price

oil industry

IBM’s Next Big Bet is … the Oil Industry

IBM wants to dig more deeply into oil and gas. They want to explore more about the oil industry.

In partnership with oilfield services giant Schlumberger (SLB), IBM will create a digital platform. A platform where oil and gas companies can access real-time data and software give them a competitive advantage.

The platform will layer Schlumberger’s suite of apps, called DELFI, onto IBM technology to provide digital tools to oil and gas companies — which rely heavily on computing-heavy processes like surveying a drilling site. The software could, for example, help determine if the soil and landscape in a certain area are good for drilling, or which angle is the best to drill to access the most oil over time.

“Digital has become an imperative for our industry,” Schlumberger CEO Olivier Le Peuch told CNN Business. “The whole industry recognizes that this is what can unlock the next level of efficiency, productivity and performance.”

A tech platform for oil and gas

The Schlumberger partnership is part of IBM’s big bet on “hybrid cloud” — a technical setup that lets companies manage data using multiple clouds in addition to their own on-premises servers. It relies on software from Red Hat, which IBM acquired for a whopping $34 billion in July 2019, which makes it easier to move data between those various spaces.

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Source: CNN

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US-oil-drilling

US Oil Drilling Set to Start Rising after Cycle Turns: Kemp

The US oil industry probably passed the low point in the current cycle in July and August, with drilling rates set to start increasing from September or October and production turning up from March or April 2021.

Since hitting a low in late April, when the coronavirus epidemic was raging and lockdowns were most stringent, front-month US oil futures prices have progressively risen for the last 19 weeks.

Over the last 30 years, changes in futures prices have typically been followed by changes in drilling with an average delay of 4-5 months (15-20 weeks) and changes in output with an overall delay of 9-12 months.

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Source: ETEnergyworld

oil-gas-renewables

There May Be No Choice but to Nationalize Oil and Gas — and Renewables, Too

Once on the margin of the margins, calls for the nationalization of US fossil fuel interests are growing. Before the COVID-19 pandemic, the basic argument was this: nationalization could expedite the phasing out of fossil fuels in order to reach climate targets while ensuring a “just transition” for workers in coal, oil, and gas. Nationalization would also remove the toxic political influence of “Big Oil” and other large fossil fuel corporations. The legal architecture for nationalization exists — principally via “eminent domain” — and should be used.

But the case for nationalization has gotten stronger in recent months. The share values of large fossil fuel companies have tanked, so this is a good time for the federal government to buy. In April 2020, one source estimated that a 100 percent government buyout of the entire sector would cost $700 billion, and a 51 percent stake in each of the major companies would, of course, be considerably less. However, in May 2020 stock prices rose by a third or so based on expectations of a fairly rapid restoration of demand.

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Source: Jacobin Mag

Oil Market Recovery

Robust Chinese Demand Fuels Oil Market Recovery

Following last week’s price rally, oil prices move higher on Monday morning, on bullish demand figures coming from China. Additionally, U.S. dollar weakness contributed to last week’s price rally. Traders are also expecting deeper OPEC+ cuts of 1.15 million bbl/d in August and September. As a result, Brent crude traded above $46 which was mainly driven by the supply disruption triggered by the hurricanes in the Gulf Mexico, which affected around 84% of the USGC production where around 1.7 million bbl/d remain offline.

Laura, a category 4 hurricane made landfall early Thursday last week, in the Southwestern part of Louisiana. becoming one of the most powerful storms in history to hit the state. More than 310 offshore platforms, out of 643, were evacuated in addition to nine refineries leading to a 2.7 million bbl/d outage, around 15% of the US refining capacity. Furthermore, initial reports reveal that the damage caused to the refineries is minor, but continuing power outages could delay the resumption of refining operations.

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Source: Oil Price

conocophillips

Oil Rallies As Twin Storms Force Shut-Ins In Gulf Of Mexico

Oil and gas companies active in the Gulf of Mexico have shut in almost 58 percent of oil production on Monday as two tropical storms threaten operations.

Oil and gas companies active in the Gulf of Mexico have shut in almost 58 percent of oil production and 44.6 percent of gas production as a hurricane and a tropical storm are approaching the area. The shut-in oil output stands at over 1.065 million bpd and the shut-in gas production is about 1.205 billion cu ft daily.

The staff on 114 production platforms had been evacuated as of Sunday. These platforms represent 1.773 percent of all Gulf of Mexico platforms, the Bureau of Safety and Environmental Enforcement said. Workers were also evacuated from five of the ten drilling rigs in the Gulf, the BSEE also said in an update. BP, Chevron, Shell, and Equinor were among the companies evacuating platform staff.

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Source: Oil Price

oil-boom

3 Ways To Play The Coming Oil Boom

The double negatives of a demand-culling pandemic and wildly declining sentiment trouncing the oil and gas. It is also pushing companies to record lows, with $30 billion in collective debt, trying to pick a winner in this sector is growing more challenging by the day. Oil boom is really coming.

On the demand front, the IEA has just cut its 2020 oil production forecast by 140,000 BPD to 91.9 million BPD, sending the FTSE 100 index down 73 points, citing the airline industry’s troubles as a key source of weakness in the oil market.

But the megatrend of ESG, or “impact” investing, is the wider threat to the oil and gas industry, with energy stocks finding themselves in the penalty box due to heightened concerns about ever-rising carbon emissions and poor governance. It’s all prompting capital to flee the sector at an unprecedented rate—even faster due to the pandemic.

The energy sector has been the worst performer in the S&P 500, gaining just 34% over the timeframe according to Refinitiv data. And in the three-month period to June, Big Oil posted massive losses as the demand shock set in.

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Source: Oil Price

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