Tom Nolan + 2,443 TN November 16, 2021 https://oilprice.com/Energy/Energy-General/The-Oil-Market-Is-Struggling-To-Interpret-Mixed-Signals.html The Oil Market Is Struggling To Interpret Mixed Signals By Tom Kool - Nov 16, 2021, 1:00 PM CST Global oil inventories are at multi-year lows, with unprecedented stock draw across the Americas and Asia At the same time, a new wave of covid has increased fears of another round of lockdowns and more demand destruction The market is likely waiting on news from either the U.S. or OPEC+ to give oil prices are firm direction Join Our Community Chart of the Week - Despite COP26 ending with no powerful mandate and a watered-down version of climate commitments, the UN summit put developing economies and OECD countries on a collision course. - According to IEA estimates, fossil fuel subsidies that the initial COP26 draft wanted to scrap, still amount to some 180 billion globally and remain likely to be a key target for upcoming climate summits. - Global oil demand alone would need to collapse by 75% over the next 30 years from today’s levels to put the world on a pathway to net-zero emissions by 2050, Platts reports. - The Beyond Oil and Gas Alliance, which seeks to phase out oil and gas altogether, failed spectacularly as even the conference host declined to sign up, making Denmark the only country participating with any sizeable production as of now. Market Movers - Royal Dutch Shell (NYSE:RDS.A) announced it would scrap its dual share structure and move its HQ to Britain from the Netherlands, on the back of Dutch court pressure and higher taxation, simultaneously changing its name for the first time since 1907 to “Shell”. - UAE state oil company ADNOC outlined its $6 billion drilling investments that would bring it closer to having a 5 million b/d production capacity, with Baker Hughes and Technip landing the sweetest bit, a $3.3 billion 10-year wellheads deal. - US oil major ExxonMobil (NYSE:XOM) launched the sale of its Barnett Shale holdings that include 2,700 wells across some 182,000 acres in North Texas, seeking to garner up to $500 million from the transaction that comes as part of its $15 billion asset sale program. Tuesday, November 16, 2021 Crude prices have stagnated this week amid diverging market signals. On the one hand, inventories have dropped to multi-year lows, losing some 300 million barrels from their summer peak. In this, both the Americas and Asia have witnessed unprecedented stock draws that fortify the sentiment of market tightness. On the other hand, resurgent COVID across the Atlantic Basin added to demand worries as nations started to consider potential lockdown measures. To top it off, the public rift between OPEC+ and the United States saw no development this week, meaning the market will need to wait for further signals before a clear direction is established. IEA Hikes 2022 Crude Price Forecast. The International Energy agency upped its average 2022 Brent price forecast to 79.40 per barrel, despite keeping incremental crude demand at 3.4 million b/d, indicating that it expects the market tightness to resonate longer in the markets. Germany Suspends Nord Stream 2 Approval. BNetzA, Germany’s energy regulator, temporarily suspended the approval process of the Nord Stream 2 gas pipeline, saying the Gazprom-controlled operating company should form a German subsidiary under German law to get the license. Xi-Biden Talks Ease Pressure on Metals. Metals prices, especially that of copper, rose today following positive geopolitical developments at the virtual Xi-Biden summit where both leaders called for increased communication between China and the United States. United OPEC+ Defies US Calls for Action. Arguing that markets would inevitably switch from a supply deficit this year to a surplus in 2022, leading OPEC+ producers such as Saudi Arabia, the UAE and Russia reiterated they would not change course and that the overall market volatility was coming from other sectors, not oil. Pressure Mounts on Biden Administration to Release SPRs. Amidst OPEC+ resisting calls to hike production, several top US officials have indicated the government should release barrels from the US Strategic Petroleum Reserve in a bid to lower fuel prices as Americans head into the holiday season. Coal Shares Plunge in COP26 Aftereffect. Despite the softening of the final COP26 communique, the targeting of coal triggered an across-the-board weakening of coal stocks, with Chinese, Australian, Indonesian, and other companies all-seeing 2-7% declines this week. Nickel, Zinc Added to US Critical Minerals List. The US Geological Survey suggested that nickel and zinc be added to the list of critical minerals, as both metals are primarily import-dependent and potential supply disruptions could undercut American supply chains. Increased Russian Gas Flows to Germany Shake Off Belarus Threat. Russia’s Gazprom (MCX:GAZP) has started to fill its European inventories amid increased flows via Belarus and Ukraine, however, shied away from booking monthly capacities and opting instead for daily transit bookings. US DUC Well Count Declines in All Shale Basins. The number of drilled but uncompleted wells (DUC) declined by 222 over the last month to a total of 5,104 wells – whilst all basins saw month-on-month drops, the Permian led the trend, accounting for half of the October backlog clearing. Italy’s Eni Inadvertently Buys Iranian Cargo. A recent London court hearing shed light on a 2019 transaction that saw the Italian major ENI (NYSE:E) admit that it inadvertently purchased a cargo of Iranian crude disguised as Basrah Light, leading to the dismissal of the crude trading unit’s boss. European Carbon Price Reaches Record High. The first day after the UN COP26 climate summit the price of EU carbon dioxide allowances rose by 4% to an all-time high of 66 EUR per metric ton ($75/mt), driven by the overall pressure on Europe’s grid and cold weather forecast for end-November. Rosneft Makes Giant Gas Discovery. Russia’s main state oil company Rosneft (MCX:ROSN), partnering with Britain’s BP (NYSE:BP), discovered a 384 bcm (13.5 tcf) giant gas field in the north of the Taimyr peninsula, naming it after the late emergency situations minister Evgeny Zinichev. Chinese Coal Production Surges After Government Free-for-All. China’s October coal output rose to a 6-year monthly high of 357.09 million tons as the government hastily approved coal extensions and expedited mining wherever it could, also forbidding local authorities to shut mines without authorization. By Tom Kool for Oilprice.com More Top Reads From Oilprice.com: Chinese Crude Oil Imports Drop To Three-Year Low In October Natural Gas Prices Soar As Putin Punks Europe Why Uranium Stocks Are Soaring Latest articles from Tom The Oil Market Is Struggling To Interpret Mixed Signals Published 16 November 2021 | viewed 1,325 times Chart of the Week - Despite COP26 ending with no powerful mandate and a watered-down version of climate commitments, the UN summit put developing economies… Pressure Mounts On Biden To Tap U.S. Oil Reserves Published 09 November 2021 | viewed 3,945 times With OPEC+ refusing to pump more oil and Saudi Arabia increasing its official selling prices, pressure is increasing on President Biden to consider tapping the… Could This Be The Biggest Winner Of The Oil Price Boom? Published 04 November 2021 | viewed 24,962 times Onshore oil discoveries are pretty much a thing of the past. The last time anyone got remotely excited about one was in 2017, when giant… Don't Hold Your Breath For A Breakthrough At COP26 Published 02 November 2021 | viewed 1,735 times The most noticeable theme to have come from COP26 so far has been the division between the Global North and the Global South and between… Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 16, 2021 https://www.zerohedge.com/energy/wti-rebounds-small-crude-build-big-cushing-draw WTI Rebounds On Small Crude Build, Big Cushing Draw by Tyler Durden Tuesday, Nov 16, 2021 - 04:36 PM Oil prices ended lower today after swinging between gains and losses driven by factors including a potential release of crude from U.S. reserves and fuel-switching concerns. “Crude prices remain very choppy as energy traders await a decision from the Biden administration over an SPR release,” said Ed Moya, senior market analyst at Oanda Corp. “It seems the energy market is convinced that even if the U.S. resorts to tapping the strategic petroleum reserve, the benefits would be minimal.” Jim Bullard's hawkish comments also did not help early on in energy markets. API Crude +655k (+1.2mm exp) Cushing -2.792mm Gasoline -491k Distillates +107k Analysts expected a fourth straight week of crude inventory builds and they were right, although the increase was smaller than expected. Cushing crude stocks fell once again, getting ever closer to operational limits... WTI tested $80 intraday before bouncing back and hovering around $80.75 ahead of API's data... “We’re still on the cusp of winter, which is the peak demand season and there’s still a bullish undertone to the market,” said John Kilduff, founding partner at Again Capital LLC. “It’s a tight set-up and still vulnerable to some upside if they don’t come through with the SPR release.” Quote Share this post Link to post Share on other sites
RichieRich216 + 454 RK November 16, 2021 Biden is a useful idiot; it's the people in the shadows, Unelected individuals telling the brain dead Biden to only refer to his notes in his jacket pocket, which he pulls out every time! When he goes off script, they shut him down as quickly as possible. The United States has unelected individuals that are pushing the farthest LEFT WING WISH LIST. Our Vice President only can cackle at every event. They are both in a race to the lowest approval ratings in U.S. History! 1 Quote Share this post Link to post Share on other sites
Jay McKinsey + 1,490 November 17, 2021 (edited) 4 hours ago, footeab@yahoo.com said: Far as I am concerned, options trading should be banned outright for everything. It is not only gambling, but it also destroys businesses who get caught up in it even though THEY are not gambling. I didn't know you were such an anti free market socialist. Edited November 17, 2021 by Jay McKinsey Quote Share this post Link to post Share on other sites
nsdp + 449 eh November 17, 2021 6 hours ago, RichieRich216 said: Biden is a useful idiot; it's the people in the shadows, Unelected individuals telling the brain dead Biden to only refer to his notes in his jacket pocket, which he pulls out every time! When he goes off script, they shut him down as quickly as possible. The United States has unelected individuals that are pushing the farthest LEFT WING WISH LIST. Our Vice President only can cackle at every event. They are both in a race to the lowest approval ratings in U.S. History! Long way to go to catch Harry Truman in 1952. I would settle for Biden being half as good as Truman. Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Latest-Energy-News/World-News/Federal-Court-Refuses-To-Move-Line-5-Case-To-State-Court.html Federal Court Refuses To Move Line 5 Case To State Court By Charles Kennedy - Nov 17, 2021, 9:30 AM CST A federal judge has retained jurisdiction over a lawsuit involving the Line 5 oil pipeline that Michigan Governor Gretchen Whitmer wanted moved to a state court. The AP reports that the case "is properly in federal court," according to the judge's opinion, which also stated that the case was "under consideration at the highest levels of this country's government." Line 5 operator Enbridge and the state of Michigan are in litigation over Michigan's withdrawal of the easement for the pipeline's operation, while Canada has officially invoked bilateral negotiations with the United States over the fate of the pipeline that brings oil and propane to the Midwest. Last year in November, the Michigan Governor and the director of the state's Department of Natural Resources revoked Enbridge's easement for the operation of the twin Line 5 pipeline, citing repeated violations of the easement and the need to protect the Great Lakes. Michigan's notice required Enbridge to cease operations of the pipelines in the Straits of Mackinac by May 12, 2021. Enbridge ignored the notice and has continued to operate the pipeline. The company says that only a court and the U.S. federal government have authority to order Line 5 shut down. This is how the case ended up in a federal court. "This is both a federal and international law issue," Enbridge spokesman Ryan Duffy said this week. "Line 5 is vital, critical infrastructure which is operating safely and is in compliance with all applicable laws." On the other hand, "Michigan's sovereign rights and duties regarding the use of our own lands and the protection of our Great Lakes are matters that belong before the state courts of Michigan," Governor spokesman Bobby Leddy said. "Regardless of today's ruling, we remain committed to getting the Line 5 dual pipelines out of the water as quickly as possible." By Charles Kennedy for Oilprice.com Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Latest-Energy-News/World-News/OPEC-Oil-Will-Be-King-Of-The-Global-Energy-Mix-Until-At-Least-2045.html OPEC: Oil Will Be King Of The Global Energy Mix Until At Least 2045 By Tsvetana Paraskova - Nov 17, 2021, 8:00 AM CST Oil will continue to be the fuel with the single largest share of the global energy mix by 2045, meeting 28 percent of energy demand then, OPEC Secretary-General Mohammad Barkindo said on Tuesday, stressing the need for investments in oil supply to meet consumption. “Oil is expected to retain its number one position in the global energy mix and provide 28 percent of the world’s energy needs by 2045,” Barkindo said at the ADIPEC energy conference in Abu Dhabi, presenting OPEC’s World Oil Outlook (WOO). The outlook says that global oil demand is expected to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045. The industry will need cumulative long-term upstream, midstream, and downstream oil-related investments of $11.8 trillion by 2045, OPEC said when it first unveiled the outlook. “Despite decelerating oil demand growth in the second part of the forecast period and strong growth in other energy sources, such as other renewables, gas and nuclear, oil is expected to retain the highest share in the global energy mix during the entire period. In 2020, oil accounted for 30% of global energy requirements. Alongside post-pandemic oil demand recovery, the share of oil is anticipated to gradually increase to a level of more than 31% by 2025, before it begins a decline and reach 28% by 2045,” according to OPEC’s outlook. Discussing the need for oil investment in view of meeting demand in the long term, Barkindo said today that “any talk of the oil and gas industries being consigned to the past and of the need to halt new investments in oil and gas is wrong-headed.” “Let me stress that the return of investments is a core objective of the Declaration of Cooperation,” he said, referring to the agreement of the OPEC+ group, which has been managing supply to the market for several years now. OPEC, oil industry executives, and analysts have been warning this year that chronic underinvestment in oil supply, while demand is still growing, would lead to energy crunches within a few years. By Tsvetana Paraskova for Oilprice.com Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Energy-General/Demand-Uncertainty-Could-Keep-Oil-From-Breaking-100.html Demand Uncertainty Could Keep Oil From Breaking $100 By Irina Slav - Nov 16, 2021, 6:00 PM CST El-Erian: demand destruction could keep oil from reaching $100 per barrel El-Erian: nobody had expected demand to rebound so quickly and so strongly Uncertainty about demand could cap oil prices Join Our Community Commodity analysts have been on a forecasting binge recently as oil prices climb higher amid surprisingly strong demand and unsurprisingly short supply. Most believe oil has a lot higher to go. Others have reason to doubt that. One of the “dissenters” is Citi’s Ed Morse, who earlier this week told Bloomberg that while prices will continue to rise this quarter, next year the U.S. could surprise everyone with its production growth, suggesting that we might see an end to the oil rally as more supply comes online. Another of those not sharing the strong bullish view is Mohamed El-Erian, the chief economic adviser of Allianz and chair of Gramercy Fund Management. This week, El-Erian cautioned against too much optimism in oil prices because the higher oil prices went, the greater the pressure would be on oil demand. Speaking to CNBC, the expert noted that the current situation is a result of two unforeseen circumstances. On the one hand, El-Erian said, nobody had expected demand to rebound so quickly and so strongly. On the other, nobody had expected the energy crunch and the challenges in the energy transition. Calling these two unthinkable just a year ago, El-Erian essentially highlighted how limited the horizon of most oil price forecasters is. A limited horizon, in turn, makes for quite imperfect predictions. Indeed, 18 months ago, the very thought of oil rebounding to $80 per barrel must have seemed far-fetched even to some Big Oil CEOs. Now, there’s talk about Brent hitting $100 or more. This is unlikely to happen, according to El-Erian, for a very simple reason: the higher the price, the more reluctant people will be to buy a commodity. This is perhaps one of the simplest market principles, and it is the principle that drives the cycles of commodity industries. “If you were to focus only on the supply side, you could get to oil at $100, because there has been underinvestment in the industry in general, and demand will stay robust,” he explained. “But if you look at what is happening on the demand side, there you get some questions. Demand is robust today but will it be robust in six months’ time? There are some really big questions in terms of demand destruction — people buying less because prices are higher — and in terms of whether policy becomes contractionary or not.” Related: Russia And Saudi Arabia See Oil Oversupply In 2022 Uncertainty about demand is what OPEC says makes it stick to its original production increase agreement despite increasingly frantic calls for more supply from large consumers such as the United States. The cartel made a special note of this in its latest Monthly Oil Market Report. In it, OPEC revised its oil demand growth forecast for this year down by 160,000 bpd to a total of 5.7 million bpd. For this quarter, OPEC cut its oil demand growth by a lot more—330,000 bpd—saying “a slowdown in the pace of recovery in 4Q21 is now assumed due to elevated energy prices.” In other words, the energy crunch that first benefited oil prices is now apparently hurting demand for the commodity. Yet, the price-driven pressure on oil demand is only one side of the coin. The other is supply and energy—rather than oil—demand. In his interview with CNBC, El-Erian noted that the energy crunch was related to the fact that alternatives to fossil fuels were not “amply available”. Meanwhile, IHS Markit’s Daniel Yergin has warned that markets could see a series of crunches because supply will continue to fall short of demand. Yergin noted what he calls a disconnect between the dynamics of oil markets and energy policies being implemented, CNBC reported, citing the oil expert. It is perhaps this disconnect that would lend additional upward pressure to oil prices, countering the natural downward pressure that excessive prices normally have on oil demand.By Irina Slav for Oilprice.com More Top Reads From Oilprice.com: Oil Prices Under Pressure As Bearish Factors Mount Biden’s Baffling Oil Policy Faces Backlash From All Sides U.S. Oil Rig Count Rises As Drilling Activity Picks Up Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Crude-Oil/Could-An-Energy-Crunch-Lead-To-A-Worldwide-Financial-Crisis.html Could An Energy Crunch Lead To A Worldwide Financial Crisis? By David Messler - Nov 16, 2021, 7:00 PM CST Reduced capital investment in upstream sources for new supplies of petroleum, match the similar scenario of the 2008-9 financial crisis Spending on fossil fuels has declined precipitously from 2014, reaching a bottom only last year The action of governments and activist shareholders to foster so-called "green energy" alternatives through edicts, tax subsidies, and regulatory barriers have discouraged upstream investment in oil and gas Two of the things that precipitated the financial crisis of 2008 were a leveraged asset bubble in housing and a maturing commodities super-cycle Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Crude-Oil/US-Asks-China-To-Release-More-Oil-From-Its-Reserves.html U.S. Asks China To Release More Oil From Its Reserves By Irina Slav - Nov 17, 2021, 9:00 AM CST During a virtual meeting this week, U.S. President Biden has asked his Chinese counterpart to release more crude oil from its reserves China released gasoline and diesel from its reserves earlier this month to halt a price rise in some parts of the country Join Our Community President Joe Biden has asked his Chinese counterpart Xi Jinping to release more crude oil from its reserves in concert with the U.S., in a bid to stabilize international oil prices. That’s according to a South China Morning Post report citing an unnamed source familiar with the topics that Biden and Xi discussed during a virtual meeting this week. China released gasoline and diesel from its reserves earlier this month to halt a price rise in some parts of the country that was beginning to make people nervous. Two months earlier, Beijing held its first-ever crude oil auction, at which it offered 7.4 million barrels of crude from the strategic national reserve. The news of the auction pushed prices lower, but the effect did not last. In the United States, members of the Biden administration have mentioned the release of oil from the petroleum reserve as one possible move to arrest the climb of fuel prices. Democratic legislators have called for this, although experts warn that it will not have the desired effect. “One of the pressing issues for both sides is energy supply,” said the South China Morning Post source. “Currently, the energy departments from both sides are negotiating the details.” China, according to the source, is open to a concerted release of crude oil from the two national reserves but has not yet made a specific commitment, noting that it needed to first take care of local consumption needs. The proposal appears to be yet another tool in President Biden’s box for handling gas price trouble—a box that has been often referred to by his administration but rarely in any detail. One other suggestion that a group of Democratic senators made earlier this month was to ban crude oil exports so there is more crude for the domestic market. The idea did not win support from the oil industry. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com: Could An Energy Crunch Lead To A Worldwide Financial Crisis? Demand Uncertainty Could Keep Oil From Breaking $100 U.S. Natural Gas Prices Could Soon Hit $6 Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Crude-Oil/Oil-Inches-Higher-After-EIA-Reports-Surprise-Crude-Draw.html Oil Inches Higher After EIA Reports Surprise Crude Draw By Irina Slav - Nov 17, 2021, 9:40 AM CST - <--Timestamp Join Our Community Crude oil prices gained today after the Energy Information Administration reported a crude oil inventory draw of 2.1 million barrels for the week to November 12. At 433 million barrels, the authority said, crude oil inventories were 7 percent below the five-year average for this time of year. The reported draw compared with an unexpected build of 1 million barrels for the previous week and analyst expectations of another build, of 1.55 million barrels. In gasoline, the EIA reported an inventory decline of 700,000 barrels for the reporting period, which compared with a draw of 1.6 million barrels for the previous week. Gasoline production averaged 9.9 million bpd last week, which compared with 10.1 million bpd for the prior week. In middle distillates, the EIA estimated an inventory draw of 800,000 barrels for the seven days to November 12, with production averaging 4.8 million bpd. This compared with a stock draw of 2.6 million barrels for the previous week and average daily production of 4.9 million barrels. Refineries processed 15.4 million bpd last week and imports of crude stood at 6.2 million bpd. This compared to refinery runs of 15.4 million bpd and imports of 6.1 million bpd for the previous week. Oil prices were trending lower at the time of writing, with Brent crude at $81.79 a barrel and West Texas Intermediate at $79.87 a barrel. A forecast by the International Energy Agency that high oil prices would lead to a boost in production served to limit the upward potential of prices this week, even though concern about the adequacy of global supply remained. At the same time, the IEA revised up its forecast for the average price of Brent for next year because of the supply concerns. Now, the authority expects the benchmark to average $79.40 per barrel in 2022. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com: Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Energy-General/Has-China-Really-Solved-Its-Power-Crisis.html Has China Really Solved Its Power Crisis? By Tsvetana Paraskova - Nov 17, 2021, 11:00 AM CST China has moved in recent weeks to squash the surge in coal prices with government intervention Chinese Vice-Premier Han Zheng: The crisis is easing, and the government efforts to secure supply and halt the coal price surge have “achieved initial results,” Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 (edited) https://www.zerohedge.com/commodities/global-coordinated-spr-release-highly-unlikely-instead-here-what-white-house-will-do Global Coordinated SPR Release "Highly Unlikely"; Instead Here Is What The White House Will Do by Tyler Durden Wednesday, Nov 17, 2021 - 12:32 PM With Biden now in a panicked scramble to give the public the impression that he is doing something, anything to lower gas prices, whether it is sending angry letters to the FTC to scapegoat oil and gas giants for his admin's catastrophic "green" policies, or casually and politely asking Xi Jinping - one of the world's biggest oil importers - to "come on, man" and release some oil from the Chinese strategic petroleum reserve, some are starting to expect that a 1970s price controls is next on the Biden agenda now that the midterm elections are less than a year away. But before we get there, some are asking - is there any chance for a coordinated global SPR release? After all, one could argue that with gas prices soaring in both the US and China, the two superpowers' interest are - for once - aligned. The answer, at least according to JPMorgan, is "highly unlikely." In a note from JPM's Natasha Kaneva, she writes that since October, when US Energy Secretary Jennifer Granholm first mentioned that the Biden administration was considering a release from the government strategic stockpile of crude oil, "a chorus of Democratic senators including Senate Majority Leader Schumer has called for the White House to leverage the Strategic Petroleum Reserve to attempt to lower fuel prices for Americans. With rising inflation and retail gasoline prices at seven-year highs, the Biden administration is under intense pressure to do something" even if other Democrats, like the top Democrat in the House, Steny Hoyer saying he is against an SPR release. ... ...And though the US holds a greater voting share than the other members because of its outsized demand allocation, JPM thinks that the IEA Governing Board is well short of consensus and a collective action and a resulting coordinated emergency sale is unlikely. So if a SPR release is unlikely, what is? One option is a large SPR Volume Exchange. According to Kaneva, while there is no precedent for a unilateral emergency sale from the SPR, there is a long history of volume exchanges and one example of a volume exchange of a similar magnitude to that of the largest emergency SPR sale. The 2000 Heating Oil Exchange, used by the Clinton Administration to support the establishment of a home heating oil reserve in the Northeast US, was for more than 30 mbd, similar in magnitude to the largest emergency sale. Delivering SPR volumes via an exchange agreement gives the Biden administration and the DOE wide latitude in how it can attempt to address the current undersupply in the global crude oil market without the risk of damaging its relationships within the IEA. In a volume exchange agreement, the DOE loans SPR barrels to oil market participants for a specified period of time after which the recipients return the volumes to the SPR. There does not appear to be any statutory limit on the volume the DOE can exchange and the deadline for volumes to be returned can be extended at the discretion of the DOE. This means that the DOE could deliver 30 mb—or, theoretically, as much as it wants—to the market today and wait until crude oil balances normalize to require the return of those barrels, no matter how long it takes... ... on Tuesday, before the US Senate Energy Committee, the EIA acting administrator Stephen Nalley, testified that the impact of an SPR release would be short-lived and that the price impact of a 15-48 mb release over a short period would only bring down crude oil prices down by about $2/bbl (or the equivalent to as much as 10 cents per gallon of gasoline), in line with our previous analysis. Furthermore, with midterm elections still a year away, President Biden likely has time to wait. However, with inflation rising and under pressure from Senate Democrats, JPM thinks the White House will ask the DOE to execute an exchange agreement, accelerate mandated sales, or a combination of both. ... Edited November 17, 2021 by Tom Nolan Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://www.zerohedge.com/energy/response-soaring-gas-prices-biden-orders-ftc-immediately-probe-illegal-conduct-oil-gas In Response To Soaring Gas Prices, Biden Orders FTC To "Immediately" Probe "Illegal Conduct" By Oil & Gas Companies by Tyler Durden Wednesday, Nov 17, 2021 - 10:38 AM Commenting on perhaps the most absurd moment of the Xi-Biden virtual summit, which as we learned last last night, was the US president begging China to release oil from its strategic petroleum reserve (ostensibly because due to opposition by Democrats in the US such as top House Democrat Steny Hoyer, Biden can't do that), Rabobank's Michael Every said that it was "an odd power dynamic when one is a massive energy exporter, and the other a massive energy importer." Alas, it does not appear that China will rush to comply with Biden's demands, and with gasoline soaring and becoming a major political headache for the Democrats ahead of the midterms... .... Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://www.zerohedge.com/energy/wti-holds-losses-despite-surprise-crude-draw WTI Holds Losses Despite Surprise Crude Draw by Tyler Durden Wednesday, Nov 17, 2021 - 10:37 AM Despite dismissals over outcomes, oil prices remain under pressure from ongoing talk of SPR releases (US and/or China) from a desperate President Biden batteling record gas prices at the pump. WTI wasn't helped by Fed's Bullard's hawkish comments either and this morning's hawkish tilt to short-term interest-rates suggests his perspective may be being taken seriously by an increasingly anxious-about0inflation market. “The actual contribution to the supply is so limited,” Hans van Cleef, senior energy economist at ABN Amro said of a possible release from reserves. “For now we are rangebound, while waiting for new triggers.” Last night's small crude build and large drop in stocks at Cushing reported by API will be key to watch in the official data. API Crude +655k (+1.2mm exp) Cushing -2.792mm Gasoline -491k Distillates +107k DOE Crude -2.101mm (+1.2mm exp, -178k whisper) Cushing +216k - first build in 6 weeks Gasoline -707k Distillates -824k According to the official data, crude stocks dropped 2.1mm barrels last week (very different from API and expectations) Source: Bloomberg Cushing stocks are getting ever closer to their low-operational-limits (around 20mm barrels) and last week's tiny 216k barrel build does nothing to change that... Source: Bloomberg “Crude oil could justifiably trade to the next level higher on the storage drought at Cushing alone,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “Forget about fuel switching, whether OPEC+ adds additional barrels, or dollar weakness: if Cushing continues to slide, it could get ugly quickly.” US Crude production had recovered to pre-Hurricane Ida levels, but the prior week saw production drfop 100k barrels... Source: Bloomberg WTI hovered around $79 ahead of the official inventory print, popped a little, but the faded back... But we are sure that Biden's cunning plan to 'fix' soaring gasoline prices will solve it. If only he could comprehend the lag between crude prices, wholesales gasoline prices, and gas prices at the pump... But hey, they need someone to blame! Because the Environmental Protection Agency is set to release biofuel quota levels in the coming weeks. A drop in blending requirements could help lower retail prices, but this may be marginal relative to the recent crude-price surge... and would not be at all in keeping with Biden's climate crisis narrative. Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://finance.yahoo.com/news/oil-declines-traders-weigh-mixed-000922397.html Oil Slips to Lowest in a Month as Traders Mull Reserves Release (Bloomberg) -- Oil losses accelerated with both benchmarks dropping below their fifty-day moving averages as investors weighed the prospect of a release from strategic reserve supplies. Futures in New York fell as much as 3.3% on Wednesday to the lowest intraday level in more than a month. President Joe Biden and his Chinese counterpart Xi Jinping discussed the merits of releasing oil from their reserves in a virtual summit Monday but didn’t make a decision, according to officials familiar with the discussions. In a letter on Wednesday, President Biden urged the Federal Trade Commission to probe possible illegal conduct in U.S. gasoline markets. “Energy markets are waiting to see what, if any, coordinated efforts with the U.S. and China happen before placing bullish bets,” said Ed Moya, senior market analyst at Oanda Corp. Crude has drifted in a range of about $7 for the last six weeks, and traders are trying to figure out the market’s likely trajectory into 2022. The International Energy Agency said this week that while demand growth remains robust, supply is catching up. Meanwhile, the Organization of Petroleum Exporting Countries said a surplus may soon emerge as the rebound from the pandemic falters. “When the trajectory of the oil market’s supply tightness is being challenged by both the IEA and OPEC, it’s difficult for the trading mood to not turn bearish,” said Louise Dickson, a senior oil markets analyst at Rystad Energy. Japan, another major consumer that has voiced concern about high prices, is unlikely to release oil from its reserves due to a law that only allows it to release stocks in the event of supply disruptions, a government official said. The U.S. Energy Information Administration earlier reported domestic crude inventories fell 2.1 million barrels last week and gasoline stockpiles slid 707,000 barrels. Yet, supplies at the nation’s biggest storage hub at Cushing, Oklahoma, edged higher. “The market’s gaze has been distracted once again by the White House,” said John Kilduff, founding partner at Again Capital LLC. “We appear to be another step closer to a release, which is pressuring prices.” Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 17, 2021 https://oilprice.com/Energy/Crude-Oil/Breakeven-Price-For-New-Oil-Projects-Drops-In-2021.html Breakeven Price For New Oil Projects Drops In 2021 By Rystad Energy - Nov 17, 2021, 12:00 PM CST Rystad: Costs within the upstream sector have come down considerably in 2021 New oil becomes more competitive and significantly cheaper to produce Deepwater and oil sands producers have significantly lowered their breakevens Join Our Community Rystad Energy’s annual cost of supply analysis has revealed that costs within the upstream sector have come down considerably in 2021, making new oil more competitive and significantly cheaper to produce. The average breakeven price for new oil projects has dropped to around $47 per barrel – down around 8% over the past year and 40% since 2014, with offshore deepwater remaining one of the least expensive sources of new supply. Our cost of supply curve for liquids indicates that back in 2014, an oil price of close to $100 per barrel was required to produce 100 million barrels per day (bpd) in 2030. By 2018, the required oil price was closer to $55 per barrel, and in 2020, it dropped to $45 per barrel. Our latest estimate remains unchanged this year at $45 per barrel for 100 million bpd of production in 2030. We maintain the required oil price to produce 100 million bpd in 2030 unchanged, despite the declining average breakeven price of new oil projects, because the potential supply for 2030 has decreased since last year due to delays in sanctioning activity and conservative shale producers. In 2014, we estimated that the total 2030 liquid potential was 104 million bpd, while in 2018, this jumped considerably to 135 million bpd mainly driven by increased potential volumes from North American tight oil. However, low activity levels in 2020 and 2021, due to the Covid-19 pandemic and a general focus on the energy transition, led to a downward adjustment in the overall liquid potential. In 2020, the potential 2030 supply was revised down to about 116 million bpd, and in 2021 we revised it further to about 113 million bpd. “As the theoretical supply in 2030 exceeds the demand trajectory by more than 10 million bpd, climate policies should be more demand-focused rather than supply-focused. Supply cuts enacted within one country will largely be countered by supply increases from other countries, while demand cuts are not met with new sources of demand,” says Espen Erlingsen, head of upstream research at Rystad Energy. Breakeven prices by production source From 2014 to 2018, tight oil and OPEC were the clear winners as both segments saw a reduction in the breakeven price and an increase in potential volumes. Back in 2014, Rystad Energy estimated the average breakeven price for tight oil to be $82 per barrel and the potential supply in 2025 to be 12 million bpd. Since then, the breakeven price has come down while the potential supply has increased. In 2018, we estimated an average breakeven price for tight oil of $47 per barrel and potential supply of 22 million bpd. The breakeven price for tight oil has continued to fall, reaching a current average of $37 per barrel. However, tight oil production potential in 2025 has dropped from our 2018 estimate to around 16 million bpd currently. This drop is due to the sharp reduction in activity during 2020. Lower activity last year, and a modest recovery this year removed potential tight oil supply from the market. Between 2014 and 2018, offshore shelf and deepwater experienced a cost reduction of around 30%. However, the lack of new sanctioning activity over the period reduced the potential 2025 offshore liquid supply. Meanwhile, since 2018, breakeven prices for offshore deepwater fell by 30%, and for shallow water by 17%. These cost reductions put average breakeven prices for deepwater just below tight oil. At the same time, the potential 2025 offshore liquids supply has not changed much. This means offshore has had the most attractive development over the last three years. Another segment with a positive development is oil sands. From 2014 to date, the average Brent breakeven price for new oil sands projects has declined from around $100 per barrel to around $55 per barrel. The main reason is that many future phases will be developed as smaller, incremental brownfield expansions rather than large-scale greenfield projects. In several cases, operators have not only indicated smaller expansions, but also plans to achieve cost savings by tying these into existing central processing facilities (CPFs) rather than building new CPFs – which might have happened several years ago when the pace of development was much quicker. Onshore Middle East is the cheapest source of new production with an average breakeven price of around $32 per barrel. This is also the segment with one of the largest resource potentials. Offshore deepwater is the second cheapest source of new production, with an average breakeven price of $36 per barrel. Shelf remains the segment with the largest resource potential at 126 billion barrels of unsanctioned volumes. Russia onshore continues to be one of the more expensive resources due to the high gross taxes in the country. By Rystad Energy More Top Reads From Oilprice.com: Could An Energy Crunch Lead To A Worldwide Financial Crisis? Demand Uncertainty Could Keep Oil From Breaking $100 Quote Share this post Link to post Share on other sites
RichieRich216 + 454 RK November 17, 2021 15 hours ago, nsdp said: Long way to go to catch Harry Truman in 1952. I would settle for Biden being half as good as Truman. At least Truman was smart enough to use the Two Atomic bombs on Japan and save Hundreds of thousands of U.S. Military lives. Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 18, 2021 https://oilprice.com/Energy/Oil-Prices/Oil-Dips-As-Consuming-Nations-Mull-Strategic-Reserve-Releases.html Oil Dips As Consuming Nations Mull Strategic Reserve Releases By Tsvetana Paraskova - Nov 18, 2021, 10:00 AM CST Join Our Community Oil prices ignored a bullish EIA inventory report and dipped on Wednesday amid expectations that the U.S. could soon announce a release from its Strategic Petroleum Reserve (SPR) and other major consuming nations could follow suit with crude releases. Prices settled more than 2 percent lower on Wednesday and were trading down in early Asian trade on Thursday before reversing to slight gains in the morning EST in the U.S. WTI Crude prices are now down to the $78 handle, trading at $78.84, up by 0.51%, as of 9:56 a.m. EST, and Brent Crude was at $80.93, up 0.71%. The EIA reported on Wednesday a surprise crude oil inventory draw of 2.1 million barrels for the week to November 12, against analyst expectations of a build of 1.55 million barrels. In gasoline, the EIA reported an inventory decline of 700,000 barrels for the reporting period, which compared with a draw of 1.6 million barrels for the previous week. In middle distillates, the EIA estimated an inventory draw of 800,000 barrels for the seven days to November 12, with production averaging 4.8 million bpd. Despite the constructive EIA report, Brent and WTI fell by over 2 percent on Wednesday and were both trading below $80 a barrel in Asian trade on Thursday. Related: Is The U.S. Shale Patch Refusing To Pump For Political Reasons? The main drag on prices continued to be the expectation that the U.S. would announce an SPR release. The U.S. has reportedly asked China and other major consumers such as India, South Korea, and Japan to release crude from their strategic stockpiles too, in a coordinated effort to lower oil prices. China is already working on a crude oil release, a spokeswoman at the National Food and Strategic Reserves Administration told Bloomberg on Thursday. “A bullish weekly US stock report was ignored as the market also took stock of recent updates from EIA and IEA, in which they both forecast current tight market conditions could start to ease early next year as supply catches up with softening demand, the latter driven by slowing growth and renewed Covid-related reductions in mobility. Having given back most of the October gas-to-oil switching gains, the first major level of support in Brent is $78.25,” Saxo Bank said in a note on Thursday. By Tsvetana Paraskova for Oilprice.com Latest articles from Tsvetana Oil Dips As Consuming Nations Mull Strategic Reserve Releases Published 18 November 2021 | viewed 832 times Oil prices ignored a bullish EIA inventory report and dipped on Wednesday amid expectations that the U.S. could soon announce a release from its Strategic… Soaring Energy Prices Drive UK Inflation To 10-Year High Published 17 November 2021 | viewed 999 times High energy prices drove inflation in the UK to a 10-year high of 4.2 percent in October, and energy is expected to fuel additional price… UAE Speeds Up $20 Billion Natural Gas Projects Published 17 November 2021 | viewed 2,276 times The Abu Dhabi National Oil Company (ADNOC) is set to imminently award engineering and construction contracts for a major offshore natural gas field to increase… Has China Really Solved Its Power Crisis? Published 17 November 2021 | viewed 2,580 times The energy crisis in China, which resulted in blackouts in September and October, is now easing, top government officials say, adding that more work must… Environmentalists Sue South Africa Over Plans For New Coal Capacity Published 17 November 2021 | viewed 757 times Environmental organizations are suing South Africa in a local high court over the government’s decision to build 1.5 gigawatts (GW) of new coal-fired power generation… OPEC: Oil Will Be King Of The Global Energy Mix Until At Least 2045 Published 17 November 2021 | viewed 3,595 times Oil will continue to be the fuel with the single largest share of the global energy mix by 2045, meeting 28 percent of energy demand… An Undisputable Truth: The World Still Needs Oil And Gas Published 16 November 2021 | viewed 3,703 times While governments in many developed countries and institutional investors push for an accelerated energy transition and a move away from fossil fuels, the reality of… Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 18, 2021 https://oilprice.com/Energy/Crude-Oil/China-Prepares-To-Release-Oil-From-Strategic-Reserve.html China Prepares To Release Oil From Strategic Reserve By Irina Slav - Nov 18, 2021, 9:00 AM CST Reuters: China is preparing to release crude oil from its strategic reserve President Biden has asked China and other large consumers to release reserves to curb high oil prices Earlier this month, Beijing also ordered the release of gasoline and diesel Join Our Community China is preparing to release crude oil from its strategic reserve, Reuters has reported, citing the country's National Food and Strategic Reserves Administration. The news comes on the heels of reports that President Biden has asked China and other large consumers to do just that in an attempt to arrest the climb of oil prices. However, Reuters notes that the Chinese National Food and Strategic Reserves Administration declined to comment on these reports, suggesting the move may have been planned before President Xi Jinping's virtual meeting with Joe Biden, which is when Biden first raised the issue. "We are carrying out the work of releasing crude oil reserves. And for any details related to the releasing, we will put out a statement on our website," a spokeswoman for the NFSRA told Reuters. "We will release more details on the volume of oil and date of its sale on our website in due time, just like we did in the first public auction," the spokeswoman told Bloomberg. Earlier this week, Reuters reported, citing unnamed sources, that besides China, the Biden administration had also approached Japan, India, and South Korea with the suggestion they release crude oil from their strategic reserves. The oil auction announced by the National Food and Strategic Reserves Administration would be the second one: in September, the authorities auctioned 7.4 million barrels of crude for sale. The news did weigh on oil prices but only for a short while before prices rebounded again. Then, earlier this month, Beijing also ordered the release of gasoline and diesel as the prices of fuels in some parts of China were rising too fast. "China has its own plan for the strategic petroleum reserve (SPR) releases. (We expect) the second release volume should be similar to the first one," SIA Energy analyst Sengyick Tee told Reuters. By Irina Slav for Oilprice.com Latest articles from Irina U.S. Asks Big Oil Consuming Nations To Release Reserves Published 18 November 2021 | viewed 725 times China is not the only big oil consumer the United States has asked to release oil from its reserves in a bid to rein in… China Prepares To Release Oil From Strategic Reserve Published 18 November 2021 | viewed 1,982 times China is preparing to release crude oil from its strategic reserve, Reuters has reported, citing the country's National Food and Strategic Reserves Administration. The news… Is The U.S. Shale Patch Refusing To Pump For Political Reasons? Published 17 November 2021 | viewed 8,894 times When President Joe Biden first called on OPEC to increase production earlier this year, he drew an angry response from Texas Governor Greg Abbott, who… Oil Inches Higher After EIA Reports Surprise Crude Draw Published 17 November 2021 | viewed 9,382 times Crude oil prices gained today after the Energy Information Administration reported a crude oil inventory draw of 2.1 million barrels for the week to November… U.S. Asks China To Release More Oil From Its Reserves Published 17 November 2021 | viewed 6,388 times President Joe Biden has asked his Chinese counterpart Xi Jinping to release more crude oil from its reserves in concert with the U.S., in a… Demand Uncertainty Could Keep Oil From Breaking $100 Published 16 November 2021 | viewed 5,970 times Commodity analysts have been on a forecasting binge recently as oil prices climb higher amid surprisingly strong demand and unsurprisingly short supply. Most believe oil… Exxon Puts Shale Gas Assets Up For Sale Published 16 November 2021 | viewed 6,475 times Exxon has put up for sale natural gas assets in the Barnett Shale in Texas, Reuters has reported, citing a confirmation of the news by… Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 18, 2021 https://oilprice.com/Latest-Energy-News/World-News/Largest-Offshore-Drilling-Auction-In-US-History-Kicks-Off-With-192M-In-Bids.html Largest Offshore Drilling Auction In U.S. History Kicks Off With $192M In Bids By Julianne Geiger - Nov 17, 2021, 3:30 PM CST Quote Share this post Link to post Share on other sites
nsdp + 449 eh November 18, 2021 On 11/17/2021 at 3:32 PM, RichieRich216 said: At least Truman was smart enough to use the Two Atomic bombs on Japan and save Hundreds of thousands of U.S. Military lives. He also relieved MacArthur of command in Korea along with Curtis LeMay who was screwing up the Berlin AirLift. both of which avoided WWIII. Marshall plan was his but he was smart enough to send Marshall to sell it on the Hill. Stayed out of Vietnam. Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 19, 2021 https://oilprice.com/Alternative-Energy/Renewable-Energy/Saudi-Crown-Prince-Unveils-Net-Zero-Industrial-Hub-In-Smart-City-Neom.html Saudi Crown Prince Unveils Net-Zero Industrial Hub In Smart-City Neom By Irina Slav - Nov 18, 2021, 4:00 PM CST Saudi Arabia's Crown Prince has unveiled another element of the NEOM megaproject, a floating industrial complex dubbed Oxagon NEOM: Oxagon presents a radical new model for future manufacturing centers Oxagon will focus on advanced technology such as space and robotics Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 19, 2021 https://oilprice.com/Energy/Energy-General/The-Energy-Transition-Will-Be-Impossible-Without-Fossil-Fuels.html The Energy Transition Will Be Impossible Without Fossil Fuels By Cyril Widdershoven - Nov 18, 2021, 7:00 PM CST OPEC members and other participants of ADIPEC2021 are calling on governments and international institutions to be realistic about the global energy transition While countries like the UAE and Saudi Arabia are ready to embrace the energy transition, they argue that nations need to accept the role of fossil fuels in the global energy mix African energy nations, in particular, have supported this message, claiming that they will be left behind if funding and development of their fossil fuel industries dries up Latest articles from Cyril The Energy Transition Will Be Impossible Without Fossil Fuels Published 18 November 2021 | viewed 2,301 times A week after COP26 came to an end, the global energy industry is now turning its focus to Abu Dhabi’s annual international oil and gas… Conflict In North Africa Threatens Gas Supply To Europe Published 06 November 2021 | viewed 5,836 times European natural gas supplies are not only waning because of lower Russian supply. Brussels, Berlin and even the Hague are keeping a keen eye on… Why Everyone Should Support Cutting Methane Emissions Published 03 November 2021 | viewed 2,310 times After decades of discussing the negative impact of methane emissions on climate and the environment, COP26 in Glasgow appears to have finally triggered some meaningful… Middle East Oil Producers Are Making Ambitious Renewable Energy Pledges Published 28 October 2021 | viewed 1,367 times Net-Zero is a phrase we’re hearing a lot of at the moment, as the world gears up for COP26. Certain Western economies are already on… Does Divestment From Fossil Fuels Really Work? Published 27 October 2021 | viewed 4,678 times The COP26 meeting next week will likely be the largest divestment party ever seen. Investors with $39.2 trillion in investments under management have already committed… Quote Share this post Link to post Share on other sites
Tom Nolan + 2,443 TN November 19, 2021 https://oilprice.com/Energy/Oil-Prices/How-A-Biden-SPR-Release-Will-Send-Oil-Prices-Even-Higher-In-2022.html How A Biden SPR Release Will Send Oil Prices Even Higher In 2022 By ZeroHedge - Nov 18, 2021, 8:00 PM CST Goldman Sachs strategist Courvalin: A possible U.S. SPR release has now been fully priced in Goldman Sachs: higher oil prices are justified by a strong demand recovery in the face of a slow supply response A slow supply response from oil producers would only lead to further upward risk for oil prices Quote Share this post Link to post Share on other sites
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