• 4 hours British Utility Companies Brace For Major Reforms
  • 8 hours Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 10 hours Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 11 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 12 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 13 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 14 hours Rosneft Signs $400M Deal With Kurdistan
  • 17 hours Kinder Morgan Warns About Trans Mountain Delays
  • 23 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 1 day Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 1 day Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 7 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 7 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 7 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 8 days China Set To Continue Crude Oil Buying Spree, IEA Says
Alt Text

Oil Markets Brace For Another Hurricane

Oil prices drew back this…

Alt Text

3 Stocks To Play Today’s Hottest Market

Big automakers have jumped on…

Alt Text

Corbyn Seeks To Renationalize Britain’s Utilities

Jeremy Corbyn wants to renationalize…

OPEC’s Conundrum: Higher Prices Or Market Share

OPEC

Oil prices retraced this week as oversupply worries once again resurfaced in spite of a bullish U.S. inventory report.

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

Friday, June 2, 2017

Oil prices continue to show weakness even though there are some bullish pieces of data emerging. The EIA reported a surprisingly strong drawdown in crude oil inventories, a drop off of 6.43 million barrels. However, weekly U.S. oil production continues to climb. Also, Libyan oil production broke new highs for the year. Oil might trade between $45 and $50 per barrel for quite a while, a range that is “the path of least resistance," Bill O’Grady, chief market strategist at Confluence Investment Management, told Bloomberg in an interview. "You stay in that range until you get some kind of clear and convincing evidence." Oil prices also sank on news that the U.S. withdrew from the Paris Climate accord (more below), raising fears of more unbridled drilling.

Exxon shareholders pass climate resolution. Shareholders of ExxonMobil (NYSE: XOM) passed a monumental resolution this week, calling on the company to assess its vulnerability to climate change. Shareholders passed the resolution with 62 percent support. The resolution is a milestone on the campaign by environmental activists to pressure the oil major into disclosing more details about its financial vulnerabilities. The difference this time compared to failed efforts in the past is that mainstream financial institutions are on board with more climate disclosure, fearing that their long-term investments are at risk. Shareholders also passed a resolution calling on Exxon to provide more details about its plans to reduce methane emissions.

OPEC faces conundrum: prices or market share. Robin Mills, a Middle-East based oil analyst, wrote in Bloomberg View that OPEC must choose between fighting for market share by raising production, or stabilizing prices by maintaining cuts. They can’t have both, despite attempts by the cartel to keep U.S. shale out of the market while also rescuing prices from falling. Unless OPEC chooses one course of action, it could face long-term attrition from lost market share and less-than-satisfying revenues.

U.S. withdraws from Paris. President Donald Trump announced his decision to withdraw from the Paris climate accord, a move that, on its face, has little impact on the trajectory of U.S. carbon emissions. The move will, however, strain the already tense relationship between the U.S. and its European allies. Meanwhile, the EU and China have vowed to press on with the accord and reaffirmed their commitment to reach their climate targets. Reaction from within the U.S was swift. Conservative organizations and some in the coal industry praised the move, but the broader corporate sector was mostly opposed to a withdrawal. Tesla’s (NYSE: TSLA) Elon Musk withdrew from a presidential advisory council in protest. Even many in the oil and gas industry wanted Trump to remain in the pact. ExxonMobil (NYSE: XOM) CEO Darren Woods made expressions of support for the climate accord.

GE receives EU approval for merger with Baker Hughes. Last year GE (NYSE: GE) announced plans to merge its oil and gas unit with oilfield services firm Baker Hughes (NYSE BHI). This week the EU gave the greenlight for the merger, a key hurdle for the merger to be realized. Related: Clash Between Qatar And The Saudis Could Threaten OPEC Deal

Offshore drilling gets cheaper. A new report from Wood Mackenzie finds that offshore oil drilling is getting cheaper and cheaper. The industry is streamlining operations and prioritizing the sweetest spots to drill, which will push down the average breakeven price to $50 per barrel next year, down from $62 in the first quarter of 2017 and as high as $75 in 2014. That is good news for oil drillers but also bad news for prices because new offshore supplies could come online even with oil at $50. “There is life in deep-water yet,” Angus Rodger, director of WoodMac’s upstream Asia-Pacific research, told Bloomberg in an interview. “When oil prices fell, many projects were deferred, but the ones that were deferred first were deep-water because the overall break-evens were highest. Now in 2017, we’re seeing signs that the best ones are coming back.”

Libya and Nigeria restore supply. OPEC saw its collective output jump in May because of rising supply from Libya and Nigeria, two countries that are exempt from the production cut deal. The uptick in output was the first monthly increase across OPEC for the year. Both countries have already stated their objective of dramatically ramping up production in the second half of this year if they can maintain security.

Exxon and Total interested in drilling off the coast of Crete. Greece, desperate for cash amid a never-ending financial crisis, has sought to promote oil and gas exploration. ExxonMobil (NYSE: XOM) and Total SA (NYSE: TOT) have submitted an expression of interest to explore near Crete.

Dakota Access Pipeline begins operations. Energy Transfer Partners (NYSE: ETP) said that its Dakota Access Pipeline began operations on Thursday. The inauguration of Dakota Access means that the company’s broader Bakken Pipeline system will now be able to ship 520,000 bpd to the U.S. Gulf Coast. The pipeline is a boon for drillers in North Dakota’s Bakken, who will now be able to ship more crude via lower-cost pipelines rather than rail. It will also allow Gulf Coast refiners to access more light sweet crude for their operations.

First floating LNG approved for Gulf Coast. The U.S. Department of Energy granted approval for what could be the U.S. Gulf of Mexico’s first floating LNG export terminal. The project, backed by Fairway Peninsula Energy Corp., could begin operation in 2020.

By Tom Kool for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News