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Oil Market Volatility Surges

Friday May 24, 2019

1. Offshore spending on the rise

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- Offshore investment is surging once again, although the uptick may only prove to be temporary.

- The services market for offshore drilling will slow from 7 percent annual growth per year in 2019-2022 to just 3 percent from 2022-2025, according to Rystad Energy.

- Higher prices has sparked more investment, but the resulting supply increase could push prices back down, cratering investment all over again. Roughly 5 million barrels of oil equivalent per day (boe/d) from the latest round of investment will begin production from 2022.

- Offshore projects, unlike short-cycle shale, depend on price stability. “Just how things ultimately play out in the offshore market will depend to a large extent on whether OPEC, with help from Russia, will decide to take serious measures to stabilize the market over the next years,” Audun Martinsen, Head of Oilfield Service Research at Rystad Energy, said in a statement. “If the group decides to rein in production to protect commodity prices, momentum in the offshore market could continue. If not, the offshore renaissance party seems destined to come to an end in 2022.”

2. Palladium still undersupplied

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- Palladium prices have surged in recent years, a material used in automobile technologies to control emissions. The rise of electric vehicles and other pollution…



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