• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 8 days The United States produced more crude oil than any nation, at any time.
  • 5 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 52 mins How Far Have We Really Gotten With Alternative Energy
Josh Owens

Josh Owens

Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and…

More Info

Premium Content

Oil Prices Dip After Hitting $70

Oil Prices

Investor Alert! As oil markets finally recover, which of the top-tier shale drillers are a buy? Read our latest Global Energy Alert investment column to get the full breakdown of which stocks to watch.

Chart of the Week

-    U.S. exports of propane reached record highs in 2020, up 13%. 

-    Propane became the largest source of refined product exports, surpassing distillate fuel oil.

-    The increase is the result of strong petrochemical and heating demand in Asia.

Market Movers

-    Eni (NYSE: E) may spin off its new retail and renewable energy business next year, while taking a minority stake in the company, in an effort to raise money for the energy transition. Reuters reports that the company could be worth around 10 billion euros.

-    The oil majors are moving into “overbought” territory, according to Seeking Alpha.

-    Vineyard Wind may soon receive a greenlight from the Biden administration. The $2.8 billion 800-MW offshore wind farm off the coast of Massachusetts would be the first major offshore wind project in federal waters. 

Tuesday, March 9, 2021 

Oil prices took a breather after a huge rally last week. Brent dipped back below $68 per barrel in early trading on Tuesday. While analysts broadly see the oil market as tight and potentially moving tighter following the OPEC+ cuts, the flip side is that high prices could start to eat into demand. 

$70 oil could slow demand. While the unexpected rollover of the OPEC+ production cuts sent Brent Crude prices up to $70 a barrel, the highest oil prices in more than a year could dampen global oil demand recovery, which the OPEC+ group itself still sees as fragile. Related: India: OPEC+ Decision Could Derail Oil Demand Recovery

Vitol: “OPEC+ is in control.” One of the world’s top oil traders says that OPEC+ decision-making is the key factor driving the oil market this year. “The market is telling us that OPEC+ have control,” Mike Muller, Vitol’s head of Asia, said Sunday in an online forum hosted by consultant Gulf Intelligence. “We’re going to get a stock-draw that is going to accelerate through the second quarter and that’s why the market is doing what it’s doing.”

OPEC+ leans towards over-tightening. The surprise OPEC+ extension signals an “overtightening of the market is likely and is only likely to be corrected after a significant lag,” Standard Chartered said in a note. The investment bank hiked its oil price forecast by $14, with Brent averaging $66 per barrel this year. But higher prices hit 2022 demand, and the bank sees Brent averaging $59. 

Refiners’ fortunes rebound. Seven of 18 refineries affected by the Texas grid crisis -- making up over 2 million barrels a day of crude processing capacity -- were operating normally as of Monday. U.S. sour crudes have seen margins shoot up as OPEC+ extended cuts and demand globally looks healthy.

Houthis hit Aramco. Houthi forces in Yemen fired drones and missiles at Saudi Arabia, including a Saudi Aramco facility at Ras Tanura that is vital to petroleum exports. But Saudi Aramco said there was no loss of property.

Chevron keeps spending restraint. Chevron (NYSE: CVX) will keep CAPEX at $14 billion for the next few years, while still hoping to grow Permian production to 1 mb/d by 2025. Chevron also promised improved returns and a modest reduction in carbon intensity, although not a reduction in absolute emissions. 

Saudi Arabia doubts demand strength. Last week, Saudi oil minister Prince Abdulaziz bin Salman Al-Saud expressed some skepticism that the global economy would roar back to life imminently, a sentiment that appears to have bolstered the OPEC+ extension. “I will believe it when I see it,” he said multiple times.

Iran reaches out to Asian buyers. Iran has reached out to refiners in Asia, suggesting that it hopes to soon step up oil exports. The overtures are perhaps an indication that Iran expects a thaw in relations with the U.S. in the coming months.

China leaves climate plans vague. Analysts expected China to add more meat on the bones to its strategy of ratcheting down greenhouse gas emissions last week when it released details of its latest 5-year plan, but analysts were disappointed with the lack of information. China said Friday it plans to lower emissions per unit of gross domestic product by 18% by 2025—the same level it targeted in the previous five-plan. Meanwhile, analysts see the size of China’s carbon market growing to $25 billion by 2030.

Goldman ups Imperial Oil to Buy. Goldman Sachs upgraded Imperial Oil (TSE: IMO)to a Buy rating from Sell, with a price target of C$36. Goldman sees earnings improving due to both better operations and costs, and the bank sees positive revisions to cash flow and earnings and now sees 23% total return for the shares.

Tesla is building a secret energy storage project in Texas. Tesla (NASDAQ: TSLA) is building a gigantic battery storage project in southern Texas, one that has been literally under wraps until Bloomberg discovered it. 


Qatar’s massive LNG buildout moves it closer to China. Qatar has plans to expand its LNG footprint with a $29 billion buildout, which will increase export capacity by a third to 110 mtpa. A string of recent deals also suggests that Qatar may be shifting a bit closer towards China’s sphere of influence.

Related: Oil Falls After Spiking Due To Missile Attack On Saudi Tank Farm

Energy transition leads to surging metals prices. Three billion tons: this is how much metals and minerals the energy transition will require, according to a World Bank report. Demand for some of these, such as copper, lithium, cobalt, and graphite, is set to increase 500 percent by 2050.

California drilling moves ahead. Kern County approved a plan to allow 40,500 new oil and gas wells in the county over the next 15 years. 

Shell to sell some Egypt assets. Royal Dutch Shell (NYSE: RDS.A) plans on selling upstream assets in Egypt worth up to $926 million.

Rystad: Oil employment more resilient in China. The job losses in the oil and gas industry from the pandemic were not as bad in China as they were elsewhere. A Rystad Energy analysis shows that the world’s top oil and gas employer, China, lost only 5.3% of its massive workforce. The toll in the US was more devastating, estimated at 11.1%, worse than its European peers and Russia.

India wants to cut Mideast dependence. Following the OPEC+ decision to roll over the production cuts into April, India is asking its state-owned refiners to aggressively look to diversify imports away from the Middle East, as the world’s third-largest oil importer isn’t happy with the tighter oil market and higher oil prices.

By Josh Owens for Oilprice.com 

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on March 09 2021 said:
    Oil prices are merely taking a breather after a very impressive surge that saw Brent crude hit $70 a barrel.

    Oil prices will shortly resume their surge underpinned by a bull market that cut last several years and fast-tightening global oil market. Soon we will see Brent surge beyond $70 with $100 oil in sight by the second half of 2022 or the the first quarter of 2023.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News