• 5 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 1 hour Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 22 hours Something wicked this way comes
  • 9 hours America's Frontline Doctors - Safely Start Living Again!
  • 12 hours France Sees 10.6% EV Market Share In September — 4× Growth Year On Year
  • 1 day A sneak peak into the US election
  • 11 hours Conoco Pledges ‘Net-Zero’ Emissions in Break With U.S. Rivals
  • 18 hours Permian in for Prosperous and Bright Future
  • 2 days covid. stop the carriers and thus stop the virus.
  • 21 hours Tesla Model 3 Is September's Top Selling Car of All Vehicles in Switzerland
  • 1 day California’s Electric Vehicle Dream Has A Major Problem: No
  • 2 days "COVID Kills Another Oil Rally" by Tom Kool 10/16/2020
  • 2 days Vote Biden for Higher Oil Prices
  • 2 days Ethanol present in gasoline
  • 3 days Is the coal industry on the way out?
  • 3 days Tucker Carlson responds to CDC after agency critiques commentary about mask-wearing
The $4.2 Trillion Trend Taking Over Wall Street

The $4.2 Trillion Trend Taking Over Wall Street

The ESG megatrend has taken…

OPEC+ Is On The Brink Of A Crisis

OPEC+ Is On The Brink Of A Crisis

OPEC+ members are on the…

Tom Kool

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

More Info

Premium Content

Oil Prices Fall As Hurricane Fears Subside

Oil prices retreated on Friday morning as it became clear that the damage caused by hurricane Laura was not as bad as markets had expected 

For Global Energy Alert members there are now two new free reports available in your dashboard. The first of these reports is on how to interpret stock charts and the second outlines the three biggest mistakes made by traders today. Make sure you become a member to read these reports and many more.

Friday, August 28th, 2020

Oil prices retreated in the wake of Hurricane Laura, which led to much less destruction than the market had anticipated. That leaves the oil price dynamic little changed from the past two months – WTI and Brent are stuck in familiar territory between $42 and $45.

Gulf of Mexico energy industry largely dodges Hurricane Laura. The concentration of energy assets along the Texas and Louisiana coast more or less avoided the worst-case scenario from Hurricane Laura. “The damage is not as bad as anticipated, which is creating more sell pressure along the energy complex,” said Phil Flynn, senior market analyst at Price Futures Group. More than 80 percent of oil output in the Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, most of which should come back online fairly quickly.

Oil and gas exports impacted. Laura shut-in some LNG operations, and gas exports are set to fall to about 2.1 bcf on Thursday, the lowest level since February 2019. Oil exports are expected to drop by nearly 1 mb/d this week. 

New Mexico oil auction is a dud. The Bureau of Land Management sold 93 land parcels covering more than 45,000 acres in New Mexico on Thursday, and the two-day auction posted an average bid per acre of $169, down from $1,386 per acre in February. The average during the Trump era in New Mexico has been $5,500 per acre. 

Kinder Morgan brings Elba LNG unit online. Kinder Morgan (NYSE: KMI) brought the last of its 10 LNG units into service on Thursday, bringing capacity up to 2.5 mtpa. 

Equinor drops South Africa exploration. Equinor (NYSE: EQNR) decided to give up its leases in offshore South Africa after a disappointing seismic campaign, according to S&P Global Platts. ExxonMobil (NYSE: XOM), which Equinor partnered with, may also abandon the effort, according to Platts, although the company has not commented. Meanwhile, Equinor also said it would suspend drilling in U.S. shale for the rest of the year. 

Report: Oil majors can’t afford dividends. The five supermajors – ExxonMobil (NYSE: XOM), Royal Dutch Shell (NYSE: RDS.A), BP (NYSE: BP), Chevron (NYSE: CVX), and Total (NYSE: TOT) – collectively paid $16.9 billion more to shareholders than they generated from their core business operations, according to an IEEFA report. They plugged the gap through asset sales and debt. ExxonMobil, which is being removed from the Dow Jones Industrial Average, posted negative free cash flow of $4.4 billion and paid out $8.1 billion to shareholders. Collectively, the majors added $50 billion in debt in the second quarter. 

Barclays downgrades Shell. Barclays cut Royal Dutch Shell (NYSE: RDS.A) to Underweight from Equal, citing expensive shares.

Mountain Valley Pipeline asks FERC for an extension. Developers for the Mountain Valley Pipeline asked FERC for an additional two years to complete construction, citing litigation and permitting risks.

Related: Oil Major Equinor Stops Drilling In U.S. Shale Patch

ConEd: No more gas pipelines. Consolidated Edison (NYSE: ED) said it would no longer invest in long-distance gas pipelines. The comments came in the context of the company’s investment in the Mountain Valley Pipeline. “We made those investments five to seven years ago, and at that time we — and frankly many others — viewed natural gas as having a fairly large role in the transition to the clean energy economy,” CEO John McAvoy said during an Aug. 26 investor presentation. “That view has largely changed, and natural gas, while it can provide emissions reductions, is no longer ... part of the longer-term view.”

Vaca Muerta sees slow recovery. Argentina's Vaca Muerta shale patch will take 12-18 months to resume pre-COVID-19 activity because of lagging demand, according to Argus.

Elon Musk has a nickel problem. Large spills of toxic waste from nickel projects demonstrate the challenge that Tesla (NASDAQ: TSLA) will have in sourcing clean nickel supplies, Bloomberg Green reports. Nickel projects planned for Indonesia will dispose of toxic tailings at sea. 

Shale should get on board with ESG. Investors are increasingly favoring environmental, social, and governance issues, and poor financial performances and bad environmental externalities from shale drillers stand out as a major liability. 

California approves energy storage system. In an effort to bolster electric grid capacity, California approved on the largest energy storage systems in the country, approving contracts on 1.2 GW of storage, expected to come online in August 2021.

PetroChina reports $4.4 billion loss and pledges near-zero-emissions. PetroChina reported a $4.4 billion loss for the first half of the year. The company announced that it would move towards near-zero emissions by 2050, including ramping up clean energy investments over the next five years.  Related: Hurricane Laura Makes Landfall In Oil Heartland

Exxon presses Guyana for approval. ExxonMobil (NYSE: XOM) is pressing the Guyanese government for approval of its third offshore oil project in the country. The project came under scrutiny during the presidential election and political turmoil, and the new government has advocated for more favorable terms. 

Morgan Stanley: Climate a key topic for oil executives. “Despite a historically weak quarter, climate change and oil companies’ energy transition strategies remained a key topic in the 2Q20 conference calls,” Morgan Stanley wrote in a report. 

Dakota Access’ fate is up to the election. The U.S. Army Corps of Engineers has asked an appeals court to reverse a lower court’s ruling vacating the permit of the Dakota Access oil pipeline to operate, arguing that such ruling creates “impossible” standards that could scupper future major infrastructure projects. The pipeline’s fate largely depends on the outcome of the presidential election.

By Tom Kool for Oilprice.com 

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Andrew Doolittle on August 29 2020 said:
    Oil prices are soaring given the massive hit to the ability to move oil via Supertanker out of Louisiana (the LOOP). Plus electricity demand in China is soaring because of devastating flooding over there. This has put a massive bid into natural gas and indeed Hurricane Season is far from over but has only just begun.

    Names like Kinder Morgan Energy and Cabot Oil and Gas look to profit immensely from this situation. The State of Louisiana in the alternative is the "big loser" from this all too predictable "natural" disaster.

Leave a comment




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