• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 1 hour The 5 Scary New Rules Of Upside-Down Capitalism
  • 3 hours U.S. Shale To Break Records Despite Bearish Rhetoric
  • 20 mins Hydrogen Hurdles in Japan
  • 11 hours More dumbed down? re Hong Kong Act of Congress
  • 2 hours Winter Storms Hitting Continental US
  • 3 hours Conoco next gen test wells Vintage 5 (V5) 20% recovery and say " We can do even better "
  • 16 hours U.S. Shale Output may Start Dropping Next Year
  • 3 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 13 hours Petroleum Industry Domain Names
  • 13 mins Aramco IPO magic trick
  • 3 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 5 hours Impeachment S**te
  • 3 hours Contaminated Oil
  • 17 hours Crazy Stories From Round The World
  • 3 hours Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
Alt Text

The Worst Is Over For Oil Markets

It has been a tough…

Alt Text

This Large Oil Producer Is Facing A Major Refining Crisis

Nigeria, Africa’s largest oil producer…

Editorial Dept

Editorial Dept

More Info

Premium Content

Shale: An Existential Threat From Within

Friday July 5, 2019

1. Petrochemicals underperform oil

- The oil majors have undertaken massive investments in petrochemical projects, viewing plastics as a more durable investment than simply producing crude oil. With the spread of electric vehicles and peak demand looming, the soaring use of plastics is seen as one of the last refuges for oil companies.

- But chemical prices have underperformed oil and natural gas liquids since 2014, according to Bank of America Merrill Lynch. “The petchem market has struggled to regain the premium it commanded over oil and NGLs ever since,” the bank said. “More recently, as oil rebounded from 4Q18 lows, NGLs and petchems continued to decline.”

- Production of oil, gas and natural gas liquids has skyrocketed, but much of it remained trapped in the U.S. As a result, companies have invested in major petrochemical capacities, such as ethane crackers. But the products they produce – ethylene and polyethylene – are also somewhat trapped.

- “US export and downstream infrastructure has stranded NGLs, causing prices to collapse, particularly for ethane, which is now trading around $0.16 per gallon, down nearly 50% from the start of the year and approaching natural gas value,” Bank of America said.

- The infrastructure bottlenecks will likely be ironed out over the next few years, but the economic deterioration now has demand up in the air.

- “In…



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play