• 4 hours Thanksgiving Gas Prices At 3-Year High
  • 8 hours Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 10 hours South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 13 hours Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 14 hours Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 15 hours Iraq Steps In To Offset Falling Venezuela Oil Production
  • 17 hours ConocoPhillips Sets Price Ceiling For New Projects
  • 3 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 4 days Venezuela Officially In Default
  • 4 days Iran Prepares To Export LNG To Boost Trade Relations
  • 4 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 4 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 4 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 5 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 5 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 5 days Santos Admits It Rejected $7.2B Takeover Bid
  • 5 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 5 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 6 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 6 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 6 days Lower Oil Prices Benefit European Refiners
  • 6 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 7 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 7 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 7 days OPEC To Recruit New Members To Fight Market Imbalance
  • 7 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 7 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 7 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 8 days Saudi Aramco To Invest $300 Billion In Upstream Projects

Breaking News:

Thanksgiving Gas Prices At 3-Year High

Alt Text

Oil Prices Nosedive On Bearish IEA Report

Oil prices are cratering after…

Alt Text

Why Oil Prices Will Keep Moving Up

With oil smashing through two-year…

Alt Text

The IEA Is Grossly Overestimating Shale Growth

The IEA’s forecast that U.S.…

Oil Prices Inch Higher Despite Rising Saudi Exports

Barrels

We've had more energy-related newsflow than we can shake a stick at this week, but as we head into the weekend, hark, here is a cornucopia of crude and energy-related tidbits assembled for your perusal.

--It was a little perplexing to read a headline this week which said 'Saudi Arabia's June oil output up on domestic summer crude burning'. Saudi Arabia may have increased its production last month by 190,000 barrels per day (per OPEC direct communication), but exports increased by four times that. Hum dee dum.

The latest monthly OPEC oil market report shows that Saudi direct crude burning for power generation is down year-on-year for the last 13 consecutive months, dropping in May by 56,000 bpd YoY - or 9 percent. The latest drop is attributed to lower temperatures compared to May 2016, as well as slowing momentum in the manufacturing sector.

The Wasit natural gas plant, which is now operating at its full capacity of 2.5 Bcf/d, is no doubt part of this equation too. All this said, parts of Saudi Arabia saw record temperatures last week in central and eastern parts of the Kingdom - temperatures soared to 53 degrees Celsius for the first time on record.

--We highlighted earlier in the year how Saudi Arabia and the UAE were likely to supplement lost revenues from the OPEC production cut deal by exporting more products. We continue to see this trend play out in our ClipperData, with Middle East exports of gasoline and middle distillates outpacing year-ago levels. This may also be a positive signal, indicating stronger end-user demand for products.

(Click to enlarge)

--According to the Indian Oil Ministry's Petroleum Planning and Analysis Cell, gasoline, diesel and LPG demand continued to show strength in June, underpinned by stronger economic growth. Diesel demand, which accounts for 40 percent of total product sales, is up 6.5 percent year-on-year (to 6.8 million tons).

Gasoline demand rose 12 percent (to 2.1 million tons), while LPG demand increased 16 percent (to 1.9 million tons). Offsetting this strength, petcoke, naphtha and bitumen demand fell. As the Indian economy recovers from the speed bump of demonetization at the end of last year, petroleum demand looks robust.

Related: The Major Wildcard That Could Send Oil To $120

This article suggests that Indian crude imports from the Middle East have dropped to their lowest share since 2015 - our ClipperData indicate otherwise. We saw it below 60 percent in February, when India pulled in more West African and Latin American barrels (think: Nigerian and Venezuelan crude).

(Click to enlarge)

--There were two wonderfully juxtapositioned views expressed at the World Petroleum Congress earlier this week in Istanbul. The first was from Royal Dutch Shell's CEO Ben Van Beurden, who highlighted the company's plans to invest as much as $1 billion a year by 2020 into renewables.

This contrasted with comments from Saudi Aramco's CEO Amin Nasser, who said it will invest more than $300 billion over the next decade to maintain its spare oil-production capacity and to develop natural gas resources, highlighting 'we need about 20 million additional barrels a day over the next five years' to offset rising oil demand and the natural decline at developed fields, expressing his concern that 'about $1 trillion in investments has been lost in the current downturn'.

--Peak oil has been a buzzword this week, and coincidentally, my latest feature on NPR's Texas Standard on Monday addressed the possible timing of peak oil demand - the interview can be found here.

We discussed how it was impossible to know when peak oil demand is coming - and that wide-ranging estimates only underscore this. The IEA projects its likelihood of being beyond 2040, while Royal Dutch Shell sees it as soon as mid-next decade.

France is banning the sale of gasoline and diesel cars by 2040, while Volvo is only going to design electric cars or hybrids after 2019, while Rolls Royce is skipping building hybrids, and shifting straight to creating electric cars. The chart below illustrates that, according to Bloomberg, electric vehicles are set to account for all the growth in global vehicle sales within a decade:

(Click to enlarge)

--The IEA has been busy this week. The chart below is from their publication about natural gas, in which it highlights that China, India and other developing countries will import more than 50 percent of global LNG volumes by 2022.

Related: Will The EV Hype Actually Help The Oil Business?

Global gas demand is expected to grow by 1.6 percent per annum to 2022, with global consumption reaching 4,000 Bcm at this point. China is projected to account for 40 percent of this growth. The U.S. is projected to account for 40 percent of global natural gas production growth over the same period, accounting for more than a fifth of global gas output by 2022.

(Click to enlarge)

--Finally, the below chart is also from the IEA, and has been grabbin' headlines this week, as it highlights the passing of a milestone: global electricity investment overtaking the investment in fossil fuel supply last year.

But as the chart below illustrates, this is less to do with rising investment in the electricity sector, and more to do with tanking investment in fossil fuel supply. Capital spending in the fossil fuel supply sector has fallen 38 percent in the last two years. Energy investment on the whole in 2016 was down 12 percent on the prior year.

(Click to enlarge) 

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




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