Posts belonging to Category energy



Trump Is Fracturing OPEC

Trump tweets

Trump’s tweet over the weekend that Saudi Arabia agreed to add 2 million barrels per day (mb/d) of supply confused the oil markets, pushing prices down a bit on Monday. Most analysts dismissed the statement, concluding that Trump was confused when the Saudis told him they have 2 mb/d of spare capacity, and not that they had planned to bring that capacity online.

A few days on from that episode, however, it actually doesn’t look that black and white.

Indeed, Trump’s tweet suggests that he very much believes that 2 mb/d of Saudi supply is coming online, and despite the attempt by the Saudis to clarify, by stating that they have surplus capacity waiting to be used in the event of a pinch, the statement was interpreted in different ways by the oil market.

https://www.oilprice.com/

Morgan Stanley hikes oil price forecast to $85

Trump targets Iranian barrels

Oil prices will rise more than previously expected in the second half of 2018, as the Trump administration aims to wipe out Iranian crude exports by November, Morgan Stanley forecasts.

The tougher-than-anticipated U.S. policy means Iran’s production could fall by 1.1 million barrels per day (bpd) at a time of high oil demand. The bank also sees output declining more than it previously forecast in Libya and Angola, leaving the oil market undersupplied by about 600,000 bpd in the second half.

As a result, Morgan Stanley said it now believes international benchmark Brent crude will average $85 a barrel over the next six months. That’s $7.50 higher than its previous estimate.

https://www.cnbc.com/

The shipping industry is back

Indicator of the health of the global economy

90 percent of today’s global trade is carried by ship. The importance of shipping is why it’s one of the most useful indicators of the health of the global economy… And, more recently, the state of China’s economy – the largest consumer of a range of commodities, including iron ore, coal, copper, and zinc, and the largest importer of oil.

The Baltic Dry Index (BDI) tracks the price of shipping raw materials such as metals, grains and fossil fuels by sea. It takes into account the day-to-day changes in shipping rates for the three major carrier sizes: Capesize, Panamax and Supramax.

Shipping companies committed a classic boom/bust cycle mistake back in 2011. At the height of the commodity boom, they ordered a huge number of cargo ships. Global shipping capacity continued to expand by approximately a net 2.5 percent rate each and every year. Meanwhile, according to the World Bank, global trade of goods and services has declined by 7 percent from 2011 to 2016, as commodity prices collapsed.

https://www.businessinsider.com/

U.S. record oil exports bite into Russia, OPEC market share in Asia

U.S. crude production hit all-time highs

Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters.

Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. [EIA/S] The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. WTCLc1-LCOc1

https://www.reuters.com/

Oil price falls

Oil slumps as OPEC, Russia look to raise output amid U.S. surge

Oil prices slumped on Monday, extending steep declines from Friday, as Saudi Arabia and Russia said they may increase supplies and as U.S. production gains show no signs of abating. Brent crude futures were at $75.09 per barrel at 0452 GMT, down $1.35, or 1.8 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $66.22 a barrel, down $1.66, or 2.5 percent. Brent and WTI have fallen by 6.4 percent and 9.1 percent respectively from peaks touched earlier in May.

In China, Shanghai crude oil futures tumbled by 4.8 percent to 457.7 yuan ($71.64) per barrel. The Organization of the Petroleum Exporting Countries (OPEC), as well as top producer but non-OPEC member Russia, started withholding supplies in 2017 to tighten the market and prop up prices, which in 2016 fell to their lowest in more than a decade at less than $30 per barrel.

https://www.cnbc.com/

Huge Chinese Demand for Natural Gas

United States is well-positioned

China’s push for cleaner air and fuel is driving an unprecedented demand for natural gas, and the United States is well-positioned to seize this opportunity and export even more of its growing gas production to the thirsty nation.

U.S. companies have plans for even more liquefied natural gas (LNG) export trains and facilities to come online in the coming years, and this winter’s surge in Chinese LNG demand and imports underpins a second wave of LNG investment in the United States, analysts and company executives believe.

http://www.oilprice.com…  March 13, 2018

America’s oil exports are booming

Prices are climbing

The resurgence of the oil industry can be traced back to what happened in Congress one day in December 2015. That’s when lawmakers ended the 40-year ban on U.S. oil exports. Crude pumped in Texas, Oklahoma and North Dakota could suddenly be shipped overseas.

At the time, a glut of supply was wreaking havoc on the energy industry. Crude eventually crashed to $26 a barrel. But that glut is disappearing, thanks in part to booming oil exports from the United States. Crude that was once trapped inside the country is now going to Europe, Latin America and even China.

The United States exported a record 1.7 million barrels of oil per day in October 2017, according to the most recent stats from the Energy Information Administration. That’s four times as much as in 2015, when federal law prohibited shipping oil to most places except Canada.

http://www.cnn.com…  January 29, 2018

Trump angers US solar installers with panel tariff

Job creator, or job killer?

U.S. President Donald Trump signed into law a steep tariff on imported solar panels on Tuesday, a move billed as a way to protect American jobs but which the solar industry said would lead to thousands of layoffs and raise consumer prices.

The 30 percent tariff on solar panels is among the first unilateral trade restrictions imposed by the administration as part of a broader protectionist agenda to help U.S. manufacturers, but which has alarmed Asian trading partners that produce lower cost goods. The administration also introduced a tariff on imported washing machines. “You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” Trump said as he signed the order.

But the solar industry countered that the move will raise the cost of installing panels, quash billions of dollars of investment, and kill tens of thousands of jobs, raising questions about whether Trump’s move will backfire by triggering mass layoffs.

http://www.reuters.com…  January 24, 2018

United States, planet’s leading crude oil producer in 2018

The United States is poised to ramp up crude oil production by 10% in 2018

The United States will produce about 11 million barrels per day, according to research firm Rystad Energy. Surging shale oil output should allow the United States to dethrone Russia and Saudi Arabia as the planet’s leading crude oil producer, Rystad predicted in a recent report. The U.S. hasn’t been the global leader, nor ahead of both Russia and Saudi Arabia, since 1975.

“The market has completely changed due to the U.S. shale machine,” said Nadia Martin Wiggen, Rystad’s vice president of markets.

The prediction shows how the fracking revolution has turned America into an energy powerhouse — a transformation that President Trump has vowed to accelerate by cutting regulation. This long-term shift has allowed the U.S. to be less reliant on foreign oil, including from the turbulent Middle East.

http://money.cnn.com/… Thu., 04  January 2018

Volkswagen invests $11.8 billion to build China electric cars

15 all-electric and plug-in hybrid vehicles over the next 2 years

Volkswagen Group said on Thursday it plans to spend 10 billion euros ($11.8 billion) by 2025 to develop and manufacture all-electric and plug-in hybrid vehicles as it seeks to comply with upcoming stringent rules in China.

The group, which includes Volkswagen AG (VOWG_p.DE) and Audi AG (NSUG.DE), intends to launch 15 of the so-called new energy vehicles (NEV) models over the next two to three years, and an additional 25 after 2025, China chief Jochem Heizmann told Reuters on Thursday. China’s NEV production and sales quotas, which must be met by 2019, have prompted a flurry of electric car deals and new launches as automakers in China race to ensure they do not fall short. Automakers that do fall short will be required to buy credits.