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Expectation is the root of all heartache, a proverb that resonates particularly well with Asian refiners at the moment after yet another set of monthly OSPs failed to provide them with the outcome they expected. For many years, the Dubai cash-futures spread could be used as a relatively fireproof gauge of what the forthcoming month’s Middle Eastern OSPs would bring about. Over December, the Dubai M1-M3 backwardation eased substantially, with the monthly average lower by $1.65 per barrel, so it was natural that Asian buyers anticipated higher…
Germany said on Tuesday that it could nix the Nord Stream 2 pipeline should Russia invade Ukraine, Reuters has reported. Fears that Russia’s troop movement in the area could spark a war have intensified in recent days. But an important bargaining chip remains in the hands of Germany—if it is willing to use it. That bargaining chip is Nord Stream 2—the controversial natural gas pipeline project that could alleviate a fair chunk of Europe’s energy woes. And Europe is looking pretty desperate in that regard. Nevertheless, Germany…
EDF shares fell 20% in a single day last week. A big move for a giant utility, whose majority stockholder is the French state. Why? Start with these facts: 2022 is an election year, and energy prices in Europe have risen rapidly in recent months due to a natural gas shortage possibly engineered by the Russians. So the French government assured consumers that electricity prices would rise no more than 4% this year. To achieve this aim, it first cut the energy tax to lower prices. Then it told EDF (which primarily produces nuclear power) to raise…
In 2020, as the coronavirus locked down country after country, many energy industry observers and even participants floated the argument that this was the end of the oil era. Demand, these commentators said, had peaked. From now on, it will be a downward spiral for it, they said. These predictions did not age well. Just a year into the pandemic, economies were reopening, growing, and unsurprisingly for many, consuming more crude oil. Last September, Bloomberg reported that some of the world's biggest economies had seen a rebound in oil demand to…
Around the world, countries are exploring ways of repurposing their coal infrastructure, as many governments pledge to stop production of the fossil fuel within the next decade or two. While the U.K. looks to geothermal energy as the potential answer, the U.S. is converting old coal plants into solar farms and nuclear energy sites, and South Africa is using infrastructure for community and sports centers. In Australia, while there are no plans for the government to turn its back on coal any time soon, the world’s largest coal port has announced…
In line with India’s commitment at the COP26 summit in Glasgow last year, the country aims to reach net-zero by 2070. Furthermore, India seeks to meet 50% of its energy needs by 2030 through renewable sources and expand non-fossil fuel power generation capacity to 500 GW in this decade. In light of these targets, the Government of India (GoI) has approved a multibillion dollar plan of setting up transmission projects for power supply from these renewable energy projects. Setting up ‘green energy corridors’ India is setting up…
Norway’s petroleum revenues reached a record-high in 2021, thanks to rising commodity prices, growing global demand, and high production from 94 offshore fields, the Norwegian Petroleum Directorate (NPD) said on Thursday. Stable high production from Norway’s continental shelf is expected to continue over the next few years, the authority said in its Shelf 2021 overview presented today. In the fourth quarter of 2021, the export value of Norway’s oil and gas exceeded $11.5 billion (100 billion Norwegian crowns) in each of the months,…
Cold temperatures that have increased the demand for heat have catapulted U.S. natural gas futures to their strongest start to a year yet. Year to date, February futures rose 27%--a record—as February natural gas futures rose 11.49% to $4.742 per million BTUs at 1:43 pm EST on Wednesday. The catalyst behind the increase in natural gas futures is a batch of freakishly cold weather hitting the East Coast, along with a winter storm that is now barreling toward the south. Millions woke up to a deep freeze on Sunday as a snow bomb cyclone ravaged…
For years EV-related headlines had Tesla in them. It was something of a must - any EV news was either about Tesla or about another company taking on Tesla. But not anymore.  Now that all the Detroit auto giants have joined the race for an electrified transport system, it’s about much more than challenging the dominion of Tesla. Normally, the Consumer Electronics Show in Las Vegas is, true to its name, about consumer electronics. This year, however, the stars of the CES were electric vehicles. Ford’s F-150 Lighting, GM’s Chevy…
Back in 2013, an announcement by the Federal Reserve about pulling back on the central bank's easy-money policies sent markets into a tizzy. Treasury bond yields skyrocketed, junk bond prices fell, emerging-markets stocks tumbled, and stock volatility was off the charts leading to the coining of a new phrase on Wall Street, "taper tantrum." Investors were expecting a similar scenario after the Fed met at its annual gathering at Jackson Hole in August to discuss tapering of asset purchases. But alas, the market appears to be taking everything in…
Dealing with the US shale industry’s produced water is increasingly controversial for operators, a new Rystad Energy report reveals. Even though total produced volumes are projected to hit new record highs in the coming years, treated water is expected to be comparatively lower than in the past, despite water disposal practices increasing oilfield seismic activity, with earthquakes nearly doubling in West Texas alone in 2021. Future growth in US shale activity is tied with an inevitable increase in produced water, as hydraulic fracturing…
2021 ended with a report that Nigeria experienced a deficit of almost 200 million barrels of crude in the first 11 months of the year, mainly due to oil theft. But these experiences are all too common, and not limited to Nigeria alone. Year on year, we are seeing huge oil losses because of theft. Oil theft in Nigeria is made easier by several factors. Aging infrastructure, such as oil pipelines, makes it easier for thieves to get access to the crude. In addition, general underinvestment across the sector and poor security of the country’s…
Rising fuel costs, especially those of natural gas, drove up wholesale electricity prices in all U.S. regions in 2021, the Energy Information Administration (EIA) said in an analysis on Friday. Average wholesale prices for electricity at all major trading hubs in the United States were higher in 2021 than in 2020 as a result of the rising costs of the fuels used for power generation. Natural gas accounts for the single largest share of U.S. electricity generation and represented 40 percent of the fuel used for power in 2020. “The cost of…
Despite persistent supply chain snags, the automobile sector comfortably outperformed the broader market over the past year. Over the past 12 months, the S&P 1500 Composite Automobiles Index posted a 53.7% return compared to 23.4% by the iShares Russell 1000 Growth ETF and 26.1% by the S&P 500. A big reason for the outperformance can be chalked up to the EV revolution. Last week, the Department of Energy reported that 13 new U.S. electric vehicle battery plants are expected to be operational by 2025 in addition to Tesla Inc.'s (NASDAQ:TSLA)…
The context for oil in Guyana is looking even more favorable thanks to the passing of a landmark local content law last week. With greater opportunities for exploration in Guyana’s waters, as well as already strong investments by some of the world’s supermajors, the Caribbean is set to be the oil-producing region of the future. Many companies have started their movement away from traditional oil-producing states, particularly in Europe and North America for several reasons. Firstly, several countries in these regions are currently…
Ford became the best-performing auto industry stock last year, beating investor favorite Tesla as it doubled down on an all-electric future. 2021 was “truly a breakthrough year for Ford … easily the most important year strategically for the company since the financial crisis,” Morgan Stanley analyst Adam Jonas told CNBC. This year saw soaring orders for the company’s Mustang Mach-3 SUV, including an order for 184 of the EVs from several New York City government agencies. The order comes in at $11.5 million, putting the…
As nat gas prices surge in Europe, Germany is kicking off the new year by moving ahead with plans to shutter three of its six remaining nuclear power plants, making good on a commitment made in the aftermath of Japan's disastrous meltdown at the Fukushima Daiichi plant. The decision was championed especially vigorously by the Greens, who are now helping to rule as part of Germany's new "stop sign" ruling coalition. But soaring natural gas prices across Europe mean this concession to the environmental lobby couldn't come at a worse time. It's a…
Most U.S. oil and gas firms expect to raise their capital expenditures next year, as analysts have largely forecast in recent months. Yet, capital available to the industry is constantly shrinking as banks continue to shun the sector due to ESG pressures and as the Biden Administration, with its green agenda and anti-oil policies, is discouraging many in the shale patch from boosting capital budgets beyond the bare minimum.  These were some of the comments and views expressed in the Dallas Fed Energy Survey for the fourth quarter released…
Despite decades of mismanagement, malfeasance and corruption, strict U.S. sanctions and crumbling energy infrastructure, Venezuela’s national oil company PDVSA has stunned observers by reporting a significant increase in crude oil output for November 2021. OPEC’s December 2021 Monthly Oil Market Report shows based on primary sources Venezuela pumped an average of 824,000 barrels daily for November 2021. This represents a notable 9% increase compared to a month earlier and is nearly double the 434,000 barrels per day produced for the…
“A lot of people like snow. I find it to be an unnecessary freezing of water.” – Carl Reiner At its core, the human body is a symphony of chemical reactions. The complexities and interdependencies of the molecular machinery that makes our bodies function are almost too staggering to ponder. As any chemist can attest, chemical reactions are usually quite sensitive to temperature, and sensitivity to temperature varies substantially across reaction pathways. As such, temperature control not only dictates reaction rates, but it also…
In recent weeks, oil market participants have focused on the potential impact of the Omicron variant on demand and the expected surplus in early 2022, apparently forgetting about one major bullish driver next year—the inability of the OPEC+ group to pump as much oil as its rising monthly targets call for.  Estimates of a large oversupply in the first quarter of 2022 have mainly rested on the assumption that OPEC and its non-OPEC allies led by Russia would be able to deliver the planned 400,000 barrels per day (bpd) increase in overall…
The energy sector is increasingly looking to end the year on a high note after U.S. crude oil managed to overcome an early slump to close above $75/bbl in Monday's trading session. Indeed, oil prices are now trading at their highest level in a month, with Brent crude trading near $80 as Omicron fears continue easing. A new study conducted by South African scientists suggests that Omicron could displace the Delta variant of coronavirus because infection with the new variant boosts immunity to the older one. So far, people who contract Omicron are…
A cornerstone of the U.S.’s strategy to counter the growing influence of China and Russia across the Middle East via Iran remains the relationship normalisation deal signed between Israel and the UAE. Not only does this provide the U.S. with some element of control over more of the oil coming from the region, to augment that principally of Saudi Arabia, but also as the oil industry in particular involves the movement of huge amounts of money, ships, equipment, technology and personnel in often disguised ways it allows for increased intelligence-gathering…
The global upstream sector is set for a rebound next year, when overall investment in exploration and production is expected to exceed $400 billion for the first time in three years.  Yet, despite record high cash flows and oil at over $70 a barrel, reinvestment rates will stay at near record low levels in 2022, as companies will maintain discipline in spending and pay more attention to climate and shareholder pressure to decarbonize operations, Wood Mackenzie said in its Global Upstream Outlook 2022 report.    After a year…

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