Monday, May 25, 2020

Excess Oil News

US Crude Futures Plunge to Lowest on Record

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U.S. crude oil futures collapsed below $0 on Monday for the first time in history, amid a coronavirus-induced supply glut, ending the day at a stunning minus $37.63 a barrel as desperate traders paid to get rid of oil.Brent crude, the international benchmark, also slumped, but that contract was nowhere near as weak because more storage is available worldwide.While U.S. oil prices are trading in negative territory for the first time ever, it is unclear whether that will trickle down to consumers…

The Numbers Tell the Story of Oil Industry Crisis

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Global oil producers and refiners are struggling with a series of unprecedented dislocations as the simultaneous epidemic and volume war between Saudi Arabia and Russia rip through every element of the supply chain.Some idea of the extraordinary speed and scale of the disruptions was evident in the "Weekly Petroleum Status Report" published by the U.S. Energy Information Administration on Wednesday.The United States is the world's largest oil consumer and producer…

Brazil Sets Parameters for Mega Oil Auction

Petrobras chief executive Roberto Castello Branco (Photo: Petrobras)

Brazil's national energy council on Thursday published updated parameters for a massive oil auction scheduled for later this year, including minimum levels of profit-sharing with the government, while also urging a shakeup in the refinery sector.The country is set to auction off rights to excess oil in the so-called transfer-of-rights (TOR) offshore area in October, having settled a long-running dispute with Petroleo Brasileiro SA, which had already begun exploration…

Brazil Government to Pay Petrobras $9 Bln

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The Brazilian government reached a landmark deal to pay state-controlled oil company Petróleo Brasileiro SA $9.058 billion for revising a transfer-of-rights oil contract, Energy Minister Bento Albuquerque said on Tuesday.Albuquerque told reporters after a meeting in Brasilia that the agreement opens the way for the government to auction off the excess oil in the transfer-of-rights area, a giant pre-salt oil reserve off the coast of Rio de Janeiro.The payment to Petrobras, as the company is known, is expected to take place on December 13.

Brazil, Petrobras Paving Way for Giant Tender

(Photo: Petrobras)

Brazil's government will announce "within days" a deal with state-run oil company Petrobras to settle a multi-billion-dollar contract dispute and clear the way to auction billions of barrels of oil off of the Brazilian coast, a minister said on Monday.Economy Minister Paulo Guedes told journalists that his team sat down recently with officials at the Mines and Energy Ministry, and that "the deal is done."Reuters reported earlier on Monday that Petroleo Brasileiro SA…

Brazil Likely to Pay Petrobras $10 Bln

(Photo: Petrobras)

The Brazilian government is likely to pay around $10 billion to state-run oil firm Petroleo Brasileiro SA to settle the so-called 'transfer-of-rights' dispute, newspaper Valor Economico reported on Tuesday, though the parties have not agreed on final terms.The financial daily, citing a source with knowledge of the matter, said the payment was a reduction from a previous proposal of $14 billion. Valor in January had reported that the government had agreed on the higher figure…

US Energy Investors Eye Cheap Takeovers as Oil Prices Sink

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Sinking oil prices are turning distressed US energy companies into takeover targets for opportunistic private investors who are prepared to offer expensive debt in return for ownership stakes, as the sector struggles to access traditional forms of bank financing.A slowing global economy and fears of excess oil supply sent the benchmark crude oil index spiraling to as low as US$53 in October from a 14-year high of US$86 earlier that month. Brent Crude was US$58.18 on Tuesday.High operating costs have also reduced oil and gas companies’ margins and free cash flow…

Cenovus Energy Posts Q1 Loss as Shipping Deadlock Drags

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Cenovus Energy Inc posted a first-quarter loss on Wednesday, hurt in part by maxed-out pipelines that hampered efforts to move crude to the United States and weighed on prices of Canadian heavy oil. The differential between Western Canada Select (WCS) and U.S. crude hit $25 in the first quarter ended March 31, much higher than the usual discount. Cenovus, which said in March it was running oil sands production below capacity and stockpiling excess oil due to transportation deadlock, posted a loss of C$914 million ($711 million), or 74 Canadian cents per share.

Cenovus Energy: Transportation Bottlenecks Impact Production

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Canada's Cenovus Energy Inc said on Thursday it was running oil sands production below capacity and stockpiling excess oil due to trouble with exporting through maxed-out pipelines to the United States. The company forecast first-quarter production to double from a year earlier, but blamed transportation bottlenecks for reduced prices of its crude, compared to U.S. alternatives. Canadian heavy oil discount has widened against the West Texas Intermediate (WTI) benchmark recently as growing inventories have led to a supply buildup.

Is Aramco Share Sale Distorting OPEC Policy? Kemp

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By restraining production, OPEC and its allies have succeeded in eliminating excess oil stocks and accelerating the recovery in prices, but they are paying an increasingly high price in terms of market share. U.S. producers will capture all the growth in global oil consumption this year, according to forecasts from the U.S. Energy Information Administration ("Short-Term Energy Outlook", EIA, March 2018). The agency predicts total crude and liquids production will rise by 2.0 million barrels per day (bpd) in 2018.

OPEC Pact Likely to Evolve Rather Than Terminate

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"The lexicon of exit is not found in our vocabulary", OPEC Secretary-General Mohammad Barkindo told reporters on the sidelines of a conference in Cairo on Monday. Ministers from the Organization of the Petroleum Exporting Countries have been anxious to counter speculation about an early end to production curbs. Barkindo was reinforcing the message that the current curbs will be maintained until at least the end of this year and could be continued into 2019 ("Barkindo stresses ongoing cooperation, not exit", Argus, Feb. 12).

Saudi Arabia to Restrain March Oil Exports

Saudi says to keep exports below 7 million bpd in March; OPEC's Barkindo says 2018 oil demand growth to be healthy. Saudi Arabia will restrain its oil exports in March despite lower domestic need for crude as OPEC's leader is pushing to eliminate fully the global oil glut and combat worries about a new cycle of oil price weakness. The kingdom will keep its crude exports below 7 million barrels per day (bpd) in March, despite a maintenance shutdown of the 400,000 bpd SAMREF refinery, the Saudi energy ministry said, confirming a plan given earlier by industry sources.

OPEC: Balanced Oil Market by Late 2018

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OPEC expects the world oil market to be balanced by late 2018 as its deal with other producers to cut output reduces excess oil in storage, even as U.S. and other producers outside the group pump more crude. The Organization of the Petroleum Exporting Countries, in a monthly report, cut its estimate of global demand for its crude in 2018 by 270,000 barrels per day (bpd) to 33.15 million bpd, in part because of higher U.S. supply. But the 14-country producer group said its oil output in November…

Oil Slips in post-OPEC Profit Taking

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U.S. crude stocks likely fell 3.5 million barrels. Oil slipped towards $62 a barrel on Tuesday as investors took profits in the wake of OPEC and other producers' pact to extend output cuts, although an expected drop in U.S. crude inventories lent support. Crude also slipped on concerns that the OPEC-led producer group's Nov. 30 decision to prolong their supply-cutting deal through 2018 could bolster U.S. output, which climbed to nearly 9.5 million barrels per day in September.

Petrobras Disputes Regulator's Offshore Oil Estimates

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Brazilian state-run oil company Petroleo Brasileiro SA said on Monday it has made its own estimates of excess volumes of oil in offshore fields under the so-called transfer of rights program that dispute forecasts published by oil regulator ANP. Petrobras' analysis indicates the upper and lower limits of the excess oil to be found in those areas are below ANP's, it said in a filing referring to the regulator's estimates released on Friday. Last week, ANP estimated…

Harvey Throws a Wrench into US Energy Engine

On August 26 NASA-NOAA's Suomi NPP satellite captured a visible image of Tropical Storm Harvey over Texas. (Credit: NOAA/NASA Goddard Rapid Response Team)

A hurricane in the heart of the U.S. energy industry is expected to upend years of U.S. excess oil capacity and low prices, with the impact expected to reverberate globally and affect energy markets for weeks. Harvey hit the Texas shore as a fierce Category 4 hurricane, causing massive flooding that knocked out 11.2 percent of U.S. refining capacity, a quarter of oil production from the U.S. Gulf of Mexico, and closed ports all along the Texas coast. Gasoline futures…

Oil Market Flashes Warning About Stock Levels in 2018

Oil traders have become increasingly doubtful that OPEC will manage to cut crude stocks down to the five-year average in 2018 and keep them there. Calendar spreads for Brent futures throughout the rest of 2017 and 2018 have weakened significantly since OPEC agreed to roll over its production allocations at the end of May. Calendar spreads (price differences between futures contracts for delivery in different months) are closely linked to the expected level of oil inventories.

OPEC Secretary General meets Kuwait’s Emir

HH Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Emir of the State of Kuwait, receives HE Mohammad Sanusi Barkindo, OPEC Secretary General Photo OPEC

His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Emir of the State of Kuwait, received on January 9 , HE Mohammad Sanusi Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), accompanied by HE Issam A. Almarzooq, Kuwait’s Minister of Oil and its Minister of Electricity & Water, at Bayan Palace, Kuwait City. The Emir commended the OPEC Secretary General on the recent successful meetings the Organization has held among OPEC Member Countries and with non-OPEC nations.

Vitol Says US Assets May Have Become Too Pricey

Trading house Vitol believes physical oil assets in the United States may have become a bit too pricey, potentially cooling appetite for them among trading houses that once viewed the U.S. oil industry as a prime acquisition target. Two years ago, as the U.S. shale oil boom flooded the world with excess oil and the country's drivers began fuelling up in record numbers on the cheaper gasoline, trading houses described U.S. assets as a "Klondike" gold rush. "Private equity and U.S.

Oil Bounces Back From Two-month Lows on Weaker Dollar

Crude futures on Tuesday bounced back from two-month lows, helped by a weaker dollar, but an oil inventory glut and a drop in bullish bets by investors weighed on prices. Brent crude was up $1.29 at $47.54 per barrel at 1218 GMT. U.S. West Texas Intermediate crude was up $1.10 at $45.86 a barrel. OPEC cut its forecast for world economic growth this year citing increased uncertainty following Britain's vote to leave the European Union and in its first 2017 forecast said the pace of oil demand growth would slip.