Support the Arctic Sea Ice Forum and Blog

Author Topic: Oil and Gas Issues  (Read 643288 times)

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3750 on: April 22, 2020, 12:05:09 AM »
What would be the outcome if Trump established a floor on oil prices by creating a 100% import tariff on oil below the US producer break-even point (say $30 bbl)?

Energy security is national security.

The large multi-national corporations (ExxonMobile, TexacoChevron) and the oil refineries oppose tarrifs.  This was briefly floated a couple of weeks ago before the OPEC+ deal was made.

https://www.cnn.com/2020/04/07/business/oil-tariffs-trump-saudi-arabia-russia/index.html

Quote
Trump could tariff foreign oil. That won't end the oil crisis
By Matt Egan, CNN Business
Thu April 9, 2020

New York (CNN Business)The drama playing out in the oil market is not short on oversized characters. But Vladimir Putin and MBS could soon have to make room for a new player: Tariff Man.
President Donald Trump, who proudly calls himself Tariff Man, is threatening to use his favorite economic weapon to protect America's beleaguered oil industry from aggression by Saudi Arabia and Russia.

Quote
"If they don't get along, I would do that," Trump said. "I would do tariffs, very substantial tariffs."

But that negotiating strategy would likely be ineffective because the United States imports little crude from Saudi Arabia and Russia these days. If anything, it could backfire on US refineries that rely on a healthy dose of foreign crude to go full blast.

And the tariff threat has exposed a deep divide within the oil industry itself. Large oil companies, the ones built to withstand cheap crude, are urging Trump not to resort to tariffs.
"The operation of the free market is the most efficient means of resolving the extreme supply and demand imbalances we are now experiencing," ExxonMobil, the largest US oil producer, told CNN Business in a statement.

Quote
Yet independent oil companies, many of which are struggling to survive, are begging Trump to use tariffs to punish Saudi Arabia and Russia for targeting high-cost US producers. That push has been driven by the Domestic Energy Producers Alliance, a coalition of oil companies led by shale pioneer Harold Hamm.

Quote
"I'm confident that among all the different things the administration can do to help the industry, tariffs are at the bottom of the list," said Joe McMonigle, senior energy policy analyst at Hedgeye Risk Management and a former Energy Department official under President George W. Bush.
That's because the United States imported just 401,000 barrels of oil per day from Saudi Arabia in January, according to the latest stats from the US Energy Information Administration. That's down 44% from a year ago and among the lowest monthly total since the mid-1980s. Russia sent just 95,000 barrels of oil to the United States in January.

Taken together, Russia and Saudi Arabia represent just 8% of total US oil imports.
"Tariffs are not really a stick. They would prove futile," said Paola Rodriguez-Masiu, senior oil market analyst at Rystad Energy.

Quote
The United States has certainly made huge strides towards weaning itself off foreign oil. Yet it is not truly independent.

More than 6 million barrels of foreign crude is still imported everyday, most of that from neighbors Canada and Mexico.

"The idea of the US being energy independent is just a political stump speech," said Michael Tran, director of global energy strategy at RBC Capital Markets.

Quote
And there's a reason for those oil imports: America's decades-old refinery system can't run on US shale alone. To profitably churn out gasoline, jet fuel and diesel, these refineries require a significant amount of heavy oil that can only be found overseas. And some of those barrels have already been sidelined by US sanctions against Venezuela.

That means blanket tariffs against all foreign oil, or even just ones imposed against countries outside North America, could be disastrous for US refineries. Refinery margins are already very weak because of the unprecedented collapse in demand for gasoline and jet fuel caused by the coronavirus pandemic.

Gasoline margins are even flirting with negative territory, meaning refineries could actually lose money on each gallon of gasoline produced.

Adding tariffs to that toxic mix would only exacerbate the pain for refiners.

Phoenix

  • Guest
Re: Oil and Gas Issues
« Reply #3751 on: April 22, 2020, 12:21:54 AM »
What would be the outcome if Trump established a floor on oil prices by creating a 100% import tariff on oil below the US producer break-even point (say $30 bbl)?

Energy security is national security.

The large multi-national corporations (ExxonMobile, TexacoChevron) and the oil refineries oppose tarrifs.  This was briefly floated a couple of weeks ago before the OPEC+ deal was made.

https://www.cnn.com/2020/04/07/business/oil-tariffs-trump-saudi-arabia-russia/index.html

Quote

The oil majors are private corporations with a mission to maximize their share price. They aren't tasked with the responsibility of US energy security. They certainly have enormous political clout.

Trump's decisions almost always favor the deepest pockets. I guess the Saudi's, Putin and the oil majors will get what they want.

P-maker

  • Frazil ice
  • Posts: 293
    • View Profile
  • Liked: 52
  • Likes Given: 0
Re: Oil and Gas Issues
« Reply #3752 on: April 22, 2020, 01:00:50 AM »
Watching this end game between a collapsing oil market and a collapsing Arctic sea ice cover is morbid in it's own peculiar way.

Thinking for a moment that either the oil market or the Arctic sea ice extent would recover within a reasonable time period, I came to the conclusion that this seems overly optimistic.

I am sorry to say, but the heydays of oil industry have passed. The urgent need to convert to renewables have arrived. Politics and tweets may be cited by the MSM, but only as long as the public bothers to follow these.

At some time - despite the Corona distance between people - we will start to reflect on the essence of our lifestyle. Do we value interpersonal qualities, or do we settle for plastic overconsumption.

Having spent a wonderful afternoon with my parents-in-law in the sun, I came to think that the former may be more valuable than the latter.

If by any means DT, you may think that prolonging the death fight of the oil industry (as you tried with the coal industry) will do you any good, please think twice.

bluice

  • Guest
Re: Oil and Gas Issues
« Reply #3753 on: April 22, 2020, 11:43:43 AM »
What would be the outcome if Trump established a floor on oil prices by creating a 100% import tariff on oil below the US producer break-even point (say $30 bbl)?

Energy security is national security.

A tariff would keep imported oil out and likely raise US oil price. But the main thing here is what is the goal for US administration. Tariff is just a tool to reach it.

The fact of the matter is there is way too much oil production globally considering the collapse in demand. One way or another supply will meet demand. The market would close the most expensive production, but oil is lot more than free market forces.

An import tariff is a tax. How much are the American consumers willing to pay to have most or all of their oil coming from domestic sources? How about the American oil companies?

gerontocrat

  • First-year ice
  • Posts: 9372
    • View Profile
  • Liked: 3748
  • Likes Given: 28
Re: Oil and Gas Issues
« Reply #3754 on: April 22, 2020, 12:33:17 PM »
What would be the outcome if Trump established a floor on oil prices by creating a 100% import tariff on oil below the US producer break-even point (say $30 bbl)?

Energy security is national security.

A tariff would keep imported oil out and likely raise US oil price. But the main thing here is what is the goal for US administration. Tariff is just a tool to reach it.

The fact of the matter is there is way too much oil production globally considering the collapse in demand. One way or another supply will meet demand. The market would close the most expensive production, but oil is lot more than free market forces.

An import tariff is a tax. How much are the American consumers willing to pay to have most or all of their oil coming from domestic sources? How about the American oil companies?
Shale oil in the USA tends to be light oil. Most of the US refineries and built to refine heavy oil from conventional fields.
Saudi oil is heavy oil, (as is Venzuela oil?)

So Saudi oil goes to the US and US oil is exported to places with refineries set up for light oil.

Tariffs are impractical and self-defeating - not that that would stop that world renowned petrologist  Professor Trump.
"Para a Causa do Povo a Luta Continua!"
"And that's all I'm going to say about that". Forrest Gump
"Damn, I wanted to see what happened next" (Epitaph)

bluice

  • Guest
Re: Oil and Gas Issues
« Reply #3755 on: April 22, 2020, 12:47:24 PM »
Shale oil in the USA tends to be light oil. Most of the US refineries and built to refine heavy oil from conventional fields.
Saudi oil is heavy oil, (as is Venzuela oil?)

So Saudi oil goes to the US and US oil is exported to places with refineries set up for light oil.

Tariffs are impractical and self-defeating - not that that would stop that world renowned petrologist  Professor Trump.
Good point. Not all oil is created equal.

We can probably trust Professor Trump to take care of this one. Just as he took care of American coal workers, North Korean nukes and the corona flu, aka Chinese Virus. His competence is astounding.

Shared Humanity

  • Guest
Re: Oil and Gas Issues
« Reply #3756 on: April 22, 2020, 03:53:22 PM »
What would be the outcome if Trump established a floor on oil prices by creating a 100% import tariff on oil below the US producer break-even point (say $30 bbl)?

Energy security is national security.

No impact at all. Oil storage in the U.S. is about to be completely full. Pumping of nonconventional and conventional oil is about to cease entirely. Trump is furiously working to replenish the strategic reserve, stored in salt dome features that can be found along the Louisiana coast, in order to keep U.S. wells producing.
« Last Edit: April 22, 2020, 03:59:23 PM by Shared Humanity »

Shared Humanity

  • Guest
Re: Oil and Gas Issues
« Reply #3757 on: April 22, 2020, 03:55:55 PM »
^ on cue ...

Trump Directs Mnuchin, Energy Secretary to Create Plan to Support  Oil, Gas Industries as Sell-Off Deepens
https://www.cnbc.com/amp/2020/04/21/trump-orders-plan-to-fund-oil-gas-industries-during-historic-selloff.html

President Donald Trump on Tuesday ordered Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin to put together a plan to get funding to the struggling U.S. oil and gas industries

Trump's promise that he will "will never let the great U.S. Oil & Gas Industry down" came as West Texas Intermediate crude futures continued trading with a negative price, a day after falling below zero for the first time ever.

https://mobile.twitter.com/realDonaldTrump/status/1252591306028785667

The president's tweet did not specify how much money would be made available, or which oil and gas companies would be eligible to receive it.

... Followed by an incomprehensible train of thought word salad of TRump's answers to reporters questions.

We can only hope that his plan to save the oil industry works as well as his plan to save the coal industry did.

The current situation will have the very fortunate consequence of nonconventional sources of oil being permanently removed from U.S. production.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3758 on: April 22, 2020, 10:52:53 PM »
A look at how quickly US fracking operations are declining.

https://oilprice.com/Energy/Crude-Oil/US-Shale-Braces-For-Largest-Ever-Drop-In-Fracking-Activity.html

Quote
U.S. Shale Braces For Largest Ever Drop In Fracking Activity

Quote
We estimate that the total number of started frac operations will end up below 300 wells in April 2020; close to 200 in the Permian and less than 50 wells each in Bakken and Eagle Ford. This translates into a 60% decline in started frac operations between the peak level seen in January to February 2020 and April 2020, as the majority of public and private operators implement widespread frac holidays.

In March we observed an extreme 30% monthly decline in the number of started frac jobs in these three major oil basins, a fall from 807 in February to just 550. Also, nationwide fracking activity, on a completed jobs basis, might have already declined by around 20% in March 2020, according to our estimates.

Quote
If we assume that no new horizontal wells are put on production from April 2020 onwards, total LTO production will decline by 1 million barrels per day (bpd) by May, 2 million bpd by July and by 3 million bpd by October to November, with the Permian Basin accounting for more than half of nationwide base decline.

Quote
The magnitude of the base decline for US LTO sounds extreme in the context of what we see for other supply sources globally. But ironically, the steep decline is actually too late to save prices; despite the oversupply issue, standard operation patterns prevent operators from simply turning the faucet off. These days Permian wells require about two months from the moment frac operations start until they produce first oil, and require about three months before they reach peak output.

Hence, the decline in started jobs which began in March will result in a lower number of wells put on production in May, which ultimately will lead to a drop in peak production in June if normal operational patterns are maintained.

interstitial

  • Grease ice
  • Posts: 609
    • View Profile
  • Liked: 213
  • Likes Given: 76
Re: Oil and Gas Issues
« Reply #3759 on: April 23, 2020, 08:36:03 AM »
The current situation will have the very fortunate consequence of nonconventional sources of oil being permanently removed from U.S. production.

Unfortunately not exactly. All of that oil from drilled wells will eventually be pumped out by somebody.  If we can make the transition from oil fast enough, they are less likely to drill new wells.

Tom_Mazanec

  • Young ice
  • Posts: 3668
    • View Profile
    • Planet Mazanec
  • Liked: 625
  • Likes Given: 319
Re: Oil and Gas Issues
« Reply #3760 on: April 23, 2020, 06:07:40 PM »
Oil: The Storm Before The Really Big Storm
https://www.zerohedge.com/energy/oil-storm-really-big-storm
Quote
The real kicker is that this is not the “negative prices” outcome I predicted a couple weeks back. “All” the April 20 event was was a single facility in a single country running out of future leased storage capacity for the month of May. The April 20 price crash will happen again in the same place and it will be bigger: June WTI futures contracts are now spazzing, and America’s Cushing oil storage and transport nexus undoubtedly will be actually full by then. But even this is nothing but the warmup for the big show.

That will happen when the world runs out of storage.
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3761 on: April 24, 2020, 08:58:37 PM »
I'm not sure which is more surprising at this point, the number of drilling rigs that have been idled or the fact that there drilling is still occurring.

https://oilprice.com/Energy/Energy-General/Rig-Count-Collapse-Continues-Despite-Jump-In-Oil-Prices.html

Quote
Rig Count Collapse Continues Despite Jump In Oil Prices
By Julianne Geiger - Apr 24, 2020

Baker Hughes reported on Friday that the number of oil and gas rigs in the US fell again this week by 64, falling to 465, with the total oil and gas rigs clocking in at 526 fewer than this time last year as U.S. drillers make hasty and significant changes to their operations.

Over the last six weeks, oil and gas rigs combined have shed a total of 327 rigs.

The number of oil rigs decreased for the week by 60 rigs, according to Baker Hughes data, bringing the total to 378—a 427-rig loss year over year. It is the fewest number of active oil rigs since July 2016.

The total number of active gas rigs in the United States fell by 4 according to the report, to 85. This compares to 186 a year ago.


vox_mundi

  • Young ice
  • Posts: 4160
    • View Profile
  • Liked: 2418
  • Likes Given: 322
Re: Oil and Gas Issues
« Reply #3762 on: April 25, 2020, 06:28:24 AM »
VIDEO: 27 Fully Loaded Tankers Parked off L.A. with No Place to Put Their Oil
https://news.usni.org/2020/04/24/video-27-full-loaded-tankers-parked-off-l-a-with-no-place-to-put-their-oil



More than two dozen oil tankers are parked just off the California coast, holding the equivalent of 20 percent of the global daily oil consumption, with nowhere to go.

As of Thursday afternoon, 27 tankers were parked outside the ports of Los Angeles and Long Beach, Calif., essentially turning the waters into a floating oil storage facility. The U.S. Coast Guard is monitoring the phenomenon, which was reported by several West Coast news outlets, including Bloomberg.

Around the world, it’s not uncommon to see cargo ships parked outside busy ports such as Shanghai and Singapore, maritime expert Sal Mercogliano told USNI News. Mercogliano is an associate professor of history at Campbell University in North Carolina and holds a merchant marine deck officer license.

“What you don’t see is fully loaded tankers waiting to come discharge in the United States. That’s unusual,” Mercogliano said. “It is entirely due to the fact that oil has bottomed out in prices. The Russians and OPEC, with dropping oil prices, have just flooded the market with cheap gas.”

... “Due to the unique nature of this situation, the Coast Guard is constantly evaluating and adapting our procedures to ensure the safety of the vessels at anchor and the protection of the surrounding environment,” Cmdr. Marshall Newberry, from Coast Guard Sector Los Angeles/Long Beach, said in a statement. “Coast Guard watchstanders, in partnership with the Marine Exchange of Southern California, are closely monitoring each anchorage to manage the increased number of tank vessels we’re seeing off the California coast.”

... “What the Russians and OPEC are trying to do is drive the American shale producers out of business,” Mercogliano said. “They’re doing a pretty effective job of doing that.”
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

kassy

  • Moderator
  • Nilas ice
  • Posts: 2483
    • View Profile
  • Liked: 1186
  • Likes Given: 1034
Re: Oil and Gas Issues
« Reply #3763 on: April 25, 2020, 01:58:35 PM »
Developers Put a Plastics Plant in Ohio on Indefinite Hold, Citing the Covid-19 Pandemic

The developers of a proposed plastics manufacturing plant in Ohio on Friday indefinitely delayed a final decision on whether to proceed, citing economic uncertainties around the coronavirus pandemic.

...

On the site of a former coal-fired power plant, the facility would have turned abundant ethane from fracking in the Marcellus and Utica shale regions into ethylene and polyethylene, which are basic building blocks for all sorts of plastic products.

The partnership had promised a final investment decision by summer, but announced the delay in a statement on its website.

https://insideclimatenews.org/news/24042020/coronavirus-pandemic-plastics-ohio-indefinite-hold
Þetta minnismerki er til vitnis um að við vitum hvað er að gerast og hvað þarf að gera. Aðeins þú veist hvort við gerðum eitthvað.

oren

  • First-year ice
  • Posts: 6313
    • View Profile
  • Liked: 2319
  • Likes Given: 1964
Re: Oil and Gas Issues
« Reply #3764 on: April 26, 2020, 08:37:42 AM »
I'm not sure which is more surprising at this point, the number of drilling rigs that have been idled or the fact that there drilling is still occurring.
That drilling is still occurring is astounding.

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3765 on: April 26, 2020, 07:38:13 PM »
The image of Big Oil as an unchangeable behemoth has been stripped away by the current crisis.  The low-carbon future may make it permanent.

Op-ed: For Big Oil, this crisis will be different, and it may be irreversible
Published Sunday, Apr 26 2020
By Andrew Logan, senior director of oil and gas at Ceres
• The energy sector’s valuation is shrinking to such a degree that it has become the second smallest segment in the entire S&P 500 index, with its weighting down 80% from a decade ago.
• The most consequential impact of the COVID-19 crisis on the oil and gas sector may be its inability to ever regain investors.
• Crude oil prices’ actual worst case scenario is much more challenging than producers ever let on, or as one industry executive recently said, it raises the fear, “we will disappear as an industry.”
Quote
In 1980, 7 of the 10 largest stocks in the S&P 500 were oil companies, representing 29% of the index. As recently as a decade ago, that weighting was 15%. Today, with Exxon having dropped to No. 28, there are no oil companies in the top 10 for the first time in the history of the S&P, and the industry’s weighting is below 3% — its lowest in history. The oil industry has gone from the mainstream to the fringes of investors’ portfolios with remarkable speed.

The COVID-19 crisis, and the tremendous drop in oil prices that it has brought about, threatens to make this shift permanent by redefining the financial community’s sense of what a worst-case scenario looks like for the oil industry. In effect, we are witnessing a real-time movement of the Overton Window, as an industry that used to tout its resilience at oil prices as low as $40 is now facing a prolonged period where prices may be half that amount or less.


The industry, at least those companies that survive the downturn, needs to prepare for a very different kind of future, one in which volatility and uncertainty around demand will rule the day.

This crisis is confronting the industry with a stress test that mirrors the sort of demand shock it could face in a decarbonizing future. Just last summer, Mark Lewis with BNP Paribas wrote a white paper arguing that advances in electric vehicle technology would eventually force the price of oil down to $10-$20/barrel — precisely where it is trading today, though at the time the idea was derided as unthinkable. What the current situation makes clear is that few if any oil companies can survive that sort of environment. A key difference is that the current situation is likely to be temporary, whereas demand destruction related to the low-carbon transition will be permanent. Why would an investor risk capital in an industry saddled with debt where the main product can go below breakeven costs for long periods of time? …
https://www.cnbc.com/2020/04/26/big-oil-crisis-caused-by-coronavirus-may-be-irreversible.html
People who say it cannot be done should not interrupt those who are doing it.

vox_mundi

  • Young ice
  • Posts: 4160
    • View Profile
  • Liked: 2418
  • Likes Given: 322
Re: Oil and Gas Issues
« Reply #3766 on: April 27, 2020, 10:12:30 AM »
Diamond Offshore Files for Bankruptcy Amid Historic Crude Crash
https://www.bloomberg.com/amp/news/articles/2020-04-26/diamond-offshore-files-for-bankruptcy-amid-historic-crude-crash-k9hfegfh

Diamond Offshore Drilling Inc., the rig contractor controlled by Loews Corp., filed for bankruptcy amid an unprecedented crash in crude prices that’s wrecking demand for oil exploration at sea.

The company listed $5.8 billion of assets and $2.6 billion of debt in a Chapter 11 petition filed in Houston, citing year-end 2019 data. It has about $434.9 million of cash on hand, according to the document.

Diamond owns rigs that can drill in water more than two miles deep. But offshore oil is among the most expensive to produce, putting the company at a disadvantage when prices plunged to less than $30 a barrel.

While newer deepwater projects are less expensive, they still take longer to develop than shale wells and they still can’t compete on costs. What’s more, a global glut of offshore ve
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

P-maker

  • Frazil ice
  • Posts: 293
    • View Profile
  • Liked: 52
  • Likes Given: 0
Re: Oil and Gas Issues
« Reply #3767 on: April 27, 2020, 11:04:59 AM »
Drilling in deep-waters off shore USA is still not legal, as far as I recollect. Moving the rigs off-shore Brazil, may not be such a good idea concerning the current crude oil prices. Drilling on land - using fracking and all kinds of polluting tricks - may neither be such a good idea.

Oil stocks may no longer be such a good idea. After long and hard pressure, my pension scheme some years ago decided to divest. Today,  I am happy to announce that they did the right thing at the right time. I feel sorry for you guys still hung up in a swamp of oil futures and rig opportunists.

gerontocrat

  • First-year ice
  • Posts: 9372
    • View Profile
  • Liked: 3748
  • Likes Given: 28
Re: Oil and Gas Issues
« Reply #3768 on: April 27, 2020, 11:06:20 AM »
https://www.reuters.com/article/us-global-oil-tankers-storage/crude-oil-held-in-sea-storage-hits-new-record-at-160-million-bbls-sources-idUSKBN21Z2A2
Crude oil held in sea storage hits new record at 160 million bbls: sources
Quote
LONDON (Reuters) - Traders are storing an estimated record 160 million barrels of oil on ships - double the level from two weeks ago as they seek to tackle a glut of stocks created by a slide in global demand from the coronavirus, shipping sources say.

Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed a record cut in output from May of 9.7 million barrels per day, or almost 10% of global supply, to help support prices and curb oversupply.

At the same time traders have rushed to find storage on land and at sea in what is believed to be the biggest oil glut in history.

Shipping sources said oil held in floating storage on tankers had reached at least 160 million barrels including 60 supertankers, known as very large crude carriers (VLCCs), which can each hold 2 million barrels. This compared with 25 to 40 VLCCs already chartered with storage options at the start of April and fewer than 10 VLCCs in February, the sources said. Smaller tankers were also being used, which was also boosting volumes being held at anchor, they added.

The last time floating storage reached levels close to this was in 2009, when traders stored over 100 million barrels at sea before offloading stocks. Locations typically include the U.S. Gulf and Singapore, where major oil hubs are situated.

The crude market is currently trading in what is known as contango, where forward prices are higher than immediate prices. This market structure encourages traders to park barrels in storage in the hopes of selling them for a profit later.

in the hopes of selling them for a profit later.
Best of luck, chaps.
Energy- today's prices from Bloomberg
INDEX   UNITS   PRICE   CHANGE   %CHANGE   CONTRACT   TIME (EDT)
CL1:COM
WTI Crude Oil (Nymex)
USD/bbl.                    14.62   -2.32   -13.70%   Jun 2020   4:44 AM
CO1:COM
Brent Crude (ICE)
USD/bbl.                    20.65   -0.79   -3.68%   Jun 2020   4:43 AM
XB1:COM
RBOB Gasoline (Nymex)
USd/gal.                     64.15   -1.97   -2.98%   May 2020   4:42 AM
NG1:COM
Natural Gas (Nymex)
USD/MMBtu               1.65   -0.10   -5.61%   May 2020   4:42 AM
"Para a Causa do Povo a Luta Continua!"
"And that's all I'm going to say about that". Forrest Gump
"Damn, I wanted to see what happened next" (Epitaph)

P-maker

  • Frazil ice
  • Posts: 293
    • View Profile
  • Liked: 52
  • Likes Given: 0
Re: Oil and Gas Issues
« Reply #3769 on: April 27, 2020, 11:22:38 AM »
Gerontocrat,

I know a young guy, who is into selling empty tankers. His business was booming until very recently. Right now, the tanker owners and the World has a potential risk of overflowing the tanker market. Some of the most outdated vessels are hardly sea worthy. Thus, we have created ourselves a potential environmental problem with all these millions of barrels of crude floating around in rusty old ships. No international law will ever be able to control the discharge of oil at negative prices. You need to stop the problem at the source...

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3770 on: April 27, 2020, 03:33:04 PM »
Quote
8:40 am: Oil drops 24% extending recent losses as storage fills
Oil prices fell again on Monday on growing concerns that storage will soon reach capacity. West Texas Intermediate for June delivery fell 24.3%, or $4.11, to trade at $12.88 per barrel, while international benchmark Brent crude traded 6.2% lower at $20.11 per barrel. Each contract is coming off its eighth week of losses in nine weeks.
The coronavirus pandemic has cut worldwide demand by as much as one third, according to some estimates, and as producers continue to pump oil analysts say there will soon be nowhere to store it. "The storage clock is ticking for producers and we are approaching the final countdown if no further action is taken," said Bjornar Tonhaugen, head of oil markets at Rystad Energy. – Stevens (CNBC)
People who say it cannot be done should not interrupt those who are doing it.

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3771 on: April 27, 2020, 08:31:45 PM »
Oil ETF dumps plunging June oil contract as Cramer says hedge funds are trying to crush the fund
Quote
The United States Oil Fund dropped more than 15% on Monday after it announced its latest structural change in a desperate attempt to stay above water. With losses mounting in the fund, which trades under the ticker 'USO' and is popular with retail investors, Jim Cramer said he wishes investors "the best of luck."

On Monday USCF, the fund's administrator, said that over the next three days the USO will sell all of its West Texas Intermediate contracts for June delivery, in favor of longer-term contracts. The fund's rough breakdown will now be as follows: 30% July contract, 15% August contract, 15% September contract, 15% October contract, 15% December contract and 10% in the June 2021 contract.

Over the last week the fund has announced a number of structural changes, with each one increasing its exposure to longer-dated contracts. The fund, which has dropped more than 50% in the last month and currently trades at $2.17, is trying to limit its exposure to the nearest West Texas Intermediate contract as oil prices continue to plunge.

But each change has taken the fund further away from its initial mandate, which was to track the near-term price of oil. According to a filing the changes are in response to "regulatory requirements, current market conditions and risk mitigation measures imposed by USO's FCM [futures commission merchant]."
On Monday the WTI contract for June delivery dropped more than 25%.

'Bury these people'
The fund has attracted record inflows from retail investors looking to profit from a rebound in oil prices, but experts warn that commodity-focused ETFs should not be purchased by those who do not fully understand dynamics in the futures market.

"There are times in life where people know that there's an instrument that is faulty, and they can shoot against that instrument and bury these people," CNBC's Jim Cramer said Monday.

"There is this financial problem: people who are buying the USO they are financial people so if you're a real person or you're a large contractor, a large player ... they can wipe out the USO. And I think that's been what's going on. It's not a conspiracy, it's a reality. When you have an organization that can't take delivery, well you should crush that organization every time, and that's what probably happened," he added. ...
https://www.cnbc.com/2020/04/27/oil-etf-uso-dumps-plunging-june-oil-contract-as-cramer-says-hedge-funds-are-going-for-the-kill.html
People who say it cannot be done should not interrupt those who are doing it.

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3772 on: April 27, 2020, 09:26:52 PM »
Mexican oil platforms start reducing staff due to coronavirus
Quote
MEXICO CITY (Reuters) - Mexico has begun removing staff from Gulf of Mexico oil platforms to limit the spread of the coronavirus, leaving essential personnel on board, state oil firm Petroleos Mexicanos (Pemex) said on Sunday.
...
Pemex has so far confirmed 248 cases of the coronavirus and 28 deaths. Five of the dead were current Pemex workers, 14 were retired employees, one an external employee and eight were relatives of workers.

President Andres Manuel Lopez Obrador has made increasing output at Pemex a top priority of his administration. Earlier this month, he fought to avoid having to commit to cuts of the magnitude of other countries in discussions with the OPEC+ group of oil producers aimed at stabilizing crude prices.  OPEC+ had pressed Mexico to make cuts of 400,000 barrels per day (bpd), but Lopez Obrador agreed only to 100,000 bpd in May and June and said the United States had pledged to make up most of the difference.

The Pemex source said the personnel reductions on platforms would likely lead to a drop in oil output considerably more than the cuts Mexico had agreed to.

Offshore areas in the Gulf produce around 1.4 million bpd of Mexico’s total output of some 1.7 million bpd.

Mexico currently plans to lift its coronavirus quarantine measures starting at the end of May.
https://www.reuters.com/article/us-health-coronavirus-mexico-oil-idUSKCN2280NS
People who say it cannot be done should not interrupt those who are doing it.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3773 on: April 27, 2020, 11:35:02 PM »
South Korea is out of oil storage and the rest of Asia is getting close.

https://oilprice.com/Energy/Energy-General/South-Korea-Has-Run-Out-Of-Oil-Storage.html

Quote
South Korea Has Run Out Of Oil Storage
By Tsvetana Paraskova - Apr 27, 2020

South Korea, the country with the fourth-largest commercial storage capacity in Asia, has just run out of room to store more oil, sources familiar with the matter told Bloomberg on Monday, as available storage capacity everywhere in the world in shrinking fast amid the demand collapse. 

South Korea’s total commercial storage capacity on land, at around 38 million barrels, is fully booked, Bloomberg’s sources say, while storage capacity is also depleting fast in India, a key oil consumer in Asia and the world’s third-largest importer of crude oil.

Quote
With demand collapsing, India’s oil refiners have already filled 95 percent of their combined storage capacity for fuel of 85 million barrels, officials at three state oil refiners told Bloomberg last week. Even the tanks at the 66,000 fuel stations in India are full, as more than a billion people are under lockdown and not driving.

In the first two weeks of April, India’s consumption of gasoline and diesel—more than half of the country’s oil demand—crashed by over 60 percent, according to Bloomberg estimates.


bluice

  • Guest
Re: Oil and Gas Issues
« Reply #3774 on: April 28, 2020, 12:29:32 PM »
As much I'd like to see Big Oil disappear I'm afraid rumours of it's death are premature.

Low prices will remove some of the excess production capacity leaving the rest in better position when demand picks up again. This is bad news for high cost producers such as Canadian tar sands and the least competitive US shale oil companies. Maybe not so bad for Big Oil and OPEC+ state owned enterprises.


gerontocrat

  • First-year ice
  • Posts: 9372
    • View Profile
  • Liked: 3748
  • Likes Given: 28
Re: Oil and Gas Issues
« Reply #3775 on: April 28, 2020, 01:31:48 PM »
As much I'd like to see Big Oil disappear I'm afraid rumours of it's death are premature.

Low prices will remove some of the excess production capacity leaving the rest in better position when demand picks up again. This is bad news for high cost producers such as Canadian tar sands and the least competitive US shale oil companies. Maybe not so bad for Big Oil and OPEC+ state owned enterprises.
I think it's time to get out of the prediction business. All I get from it is perpetual self-humiliation.

Meanwhile, 

This morning WTI Crude June contract is at around 12 bucks a barrel,  not reaching 30 bucks a barrel until March '21, and the giddy heights of 49 bucks by August 2028.

Brent crude is at 20 bucks.

Even at approaching $50 per barrel, while a large part of the oil industry can be profitable, the countries that rely on oil royalties will go through varying degrees of horrible economic and social times - (and that includes Alberta & Alaska, though that maybe a reprieve for wildife).

https://www.barchart.com/futures/quotes/CL*0/futures-prices

"Para a Causa do Povo a Luta Continua!"
"And that's all I'm going to say about that". Forrest Gump
"Damn, I wanted to see what happened next" (Epitaph)

gerontocrat

  • First-year ice
  • Posts: 9372
    • View Profile
  • Liked: 3748
  • Likes Given: 28
Re: Oil and Gas Issues
« Reply #3776 on: April 28, 2020, 03:20:06 PM »
Some pre-Covid graphs attached on US use of Natural Gas.

Even before the covid-19 hit the US economy, the natural gas industry was in deep trouble in the USA. Yet the graphs show steadily increasing demand for the product.

A testament to the downside of totally unregulated commerce and industry ?
"Para a Causa do Povo a Luta Continua!"
"And that's all I'm going to say about that". Forrest Gump
"Damn, I wanted to see what happened next" (Epitaph)

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3777 on: April 29, 2020, 12:24:19 AM »
US transportation fuel usage is down by more than 30%.  We're running out of places to store the crude oil because the refiners don't want it.  But don't worry, the very Stable Genius is actively tweeting away as we type.

https://www.washingtonpost.com/climate-environment/trump-faces-big-decisions-on-energy-industry-rescue-as-us-runs-out-of-places-to-store-abundance-of-oil/2020/04/26/fe0f6ee8-8632-11ea-a3eb-e9fc93160703_story.html

Quote
Trump faces big decisions on energy industry rescue as U.S. runs out of places to store abundance of oil
By Steven Mufson
April 27, 2020 at 12:20 p.m. PDT

The White House’s scramble to contain an energy market crisis became harder on Monday, when U.S. crude oil prices plunged more than 20 percent, an oil services company declared bankruptcy, and a flotilla of about 20 Saudi Arabian supertankers continued their approach to the Gulf of Mexico.

Quote
Thanks to stay-at-home orders and the cratering U.S. economy, consumption of car, truck and jet fuel has tumbled 31 percent since March 13 as people comply. Pioneer Natural Resources chief executive Scott Sheffield estimates that production cuts totaling 15 million to 20 million barrels a day are needed.

Quote
What Trump once called “energy dominance” suddenly looks like weakness. Trump wants to help the industry, which he said on Friday had been “unnecessarily hurt.” In addition, a dozen senators from Republican states have been urging him to do something. So, the president has directed Mnuchin and Energy Secretary Dan Brouillette to come up with a plan to channel funds to the industry. “We will never let the great U.S. oil & gas industry down,” Trump tweeted.

Quote
The most likely move would be to let companies lease storage space in the Strategic Petroleum Reserve to ease the supply glut.

It would be easier to buy supplies for the reserve, which has about 79 million barrels of spare capacity. “We’re going to have that filled up pretty soon,” Trump said Friday, “and we’re doing it at a very, very low cost.” But that requires an appropriation, and Democrats in Congress are reluctant to approve money to bail out the industry without helping the renewable energy business, too, by extending tax credits. Trump doesn’t want to do that.

Even if US oil production falls from the high of 13 million barrels per day to 8 million barrels per day, there's less than 10 days of storage capacity left in the strategic petroleum reserve.

Quote
Oil service firms continue to lay off more workers as the nation’s drilling rig count plunged to 465 on Friday, the fifth consecutive week of decline and down 53 percent from a year ago, according to the oil field service company Baker Hughes.

The amount of oil fed into refineries sank to its lowest level since September 2008, when the financial crisis hit.

The financial sector could feel the ripple effects as oil companies carrying high levels of debt face deadlines for loan or bond payments.

Quote
During the week ending April 17, U.S. oil production slipped 900,000 barrels below its record 13.1 million-barrels-a-day level just a month ago, according to the American Petroleum Institute. BP cut 70,000 barrels a day of production; more production cuts may be imminent. U.S. production will soon drop 2 million barrels a day, Brouillette, the energy secretary, told the Group of 20 nations recently.

Quote
Meanwhile, the scramble for storage continues. The number of tankers being used as floating storage has increased from around 10 in February to more than 60 today, carrying a record 160 million barrels of oil. The price of renting a tanker has soared from about $20,000 a day in February to more than $150,000 a day last week.

Richard Rathbone

  • Grease ice
  • Posts: 822
    • View Profile
  • Liked: 136
  • Likes Given: 11
Re: Oil and Gas Issues
« Reply #3778 on: April 29, 2020, 02:20:25 AM »


Quote
The most likely move would be to let companies lease storage space in the Strategic Petroleum Reserve to ease the supply glut.

It would be easier to buy supplies for the reserve, which has about 79 million barrels of spare capacity. “We’re going to have that filled up pretty soon,” Trump said Friday, “and we’re doing it at a very, very low cost.” But that requires an appropriation, and Democrats in Congress are reluctant to approve money to bail out the industry without helping the renewable energy business, too, by extending tax credits. Trump doesn’t want to do that.

I'm not sure what volume traded at negative prices, but there was at least some oil that they would have been paid to put into the SPR rather than needing funds to to buy it.

blumenkraft

  • Guest
Re: Oil and Gas Issues
« Reply #3779 on: April 29, 2020, 06:53:32 PM »
The Corona Oil Shock


Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3780 on: April 30, 2020, 12:25:45 AM »
^^^
Outstanding interview.  Well worth listening to.  Thanks for posting.

sidd

  • First-year ice
  • Posts: 5687
    • View Profile
  • Liked: 790
  • Likes Given: 0
Re: Oil and Gas Issues
« Reply #3781 on: May 01, 2020, 12:24:42 AM »
Saud-USA axis weakens:

"Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom"

"Trump told the Saudi ruler he was going to “cut them off” the next time Congress pushed a proposal to end Washington’s defense of the kingdom, according to the source with knowledge of the call. Trump also publicly threatened in early April to impose tariffs on oil imports from Saudi Arabia and Russia. "

"The prospect of losing U.S. military protection made the royal family “bend at the knees” and bow to Trump’s demands"

https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport/special-report-trump-told-saudis-cut-oil-supply-or-lose-u-s-military-support-sources-idUSKBN22C1V4

sidd


sidd

  • First-year ice
  • Posts: 5687
    • View Profile
  • Liked: 790
  • Likes Given: 0
Re: Oil and Gas Issues
« Reply #3782 on: May 01, 2020, 12:27:45 AM »
Shell cuts dividend, first cut since WWII:

" suspended the next tranche of its share buyback programme."

"The move came as it announced a 46% fall in first-quarter net income to $2.9bn (£2.3bn)."

"Shell is cutting its quarterly dividend by two-thirds, from 47 cents to 16 cents, starting in the first quarter of this year. "

"The company debt has ballooned from $1bn in 2005 to $73bn today. During that same period, it's paid out $153bn in dividends and spent $48bn buying back its own shares. "

https://www.bbc.com/news/business-52483455

sidd

vox_mundi

  • Young ice
  • Posts: 4160
    • View Profile
  • Liked: 2418
  • Likes Given: 322
Re: Oil and Gas Issues
« Reply #3783 on: May 01, 2020, 12:28:27 AM »
Remote, Forbidding, and Infected: The Coronavirus Is Spreading in the Russian Arctic
https://www.newyorker.com/news/dispatch/remote-forbidding-and-infected-the-coronavirus-is-spreading-in-the-russian-arctic/amp

Talk of a coronavirus quarantine in Belokamenka, a Russian village on a remote bay in the Barents Sea, began to leak out in early April. Since 2017, tens of thousands of construction workers from across the country—and also from China, Turkey, and Central Asia—have been travelling in and out of the village to build a supply facility for a twenty-one-billion-dollar liquid-natural-gas project run by Novatek, one of Russia’s largest privately held energy companies.

Early this month, several workers posted on social media about how, after arriving in the village, they were placed in mandatory quarantine, presumably so that the infected among them would not inadvertently spread the virus at the sprawling construction site. For many, the quarantine only lasted four or five days, instead of two weeks, as is recommended by most health officials—and those newly arrived workers lived in tightly packed dormitories and ate together in a crowded dining hall. Videos posted on social media showed lines of hundreds of people waiting to pass through checkpoints or be tested for the virus.

Within several days, dozens of workers at the Belokamenka site tested positive for COVID-19. By mid-April, that number grew to more than two hundred; the local administration declared a state of emergency, and medics from the federal emergencies ministry arrived to build a field hospital in a snow-covered spot near the construction site.

... “Everything is being kept closed and secret,” one man told me. “So there’s no panic, I guess.” One thing was obvious, though. “The more of us there are crammed together, the more infections there will be,” he said. As of Monday, there were eight hundred and sixty-seven officially registered cases of COVID-19 in Belokamenka—more than in most entire Russian regions. The BBC Russian Service declared the village “the largest recorded outbreak in Russia.”

... one particularity of the virus in Russia has been its spread in remote settlements above the Arctic Circle, in places such as Belokamenka—forbidding outposts that exist to service the country’s lucrative oil-and-gas industry. Otherwise cut off from the rest of the world by geography and climate, they are connected to the rest of Russia and beyond through their ever-rotating workforces—which, in the time of a global pandemic, serve as a dangerously efficient vector for spreading the virus.

In recent weeks, a number of far-flung oil and gas fields across Siberia and Yakutia—a Russian republic that is five times the size of France—have been hit by their own localized COVID-19 outbreaks. Dozens of people have tested positive for the coronavirus at the Chayanda natural-gas field in Yakutia, which provides most of the gas for the Power of Siberia pipeline, the cornerstone of a four-hundred-billion-dollar energy deal that Russia signed with China, in 2014.



On Monday evening, hundreds of workers gathered in an angry protest against conditions at the site; a video of the demonstration appeared online. In it, one worker yells, from the crowd, “What are we, pigs?” Another says, “Where is the quarantine? Where are the masks? There is nothing! They’ve crammed us all into dormitories, where we’re infected with who knows what.” The governor of Yakutia announced that all ten thousand workers at the Chayanda field have since been tested, and, although the results are not ready yet, “the number of sick people there is significant.”

As of Tuesday, more than a hundred and thirty workers from the Yamal liquified natural gas project have tested positive for COVID-19.

Another hot spot is Sabetta, a port on the Kara Sea, which serves as a transport hub for liquified natural gas (L.N.G.) from the Yamal Peninsula, a four-hundred-mile stretch of permafrost jutting into the Arctic Ocean. In 2017, Putin himself launched the Yamal L.N.G. project, with great fanfare. Last year, it exported eighteen and a half million tons of L.N.G. on ice-breaking tankers.

... In late March, a new contingent of workers—several hundred people—passed through the Sabetta airport. Chaos ensued: some newly arriving crews were put under mandatory quarantine before being let into the general population; others were sent to work right away. “It all started from there,” one worker at the Yamal L.N.G. site told me. Two weeks later, in mid-April, a handful of people reported fevers and other common COVID-19 symptoms. As at Belokamenka, the Yamal bosses said little, even as the first suspected coronavirus patients went to hospitals in nearby cities. As of Tuesday, more than a hundred and thirty workers from the site have tested positive for COVID-19.

... at first, the virus came to the Arctic from the “mainland,” as the rest of Russia is known among locals and workers in the far north, and now it risks reëntering the general population through the country’s Arctic hot spots. In late April, nearly two dozen workers from the Yamal L.N.G. site who returned home to Buryatia, a Russian republic near the border with China, tested positive for the virus. At Belokamenka, an evacuation flight last week—to take ostensibly uninfected workers to Yekaterinburg, a city in the Ural Mountains, nearly two thousand miles away—was cancelled at the last minute, after a number of would-be passengers tested positive.

... On Tuesday, I saw a list of those who tested positive in the latest round of testing at Belokamenka: eleven hundred and forty-five people, out of a work force of four or five thousand.  ...



-----------------------------

Sabetta Airport Closes as Coronavirus Spreads Across Russia’s Arctic Oil and Gas Fields
https://www.arctictoday.com/sabetta-airport-closes-as-coronavirus-spreads-across-russias-arctic-oil-and-gas-fields/

... Commuter workers at Russian’s remote oil and gas fields appear to have brought infection to outposts in the region. The closure of the airport in Sabetta, on the Yamal Peninsula, comes as more than 140 people now are registered as carriers of the coronavirus in the remote industrial town.

Flight Radar data obtained by the Barents Observer on Saturday showed that an aircraft from the Russian Ministry of Emergency Situations was en route to Sabetta. The aircraft, an Ilyushin-76 transport plane, is similar to the flights that on April 12 brought a mobile hospital to Novatek’s Belokamenka plant outside Murmansk.

In Belokamenka, about 900 workers are now registered as infected.

... The decision was soon protested by Novatek. Subsidiary company Yamal LNG argued that regional health authorities are not entitled to close an airport and has addressed “competent authorities” with the complaint, RBC reports.
------------------------------
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Tom_Mazanec

  • Young ice
  • Posts: 3668
    • View Profile
    • Planet Mazanec
  • Liked: 625
  • Likes Given: 319
Re: Oil and Gas Issues
« Reply #3784 on: May 01, 2020, 10:53:06 AM »
GAME OVER FOR OIL, THE ECONOMY IS NEXT
https://www.artberman.com/2020/04/27/game-over-for-oil-the-economy-is-next/
Quote
Those who see an opportunity for renewable energy in the demise of oil need to think again. The manufacture of solar panels, wind turbines and electric cars depend on diesel all along the supply chain from extraction to distribution of finished products. A world in economic depression will default to the cheapest and most productive fuels. Oil will be cheap and abundant for a long time. There will be little money or appetite for the massive equipment changes that renewable sources require. Climate change will not be high in the consciousness of people struggling to survive.
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3785 on: May 01, 2020, 04:45:24 PM »
Exxon loses $610 million in the first quarter on writedowns tied to plunging oil
Quote
Exxon Mobil on Friday reported its first loss in decades as oil prices plunged to historic lows following a drop-off in demand caused by the coronavirus.

The oil giant lost $610 million in the first quarter due to $2.9 billion in writedowns tied to falling oil prices. Exxon posted a GAAP loss of 14 cents per share, and a non-GAAP profit of 53 cents per share. In the same quarter a year earlier the company earned $2.35 billion, or 55 cents per share, on revenue of $63.63 billion.

"COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins," CEO Darren Woods said in a statement.
The company said that oil-equivalent production rose 2% year-over-year to 4 million barrels per day.
https://www.cnbc.com/2020/05/01/exxon-mobil-xom-earnings-q1-2020.html


Chevron says results will be 'depressed' as long as oil stays low, takes steps to protect dividend
Quote
Chevron shares dropped on Friday after the company warned that results will remain depressed as long as oil prices stay low, and said it was further cutting its 2020 capital spending plan.

For the first quarter, Chevron reported earnings per share of $1.93, which included $680 million in one-time favorable items, and $31.5 billion in revenue, helped by downstream margins and increased production in the Permian Basin. In the same quarter a year earlier, the oil giant earned $1.39 per share on $35.20 billion in revenue.

Production at the nation's second-largest oil company rose 6% year over year to reach a record high of 3.24 million barrels per day of net oil-equivalent production. Chevron said production in the Permian rose 48% year over year.

But looking forward, the company said lower oil prices will have a significant impact. "Financial results in future periods are expected to be depressed as long as current market conditions persist," the company said. Chevron said that in the first quarter, the average price per barrel of crude and natural gas liquids was $37, roughly 23% lower than a year earlier, while the sale price for natural gas dropped from $1.64 to 60 cents.
https://www.cnbc.com/2020/05/01/chevron-cvx-earnings-q1-2020.html

“Shares of Exxon have shed 34% this year.”
“Shares of Chevron have shed 23% this year.”

Pumping more; earning less.  Divestment looking better and better.
People who say it cannot be done should not interrupt those who are doing it.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3786 on: May 01, 2020, 05:22:21 PM »
GAME OVER FOR OIL, THE ECONOMY IS NEXT
https://www.artberman.com/2020/04/27/game-over-for-oil-the-economy-is-next/
Quote
Those who see an opportunity for renewable energy in the demise of oil need to think again. The manufacture of solar panels, wind turbines and electric cars depend on diesel all along the supply chain from extraction to distribution of finished products. A world in economic depression will default to the cheapest and most productive fuels. Oil will be cheap and abundant for a long time. There will be little money or appetite for the massive equipment changes that renewable sources require. Climate change will not be high in the consciousness of people struggling to survive.

Solar and wind have been cheaper than new fossil fuel plants for two years now.  Building new solar and wind plants is cheaper than operating existing coal, and increasingly, natural gas plants in most of the world since last year.

Stop posting denier talking points that have been repeatedly debunked.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3787 on: May 01, 2020, 05:46:08 PM »
Shutting down producing oil wells often leads to problems when re-starting production.  This is a very long article that explains some of the problems and why many of the wells shut down during the Covid recession probably won't be restarted when the recession is over.

https://oilprice.com/Energy/Crude-Oil/The-Oil-Wells-That-Will-Never-Recover.html

Quote
The Oil Wells That Will Never Recover
By David Messler - Apr 30, 2020

Quote
I get a lot of questions from readers of my articles, and students in my Reservoir Drill-In Fluids design classes about what happens with oil and gas wells that are shut-in. As discussed, there is a lot of this going on right now due to the oil glut we are experiencing. That answer is generally, that there are definite problems associated with doing this, but it’s not guaranteed they will occur in every instance. Sometimes you just get lucky. More often than not though, the sub-surface gremlins that reside in oil and gas reservoirs are going to get you. There is a reason that service companies earn billions of dollars annually pumping stuff down wells to fix perceived problems with production. So the question before us now is what are some of the mechanisms that cause problems restoring production to oil and gas wells after they have been shut-in?

Quote
Early onset of water production

First, water production is the death of oil production. Another oil production maxim is: as permeability to water increases, permeability to oil declines.



Quote
Here is a fairly common producing scenario. When you have an extended producing interval, not all sectors contribute equally to production. Over time this can lead to "water coning." This can be tolerated for a time, but eventually the shift toward higher water production will make the well uneconomic to produce. In the case of a shut-in scenario the water contact may encroach prematurely into rock that was producing oil. The graphic below illustrates this problem in horizontal wells. There isn't a lot you can do about this once it occurs. Prevention is the cure, and that is the science behind "Production or Reservoir Engineering."

Quote
Emulsions

With oil production you change the state of fluids-oil, condensate, and connate brines, that have rested in equilibrium with each other for millions of years. They were doing great, and then we oilies come along, and disturb the peace and quiet. This happens in a relative instant on the geologic time-scale. When incompatible substances are mixed, emulsions can be formed. The combination of oil/water/and oil of varying quality can form very thick, nasty emulsions in situ that will definitely restrict further production of oil from the reservoir. The picture below shows the effect of mixing various crudes with oilfield brines.



Quote
The larger point is not who causes the problems that create emulsion, but rather that they are a routine hurdle to efficiently producing wells. In the well shut-in scenario we are discussing there is potential for emulsions like those shown in the example above to be created in-situ, and they will impede production initially and perhaps as the result of remedial stimulation attempts that go wrong.

One final problem-fines

This one is actually related to the onset of water production. Most oil and gas reservoirs are water-wet. What this means is that the individual grains that makeup the rock oil of an oil reservoir are coated with a film of water. If that changes to where they are coated with oil we say we have changed the "wettability" of the rock. This is bad for oil production.

Fixing those problems to bring the wells online will be expensive, so it won't occur unless the price of oil increases.  The lasting effects of this pandemic will ensure that demand doesn't return to pre-pandemic levels. (How many people are going to want to fly or book a vacation cruise?  If you've been teleworking to social distance, do you want to hop back in your car for an hour long commute when the pandemic is over?)

So high cost wells won't be needed.  That means the Canadian tar-sands, US fracking fields, Brazilian pre-sal and African deep offshore fields are done.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3788 on: May 01, 2020, 05:55:59 PM »
US oil production down 900,000 bpd in a few weeks and more cuts on the way.

https://oilprice.com/Energy/Crude-Oil/The-Wave-Of-Shale-Well-Closures-Has-Finally-Begun.html

Quote
The Wave Of Shale Well Closures Has Finally Begun
By Alex Kimani - Apr 30, 2020

Quote
Oil production in the country tumbled sharply to 12.2 million bpd in the third week of April, a good 900,000 bpd less than the record peak of 13.1 million bpd recorded just a month prior. That's a 7% production cut in the space of only a few weeks and the lowest level since July.

A lot more could be on the way.

Quote
Rystad's head of shale research, Artem Abramov, has estimated that the biggest shale fields--Permian, Eagle Ford, and Bakken--will cut a further 900,000 bpd, 250,000 bpd, and 400,000 bpd, respectively, throughout 2Q20, with shut-ins accounting for a staggering 60% in the early stages.

Quote
A well shut-in is considered a drastic action of last resort mainly because it can result in huge or even total loss of production.

That's a big consideration in these dire times, where even oilfield values are descending into negative territory due to liabilities such as plugging wells and land remediation.

Quote
As Bob Bracket of Bernstein Research revealed last week, "Shut-ins are not easy decisions. When production shuts-in, problems arise. Multi-phase well flows begin to separate out, while problematic hydrates, waxes, asphaltenes form which will have serious economic implications," citing numerous examples of fairly large wells with flows exceeding 1,000 barrels/day that could not be brought back to life after being shut-in.

That's the main reason why even heavily indebted shale companies, including bankrupt ones like Whiting Corp. (NYSE:WLL), insist on continuing to pump at all costs.

California Resources Corp. (NYSE:CRC) is a $133.7M (market cap) company drowning in debt to the tune of more than $4 billion due by the end of 2022. The company's average all-in cost per barrel of $35 means that it's losing ~$20 for each barrel of crude it pumps. Yet, the company is unable to shut-in its wells because they require a continuous injection of steam to keep them alive.


Tom_Mazanec

  • Young ice
  • Posts: 3668
    • View Profile
    • Planet Mazanec
  • Liked: 625
  • Likes Given: 319
Re: Oil and Gas Issues
« Reply #3789 on: May 01, 2020, 06:48:13 PM »
GAME OVER FOR OIL, THE ECONOMY IS NEXT
https://www.artberman.com/2020/04/27/game-over-for-oil-the-economy-is-next/
Quote
Those who see an opportunity for renewable energy in the demise of oil need to think again. The manufacture of solar panels, wind turbines and electric cars depend on diesel all along the supply chain from extraction to distribution of finished products. A world in economic depression will default to the cheapest and most productive fuels. Oil will be cheap and abundant for a long time. There will be little money or appetite for the massive equipment changes that renewable sources require. Climate change will not be high in the consciousness of people struggling to survive.

Solar and wind have been cheaper than new fossil fuel plants for two years now.  Building new solar and wind plants is cheaper than operating existing coal, and increasingly, natural gas plants in most of the world since last year.

Stop posting denier talking points that have been repeatedly debunked.
You mentioned gas and coal. The article talks about oil, which has become preposterously cheap.
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3790 on: May 01, 2020, 07:18:40 PM »
GAME OVER FOR OIL, THE ECONOMY IS NEXT
https://www.artberman.com/2020/04/27/game-over-for-oil-the-economy-is-next/
Quote
Those who see an opportunity for renewable energy in the demise of oil need to think again. The manufacture of solar panels, wind turbines and electric cars depend on diesel all along the supply chain from extraction to distribution of finished products. A world in economic depression will default to the cheapest and most productive fuels. Oil will be cheap and abundant for a long time. There will be little money or appetite for the massive equipment changes that renewable sources require. Climate change will not be high in the consciousness of people struggling to survive.

Solar and wind have been cheaper than new fossil fuel plants for two years now.  Building new solar and wind plants is cheaper than operating existing coal, and increasingly, natural gas plants in most of the world since last year.

Stop posting denier talking points that have been repeatedly debunked.
You mentioned gas and coal. The article talks about oil, which has become preposterously cheap.

The article claims that people will use the lowest cost forms of energy.  For electricity, that's solar and wind.  Oil is used for transportation, which due to teleworking, fear of being trapped on a cruise ship or breathing in re-circulated viruses on an airplane, will decline even when the pandemic is over.

Please think about what you're posting before posting it.  Does in make sense?  If not, don't post it.  Otherwise, you're just spreading denier nonsense.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3791 on: May 01, 2020, 07:23:58 PM »
I posted this in the 2020 Emissions thread, and it applies here.

https://oilprice.com/The-Environment/Global-Warming/CO2-Emissions-Expected-To-Fall-To-8-Year-Lows.html

Quote
CO2 Emissions Expected To Fall To 8-Year Lows
By Irina Slav - May 01, 2020

The International Energy Agency expects carbon dioxide emissions to decline by 8 percent this year due to the devastation the coronavirus wreaked on energy demand.

The agency said in the new edition of it Global Energy Review that the annual drop in oil demand this year could reach 9 percent, which translates into a loss of 9 million bpd. This would make 2020 oil demand equal to the average levels in 2012.

Quote
There is good news for renewables, however. According to the IEA, demand for energy from renewable sources will actually increase this year, bucking the trend. This would be possible thanks to low operating costs and “preferential access to many power systems”.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3792 on: May 01, 2020, 07:32:11 PM »
Given that many oil frackers were in deep debt before the Covid 19 recession hit, it will be difficult for them to raise money to restart production when the recession is over.  The loss of revenues during the recession will finish off all but the largest companies (and the ones owned by oil producing nations).

https://oilprice.com/Energy/Energy-General/Covid-19-Set-To-Wipe-Out-1-Trillion-In-Oil-Production-Revenues.html

Quote
Covid-19 Set To Wipe Out $1 Trillion In Oil Production Revenues
By Tsvetana Paraskova - Apr 30, 2020

Oil and gas exploration and production (E&P) companies around the world are set to see their total annual revenues plunge by a whopping US$1 trillion this year, due to the coronavirus pandemic and its effect on global oil demand and prices, Rystad Energy said in an analysis this week.

Quote
The current extraordinary times for the oil industry will also result in shrinking cash flows for E&P companies. Total free cash flow is now seen at US$141 billion for 2020, which would be just one-third of the free cash flow oil and gas E&P firms generated in 2019. Rystad’s estimates for cash flows are based on a base-case oil price scenario of $34 a barrel in 2020 and $44 per barrel in 2021, “so there is a considerable downside risk if the current low-level prices persist.”

“This drop not only undermines the companies’ solidity and reduces money available for investments and dividends, but also significantly cuts government tax revenue. It will be challenging for petro-states such as Russia and many Middle Eastern countries to sustain their budgets,” Rystad Energy’s upstream analyst Olga Savenkova said.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3793 on: May 01, 2020, 08:05:46 PM »
The IEA is forecasting that demand for fossil fuels won't recover from the Covid-19 recession.  Only renewables will see growth in the energy sector following the recession.

https://www.theguardian.com/business/2020/apr/30/covid-19-crisis-demand-fossil-fuels-iea-renewable-electricity

Quote
Covid-19 crisis will wipe out demand for fossil fuels, says IEA
Renewable electricity may be only source to withstand biggest shock in 70 years
Jillian Ambrose Energy correspondent
Thu 30 Apr 2020 00.00 EDT

Renewable electricity will be the only source resilient to the biggest global energy shock in 70 years triggered by the coronavirus pandemic, according to the world’s energy watchdog.

The International Energy Agency said the outbreak of Covid-19 would wipe out demand for fossil fuels by prompting a collapse in energy demand seven times greater than the slump caused by the global financial crisis.

In a report, the IEA said the most severe plunge in energy demand since the second world war would trigger multi-decade lows for the world’s consumption of oil, gas and coal while renewable energy continued to grow.

Quote
Renewable energy is expected to grow by 5% this year, to make up almost 30% of the world’s shrinking demand for electricity. The growth of renewables despite a global crisis could spur fossil fuel companies towards their goals to generate more clean energy, according to Birol, but governments should also include clean energy at the heart of economic stimulus packages to ensure a green recovery.

“It is still too early to determine the longer-term impacts,” said Birol. “But the energy industry that emerges from this crisis will be significantly different from the one that came before.”

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3794 on: May 01, 2020, 11:11:25 PM »
Renewables with storage will beat out natural gas in the post-Covid-19 recession.

http://redgreenandblue.org/2020/05/01/energy-storage-ramps-bury-coal-natural-gas/

Quote
Energy storage ramps up to bury coal and natural gas
Published on May 1st, 2020

Everybody knows that coal is on the way out, but the latest electricity report from BloombergNEF is something of a shocker. It casts a shadow of gloom over natural gas, too. Low-cost renewables are creeping into gas territory, helped along by falling costs for energy storage. In fact, according to BNEF, energy storage is now a cheaper alternative to building new gas “peaker” plants in some regions. And by some they mean Europe, which was supposed to be a lifeline for US gas exporters.

Quote
BNEF looked at two-hour battery energy storage and found that batteries now beat the cost of building new gas peaker plants in major gas importing regions, including Europe as well as China and Japan.

There’s more where that came from. BNEF makes the point that scale is driving down costs, with the average capacity of battery storage now weighing in at 30 mWh, up  from the 7 mWh average of just four years ago. That’s bringing down the cost of longer-duration batteries, too.

“Since 2018, increasing project sizes combined with a rapidly expanding manufacturing base and more energy dense chemistries, have halved the LCOE [levelized cost of energy] of energy storage. BNEF’s global LCOE benchmark sits now at $150/MWh for battery storage systems with a four-hour duration,” the firm explains.

Quote
To top that top, the global economy has collapsed and along with it, demand. It’s likely that recovery will be long and slow, and not particularly receptive to the idea of building new gas peaker plants if something cheaper is available.

In addition, EIA’s pre-COVID forecast about an increase in European demand for gas was based on the assumption that gas would continue to be perceived as an effective tool for decarbonization.

Apparently that view is not holding up over time. As Europe plans on a post-COVID recovery, momentum is building for a European Green Deal recovery plan that de-emphasizes natural gas in favor of renewable energy.

Alexander555

  • Nilas ice
  • Posts: 1264
    • View Profile
  • Liked: 136
  • Likes Given: 44
Re: Oil and Gas Issues
« Reply #3795 on: May 01, 2020, 11:42:54 PM »
« Last Edit: May 01, 2020, 11:46:19 PM by kassy »

vox_mundi

  • Young ice
  • Posts: 4160
    • View Profile
  • Liked: 2418
  • Likes Given: 322
Re: Oil and Gas Issues
« Reply #3796 on: May 02, 2020, 05:19:42 AM »
Chesapeake Energy Preparing Bankruptcy Filing
https://www.reuters.com/article/us-chesapeake-enrgy-bankruptcy-exclusive/exclusive-chesapeake-energy-preparing-bankruptcy-filing-idUSKBN22B31M

(Reuters) - Chesapeake Energy Corp, the oil and gas exploration and production company that was at the forefront of the past decade’s U.S. shale boom, is preparing a potential bankruptcy filing as it grapples with an unprecedented rout in energy prices, people familiar with the matter said on Wednesday.

The Oklahoma City-based company, cofounded by late wildcatter and outspoken natural gas proponent Aubrey McClendon, has held discussions with creditors about a possible loan that would aid operations while it navigates bankruptcy proceedings, the sources said. The loan could total roughly $1 billion, though its size remains in flux, one of the sources added.

Such loans, referred to as debtor-in-possession financing, are key to companies seeking Chapter 11 bankruptcy protection because they help them sustain as much of their business as possible during court proceedings.

... Chesapeake was trying to pivot from gas to a greater emphasis on oil production when a Saudi-Russian energy price war earlier this year upended its plans and the wider crude market. It was dealt another blow by the coronavirus outbreak, which caused energy demand to dwindle by shutting large swaths of the global economy.
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Sigmetnow

  • Multi-year ice
  • Posts: 18189
    • View Profile
  • Liked: 827
  • Likes Given: 318
Re: Oil and Gas Issues
« Reply #3797 on: May 03, 2020, 07:44:27 PM »
Church of England’s fund urges other ExxonMobil investors to sack board over climate
Church Commissioners writes to fellow shareholders ahead of protest vote at oil giant’s AGM
Quote
The Church of England’s investment arm has urged shareholders in ExxonMobil to vote against re-electing the oil company’s entire board for failing to take action on the climate crisis.

The Church Commissioners and New York State Common Retirement Fund have written to fellow ExxonMobil investors ahead of an annual shareholder meeting on 27 May, hoping to support for the protest votes, which include forcing ExxonMobil to disclose its lobbying activities and their cost.

“Our voting intentions are, again, a measure of our profound dissatisfaction with ExxonMobil’s approach to climate change risks and the governance failures that underpin it,” the letter said.

“As the world, ExxonMobil’s peers and investors confront the climate emergency, ExxonMobil is carrying on as if nothing has changed. It is crystal clear to us that ExxonMobil’s inadequate response to climate change constitutes a broad failure of corporate governance and a specific failure of independent directors to oversee management,” the letter added. ...
https://amp.theguardian.com/business/2020/apr/24/church-fund-urges-other-exxonmobil-investors-to-sack-board-over-climate-inaction
People who say it cannot be done should not interrupt those who are doing it.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3798 on: May 04, 2020, 06:09:01 PM »
Another story acknowledging that Covid-19 has hastened the arrival of peak oil demand.

https://oilprice.com/Energy/Energy-General/COVID-19-Could-Accelerate-The-Arrival-Of-Peak-Oil-Demand.html

Quote
COVID-19 Could Accelerate The Arrival Of Peak Oil Demand
By Tsvetana Paraskova - May 03, 2020

Until three months ago, the oil industry was pinning its hopes on aviation, alongside petrochemicals, for continued growth in oil demand for at least another decade.   The aviation industry, however, was dealt a near-deadly blow by the coronavirus pandemic, which upended all plans for fleet utilization for years to come. Airlines and aircraft manufacturers do not expect global airline traffic to return to 2019 levels for several years, while air carriers are set to retire the older, larger, less fuel-efficient aircraft earlier than planned.

Quote
The crisis in the aviation industry and the early retirements of older wide-body planes suggests that the expected growth in global jet fuel demand through 2040 may not occur, Bloomberg Opinion columnists Liam Denning Brooke Sutherland write.

According to BP’s latest oil demand outlook through 2040, aviation and marine transport were set to account for nearly half of the increase in energy used in transport in the 2030s, even though their combined share of total transport demand today is only 20 percent. Aviation was also expected to be the key growth driver of oil use in transportation through 2040, rather than road transport. 

Quote
Currently, passenger traffic in the U.S. is down 95 percent compared to a year ago, Calhoun said, noting that airlines are cutting operations dramatically.

Quote
“We believe this industry will recover but it will take two to three years for travel to return to 2019 levels and it will be a few years beyond that for the industry to return to long-term growth trends,” he added.

According to IAG, the owner of British Airways, “Recovery to the level of passenger demand in 2019 is expected to take several years, necessitating Group-wide restructuring measures.”

So far into the pandemic, jet fuel was the oil product with the largest decline in demand relative to 2019, the International Energy Agency (IEA) said in its Global Energy Review 2020 report this week.   

Quote
Despite the fact that jet fuel demand overall represents around 8 percent of ‘normal’ annual global oil demand, jet fuel demand was widely expected to support the growth in oil demand through the next decade at the very least, also because jet fuel transportation is not threatened by electrification the way road transportation is.

Ken Feldman

  • Nilas ice
  • Posts: 1426
    • View Profile
  • Liked: 234
  • Likes Given: 139
Re: Oil and Gas Issues
« Reply #3799 on: May 05, 2020, 01:31:39 AM »
India has reach 95% storage capacity while demand for fuel is down 60%.

https://oilprice.com/Latest-Energy-News/World-News/Indias-Fuel-Demand-Crashes-60-In-Lockdown.html

Quote
India’s Fuel Demand Crashes 60% In Lockdown
By Tsvetana Paraskova  - May 04, 2020

Gasoline and diesel demand in the world’s third-largest oil importer, India, crashed by around 60 percent annually in April due to the nationwide lockdown to curb the spread of the coronavirus, two industry sources told Reuters on Monday.

India – with a population of 1.3 billion people – went into a nationwide lockdown at the end of March. The lockdown has since been extended to the middle of May.

In April, gasoline and diesel sales in India collapsed by 61 percent and 57 percent on the year, respectively, provisional industry data provided to Reuters by the sources showed. At the beginning of April, the demand crash was more pronounced, with gasoline sales down 61 percent and diesel sales crashing by 64 percent in the first half of the month.

Quote
With demand collapsing, India’s oil refiners have already filled 95 percent of their combined storage capacity for fuel of 85 million barrels, officials at three state oil refiners told Bloomberg at the end of April. Even the tanks at the 66,000 fuel stations in India are full, as more than a billion people are under lockdown.