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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3650 on: March 20, 2020, 06:29:44 PM »
”It’s simple math”

Exxon's Rapid U.S. Production Growth Can't Last
Quote
In 2019, Exxon's U.S. shale production increased an incredible 79% over 2018 levels. That growth helped push the oil giant's full-year production higher by around 3%, the first uptick in several years. And it's still early days for a region for which Exxon has very big plans. In fact, by 2025, it hopes to at least double production from current levels.   

Moreover, Exxon is openly making the choice to invest counter cyclically. It is well aware that oil prices are weak today, and it is using the downturn to upgrade its portfolio at what it believes will be advantageous prices. In fact, the company estimates that onshore drilling is about 25% cheaper today than it was roughly five years ago. Offshore drilling is even cheaper, with costs falling by more than 50%!   

That helps explain why Exxon is still planning capital investment spending of as much as $35 billion a year through 2025. To be fair, the COVID-19 scare could lead to a pullback in Exxon's plans, but it is unlikely to lead to a massive decline. That's because the company believes the long-term supply/demand outlook remains favorable for higher oil prices. It isn't the only oil major that believes oil is here to stay.    ...
https://www.fool.com/investing/2020/03/19/exxons-rapid-us-production-growth-cant-last.aspx
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gerontocrat

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Re: Oil and Gas Issues
« Reply #3651 on: March 21, 2020, 03:28:41 PM »
From Sigmetnow
Quote
”It’s simple math”

Exxon's Rapid U.S. Production Growth Can't Last

My mother's mother worked in London as a typist for what was then Standard Oil during World War I, who were making oodles of cash as warfare became mechanised.

She said they were scum then and are certainly scum now. I guess they hope to be the "Last Man Standing" after the others have stood against the wall and been asked if they want a blindfold before the coup de grâce.

I hope EXXON fails / falls.

Meanwhile, Blloomberg says that attention is turning to demand as perhaps even worse than the price drop.
https://www.bloomberg.com/markets/commodities
Quote
3/2/02020 Oil Demand Catastrophe Is Making the Price War a Sideshow
3/20/2020 Tens of Thousands Are Getting Laid Off in U.S. Shale Patch.

The attached graph from Standard Chartered shows the guess by many of a 10 millon bpd drop and a very quick recovery. Some are asking if that recovery will be so easy, early, or rapid.
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3652 on: March 23, 2020, 04:54:05 PM »
Oil declines as Fed stimulus fails to offset COVID-19 pandemic-related demand woes
Countries around the world move to further restrict activity in a bid to slow the COVID-19 pandemic
Quote
West Texas Intermediate crude for May delivery CL.1, -1.81% was down 26 cents, or 1.2%, to $22.37 a barrel on the New York Mercantile Exchange, though wavered between modest losses and gains. May Brent crude BRN.1, -4.74%, the global benchmark, declined by $1.06, or 3.9%, to $25.92 a barrel on ICE Futures Europe.
...
“The enthusiasm the markets participants gained from efforts by policy makers across the globe to strengthen economies was lost, as the rescue package proposed by the US ran into political delays,” said Paola Rodriguez-Masiu, senior market analyst at Rystad Energy.

“We believe that prices will continue the slump, as we estimate that supply will surpass demand by more than 10 million barrels next quarter and storage infrastructure will be insufficient to support the current production level,” she said in emailed commentary.

In other energy trading, April gasoline (RBJ20, -17.26%) plunged 15.7% to 51.02 cents a gallon, with prices continuing to trade at their lowest levels since trading of the reformulated gasoline contract began trading in October 2005, according to Dow Jones Market Data. April heating oil fell 1.1% at 99.56 cents a gallon.
https://www.marketwatch.com/story/oil-mixed-as-fed-throws-more-stimulus-at-economy-2020-03-23
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Tom_Mazanec

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Re: Oil and Gas Issues
« Reply #3653 on: March 23, 2020, 06:39:27 PM »
Sigmetnow, if gasoline futures are something like $0.60 normally, why do I pay at least two bucks?
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3654 on: March 23, 2020, 07:52:48 PM »
^^^

Tom,

That's the difference between what the gasoline costs strait out of the refinery and what you pay at the pump.  There are distribution costs (pipelines, gas station, marketing, etc...) and then there are taxes.

https://gaspricesexplained.com/#/?section=whatconsumers-are-paying-for-at-the-pump





Ken Feldman

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Re: Oil and Gas Issues
« Reply #3655 on: March 23, 2020, 08:00:29 PM »
US oil producers are announcing major cuts to exploration, drilling, and well completions.

https://oilprice.com/Energy/Energy-General/Oil-Majors-Slash-Spending-Amid-Price-Plunge.html

Quote
Oil Majors Slash Spending Amid Price Plunge
By Tsvetana Paraskova - Mar 23, 2020

Shell became the latest oil major to announce significant spending cuts to protect its balance sheet from crashing oil prices, joining other majors such as Exxon in the drive to optimize costs at oil below $30 a barrel. 

On Monday, Shell said it was reducing its underlying operating costs by US$3-4 billion per year over the next 12 months compared to 2019 levels. The supermajor will also cut capital expenditure to US$20 billion or below this year, down from originally planned level of around US$25 billion, and will slash working capital.

Quote
U.S. oil producers were the first companies to react to the crashing oil prices, announcing capital spending and dividend cuts by the hour as many of their operations are unsustainable and deep in the red at $30 a barrel WTI Crude.

Oil supermajors aren’t immune to the price crash, as recent announcement show. ExxonMobil said last week it was looking to “significantly reduce spending as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases.”

gerontocrat

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Re: Oil and Gas Issues
« Reply #3656 on: March 23, 2020, 10:49:41 PM »
Natural Gas closed at $ 1.60 million btu.

US Oil / Gas Patch another step forward to DOOM.
"Para a Causa do Povo a Luta Continua!"
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TerryM

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Re: Oil and Gas Issues
« Reply #3657 on: March 24, 2020, 02:17:13 AM »
Natural Gas closed at $ 1.60 million btu.

US Oil / Gas Patch another step forward to DOOM.
Burn Baby Burn
Otherwise it will all escape into the atmosphere. Use it or lose it to Global Warming!


.............
As an aside.
How many young guys do we have that know how to operate all of the generating stations in these perilous times.


Frankly how many bright kids have been studying Nuclear Energy Management over the last few decades? Has it seemed like a field that a person could grow old in?
Terry

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3658 on: March 24, 2020, 03:35:39 PM »
”In POLITICO interviews, half a dozen industry officials who have talked with White House officials in recent days described Trump as slow to comprehend the twin body blows a global pandemic and a price war between Saudi Arabia and Russia would have on an industry he has long supported. Oil prices at $20 a barrel threaten to rain destruction on an industry that has donated $1.8 million to Trump's reelection campaign and employs hundreds of thousands of people in states key to any hope to beat his eventual Democratic rival for the presidency.”

Oil execs to Trump: Whose side are you on?
Quote
An industry that once enjoyed the president’s favor now cringes when it hears him celebrate low prices for consumers.

Last August, President Donald Trump stood before workers in Western Pennsylvania, where Shell Oil was building a new natural gas processing facility, and celebrated the nation’s shale boom.

"That’s our gold,” Trump declared. “That’s gold underneath our feet."

For almost the entirety of his administration, Trump has bragged about U.S. “energy dominance” and the riches that oil and gas would bring to the country thanks to his administration’s full-throated support. Now, however, Trump’s dream of a golden, dominant energy industry is almost gone and, industry executives said, so is his full-throated support.

The collapse of energy prices because of the coronavirus crisis, combined with Saudi and Russian refusals to curb production, has already forced the suspension of the Shell project that Trump touted in Western Pennsylvania. The crash is also estimated to knock out about half of all shale producers, according to analysts at Raymond James Inc., if prices remain at between $20 and $30 per barrel. (The price as of midday Monday was $22.73 per barrel by the standard West Texas Intermediate benchmark.) A price at that level would cost thousands of jobs and deal a serious blow to the vision of U.S. energy independence.

"There is no sugar-coating it, U.S. oilfield activity will collapse with oil prices well below $30," on the WTI benchmark, said analyst Praveen Narra of Raymond James in a market update published on March 23. "The pace of rig count declines is likely to occur at a pace we have not seen before."

Worse, some industry executives say, Trump seems either not to recognize the threat or to be unwilling or unable to address it, touting instead his excitement over lower prices for consumers.

"Good for the consumer, gasoline prices coming down!" Trump tweeted on March 9, as the domestic oil price fell by 25 percent. ...
https://www.politico.com/news/2020/03/24/oil-execs-to-trump-whose-side-are-you-on-145927
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3659 on: March 26, 2020, 06:31:25 PM »
A Federal Court Delivers a Victory for Sioux Tribe, Another Blow for the Dakota Access Pipeline
Quote
In a major victory for opponents of the controversial Dakota Access Pipeline, a federal judge ruled on Wednesday that prior environmental assessments failed to fully consider the impact of the project. The Army Corps of Engineers will now have to undertake a more thorough review.

The pipeline crosses the Missouri River just upstream from the reservation of the Standing Rock Sioux Tribe of North and South Dakota. The tribe gained international attention starting in the summer of 2016, as thousands flocked to the reservation in support of the tribe's opposition to the pipeline. The project was approved by the Trump administration and completed in June 2017.
...
Parenteau said the more complete environmental assessment that the judge has now ordered would probably take two years or more to complete—longer than usual because of the ongoing coronavirus pandemic.

The judge will now consider whether the pipeline should shut down during this time. Boasberg has asked the Corps and the tribes to submit written arguments by April 15 in regard to whether the pipeline should be allowed to remain open or shut down during the new environmental assessment.
https://insideclimatenews.org/news/25032020/dakota-access-pipeline-under-review-federal-court
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3660 on: March 26, 2020, 08:32:29 PM »
The "massive demand shock" is coming in April.

https://oilprice.com/Energy/Energy-General/Goldman-Sachs-Prepare-For-A-Massive-Oil-Demand-Shock.html

Quote
Goldman Sachs: Prepare For A Massive Oil Demand Shock
By Tsvetana Paraskova - Mar 26, 2020

Global oil demand could plummet by 18.7 million bpd in April, deepening an expected demand plunge of 10.5 million bpd for March, Goldman Sachs said, while the coronavirus pandemic continues to claim thousands of lives and forces a growing number of major economies into lockdown. 

“A demand shock of this magnitude will overwhelm any supply response including any potential core-Organization of the Petroleum Exporting Countries output freeze or cut,” Goldman Sachs said in a note this week, as carried by Reuters.

Quote
Goldman Sachs’s view about demand destruction is echoed by the world’s largest independent oil trader, Vitol, as analysts and trading houses race to reduce their demand outlooks and oil price forecasts by the week. 

Vitol expects that oil demand could slump by 15 to 20 million bpd at its peak over the next few weeks, chief executive Russell Hardy told Bloomberg in an interview earlier this week. On an annual basis, Hardy said, this would contribute to a demand decline of 5 million bpd.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3661 on: March 26, 2020, 08:48:27 PM »
Oil and gas companies are practicing pandemic prevention social distancing by delaying maintenance.  This means that they won't be cutting production next month when Saudi Arabia and Russia turn on their spigots. 

https://oilprice.com/Energy/Energy-General/The-Oil-Glut-Is-About-To-Get-Even-Worse.html

Quote
The Oil Glut Is About To Get Even Worse

With only a week to go before OPEC+ countries start flooding the world’s total oil production with an estimated extra 2.5 million barrels per day (bpd) amid the Covid-19 crisis, building one of the biggest oil supply gluts the world has ever seen, UK operator INEOS has decided to postpone its scheduled maintenance for the North Sea Forties pipeline system (FPS) in a move that Rystad Energy calculates will add several hundred thousands of extra barrels to the market every day.

Based on this development, Rystad Energy has raised its North Sea oil production forecast by 330,000 bpd to 2.96 million bpd for June 2020 and by 190,000 bpd to 3.04 million bpd for July 2020.

Quote
E&P companies are trying to keep oil flowing during the coronavirus outbreak while cutting back on all other activities – including maintenance. Turnarounds increase human-to-human contact adding maintenance crews typically results in more people working at the platform and more rotation.

“Given the current struggle, E&Ps are understandably trying to mitigate the coronavirus risk by implementing their version of social distancing,“ adds Rudel.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3662 on: March 26, 2020, 08:54:12 PM »
Gasoline demand in the US is plummeting despite the low prices.  People are obeying the stay-home orders to combat the spread of Covid-19.

https://oilprice.com/Latest-Energy-News/World-News/US-Gasoline-Demand-Plummets-Despite-Low-Oil-Prices.html

Quote
U.S. Gasoline Demand Plummets Despite Low Oil Prices
By Irina Slav - Mar 26, 2020

Demand for gasoline in the United States fell by 859,000 bpd, the Energy Information Administration (EIA) said in its weekly petroleum status report. According to Reuters, this is the sharpest demand decline since last September.

Total fuel demand also declined, almost 2.1 million bpd last week, as lockdowns begin to weigh on consumption.

Earlier this month, Reuters reported gasoline pumps are sitting idle as people cancel their travel plans amid the worsening coronavirus outbreak that has so far infected more than 68,500 Americans and killed more than 1,000.

Quote
The worst is yet to come, according to analysts, as expectations are the number infected with Covid-19 will continue to rise for a while, possibly forcing an extension of the social distancing measures that prompted the drop in gasoline consumption.

“We would estimate commuting and leisure driving will be down up to 50%, with most impact in the northern states where the virus spreads faster now,” a partner in Rystad Energy told Reuters.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3663 on: March 28, 2020, 12:31:10 AM »
The US drill rig count is falling fast.

https://oilprice.com/Energy/Energy-General/Rig-Count-Crashes-Most-In-4-Years-As-Oil-Shock-Rocks-US-Shale.html

Quote
Rig Count Crashes Most In 4 Years As Oil Shock Rocks U.S. Shale
By Julianne Geiger - Mar 27, 2020

Baker Hughes reported that the number of oil and gas rigs in the US fell again this week by 44, falling to 728, with the total oil and gas rigs clocking in at 278 fewer than this time last year. It is the largest single-week drop since February 2016.

Quote
The number of oil rigs decreased for the week, by 40 rigs, according to Baker Hughes data, bringing the total to 624—a 192-rig loss year over year.

The total number of active gas rigs in the United States fell by 4 according to the report, to 102. This compares to 190 a year ago.

Quote
Canada’s overall rig count decreased by 44 rigs as well this week, to a total of just 54 rigs. Oil and gas rigs in Canada are now down 34 year on year.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3664 on: March 28, 2020, 02:28:34 AM »
EPA suspends enforcement of environmental laws amid coronavirus
Quote
The Environmental Protection Agency (EPA) issued a sweeping suspension of its enforcement of environmental laws Thursday, telling companies they would not need to meet environmental standards during the coronavirus outbreak.

The temporary policy, for which the EPA has set no end date, would allow any number of industries to skirt environmental laws, with the agency saying it will not “seek penalties for noncompliance with routine monitoring and reporting obligations.”

Cynthia Giles, who headed the EPA’s Office of Enforcement during the Obama administration, called it a moratorium on enforcing the nation's environmental laws and an abdication of the agency's duty.

“This EPA statement is essentially a nationwide waiver of environmental rules for the indefinite future. It tells companies across the country that they will not face enforcement even if they emit unlawful air and water pollution in violation of environmental laws, so long as they claim that those failures are in some way 'caused' by the virus pandemic. And it allows them an out on monitoring too, so we may never know how bad the violating pollution was,” she wrote in a statement to The Hill.

...
In a 10-page letter to the EPA earlier this week, the American Petroleum Institute (API) asked for a suspension of rules that require repairing leaky equipment as well as monitoring to make sure pollution doesn’t seep into nearby water. ...
https://thehill.com/policy/energy-environment/489753-epa-suspends-enforcement-of-environmental-laws-amid-coronavirus
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blumenkraft

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Re: Oil and Gas Issues
« Reply #3665 on: March 28, 2020, 05:15:54 PM »
Fucking bastard cunts!
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gerontocrat

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Re: Oil and Gas Issues
« Reply #3666 on: March 28, 2020, 09:49:57 PM »
Re above post. Definitely, without doubt, in spades. Meanwhile....

The US EIA have done their monthly spreadsheet updates @ https://www.eia.gov/totalenergy/data/monthly/

Natural Gas - electricity generation

Here is  firstly a pre-covid graph to Dec 19 showing solar+wind increasing, coal declining, and Natural Gas powering up.

And secondly the use of Natural Gas by types of consumers. Electricity is not the major use.

And thirdly, primary energy use by source. Wind+solar winning against coal, losing against natural gas ?
_______________________
Of course who knows what will happen during and afterr the covid-19 epidemic & the oil war twixt Russia China & the US and afterwards.
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rboyd

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Re: Oil and Gas Issues
« Reply #3667 on: March 29, 2020, 12:01:30 AM »
Natural Gas prices plummeted in the US in the last few months of 2019, so makes sense that electricity generators would increase its use relative to coal. COVID-19 by reducing industrial usage will just make the gas price go even lower.

US natural gas prices drop to lowest level in 4 years

https://www.ft.com/content/7764bb4e-3b75-11ea-b232-000f4477fbca

Virus Seen Hammering Demand into Injection Season as Natural Gas Futures Plummet

https://www.naturalgasintel.com/articles/121379-virus-seen-hammering-demand-into-injection-season-as-natural-gas-futures-plummet

Reductions in oil fracking may reduce the supply of natural gas (NG is a side effect of oil fracking), plus the low NG prices may reduce gas fracking. But the scale of the demand shock may overwhelm any production reductions.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3668 on: March 29, 2020, 02:46:33 PM »
Oil-rich wealth funds seen shedding upto $225 billion in stocks
Quote
LONDON (Reuters) - Sovereign wealth funds from oil-producing countries mainly in the Middle East and Africa are on course to dump up to $225 billion in equities, a senior banker estimates, as plummeting oil prices and the coronavirus pandemic hit state finances.

The rapid spread of the virus has ravaged the global economy, sending markets into a tailspin and costing both oil and non-oil based sovereign wealth funds around $1 trillion in equity losses, according to JPMorgan strategist Nikolaos Panigirtzoglou.
...

DEFENDING THE CURRENCY

State-backed, energy-rich funds account for a significant chunk of the roughly $8.40 trillion in total sovereign wealth assets, funds they’ve built up as a bulwark for when oil revenues dry up.

Sovereign funds have become major players on global stock markets, accounting for roughly 5-10% of total holdings, and an important source of income for Wall Street asset managers.

While they have been hit hard by the approximate 20% slide in global equity prices, the oil-based funds’ governments in Abu Dhabi, Kuwait, Qatar, Bahrain, Saudi Arabia, Nigeria and Angola have also seen their finances strained by a nearly two thirds drop in oil prices this year.

Gulf sovereign wealth funds could see their assets decline by $296 billion by the end of this year, according to Garbis Iradian, chief Middle East and North Africa economist at the Institute of International Finance (IIF).

Around $216 billion of that fall would be from stock market losses and a further $80 billion from drawdowns taken by cash-squeezed governments. ...
https://www.reuters.com/article/us-health-coronavirus-swf-analysis-idUSKBN21G05K
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rboyd

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Re: Oil and Gas Issues
« Reply #3669 on: March 29, 2020, 05:53:55 PM »
As long as oil prices stay low, the sovereign wealth funds will be net sellers as their governments run massive budget deficits. Add that to restrictions on buy-backs (which have been estimated to have provided at least half of the demand for stocks in the past decade) for bailed out companies and you get a continuing imbalance between those wanting to sell and those wanting to buy.

If this continues to crash stocks then the feedback into the economy will dump oil even lower, intensifying the wealth fund selling, and also serving to restrict the ability of companies to buy back their stocks. A very nasty self-reinforcing vicious cycle. Then we add the COVID-19 impacts on top of  that.

Houses in Dubai and Alberta may be very cheap a few years from now ...

Buybacks are the ‘dominant’ source of stock-market demand, and they are fading fast: Goldman Sachs

https://www.marketwatch.com/story/buybacks-are-the-dominant-source-of-stock-market-demand-and-they-are-fading-fast-goldman-sachs-2019-11-06

Stock Buybacks By Corporations The Largest Share of U.S. Equity Demand

https://www.forbes.com/sites/robertlenzner/2018/02/22/stock-buybacks-by-corporations-the-largest-share-of-u-s-equity-demand/#b71843f53047

Saudi Arabia's budget deficit forecast to widen to $61bn on virus, oil rout - does not take into account $20 oil.

https://www.arabianbusiness.com/politics-economics/443369-saudi-arabias-budget-deficit-forecast-to-widen-to-61bn-on-virus-oil-rout

The Very Real Prospect Of $5 Oil

https://oilprice.com/Energy/Energy-General/The-Very-Real-Prospect-Of-5-Oil.html

Barrel of Monkeys now worth more than a barrel of Alberta oil

Quote
Price of Canadian oilsands crude plunges to lowest level on record — and could be headed to $0

https://www.cbc.ca/news/business/bitumen-wcs-wti-oil-1.5511386
« Last Edit: March 29, 2020, 06:02:14 PM by rboyd »

vox_mundi

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Re: Oil and Gas Issues
« Reply #3670 on: March 30, 2020, 02:06:10 AM »
Oil Plummets to 17-Year Low as Virus Threatens Demand Slump
https://www.bnnbloomberg.ca/oil-plummets-to-17-year-low-as-virus-threatens-demand-slump-1.1414289



(Bloomberg) -- Crude dropped to its lowest in 17 years in Asia as the spread of coronavirus in Europe and North America showed little sign of slowing, and as Saudi Arabia and Russia dug in their heels over a damaging war for market share.

Futures in London fell as much as 7.6% to their lowest since November 2002, after losing 5.4% on Friday to post a fifth straight week of declines.

Saudi Arabia and Russia appear to be hunkering down for a protracted price war. The kingdom said on Friday that it hadn’t had any contact with Moscow about output cuts or on enlarging the OPEC+ alliance of producers. Russia also doubled down, with Deputy Energy Minister Pavel Sorokin saying oil at $25 a barrel is unpleasant, but not a catastrophe for Moscow.
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vox_mundi

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Re: Oil and Gas Issues
« Reply #3671 on: March 30, 2020, 02:03:56 PM »
Goldman Sachs: Coronavirus Crisis Game Changer for Oil Sector
https://www.aljazeera.com/news/2020/03/death-toll-york-state-passes-1000-live-updates-200329234257896.html

The coronavirus pandemic and resulting plunge in crude prices will result in a leaner, stronger oil industry but raise the risk of shortages further down the line, Goldman Sachs analysts said.

"If pipelines get clogged up as refineries shut down, inventories cannot build, reducing the cushion and creating a very quick risk reversal towards oil shortages," Goldman said in a note.

This would in turn cause an oil shortage, pushing prices above the Wall Street bank's $55 a barrel target for 2021, it said.

"This will likely be a game changer for the industry," the bank said.

"Big Oils will consolidate the best assets in the industry and will shed the worst ... when the industry emerges from this downturn, there will be fewer companies of higher asset quality, but the capital constraints will remain."

Oil has been hit disproportionately by the "coronacrisis", sending landlocked crude prices into negative territory, Goldman said.

"Paradoxically, this will ultimately create an inflationary oil supply shock of historic proportions because so much oil production will be forced to be shut in," it added. "The oil price war is made irrelevant by the large decline in demand and has made a coordinated supply response impossible to achieve in time."
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3672 on: March 30, 2020, 06:57:32 PM »
Oil falls back to 18-year lows below $20 as global demand evaporates
Quote
U.S. oil dropped more than 7% to trade around an 18-year low on Monday as demand continues to evaporate, and as Saudi Arabia and other OPEC+ nations prepare to ramp up production.

With much of the world in lockdown as the coronavirus pandemic rages on, demand for oil has fallen off a cliff. People aren't travelling and business has slowed, reducing the need for jet fuel and gasoline.

U.S. West Texas Intermediate crude dropped 7.3% to trade at $19.93 per barrel. Earlier WTI dropped to a session low of $19.85 per barrel, which is around an 18-year low. The contract briefly traded below the key $20 per barrel mark on March 20, although it was in thin trading on a contract that was set to expire.

International benchmark Brent crude fell 12.2% to trade at $21.89 per barrel, a price last seen in 2002.

The drop-off in demand comes just as the OPEC+ production cuts expire. Beginning April 1 the 14-member cartel and its allies will be able to pump as much oil as they please, and Saudi Arabia is among the nations that has vowed to ramp up its production.

Given the hit to both supply and demand, analysts are projecting that despite WTI's 54% slide this month — its worst on record — there could still be more downside ahead.

"With the effects of COVID-19 continuing to weigh on global demand, it's likely global crude storage capacity maxes out in 2Q20, creating a nightmarish scenario and the possibility that crude could test the $10/bbl threshold," Raymond James analyst John Freeman said in a note to clients Monday.
...
https://www.cnbc.com/2020/03/30/oil-falls-to-back-to-18-year-lows-below-20-as-global-demand-evaporates.html
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3673 on: March 30, 2020, 07:21:23 PM »
As Saudi Arabia opens the spigots, the world runs out of places to store the oil.

https://business.financialpost.com/commodities/energy/the-worlds-on-the-brink-of-running-out-of-places-to-put-oil

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The world's on the brink of running out of places to put oil
With supply exceeding demand by 12.4 million barrels a day, producers will be forced to cut output by June

The world will run out of places to store oil in as little as three months, according to an industry consultant.

IHS Markit said that current rates of supply and demand mean inventories will increase by 1.8 billion barrels over the first half of 2020. With only an estimated 1.6 billion barrels of storage capacity still available, producers will be forced to cut output because by June there’ll be no place left to put the unwanted crude, it said.

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Supply may exceed demand by 12.4 million barrels a day in the second quarter, with other traders, banks and consultants also forecasting bumper surpluses, IHS said. Vitol said on Wednesday that demand has fallen as much as 20 million barrels a day from last year.

kassy

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Re: Oil and Gas Issues
« Reply #3674 on: March 30, 2020, 10:11:35 PM »
Thx, i have been wondering about that.
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vox_mundi

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Re: Oil and Gas Issues
« Reply #3675 on: March 31, 2020, 06:57:48 PM »
Gasoline prices fall below $2 a gallon on average in the United States
https://amp.cnn.com/cnn/2020/03/31/energy/gas-prices-two-dollars/index.html

The average price of a gallon of gas has fallen below $2 in the United States — the lowest price in four years, according to AAA. Today, drivers can find a gallon of gas for $1.99 or less at roughly 70% of US gas stations, AAA said.

... AAA said in a press release Tuesday that it expects gas prices to fall to $1.75 or less in April. Kloza, however, predicts they will continue to drop beyond that, to between $1.25 to $1.50 per gallon in the next few months.
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3676 on: March 31, 2020, 07:45:57 PM »
US gasoline prices are below $2 per gallon on average for first time in four years
Quote
... A recent poll from The Washington Post and ABC News found that roughly nine in every ten Americans are currently practicing social distancing and staying at home, thereby significantly cutting back on demand for gas.

"My quick workbook on this suggests whereas last April we spent $1.1 billion a day on gasoline, I think this April we're looking at $350 million a day. We're going to be saving $20 billion on gasoline this month," Tom Kloza, global head of energy analysis at Oil Price Information Services, said to CNBC March 23.

And AAA expects prices to keep declining, with the national average falling to $1.75 or less in April. The association said that currently gas can be found for under $2 per gallon at 68% of gas stations in the U.S.

"Across the country, state averages are less than $3/gallon except in Hawaii ($3.36) and California ($3.05). Today, twenty-nine states have regular gas price averages under $2, with Oklahoma ($1.55) having the cheapest in the country," the statement said.


Of course, more and more Americans staying home also means that consumers are not enjoying the benefit of low gas prices nearly as much as they usually would.

Lower fuel prices are also not necessarily going to be a boon to the economy, Bank of America said Tuesday. The firm found that between March 17 and March 24 spending on gasoline fell 37% year-over-year. Usually, the lower prices would allow people to utilize the additional money in their pocket by "driving more, spending on other discretionary goods and services, paying down debt, or building up their savings," the firm said.

But with people staying home and avoiding discretionary areas like movie theaters, for example, the money won't flow back to the economy in the same way.

"Bottom line: the outbreak is causing a meaningful shift in the consumer basket and lower oil prices are unlikely to be the jet fuel for consumption that they would be in a more normal environment," Bank of America said.
https://www.cnbc.com/2020/03/31/us-gasoline-prices-are-below-2-per-gallon-on-average-for-first-time-in-four-years.html
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3677 on: March 31, 2020, 10:24:13 PM »
The oil price war between Saudi Arabia and Russia, combined with the demand destruction due to the Covid-19 outbreak, will be especially hard on land-locked oil producers.  This is not good news for the Canadian tar-sands and the US shale patch.

https://www.washingtonpost.com/business/2020/03/31/cheap-oil-doesnt-mean-much-when-no-ones-going-anywhere-coronavirus-will-reshape-oil-industry/

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Cheap oil doesn’t mean much when no one’s going anywhere: Coronavirus will reshape the oil industry
The Saudis and Russians launched an oil price war. But its effect pales alongside that of the coronavirus and what it has done to demand.
By Will Englund
March 31, 2020

The spiraling drop in demand for oil because of the novel coronavirus — as airlines cancel flights, commuters work from home or lose their jobs, and ships ride at their moorings — has far outstripped this month’s Saudi-Russian oil war as a factor in the price collapse, analysts now believe.

And some are arguing that this opens the door to a major restructuring of the oil business, as wells shut down and marginal companies go under.

With storage capacity fast filling up, oil firms will have to start imposing production cuts, and many probably will seek help from Washington.

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The cost of a barrel went tumbling on March 7 when the Saudis announced they would be ramping up their production, and they were followed in turn by the Russians. Wednesday is the day those production increases are supposed to start, but by now, it’s almost a sideshow. The two countries, joined by others, will be increasing their production by 2 million to 3 million barrels a day. However, global demand has dropped by 14 million barrels a day, and some forecasters believe that will drop by 26 million barrels in April.

That would be a 25 percent decline in oil consumption.

Quote
“The worst is still ahead for oil prices,” S&P Global Platts Analytics said. “This will be the worst demand contraction ever recorded.”

The company predicts a price of $12 a barrel for Brent crude in May, but “prices could easily dip into the single digits, whatever it takes to get significant supply off the market and quickly.”

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The company said that the battering could provoke a sharp contraction in the number of producing wells and a consolidation of oil-field companies. Rigs in landlocked areas such as the Bakken Formation in North Dakota, the Permian Basin in Texas and Oklahoma, and the Canadian oil sands would be hit hardest, the company said, because they are a long way from saltwater ports and production costs are already higher than at offshore platforms.

The article has more details at the linked website, including the tradeoff in costs to close down a well versus selling oil at a loss and an analysis of storage available in several countries.

Tom_Mazanec

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Re: Oil and Gas Issues
« Reply #3678 on: March 31, 2020, 11:16:44 PM »
Ken:
Of course that is setting up the stage for a huge supply crisis when (if?) the economy recovers.
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #3679 on: April 01, 2020, 08:25:49 PM »
'The other bomb' — Cramer's warning as first shale company files for Chapter 11
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Analysts have warned that falling oil prices will lead to a wave of consolidation or bankruptcies in the U.S. energy sector, and the Street got its first taste of what could be to come when U.S. shale producer Whiting Petroleum filed for bankruptcy on Wednesday.

"The oil patch is falling apart. ... This is the other bomb that's dropping," CNBC's Jim Cramer said on "Squawk on the Street."  "I think they're the first of many."

Oil producers are struggling to break even as crude prices tumble. The coronavirus outbreak and subsequent travel slowdown has led to soft demand, just as a price war between OPEC+ nations Saudi Arabia and Russia broke out.

West Texas Intermediate crude trades around $20.36 per barrel, after losing more than half its value in March. The contract is coming off its worst month and quarter on record. Depressed prices have hit the industry hard — the S&P 500 energy sector has dropped 53% this year.

Cramer noted that the industry remains key to the economy, given the number of people it employs directly and indirectly. "This is something that we have to keep an eye on, because when we start seeing the layoffs, some of the layoffs are going to bounce back, and some of them are not coming back at all," he said.

Cramer also said the U.S. "can't afford oil to go down to $5, $10" per barrel. Doing so would be "completely destructive for our companies," he said. He added that almost every company apart from Chevron is not ready for an environment where oil prices are that low. "You do not want a big raft of bankruptcies," he warned. ...
https://www.cnbc.com/2020/04/01/the-other-bomb-thats-dropping-cramers-warning-as-first-shale-company-files-for-chapter-11.html
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Paddy

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Re: Oil and Gas Issues
« Reply #3680 on: April 02, 2020, 05:08:48 PM »
Given how much production has been shut down as unprofitable, how soon will production bounce back once demand picks up, as and when we have a vaccine and business goes back more or less to usual?

And will there be slightly less demand than prior to lockdown due to general economic fallout, people having got used to videoconferencing / working from home?  Or more, because many people will have unfinished business to catch up on?

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3681 on: April 02, 2020, 08:32:22 PM »
Oil industry insiders state that the industry needs production cuts of at least 10 million barrels per day just to offset the Covid-19 demand destruction.

https://www.worldoil.com/news/2020/3/31/ihs-markit-sees-forced-oil-production-cuts-of-10mmbpd-ahead

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IHS Markit sees forced oil production cuts of 10MMbpd ahead
3/31/2020

WASHINGTON – Research firm IHS Markit expects up to 10 MMbpd of world oil production will be cut or shut-in from April to June 2020 as oil storage fills up and output from financially strapped companies begins to fall. If oil cannot be sold or stored, it cannot be produced. Transportation constraints and lack of access to every available tank will prevent the utmost maximum level of storage capacity being reached.

 “If there is no international agreement to curtail oil production then brutal unadulterated market forces will bring the oil market into balance. The laws of supply and demand are fierce in extreme conditions,” Jim Burkhard, IHS Markit’s vice president and head of oil markets, said in an email.

But Trump tweeted today that Saudi Arabia and Russia will cut production by 15 million barrels per day, so we're all good!  The story continues...

Quote
The aftermath of the extreme, light-speed rebalancing of the oil market will result in significant changes in some countries production levels, especially in 2021. Assuming global oil demand returns to growth in 2021 Saudi Arabia and Russia are better positioned to maintain or even increase production compared to the United States. By fourth quarter 2021 we estimate U.S. crude oil production will be 8.8 MMbpd—down 4.1 MMbpd from first quarter 2020 production. In contrast, output from Saudi Arabia is projected to be 1.8 MMbpd higher with Russian production just slightly lower relative to first quarter 2020.

“Saudi Arabia and Russia are better positioned in a low-price environment to maintain or even increase production over the next two years compared to the United States. Their systems depend on conventional production, which has much lower decline rates compared to U.S. tight oil. A decline in upstream investment will impact short-term production capacity to a much lesser degree than in the United States,” said Bhushan Bahree, executive director, IHS Markit.

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Re: Oil and Gas Issues
« Reply #3682 on: April 02, 2020, 08:46:32 PM »
In the US, pipeline operators are telling oil producers to scale back production because storage areas are near capacity.

https://www.bloomberg.com/news/articles/2020-03-28/pipelines-ask-u-s-oil-drillers-to-curb-output-as-tanks-fill-up

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Pipelines Ask U.S. Oil Drillers to Curb Output as Tanks Fill Up
By Javier Blas, Sheela Tobben, and Rachel Adams-Heard
March 28, 2020

American pipeline operators have begun asking oil producers to voluntarily ratchet back their output in the clearest sign yet that a growing glut of crude is overwhelming storage capacity.

Plains All American Pipeline LP, one of the biggest shippers of crude in the U.S., sent a letter this week asking its suppliers to scale back production. The notice came from the company’s marketing unit that buys and sells oil to customers. A Texas oil regulator said Saturday that drillers were getting similar notices from pipeline operators.

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There were already signs that North America’s storage system was nearing its limit. On Friday, prices for physical delivery of several key crude grades in North America plunged to the lowest levels in decades.

West Texas Intermediate crude in the heart of the Permian shale region plunged to $13.01 a barrel, the lowest since 1999. West Canada oil crude neared $5 a barrel. Trading house Mercuria Energy Group Ltd. bid just 95 cents for Wyoming Asphalt Sour, a dense oil used mostly to produce paving bitumen, and said the same barrel was bid at below zero earlier this month.

U.S. oil refiners have been cutting back on the amount of crude they buy and process as lockdowns across the nation keep cars off the road, sending gasoline demand plummeting. Retail pump prices have, in some places, fallen below $1 a gallon.

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Re: Oil and Gas Issues
« Reply #3683 on: April 02, 2020, 09:13:46 PM »
I won't believe their is a deal for oil cuts until someone besides trump says it. He likes to spread false information.
Q:You know how you can tell trump is lying?
A: His lips are moving.

Alexander555

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Re: Oil and Gas Issues
« Reply #3684 on: April 02, 2020, 09:29:12 PM »
Russia and Saudi arabia produce 23 million barrels a day. That includes what they consume themself. If they have to cut 15 million barrels there is not much left. That would basically mean that they will bring their own income to zero. To save production in the rest of the world.

FrostKing70

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Re: Oil and Gas Issues
« Reply #3685 on: April 02, 2020, 10:08:27 PM »
I don't think they will cut that far.  This feels like a longer term plan to bankrupt some very debt heavy companies in the US, which will then cut US oil production as the current wells deplete in 12 to 18 months.   Once that happens, I expect SA and Russia to trim production back to get oil back to $50 to $60 / BBL, with a much larger share of the market being supplied from their own production.

FrostKing70

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Re: Oil and Gas Issues
« Reply #3686 on: April 02, 2020, 10:11:12 PM »
On the gasoline prices, I suspect that many stations were caught off guard by the sudden drop in both prices and demand.  They likely have tanks full of gasoline that they paid $1.80 per gallon for, so are reluctant to lower their prices until they sell off the gasoline in their tanks.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3687 on: April 03, 2020, 12:56:20 AM »
Oil from the Canadian Tar Sands is now selling at $5 per barrel, which could permanently shut them down.

https://oilprice.com/Energy/Oil-Prices/5-Crude-Could-Put-Canadas-Oil-Sands-Out-Of-Business.html

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$5 Crude Could Put Canada’s Oil Sands Out Of Business
By Tsvetana Paraskova - Apr 02, 2020

Over the last few weeks, the higher breakeven costs for oil and the lack of sufficient takeaway capacity has come back to haunt Canada’s oil patch.  Two months ago, the Canadian Association of Petroleum Producers (CAPP) was expecting upstream capital investment in Canada’s oil sands to grow this year from 2019 for the first increase in capital expenditures in five years due to “a more competitive economic environment,” thanks to new policies of the Alberta government. 

It took just two months of a ‘black swan’ global event not only to wipe out any competitive environment but to send Canada’s oil industry fighting for its life, again, just five years after the previous oil price crash from which the industry had just recovered.

Due to the price war and the demand plunge in the pandemic, the price of Western Canadian Select (WCS), the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta, is US$5 or less these days, pushing all producers out of the profitability range and raising the question: Will Canada’s oil sands industry make it through this price slump?

Quote
After the previous crash and the subsequent downturn, international oil majors pulled out en masse from oil sands operations, divesting their Canadian businesses to the large local companies. The exodus continued even when international oil prices were more than double the current levels because of pipeline shortages that weighed on Canadian oil prices.

This time around, the record low prices for Canada’s oil combine with a record decline in oil demand domestically and in Canada’s key, and almost exclusive, export market—the United States. Oil prices in Alberta have slumped so low that a barrel of crude now costs less than the cost to ship it to the U.S. market, which doesn’t need it now anyway because of lockdowns and stay-at-home orders. 

Quote
Beyond the current crisis, which put an abrupt end to the oil and gas industry’s recovery, Canada’s oil sands face the existential threat of becoming sidelined on the oil market, where lower-cost producers have the economic advantage to continue supplying the world with oil amid growing calls for decarbonization.

Quote
Yet, a second major crisis in Canada’s oil in just five years could see some investors bail out on the oil sands forever.

cmcgugan

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Re: Oil and Gas Issues
« Reply #3688 on: April 03, 2020, 04:11:47 AM »
Perhaps Alberta thinks it can make up for low prices by selling more oil. https://www.cbc.ca/news/canada/calgary/tc-energy-keystone-xl-pipeline-1.5515850
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TC Energy to start building Keystone XL pipeline after Alberta government invests $1.1B US
Alberta Premier Jason Kenney said during a news conference on Tuesday that the project was a wise investment and essential for the province's future prosperity.

"Every projection for the Canadian energy sector was that we need a significant increase in pipelines to ship our energy," he said, pointing to issues like the price differential and export capacity that were front of mind before oil prices crashed this month.

"Inevitably prices will come back to something like normal and there will be a growing global demand for energy for decades to come."

Kenny does not seem to be able to see the writing on the wall.

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Re: Oil and Gas Issues
« Reply #3689 on: April 03, 2020, 05:30:41 AM »

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Re: Oil and Gas Issues
« Reply #3690 on: April 03, 2020, 07:07:40 AM »
https://thehill.com/policy/energy-environment/490675-epa-loses-case-seeking-modeling-behind-obama-mileage-rollback


EPA loses case to roll back mpg standards. Model added a trillion miles of additional driving of older vehicles to make it look like lowering the standard would reduce air pollution.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3691 on: April 03, 2020, 07:57:56 PM »
While the President tweets, the collapse continues.

https://oilprice.com/Energy/Energy-General/The-Largest-Rig-Count-Collapse-In-5-Years.html

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The Largest Rig Count Collapse In 5 Years
By Julianne Geiger - Apr 03, 2020

Baker Hughes reported that the number of oil and gas rigs in the US fell again this week by 64, falling to 664, with the total oil and gas rigs clocking in at 361 fewer than this time last year. It is the largest single-week drop since March 2015. It is the fewest number of active rigs since January 2017.

The number of oil rigs decreased for the week, by 62 rigs, according to Baker Hughes data, bringing the total to 562 - a 269-rig loss year over year.

The total number of active gas rigs in the United States fell by 2 according to the report, to 100. This compares to 194 a year ago.

Quote
Canada’s overall rig count decreased by 13 rigs as well this week, to a total of just 41 rigs. Oil and gas rigs in Canada are now down 27 year on year.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3692 on: April 03, 2020, 10:24:33 PM »
Quote
Bill McKibben (@billmckibben) 4/2/20, 5:05 PM
For ten years so many have fought so hard to stop #KXL pipeline.
Now, under cover of a pandemic, knowing that protest is illegal because we all must shelter, the oil industry is mounting a blitzkrieg construction effort.
They are vile cowards.
https://twitter.com/billmckibben/status/1245819597154025472

In the Midst of the Coronavirus Pandemic, Construction Is Set to Resume on the Keystone Pipeline
https://www.newyorker.com/news/daily-comment/in-the-midst-of-the-coronavirus-pandemic-construction-is-set-to-resume-on-the-keystone-pipeline
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P-maker

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Re: Oil and Gas Issues
« Reply #3693 on: April 04, 2020, 07:29:33 AM »
Ken, just for clarification:

In a civilized country, owners of rigs like these would be paid to scrap them, now they just stand idle waiting for the next boom in business. Is that correct?

An uncivilized country would carry on building pipelines in order to get the rigs into action again. Is that correct?

All the scrap metal from these rigs and pipelines would make for some mighty fine turbine towers, but that would be somewhat outlandish - wouldn't?




kassy

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Re: Oil and Gas Issues
« Reply #3694 on: April 04, 2020, 12:36:49 PM »
United States No Longer Reducing Energy-Related Carbon Emissions


...

Regardless, there is no doubt that the United States has sharply reduced energy-related CO2 emissions—by roughly 14 percent between 2005 and 2019. Yet the most recent data released by the U.S. Energy Information Administration for 2019 highlight a worrying reality: the United States is no longer reducing emissions. CO2 emissions fell in 2019, but they’re still higher than they were in 2017—and remain unchanged versus 2016. From 2016 to 2019, emissions have fallen by 0.6 percent, which is hardly a record to boast about (in the United Kingdom, the equivalent number was closer to 9 percent).
 
The problem in the United States is overall energy consumption. The carbon intensity of primary energy continues to fall as the country uses less coal, more gas, and more renewables. But overall energy use has risen. Some of that increase is due to weather: 2018 and 2019 were colder than 2016 and 2017, and this led to a 4.3 percent spike in energy use in buildings from 2017 to 2019. But there is also a structural dynamic. Industrial energy use rose by 5.2 percent between 2012 and 2019 (2012 being the low point for energy consumption). Energy use in transportation also jumped 8.3 percent versus 2012.

In other words, the primary mechanism that the United States has relied on to reduce emissions—coal to gas switching—is no longer sufficient. The growth in energy consumption is offsetting the gains that come from reducing the carbon intensity of primary energy. And so, even though the United States has an impressive track record in reducing CO2 emissions from energy consumption, that story is mostly in the past, and the trend line since 2016 shows that the United States is no longer on a pathway to reduce emissions.

https://www.csis.org/blogs/energy-headlines-versus-trendlines/united-states-no-longer-reducing-energy-related-carbon
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.

kassy

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Re: Oil and Gas Issues
« Reply #3695 on: April 04, 2020, 12:45:25 PM »
The US’ most polluted region is battling the country’s biggest plastics plant

The new Formosa Petrochemical factory would not only worsen pollution in a heavily polluted town, but also contribute considerably to greenhouse emissions


Named the Sunshine Project, the planned plastics manufacturing complex, a project of the Taiwan-based Formosa Petrochemical Corp (台塑石化) through its subsidiary FG LA LLC, has become a focal point in the fight against industrial pollution in Saint James parish and the surrounding region.

The Louisiana Department of Environmental Quality in January granted the Sunshine Project a final set of permits, allowing construction of the complex’s 14 separate plants to begin.

Saint James parish neighbors Saint John the Baptist parish, home to the most toxic air in the US. Local campaigners such as LeBoeuf have been saying for years that the cocktail of new pollutants — including the cancer-causing compounds ethylene oxide, styrene and benzene — creates an intolerable risk to local health.

In District 5 of Saint James parish — 26,700 hectares of land — there are eight industrial plants operating, and the new project is to occupy 931 of those hectares.

The Sunshine Project would not only be a major contributor to local toxic pollution, but would also be a significant source of greenhouse gas emissions. The department has permitted Formosa to release an astonishing 13.6 million tonnes of greenhouse gases per year, the equivalent of three-and-a-half coal-fired power stations.

...

Many of the projects are to produce plastics — a sector that the research firm IHS Markit forecasts is to expand an average of 3.5 to 4 percent per year through 2035.

This boom in plastics manufacturing is fueled by cheap oil and gas released by hydraulic fracturing, known as fracking.

The fracking sector is planning 157 new or expanded plants and more drilling over the next five years, a report released by the Environmental Integrity Project said.

These projects are to release up to 205.93 million tonnes of additional greenhouse gases by the end of 2025 — a 30 percent increase from the sector’s footprint in 2018.

Oil companies are banking on plastics growth for when oil demand in the transportation industry peaks, said Steven Eric Feit, an attorney for the Center for International Environmental Law’s Climate and Energy Program.

...

The discovery of fracking — a method of injecting fluid into the ground at a high pressure to release oil and gas — vastly expanded the supply available to drillers. In turn, oil and gas prices plummeted.

Fracking has also made it cheaper to make plastics, which come from a by-product of the extracted gas.

Experts have said that the rapid boom in plastics production has been overlooked as the lower-emitting gas has allowed the US to phase out coal plants, at a benefit to the environment.

“Industry is saying this is good because we’re replacing coal, but they don’t talk about what else they’re doing with it — which is making plastic and chemicals,” Environmental Integrity Project director of research Courtney Bernhardt said.

https://www.taipeitimes.com/News/editorials/archives/2020/04/04/2003733962
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.

gerontocrat

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Re: Oil and Gas Issues
« Reply #3696 on: April 04, 2020, 04:09:56 PM »
United States No Longer Reducing Energy-Related Carbon Emissions

 Energy use in transportation also jumped 8.3 percent versus 2012.

https://www.csis.org/blogs/energy-headlines-versus-trendlines/united-states-no-longer-reducing-energy-related-carbon

A switch from big fat gas-guzzling sedans to even bigger, fatter, SUV gasoline gluttons.
The sedan market has collapsed. I read somewhere that this is reducing average m.p.g. of personal transportation in the USA.

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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3697 on: April 06, 2020, 06:49:50 PM »
As people get used to teleworking and realize that airplanes and cruise ships are great virus spreaders, don't expect transportation emissions to rebound to pre-Covid levels.  It may take years to rebuild confidence in those forms of transportation, and battery powered planes and ships are in development now.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3698 on: April 06, 2020, 06:57:21 PM »
Meanwhile, North Sea oil producers are in financial trouble due to the low price of oil and the high cost of production.

https://oilprice.com/Energy/Energy-General/North-Sea-Oil-Faces-Crisis.html

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North Sea Oil Faces Crisis
By Vanand Meliksetian - Apr 05, 2020

Oil and gas production in the North Sea became viable due to the 1973 oil crisis. The Arab-Israeli conflict caused a serious disruption that led to skyrocketing prices. Energy security became an important issue, which supported the development of the North Sea’s energy resources. However, the industry has been in decline due to sustained lower prices in the past decade. The current crisis could be the final blow to an industry that was already struggling to survive. The North Sea enjoys several advantages that have made it an interesting investment destination. First, oil and gas fields are relatively close to consumers. The development of the region has created one of the most elaborate pipeline infrastructures in the world. Second, the industry enjoys exposure to highly developed economies in northwestern Europe that supply human capital and other necessary resources such as harbors.

However, production costs in the North Sea are relatively high compared to, for example, the Middle East. According to Kevin Swann, research analyst at energy consultancy Wood Mackenzie, energy companies need prices above $40 to maintain profitability. A window of $60-$70 would be “comfortable”, while $40-$50 puts many projects in the “risk zone”. On average globally projects are sanctioned at a breakeven oil price of $35 per barrel. Currently, Brent Crude is traded for approximately $25 and it could slide even further.

With the oil traders focusing on possible production cuts by Russia and Saudi Arabia, the Brent price index has rebounded to $32.97 as I type.  However, there are signs that the recent price boost due to a new OPEC+ deal are fading as the reality of the Covid-19 countermeasures demand destruction rule the market.

The article continues:

Quote
The crisis has significantly affected the North Sea’s energy industry. The number of workers that operate oil and gas platforms under normal circumstances stands at about 11,500. But that has already fallen to 7,000 within just a couple of weeks, which is a decrease of 35 percent. Companies have aborted all non-essential work. Also, the continued risk of infections is another threat that could derail certain operations. Rystad Energy has predicted that more than one million workers in the oil and gas industry could lose their jobs in 2020.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3699 on: April 07, 2020, 08:13:35 PM »
The US President will let the markets decide.  As the price of oil is currently lower than the cost to produce it in most US oil patches, this is not good news for the fossil fuel extractors.

https://oilprice.com/Energy/Energy-General/Trump-Free-Markets-Will-Determine-US-Oil-Production.html

Quote
Trump: Free Markets Will Determine U.S. Oil Production
By Irina Slav - Apr 07, 2020

U.S. President Trump believes local oil production output cuts will happen automatically thanks to the nature of the free market, he told reporters this week.

“I think the cuts are automatic if you are a believer in markets,” Trump said at his daily coronavirus press briefing. He also added that the U.S. had not been officially asked to take part in any production cuts.

Quote
One could argue that Trump’s call on OPEC and Russia to cut production goes counter to his belief in the free market, but it is also true that U.S. producers would be forced to cut output with or without an international agreement if their breakeven prices are higher than the price at which oil is actually trading.