recovery-oil-demand

What’s Holding Back A Full Recovery In Oil Demand

Since oil demand started crashing amid lockdowns to contain the coronavirus, analysts have been trying to predict when demand will return to the pre-crisis levels, throwing in V, U, or L shaped forecasts. There is a growing consensus among major international forecasting agencies that a ‘return to normal’ oil demand will take longer than anticipated—probably until 2022. Many analysts believe that a V-shaped recovery for total global oil demand is not in the cards.

While oil demand for road transportation is showing signs of recovery–especially in China, which exited lockdowns first–demand for jet fuel will continue to drag on global oil demand for at least another two years. Permanent changes in lifestyle and possible reduced commuting in developed economies (with work from home now the norm rather than the exception) could also weigh on oil demand. Then there’s the recession with high unemployment rates and reduced manufacturing activity, which could also stall the recovery in oil demand.

According to the International Energy Agency (IEA), oil demand will take over a year and a half to (potentially) return to the levels before the pandemic.

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Source: Oil Price

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pipeline

U.S. Supreme Court Grants Right-Of-Way To Key Natural Gas Pipeline

The U.S. Supreme Court sided with the developers of a natural gas pipeline project, clearing some of the obstacles to the completion of the Atlantic Coast Pipeline by ruling this week that the U.S. Forest Service had the authority to grant the right-of-way to the pipeline to pass through the Appalachian Trail in Virginia.

Atlantic Coast Pipeline, a US$7.5 billion project proposed by Dominion Energy and Duke Energy, is a 604-mile natural gas pipeline from West Virginia to North Carolina along a route that crosses 16 miles of land within the George Washington National Forest. The project had secured a special use permit from the United States Forest Service, obtaining a right-of-way to go underneath a portion of the Appalachian National Scenic Trail, which also crosses the National Forest.

But environmentalists and other associations appealed the permit at the Fourth Circuit court, which vacated that permit, effectively halting the project.

Now the U.S. Supreme Court, in a 7-2 ruling on Monday, overturned the lower court’s ruling to vacate the permit.

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Source: Oil Price

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oil-price-jump

Oil Jumps 2% on Optimism Around OPEC+ Output Pact

Oil prices rose on Monday as signs fuel demand was recovering while OPEC+ members were complying with a production cut deal outweighed fears that new coronavirus infections could further slow the global economy.

West Texas Intermediate crude rose 86 cents, or 2.37%, to settle at $37.12 per barrel. Brent crude rose 96 cents, or 2.5%, to trade at $39.73 per barrel.

Prices rebounded from early losses after the energy minister of the United Arab Emirates voiced confidence that OPEC+ countries with poor compliance to agreed cuts would meet their commitments and reported signs oil demand was picking up.

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Source: Reuters

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oil-price

Drilling Executive: Oil Prices Could Hit $70 This Fall

WTI Crude prices may be set for a 90-percent jump to $70 a barrel by the fall as U.S. oil producers may have “over-cut” production, Dan Eberhart, chief executive of Canary Drilling Services, told Markets Insider this week.

According to the manager of the drilling firm, U.S. oil companies have curtailed production too much too fast when prices collapsed, setting the stage for a “mini-supply shock” on the U.S. oil market.

Early on Friday, WTI Crude prices were rallying 4.38 percent to $39.05, as the market appears confident that the OPEC+ group will extend the current level of production cuts for one month after June at a meeting scheduled for Saturday.

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Source: Oil Price

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oil-gas-king

Oil & Gas Still King Despite Renewable Hype

The death of coal has run hand-in-hand with the rise of renewable energy, though the real credit for killing king coal might just go to U.S. shale. Even if the renewable revolution is growing too big to ignore.

There are plenty of environmental and ideological reasons that many academics and pundits are pushing for placing renewable energy at the heart of COVID-19 economic recovery plans. But it turns out that there are plenty of economically compelling reasons for a renewables-forward strategy as well. Last month the World Economic Forum published a report pleading with the energy industry to use the novel coronavirus’ unprecedented disruption of the economic and societal status quo to begin building a “new energy order.” Although COVID-19 has severely battered (in some cases irreparably) huge portions of the global energy industry, this is a unique opportunity to redirect resources, investment, and research and development into renewable energy ventures that we may never see again in our lifetimes–and then it will be too late.

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Source: Oil Price

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oil

U.S. Crude Strengthens as Certain Stimulus Measures to Continue

U.S. crude ended slightly higher on Tuesday, as U.S. Treasury Secretary Steven Mnuchin said he supported extending certain measures intended to bolster the economy, while Brent ended lower on concerns that output cuts might not be sufficient.

Oil has rallied for several days following numerous output cuts from major producers to curb supplies, and as demand picks up with governments worldwide easing restrictions on movement put in place to stop the spread of the coronavirus pandemic.

The front-month contract for U.S. West Texas Intermediate crude, which expires on Tuesday, settled up 68 cents a barrel, or 2.1%, at $32.50 a barrel. The July contract, trading at vastly higher volumes, settled up 31 cents at $31.96 a barrel.

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Source: Reuters

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oil-collapse

Is The Oil Collapse Over Already?

It has just been an amazing week for crude oil! We haven’t seen upward movement in WTI like we’ve seen this week in…forever, on a percentage basis. Buoyed by a dramatic shift in sentiment following an avalanche of good news generally, over a very short time span oil has rocketed higher.

Key among this data was a crude storage report turning out to not be as bad as originally feared and on the decline. In the most recent weeks’ edition of the EIA-WPSR, a slight build was forecast, that turned into an actual decline of 0.7 mm bbls. The market loves data like this, particularly in the face of several months of increasing bearish data up to this point.

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Source: Oil Price

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