Oil and Gas is a Partner — Not Adversary — in Meeting Our Economic and Environmental Goals

While the majority of the news this week is focused on the Supreme Court, there are number of energy and environmental actions being undertaken in the legislative branch, including: consideration of the House energy package, the Senate Committee on Environment & Public Works legislative hearing on Chairman John Barrasso’s (R-Wyo.) “The Endangered Species Act Amendments of 2020”, and Rep. Garrett Graves (R-La.) introduction of a bill to codify much of the Council on Environmental Quality (CEQ’s) National Environmental Policy Act (NEPA) rulemaking.

These legislative actions are crucial because they recognize that that our nation needs affordable, reliable energy and modern infrastructure to rebuild our economy, grow our workforce, and lead the world’s transition to a lower carbon future.

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Source: The Hill

Colombia’s Oil Major Plans To Drill 100 Wells In The Permian

Colombia’s state-held oil firm Ecopetrol, which has a strategic alliance with Occidental Petroleum to develop acreage in the Permian, plans to have drilled as many as 100 wells in the most prolific U.S. shale basin by the end of 2021, Ecopetrol’s CEO Felipe Bayon told a conference on Monday.

“By the end of next year, we should have over a hundred wells,” Bayon said at a virtual conference, as carried by Reuters.

Last year, Ecopetrol and Occidental Petroleum Corp agreed to set up a strategic joint venture to develop unconventional reservoirs in approximately 97,000 acres of the Permian Basin in West Texas.

This deal was part of Ecopetrol’s strategic priorities to develop more unconventional resources and have more operations outside Colombia, the company said in November 2019.

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Source: Oil Price

Oil Prices Rise On Hurricane Outages

Oil prices rose on Tuesday afternoon, ahead of the weekly crude inventory data releases, but traders remain concerned about the pace of the recovery in global oil markets.

After a sobering OPEC report on Monday, the IEA published its updated demand forecast for 2020, revising its previous outlook downward by 200,000 bpd to 91.7 bpd, slightly more optimistic than OPEC’s 90.2 million bpd forecast.

After a few months of quick demand recovery, the International Energy Agency now sees headwinds for further recovery of crude demand, expecting the pace of recovery to slow down significantly as most of the ‘’easy gains’’ are already achieved.

While most analysts and energy executives remain concerned about the slowing demand for road fuels as driving season in North America comes to an end, it’s jet fuels that represent the largest mid to long-term threat for oil markets.

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Source: Oil Price

IBM’s Next Big Bet is … the Oil Industry

IBM wants to dig more deeply into oil and gas.

In partnership with oilfield services giant Schlumberger (SLB), IBM will create a digital platform where oil and gas companies can access real-time data and software give them a competitive advantage.

The platform will layer Schlumberger’s suite of apps, called DELFI, onto IBM technology to provide digital tools to oil and gas companies — which rely heavily on computing-heavy processes like surveying a drilling site. The software could, for example, help determine if the soil and landscape in a certain area are good for drilling, or which angle is the best to drill to access the most oil over time.

“Digital has become an imperative for our industry,” Schlumberger CEO Olivier Le Peuch told CNN Business. “The whole industry recognizes that this is what can unlock the next level of efficiency, productivity and performance.”

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Source: CNN

US Oil Drilling Set to Start Rising after Cycle Turns: Kemp

The US oil industry probably passed the low point in the current cycle in July and August, with drilling rates set to start increasing from September or October and production turning up from March or April 2021.

Since hitting a low in late April, when the coronavirus epidemic was raging and lockdowns were most stringent, front-month US oil futures prices have progressively risen for the last 19 weeks.

Over the last 30 years, changes in futures prices have typically been followed by changes in drilling with an average delay of 4-5 months (15-20 weeks) and changes in output with an overall delay of 9-12 months.

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Source: ETEnergyworld

There May Be No Choice but to Nationalize Oil and Gas — and Renewables, Too

Once on the margin of the margins, calls for the nationalization of US fossil fuel interests are growing. Before the COVID-19 pandemic, the basic argument was this: nationalization could expedite the phasing out of fossil fuels in order to reach climate targets while ensuring a “just transition” for workers in coal, oil, and gas. Nationalization would also remove the toxic political influence of “Big Oil” and other large fossil fuel corporations. The legal architecture for nationalization exists — principally via “eminent domain” — and should be used.

But the case for nationalization has gotten stronger in recent months. The share values of large fossil fuel companies have tanked, so this is a good time for the federal government to buy. In April 2020, one source estimated that a 100 percent government buyout of the entire sector would cost $700 billion, and a 51 percent stake in each of the major companies would, of course, be considerably less. However, in May 2020 stock prices rose by a third or so based on expectations of a fairly rapid restoration of demand.

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Source: Jacobin Mag

Robust Chinese Demand Fuels Oil Market Recovery

Following last week’s price rally, oil prices move higher on Monday morning, on bullish demand figures coming from China. Additionally, U.S. dollar weakness contributed to last week’s price rally. Traders are also expecting deeper OPEC+ cuts of 1.15 million bbl/d in August and September. As a result, Brent crude traded above $46 which was mainly driven by the supply disruption triggered by the hurricanes in the Gulf Mexico, which affected around 84% of the USGC production where around 1.7 million bbl/d remain offline.

Laura, a category 4 hurricane made landfall early Thursday last week, in the Southwestern part of Louisiana. becoming one of the most powerful storms in history to hit the state. More than 310 offshore platforms, out of 643, were evacuated in addition to nine refineries leading to a 2.7 million bbl/d outage, around 15% of the US refining capacity. Furthermore, initial reports reveal that the damage caused to the refineries is minor, but continuing power outages could delay the resumption of refining operations.

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Source: Oil Price

3 Ways To Play The Coming Oil Boom

With the double negatives of a demand-culling pandemic and wildly declining sentiment trouncing the oil and gas and pushing companies to record lows, with $30 billion in collective debt, trying to pick a winner in this sector is growing more challenging by the day.

On the demand front, the IEA has just cut its 2020 oil production forecast by 140,000 bpd to 91.9 million bpd, sending the FTSE 100 index down 73 points, citing the airline industry’s troubles as a key source of weakness in the oil market.

But the megatrend of ESG, or “impact” investing, is the wider threat to the oil and gas industry, with energy stocks finding themselves in the penalty box due to heightened concerns about ever-rising carbon emissions and poor governance. It’s all prompting capital fleeing the sector at an unprecedented rate—even faster due to the pandemic.

The energy sector has been the worst performer in the S&P 500, gaining just 34% over the timeframe according to Refinitiv data. And in the three-month period to June, Big Oil posted massive losses as the demand shock set in.

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Source: Oil Price

Tech Giants Are Building Carbon Footprint Software For Big Oil

A growing number of oil and gas companies are looking to measure and reduce their carbon emissions under increased pressure from shareholders to join the fight against climate change – and the result is that the tech industry is starting to get into the oil and gas game.

A growing number of technology companies – from well-established names to start-ups – are now launching carbon emissions tracking and accounting software, Reuters reports.

In June, Germany’s SAP launched a carbon emissions accounting system to help firms manage and reduce their carbon footprint and accelerate the move to sustainable business practices.

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Source: Oil Price

Bank Of America: Brent Will Recover To $60 In H1 2021

Bank of America expects oil prices to recover to $60 a barrel for Brent crude in the first half of next year thanks to shrinking global inventories and prices improving faster than previously expected.

“Back in June, we upped our oil price forecasts by $5 per barrel (/bbl) and argued that Brent would average $43/bbl in 2020 and $50/bbl in 2021,” Bank of America’s analysts said as quoted by Trade Arabia.

However, since then, oil futures have been rising faster than expected even though spot prices remained range-bound, the bank noted. Because of this and because it expects an oil market deficit of 4.9 million bpd for the second half of this year and another of 1.7 million bpd next year, BofA expects prices to shoot up.

The bank’s analysts noted the slump in drilling rigs, notably in the U.S. shale patch, and the OPEC+ oil production cuts as some of the main factors that would push the oil market into a deficit and prop up prices.

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Source: Oil Price