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goldman sachs oil

Goldman Turns Bullish On Oil: Sees $65 Brent In 2021

Structural underinvestment in oil and gas will put upward pressure on oil prices. Goldman Sachs’ commodities chief Jeffrey Currie told CNBC this week and gave comments on commodity markets.

All markets except wheat, Currie noted, are in a deficit, and this is certainly bullish for prices. But what he calls structural underinvestment also has its part to play in the future of prices. This is particularly true for oil, where the underinvestment is not just by the price rout. It is by the shift toward renewable energy investments.

This shift, however, may stimulate short-term demand for oil, Currie also noted, expecting it to rise over the next few years as so-called green infrastructure is being built. Afterward, as this infrastructure starts operating, there will be a negative impact on oil demand and, likely, prices.

Oil started this week again as the United States began vaccinating its frontline workers, but by the end of trade, prices were on the decline again as worry about excessive supply outweighed the positive news about the vaccines.

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Source: Oil Price

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Oil Prices Rise As U.S. Vaccinations Begin

Oil prices rose early on Monday after the U.S. FDA approved the Pfizer-BioNTech vaccine for emergency use and shipments of batches of vaccine vials began this weekend, with first vaccinations expected as early as on Monday.

As of 9:04 a.m. ET today, WTI Crude prices had gained 1.67 percent at $47.34, and Brent Crude was trading at above the $50 a barrel mark, at $50.69, up by 1.48 percent on the day.

Last Thursday, Brent Crude hit $50 a barrel for the first time since oil prices had crashed in early March, as hopes of swifter-than-thought vaccine rollout fueled bullish expectations of strengthening oil demand early next year.

The U.S. approval of the Pfizer-BioNTech vaccine further strengthened bullish sentiment on Monday that fuel demand could rise with mass vaccination. The U.S. Food and Drug Administration (FDA) issued on Friday the first emergency use authorization for a vaccine against COVID-19. The authorization allowed the vaccine to be distributed in the United States.

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Source: Oil Price

Was Buffett Right About Energy In 2020?

Every time Berkshire Hathaway founder and CEO Warren Buffett buys or sells a stock, the investing world tends to sit up and take notice. That’s mainly because the Oracle of Omaha has a better investing track record than your average hedge fund, managing to outperform the S&P 500 in 37 of the past 55 years, or about two-thirds of the time.

Buffett made his foray into the energy sector 18 years ago when Berkshire bought a $500 million stake in PetroChina Co. (NYSE:PTR) before selling it five years later for a $3.5B profit.

His energy track record after PetroChina has, however, been a mixed bag. His next big purchase, ConocoPhillips (NYSE:COP) in 2008, ended up losing Berkshire Hathaway Inc. (NYSE:BRK.B) several billions of dollars.

His biggest hit so far has been his 2009 investment in Burlington Northern Railroad for $44 billion. BNSF is a railroad behemoth that used to transport crude from the Bakken to refiners and still transports enough coal to generate 10% of the electricity consumed in the United States since the purchase. Berkshire has collected nearly $20 billion dollars in dividends from Burlington Northern Railroad, annual revenues have increased by 80%, and earnings have more than doubled.

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Source; Oil Price /

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3D-Printing

How 3D Printing Will Reshape The Oil And Gas Industry

Multiple new technologies are present now that’s why the oil and gas industry is suffering in 2020. 3D printing is the latest fad to gain traction in space. Additive manufacturing has been extremely useful during the Covid-19 pandemic. It is delivering vital PPE to frontline workers across the globe. But now, the ever-evolving technology is also useable in innovative ways across the energy sector.

Earlier this year, we saw several companies relying on 3D printing to supply hard-to-get parts because of global pandemic restrictions and delays in delivery. This takes the reliance away from third-party companies as well as the need to ship parts from other countries. Further, the more parts that can be in-house, the better the inventory processes of the company.

To effectively manufacture additives, companies must create a digital inventory. The idea is to make a database of all the parts we need. Their design and how they can be makeable with a 3D printer. This helps companies prepare for any spare parts they might suddenly need.

The Process

3D printing continues to be a costly process. It is particularly useable for basic parts such as pipes, nuts, and bolts. It’s fantastic for when you’re in a bind and parts are impossible to get your hands on.

By 2025, 3D Printing in the oil and gas sector is expected to be worth $32 billion according to recent reports. Although 3D printing only accounts for 0.1 percent of the global manufacturing market at present, increased adoption of the technology suggests that it could be worth as much as $60 billion by 2030.

3D printing has already been adopted by the automotive and aerospace industries. Now, the energy sector is looking to 3D printers for manufacturing processes, to supply vital components at the drop of a hat.

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oil-gas-spending

Will OPEC+ Increase Oil Production In January?

OPEC+ is discussing the possibility of starting to raise its collective oil production from January, the Wall Street Journal reported, citing unnamed sources familiar with the discussions.

The extended oil cartel is meeting today to continue debates on the future of its oil production cut deal after it failed to reach an agreement on Tuesday. According to Reuters, most observers were unanimous that OPEC+ will continue with the current rate of cuts—7.7 million bpd—which were originally supposed to be in effect until the end of this year, to be followed by a relaxation of 2 million bpd beginning in January.

Russian business daily Vedomosti reported yesterday that Moscow would rather boost production from January by a modest 500,000 bpd, and The Wall Street Journal’s sources also mentioned this figure. In that, Vedomosti said, Russia’s position was shared by the UAE.

According to the WSJ sources, an increase in production of half a million barrels daily would be the compromise necessary to move the deal forward after internal divisions in OPEC+ cast a shadow over its future.

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Source: Oil Price

oil-and-gas

U.S. Oil Production Is On The Rise Again

Crude oil production, including lease condensate, in the United States rose in September to 10.860 million barrels per day on average, according to the Energy Information Administration’s monthly report released on Monday. September’s oil production was up 286,000 barrels per day on average compared to the month prior, but still down significantly—1.635 million bpd—from September 2019.

The increase in September over August was mostly due to offshore oil production off the Gulf of Mexico, which saw a 315,000 bpd increase to 1.510 million bpd. This compares to 1.917 million bpd in September 2019.

North Dakota’s oil production also increased in September to 1.215 million bpd, for an increase of 61,000 bpd.

Meanwhile, Texas—which accounts for the largest portion of oil production by far – saw declines in its September crude oil production, to 4.628 million bpd from 4.688 million bpd. Texas’ oil production is 563,000 bpd lower than the same month last year.

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Source: Oil Price

Saudi Arabia Oil

Total And Exxon Renegotiate A Major Gas Sharing Deal

Supermajors ExxonMobil and Total are renegotiating a natural gas resource sharing deal for their respective liquefied natural gas (LNG) projects offshore Mozambique, Reuters reports, citing sources with knowledge of the talks.

Exxon and Total are leading the Rovuma LNG and the Mozambique LNG projects, respectively, and are looking to renegotiate a 2015 deal on using resources from the basins that would supply gas to their respective projects. Both oil majors, who are looking to cut project costs, want to use the resources from a shared field first because they are cheaper to extract.

The 2015 deal stipulates that Exxon and Total extract a total of 24 trillion cubic feet of natural gas from the “straddling” reserves in a 50/50 share in the first phases of their projects.

“They want to use the cheapest gas first – which is the straddling resources,” one of Reuters’ sources said.

The renegotiation of the gas extraction deal also involves the government of Mozambique, which has to sign off on any new resource-sharing deal, the sources told Reuters.

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Source: Oil Price

Morgan Stanley

Oil Stocks Are Finally Bouncing Back

This year has been a true rollercoaster ride for the U.S. oil and gas market, but it is increasingly looking to end on a high note.

The sector is up nearly 16% over the past 10 days alone as the world moves closer to vanquishing one of mankind’s biggest threats in modern history.

The outlook keeps getting better for the oil and gas bulls.

Here are three key reasons why the bulls are likely to have the upper hand going forward.

#1. Covid-19 vaccines The oil and gas industry has been deeply out of favor over the past few years, thanks to huge supply/demand imbalances that only got much worse after Covid-19 struck. Indeed, trying to call a bottom on the bear market has largely been a fool’s errand as one step forward (OPEC production cuts) was immediately met by several steps backward (massive demand destruction due to global lockdowns).

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Source: Oil Price

venezuela

Why Biden’s Approach To Venezuela Is So Important For Oil Markets

In a hard-fought campaign Democrat Joe Biden won the November 2020 U.S. presidential race beating incumbent Donald Trump. There were considerable fears in the run-up to the election that a Biden victory would put a damper on oil prices but, along with the boost given by news of a COVID-19 vaccine, the opposite has occurred. This has been a boon for many South American countries where petroleum production is an important economic driver. Biden’s ascension to the top job marks an end to the hardline policy taken by the Trump White House toward Venezuela and its attempts to oust autocratic socialist leader Nicolás Maduro.

Trump’s aggressive sanctions, which cut Venezuela off from global energy and capital markets as well as the veiled threat of military intervention appear to have failed. Essentially, that policy forced Maduro to turn initially to China, then Russia and finally Iran for assistance to prop-up his position and receive strategic financial, economic, political and military lifelines. It permitted Moscow to bolster its influence in Latin America and gain control over Venezuela’s vast oil reserves, which at 300 billion barrels are the world’s largest. In exchange for debt relief, loans and military advisers Moscow gained access to Venezuela’s all-important economic engine and some of the country’s most valuable oil assets. These include ownership of interests in some of Venezuela’s most productive oil projects and a 49.9% lien, from an oil backed loan, over PDVSA’s Citgo refining business, which many analysts regard to be the crown jewel of the state-owned oil company’s assets. To mitigate the impact of U.S. sanctions on Russian government controlled but publicly listed energy company Rosneft, which initially was responsible for the oil backed loans to Caracas, a Kremlin owned company purchased all Venezuelan assets earlier this year.

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Source: Oil Price

Best 3 Stocks to Buy Now

Oil and Gas Discoveries Resilient In 2020 Despite Pandemic

There have been delays in drilling campaigns and reduced exploration budgets due to COVID-19. With that, the volume of oil and gas discoveries globally is set to reach 10 billion barrels of oil equivalent (boe) this year. This will avoid a repeat of the multi-decade low during the previous crisis in 2016. This is what Rystad Energy said in a new analysis on Monday.

In 2016, just 7.7 billion boe were discovered globally.

Between January and October this year, a total of 73 discoveries of oil and gas resources were announced. This is the combination of resources exceeding 8 billion boe, the energy research company said.

Wildcats planned for the final two months of 2020 could yield more resources. This will raise this year’s total discovered volumes to around 10 billion boe. Palzor Shenga, a senior upstream analyst at Rystad Energy, said.

Of the discoveries announced through October, 36 were onshore and 37 were offshore. The gas accounts for 46 percent of the total discovered resources.

The leader in total discovered volumes this year is Russia. This is where gas discoveries prevail. Also, this is by Suriname with mostly oil discoveries. The United Arab Emirates (UAE) with all discoveries consisting of gas.

Among the companies with the highest resources discovered, Russia’s gas giant Gazprom leads, followed by Total and Apache, which found around 960 million boe and 700 million boe, respectively, mainly thanks to three major discoveries in Block 58 offshore Suriname, Rystad Energy said.

In 2019, oil and gas explorers discovered 12.2 billion boe, the highest volume since 2015, Rystad said earlier this year.

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Source: Oil Price