Oil Prices Climb 10% In A Week

Oil prices are expected to rise 10 percent this week as Hurricane Delta shuts down over 90 percent of production in the Gulf of Mexico, leading some analysts to claim prices are fixed for an outbreak.

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Friday 9th October 2020

Oil prices have risen sharply this week, although trading opened on Friday fell slightly. WTI was trading at $ 41 and Brent near $ 43, a crude oil gain of nearly 10 percent from last week.

Aramco doubles on oil. Saudi Aramco (TADAWUL: 2222) intends to increase oil production in the coming years in order to monetize its oil reserves in view of peak demand. Even in a world of lower oil prices, Saudi Arabia has some of the lowest cost of production in the world, which allows it to undercut the competition. Aramco aims to increase the production capacity from the current 12 mb / d to 13 mb / d.

Oil prices are unlikely to collapse. The oil market has already priced in the slowing recovery in global demand and growing uncertainties about the economy as coronavirus cases have re-emerged in many parts of the world. Analysts broadly agree that oil prices are unlikely to be much higher than they are now around $ 40 a barrel by the end of the year, but they are unlikely to fall much either, as bearish factors have been priced in.

Election doesn't move oil prices. The US is entering the final weeks of the presidential election, but the energy markets have not moved noticeably to change the fate of the candidates. According to most polls, a Biden landslide win is more likely than a Trump win. But the oil market couldn't care less. Here's why.

Oil traders should reduce emissions. The world's largest raw material and energy companies have launched an initiative to reduce emissions by 50 percent compared to 2008 by 2050.

Refineries struggle as jet fuel and gasoline diverge. Gasoline demand has recovered, but the demand for jet fuel remains depressed. Refineries have trouble producing one without the other, and two-speed recovery is squeezing margins.

Hurricane Delta switches energy offline. The hurricane delta weakened over the Yucatan peninsula, but intensified again to a Category 3 storm in the Gulf of Mexico. Oil producers had evacuated 272 offshore platforms by Thursday, representing 42 percent of the total in the Gulf.

Venezuela's rig count drops to zero. The number of oil rigs in Venezuela has fallen to zero and the country's oil sector is in a state of total collapse. The New York Times describes part of the destruction.
Related: The Secret to Survival for Canada's Oil Sands

From "petrostats" to "electrostats". In an essay on foreign policy, Columbia University's Jason Bordoff describes some of the geopolitics of energy in the world's transition to low-carbon fuels. He argues that there are many more nuances than conventional wisdom suggests - Middle Eastern oil producers are not going to collapse, Russia is not destined for disaster, and clean energy politics is much more complex than it appears at first glance.

Norway's oil strike could end when the sides meet. Oil companies and labor officials agreed to meet with a mediator on Friday to end a workers' strike that left 25 percent of Norwegian oil offline.

Chevron outperforms ExxonMobil. Earlier this week, ExxonMobil's (NYSE: XOM) market cap briefly fell below that of NextEra Energy (NYSE: NEE), a renewable energy developer. Days later, Chevron (NYSE: CVX) briefly outperformed Exxon. Exxon has regained a larger market cap, but it has not been since the days of Standard Oil that Exxon has fallen out of place.

Nord Stream 2 faces uncertainty after being fined $ 7.6 billion. Polish regulators fined Nor Stream 2 $ 7.6 billion for competition concerns. The move will not prevent the physical construction of the pipeline, which is nearing completion, but it will further poison the political atmosphere.

Total invests in the commissioning of fuel cell trucks. Total (NYSE: TOT) plans to sell its resins business to free up cash in transition to renewable energy. The French oil giant is also investing in a fuel cell startup, Hyzon Motors.

Chevron to eliminate jobs. Chevron (NYSE: CVX) is urging its employees to reapply for their jobs as the company seeks to cut 15 percent of its workforce, according to Reuters.

Trump administrator announces new Iranian sanctions. The US announced new sanctions against the Iranian financial sector, a move that critics say could have humanitarian consequences. Meanwhile, Bloomberg reports that a potential Biden administration could see a return in Iran's oil supplies if the two countries return to a nuclear deal.

OPEC sees peak load. For the first time, OPEC recognized the likelihood of peak oil demand, even though the cartel says the date won't come for about 20 years.

Tesla wants to produce 500,000 cars. Tesla (NASDAQ: TSLA) has the chance to produce half a million cars this year, according to Elon Musk.

Record renewable energy installations this year, 2021 uncertain. The EIA estimates that solar and wind capacity could grow by a record 37 GW this year, more than doubling the previous annual record of 17 GW set in 2016. Part of the massive growth is the result of developers trying to get past expiring subsidies. However, growth is expected to slow in 2021 and beyond unless supportive policies return.
The story goes on

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