What’s Keeping Oil From Rallying To $75?

WTI recently hit $60 per barrel for the first time since November, driven higher by the OPEC+ cuts, as well as by outages in Venezuela and Iran. Those supply cuts have been tightening up the market for a while now, but the mid-week report from the EIA that showed a massive inventory drawdown helped push WTI over $60 per barrel. Oil prices had seemed to run out of steam just short of that threshold, but the decline of 9.6 million barrels was a surprise. “It was also the biggest inventory reduction within a week since July 2018…Stocks…

A New Trend In Natural Gas: Just-In-Time Supply

U.S. natural gas prices reached the highest maximum level in 4 years this winter. That’s because of a new “just-in-time” gas supply paradigm that relies more on wellhead production than storage. It has pluses and minuses. In November 2019, weekly Henry Hub spot prices were $4.68/mmBtu, a level only exceeded in January 2014 over the last several years (Figure 1). (Click to enlarge) Figure 1. Highest natural gas price maximum in four years.Source: EIA and Labyrinth Consulting Services, Inc.That was because winter gas storage was…

What Norway’s Decision To Divest Means For US Shale

After months of deliberations, Norway’s government proposed in March that the country’s US$1-trillion fund—the world’s biggest sovereign wealth fund—divest from oil and gas exploration companies. The move by the fund, which has amassed its vast wealth on the back of Norway’s oil and gas revenues, comes at a time when investors are increasingly pressing major oil companies to start taking climate change seriously and to prepare their business portfolios for a world of peak oil demand, whenever that may come. Norway,…

Oil Markets Ignore Warning Signs Of Looming Recession

When you write about financial markets as I do, being a profit of doom can be a good short-term strategy, and that short-term nature makes it an effective one in the modern ADHD world. A headline about an impending “collapse” or “crash” is, after all, much sexier than “We will probably go a bit higher over time because that is what has happened consistently over the last two hundred years or so…”, and a sexy headline draws clicks and eyeballs. Fear sells, but there are two reasons to avoid exploiting that.…

Russia, U.S. Compete For Asian LNG Market Share

For several years, at least since Donald Trump became president more than two years ago, the U.S. has insisted that American sourced liquefied natural gas (LNG) is the answer for Europe’s gas diversification needs, particularly a long-needed pivot away from geopolitically charged Russian pipeline gas. Moreover, U.S. claims that its LNG is the answer for European gas and energy security needs have caused rifts in EU-US relations, particularly relations between longtime allies Washington and Berlin.  In a televised meeting with reporters…

How Big Oil Could Become Big Electricity

When Big Oil majors started buying EV charging networks and battery producers, they probably earned some praise for venturing into new business directions away from their increasingly unpopular core business. Now, they are taking this a step further: supermajors have super utility plans. It was only a matter of time, really. Integrated oil companies know the importance of covering the whole supply chain in an industry, so it only made sense to grow into power generation once you’ve established a presence in one of the biggest growth segments…

Flurry Of Bearish News Sends Oil Lower

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Friday, threatening to erase this week’s gains just one day after the markets hit a four-month high. The price action is being driven by uncertainty over domestic and global economic growth on future demand. Despite the worries, the market continues to be supported by the OPEC-led supply cuts and the U.S. sanctions against Iran and Venezuela. On Thursday, both WTI and Brent crude oil hit new highs for the year, but both showed little follow-through…