All posts by Nick Cunningham

IEA: Oil Demand To Fall For First Time In A Decade

The IEA slashed its demand forecast for the first quarter of 2020, predicting that global oil consumption will contract for the first time in over a decade. In its first publication on the oil market since the outbreak began, the International Energy Agency (IEA) dramatically revised its oil demand forecast, predicting consumption will actually contract by 435,000 bpd, the first outright decline year-on-year since the global financial crisis more than a decade ago. Previously, the agency expected consumption to increase by 800,000 bpd from a year…

Canada Rocked By Anti-Pipeline Protests

Protests continue to swell over the Coastal Gaslink Pipeline, a long-distance pipeline carrying natural gas from Alberta to the Pacific Coast. The pipeline’s route would travel more than 400 miles to the coast at Kitimat, British Columbia, where it intends to deliver gas to a massive LNG export project, under construction by a joint venture led by Royal Dutch Shell. The $6.2 billion Coastal Gaslink pipeline, which is being built by TC Energy, runs through territory of the Wet’suwet’en Nation. Some First Nations chiefs support…

Shale Gas Drillers Are Facing A Perfect Storm

Natural gas prices under $2/MMBtu have hit Appalachian shale gas drillers hard, but the longer the gas glut wears on, the deeper the problems will become. With each passing week, the shale industry reveals more financial stress. On Monday, analysts at Piper Sandler downgraded their near-term outlook for Range Resources and Gulfport Energy, two Appalachian drillers, to Neutral from Overweight, citing a “deteriorating” outlook. An analyst with the firm pointed to the global glut for LNG, the coronavirus, collapse of prices and force majeure…

The Ticking Time Bomb That Could Crush Oil Markets

Libya’s oil production is down to less than 200,000 bpd, and the uncertainty surrounding the outage create complications for OPEC+ as it looks to cut deeper. Libya’s civil war entered a dangerous new phase a few weeks ago when the Libyan National Army (LNA) and associated militias blockaded oil export terminals as a way of applying pressure on the Government of National Accord (GNA) in Tripoli. The standoff continues, and Libya’s output has plunged to around 180,000 bpd, according to estimates from late last week. On Sunday, Libya’s…

Oil And Gas Prices Fall As OPEC Fails To Act

Oil sank again as OPEC+ backed away from an emergency meeting. OPEC’s Joint Technical Committee (JTC) recommended extending the current production cuts through the end of the year while adding an additional 600,000 bpd in reductions.  Russia hesitated last week, before signaling some support for additional cuts. Still, nothing has yet been confirmed or approved. OPEC+ had raised expectations of an emergency meeting, rumored to take place as soon as this week, but now it looks like nothing will occur before the previously scheduled meeting…

OPEC+ Cuts Fail To Boost Oil Prices

After deliberations, Russia appears set to support Saudi Arabia in the push for deeper production cuts. OPEC’s Joint Technical Committee met on Tuesday, and it was only supposed to be a two-day affair. The expectation was that the JTC would conclude that the oil market was oversupplied and that OPEC+ should cut more. But Russia was unconvinced and asked for more time. The talks stretched on, and the prospect of the negotiations ending with no result sent oil prices down towards the end of the week. But Russia’s top diplomat ended the…

Peak Shale Will Send Oil Prices Sky High

Much of the cheap oil has been produced, and the oil industry is increasingly relying on costly reserves. While the world is awash in supply right now, the market may begin to tighten up in the next few years, forcing prices higher. But the global economy will begin to sputter as a result of higher crude prices. “The current economic system cannot sustain oil prices above $100 a barrel, and engage in genuine growth in the real economy for very long,” warned the report, authored by Dr. Simon Michaux and published by the Geological Survey…

“Gasmaggedon” Sweeps Over Global Gas Market

China’s state-owned gas importers are considering declaring force majeure on LNG imports, which would amplify the turmoil in global gas markets. LNG prices have already plunged to their lowest levels in a decade in Asia as the ramp up of supply in 2019 came at a time when demand has slowed. That was true before the outbreak of the coronavirus. But the quarantine of around 50 million people and the shutdown of huge swathes of the Chinese economy has sent shockwaves through commodity markets. Shipments of oil and gas are backing up at Chinese…

Oil Prices Already Reflect Huge Demand Destruction

OPEC+ is moving quickly to try to halt the meltdown in oil prices as the demand hit from the coronavirus continues to grow. The Joint Technical Committee (JTC) meets Tuesday and Wednesday to assess the damage and to recommend a course of action. Press reports suggest OPEC+ is considering deeper cuts on the order of 500,000 bpd to 1 million barrels per day (mb/d). The rumor was enough to halt the slide in oil prices on Tuesday, after WTI briefly dipped below $50 per barrel during intraday trading on Monday. BP’s CFO Brian Gilvary said that…

Exxon: An Oil Giant In Crisis

Goldman Sachs downgraded ExxonMobil’s shares to Sell from Neutral, following another disappointing quarter. Exxon reported a drop in profits on Friday for the fourth quarter, weighed down by a deterioration in nearly every segment. Oil prices were weak, natural gas prices fell sharply, while profit margins for refining and petrochemicals also deteriorated. “There’s no doubt that 2019 was a challenging year for a number of our businesses,” Exxon CEO Darren Woods admitted to shareholders and analysts on an earnings call on January…