Oil demand threatened by Delta COVID variant

Oil edged up on Tuesday after posting a loss on Monday due to demand issues sparked by the Delta variant of the COVID-19 virus.

Graph of the week

– The demand for gasoline, distillate and jet fuel is on the rise in the United States as mobility increases.

– For the week ending June 18, the four-week average gasoline demand was 94% of the four-week average for the same week in 2019, distillate was 98% and jet fuel was 74%, according to EIA.

– At their lowest points in 2020, gasoline demand fell to 56% of its corresponding 2019 level, distillate demand 80% and jet fuel demand 31%.

Market movers

Total Energies SE (NYSE: TOT) is partnership with Uber offer charging stations to EV drivers in France.

ExxonMobil workers in Chad are continuing their strike.

Californian resources dived by more than 8% after Goldentree Asset Management, which owns 10% of the company, sold shares.

Tuesday, June 29, 2021

Oil edged up Tuesday after posting a loss on Monday amid demand concerns.

New restrictions related to Covid. the spread of the Delta variant is raising a few red flags, with new restrictions on tours implemented to Hong Kong, Spain and Portugal in recent days. New outbreaks of cases have occurred in the UK and Australia, among others. The Delta variant could present risks to oil demand, and oil prices have therefore slowed.

OPEC + optimistic before the meeting. OPEC + says general oil market conditions have improved considerably in recent months. The group was optimistic at the start of meetings this week, with a decision on easing production cuts expected on July 1. Related: How Much Oil Can Saudi Arabia Really Produce?

The American shale still shows restraint. Although WTI has peaked in two years, shale drillers are not rushing with a wave of new drilling. “I am still convinced that producers will not react” to the surge in prices, noted Scott Sheffield, CEO of Pioneer of natural resources.

Anger in Texas after huge gas bills from the February storm. Utilities in several mid-US states are suffering losses from the widespread blackout in Texas in February. Lawmakers and regulators in Minnesota, Oklahoma, Missouri, Arkansas and Kansas have call for investigating market manipulation and studying regulatory changes.

The EU has endorsed the climate target in law. The countries of the European Union on Monday gave the final seal of approval for a law to make the bloc’s greenhouse gas emissions targets legally binding. The bloc will reduce its emissions by 55% by 2030.

VW will end ICE cars by 2035. German automaker Volkswagen is going Stop sell combustion-engine cars in Europe by 2035, but a little later for its sales in the United States and China.

California approves 11.5 GW of new clean energy. California has approved an 11.5 GW supply program made up entirely of clean energy resources that will come online mid-decade, marking its the biggest ever the capacity supply ordered at one time.

Shell acquires BP’s stake in the North Sea gas field. Royal Dutch Shell bought BP stake in the Shearwater gas field in the North Sea, increasing its stake in the field to 55.5%.

DUCs fall by 27%. The number of drilled but incomplete (DUC) wells in the US shale patch has fallen by 27% since the peak in June 2020, the Energy Information Administration (EIA) has estimated.

Biofuels groups urge the EPA not to issue waivers. After the Supreme Court awarded oil refiners a victory in their dispute with the ethanol groups, the biofuel industry is hoping the EPA will limit the waivers nonetheless.

Russia is struggling to increase its oil production. Russia is struggling to reverse a cut in oil production it implemented as part of its deal with OPEC +. Russia has produced some 10.42 million bpd of crude oil and condensate since the start of the month, which is lower than the May average of 10.45 million bpd. Related: U.S. Shale Producers Stick to Production Discipline

The Supreme Court ruled in favor of Penn East. The Supreme Court of the United States ruled in favor of PennEast Pipeline Company in a high-profile case over a prominent estate, overturning a lower court ruling in favor of the state of New Jersey which sought to protect landowners.

Aramco is betting on blue hydrogen. Saudi Aramco (TADAWUL: 2222) presented plans to invest in blue hydrogen as the world moves away from dirtier forms of energy, but noted it will be at least until the end of this decade before a global market for fuel develops.

The smaller tar sands continue to pump. Despite the trend towards decarbonization, the exploitation of carbon-intensive tar sands increases cash flow and efficient well in the short term.

Qatar: Gas peak around 2040. One of the world’s largest exporters of liquefied natural gas (LNG), Qatar, expects global demand for natural gas to peak around 2040. According to the Qatari state-owned giant, global demand for natural gas has further increased. two decades to grow.

Brazil’s oil boom continues. Latin America’s largest oil producer, Brazil, is one of the countries most affected by the COVID-19 pandemic in the world. In March 2021, oil and natural gas production was on the decline, with total hydrocarbon production declining nearly 3% year-on-year to an average of 3.6 million barrels of oil equivalent per day. Nonetheless, in April, operations began to resume and the country’s production of economically critical oil was increasing.

The prices of natural gas are soaring. A historic heat wave in the Pacific Northwest, along with other heat waves in parts of the United States, has contributed to a huge surge in natural gas prices. The August contract rose 7.3 cents during Monday’s trading, a rally that EBW Analytics Group analysts attributed to the near-term heat and corresponding strength in the physical market.

Natural gas prices in Europe are also skyrocketing. TTF price of natural gas shot above $ 11 / MMBtu in recent days. Russia on Tuesday refused to add more gas to its pipeline network through Ukraine, another upward spark for European gas markets.

By Josh Owens for Oil Octobers

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Felix J. Dixon