Zubee Capital Oil and Gas Update (2024)

23/02/2021

Summer oil market looks strong after Texas freeze, says crude trader Trafigura

(Bloomberg) --Trafigura Group sees oil markets firming in the coming months as most of the world emerges from lockdowns and production losses from the recent U.S. deep freeze add to a tighter supply outlook.

“We have a strong market going into summer,” Ben Luckock, co-head of oil trading at the commodities trading giant, said in a Bloomberg Television interview. “We’re certainly very bullish most of the world in getting out of lockdowns this summer. So this market has been given an impetus given the events in Texas.”

The market is likely underestimating the impact from an unprecedented polar blast that hit the central U.S. last week, Luckock said. Some 40 million barrels of February oil output, largely from the Permian Basin, will not be produced due to the freeze, while refined products likely faced a similar number in lost output, he said. Plus, about 1 million barrels a day of crude production may never come back due to the damage some oil wells incurred from the weather.

While it’s “impossible” at the moment to comprehensively assess the impact of the recent polar blast, figures for U.S. crude and refined products will likely show large draws in the next few weeks, further helping firm oil markets, Luckock said.

Global benchmark Brent crude futures have risen roughly 25% this year as a combination of vaccine breakthroughs and OPEC+ supply curbs triggered a rally to more than one-year highs. Underpinning the recent gains in headline crude prices, the oil futures curve has also markedly firmed where nearer-dated contracts are more expensive than later ones -- a bullish structure called backwardation that Luckock says is likely “here to stay.”

READ FULL SOURCE: https://www.worldoil.com/news/2021/2/20/summer-oil-market-looks-strong-after-texas-freeze-says-crude-trader-trafigura

The market is likely underestimating the impact from an unprecedented polar blast that hit the central U.S. last week, while some 40 million barrels of February oil output, largely from the Permian basin, will not be produced due to the recent Texas freeze.

23/02/2021

Texas Alliance: Last week’s rare cold weather stressed the power grid, but gas wasn’t the culprit

The brutally cold temperatures that hit the State of Texas, beginning on Feb. 14 and lasting through this past week—thanks to Winter Storm Uri—resulted in the inability of the ERCOT (Electric Reliability Council of Texas) grid to provide enough power to keep electricity flowing for household and commercial use. As a result, rolling blackouts were implemented, to try to bring usage down to the available levels of power being supplied.

In some locations, these blackouts were short, with only one or two occurrences, while in others, power remained out for days. These matters will be under investigation in the weeks ahead, and much light will be shed on the events of the past week.

People looking for scapegoats. For now, however, proponents of expanded renewable forms of energy (and opponents of fossil fuel energy, including petroleum) have taken this catastrophe as an opportunity to demonize natural gas, suggesting that falling natural gas supplies were the primary source of the loss of power supply.

READ FULL SOURCE: https://www.worldoil.com/news/2021/2/20/texas-alliance-last-week-s-rare-cold-weather-stressed-the-power-grid-but-gas-wasn-t-the-culprit

Proponents of expanded renewable forms of energy (and opponents of fossil fuel energy, including petroleum) have taken this catastrophe as an opportunity to demonize natural gas, suggesting that falling natural gas supplies were the primary source of the loss of power supply.

23/02/2021

Socar Trading projects oil prices to hit $80 in 2021

(Bloomberg) --Oil prices will hit $80 a barrel this year as demand comes roaring back and producers won’t be able to immediately respond with sufficient supply, Socar Trading SA said, joining a chorus of bullish calls on the market.

Hayal Ahmadzada, Socar’s chief trading officer, said the glut of excess oil stocks that built up in 2020 in response to the pandemic will be fully drawn down by the summer. At the same time, soaring prices for steel used in pipes, wells and fittings as well as the high cost of capital for producers will crimp a meaningful supply response by an already hobbled industry even as demand returns.

“I will not be surprised if we see $80 a barrel in summer or before year-end and above $100 a barrel in the next 18 to 24 months,” Ahmadzada said in an interview from Baku, Azerbaijan.

The global trading arm of the government-controlled State Oil Company of Azerbaijan Republic, Geneva-based Socar Trading is one of the world’s biggest energy trading houses, handling around 1 million barrels a day of crude and petroleum products, giving it keen insight into global energy supply and demand.

READ FULL SOURCE: https://www.worldoil.com/news/2021/2/20/socar-trading-projects-oil-prices-to-hit-80-in-2021

Hayal Ahmadzada, Socar’s chief trading officer, said the glut of excess oil stocks that built up in 2020 in response to the pandemic will be fully drawn down by the summer. At the same time, soaring prices for steel used in pipes, wells and fittings as well as the high cost of capital for producer...

22/02/2021

Angola to allow oil and gas drilling in some nature preservation zones

Angola to allow oil and gas drilling in some nature preservation zones
By CANDIDO MENDES on 2/21/2021

Okavango River Basin
Okavango River Basin
(Bloomberg) --Angolan lawmakers revoked a ban on exploration for crude and natural gas in protected natural reserves, including the Kassanje Basin and the wildlife-rich Okavango River Basin.

Prospecting will be allowed in 5% of protected zones and “possibly” only 3% will be drilled, Mineral Resources Minister Diamantino Azevedo said.

“What we’re doing is not unheard of,” he said, citing the U.S., Norway and Gabon as examples of countries exploring for oil in protected zones. Oil revenues will benefit local communities and the parks themselves, he said.

The move may breach international agreements because Angola receives donor funding to protect the sites, according to Luanda-based environmental activist Eufrazina Paiva. Angola will respect its commitments to protect habitats, State Secretary for Social Communication Nuno Caldas Albino said.

The change is still to be signed into law by President Joao Lourenco, who had proposed the amendment.

The National Agency for Petroleum, Gas and Biofuels on Feb. 10 opened a “limited” public tender for a domestic company to carry out studies on the environmental impact, restoration and restocking of the eastern and western parts of the Etosha and Okavango Basin, according to an announcement on its website.

READ FULL ARTICLE :

https://www.worldoil.com/news/2021/2/19/angola-to-allow-oil-and-gas-drilling-in-some-nature-preservation-zones

Angolan lawmakers revoked a ban on exploration for crude and natural gas in protected natural reserves, including the Kassanje Basin and the wildlife-rich Okavango River Basin.

22/02/2021

Nigeria blocks Shell’s bank accounts over oil pipeline dispute

(Bloomberg) --A Nigerian court restricted Royal Dutch Shell Plc’s access to its bank accounts in the West African country amid a legal dispute with a local oil producer over a pipeline deal six years ago.

Aiteo Eastern E&P Co. Ltd. is demanding billions of dollars in damages, claiming Shell misrepresented the condition of the pipeline and under-counted the volume of crude one of its facilities received from the Nigerian firm, according to court documents seen by Bloomberg.

Shell said Aiteo’s lawsuit is baseless and it is working to overturn the freezing order.

The dispute is just one among a growing list of legal entanglements related to Shell’s business in Africa’s largest crude producer. Since the start of the year, a Dutch court has ordered the company to pay compensation for oil spills in two villages more than a decade ago, and the U.K. Supreme Court allowed 40,000 fishermen and farmers to sue Shell in England.

The legal precedents could result in the company facing more cases related to Nigeria in its home country.

A federal court in Lagos, Nigeria’s commercial hub, on Feb. 15 retained an injunction issued late last month directing Shell not to withdraw funds held at 20 banks “without first preserving or ring-fencing” almost $2.8 billion. The judge, Oluremi Oguntoyinbo, has adjourned proceedings until Feb. 24.

READ FULL ARTICLE :

https://www.worldoil.com/news/2021/2/19/nigeria-blocks-shell-s-bank-accounts-over-oil-pipeline-dispute

A Nigerian court restricted Royal Dutch Shell Plc’s access to its bank accounts in the West African country amid a legal dispute with a local oil producer over a pipeline deal six years ago.

22/02/2021

Argentina’s Vaca Mu**ta shale goals move further out of reach

(Bloomberg) --YPF SA, Argentina’s state-run oil company, needs to come up with more than $1 billion to spur drilling in Patagonia, where it’s leading development of the biggest shale patch outside the U.S.

It’s not going to be easy. YPF restructured bonds last week to free up money to spend on shale, which demands a relentless cycle of drilling and fracking. But relatively few creditors took the new notes, and the company could only get $630 million of relief from debt payments over the next two years. It wanted more than that and will have to take extra steps to achieve spending targets, according to a person familiar with the matter.

Cash Crunch

“They really didn’t clean their house as they’d hoped,” said Fernando Valle, an oil analyst for Bloomberg Intelligence in New York. YPF declined to comment.

YPF is aiming for capital expenditures this year of $2.7 billion, which includes $1.3 billion in shale formation Vaca Mu**ta, as it tries to halt four years of production declines. After the coronavirus pandemic decimated revenue and the debt swap yielded limited results, getting there will require increasing fuel prices, cutting drilling costs, selling local debt, and maybe divesting assets.

READ FULL ARTICLE :

https://www.worldoil.com/news/2021/2/19/argentina-s-vaca-muerta-shale-goals-move-further-out-of-reach

YPF is aiming for capital expenditures this year of $2.7 billion, as it tries to halt four years of production declines. After the coronavirus pandemic decimated revenue and the debt swap yielded limited results, getting there will require increasing fuel prices, cutting drilling costs, selling loca...

16/02/2021

Texas prioritizes natural gas to electricity plants amid record winter storms

HOUSTON – The Texas Railroad Commission is taking action to prioritize natural gas supplies to support electricity generation, as the state faces multiple days of record cold temperatures.

In a statement, the RRC said:

“The safety and protection of Texas residents is of utmost importance to the RRC. As an exceptional winter weather system sweeps across Texas, the Commission took action to ensure that Texas families and businesses can stay warm. RRC commissioners during an emergency meeting Friday night temporarily amended Rule 2 of Order 489 to elevate electric generation facilities serving human needs customers to a higher priority. This action was taken to ensure the availability of gas supplies to gas-fired generation facilities in Texas during this critical period. The Commission took this action to prioritize the protection of public health and safety during this extreme weather event.”

SOURCE: https://www.worldoil.com/news/2021/2/12/texas-prioritizes-natural-gas-to-electricity-plants-amid-record-winter-storms

The Texas Railroad Commission is taking action to prioritize natural gas supplies to support electricity generation, as the state faces multiple days of record cold temperatures.

16/02/2021

Record cold brings a windfall for small U.S. natural gas producers

HOUSTON (Bloomberg) --Chris Bird first saw the rumors Friday morning on Twitter.

Physical natural gas prices were soaring in Oklahoma amid a cold blast that was gripping much of the U.S. and only stood to get worse. Bird, owner of a small gas producer in Tulsa, called one trader who confirmed the heating fuel was going for a staggering $350 per million British thermal units. Then he called another who said it had risen to $395.

That’s all Bird needed to know. He and his production technician grabbed some winter clothes at the dollar store and drove the stretch of highway to Osage County some 20 miles north. They met up with a buddy who owns a propane torch and began melting ice off idled gas wells to get them back online.

“We’ve got four of us in the office turning on every single gas well that we’ve got,” Bird said. “We have old wells that haven’t produced in 10 years, and we’re like, ‘open the taps, let’s go.’”

After years of depressed prices and weak margins, U.S. natural gas producers -- at least those with wells and equipment that aren’t frozen -- are cashing in on an unusually extreme blast of cold. The freeze is giving a rare boost to a market that’s never recovered from a crash more than a decade ago, flooded by cheap supplies from shale fields.

Prices have surged more than 4,000% in two days in Oklahoma, while gas processing plants across Texas are shutting as liquids freeze inside pipes, disrupting output just as demand for the heating fuel jumps.

SOURCE: https://www.worldoil.com/news/2021/2/12/record-cold-brings-a-windfall-for-small-us-natural-gas-producers

Prices have surged more than 4,000% in two days in Oklahoma, while gas processing plants across Texas are shutting as liquids freeze inside pipes, disrupting output just as demand for the heating fuel jumps.

16/02/2021

U.S. oil demand accelerates as refiners project more summer driving

(Bloomberg) --U.S. oil demand is finally starting to emerge from the grips of pandemic after months with Asia serving as the lone bright spot in the global market market.

American refiners are processing the most crude since the economy ground to a halt in March in anticipation of a vaccine-driven boost in gasoline demand this summer. The uptick means that the refiners are competing for domestic barrels that for months were sent to more robust markets in Asia. Prices for cargoes of grades like West Texas Intermediate crude have picked up by at least 50 cents a barrel from earlier this month.

The return of U.S. demand, which began when a global vaccination campaign kicked off in December, is the latest development in oil’s recovery from the depths of the pandemic. For months oil prices were managed by OPEC and its partners with production cuts, without the help of demand outside of Asia.

As domestic oil demand recovers, it could meet with supply shortages. Economic-driven output declines took about 2 million barrels a day of local crude off the market from the peak of 13.1 million, after dozens of drillers slashed budgets and filed for bankruptcy. The U.S. government sees production recovering to only 11.5 million barrels a day in 2022.

SOURCE: https://www.worldoil.com/news/2021/2/12/us-oil-demand-accelerates-as-refiners-project-more-summer-driving

The return of U.S. demand, which began when a global vaccination campaign kicked off in December, is the latest development in oil’s recovery from the depths of the pandemic.

16/02/2021

Oil prices rally as record winter storms hit Texas shale supplies

(Bloomberg) --Oil hit a fresh 13-month high as cold weather in Texas may see supply curbed from America’s largest shale patch.

U.S. West Texas Intermediate futures surged as much as 2.2% in early Asian trade, rising above $60 a barrel for the first time in more than a year. Brent crude in London rallied past $63. Traders estimate a few hundred thousand barrels a day of output in Texas may be impacted by well shutdowns, disrupted road transport and power outages, crimping American supplies just as global markets are seen to have rebalanced.

The Arctic blast gripping the central U.S. may threaten exports from one of the world’s top producers amid rapidly-normalizing global stockpiles that point to the success OPEC+ has had in draining a surplus left in the wake of the pandemic. American oil demand may also be finally catching up with Asia, where fuel consumption was the first to rebound, with refiners processing the most crude since March in anticipation of a vaccine-driven boost in gasoline use this summer.

SOURCE: https://www.worldoil.com/news/2021/2/15/oil-prices-rally-as-record-winter-storms-hit-texas-shale-supplies

The Arctic blast gripping the central U.S. may threaten crude exports from one of the world’s top producers, amid rapidly-normalizing global stockpiles that point to the success OPEC has had in draining a surplus left in the wake of the pandemic.

09/02/2021

Oil majors outbid green energy firms to build offshore UK windfarms

(Bloomberg) --Oil majors agreed to pay a hefty premium to develop the next generation of major British offshore wind farms after BP Plc and Total SE won contracts in an auction ahead of many of the utilities that have dominated the space until now.

The Crown Estate auctioned seabed rights that will allow about 8 gigawatts of new wind farms, enough to power more than 7 million homes. With oil majors taking a majority of the sites, it’s a sign that green energy companies are facing a new era of competition for some of the world’s biggest renewable energy projects.

The winning companies will pay about $1.2 billion per year in total for up to a decade to develop the wind farms. BP led the bidding with an offer about 80% higher than the average of its competitors in the auction for sites in the waters around England and Wales, an area it’s long familiar with through its oil operations.

“These huge upfront costs will put up barriers to entry for utilities and oil and gas companies without very deep pockets,” Barclays Plc analysts led by Dominic Nash said in a note.

SOURCE:
https://www.worldoil.com/news/2021/2/8/oil-majors-outbid-green-energy-firms-to-build-offshore-uk-windfarms

The UK's Crown Estate auctioned seabed rights that will allow about 8 gigawatts of new wind farms, enough to power more than 7 million homes. With oil majors taking a majority of the sites, it’s a sign that green energy companies are facing a new era of competition for some of the world’s bigges...

09/02/2021

Turkish Petroleum mulls partnerships for multi-billion Black Sea gas project

(Bloomberg) --Turkey’s state-owned oil and gas company is considering partnerships and plans to raise funding this year to carry out work on the biggest natural gas discovery in the Black Sea, according to people with knowledge of the matter.

Turkish Petroleum Corp. has made preliminary contact with several international oil firms, including some of the majors, to jointly produce gas from the offshore field, said the people, who asked not to be identified because deliberations are confidential. The negotiations may not result in any ventures and the Ankara-based company may still go it alone, they said.

The necessary capital investment to produce the gas and deliver it onshore is estimated to be around $3.2 billion, one of the people said. Turkish Petroleum, also known as TPAO, was allocated 13.4 billion liras ($1.9 billion) from the government’s 2021 budget. It isn’t clear how much of that will be earmarked for the Black Sea gas project.

TPAO and Turkey’s Energy Ministry didn’t respond to emailed requests for comments.

The project to develop the Sakarya field will see gas extracted from wells about 175 kilometers (109 miles) off Turkey’s Zonguldak coast. These could produce more than eight times the country’s demand and end its reliance on imports.

SOURCE:
https://www.worldoil.com/news/2021/2/8/turkish-petroleum-mulls-partnerships-for-multi-billion-black-sea-gas-project

Turkey’s state-owned oil and gas company is considering partnerships and plans to raise funding this year to carry out work on the biggest natural gas discovery in the Black Sea, according to people with knowledge of the matter.

09/02/2021

Oil stocks rallying in 2021, despite Biden’s fossil fuel threats

Oil stocks rallying in 2021, despite Biden’s fossil fuel threats
By MICHAEL BELLUSCI on 2/8/2021

(Bloomberg) --U.S. oil and gas stocks, by far the worst performers last year, are standing out as the best in 2021 -- a turnaround that might seem a bit surprising given the new balance of power in Washington.

Companies including Exxon Mobil Corp., Diamondback Energy Inc. and Marathon Oil Corp. have posted double-digit gains this year as a rebound in oil prices and the prospect of an economic recovery have outweighed risks to the industry from a Joe Biden administration. The S&P 500 Energy Index is up 12% this year compared to 2020’s 37% plunge.

However, Wall Street is now assessing whether those gains are sustainable as Democrats commit to speeding the shift away from fossil fuels. Companies that extract gas and oil from shale rock using a process known as fracking are already under pressure to reduce spending rather than invest in production. Any additional regulatory measures could be received poorly by investors.

So far Biden has made good on a campaign promise to cancel the Keystone XL oil pipeline and issued a moratorium on new oil and gas leasing on federal lands. While such moves can be a short-term boon for crude prices by restraining supply, they mark what is likely to be a strong pivot in energy policy away from hydrocarbons.

The bull case for oil majors will hinge on self-help measures that increase investor interest as shareholders continue to pressure the group to show greater austerity and return profits rather than use the money to boost production.

SOURCE:https://www.worldoil.com/news/2021/2/8/oil-stocks-rallying-in-2021-despite-biden-s-fossil-fuel-threats

Companies including Exxon Mobil, Diamondback Energy and Marathon Oil have posted double-digit gains this year as a rebound in oil prices and the prospect of an economic recovery have outweighed risks to the industry from the Biden administration.

04/02/2021

Global oil supply imbalance shrinks China’s crude reserves

Inventories capped a seventh weekly decline last week, dropping to 990 million barrels, according to market intelligence firm Kayrros. While that’s the least since February 2020, stockpiles are still 16% higher than a year earlier. A resurgent virus and lockdowns in parts of the country have raised concerns about a near-term demand hit, but an overall improvement in domestic travel compared with last year is contributing to the recovery.

Timespreads for global benchmark Brent are in a bullish structure known as backwardation -- where prompt crude is pricier than later shipments, making it unattractive to hoard cargoes and profit from delayed sales. Meanwhile, OPEC+ signaled on Tuesday that it expects to drain an oil surplus by the middle of the year, and Goldman Sachs Group Inc. sees worldwide demand reaching pre-virus levels of 100 million barrels a day by August.

Stockpiling in China has leveled off, with higher oil prices and limits on storage capacity the main factors driving the decline, Kieran Clancy, assistant commodities economist at Capital Economics Ltd., said in a note. Crude purchases for stockpiling in 2021 are likely to be far lower given tighter storage, while prices are unlikely to revisit the lows of last year, he said.

Brent’s prompt timespread was 27 cents a barrel in backwardation, compared with a 7-cent contango at the start of the year.

SOURCE: https://www.worldoil.com/news/2021/2/3/global-oil-supply-imbalance-shrinks-china-s-crude-reserves

Inventories capped a seventh weekly decline last week, dropping to 990 million barrels, according to market intelligence firm Kayrros.

04/02/2021

OPEC+ members focus on reducing pandemic’s crude oil surplus

(Bloomberg) --OPEC+ said it will keep pushing to quickly clear the oil surplus left behind by the pandemic, a bullish signal for prices that have already surged to a one-year high.

Ministers led by Saudi Arabia and Russia “stressed the importance of accelerating market re-balancing without delay” amid “uncertain” prospects for the global economy and oil demand on Wednesday. Crude in New York extended gains after the communique, advancing as much as 2.9% to above $56 a barrel.

The Organization of Petroleum Exporting Countries and its allies have taken a two-month pause while restoring some of the millions of barrels of crude output they halted when the coronavirus emerged to crush fuel demand last spring. Saudi Arabia is tightening supplies further this month and next with an extra cut of 1 million barrels a day.

The committee left any discussion about what to do after the two-month hiatus ends to its next full ministerial meeting in early March. OPEC+ is currently withholding just over 7 million barrels of daily output, or roughly 7% of global supplies.

The online meeting of the Joint Ministerial Monitoring Committee was unusually smooth and brief for an OPEC+ gathering, lasting just over an hour. When the 23-nation coalition met last month, ministerial talks spilled into two days and were marred by discord over how far to constrict supplies.

SOURCE: https://www.worldoil.com/news/2021/2/3/opecplus-members-focus-on-reducing-pandemic-s-crude-oil-surplus

OPEC and its allies have taken a two-month pause while restoring some of the millions of barrels of crude output they halted when the coronavirus emerged to crush fuel demand last spring.

04/02/2021

Argentina’s state-run shale driller faces debt deadline

By SCOTT SQUIRES AND JONATHAN GILBERT on 2/3/2021

(Bloomberg) --Creditors of Argentina’s state-run oil company, YPF SA, are sending mixed signals as one group of bondholders rejected the company’s latest debt restructuring plan while another voiced support.

The YPF Ad Hoc Bondholder Group, which says it holds 45% of YPF’s bonds maturing in March, said it wouldn’t tender its bonds in the company’s $6.2 billion debt swap, according to an emailed statement from Clifford Chance LLP, one of the group’s legal advisers. A second committee of creditors, led by law firms Dechert LLP and DLA Piper, said it supported the company’s latest amendments to its debt offer, which expires Friday at 11:59 pm in New York. This second group says it holds 25% of YPF’s debt across the company’s seven bonds, according to a separate statement.

Bondholders have until Friday to accept YPF’s proposal to exchange $6.2 billion of existing debt for three new bonds and a cash sweetener. On Monday, the company amended its offer for the third time, proposing to its creditors a larger upfront cash payment as an incentive to attract more support for the swap.

The offer “represents an improvement on previous terms announced by the company, but fails to provide a balanced solution, including appropriate treatment for the bonds maturing on March 23, 2021,” according to the statement from the group led by Clifford Chance. The group also said it submitted a counterproposal to YPF that would provide “interest savings over the next several years with below-market interest rates.”

The committee, which was previously advised by Whit

SOURCE: https://www.worldoil.com/news/2021/2/3/argentina-s-state-run-shale-driller-faces-debt-deadline

Creditors of Argentina’s state-run oil company, YPF SA, are sending mixed signals as one group of bondholders rejected the company’s latest debt restructuring plan while another voiced support.

Zubee Capital Oil and Gas Update

23/02/2021

23/02/2021

23/02/2021

22/02/2021

22/02/2021

22/02/2021

16/02/2021

16/02/2021

16/02/2021

16/02/2021

09/02/2021

09/02/2021

09/02/2021

04/02/2021

04/02/2021

04/02/2021

Address

Website

Alerts

Shortcuts

Share