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Expert Commentary: An Oil Price Correction Is Due

September 22, 2017 OilPrice.com 0

– Oil markets appeared to be firing on all cylinders this week. Flat price brent reached a 5-month high on Friday at $56.91 and is +28% since June, Brent Dec’17/Jun’18 reached a 7-month high and Dated vs. Front Line Brent traded to its highest mark since mid-2014. OPEC compliance remains strong, global refined product stocks are drawing aggressively and COT positioning on brent, gasoline and heating oil shows funds continuing to pile into the long side of the market. – In our view the current strength in flat price, spreads and refined…

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The EV Boom Is Dead Without Proper Support

September 21, 2017 OilPrice.com 0

Frankfurt’s car show, one of the most important in the world, this September spotlighted electric vehicles (EVs). France and the United Kingdom have already decreed an end to sale of cars with internal combustion engines by 2040. Norway is looking to do the same by 2025. And China has begun the push to electrify its vehicle fleet. In the process putting pressure on foreign manufacturers to share technology if they want to gain entry to the potentially enormous Chinese market. Politicians, eager to claim credit for factories and jobs, have…

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Supermajors Prepare For A Permian Bidding War

September 14, 2017 OilPrice.com 0

BHP announced their plans to divest their U.S. shale assets, including a 123,000-acre position in the heart of the Delaware Basin. This acreage position, in terms of a pricing evaluation, could rival the Exxon acquisition of the Bass family’s assets, which totaled over $5.6 billion. We are anticipating a bidding war between supermajors. To break down this gem of an acquisition target, we wanted to analyze comparable transactions in the basin along with key data points to understand the upside of BHP’s Delaware acreage position. (Click…

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Argentina Doubles Down On Shale Gas And Renewables

September 13, 2017 OilPrice.com 0

Traditionally one of the most prominent oil and natural gas markets in South America, Argentina is increasingly turning towards alternative forms of energy, with the government exploring shale gas and renewable options as it looks to diversify its power market. The shift comes amid challenges to longstanding hydrocarbons production, which has seen Argentina record export deficits in recent years. Foot on the gas According to the “BP Statistical Review of World Energy 2017”, natural gas accounts for 50.2 percent of Argentina’s…

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How Will Venezuela Deal With A PDVSA Default?

September 13, 2017 OilPrice.com 0

While debt servicing has been a government priority, declining external liquidity and a deteriorating domestic situation (three-digit hyperinflation, shortages, and a political crisis between the government and the National Assembly) make it a daunting task. By 2020, the country must repay 30 percent of the external debt due to expire in the next 23 years. Venezuela can get access to liquidity via three main ways. The first option is to borrow directly on the financial market which implies that the country must pay an increasingly prohibitive risk…

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OPEC’s Output Drop: Saudis Overcompensate While Compliance Slides

September 12, 2017 OilPrice.com 0

Confirming Monday leaks that OPEC production had dipped last month, the just released OPEC report for the month of September confirmed that OPEC produced 32.755mmb/d (according to secondary source data), a drop of 79,100 bpd, and the first monthly decline in 4 months. According to the underlying data, in the last month output increased in Nigeria (+138.3Kb/d), while declining in Libya, Gabon, Venezuela Saudi Arabia, and Iraq. (Click to enlarge)While secondary sources pegged Saudi production in August at 10.022mmb/d, a drop of 10.3kb/d…

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Can North Korea Survive An Oil Embargo?

September 12, 2017 OilPrice.com 0

The United States has recently suggested a global oil embargo against North Korea, something both China and Russia oppose. The DPRK’s neighbours to the north support UN sanctions against Pyongyang, but have firmly opposed unilateral U.S. sanctions against North Korea. Russia and China have made a commitment never to support sanctions against Pyongyang that could negatively impact the civilian population, a stance that would almost certainly include a full-scale oil embargo. On the contrary, Russia’s plan to de-escalate tensions on the…

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Expert Commentary: Oil Market Tighter After Hurricane Harvey

September 8, 2017 OilPrice.com 0

– Crude oil flat price, spreads, refining margins and product spreads all mean-reverted this week as PADD III refineries came back on line to the tune of roughly 2m bpd and the remaining outages developed a more clear return time frame. Refining margins and product spreads still remain elevated but we were struck by the snap-back in crude oil time spreads and flat price while 2-month WTI volatility languished near 26%-29%. In our view, the quick recovery following such traumatic fundamental stress is great evidence of the strength of the sideways…

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Two Nuclear Plants Are In The Path Of Hurricane Irma

September 7, 2017 OilPrice.com 0

Hurricane Irma is more powerful than all of the other major Atlantic storms this year combined, and it has an eye as large as the entire Detroit metro area. It is being reported that “upwards of 90 percent” of Barbuda has already been destroyed by the storm, and it is being projected that some areas of Puerto Rico could be without power “for between four and six months”. You may want to view these photos and these videos to get a better idea of the immense destructiveness of this very powerful…

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The Next Step In Mexico’s Oil & Gas Privatization Push

September 4, 2017 OilPrice.com 0

Mexico’s Energy Regulatory Commission (CRE) released its first monthly price report on August 18, 2017. As part of its ongoing series of energy reforms that reduce government market controls, the Mexican government converted to a liberalized natural gas market on July 1, 2017. Along with releasing the price index report, Mexico’s pipeline system operator (CENAGAS) launched its natural gas capacity reservation system with electronic bulletin boards for posting natural gas flows. The price index system captures data on…

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