Oil News Brief/Roundup to 5th August 2016
The price of OPEC basket of fourteen crudes stood at $40.08 a barrel on Friday, compared with $39.60 the previous day, according to OPEC Secretariat calculations.
International benchmark Brent futures were trading at $45.19 per barrel
U.S. West Texas Intermediate (WTI) crude futures were at $42.73 per barrel
Saudi Aramco to discount its future oil sales to its Asian customers in a bid to gain more market share.
Saudi’s Aramco recently disclosed that it has priced its September shipments to its Asian customers at $1.10 below the continent’s benchmark. Bloomberg reported that the discount was $1.30 lower than the price for August shipments and 10 cents lower than estimates made by refiners and commodity traders it polled.
IOCs divest from 24 Oil Mining Leases (OML) in the Nigeria
Three International Oil Companies (IOCs), Shell Petroleum Development Company (SPDC), Chevron Joint Venture (JV), and Conoco Philips, have collectively divested from 24 Oil Mining Leases (OML) in the Nigeria, with the Department of Petroleum Resources (DPR) and the The Nigerian National Petroleum Corporation (NNPC) stating that this would improve the overall capacity of Nigerian independents, according to newspaper reports.
The Department of Petroleum Resources (DPR), reportedly made this disclosure in a presentation at the conference of the Society of Petroleum Engineers (SPE).
“The spate of divestments would not lead to crisis in the nation’s oil and gas industry. Rather, the divestment by the majors is changing the onshore corporate landscape and creating material brownfield opportunities for upstream players looking to enter the Nigerian upstream space,”.
Oil prices are likely to remain depressed for the foreseeable future.
Shale oil producers are now able to reduce the amount of time it takes to get an oil well into production to around 150 days.
If oil prices rise these producers can quickly bring production on-stream to make the most of the increased price.
In comparison, the oil industry’s traditional deepwater projects can take decades to bring on-stream.
Big Oil companies like Shell, BP and Chevron are at risk in today’s new oil industry. In the past, Big Oil’s response to lower oil prices has been to rein-in new drilling, cut costs, and wait for prices to rise again.
A Chatham House’s report warns that this time around the old playbook may not work as the oil markets are “going through fundamental structural changes driven by a technological revolution and geopolitical shifts.”
As Stockpiles of refined products continues to build up while demand remains more or less stagnant or insufficient to absorb all the gasoline that refiners have available, Crude prices would probably remain low.
OPEC members called for production curbs to bring crude supplies in line with demand but Non OPEC producers like Russia scoff at any this and continue to flood the markets. Saudi Arabia, kept production levels close to record highs in order to limit Iran while it attempts to regain lost market share and even Nigeria has increased outputs despite militant attacks on its pipelines. Guess no one is listening!!!
Despite low crude prices, Its been reported that energy has outstripped all but the utility sector in the S&P 500.
Shale producers are also reportedly having an outsized impact on how LNG is sold, prompting spot trading in lieu of long-term contracts. Shale drillers have flooded the U.S. with so much natural gas over the past decade they caused oil prices to collapse to a 17-year low.
The U.S. began shale gas exports by sea this year and is projected by the International Energy Agency (IEA) to become the world’s third-largest liquefied natural gas supplier in five years. This is likely to have an effect on the global market for sure.
LNG became the world’s second most traded commodity after oil last year and demand will keep growing according to experts.
Transcorp suspends N320bn power plan on gas scarcity
Hydrocarbon Pollution Remediation Project (HYPREP)
NNPC says Saudi Arabia’s price cut is no threat to Nigeria’s crude exports
Marginal field producers need to keep production cost under $20 per barrel
UK Shale Gas Royalties May Go Directly To Residents
US Oil, Gas Industry Sees 26% Decline in Employment
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