Industry Trends ///
Shawn Thomas, CentraMark Technical Sales Associates; Toni Hogan, Crystal Group
Pursuing revolutionary transformation will redefine how we work and catapult the oil and gas industry forward
On September 23rd, Governor Gavin Newsom ordered regulators to phase out the internal combustion engine and ban the sale of all new gasoline-fueled cars after 2035. With that, California became the first state in America to impose such a prohibition and delivered the biggest jolt yet to automakers already under pressure to give up fossil fuels and deliver a new generation of electric vehicles.
After all the trauma the U.S. oil industry has been through this year -- from production cuts to mass layoffs and a string of bankruptcies -- many producers say they’re still prioritizing output over reducing debt.
Greece, Italy, Egypt, Israel and two other countries will form a permanent organization to promote co-operation over natural gas in the Eastern Mediterranean. Turkey, which has raised tensions by exploring for the fuel in contested waters, is not as yet included.
World Oil has finished compiling the 2020 mid-year forecast update for drilling and production and, if projections hold true, the number of oil wells drilled in the U.S. annually will reach lows not seen since the 1930s, or even further back.
Straight-run kerosene, usually processed into jet fuel, is now being used to make very low-sulfur fuel oil for the maritime industry amid a plunge in consumption by airlines. Higher than normal amounts of diesel and vacuum gasoil are also finding their way into shipping fuel.
Oil declined as Libya signaled the resumption of some crude exports, while surging coronavirus cases clouded the outlook for demand and weighed on risky assets.
BP has boldly claimed that global oil demand will peak in the next ten years in its 2020 Energy Outlook. Some emerging trends in the upcoming World Oil 2020 Drilling Forecast reveal how future production capacity may make that possible.
In recent months, the UAE has become one of the worst quota-breakers among the Organization of Petroleum Exporting Countries and its allies. The UAE made just 10% of its pledged cuts in August, according to the International Energy Agency.
BP's 2020 Energy Outlook sees oil consumption topping out not much higher than it is now: around 100 million barrels of oil per day, the same level as last year. In scenarios involving dramatic action by governments to limit climate change, BP determines that demand has already peaked.
Legacy energy companies are for the first time sketching out new strategies that in the near future—as soon as 2030, in some cases—would eliminate hydrocarbons. The industry would like everyone to believe it’s turning its back on fossil fuels for the good of the planet; however, the reality is that Big Oil has been forced to change by green campaigners, local politicians, and pension funds.
The American Petroleum Institute reported crude stockpiles declined by 9.52 million barrels last week, according to people familiar with the numbers. While the global economy is still expected to shrink this year, the slump won’t be as sharp as previously feared, according to the OECD.
Vitol Group said inventories have been falling sharply and will continue to decline this year. Trafigura Group, the second-biggest trader, says the market will go back into a surplus. Both companies forecast demand to stagnate and foresee a volatile few months before a gradual recovery next year.
The United Arab Emirates almost entirely disregarded its commitment to OPEC+ production quotas last month, when it opened the taps even further, according to the International Energy Agency.
In a local Philadelphia TV interview, Democratic nominee Joe Biden told reporters “I will not ban fracing.” He failed to mention that his climate plan’s ban on drilling on federal property would go much further than a simple frac ban.
The European Union’s executive will unveil an ambitious emissions-cut plan this week that’ll leave no sector of the economy untouched, forcing wholesale lifestyle changes and stricter standards for industries.
The ship, identified as Honey, turned off its satellite signal and started unloading about 2 million barrels of South Pars condensate at Venezuela’s state-controlled port of Jose on Saturday, according to a report and a person with knowledge of the situation.
It will take until late 2021 for global oil consumption to return to the 2019 level of 101 million barrels a day due to growth in economy, ,” Ed Morse, global head of commodities research at Citi, said in an interview during the S&P Global Platts Asia Pacific Petroleum Conference.
On September 17th, Saudi Arabia and Russia will chair a monitoring meeting to assess whether the vast production cuts, which they started easing in August, are still staving off an oil glut. New signs of exporters reneging on the deal aren’t helping.
In this week's podcast, World Oil editors discuss how legislative activities, a smaller labor pool, and harsh economic realities are impacting options for oil and gas sector growth in North America's post-coronavirus economy.