QatarEnergy has entered an agreement with ExxonMobil Canada to explore offshore of Newfoundland and Labrador, the country’s most eastern province in the Atlantic, according to…
Oct 24, 2021
QatarEnergy has entered an agreement with ExxonMobil Canada to explore offshore of Newfoundland and Labrador, the country’s most eastern province in the Atlantic, according to an Oct. 24 announcement from the Middle East gas giant.
QatarEnergy will hold 40% of the farm-in exploration license EL 1165A and ExxonMobil Canada will own the rest, the state-owned Qatari firm said. The transaction, which is the latest in QatarEnergy’s overseas expansion, has received all necessary approvals from the Canada-Newfoundland and Labrador Offshore Petroleum Board, it said.
The exploration site “represents our first entry into offshore Canada in an established producing basin with the leading producer in the area,” Qatar energy minister Saad al-Kaabi said in the statement. “This builds on our strong partnership with ExxonMobil and is an important addition to our growing international exploration portfolio.”
The block covered by the license is located approximately 450 km east of the city of St. John’s in Newfoundland and Labrador, in water depths of approximately 1,100 meters, according to the statement. There was no comment from ExxonMobil in the statement and a call to the company’s Qatar office wasn’t immediately returned.
QatarEnergy has increasingly looked abroad for upstream assets in a global diversification push. Qatar produces about 600,000 b/d of crude and has LNG output capacity of about 77 million mt/yr.
Oct 25, 2021
Crude oil markets started the Oct. 25-29 trading week on a bullish note as resurgent pandemic concerns failed to dampen continuing expectations of supply tightening due to crude production being outstripped by recovering global demand.
ICE December Brent crude futures stood at $86.39/b at 0300 GMT Oct. 25, up 86 cents/b (1.01%) from the Oct. 22 settlement.
– Spot market activity for December-loading barrels may remain dormant as the focus moves to trading for January.
– However some end-month spot buying may emerge as unsold cargoes of some Middle East medium and sour crude grades were heard offered for December loading.
– Spot trade continued to ease last week as buying neared completion, though some cargoes of Middle East crude did exchange hands, including Taiwan’s CPC procuring Upper Zakum crude for December loading.
– Iraq’s SOMO sold December-loading Basrah Light crude to Petraco at a premium of around 15 cents/b to the grade’s official selling price.
– Dubai cash/futures (M1/M3) averaged $2.25/b in the week ended Oct. 22, against $2.28/b in the week ended Oct. 15.
– Intermonth spreads were higher during mid-morning trade Oct. 25, with December-January pegged at $1.03/b, up 10 cents/b from the Asia close Oct. 22.
– The December Brent/Dubai Exchange of Futures for Swaps was pegged at $4.58/b mid-morning Oct. 25, up 26 cents/b from the Asia close Oct. 22.
– Market participants will seek clarity on trade details for the remaining December-loading barrels of Australia’s Ichthys Field Condensate this week.
– Spot trades across Malaysia’s MCO basket of crude grades remain in focus amid thin spot trading activity for Kimanis crude so far this month, despite a longer loading program.
– Traders will be watching out for the term tender results of PetroVietnam Oil’s Su Tu Den cargoes amid resilient gasoil and jet fuel product cracks.
– Details of trading activities for Sudan/South Sudan’s November-loading Nile Blend are expected to emerge amid rangebound low sulfur fuel oil cracks.
– Traders may also seek clarity on the availability for December-loading barrels of Indonesia’s Banyu Urip crude.
– Trading activity for December-loading barrels of Australian heavy sweet crude including Vincent, Pyrenees and Van Gogh was expected to emerge this week.
– Malaysian Crude Oil official selling price differentials for November may also emerge this week.
– Traders will be keeping an eye on the monthly sweet crude tender results from Taiwan’s CPC Corp. amid rising flat prices for WTI Midland crude on the month.
– Cash differentials for January-arrival cargoes of Brazilian Tupi crude are expected to dim following patchy Chinese demand despite the release on China’s 4th batch of import quotas.
– The return of pandemic restrictions in Russia has added uncertainty to near-term oil demand outlooks, however market watchers remain optimistic as the ongoing supply crunch in natural gas and coal supplies continues to fire up oil demand as a substitute for power generation.
– The US’ commercial crude stocks fell 430,000 barrels in the week ended Oct. 15 to 426.54 million barrels, Energy Information Administration data showed Oct. 20, putting them around 6% behind the five-year average for this time of year.
– The bulk of the crude draw was realized at the NYMEX delivery point of Cushing, Oklahoma, where stocks fell 2.32 million barrels to 31.23 million barrels, the largest week-on-week inventory slide at Cushing since February and leaving inventories nearly 40% behind the five-year average and at the lowest since October 2019.
– The next OPEC+ meeting is scheduled for Nov. 4, where the alliance is expected to review production decisions for December.
– The December contract for ICE Brent futures rose 0.79% on the week to settle at $85.53/b Oct. 22, while the December contract for NYMEX light sweet crude rose 1.8% to $83.76/b.
Oct 23, 2021
Saudi Arabia, the world’s largest crude oil exporter, aims to achieve net-zero carbon emissions by 2060, with more than 60 initiatives planned at an initial cost of almost $190 billion, Crown Prince Mohammed bin Salman announced Oct. 23.
Renewables, carbon capture, utilization and storage, direct air capture, hydrogen and low carbon fuels are among the projects that Saudi Arabia will develop to help achieve the target, Saudi energy minister Prince Abdulaziz bin Salman told the inaugural annual Saudi Green Initiative forum in Riyadh.
The goal refers to emissions produced domestically and does not apply to hydrocarbons exported and combusted elsewhere.
Saudi Arabia is the world’s fifth largest emitter of carbon emissions per capita at 14.59 mt/yr, according to the S&P Global Platts Atlas of Energy Transition, and has the third largest fossil fuel demand per capita.
State oil giant Saudi Aramco, along with its 70% owned Sabic petrochemicals company, set their net zero target at 2050.
“As the largest provider of energy to the world, Aramco’s ambition to reach net-zero greenhouse gas emissions across our operations in less than three decades is a historic step forward that will help tackle the most pressing challenge facing humanity,” Aramco CEO Amin Nasser told the forum.
The kingdom considers 2060 a realistic target to reach net zero because most technologies needed for the energy transformation won’t be “mature” until 2040, the Saudi energy minister said. More time will also allow the kingdom to adjust without risking social or economic effects, he said. Saudi Arabia will not be seeking financing on any of its programs, and will support regional initiatives, he said.
Saudi Arabia’s interim target is to reduce carbon emission by more than 278 mt/year by 2030, more than double the target set earlier this year, according to a government statement. The kingdom will also join the Global Methane Pledge to contribute to cutting global methane emissions by 30% by 2030, the crown prince said.
The Saudi plan follows the UAE’s announcement on Oct. 7 that it aims to achieve net zero by 2050, becoming the first country in the Middle East and North Africa to set such a goal.
The UAE’s program includes $163 billion in planned investment for renewables alone and comes even as the country is planning to expand its crude production capacity 25% by 2030, as well as boost its gas output to drive energy self-sufficiency.
In renewables, Saudi Arabia wants its power sector to get 50% of its electricity from renewables and the other 50% from more natural gas. Prince Abdulaziz noted Saudi Arabia was able to achieve a record low solar cost of 1.04 US cents/kWh.
“That record I think will be there for quite some time,” he said. The kingdom also has an energy efficiency program that has reduced carbon emissions by 48 million mt/year and plans to boost that to 90 million mt/year with a focus on industry, transportation and building, which make up 90% of the kingdom’s energy intake, he added.
A key focus area is cement, steel, petrochemicals and building and transport fuels. A smart metering program started in February 2020 was able to add 127,000 smart meters a day even during lockdowns in the pandemic, and was finished by March 30 this year on time, he noted.
All but 1,500 electricity customers in the country now have smart meters, he said. All street lamps and bulbs in Saudi Arabia have been changed to efficient lights.
Saudi Aramco’s plans to boost natural gas capacity over the next 10 years will allow it to eliminate burning crude for power generation and use gas instead within 10 years, Nasser added. The company is building capacity in hydrogen, expanding its maximum sustained crude capacity to 13 million b/d, building renewables and processing crude to chemicals.
Investment is important in oil and gas, he said, noting that a pickup in the airline industry would be enough to close the 3 million b/d of spare capacity in the market currently.
On the petrochemicals side, Sabic aims to reduce greenhouse gas emissions by 20% by 2030, from a 2018 base, and will focus on ways to adapt processes to use renewables, invest in low carbon emitting technology and deploy green hydrogen, CEO Yousef al-Benyan said.
Lauren Smart, Chief Commercial Officer for S&P Global Sustainable1 sat down with Gordon Bennett, Managing Director of Utility Markets, ICE to talk about ESG, the energy transition,…
Oct 25, 2021
Lauren Smart, Chief Commercial Officer for S&P Global Sustainable1 sat down with Gordon Bennett, Managing Director of Utility Markets, ICE to talk about ESG, the energy transition, hedging, decarbonization, and the role of markets to navigate the challenges and opportunities that lie ahead.
Security incidents targeting oil facilities, pipelines and tankers are on the rise. According to data compiled by S&P Global Platts, security events such as physical…
Sep 08, 2021
Security incidents targeting oil facilities, pipelines and tankers are on the rise. According to data compiled by S&P Global Platts, security events such as physical attacks on petroleum infrastructure, or shipping, in the Persian Gulf and the Arabian Peninsula region have tripled on an annualized basis since 2017. This year has seen a peak in the number of incidents reported by Platts over the period, with 27 confirmed security events verified through to Sept. 6.
With liquidity being complex and volatile, what’s driving growth and derivatives on the lighter side and how can traders navigate this market successfully? Join Dave…
Oct 11, 2021
With liquidity being complex and volatile, what’s driving growth and derivatives on the lighter side and how can traders navigate this market successfully? Join Dave Ernsberger, Global Head of Pricing and Market Insight, S&P Global Platts and Greg Newman, CEO, Onyx Capital Group discuss in depth about oil markets here. This video is a part of the #PlattsAPPEC exclusive CEO Conversation Series.
Our editors are keeping an eye on oil refining cracks ahead of winter, as well as potential demand from Asia as COVID-19-related restrictions ease. Tesla’s…
Oct 25, 2021
Our editors are keeping an eye on oil refining cracks ahead of winter, as well as potential demand from Asia as COVID-19-related restrictions ease. Tesla’s change in battery chemistry and the International Maritime Organization’s long-term emissions reduction goals are also in focus.
What’s happening? Tighter fundamentals are supporting gasoline and diesel cracks in major hubs. Gasoline inventories are low in the Atlantic Basin, while distillate stocks are below average in all major hubs as heating season approaches in the northern hemisphere. Current backwardation in the ICE gasoil market is signaling incentives to destock product. Refining—particularly in Europe and parts of Asia—is feeling additional pressure from high natural gas prices. Refiners unable to substitute gas with cheaper inputs might need to cut runs as margins are squeezed, adding to refined product tightness.
What’s next? Diesel cracks are expected to stay firm as winter approaches, with potential spikes ahead from colder-than-normal weather or supply disruptions. Backwardation in the gasoil market should remain constructive for the next month as higher prompt prices pull up the front end of the strip. The ongoing high gas price environment will continue to exert pressure on refiners to trim runs, leading to market tightness. Abnormally high gasoline cracks this season should correct to their five-year range through end-2021. Increased mobility and economic recovery will keep supporting demand although there are risks: new COVID-19 variants, constrained global supply chains (consumer goods and raw materials), high oil prices, and extreme weather, among others.
What’s happening? Tesla announced that it will shift to lithium-iron-phosphate (LFP) battery chemistry for all its standard range vehicles globally. The electric vehicle maker already employs LFP in its standard range Model 3 in China, but the rest of its portfolio is powered by batteries featuring a nickel-rich chemistry known as nickel-aluminum-oxide (NCA). Nickel-rich chemistries require lithium hydroxide instead of carbonate because the first can operate at much higher temperatures. They also provide longer driving ranges. Carbonate-based LFP is cheaper and safer, and does not use nickel or cobalt.
What’s next? Shifts in battery chemistry choices imply demand changes for battery metals. Tesla’s announcement is supportive of lithium carbonate—once seen by many industry participants as doomed to lose relevance as carmakers favor lithium hydroxide. Battery-grade nickel supply is expected to be very tight in the coming years, while there are also concerns over the ethnical sourcing of cobalt. It will be crucial to watch the prices of these two key battery metals amid a potential shift in demand.
What’s happening? Indian policy makers, ministers and refiners who attended the India Energy Forum by CERAWeek said that the country’s domestic gasoline and diesel consumption had bounced back to a level higher than even pre-pandemic levels, sending a strong signal that the worst for gasoline and diesel demand is over. Latest data from the Petroleum Planning and Analysis Cell showed that India’s demand for oil products in September rose 5.2% year on year to 15.92 million mt, or 4.2 million b/d.
What’s next? India’s increased demand in transportation fuels, like diesel and gasoline, is expected to be sustained from October onwards in the absence of any fresh wave of COVID-19. S&P Global Platts Analytics forecasts India’s overall 2021 oil demand to grow 295,000 b/d year on year to 4.9 million b/d, and return to pre-pandemic levels in 2022. Long-term, India Energy Forum delegates said while the share of oil in India’s energy basket won’t change drastically over the next two decades, incremental demand and the energy transition process would create enough room for new and cleaner forms of energy.
What’s happening? Iraq’s State Oil Marketing Organization cut November official selling price differentials by 40-50 cents/b across its Asia-bound Basrah crude grades. The cuts were on top of the $1.20-$1.50/b reduction in OSPs announced over August-September. As a result, major Northeast Asian refiners indicated that OSP spreads between Iraqi crude and other Persian Gulf grades have fallen sharply, making Iraq’s flagship Basrah Light and Basrah Heavy crudes very attractive.
What’s next? South Korean refiners are especially keen to take full advantage of the competitive prices to serve their fast-rising refinery run rates. The country’s overall crude imports are on course to recover to pre-pandemic levels over the coming quarters as major refiners raise run rates to lift transportation fuel production, with the government aiming to shift to a phase of living with COVID-19 starting Nov. 9. Meanwhile, Japanese refiners continue to seek lighter crude grades for kerosene production ahead of winter, though rising premiums of some Middle Eastern grades have also prompted Japan’s Basrah purchases.
What’s happening? The International Maritime Organization has set a target to reduce shipping emission intensity by at least 40% by 2030 (from 2008 levels). The IMO also plans to further reduce emission intensity by 70% and overall emissions by 50% by 2050 from 2008 levels. The 2025 and 2030 international shipping carbon intensity targets are well within reach, but to achieve IMO’s long-term goals is impossible without large-scale adoption of alternative fuels and technologies.
What’s next? The IMO is discussing different proposed lifecycle greenhouse gas accounting methods—from fuel production to end-use on a ship. There is pressure to include GHG emissions from the upstream process, also known as well-to-tank, which would encompass flaring and fugitive methane leaks from oil and gas production. The current IMO targets only include emissions from the combustion of the fuel on the ship. If the scope of emissions were to change, it could serve as a driver to clean up the maritime upstream fuel supply by holding the suppliers accountable. It can also increase investments in the infrastructural development of clean future marine fuels such as green methanol, ammonia and hydrogen.
Reporting and analysis by Lenny Rodriguez, Rebeka Foley, Sergio Baron, Henrique Ribiero, Sambit Mohanty, Phil Vahn, Anne Robba, and Ankit Sachan.
The Platts Periodic Table of Oil is an interactive chart of 150 crudes selected by the S&P Global Platts Pricing & Market Insight team. It…
Sep 01, 2021
The Platts Periodic Table of Oil is an interactive chart of 150 crudes selected by the S&P Global Platts Pricing & Market Insight team. It represents the most diverse and key streams in global oil markets.
Bullish oil prices look undermined by potential COVID-19 resurgence, oil and gas majors announce third-quarter results, the EU steel sector grapples with high energy costs,…
Oct 25, 2021
Bullish oil prices look undermined by potential COVID-19 resurgence, oil and gas majors announce third-quarter results, the EU steel sector grapples with high energy costs, and gas markets watch for signs of a transit deal between Algeria and Morocco.
-Mixed signals for oil prices (00:13)
-Energy majors release Q3 results (00:33)
-EU steel sector grapples with high energy costs (01:32)
-Last-ditch gas transit deal for Algeria and Morocco? (02:00)
-Tankers delayed at Turkish Straits (02:49)
The future of energy in the region As global economies start to recover, OPEC+ production begins to steadily increase and a bullish commodities market spurring…
Sep 27, 2021
Over the first six months from its introduction, Platts AGS was assessed, on average, at around $1/b under Dated Brent. The spread widened to around $1.90/b over…
Jul 01, 2021
Over the first six months from its introduction, Platts AGS was assessed, on average, at around $1/b under Dated Brent. The spread widened to around $1.90/b over the following six months with freight costs acting as the key driver of the spread, followed by regional supply/demand dynamics.
For 2021, Platts Analytics forecasts the Platts AGS/Dated Brent average spread will stay around $1.90/b but then narrow next year to about $1.15/b as refinery crude runs/refined product demand in the Atlantic Basin recover more dynamically.
US crude oil exports are expected to continue rising near term as local shale production ramps up following the COVID slump.
Notably, Corpus Christi/Ingleside, with its deeper draft and ability to load larger vessels (VLCCs can load a bit over 1 million barrels at the port, then sail out to sea and perform a single STS transfer with a Suezmax), has overtaken Houston as the busiest crude export location on the USGC. It went from average outflows of 770,000 b/d in 2019 to 1.50 million b/d in 2020 and has climbed slightly to 1.58 million b/d so far this year.