|Day's range||58.27 - 58.98|
Gil Goodrich became the CEO of Goodrich Petroleum Corporation (NYSEMKT:GDP) in 1995. This analysis aims first to...
Given the prolonged move up in terms of price and time, the direction of the March E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to Friday’s close at 29279.
(Bloomberg Opinion) -- On the face of it, the Phase One trade deal signed between the U.S. and China last week looks set to provide a big boost to American oil and gas producers who need to develop new export markets. Just how well they fare against exporters who are much closer to the world’s biggest energy importer may depend as much on economics as on politics.The energy trade section of the deal signed on Jan. 15 commits China to increasing its purchases of American energy products — crude oil, refined products, liquefied natural gas and coal — from levels seen in 2017, a high-point for U.S. exporters before the trade war began to hamper bilateral relationships. The countries agreed that shipments should increase from the 2017 level by no less than $18.5 billion this year and be at least $33.9 billion above the same baseline in 2021.U.S. producers need to develop new export markets to soak up production that is still growing faster than domestic energy needs. That over-supply is capping domestic crude and natural gas prices and hurting their bottom lines.Back in the baseline year of 2017, before China retaliated to the first wave of U.S. tariffs on its exports, American exporters shipped $9 billion worth of energy-related products to China, according to the International Trade Commission. Crude oil exports reached 78.7 million barrels, according to the commission, or 81.8 million barrels, according to data from the Energy Information Administration.According to the EIA, crude accounted for half of all U.S. oil exports to China in 2017, while natural gas liquids (ethane and butane) — key components of much of the production from U.S. shale plays — accounted for another third.Exports of natural gas to China also jumped to $2.5 billion in 2017, driven in part by increased export capacity at Cheniere’s Sabine Pass liquefaction terminal in Louisiana, according to the trade commission, but that was still only a small fraction of total liquefied natural gas by U.S. producers. The IEA puts 2017 LNG shipments to China at 103 billion cubic feet, or 15% of total exports from the U.S. The volume fell in both 2018 and 2019.So that means the deal should result in a huge jump in U.S. oil and gas export to China. If the entire increase were to be in the form of crude, the industry could expect an additional 770,000 barrels a day of exports in 2020 and 1.4 million barrels a day in 2021, based on a WTI price of $60 a barrel and shipment cost of $5.50.But, U.S. exporters may not have an easy job in prizing open the Chinese market for U.S. energy products, especially if Chinese import tariffs of 5% for American crude oil and 25% for LNG and propane remain in effect.Gas exporters may find it particularly difficult. China imported 121 billion cubic meters (4.29 trillion cubic feet) of natural gas in 2018, according to the BP Statistical Review of World Energy, with about 60% of the total in the form of LNG and the rest delivered by pipeline from countries in Central Asia. China’s biggest LNG suppliers — Australia, Qatar, Malaysia and Indonesia — are all much closer than the U.S., which gives them significant shipping-cost advantages. U.S. natural gas feedstock prices will have to stay low enough to offset that shipping disadvantage.The list of other potential hurdles is long. There will be greater competition from pipeline supplies with the start-up of the Power of Siberia link from Russia’s East Siberia, which will deliver at least 5 billion cubic meters of Russian gas this year. That volume will double in 2021 and eventually rise to as much as 38 billion cubic meters per year.And all gas suppliers will face the challenges of weaker Chinese demand growth as the country faces economic headwinds and a plethora of competitive supply options, according to consultancy group Wood Mackenzie. China’s own gas production is projected to rise by 9% this year.In the oil sector, U.S. suppliers met just 3% of China’s crude oil import requirements in 2018, giving them plenty of room for growth. U.S. grades are unlikely to supplant flows from the Middle East, which are typically heavy and sour (containing high concentrations of sulfur that have to be removed). Russian crude is similar, as is much of the oil imported from Central and South America. Their easiest targets may be producers in West Africa and the North Sea, which pump crudes that are more like U.S. grades than those from China’s other big suppliers. But even here U.S. producers are at a disadvantage in terms of distance and thus transport costs.One area where U.S. producers may face fewer obstacles is in the natural gas liquids that form the basis of most petrochemical processes. Plastics are seen as a key growth area for oil demand in medium-term forecasts and China vies with the U.S. for the top spot in the International Energy Agency’s list of incremental feedstock use. Producers of very light, sweet (low-sulfur) crude and natural gas liquids from the U.S. shale formations face far fewer competitors for their shipments and it may be them, rather than the exporters of more conventional U.S. crude grades, who are the real energy winners from the Phase One trade deal.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The selling was revved up late Thursday after the European weather model dropped more than 15 heating degree days from its forecast for the period running from next Tuesday through January 28, NatGasWeather said in a note to clients.
China has been the key oil price driver this week, with phase one of the trade deal driving prices higher before worrying economic data from the country dragged prices lower
The crude oil markets fell initially during the week but have turned around to show signs of life again by forming a hammer. This has happened in both grades that I follow here at FX Empire.
(Bloomberg Opinion) -- A quick reader’s note on some exciting news: Starting next week, Sparklines becomes part of a new daily climate newsletter from Bloomberg. You’ll get the latest on critical scientific, financial and technological developments all week long, including Sparklines every Thursday. You can unsubscribe at any point or modify your email preferences on your account page.This week, BlackRock Inc. Chief Executive Officer Larry Fink published two letters — one to CEOs, one to BlackRock clients — outlining the asset manager’s environmental, social and governance priorities for 2020 and beyond. To say the letters’ import is significant doesn’t nearly do it justice. On Wednesday, I attended a conference of energy CEOs, executive board members, institutional investors and proxy advisors, and Fink’s letters were mentioned multiple times in every session. A wave of disclosure of climate change risks is coming in force, and with it, a wave of physical and financial asset allocation decisions. One sector, already on notice, will feel that wave breaking first: coal.In his letter to clients, Fink said BlackRock is “in the process of removing from our discretionary active investment portfolios the public securities (both debt and equity) of companies that generate more than 25% of their revenues from thermal coal production, which we aim to accomplish by the middle of 2020.” The parameters he lays out aren’t completely new; insurance firms have placed similar restrictions on coal lending and underwriting, which I wrote about last year.In the U.S., the move away from coal was well underway before the $7 trillion asset manager announced its restrictions. Companies have been shutting down coal-fired power plants and setting “transformative responsible energy plans” removing coal from the mix completely, even in the absence of robust federal policies. U.S. coal consumption in power generation fell below 600 million tons last year. This year, the U.S. Energy Information Administration expects it to fall much further still, below 500 million tons. That’s not only down by more than 50% since 2007, but it would also put coal consumption back to 1978 levels.That decline is thanks to a massive number of plant retirements, now totaling more than 300 since 2010. The U.S. coal fleet has not had any net capacity additions since 2011. 2015 is the most significant year for coal retirements to date, as a suite of Obama-era air quality standards took effect. 2018 wasn’t far behind, however, and 2019 wasn’t far behind 2018.The base effect of a smaller number of operational coal plants also means that consumption is declining at an accelerating rate. Using the EIA’s projection for 2020 coal burn in the power sector, year-on-year consumption will decline nearly 15%, the most since at least 1950.Coal’s decline doesn’t exist in isolation. Most coal in the U.S. travels from mine to plant by rail, so there’s a predictable impact on rail cargoes. A decade ago, U.S. rail carriers shipped nearly 7 million carloads of coal. Last year, that figure was barely 4 million.Rail shipments in other sectors have grown. Total rail carloads are up about about 50 percent since 2001, and chemical carloads are up slightly. Oil carloads, thanks to soaring production in the Bakken formation of North Dakota as well as a significant shortage of pipeline capacity, were up more than 250% by mid-2015 and are now soaring back up after plunging along with oil prices. Coal’s path is negative and, given planned power generation retirements, might never move back up.It wasn’t only the restrictions on coal investment, or what sectors might be restricted next, that people were talking about this week. BlackRock’s call to publish disclosures align with Sustainability Accounting Standards Board and Taskforce on Climate-Related Financial Disclosures guidelines, including companies’ plans for operating in a world where the Paris Agreement’s climate goals are fully met. It’s not just coal that is on notice, or just the power sector, or just energy. It’s every big business, everywhere. BlackRock’s position on coal is set, but it could be a playbook for a wave of more restrictions and disclosures to come. The coal sector is the first to feel this breaking wave. Other sectors no doubt will, too.Finally, a note to readers. For more than two years, I’ve had the great pleasure to write this newsletter for Bloomberg Opinion. Next week, I’ll move to become part of a new daily newsletter series and will be publishing on Thursdays. My thanks to you for reading, and I hope you’ll continue to do so on Thursdays, too. A special thanks is due to my Opinion editor Brooke Sample, too, without whom I could quite literally not have been able to write for you all.To contact the author of this story: Nathaniel Bullard at firstname.lastname@example.orgTo contact the editor responsible for this story: Brooke Sample at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Of the additional $200-billion purchase of U.S. goods over the next two years (keeping 2017 imports as the base level), $52.4 billion will likely come from the energy sector.
Crude is steady, as it trades just shy of the $59 level. After a rough start to the week, crude has bounced back, with the signing of the Phase One trade accord and a surprise EIA crude inventory drawdown.
The British pound is steady, but could receive a boost if retail sales delivers a solid gain (release on Friday at 9:30 GMT). The story of the week has been the Chinese yuan, which has climbed to a 7-month high against the U.S. dollar.
(Bloomberg) -- Germany could close its last coal-fired power plant long before a 2038 deadline as the dirtiest fossil fuel gets squeezed out of the energy mix by clean electricity.A plan struck on Thursday by Chancellor Angela Merkel to compensate regions and companies for the exit anticipates some of the most polluting plants running down the clock to the final date. But a cocktail of rising renewables, halted investments and soaring carbon emission costs will probably hasten the exit, according to economists and analysts.Solar, wind and other forms of renewables already have become Germany’s biggest source of electricity and will cut deeper into coal’s share in the next few years. The government forecasts that green power will make up about 80% of the electricity mix by 2038, compared with just over 40% now. Higher carbon prices may gut profit for whatever plants are still able to run.“The political message in the agreement is that the government is willing to pay for coal to be taken out of the market,” said Goetz Reichert, an expert on EU climate and energy policy at the Centre for European Policy in Freiburg, Germany. But the market has already been saying that for some time and coal power will be priced out anyway by cheaper clean energy, he said.Coal and lignite are Germany’s only native energy commodities, and the country has enjoyed a two-century love affair with fossil fuel. Merkel’s plan is an attempt for a civilized break up, something that’s been complicated by protests at mines and coal plants across the country. It’s not clear that Merkel’s plan will appease protesters who have disrupted operations at sites including RWE AG’s Hambach mine.“Sorry, a coal exit by 2038 isn’t good enough,” Luisa Neubauer, a leading German climate activist from the Fridays for Future movement, wrote on Twitter. She added that the government plan is little too late given the urgency of climate change.Germany’s coal exit could offer a model for how countries such as China and India make ahead-of-time closures of recently built plants and how they compensate workers. The payout to the many thousands of coal workers who will lose their jobs could reach almost 5 billion euros by 2043.“This plan brings together social and climate justice,” said Michael Vissiliadis, head of the IGBCE mining union.Echoing the U.S. trend where renewables are beating coal-fired power production despite President Donald Trump’s support for the fuel, the markets are already moving faster than lawmakers. Burning coal at German and European utilities slumped last year. Because capital markets are limiting funds for fossil fuel projects, the price of energy commodities may stay relatively high, Michele Della Vigna, commodity equity business unit leader in EMEA at Goldman Sachs Group Inc., said in a podcast. That will limit the risk of stranded assets and encourage consumers to make cleaner choices, he said. Even though German utilities own their lignite supply with mines in close proximity the plants, Gas prices, which emits half as much carbon dioxide as coal at power plants, are near their lowest in a decade because of a global glut.Because of the projected jump in renewables squeezing out coal anyway, energy economists say that the utilities may not have done that badly after all by securing billion-euro deals with the government.“This is expensive,” said Claudia Kemfert, economist at the DIW school in Berlin. “Especially since coal-fired power stations are hardly worth anything today, but compensation must flow.”(Updates with Goldman Sachs comment on commodity prices in 10th paragraph.)\--With assistance from Mathew Carr.To contact the reporters on this story: William Wilkes in Frankfurt at firstname.lastname@example.org;Brian Parkin in Berlin at email@example.com;Birgit Jennen in Berlin at firstname.lastname@example.orgTo contact the editors responsible for this story: Reed Landberg at email@example.com, Lars Paulsson, Jonathan TironeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The gold markets pulled back slightly during the trading session on Thursday, as we continue to chop back and forth. One thing that should be noticed though is that we have formed a couple of hammers on the way down.
The British pound rallied a bit during the trading session on Thursday in order to break above the gap that had formed at the beginning of the week. Now that that gap has been filled, it becomes a question as to whether or not it will hold.
The British pound broke higher during the trading session on Thursday, as we have cleared a little bit of resistance in the form of the ¥143.50 level.
The Euro rallied a bit during the trading session on Thursday but giveback quite a bit of the gains to show a sluggish reluctance to break towards the top of the overall range.
The Australian dollar has broken higher during the trading session on Thursday, as we continue to show strength based upon the market hanging above the 200 day EMA for the last four days again.
(Bloomberg) -- Some buyers of Venezuelan crude oil have halted purchases after the country started demanding payment of port fees in its failed cryptocurrency.Exports of at least 1 million barrels of oil were put on hold after the government announced this week that certain maritime fees, currently paid in euros, must be paid in Petros starting Monday, according to people with knowledge of the situation. Buyers worry the payment may be in violation of sanctions after the U.S. targeted the cryptocurrency, calling it a “scam.”The oil-rich nation launched the Petro two years ago as a way to navigate wide-reaching U.S. sanctions that have cut off Venezuela from international capital markets. Although banners with the Petro symbol adorn government buildings in downtown Caracas, it’s largely ignored by Venezuelans who don’t know how or where to buy it. It’s backed by the country’s oil reserves, the world’s largest.The move to require payments in Petros is an attempt to boost the crypto and help Venezuelan President Nicolas Maduro’s reduce his country’s dependence on foreign currencies. It comes as crude exports are starting to recover from U.S. sanctions on Venezuela and its oil company, Petroleos de Venezuela SA. Oil exports rebounded in December, surpassing the 1 million-barrel-a-day mark for the first time since February.Crude buyers typically use shipping agencies based in Venezuela to pay port fees. Although buyers are not directly involved, at least one company last year included a clause prohibiting shipping agents from using money transfers to buy digital currencies in Venezuela after the Petro was sanctioned in March 2018, according to a document seen by Bloomberg.Most companies taking Venezuelan crude no longer pay cash. Instead, they engage in swap transactions, where they take crude oil in exchange for gasoline or diesel. Others, like Eni SpA and Repsol SA, get oil in payment for old debts.To contact the reporter on this story: Lucia Kassai in Houston at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Mike Jeffers, Catherine TraywickFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Crossing to the strong side of the angle at 9149.25 will put the March E-mini NASDAQ-100 Index in an extremely bullish position.