“Even if the UK, France and the Western world, in general, will all go to 100 percent electric vehicles, that would be great, but that wouldn’t be enough…We still have less advanced economic economies that cannot do that switch.”
Ben van Beurden, CEO of Royal Dutch Shell (7/28)
Oil prices were strong last week with New York futures closing about $4 a barrel higher for the week at $49.71 and London at $52.52. Behind the move was another unexpectedly large decline in US stockpiles of 7.2 million barrels. This decline was brought about by a high level of US refinery consumption of almost 17.3 million b/d of crude the week before last. This was 620,000 b/d higher than in the comparable week in 2016. A reduction in Saudi shipments to the US was also seen as responsible for the unusually large decline in inventories.
“The fact is, oil at $50 a barrel makes Arctic oil uncompetitive. In terms of what’s going to happen down the road, I saw a World Bank report placed the oil in nominal dollars at $80 a barrel in 2030. That’s still way below break the price for Arctic oil.”
Stephen M. Carmel, senior vice president of Maritime Services at Maersk Line Ltd. (7/21)
The markets remain confused about the future of oil prices as analysts attempt to interpret alternating bullish and bearish signals. Last week prices rose on Tuesday and Wednesday while falling on Monday, Thursday, and Friday leaving US futures at $45.77 or about $1 below where they started the week. With the US now exporting circa 1 million barrels of oil each day and imports up only about 300,000 b/d over last year, US stocks have been falling of late. There has been some increase in US consumption, but a rapid rise in US oil product exports is clouding the picture as to whether the high levels of US refinery output are being consumed domestically or being shipped abroad.
“What oil companies and car companies are saying [about future sales of plug-in vehicles] is diverging. This is a trillion-dollar question, and someone is going to be wrong.”
Colin McKerracher, head of advanced transport analysis for Bloomberg New Energy Finance
Oil prices climbed steadily last week, ending up Friday about $5 a barrel higher in New York at $46.54 with London the usual $2.50 or so higher. Although market concerns about oversupply have not gone away, a 7.6-million-barrel decline in US crude stocks and better demand from Europe and China was enough to keep the markets climbing higher. Rising prices were kept in check, however, by the continuing increases in oil production in the US, Canada, Libya and Nigeria. There are also concerns that adherence to the OPEC production cut is slipping and many traders are losing confidence in OPEC’s ability to balance the markets with the current level of effort.
“Here’s a little economics lesson, supply and demand: You put the supply [more coal] out there and the demand will follow that.”
US Energy Secretary Rick Perry, who was criticised by economists who point out that, typically, supply follows demand
Last Monday, oil prices rose for the eighth consecutive session closing in New York at $47 a barrel and setting a record for the longest gaining streak in nearly eight years. This surge came on speculator concerns that increases in US shale oil production were starting to slow. The rest of the week was mostly downhill with NY futures closing at $44.23. The slide came among reports that OPEC was not interested in further price cuts; a resumption of the increase in the US oil-rig count of seven rigs, adding to the run of 23 weeks of steady gains before the count fell by one the week before last; US crude production and exports continuing to gain; and OPEC exports increasing by 220,000 b/d in June to 32.49 million b/d.
“We will be dominant. We will export American energy all over the world, all around the globe. These energy exports will create countless jobs for our people, and provide true energy security to our friends, partners, and allies across the globe.”
U.S. President Donald Trump, in a speech [Ed. Note: possible hyperbole?]
After a decline of nearly $10 a barrel since mid-May, oil prices rebounded sharply last week with New York futures climbing from below $43 to close at $46 a barrel. Although many are still worried about excess oil inventories, most traders are optimistic that the worst is over and that higher oil prices stemming from the OPEC production cut are ahead. Many see the recent surge in US shale oil production slowing due to oil prices being in the $40s.
