A historic oil price collapse, with worries headed into 2021

 

The Dulang B Platform operates at Terengganu, Malaysia. For 2015, IHS see a potential for $8-9 billion in drilling spend in the Asia Pacific, with Malaysia as a leader along with India and Australia. Actual drilling spend will depend on the health of the oil price, however.

https://www.reuters.com/article/uk-global-oil-yearend/a-historic-oil-price-collapse-with-worries-headed-into-2021-idukkbn2930ew

NEW YORK (Reuters) - This year was like no other for oil prices.

Even as global prices end the year at about $51 a barrel, near the average for 2015-2017, it masks a year of volatility. In April, U.S. crude plunged deep into negative territory and Brent dropped below $20 per barrel, slammed by the COVID-19 pandemic and a price war between oil giants Saudi Arabia and Russia.

The remainder of 2020 was spent recovering from that drop as the pandemic destroyed fuel demand around the world. While the short-lived decline of U.S. oil futures below negative-$40 a barrel is not likely to be repeated in 2021, new lockdowns and a phased rollout of vaccines to treat the virus will restrain demand next year, and perhaps beyond.

“We really haven’t seen anything like this - not in the financial crisis, not after 9/11,” said Peter McNally, global sector lead for industrials, materials and energy at research firm Third Bridge. “The impact on demand was remarkable and swift.”

Fossil-fuel demand in coming years could remain softer even after the pandemic as countries seek to limit emissions to slow climate change. Major oil companies, such as BP Plc and Total SE, published forecasts that include scenarios where global oil demand may have peaked in 2019.

World oil and liquid fuels production fell in 2020 to 94.25 million barrels per day (bpd) from 100.61 million bpd in 2019, and output is expected to recover only to 97.42 million bpd next year, the Energy Information Administration said.

“Every cycle feels like the worst when you’re going through it, but this one has been a doozy,” said John Roby, chief executive of Dallas, Texas-based oil producer Teal Natural Resources LLC.

 

DEMAND SLACKENS

As coronavirus cases spread, governments imposed lockdowns, keeping residents indoors and off the roads. Consumption of world crude and liquid fuels fell to 92.4 million bpd for the year, a 9% drop from 101.2 million bpd in 2019, EIA said.

The changing landscape poses a threat to refiners. About 1.5 million bpd of processing capacity has been taken off the market, Morgan Stanley said.

Worldwide crude distillation capacity is expected to keep rising, according to GlobalData, but falling demand and weak margins for gasoline, diesel and other fuels has prompted refineries in Asia and North America to close or curtail output, including several facilities along the U.S. Gulf Coast.

Shutdowns in more developed economies “increase refineries’ exposure to the highly ‎competitive product export market,” BP said in its outlook, released in September. ‎ 

VOLATILITY CLIMBS

The next several months are likely to be volatile as investors weigh tepid demand against another potential spike in oil supply from producers, including the Organization of the Petroleum Exporting Countries (OPEC) and allies.

“Markets have been tumultuous and disorderly over the last 12 months with long-lasting implications, as we begin to form new contours of normality towards a post-virus equilibrium,” Mitsubishi UFJ Financial Group analysts said.

The Cboe Crude Oil ETF Volatility Index surged to a record 517.19 in April. The index has since dropped to around 40, but that is still about 60% higher than this time a year ago, Refinitiv Eikon data shows.

Russia: OPEC+ Deal Could Be Tweaked If Oil Demand Recovers Faster

 

Alexander Novak

https://oilprice.com/Energy/Crude-Oil/Russia-OPEC-Deal-Could-Be-Tweaked-If-Oil-Demand-Recovers-Faster.html 

The terms of the OPEC+ production pact could be revised if oil demand recovers next year faster than currently expected, Russian Deputy Prime Minister Alexander Novak, who is still in charge of coordinating Russia’s oil policy with OPEC, told Rossiya TV news channel in an interview on Monday.

The vaccine rollout is helping global oil demand to recover, and consumption could return to pre-crisis levels during 2021, Novak said.  

According to the man who is the face of Russia’s oil policy, global oil demand could grow by between 5 million barrels per day (bpd) and 6 million bpd on an annual basis in 2021 compared to 2020—roughly in line with forecasts from the International Energy Agency (IEA) and OPEC.

Despite renewed fears about oil demand due to the new coronavirus strain, the leader of the non-OPEC group in the OPEC+ pact, Russia, is still in favor of another 500,000 bpd increase in the alliance’s oil production from February, Bloomberg reported last week, citing officials with knowledge of the Russian oil policy.  

The original plan for a 2-million-bpd increase of OPEC+ production as of January was watered down to a 500,000-bpd rise for January in a compromise agreement, largely seen as a positive outcome that avoided a break-up of the OPEC+ pact or even of OPEC. 

The total production cut for January will thus be 7.2 million bpd compared to the current 7.7 million bpd collective cut. The ministers decided to hold monthly meetings to decide the oil production policy for the following month.

At the January 4 meeting of the OPEC+ ministers, Russia will back another 500,000-bpd rise in the OPEC+ collective production from February, Novak told Reuters in comments cleared for publication on Friday.

“If the situation stays normal and stable, we will support this position (increase by 500,000 bpd),” Novak said at a briefing, as carried by Reuters.

By Tsvetana Paraskova for Oilprice.com

Saudi Aramco Makes Four Oil and Gas Discoveries

State-controlled Saudi Aramco has made four new oil and gas discoveries, the country’s oil minister Prince Abdulaziz bin Salman said today.

The first discovery, comprising unconventional Extra Light Arab crude, was made at the al-Reesh field, northwest of Dhahran, where Aramco is headquartered. Extra Light crude and associated gas flowed from three wells at the field: 4,452 b/d of crude and 3.2mn ft3/d of gas from the al-Reesh 2 well; 2,745 b/d of crude and 3mn ft3/d of gas from al-Reesh 3; and 3,654 b/d of crude and 1.6mn ft3/d of gas from al-Reesh 4.

The discovery — in the Eastern Province of the country where Aramco’s oil and gas facilities are located — is of special significance, Prince Abdulaziz said, because it proves that Arab Extra Light crude can be produced from the Tuweiq Mountain formation.

Arab Extra Light crude, which has an API of 36-40, is produced at the 1mn b/d Shaybah and 250,000 b/d Abqaiq fields.

Another oil discovery, al-Ajramiyah, was made northwest of the city of Rafhaa on Saudi Arabia’s northern border, where a test well flowed at the rate of 3,850 b/d. The oil minister did not specify whether the al-Ajramiyah find comprises conventional or unconventional crude, nor did he provide its API.

Two further finds comprised non-conventional gas. The first, at the al-Minahhaz well, southwest of the giant Ghawar field, yielded 18mn ft3/d of gas and 98 b/d of condensate from the al-Sarrah reservoir. The Sahbaa well, south of Ghawar, yielded 32mn ft3/d of gas.

Aramco is now delineating the fields to determine their size and capacities, said Prince Abdulaziz.

Aramco, which has a crude production capacity of 12mn b/d and reserves of around 260bn bl, focuses its exploration activities on gas, rather than crude, and is working to include shale gas in its portfolio. The company produced 8.978bn ft3/d of natural gas in 2019, much of it conventional.

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Merry Christmas! Jesus is born!

 

Merry Christmas Eve 2020!

 

Turkish Farmers Eye $3 Billion Profit Jackpot From Gold Find

https://www.bloomberg.com/news/articles/2020-12-23/turkish-farmers-eye-3-billion-profit-jackpot-from-gold-find 

• Technical partners being sought to help with mining operations
• Gubretas parent Tarim Kredi to use proceeds to start bank

A Turkish fertilizer producer expects to net $3 billion of profit from a recent gold discovery that may allow its parent company to fulfill its ambitions of starting an Islamic bank.

Those earnings would be more than five times the annual sales of Gubretas, which earlier this month announced it found 3.5 million troy ounces of gold reserves worth about $6 billion at current prices.

The bullion will be extracted by its 75%-owner Agricultural Credit Cooperatives with the help of external experts, said Fahrettin Poyraz, Gubretas’s chairman and chief executive officer of the cooperative known as Tarim Kredi. He didn’t disclose a time line of the earnings expected to flow from the project.

Turkey Has No Cure for a Gold Craze That Leaves Lira Vulnerable

Gold is big business in Turkey, one of the largest consumers of the precious metal in the world. Turks use gold as protection during times of currency devaluation and inflation, and traditionally gift it for events from weddings to circumcision ceremonies. Local producers fall way short of domestic demand, resulting in an import bill that weighs on the lira.

Record Turkey Gold Output Is All Headed for the Central Bank

Three-quarters of the proceeds will go to Tarim Kredi, which will use the cash toward its “medium- to long-term target of establishing a participation bank,” he said by phone. Tarim Kredi has been looking to start an Islamic bank since 2018, joining a push by President Recep Tayyip Erdogan to expand Shariah-compliant financing that only accounts for about 5% of lending in the country.

As part of the gold exploration process, Gubretas, also known by its full name Turkiye Gubre Fabrikalari AS, established a mining unit in April. Of the two deposits found at the town of Sogut in northwestern Turkey, 1.92 million ounces of gold are proven reserves, while a return of 83% is projected for the remaining 1.6 million ounces, Poyraz said.

Gubretas estimates there’ll be about $400 million in investment costs, and talks with domestic and foreign firms on the company’s financing needs will begin in coming days, he said.

Shares in the company have surged 21% over the past two days and are up more than sixfold this year, making it the-third best performing stock on the benchmark Borsa Istanbul 100 Index.

— With assistance by Taylan Bilgic, Asli Kandemir, and Thomas Biesheuvel

Oil Rises From the Ashes as the Big Coronavirus Recovery Trade

Brent crude topped $50 a barrel last week for the first time since March, a milestone for an oil market that’s been grinding its way back out of a deep slump for months.

Things aren’t back to normal yet, but the positive signals are proliferating. The enormous glut of fuel that accumulated this year on everything from tiny barges to giant supertankers is being steadily depleted.

While the coronavirus pandemic is worse than ever in the U.S., demand in Europe is bouncing back as a second wave of lockdowns eases and Asia continues to pull in huge volumes of crude.

But there’s more to this than a realignment of supply and demand — huge financial flows are also driving the price rally. In a world that’s expecting to see travel recover sharply next year, crude has become a hot Covid-vaccine trade.

“Oil is the cheapest of all reflation assets,” said Amrita Sen, co-founder of London-based consultant Energy Aspects Ltd. “With vaccines slowly rolling out, we expect investors to start returning to the oil sector and for prices to continue firming.”

In some corners of the world, the recovery in demand is almost complete. India’s largest refiner said last week its plants are processing at full capacity and it’s expecting a v-shaped rebound in fuel use. Consumption of gasoline is also at or near pre-Covid levels in China and Japan, the world’s second and fourth biggest oil consumers.

European motorists are hitting the roads again as governments relax national lockdowns in countries including the U.K., Spain, and France, according to an index of road usage and traffic compiled by Bloomberg News. Road freight is sharply higher as companies rebuild inventories and the Christmas shopping season gets in full swing.

As demand is recovering, the Organization of Petroleum Exporting Countries and its allies are keeping tight limits on production. The group canceled January’s 1.9-million-barrel-a-day supply hike and will instead add no more than 500,000 barrels a day to the market each month in the new year. Estimates for U.S. shale oil output are still falling.

Cargoes of crude are changing hands at higher prices from the North Sea to the U.S. shale heartland of Midland, Texas as consumers trawl the globe for extra supplies. Saudi Arabia raised the cost of its oil for Asia — a benchmark for the world’s refiners — by the most since August last week.

Hot Money

A more subtle shift in the market has also got traders excited. For most of December, nearby crude futures have been trading at a premium to later-dated ones, a price structure known as backwardation.

That buying of contracts at the front of the so-called price curve is evidence that managed money is flowing into the market, Eagle Commodities said in a note. The steeper the backwardation, the greater the return from holding futures from one month into the next, which encourages further buying in a “self-reinforcing cycle,” the brokerage said.

In recent weeks, cash has poured back into energy markets. Holdings of energy contracts rose by $3.6 billion through early December, according to JPMorgan Chase & Co., driven by inflows into Brent and West Texas Intermediate. Investors pumped money into U.S. exchange-traded energy funds last week, with a swing of almost $400 million from the prior period’s outflows.

Price Risks

“Right now, oil has priced in that promising future,” said Victor Shum, vice president of energy consulting at IHS Markit Ltd. in Singapore. “While we have to deal with the immediate dark Covid winter.“

There are reasons to think $50 could be oil’s ceiling for now. The price could tempt producers from Baghdad to Oklahoma to increase production. There are already tensions within OPEC+, with some members chafing at the cartel’s self-imposed supply limits.

“A persistent rally could turn OPEC+ much less conservative, in turn driving a price pullback,” said Citigroup Inc. analysts including Ed Morse.

The backwardation that’s attracting speculators could also draw real barrels into the market, because the price structure isn’t profitable for any traders still storing physical crude.

On the west coast of South Africa, a supertanker loaded oil from the tanks at the Saldanha Bay storage terminal earlier this month before sailing to Asia. It’s a reminder that there are still plenty of barrels left over from the spring surplus.

Relentless Asian buying may pause at some point, especially with Lunar New Year celebrations starting in early February. Higher-cost crude will start to dampen the profitability of refiners in the region. A standard refining process in Singapore is now loss-making when using five of the eight oil grades tracked by Oil Analytics Ltd.

For now, positive trends in fuel consumption are buoying traders’ desire for both real and paper barrels. And there could be more hot money coming down the pipe.

At the start of 2021, billions of dollars of commodities investments will be affected by a broader rebalancing of portfolios. The move could attract $8 billion of inflows into Brent and WTI futures, according to Citigroup.

“There’s been a distinct shift in the financial oil market,” said Michael Tran, an analyst at RBC Capital Markets. Speculators are buying futures and holding onto them, scared that they’ll miss out on a further rally, he said.

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ExxonMobil Announces Emission Reduction Plans; Expects to Meet 2020 Goals

https://www.petroleumafrica.com/exxonmobil-announces-emission-reduction-plans-expects-to-meet-2020-goals/ 

ExxonMobil said Monday it plans further reductions in greenhouse gas emissions over the next five years to support the goals of the Paris Agreement and anticipates meeting year-end 2020 reductions.

ExxonMobil plans to reduce the intensity of operated upstream greenhouse gas emissions by 15 to 20 percent by 2025, compared to 2016 levels. This will be supported by a 40 to 50 percent decrease in methane intensity, and a 35 to 45 percent decrease in flaring intensity across its global operations. The emission reduction plans, which cover Scope 1 and Scope 2 emissions from operated assets, are projected to be consistent with the goals of the Paris Agreement. The company also plans to align with the World Bank’s initiative to eliminate routine flaring by 2030.

“These meaningful near-term emission reductions result from our ongoing business planning process as we work towards industry-leading greenhouse gas performance across all our business lines,” said Darren Woods, chairman and chief executive officer of Exxon Mobil Corporation. “We respect and support society’s ambition to achieve net zero emissions by 2050, and continue to advocate for policies that promote cost-effective, market-based solutions to address the risks of climate change.”

ExxonMobil’s plans will leverage the continued application of operational efficiencies, and ongoing development and deployment of lower-emission technologies.

The plan is the result of several months of detailed analysis and includes input from shareholders.

The full release on ExxonMobil’s plans can be reviewed here.

U.S. Crude Oil Inventory Declines; Weekly Demand Increases But Remains Modest, EIA Says

 

https://www.naturalgasintel.com/u-s-crude-oil-inventory-declines-weekly-demand-increases-but-remains-modest-eia-says/ 

After jumping a week earlier, domestic oil inventories dropped during the week ended Dec. 11, the U.S. Energy Information Administration (EIA) said Wednesday.  

EIA said in its Weekly Petroleum Status Report that U.S. commercial crude oil inventories — excluding those in the Strategic Petroleum Reserve — decreased by 3.1 million bbl from the prior week. A week earlier, stockpiles increased by nearly 15.2 million bbl amid robust imports and after light post-Thanksgiving holiday demand, lifting crude storage to its highest level since August.

The latest result “was a nice walk down from last week’s supersized” build, said Robert Yawger, director of energy futures at Mizuho Securities USA LLC. The prior week increase “threatened to overwhelm storage in a relatively short time span. This week’s report has reduced those concerns.”

Despite a draw in the latest covered week, U.S. inventory of 500.1 million bbl is still about 10% above the five-year average for this time of year, EIA said.

Demand, meanwhile, increased 4% week/week for the latest covered period, EIA said, but it remained weak relative to pre-pandemic levels in 2019. Demand has been choppy on a week-to-week basis but, aside from an occasional exception, it has been consistently below year-earlier levels in recent months.

Demand for the Dec. 11 week was 11% below the comparable week of 2019, with jet fuel consumption down 44% year/year and gasoline off 15%.

Total petroleum products supplied over the past four weeks averaged 18.9 million b/d, EIA said, down 8% from the comparable period a year earlier. Over the same period, motor gasoline demand fell 13%, while jet fuel demand dropped 36%.

With the pandemic intensifying during November and December across the United States, analysts at Raymond James & Associates said Wednesday demand headwinds are “not going away anytime soon.”

Refinery utilization declined to 79.1% last week from 79.9% in the prior week. Imports totaled 7.7 million b/d, down from 8.6 million b/d.

Earlier this week, both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) updated their global oil demand forecasts to reflect the adverse impacts of the ongoing pandemic.

Pointing to travel restrictions imposed to slow coronavirus outbreaks, IEA said demand for jet fuel and gasoline in both Europe and the United States remain weak. The Paris-based watchdog said 2020 oil demand would fall 8.8 million b/d when compared to 2019, to 91.2 million b/d. That was 50,000 b/d lower than its November forecast.

OPEC expects oil demand to decline by 9.77 million b/d to 89.99 million b/d this year, down slightly from a previous outlook.

IEA and OPEC researchers said coronavirus vaccines that health officials began to roll out this week in the United States – and earlier in Europe – are expected to eventually help bring an end to the pandemic and pave a path for increased travel and fuel needs.

Both organizations, however, also emphasized it will take several months to inoculate enough people to substantially lower infection risks and normalize travel conditions. In the meantime, demand for both gasoline and jet fuel is likely to remain light through the winter months.

Oil tanker 'attacked by bomb-laden boat' in Jeddah, Saudi Arabia says

The owner of the BW Rhine said its 22 crew were not harmed in the incident (file photo)

https://www.bbc.com/news/business-55298807 

Saudi Arabia says an oil tanker was attacked by an explosive-laden boat while it was anchored at Jeddah's port.

The overnight attack at the facility's fuel terminal resulted in a small fire on board that was extinguished, the energy ministry told state media.

The owner of a Singapore-flagged tanker, BW Rhine, earlier said that it had been "hit from an external source", causing a blast that damaged its hull.

The energy ministry did not say who it suspected was responsible.

But the incident comes weeks after what Saudi authorities previously alleged were attacks by Yemen's rebel Houthi movement on a Maltese-flagged tanker and two Saudi oil facilities.

• Yemen crisis: Why is there a war?
• New deal to secure oil tanker abandoned off Yemen

On Monday, tanker company Hafnia reported that the BW Rhine had been "hit from an external source whilst discharging at Jeddah" at about 00:40 local time (21:40 GMT on Sunday), "causing an explosion and subsequent fire".

The 22-strong crew extinguished the fire with assistance from the shore fire brigade and tug boats, a statement said. No-one was injured, but a water ballast tank and a cargo tank on the port side were damaged.

"It is possible that some oil has escaped from the vessel, but this has not been confirmed and instrumentation currently indicates that oil levels on board are at the same level as before the incident," the statement added.

The United Kingdom Maritime Trade Operations (UKMTO) naval authority said an unnamed tanker had experienced an explosion in Jeddah, and that there were also unconfirmed reports that a second vessel was involved.

Saudi authorities did not confirm the incident until Monday afternoon when an energy ministry spokesman spoke to state media.

There was no damage caused to the unloading facilities, nor any effect on supplies, the Saudi Press Agency reported.

The ministry spokesman "condemned the terrorist attack, which came shortly after other attacks on another ship in al-Shuqaiq, on the petroleum products distribution station in north Jeddah, and on the floating unloading platform of the petroleum products distribution station in Jizan", the agency added.

The spokesman also warned that "these acts of terrorism and vandalism, directed against vital installations, go beyond the kingdom and its vital facilities, to the security and stability of energy supplies to the world and the global economy".

There was no immediate comment from the Houthis. A Saudi-led military coalition fighting in Yemen's civil war has blamed them for the three attacks listed by the energy ministry.

A fire broke out at the Jizan fuel terminal on 12 November after the coalition reportedly intercepted and destroyed two explosives-laden boats launched from Yemen's Hudaydah province.

On 25 November, an explosion damaged the Maltese-flagged oil tanker Agrari near Shuqaiq. A British security firm attributed the blast to a mine, but the Saudi-led coalition said a bomb-laden boat was launched towards the tanker.

The Houthis did not comment on either incident but did say they had fired a cruise missile at a Saudi Aramco oil facility in Jeddah on 23 November. The Saudi energy ministry said a projectile struck a fuel tank at a petroleum distribution station and ignited a fire.

China should consider alternatives for Australian iron ore as trade tensions simmer, analyst says

 

Iron ore on railway wagons at Salanaha Bay Terminal in South Africa.

Education Images | UIG | Getty Images

 https://www.cnbc.com/2020/12/16/as-china-australia-trade-tensions-rise-beijing-needs-iron-ore-alternative.html

• China imports 60% of its iron ore from Australia, and is heavily dependent on the commodity.
• Other Australian exports to China have been affected by the deteriorating relationship between the countries, with Beijing hitting goods such as wine and barley with tariffs.
• Beijing has, so far, spared iron ore from Australia, which analysts attributed to the lack of alternatives available.
• China is likely to turn to a country where they have been investing, according to Peter O’Connor, senior analyst of metals and mining at investment firm Shaw and Partners.

SINGAPORE — As tensions between Australia and China continue to simmer, Beijing needs to think about diversifying the supply of one key commodity from Down Under, according to an analyst.

Beijing imports 60% of its iron ore from Australia, and is heavily dependent on the commodity, which it uses to make steel. China is the world’s top producer of steel.

Other Australian exports to China have been affected by the deteriorating relationship between the countries, with Beijing hitting goods such as wine and barley with tariffs. Bilateral relations between Canberra and Beijing soured earlier this year after Australia supported a growing call for an international inquiry into China’s handling of the coronavirus pandemic.

But Beijing has, so far, spared iron ore from Australia, which analysts attributed to the lack of alternatives available. Australia is the world’s largest iron ore producer.

However, Peter O’Connor, senior analyst of metals and mining at investment firm Shaw and Partners, says that Beijing now needs to consider diversifying its supply of iron ore.

“That direction or that narrative that we need to think about, that started several years ago … was about diversity of supply. It’s where can China source, how can they diversify away from Australia, also Brazil,” he told CNBC’s “Street Signs Asia” on Tuesday.

Brazil is the next largest supplier of iron ore to China, but has its own slate of issues. In January 2019, a deadly dam disaster at a Vale iron ore site led the Brazilian mining giant to halt production at ten locations. Vale is the world’s second-largest iron ore producer, and its biggest market is also China.

Following that accident, Brazil has struggled to get its iron ore exports back to 2018 levels, said Vivek Dhar, director of mining and energy commodities research at the Commonwealth Bank of Australia.

Iron ore prices recently spiked as demand from China rose, and have been further stoked by dwindling supply and disruptions caused by storms hitting Australia. At the same time, China’s economy has largely recovered from the worst of the coronavirus hit, fueled in part by funneling stimulus into infrastructure.

One possible source of iron ore

Shaw and Partner’s O’Connor said, however, China has an alternative source that they could fall back on.

“China needs to diversify their supply, and I think the country where they will most likely do that, which has been simmering for some time, is a country in West Africa called Guinea … and probably largely China funded and developed,” he said.

Guinea says its Simandou region boasts an estimated 1.8 billion tons of iron ore reserves — the world’s largest known, yet untapped deposits.

Reuters previously reported that Baowu Group, China’s biggest steel producer, plans to invest in the Simandou iron ore mine and develop the deposit with other steel makers. The news agency has also reported that a China-backed consortium won a $14 billion government tender in Guinea to bring the Simandou iron ore deposit into production by 2025.

Iran uses disguised tanker to export Venezuelan oil — documents

 

 https://www.arabnews.com/node/1777276/world

• Names of scrapped vessels being used to disguise routes and identities of tankers
• Venezuela and Iran have deepened their cooperation this year

A tanker chartered by the National Iranian Oil Company (NIOC) is loading Venezuelan crude for export, documents from state-run PDVSA show, providing evidence of the two countries’ latest tactics to expand their trade in defiance of US sanctions.
Venezuela and Iran have deepened their cooperation this year as Venezuela has exchanged gold and other commodities for Iranian food, condensate and fuel.
Names of scrapped vessels are being used by several PDVSA (Petroleos de Venezuela, S.A.) customers, including NIOC, to disguise the routes and identities of the tankers they use.
A very large crude carrier (VLCC), identified in PDVSA’s loading documents as the Ndros, arrived at Venezuela’s main oil port of Jose last week to load 1.9 million barrels of heavy Merey 16 crude bound for Asia, the documents showed.
Vessel-monitoring service TankerTrackers.com used satellite photos to show the Ndros was scrapped in 2018, confirming reports on international shipping databases.
Also using satellite imagery and comparing it with photographs, it said the VLCC’s real identity is the Liberia-flagged Calliop. Reuters could not independently verify that as the tanker’s name at the hull had been painted black before its arrival at Jose.
PDVSA, Venezuela’s oil ministry and NIOC did not respond to requests for comment. The US Treasury Department declined to comment.
Hong Kong-based Ship Management Services Ltd, which bought the Calliop in October, the shipping databases showed, could not be reached for comment.
A spokesperson for the US State Department said that “reports of any impending deliveries would again illustrate the illegitimate regime in Venezuela has turned to international pariahs like Iran to enable their exploitation of Venezuela’s natural resources.”
Iran sent a VLCC named the Horse to Venezuela in September. It delivered condensate, a very light form of oil, for PDVSA to blend with its very heavy oil to formulate exportable crude.
The tanker returned to Iran in October carrying Venezuelan heavy oil for NIOC, PDVSA’s schedules showed. The tanker was misidentified at PDVSA’s databases as the Master Honey.
In the run-up to leaving office in January, US President Donald Trump’s administration has tightened sanctions on Iran and Venezuela.
A handful of PDVSA’s customers that had been allowed to swap Venezuelan oil for fuel under US sanctions had their authorizations suspended in October. But Washington has not intercepted vessels that contribute to the Iran-Venezuela trade.
Smaller Iranian tankers have also delivered gasoline to Venezuela, making several voyages between the two countries since May.
The US Department of Justice in August seized 1.1 million barrels of Iranian gasoline bound for Venezuela on four privately-owned tankers.
The cargoes were transferred to two separate tankers that delivered the gasoline to US ports for auction, in what the department said led to the largest seizure of Iranian fuel.

Oil Rises From the Ashes as the Big Coronavirus Recovery Trade

 

(REUTERS)

Financial flows helped to drive crude above $50 in London. Fuel demand is returning to normal levels in Europe and Asia.

Brent crude topped $50 a barrel last week for the first time since March, a milestone for an oil market that’s been grinding its way back out of a deep slump for months.

Things aren’t back to normal yet, but the positive signals are proliferating. The enormous glut of fuel that accumulated this year on everything from tiny barges to giant supertankers is being steadily depleted.

While the coronavirus pandemic is worse than ever in the U.S., demand in Europe is bouncing back as a second wave of lockdowns eases and Asia continues to pull in huge volumes of crude.

But there’s more to this than a realignment of supply and demand — huge financial flows are also driving the price rally. In a world that’s expecting to see travel recover sharply next year, crude has become a hot Covid-vaccine trade.

“Oil is the cheapest of all reflation assets,” said Amrita Sen, co-founder of London-based consultant Energy Aspects Ltd. “With vaccines slowly rolling out, we expect investors to start returning to the oil sector and for prices to continue firming.”

In some corners of the world, the recovery in demand is almost complete. India’s largest refiner said last week its plants are processing at full capacity and it’s expecting a v-shaped rebound in fuel use. Consumption of gasoline is also at or near pre-Covid levels in China and Japan, the world’s second and fourth biggest oil consumers.

European motorists are hitting the roads again as governments relax national lockdowns in countries including the U.K., Spain, and France, according to an index of road usage and traffic compiled by Bloomberg News. Road freight is sharply higher as companies rebuild inventories and the Christmas shopping season gets in full swing.

Three-Speed Recovery

As demand is recovering, the Organization of Petroleum Exporting Countries and its allies are keeping tight limits on production. The group canceled January’s 1.9-million-barrel-a-day supply hike and will instead add no more than 500,000 barrels a day to the market each month in the new year. Estimates for U.S. shale oil output are still falling.

Cargoes of crude are changing hands at higher prices from the North Sea to the U.S. shale heartland of Midland, Texas as consumers trawl the globe for extra supplies. Saudi Arabia raised the cost of its oil for Asia — a benchmark for the world’s refiners — by the most since August last week.

Hot Money

A more subtle shift in the market has also got traders excited. For most of December, nearby crude futures have been trading at a premium to later-dated ones, a price structure known as backwardation.

That buying of contracts at the front of the so-called price curve is evidence that managed money is flowing into the market, Eagle Commodities said in a note. The steeper the backwardation, the greater the return from holding futures from one month into the next, which encourages further buying in a “self-reinforcing cycle,” the brokerage said.

In recent weeks, cash has poured back into energy markets. Holdings of energy contracts rose by $3.6 billion through early December, according to JPMorgan Chase & Co., driven by inflows into Brent and West Texas Intermediate. Investors pumped money into U.S. exchange-traded energy funds last week, with a swing of almost $400 million from the prior period’s outflows.

Price Risks

“Right now, oil has priced in that promising future,” said Victor Shum, vice president of energy consulting at IHS Markit Ltd. in Singapore. “While we have to deal with the immediate dark Covid winter.“

There are reasons to think $50 could be oil’s ceiling for now. The price could tempt producers from Baghdad to Oklahoma to increase production. There are already tensions within OPEC+, with some members chafing at the cartel’s self-imposed supply limits.

“A persistent rally could turn OPEC+ much less conservative, in turn driving a price pullback,” said Citigroup Inc. analysts including Ed Morse.

The backwardation that’s attracting speculators could also draw real barrels into the market, because the price structure isn’t profitable for any traders still storing physical crude.

On the west coast of South Africa, a supertanker loaded oil from the tanks at the Saldanha Bay storage terminal earlier this month before sailing to Asia. It’s a reminder that there are still plenty of barrels left over from the spring surplus.

Relentless Asian buying may pause at some point, especially with Lunar New Year celebrations starting in early February. Higher-cost crude will start to dampen the profitability of refiners in the region. A standard refining process in Singapore is now loss-making when using five of the eight oil grades tracked by Oil Analytics Ltd.

For now, positive trends in fuel consumption are buoying traders’ desire for both real and paper barrels. And there could be more hot money coming down the pipe.

At the start of 2021, billions of dollars of commodities investments will be affected by a broader rebalancing of portfolios. The move could attract $8 billion of inflows into Brent and WTI futures, according to Citigroup.

“There’s been a distinct shift in the financial oil market,” said Michael Tran, an analyst at RBC Capital Markets. Speculators are buying futures and holding onto them, scared that they’ll miss out on a further rally, he said.

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Large Oil Trader Trafigura Books Strongest Trading Year Ever

© Getty 

One of the world’s biggest commodity traders, privately held Trafigura, delivered record core earnings in what became its strongest trading year ever due to the extreme oil market swings earlier this year.

In its annual report for 2020, covering the financial year ended on September 30, Trafigura booked exceptionally strong financial results, mostly thanks to its core oil and petroleum trading business. The commodity trader’s net profit was the highest since 2013, while the gross profit and earnings before interest, tax, depreciation, and amortization (EBITDA) were the highest on record.

The biggest commodity traders typically profit from a glut in oil markets as they store oil to sell at higher prices in the future. In the second quarter this year, the oversupply on the market reached record highs as global oil demand crashed in the pandemic and Saudi Arabia and Russia briefly fought a price war for market share, which also contributed to the glut and to the oil price collapse.

In March and April, traders rushed to charter supertankers for floating storage for several months to a year so they could sell the oil at higher prices later.

“Extremely volatile conditions and market distortion throughout much of FY2020 created increased demand for the services of a large physical trading house like Trafigura in helping to manage the disruptions resulting from imbalances in supply and demand. Accordingly, our Oil and Petroleum Products Trading division had a very strong year,” Trafigura said.

In the financial year October 2019 through September 2020, Trafigura saw its net profit jump to US$1.6 billion, up from US$900 million in FY 2019, while gross profit more than doubled to US$6.8 billion and EBITDA tripled to US$6 billion.

“Our financial result, including a net profit for the year of USD1,599 million, reflects an excellent performance from our core trading divisions, Oil and Petroleum Products, and Metals and Minerals, both of which delivered record gross profit and EBITDA,” Jeremy Weir, Trafigura’s Executive Chairman and CEO said in a statement.

Looking ahead, the commodity trader expects “volatility and market distortion to continue, while demand will be slow to recover from the effects of COVID-19.”

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Weymouth Drops Compressor Fight In Enbridge Agreement

The Weymouth Natural Gas Compressor Station, photographed on Sept. 13. (Robin Lubbock/WBUR)

https://www.wbur.org/earthwhile/2020/11/02/weymouth-compressor-enbridge-agreement 

The town of Weymouth will drop its ongoing legal fight against a controversial natural gas project, and energy giant Enbridge will pay the municipality $10 million as part of a newly reached host community agreement that immediately drew condemnation from opponents of the compressor station.

With the compressor station already built and awaiting permission to advance after recent emergency shutdowns, municipal and company officials announced a joint agreement Friday, ending years of courtroom battles.

Enbridge will pay Weymouth $10 million within 30 days. Town officials said in a press release that the money will go toward a range of public safety, infrastructure and environmental uses.

The company will also help the town seek changes to the state tax structure in an attempt to avoid a "less favorable property tax structure from being applied to the compressor station upon operation," the town wrote in a press release. If successful, Weymouth could collect up to $28 million more in property taxes over the next 35 years.

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Enbridge, Weymouth and the state Department of Environment Protection agreed to place a permanent air-monitoring station on town-owned land off of Monatiquot Street, which officials said is "the closest to Town residents, providing the most accurate information about the air residents breathe."

Weymouth municipal leaders had been vocal opponents of the proposed facility for years, joining with environmental, public health and community groups in attempts to sink its approval or get permits overturned.

Attorneys warned that they are unlikely to succeed on any outstanding lawsuits, according to the release, which appears to have pushed town officials into accepting a deal smaller than the $47 million that Enbridge predecessor Spectra offered in 2016.

"The natural gas companies have all the permits necessary to operate," Weymouth wrote in its release. "There is almost no chance these remaining lawsuits will cause the compressor station to stop operating and stay stopped. Just like the recent pause, the Town may be able to pause operations temporarily, but again, the compressor station will operate (unless) three remote possibilities simultaneously occur."

Weymouth Mayor Robert Hedlund told the Patriot Ledger that the town will not pursue appeals on any remaining lawsuits.

"The clock has run out on us and we have a fully permitted facility that we know is going to start up very soon," he told the Ledger.

Hedlund stressed, however, that the agreement does not prevent the town from future legal action if Enbridge "steps over the line."

"Town public safety, emergency management, and health officials will remain vigilant in monitoring the operations of the facility and hold the gas company accountable if there is any deviation from the aforementioned plans or from any mismanagement of this facility," he said.

The facility has long been a source of controversy, drawing criticism from a range of advocacy groups and from virtually every lawmaker representing the area. It received all required state and federal permits, however, and Gov. Charlie Baker's administration has upheld those approvals after appeal processes.

The Fore River Residents Against the Compressor Station group blasted Hedlund for reaching the agreement with Enbridge, calling it "hush money."

"Four years ago, Enbridge came to Weymouth with a $47M offer, half of which was predicated on a state level tax code change," FRRACS President Alice Arena said. "Now, with their threat of the compressor almost fully realized, they offer one fourth of the amount at a time when the Town needs even more to cover the cost of additional fire and police training and equipment due to the siting of their toxic and dangerous facility. We have no faith that this tax code change will ever occur."

"This paltry sum will never make the community whole after Enbridge has taken our health — and possibly our property and lives — away," Arena continued. "While we thank the Town for their legal efforts up to this point, we are more than disappointed that the Town did not consider what the life of even one citizen is worth. FRRACS will continue to fight the operation of this facility."

Enbridge's compressor station, located on the banks of the Fore River near densely populated neighborhoods, is fully built and had been poised to start service until two emergency shutdowns and natural gas releases in September prompted federal regulators to shut it down.

Max Bergeron, a spokesperson for the company, said Friday that the company is still working with the federal Pipeline and Hazardous Materials Safety Administration to meet required corrective actions.

He declined to say when Enbridge would seek permission to start compressor service shipping natural gas northward to utilities in Maine and Canada.

"The Host Community Agreement was reached in order to strengthen our relationship with the Town of Weymouth moving forward, and ensure we are well-positioned to be a good neighbor and a positive presence in the community," Bergeron said. "The agreement helps nurture a collaborative relationship with local officials and community leaders, as we make progress toward safely placing the Weymouth Compressor Station in service."

Copper prices approach eight-year high

Some analysts predict copper prices will increase close to their 2011 record, when the metal was trading for more than $4.50 per pound. | Syafiq Adnan/Shutterstock

 https://resource-recycling.com/e-scrap/2020/12/10/copper-prices-approach-eight-year-high/

Prices for a major metal found in the electronics recycling stream have climbed high in recent weeks, largely driven by China’s economic recovery following its COVID-19 lockdown.

Copper is currently sitting at about $3.50 per pound, its highest price since early 2013, according to historical COMEX pricing figures.

The pricing dynamic is connected to economic activity in China, where the pandemic lockdown early in 2020 limited demand for a time. Since the country’s lockdown ended, an economic recovery has shifted the global market for certain metals.

Prices for copper and other industrial metals “are particularly sensitive to manufacturing activity in China because the country accounts for roughly half of global demand for copper and other materials,” The Wall Street Journal reported this week. “The faster-than-expected recovery there has sparked a reversal in prices, which had languished in recent years due to trade tensions between the U.S. and China, even before pandemic lockdowns dented demand.”

According to The Wall Street Journal, some analysts predict copper prices will increase close to their 2011 record, when the metal was trading for more than $4.50 per pound.

Copper is a key component of the electronics recycling stream. Industry sources have told E-Scrap News there are roughly 200-400 pounds of copper per ton of printed circuit boards, for example.

George Lucas, vice president of sales and business development at precious metals refiner Gannon & Scott, said the pricing shift has implications for how e-scrap suppliers handle certain material streams.

“Prior to copper’s price increase, customers may have chosen to send a particular recycling stream directly to a smelter or shred it and sell as a commodity,” he told E-Scrap News this week. “That material stream may not have met the minimum dollar value to justify sending it to us. However, with the increase in copper prices as well as the increase in precious metal prices, it now puts a higher value on that material to where it makes sense to send it to us for recovery.”

Aramco Hires Moelis to Raise Billions From Asset Sales

 

https://www.bloomberg.com/news/articles/2020-12-10/aramco-is-said-to-hire-moelis-to-raise-billions-from-asset-sales

• Kingdom’s state energy firm weighs selling stake in pipelines
• Saudi Arabia’s using similar strategy to neighbor Abu Dhabi

Saudi Arabia is looking to emulate neighboring Abu Dhabi by using its state energy firm to raise billions of dollars from investors, as the kingdom seeks cash to counter a severe recession.

Saudi Aramco, the world’s biggest oil company, has hired Moelis & Co. to devise a strategy for selling stakes in some subsidiaries, according to people familiar with the matter. The plan includes raising around $10 billion from a stake sale in Aramco’s pipelines, said the people, who asked not to be identified because the matter is private.

Moelis and Aramco declined to comment.

Saudi Arabia has been hammered this year by coronavirus lockdowns and the slump in crude prices. The economy will contract 5.4% in 2020, the most since the 1980s, according to the International Monetary Fund. The budget deficit could widen to 12% of gross domestic product.

Oil-producing Gulf Arab economies have been forced to accelerate efforts to attract investment.

Moelis had a broad role in helping Abu National Oil Co. raise more than $15 billion this year from the likes of Apollo Global Management Inc., Brookfield Asset Management Inc. and Singapore’s sovereign wealth fund. It played a part in nearly all of the major asset disposals by the state-owned energy firm.

Read: Apollo Group Invests $2.7 Billion in UAE Oil Firm’s Property

Adnoc, which pumps almost all the oil in the United Arab Emirates, OPEC’s third-biggest producer, sold shares in its fuel-retail arm and leasing rights for properties and natural-gas pipelines.

‘Ken of Arabia’

Many bankers have said this was a quicker way of generating cash than Aramco’s initial public offering in December 2019, which raised almost $30 billion for the kingdom but took around two years to complete.

While Dhahran-based Aramco issued $8 billion of bonds last month to fund the world’s biggest dividend, executives have said they want to lower the company’s leverage following its $69 billion acquisition of chemical maker Saudi Basic Industries Corp. this year. The energy firm has lined up banks including JPMorgan Chase & Co. to help with a stake sale in the pipeline business, Bloomberg News reported in April.

Aramco reshuffled its senior management in August and created a division focused on “portfolio optimization” as it adjusted to weaker energy prices.

Moelis was among the banks that arranged Aramco’s IPO. Its founder, Ken Moelis, has extensive experience of deal-making in the region and has the nickname “Ken of Arabia.”

(Updates with Aramco declining to comment in third paragraph, background in penultimate.)

Full Elon Interview. 8th Dec 2020. Wall Street Journal. Visual notes on ...

This Retired Oil Exec Wants to Plug Up Millions of Abandoned Wells Acros...

Oil turns lower after surprise inventory build

Oil pumpjacks operate at dusk Willow Springs Park in Long Beach, California on April 21, 2020.

Apu Gomes | Getty Images

https://www.cnbc.com/2020/12/09/oil-markets-coronavirus-cases-rise-us-stimulus-hopes.html 

Oil prices were mixed Wednesday, reversing strong gains after data showed U.S. crude stockpiles jumped unexpectedly in their largest build since April amid a record surge in imports.

U.S. crude inventories rose by 15.2 million barrels to 503.2 million barrels last week, according to the Energy Information Administration, compared with analysts’ expectations in a Reuters poll for a 1.4 million-barrel drop..

Brent crude was unchanged at $48.84 per barrel. U.S. West Texas Intermediate (WTI) crude fell 6 cents to $45.54 per barrel.

“I’m trying to get my jaw off the ground here...15 million barrels is an off-the-charts build,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

U.S. net imports of crude oil rose by 2.7 million barrels per day last week, the biggest increase on record, as exports plunged.

“It looks like the Saudis are targeting the U.S. inventories situation again, sending barrels here,” said John Kilduff, partner at Again Capital LLC in New York.

U.S. gasoline and distillate stockpiles were also markedly higher as refineries boosted output.

“The significant increase in gasoline and distillate inventories is likely a result of lower oil demand post the Thanksgiving holiday, as well as additional stay at home measures across country,” said Andrew Lipow, president of Lipow Oil Associates in Houston.​

Earlier in the session, oil rose as news about COVID-19 vaccines lifted investor hopes for a recovery in fuel demand and the U.S. dollar, in which oil is traded, reached 2-1/2-year lows.

Britain began mass vaccinations on Tuesday. Expectations that others will soon follow helped offset fears about a sharp rise in coronavirus cases globally that has led to new restrictions on movements around the world.

The vaccine news helped offset some fears from a sharp rise in coronavirus cases globally that has led to a string of renewed lockdowns, including strict measures in California, Germany and South Korea.

“The worsening COVID situation, in particular in Europe, is weighing on prices,” research firm JBC Energy said.

Aramco CEO Sees Meaningful Oil Price Recovery In 2021

Saudi Aramco president and CEO Amin Nasser

Oil prices are set to see a meaningful recovery in the second half of next year as the worst for producers, and the market is behind us, Amin Nasser, the chief executive of Saudi oil giant Aramco, said at an industry event this week.

“We are still in the tunnel, but I believe we can now see more light at the end of the tunnel,” Petroleum Economist quoted Nasser as saying as he was accepting the 2020 Kavaler Award from petrochemicals industry association The Chemists’ Club.

Although there is still uncertainty over the second coronavirus waves in Europe and the United States, “I believe the worst is behind us at this moment,” Nasser said.

The prospects of vaccine rollout early next year and signs of a strong recovery in oil demand in Asia makes Aramco and its top executive optimistic about the oil market’s prospects next year, especially in the latter half.

“We can expect a better recovery in the oil market in the second half of 2021,” Nasser said, as carried by Petroleum Economist.

The top executive of the Saudi oil giant voiced concern that the current downturn would severely constrain future investment in upstream oil and gas.

Aramco continues to bet on expanding in the downstream to take advantage of expected growth in petrochemicals, Nasser added.

About a month ago, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said that the worst is over for the oil market. That statement at the CERAWeek’s India Energy Forum came two weeks before pharmaceutical companies started announcing vaccine breakthroughs, giving the oil market hope that vaccine rollouts next year would significantly help fuel demand and traveling.

At the end of November, oil prices hit their highest level since early March, when Saudi Arabia and Russia disagreed on how to manage oil supply in the pandemic and started a brief oil price war that contributed to the price collapse together with the demand destruction.

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New Militant Group Threatens Attacks on Nigerian Oil Installations

https://www.vanguardngr.com/2020/11/breaking-new-niger-delta-militant-group-throws-up-5-demands/

https://www.petroleumafrica.com/new-militant-group-makes-threatens-attacks-on-nigerian-oil-installations/ 

A coalition of 36 militant groups in Nigeria calling themselves Continuous Emancipation of Niger Delta (CEND) have been carrying out attacks on oil and gas installations in Bayelsa state in recent weeks and have vowed they will continue “destructive attacks” unless their demands are met.

Among the main demands CEND has called for is the demilitarization of the Niger Delta and the relocation of petroleum companies operating in the region.

CEND has stated that there will be attacks in the coming days. “We are prepared to carry out our threats to the letter without any iota of fear as we have the capacity to bring the oil and gas facilities in the Niger Delta to rubbles if our demands are not met. In the coming days, there will be series of attacks on major oil and gas installations in the Niger Delta simultaneously because they are well prepared to push the pawn to the other side of the board without fear and harassment from security agencies and the federal government.”

The militants also warned that foreign nationals working in the country should leave. “We want to warn all foreign nationals that this is the time to leave the Niger Delta region, as the attacks which will be total in the coming days, will not spare them. All foreign embassies should as a matter of urgency evacuate their citizens.”

Glencore CEO Glasenberg to retire in 2021

Ivan Glasenberg is set to retire as Glencore CEO in the first half of 2021. Photo: Andrey Rudakov/Bloomberg News

 https://www.sharecast.com/news/news-and-announcements/glencore-ceo-glasenberg-to-retire-in-2021--7737519.html

Glencore said Ivan Glasenberg would retire in the first half of 2021 after 19 years as chief executive of the commodities trader and miner.

Glasenberg's replacement will be Glencore veteran Gary Nagle, who runs the FTSE 100 company's coal industrial business.

South African-born Glasenberg, who is 63, joined Marc Rich & Co in 1984 and became head of its coal department in 1991. The company changed its name to Glencore in 1994 after Rich, then a US exile in Switzerland to avoid tax evasion charges, sold out to management.

Glasenberg became Glencore's CEO in 2002 and led the Zug-based company to a listing on the London Stock Exchange in 2011 and the takeover of the miner Xstrata in 2013. Forbes estimates his wealth at $4.6bn and he is Glencore's second-biggest shareholder with a stake of about 9%.

"Together, we have created one of the world's largest diversified miners and marketers of commodities," Glasenberg said. "I have worked with Gary since he joined the company 20 years ago. I am confident that his leadership, along with the support of the management team, will enable Glencore to take advantage of the opportunities that lie ahead and be a strong custodian for my shareholding in the company."

Glasenberg originally indicated he would retire between the ages of 65 and 67 but in 2019 he said he might step down in 2020 because he did not want to be "an old guy running the company". He had said he hoped to hand over to a new CEO aged about 45 - the same age as his chosen successor.

Nagle joined Glencore in 2000 and was heavily involved in the company's initial public offering. He ran Glencore's Colombian coal operation for five years before moving to South Africa in 2013 to head the company's alloys assets.

He takes over with miners under pressure to dispose of coal assets for environmental reasons. Glasenberg said in October it was better for big companies like Glencore to hold on to their mines and run them down responsibly while investing in other commodities needed for a green future.

Tony Hayward, Glencore's chairman, said: "As Ivan hands over to Gary, he does so at a time of huge change. As the world moves to recover from the impacts of the Covid-19 pandemic, while also addressing the challenge of climate change, our industry has a significant opportunity to contribute to the economic recovery by providing commodities essential to the transition to a low-carbon economy."

Glencore scrapped its deferred $2.6bn dividend in August to strengthen its balance sheet after the Covid-19 crisis cut the prices of commodities.

Goldman says copper bull run ‘fully underway,’ sees potential for record high

 

The smelter is melting copper on July 23, 2020 in Jinhua, Zhejiang, China.

TPG | Getty Images News | Getty Images

https://www.cnbc.com/2020/12/02/goldman-sachs-says-copper-prices-could-soon-test-record-highs.html 

• Copper, which is used in everything from power to construction, has risen more than 22% this year, on pace for its best year since 2017.
• “This current price strength is not an irrational aberration, rather we view it as the first leg of a structural bull market in copper,” Goldman Sachs said.
• The investment bank believes the speculative length in the rally is still “some way from its limit.”

LONDON — Analysts at Goldman Sachs believe copper prices could soon test their existing record highs, saying the bull run for the industrial metal is now “fully underway.”

Copper prices on Tuesday rose to their highest level since March 2013, touching $7,719 per metric ton following stronger-than-anticipated manufacturing activity in China and South Korea.

The metal has since pared gains, with three-month copper futures on the London Metal Exchange last seen trading at $7,626 per metric ton.

Copper, which is used in everything from power to construction, has risen more than 22% this year, on pace for its best year since 2017. Prices have been boosted by supply disruptions, hopes for “green” economic stimulus and China’s swift recovery from the coronavirus crisis.

“The bull market for copper is now fully underway with prices up 50% from the 2020 lows, reaching their highest level since 2017,” Goldman Sachs analysts said in a research note Monday.

“This current price strength is not an irrational aberration, rather we view it as the first leg of a structural bull market in copper.”

‘Some way from its limit’

Goldman analysts raised their 12-month forecast for copper to $9,500 per metric ton, up from a previous estimate of $7,500.

The Wall Street bank said it now expects a sustained, higher average price for 2021 and 2022. It has estimated copper prices will average around $8,625 next year, before climbing to an average of $9,175 in 2022.

By the first half of 2022, Goldman analysts said, it is “highly probable” copper would test the existing record highs of $10,170 set in 2011.

The bullish prediction comes at a time when investors are increasingly optimistic over coronavirus vaccines.

It is hoped a safe and effective coronavirus vaccine could help bring an end to the Covid pandemic that has claimed over 1.48 million lives worldwide and wiped out a chunk of the global economy.

In addition to vaccine hopes, a weaker U.S. dollar has lent further support to copper prices in recent months. Copper prices had slumped to $4,600 per metric ton in March.

Analysts at Goldman cautioned that copper’s path to $10,000 would not be without its hurdles, citing a seasonal slowdown in demand and several periods of price consolidation among other factors.

However, the investment bank believes the speculative length in the rally is still “some way from its limit,” adding that significantly higher copper prices would be needed to incentivize new supply and help balance the market over the coming months.

Venezuela’s Oil Exports Double in November As Mysterious New Buyers Emerge By Julianne Geiger -

 

Oil tankers remain docked in front of Isla oil refinery, which is leased by Venezuelan state oil company PDVSA in the Netherlands Antilles.Luis Acosta—AFP/Getty Images

https://oilprice.com/Latest-Energy-News/World-News/Venezuelas-Oil-Exports-Double-in-November-As-Mysterious-New-Buyers-Emerge.html

Venezuela’s oil exports doubled in November, data from PDVSA and Refinitiv Eikon showed on Wednesday.

Venezuela’s crude oil exports were less than 370,000 barrels per day in October, on average. In September, Venezuela’s oil exports averaged 392,000 bpd.

But in November, the sanctioned country’s oil exports picked up substantially, to 69,000 bpd on average, after it found eager new buyers.

These new buyers include Xiamen Logistic Grass, Olympia Stly Trading, Zaguhan & Co., Karaznbas, Kalinin Business International and Poseidon GDL Solutions—all who are mysterious and rather convenient nobodies that seemed to take the place of traditional oil company names that are now prohibited from purchasing Venezuela’s oil due to the sanctions. They are all registered in Russia.

ENI, Rosneft, and Repsol are just a handful of the companies that have officially had to stop purchases of PDVSA crude.

According to Eikon data, these companies commissioned tankers to sail to Venezuela to pick up the oil with their transponders turned off. And several of the tankers sported the names of scrapped tankers to further obfuscate the transactions.

India, one country that had to stop its crude purchases from PDVSA, is eager to have more buying choices open up for it—avenues that have been closed due to the sanctions in both Iran and Venezuela. India, one of the largest crude oil importers in the world, has repeatedly asked its OPEC suppliers to be mindful of prices during these difficult times.

Meanwhile, Venezuela is still in crisis mode, both with regards to crude oil sales and fuel shortages. Its crude oil exports may be up in November, but its production of crude is still down by well over a million barrels per day since 2016, according to EIA data.

By Julianne Geiger for Oilprice.com