Friday, January 10, 2020
Energy, Petrochemicals and Plastics 46
1 Natural gas prices in 2019 were the lowest in the past three years
https://www.eia.gov/todayinenergy/detail.php?id=42455
In 2019, natural gas spot prices at the national benchmark Henry Hub in Louisiana averaged $2.57 per million British thermal units (MMBtu), about 60 cents per MMBtu lower than in 2018 and the lowest annual average price since 2016. Lower natural gas prices in 2019 supported higher consumption—particularly in the electric generation sector—and higher natural gas exports. Continued growth in domestic production of natural gas also supported lower natural gas prices throughout the year.
2 Divergent paths: Oil, natural gas going different directions
https://www.reuters.com/article/us-usa-natgas-oil-graphic-idUSKBN1Z80ID
The oil-to-gas ratio, or the level at which oil trades compared with natural gas, recently reached 30-to-1, and could increase further as analysts expect average gas prices will fall for a second consecutive year in 2020 to their lowest level in over 20 years. That is because most U.S. drillers are not looking for gas.
3 Oil Price Fundamental Daily Forecast – Bullish Jobs Report Could Raise Hope for Increased Demand
https://www.fxempire.com/forecasts/article/oil-price-fundamental-daily-forecast-bullish-jobs-report-could-raise-hope-for-increased-demand-625024
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading sideways to higher on Friday as speculators continue to try to establish support after dumping risky long positions as the threat of war in the Middle East receded and investors expressed concerns over rising U.S. inventories.
4 Natural Gas Price Fundamental Daily Forecast
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-traders-waiting-for-cold-weather-to-fuel-short-squeeze-rally-625009
Natural gas futures are edging lower on Friday shortly before the regular session opening. The market is coming down from a failed attempt to follow-through to the upside following Thursday’s higher close. Today’s intraday high at $2.176 also fell short of the high of the week at $2.185.
5 Volume Resin Prices Flat or Down
https://www.ptonline.com/articles/volume-resin-prices-are-flat-or-down
Prices of nearly all volume resins were largely expected to bottom out by the end of 2019, and flat pricing was generally projected for the start of this new decade. Factors driving the downward trajectory included lower feedstock prices, supply outpacing demand, and an overall global demand slowdown and lower global prices.
6 Weekly resin report: Historically low resin prices ring in new year
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-historically-low-resin-prices-ring-new-year/167894244362176
Most commodity resin prices fell sharply during 2019, but the variance among grades also highlighted distinct differences in sub-markets. High-density polyethylene (PE) resins, including film, blow mold and injection materials, each eroded $0.12 to 0.14/lb over the course of the year; film and injection linear-low-density PE dropped a solid 9 cents; while low-density PE for injection lost a nickel and snugly supplied low-density film only shed a single cent. The vast majority of new PE production was sold into the export market, which continuously rocketed into record monthly volumes.
7 INSIGHT: ICIS index charts 17% fall in global petchem prices in 2019
https://www.icis.com/explore/resources/news/2020/01/07/10457594/insight-icis-index-charts-17-fall-in-global-petchem-prices-in-2019
Propylene prices on the US Gulf Coast were 31% lower year on year, for example. Ethylene prices were down 28% year on year in northeast Asia. Northwest European markets appeared to be less volatile although no region escaped the steep 20% plus fall in methanol contract prices over the course of the year. Prices in the US may have bucked a more general downward price trend earlier in the year but by mid year, the regional ICIS indexes (IPEXs) were heading south. The most recent monthly global IPEX value (for December 2019) reflects a 2.7% fall in the US Gulf Coast index component.
8 Petrochemicals: Weak Margins Sweep Asia
https://aogdigital.com/news/474295-petrochemicals-weak-margins-sweep-asia
Asian petrochemical makers, who are unable to pass down sky-high feedstock costs, are resorting to run cuts or extending cracker shutdown periods to tie through the bad times.
9 Global oil and gas discoveries reach four-year high in 2019, boosted by ExxonMobil’s Guyana success
https://www.rystadenergy.com/newsevents/news/press-releases/global-oil-and-gas-discoveries-reach-four-year-high-in-2019/
The world’s oil and gas explorers powered ahead and discovered 12.2 billion barrels of oil equivalent (boe) in 2019, the highest volume since 2015, according to estimates from Rystad Energy. Last year recorded 26 discoveries of more than 100 million boe, with offshore regions dominating the list of new oil and gas deposits.
10 Why Oil Markets Don’t Have To Worry About World War 3
https://oilprice.com/Geopolitics/International/Why-Oil-Markets-Dont-Have-To-Worry-About-World-War-3.html
In a series of moves, Trump has successfully distracted public attention from his impeachment. With some targeted strikes on Hezbollah in Iraq and Syria and the intentionally spectacular public assassination of a key Iranian general – who could have been taken out any time over the course of the past couple of years – the President has relieved much of the domestic pressure that had been building.
11 Fluor, Kiewit win multibillion-dollar contract to build new petrochemical facility outside Edmonton
https://www.on-sitemag.com/financing/fluor-kiewit-win-multibillion-dollar-contract-to-build-new-petrochemcial-facility-outside-edmonton/1003966544/
The Canadian and Kuwaiti companies developing a new multibillion-dollar petrochemical facility in Alberta have awarded a lump sum construction contract to a 50/50 partnership between Fluor Canada Ltd. and Kiewit Construction Services ULC.
12 Three Ways Oil Companies Can Prevent An Investor Exodus
https://oilprice.com/Energy/Energy-General/Three-Ways-Oil-Companies-Can-Prevent-An-Investor-Exodus.html
Money continues to flow from the sector to better performing index funds and/or other “greener energy” sectors, as evidenced by shrinking stocks and the sector’s weighting in the S&P 500 dropping from 13% at the height of the shale boom to just 5% currently. So, how are E&P strategies changing?
13 Mexico’s Mega Oil Hedge Cost “Around” $1 Billion
https://oilprice.com/Latest-Energy-News/World-News/Mexicos-Mega-Oil-Hedge-Cost-Around-1-Billion.html
The largest oil hedge in the world cost Mexico “around $1 billion” for 2020, Mexico’s Finance Minister Arturo Herrera said on Thursday, according to Reuters. Herrera had said the cost of the hedge would be revealed on Thursday.
14 Mexico’s president doubles down on nationalist line: no oil auctions
https://www.reuters.com/article/us-mexico-oil-auctions-idUSKBN1Z729H
Mexico’s President Andres Manuel Lopez Obrador said on Wednesday his government was not contemplating reopening oil and gas auctions this year, ending hopes his left-leaning government will soon spur private investment in the energy sector.
15 U.S. weekly LNG exports jump
https://www.lngworldnews.com/u-s-weekly-lng-exports-jump/
Data from the Energy Information Administration (EIA) shows that a total of 19 vessels with a combined LNG-carrying capacity of 68 Bcf departed the United States between January 2 and January 8, 2020.
16 Energy Hedge Fund Is Bullish on Canada
https://www.rigzone.com/news/wire/energy_hedge_fund_is_bullish_on_canada-10-jan-2020-160768-article/
After big wins shorting U.S. shale companies last year, one energy hedge fund is turning its sights on the beaten-down Canadian oil sector.
17 Low Gas Prices Crush Appalachia Shale Boom
https://oilprice.com/Energy/Natural-Gas/Low-Gas-Prices-Crush-Appalachia-Shale-Boom.html
Gas production in Appalachia declined by about 1 billion cubic feet per day (Bcf/d) over the past 30 days, bringing output down to an average of 32.7 Bcf/d, according to S&P Global Platts Analytics. That helped drag down overall U.S. gas production to 91.8 Bcf/d, a 1.7 percent decline from 93.4 Bcf/d in November.
18 Oil Workers Wanted with More Tech, Less Roughneck
https://www.rigzone.com/news/oil_workers_wanted_with_more_tech_less_roughneck-09-jan-2020-160752-article/
The oil industry is facing a talent challenge, caused in part due to the aging nature of its workforce, market conditions and a decline in interest by potential recruits to seek employment in the industry. One solution the oil business is adopting is investment in new innovative technologies, which cuts costs and boosts productivity.
19 Operational production costs have fallen globally, led by the United Kingdom
https://www.rystadenergy.com/newsevents/news/press-releases/operational-production-costs-have-fallen-globally/
Operational production costs in the oil and gas industry have fallen across the globe, with the United Kingdom emerging as a cost-cutting powerhouse among global offshore regions. A Rystad Energy analysis aimed at mitigating currency effects confirms this trend, after examining regional opex reduction per barrel, measured in local currency. The results are clear – from 2014 to 2018 the UK reduced operational production costs by 31%, followed by Norway and the United States with opex reductions of 19% and 15%, respectively.
