- November 17, 2018
- 2270 views
The recent multi-month Oil prices lows seem to be the result of a confluence of factors all point in a bearish direction.
On top of U.S. oil production surges (The EIA reported that production skyrocketed to 11.6 million barrels per day in the U.S.), there are 10 other important factors that were identified by Oilprice.com:
1. Russia could benefit from OPEC+ cut. (Russia’s oil production is at a post-Soviet record high)
2. OPEC+ increase would be third reversal. (Saudi Arabia increased production in 2015, 2016 and again this year)
3. Chevron considers Venezuela exit.
4. Natural gas prices up sharply.
5. Keystone XL construction blocked by court. (Imperial Oil gives FID to oil sands project. Imperial Oil gave the go-ahead to a $2.6 billion bitumen project in Alberta, the first new oil sands project to receive a final investment decision since 2013.)
6. Shale companies to pivot back to Permian. (The potential plans to add rigs back into the field suggests that the lull in the Permian could be nearing an end)
7. Enbridge pipeline at risk after elections. (The aging 65-year-old pipeline, with a capacity of 540,000 bpd, presents an environmental risk to the Great Lakes and Michigan’s waterways, Governor-elect Gretchen Whitmer has argued.)
8. Wind and solar cheaper than coal. (Renewable energy has been gaining ground at the expense of coal for some time, but a new study estimates that wind and solar are not just cheaper than new coal plants, but actually cheaper than simply running existing coal plants.)
9. Saudi think tank explores non-OPEC world. (A Saudi think tank is undertaking a research study to explore the ramifications of a hypothetical scenario in which OPEC fell apart or was disbanded.)
10. China’s oil imports still strong. (China imported a record volume of oil in October, dispelling fears that the Chinese economy is slowing down.)