Friday, February 26th, 2021
Oil prices took a breather on Friday after Brent traded just
above $67 on Thursday. While downside risks remain, banks are now openly talking about the
possibility of $100 oil at some point. OPEC+ still has the power to send oil
prices down, but very few analysts are staking out overly bearish
scrutinizes blackouts. 5 members of ERCOT, the grid
manager in Texas blamed for the historic outages last week, resigned on
Wednesday. A sixth withdrew his application. Executives from Calpine
Corp., Vistra Corp. (NYSE: VST), and NRG Energy (NYSE:
NRG) blamed natural
gas production fell by half. Natural gas production in
Texas collapsed by half during the freeze.
betting on $100 oil. The open interest on
$100 strike Dec 2022 calls has exploded higher since the turmoil in the Texas
energy markets. $100 oil is still a gamble, but there is more interest in
triple-digit oil prices than there has been in years.
Deer Park refinery could take until April. Royal Dutch
Shell’s (NYSE: RDS.A) Deer Park refinery in Texas could take until April
to restart, following damage from the freeze across Texas.
shale boom over before it began. Despite China’s
natural resources and best efforts, the country has not been able to get its
own shale boom off the ground, and
a recent analysis by Reuters shows that what progress Beijing has made toward
its own shale revolution could already be obsolete by the middle of this
decade. “Complex geology and failure to draw in more investors” are
projected to make the industry’s expansion economically untenable.
XL death means more oil by rail. Cenovus
Energy (TSE: CVE) and Imperial Oil (TSE: IMO) are
moving more oil by rail, and Canada’s oil-by-rail shipments have tripled since
July. Analysts say without Keystone XL, more oil will hit the
rails over the course of the 2020s to get heavy Canadian crude to Gulf Coast
Resources sues BLM over delay in leases. Continental
Resources (NYSE: CLR) is suing the Bureau of
Land Management over what it says is an illegally long wait for 50 applications
for drilling on federal lands.
and Iran swap jet fuel for gasoline. Venezuela and
Iran, both sanctioned by the United States, are helping each other out.
Venezuela is shipping jet
fuel to Iran in the same tankers in which Iran delivers gasoline and spare
parts for the refineries in Venezuela.
oil imports to slow. China’s oil imports in the second
quarter are expected to slow in the face of
higher prices and refinery maintenance.
to lose $750 million on midstream. Occidental
Petroleum (NYSE: OXY) has seen its Permian…
Read More: Why Oil Bulls Won’t Back Down – OIR 260221