OPEC+ Talks to Offer Clues on Next Phase of Oil Supply Revival - Bloomberg
For oil traders, the biggest question in the market is how fast OPEC and its allies will revive production later this year. Next week they may get some clues.
When it meets on Tuesday, delegates said the alliance led by Saudi Arabia and Russia looks set to rubber-stamp output increases scheduled for the next two months.
But more importantly, Riyadh and Moscow may offer insights on the next stage of their strategy: bringing back the millions of barrels a day that remain offline after being shuttered when the coronavirus struck.
In theory, there’s a yawning supply gap for the Organization of Petroleum Exporting Countries and its partners to fill in the second half of the year as economies open up and fuel demand soars. Yet the group will need to weigh that against the risk from renewed virus outbreaks in India and elsewhere, and the prospect of extra supply from fellow member Iran.
The pace of revival they ultimately choose will be critical for crude markets and the fortunes of producers around the world. It was OPEC’s intervention that ended last year’s oil-price crash and fostered their recovery to nearly $70 a barrel today.
“We’re still expecting OPEC+ to push through with the announced measures until the end of July,” said Bill Farren-Price, a director at research firm Enverus and veteran observer of the cartel. Beyond that “it remains a delicate balancing act. OPEC’s sense of caution is warranted.”
Saturday 29 May 2021
Racing for Hydrogen: How Gas Giants Are Vying to Stay Relevant - Bloomberg
Racing for Hydrogen: How Gas Giants Are Vying to Stay Relevant - Bloomberg
The global gas industry is in an existential race: either find a way to be part of the next generation of energy or risk getting supplanted by alternatives.
BP Plc, Sinopec, Equinor ASA and Royal Dutch Shell Plc are among the producers looking to hydrogen to help secure demand that otherwise may falter as decarbonization speeds up. They want to utilize existing pipelines, storage tankers and fuel supply to make blue hydrogen, a process that uses natural gas but captures the carbon emissions and stores them.
The straightest route to net-zero emissions uses hydrogen produced by renewable electricity -- known in the industry as green hydrogen -- but the blue variety is expected to be cheaper until at least 2030 as wind and solar power ramp up. Gas companies aiming to lower emissions now and avoid obsolescence next decade are planning to pour billions of dollars into building their blue businesses. At least 15 projects are scheduled to go online through 2027 in the U.K., Germany, Norway, the Netherlands, Sweden and New Zealand.
“Green is the destination, but we’ll get there on a blue highway,” said Al Cook, executive vice president for development and production at Stavanger, Norway-based Equinor. “At some point, green hydrogen might well be lower cost than blue, but that will likely not be for at least a decade.”
Clean hydrogen could meet a quarter of the world’s energy needs by 2050, with annual sales reaching 630 billion euros ($770 billion). Production of blue needs to be scaled up quickly because projects that don’t come online by 2030 risk becoming uncompetitive, according to BloombergNEF.
The global gas industry is in an existential race: either find a way to be part of the next generation of energy or risk getting supplanted by alternatives.
BP Plc, Sinopec, Equinor ASA and Royal Dutch Shell Plc are among the producers looking to hydrogen to help secure demand that otherwise may falter as decarbonization speeds up. They want to utilize existing pipelines, storage tankers and fuel supply to make blue hydrogen, a process that uses natural gas but captures the carbon emissions and stores them.
The straightest route to net-zero emissions uses hydrogen produced by renewable electricity -- known in the industry as green hydrogen -- but the blue variety is expected to be cheaper until at least 2030 as wind and solar power ramp up. Gas companies aiming to lower emissions now and avoid obsolescence next decade are planning to pour billions of dollars into building their blue businesses. At least 15 projects are scheduled to go online through 2027 in the U.K., Germany, Norway, the Netherlands, Sweden and New Zealand.
“Green is the destination, but we’ll get there on a blue highway,” said Al Cook, executive vice president for development and production at Stavanger, Norway-based Equinor. “At some point, green hydrogen might well be lower cost than blue, but that will likely not be for at least a decade.”
Clean hydrogen could meet a quarter of the world’s energy needs by 2050, with annual sales reaching 630 billion euros ($770 billion). Production of blue needs to be scaled up quickly because projects that don’t come online by 2030 risk becoming uncompetitive, according to BloombergNEF.
Brent ends at two-year high as demand outlook counters supply fears | Reuters
Brent ends at two-year high as demand outlook counters supply fears | Reuters
Oil prices ended the week more than 5% higher, with global benchmark Brent edging up on Friday to settle at a two-year high, as strong U.S. economic data and expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.
Brent settled 17 cents or 0.2%, higher at $69.63 a barrel, its highest close since May 2019. U.S. West Texas Intermediate crude settled down 53 cents a barrel, or 0.79% at $66.32.
"Boosted by good economic data and risk appetite among investors on the financial markets, Brent is making a renewed bid for the psychologically important $70 per barrel mark," said Commerzbank analyst Eugen Weinberg.
"Concerns about demand because of the pandemic are giving way to optimism in view of the rapid return of consumers," he added.
Oil prices ended the week more than 5% higher, with global benchmark Brent edging up on Friday to settle at a two-year high, as strong U.S. economic data and expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.
Brent settled 17 cents or 0.2%, higher at $69.63 a barrel, its highest close since May 2019. U.S. West Texas Intermediate crude settled down 53 cents a barrel, or 0.79% at $66.32.
"Boosted by good economic data and risk appetite among investors on the financial markets, Brent is making a renewed bid for the psychologically important $70 per barrel mark," said Commerzbank analyst Eugen Weinberg.
"Concerns about demand because of the pandemic are giving way to optimism in view of the rapid return of consumers," he added.