May 4, 2021/OilPrice.com
Chart of the Week
– Air travel is on the rise in the U.S., indicating an uptick in jet fuel demand.
– Jet fuel demand has averaged 1.2 mb/d over the past four weeks, up 200,000 bpd from March levels.
– In March, 1.2 million passengers passed through U.S. airports per day on average. That jumped to 1.4 million passengers per day in April.
– Citibank added Valero (NYSE: VLO) to its focus list, raising its price target to $121 per share, up from $95.
– Bank of America upgraded First Solar (NYSE: FSLR) to a Buy rating, stating that recent bearish pressure is overdone.
– BP (NYSE: BP) is set to bid on a second offshore wind farm in Scotland.
Tuesday, May 4, 2021
Oil prices jumped to a seven-week high as markets are pricing in higher demand expectations. As of 8:51 a.m. EDT on Tuesday, the U.S. benchmark WTI Crude was back above $65 per barrel, having touched the highest level since March earlier in the day.
Exxon and Chevron confirm carbon capture projects. ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) confirmed their commitments to a build large-scale carbon capture projects. Exxon’s initial foray is a Texas hub to capture CO2 from heavy industries in Houston, a $100 billion idea that would need government support.
Venezuela puts jailed oil executives on house arrest. Venezuela moved six American oil executives from jail to house arrest, viewed as a gesture of goodwill to the Biden administration.
Exxon locks out workers at refinery. ExxonMobil (NYSE: XOM) locked out union workers at its Beaumont, Texas refinery over a labor dispute. Exxon is bringing in non-union workers to keep the facility running.
Iraq may buy Exxon’s stake. Baghdad said that the Iraqi government could buy ExxonMobil’s (NYSE: XOM) 32.7% stake in the West Qurna-1 oil field in southern Iraq.
Spot LNG prices jump. Spot LNG prices in Asia rose earlier than expected ahead of a typical summer rally as buyers wanted to stock up over concerns about supply. Spot prices hit $8.85/MMBtu in the last week of April, the highest price since early January.
Commodity boom underway. A wide-ranging price rally has swept over global commodity markets, bolstering the notion that a “supercycle” is underway. Iron ore, palladium, and lumber all hit record highs in the past week. Agricultural commodities have also hit near-decade highs. “I don’t know if we have seen anything like this before,” Ulf Larsson, chief executive of Swedish pulp and timber company SCA, told the FT. “We are in some kind some of perfect storm.”
Interior approves massive solar project. The Department of Interior approved a massive 350-megawatt solar plus battery storage project for the California desert. The $550 million Crimson Solar Project will be developed by a subsidiary of Canadian Solar (NASDAQ: CSIQ).
Investors stake out bullish bets on manufacturing pickup. Hedge funds and other money managers boosted their positions in oil futures as manufacturing data shows a continued rebound.
Biden admin declines to shut down DAPL again. A federal court gave the Army Corps one more chance to shut down the Dakota Access pipeline, but the Biden administration stated its support on Monday to keep it online while an environmental review proceeds.
Oil majors hike dividends. With impressive bottom-line growth, many top energy names are rewarding investors with fatter dividends with no energy company announcing a dividend cut so far. Here’s a rundown of Big Oil’s dividend trends after the latest earnings report.
BMW and Ford bet $130 million on battery tech. BMW (ETR: BMW) and Ford (NYSE: F) invested $130 million in a solid-state battery startup, a vote of confidence in next-generation battery technology.
EnergyX raises $20 million for lithium mining. EnergyX has raised $20 million in Series A funding to advance its direct lithium extraction technology, which would provide a technological boost to lithium production.
Talen Energy announces 1 GW of battery storage. Talen Energy Corporation announced the development of 1 GW of energy storage across three states.
ESG debt surges. Since last summer, companies have issued nearly $240 billion in debt tied with ESG promises, nearly double the cumulative figure for the previous three years.
Investors skeptical of oil majors’ green plans. Only a minority of institutional investors in oil and gas seem to believe that Big Oil will be able to pull off a green transition.
Mountain Valley Pipeline delayed again. Mountain Valley Pipeline said on Tuesday that its in-service date has been pushed off until at least the summer of 2022, with costs ballooning to $6.2 billion. The pipeline is a key outlet for Marcellus shale gas to the U.S. southeast. The original price tag was pegged at $3.7 billion.
Saudi Aramco posts big profits. Saudi Aramco (TADAWUL: 2222) reported $21 billion in first-quarter profit, up 24% from a year earlier. However, it was not large enough to cover its dividend.
Cheniere ships carbon-neutral LNG. Cheniere Energy (NYSE: LNG) shipped what it says is a carbon-neutral LNG cargo. Carbon was offset by nature-based offsets.
Could oil shoot up to $80? Some investment banks have predicted that crude oil prices could hit $80-$85 in the second half of this year, as Europe, and many other regions, emerge out of lockdowns and as intercontinental aviation starts to pick up gain.
Baker Hughes upgraded. Barclays upgraded Baker Hughes (NYSE: BKR) to Overweight and said it is “time to own.”
Europe’s first big hydrogen hub? The Port of Rotterdam in the Netherlands, emboldened by the European Union’s new Hydrogen Strategy, is taking significant fist steps to becoming Europe’s ‘hydrogen hub’ and one of the most advanced centers of green hydrogen production in the world.