Oil Returns To $40 After COVID Correction

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Oil posted a price correction on Thursday on fears of the rising coronavirus numbers in the U.S., something that the IEA warned about in its latest Oil Market Report out today. In early trading, prices firmed up, with WTI holding onto $40 per barrel.

IEA raises demand forecast; warns about risk. The IEA hiked its demand forecast for 2020 but also warned that the spreading coronavirus in the U.S. poses downside risks. The agency said demand could be 400,000 bpd higher than previously thought this year due to a rapid bounce back in many economies around the world, particularly in China and India. Also, the oil supply fell by 2 mb/d in June, further tightening the market.

COVID hits Texas refineries. Marathon Petroleum’s (NYSE: MPC) Galveston Bay refinery in Texas City, the second-largest refinery in the country, has over 100 confirmed cases of Covid-19, according to Bloomberg. At least four other refineries have also reported positive cases.

U.S. offshore wind to take off. Investment in U.S. offshore wind could soon match total investment levels in offshore oil and gas. A new study from Wood Mackenzie projects offshore wind investment could reach $78 billion this decade, compared to $82 billion for offshore oil and gas. In the decade ending in 2010, wind saw virtually nothing while offshore oil and gas received $154 billion.

Libya lifts force majeure. Libya’s National Oil Corp. lifted force majeure on its oil exports, raising the prospect of additional supply coming back to the market.

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Oklahoma Supreme Court ruling raises questions for oil. The U.S. Supreme Court ruled that a large swathe of Oklahoma remains in control of Native American tribes. The decision raises questions about whether oil and gas sites will no longer fall under the control of Oklahoma regulators, instead potentially reverting to federal control with tribes as beneficiaries.

Permian gas pipeline inches forward. Global Infrastructure Partners announced a $345 million initial investment in the Whistler pipeline, which would carry natural gas from Waha in West Texas to the Gulf Coast. The pipeline is slated to come online in late 2021.

Iran’s oil storage is almost full. Iran has cut oil production to its lowest level in four decades as storage tanks fill up, according to Reuters.

Shell to become a “power company.” Royal Dutch Shell (NYSE: RDS.A) chairman Chad Holliday said that the company would transition to become “more of a power company than an oil company.”

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EIA lowers gas production forecast. The EIA slightly downgraded its forecast for U.S. natural gas production for the third quarter by nearly 1 percent, noting lower natural gas prices. Gas output is expected to fall by 3 percent for all of 2020. The declines come after the U.S. posted record gas production numbers in 2019.

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U.S. LNG utilization rates fall to just 32 percent. The glut of LNG has led to a steep drop in utilization rates of U.S. LNG export terminals. Gas flows to LNG facilities has declined by more than half to 3.1 bcf/d so far this month, down from 8.7 bcf/d in February. Export terminals are now only using 32 percent of capacity. Utilization is expected to rebound, but still only average between 60 and 70 percent for the next several years.

Texas drilling permits fall by 69 percent. The Texas Railroad Commission approved 312 new drilling permits in June, down from 1,001 in May.

More U.S. oil coming back. Houston-based Noble Energy plans to bring back by the end of July most of the oil production it had curtailed in the second quarter. Overall, U.S. oil production held steady in the most recent EIA data at 11 mb/d.

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Canadian oil sands restore 20 percent of shut-in production. Canadian oil sands producers brought back 20 percent of their shut-in production.

Is $150 oil possible? The steep decline in upstream investment could create a historic bull market in the years ahead. “That funding pressure is going to be massive. It’s going to be really difficult for some of the producers to produce,” Trevor Woods, a chief investment officer of Ohio-based hedge fund Northern Trace Capital, told the WSJ. “We could hit $150 pretty easily by 2025.” The thesis rests on slow but steady increases in demand over the next decade.

U.S. imports of Mexican oil hit 8-year high. A fire at a Mexican refinery and swelling inventories pushed more Mexican oil to the United States, which imported 1.3 mb/d in the first week of July, the highest level since 2012.

North American oil and gas bankruptcies rise. The number of oil and gas bankruptcies rose by 18 in the second quarter, according to a new analysis from Haynes and Boone. That was the highest quarterly total since 2016. Chesapeake Energy’s (NYSE: CHK) bankruptcy stood out as the largest on the list.

Tesla: close to an autonomous car. Elon Musk said that Tesla (NASDAQ: TSLA) is very close to having the Level 5 autonomous driving technology. “I remain confident that we will have the basic functionality for level 5 autonomy complete this year,” Musk said in a pre-recorded message.

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New entrant AECO Energy launches business innovation to deliver ‘last mile of value chain’ to Singapore’s maturing open electricity market

  • AECO Energy announces the launch of its operations in Singapore to provide innovation to the open electricity market for businesses with generation 2.0 of its technology and service offerings.
  • The company will introduce three solutions as part of its initial portfolio, customisable to specific business needs.

SINGAPORE - Media OutReach - 13 April 2021 - AECO Energy, a new entrant to Singapore's electricity sector, has today announced the launch of its operations. AECO Energy will be the first-of-its kind energy technology and services company aimed at innovating customer-centric offerings in electricity and renewable energy markets.

With over 12 years of experience in delivering open market electricity services and solutions to businesses in Australia under the Power Choice brand, AECO Energy is bringing its second generation of services and technology to Singapore for the first time. AECO's second generation delivers on two major offerings.

Firstly, AECO delivers the 'last mile' of value in Singapore Open Electricity Market (OEM) value chain by providing innovative services to assist businesses to manage, plan and make better buying decisions.

AECO is all about enabling increased profits for businesses. AECO has a customer-centric mission to use its low-cost proven technology and expert-led services to enable better business decisions within a complex electricity market with multiple providers and opaque medium- to long-term pricing information. This comes against the backdrop of Singapore's maturing OEM, which gives businesses and consumers the autonomy to buy and choose their electricity providers - the freedom to choose.

AECO Energy's technology platform, MarketPro™ with its unique, electricity futures market simulator Rate Watch™, delivers business and electricity efficiency and empowers businesses through relevant and timely pricing information, while also helping Singapore businesses make better buying decisions via automated tenders and reverse auctions. Moreover, for businesses who do not have the capability and capacity to manage and purchase its own electricity, AECO Energy Portfolio™ delivers scalable buying power with a fully-managed contract management and purchasing aggregation service for small, medium and large businesses.

Alan Jones, CEO, Chairman & Founder, AECO Energy, said: "We are incredibly excited and humbled to be joining Singapore's dynamic energy scene with our low-cost, high-value products and services. Our mission is clear: just like Amazon is revolutionising the 'last mile' of product supply chains with its same day delivery, we are also delivering the 'last mile' of the value chain in Singapore's OEM that enables more businesses better purchasing decisions, more business profitability and growing all of Singapore's economy."

Secondly, with SGX-listed entities, enterprises and multinational corporations (MNCs)' increasing emphasis on sustainability, AECO (through its SustainPro™ offering) will bring for the first-time in Singapore the benefit of AECO's direct relationship with generators of International Renewable Certificates (I-REC). This enables Southeast Asian markets the benefit of medium- to long-term low-cost and structured REC solutions to meet renewable energy targets and sustainability goals. This translates to more profits by providing more predictable costs for businesses in meeting their sustainability and renewable energy goals.

"As a specialised company, unburdened with corporate overheads and distractions from Singapore's local market participants, we can offer companies who are based anywhere in Southeast Asia, sustainability and renewable energy solutions that span markets and countries at a lower and more predictable price. We are honoured to play our part to bring sustainability and increased renewable energy throughout the world and to do so while benefiting our customers' cost structures," continued Mr. Jones.

AECO Energy is introducing three offerings as part of its electricity management solutions:

  • MarketPro™: Businesses can optimise costs and seize market opportunities with exclusive access to customised market price information through AECO Energy's integrated online procurement and management platform equipped with Rate Watch™, a market simulation and automated procurement technology from as low as SGD $149 per month.
  • Portfolio™: Businesses get exclusive access to economies of scale with better buying power through professional and expert-managed energy procurement portfolios overseen by AECO Energy experts. This allows enterprises to focus on their core business while AECO Energy experts will fully-manage their electricity contracts and make better buying decisions on their behalf from as low as an additional SGD $74 per month.
  • SustainPro™: SustainPro focuses on helping businesses meet their sustainability goals at the lowest cost. AECO Energy offers lower costs on the procurement of Renewable Energy Certificates (RECs) and tailored REC supply solutions designed to meet transition needs towards a more sustainable business.

"With the understanding that business needs are unique for every organisation, our energy experts will work closely with customers here in Singapore to help them reduce costs, drive efficiency and make better buying decisions. By providing technology-enabled, insights-driven energy technology solutions, we want to create a profound impact on our customers' businesses to better position them for sustainable growth in the long-term," concluded Alan.

About AECO Energy:

Based in Singapore, the AECO Pacific Group owns and operates the Power Choice and AECO Energy brands. A leading pioneer for more than 12 years in electricity brokerage and consulting services in Asia Pacific focusing on deregulated electricity markets, AECO Pacific helps businesses with electricity procurement and management backed by market intelligence. Transforming and saving businesses more, AECO's combined experience in energy leadership and innovative technology solutions remain unmatched in dynamic and changing energy markets. For more information, visit https://powerchoice.com.au/ and https://aecoenergy.sg/.

Oil Returns To $40 After COVID Correction - Brand Spur
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