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I found this Offshore article refreshing as to imaging technology for the Gulf of Mexico.
https://www.offshore-mag.com/geosciences/article/14203625/reprocessed-flex-trend-data-reveals-nearfield-gulf-of-mexico-potential
PGS has released more full integrity products from the Flex Vision data rejuvenation program in the Gulf of Mexico.
The application of new imaging technology to the Flex Trend has revealed near-field opportunities that boost potential far beyond original estimates, the company said.
New data unlocks opportunities adjacent to existing discoveries, to enable infrastructure-led exploration in an area of the Gulf of Mexico that has been producing oil and gas for more than two decades. Salt, the biggest challenge for exploration on the Flex Trend, is resolved with high-quality depth imaging and improved velocity control.
According to the company, the final data from the Flex Vision program demonstrates improvements in image quality, resolution, bandwidth, and geologic accuracy. The data rejuvenation process started from field tapes and applied the latest broadband imaging techniques and workflows, from data conditioning, noise, and multiple suppression, to new model building and imaging algorithms.
The Flex Vision rejuvenated dataset covers 727 blocks (about 17,000 sq km or 6,564 sq mi) over the mature shelf and shelf break areas of the US Gulf of Mexico, from Vermilion in the west to Grand Isle in the east, along with northern portions of Garden Banks and Green Canyon. High-resolution Kirchhoff and least-squares RTM products are now available.
Mrs. Smith
Typo Correction!
“Somethings” should be some things.
I am having one of those days where I am running around like a chicken with it’s head cut off. At least I did not find a missing piece of GF waffle in one of the bathroom drawers (for a second time). Not yet anyway!
You are right spec it does happen to the best of us.
Mrs. Smith
You are welcome.
Somethings never change. Thank you for pointing out the number of typos.
Take care my friend,
Mrs. Smith
Good News? The GOM ‘Offshore Rig Count Update’ increased by more than 15% from the previous week and is currently showing 15 rigs. The Total US oil and gas rig count reflects 453 rigs an increase of 5 rigs, 2 of which are for GOM Louisiana offshore. All of Gulfslope’s prospects are in GOM Louisiana offshore waters.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
I was reflecting in reference to Gulfslope’s Tau Prospect 75% working interest partner and 24% Capital shareholder, Delek Group and had a few observations.
Clearly within the parent company of Delek Group they have many who’s job is to analyze and play the “what if”. In business it is not a game, it is REAL. They plan for it, prepare for it and eventually act on it.
I am convinced Delek knew they were spread for unforeseen circumstances thin at the end of 2019, and they were aware of what was coming down the pike with COVID and crude pricing very early on in 2020. That is why they have been so successful in pulling themselves through this crisis. They continue to reduce debt, produce revenue and create other forms (IPOs too) of income. Brent Crude pricing is at preCovid levels. Delek Group’s stock price was up and holding but slightly down today.
Delek Group has been around for what 70 years and how long have they been fighting in the Middle East? Yes, thought so. Nice to know two things about Delek Group, their headquarters is north of Tel Aviv and most of their executive and management teams are still with them.
Every society is different. China with it’s coal, the US with it’s fossil fuels, etc. You can not change the world on energy over night it takes decades. Fossil fuels will be the majority and with us for a good while.
Delek Group still references pursuing interests in North America. Sure they could pursue all their North America opportunities on land, but their history and aspiration has also been offshore.
spec you brought up some excellent points one was the bid, you said “the bid is your friend”.
I say watch the issued BOEM shallow water permits. “The issued BOEM permits are your friend” too. Over the last 7 weeks there have been close to 123 BOEM deep and shallow water drilling permits issued.
Arena Energy (privately owned) was the largest GOM OCS shallow water oil and gas EP company out there. In 2020 they successfully went through a bankruptcy.
Yes, the organization that was approved in the bankruptcy court (and they had to compete for it) is largely owned and operated by the original members of Arena, but that just shows you how valuable they thought their GOM shallow water prospects were.
Since the completion of Arena’s bankruptcy, they has been submitting like crazy GOM shallow water permit applications, and the BOEM is popping those approvals out like a rabbit.
Do I think Delek Group will eventually go after their 75 percent interest in the Tau assets, YES! Delek Group’s foreign subsidiary cannot bid on BOEM GOM leases but Gulfslope can. Due to EO 14008 the BOEM lease sales have been put on pause. Could that make the Tau BOEM (2) leases even more attractive to interested parties?
I am no expert on everything, sure some test wells have hydrocarbon shows, but do many have the Quality and Quantity the Tau Prospect “Resources” offer, absolutely NOT!
Delek and Gulfslope had to have seen something to make them throw all that money at the Tau test well 1.
Despite the volatility in crude pricing I still believe in Gulfslope Energy. I see the Tau prospect as the Goose that could lay the golden eggs for Delek, Gulfslope and US.
It is conceivable the Tau Prospect could offer endless years of returns, similar to the Mahogany field, be it new wells or the operator taps her via sidetracks.
I did notice a few positive subtle items on Gulfslope’s recent Quarterly, but I am not prepared to make any remarks, I will over the next few weeks.
Take care my friends,
Mrs. Smith
EDITED
Texas South Energy’s (TXSO) 3rd and last amendment to their March 2014 Farm-out agreement with Gulfslope Energy was in January 2018.
On August 15, 2018 Gulfslope was high bidder on two blocks one of them being the Vermilion (VR) block 376 BOEM lease G-36357 where the “Rooster” platform is located.
I still do not believe Texas South Energy has ever had a working interest of any kind in Gulfslope’s Vermilion block 376 BOEM lease G-36357. Wanted to respond earlier but was getting ready to head out. Hope this helps.
Take care my friends,
Mrs. Smith
But do they have a current business relationship? Do not think so!
Mrs. Smith
I had a few items to add to your post, I hope you do not mind.
In reference to the Jones Act effective May 12, 2021 “Secretary of Homeland Security Alejandro Mayorkas released the following statement on the announcement that the Department of Homeland Security will approve a temporary and targeted Jones Act Waiver in response to eastern seaboard oil supply constraints.” See link underneath:
https://www.dhs.gov/news/2021/05/12/statement-secretary-mayorkas-approval-jones-act-waiver-response-eastern-seaboard-oil
Secondly, loading, unloading and lightering in the Chesapeake Bay Area: Why not just transport by railway and truck from the New York/New Jersey port. The Federal Motor Carrier Safety Administration on May 12, 2021 issued an Amended Regional Emergency Declaration easing trucking regulations. See link underneath:
https://www.fmcsa.dot.gov/emergency/amended-regional-emergency-declaration-under-49-cfr-ss-39023-no-2021-002-0
Lastly, in regards to fuel regulations, the EPA on May 11, 2021 issued a Fuel Waiver for twelve states and the District of Columbia impacted by the Colonial Pipeline shutdown’. See link underneath:
https://www.epa.gov/newsreleases/epa-issues-fuel-waiver-twelve-states-and-district-columbia-impacted-colonial-pipeline
These waivers and declaration were just implemented and I thought you would want to know.
I looked it up the Johnny Carson toilet paper joke in 1973 was way before my time, but I get your point.
I thoroughly enjoyed reading your attached post.
Take care my friend,
Mrs. Smith
Wow, your V’ger could not come up with around 10 more points, or did Al get hoarse?
Did I not read they had practically 50% of the main pipeline back up and running.
They could allow more independent maritime companies to run their oil tankers up and down the east coast. More vessel chartering fees less pipeline tariffs that is all. They still transport by rail and truck, and it just got a lot easier due to relaxed trucking regulations.
I am a touch busy right now perhaps you could tap on that vessel tracking link of yours, and see if there is any increased activity at the ports.
Would not a run on gasoline imply more drivers and that things are getting closer to being back to normal?
I see Mr. Seitz and partner(s) visualizing the future not so much the present in their decision making. Remember, nothing stays the same.
Albeit I can handle it, I do not know if I will have a comment right away as to Gulfslope’s upcoming Quarterly it is a lot of information to take in. I am not expecting substantial news but they could surprise me. In the meantime, I will be looking for clues in their next Quarterly.
Mrs. Smith
OPEC and non-OPEC April 27th Ministerial Meeting highlights:
https://www.opec.org/opec_web/en/press_room/6429.htm
https://www.opec.org/opec_web/static_files_project/media/downloads/15th%20ONOMM%20-%20Production%20adjustments%20table%20(pdf).pdf
The 16th OPEC and non-OPEC Ministerial Meeting of the Declaration of Cooperation (DoC) took place via teleconference on Tuesday, 27 April 2021, under the Chairmanship of HRH Prince Abdul Aziz bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair HE Alexander Novak, Deputy Prime Minister of the Russian Federation.
The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting (ONOMM) on 12 April 2020 to adjust downwards overall crude oil production, and subsequent decisions.
The Meeting highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support, while noting that the recovery is expected to pick up speed in the second half of the year. The Ministerial Meeting emphasized, however, that COVID-19 cases are rising in a number of countries, despite the ongoing vaccination campaigns, and that the resurgence could hamper the economic and oil demand recovery.
The Meeting reviewed the monthly report prepared by the Joint Ministerial Monitoring Committee (JMMC), including the crude oil production data for March 2021, and welcomed the positive performance of the Participating Countries. Overall conformity to the production adjustments was 115% in March 2021, reinforcing the trend of high conformity by the Participating Countries.
The Meeting expressed its appreciation to the Participating Countries that performed beyond expectation in March 2021, with total overconformed volumes of 1.23 mb/d. However, some Participating Countries have yet to achieve the minimum expectation of 100% conformity and to compensate for overproduced volumes.
The Meeting further noted that DoC Participating Countries pledged to achieve full conformity and make up for previous adjustment shortfalls during the extended compensation period, which runs through the end of September 2021, and stressed the importance of accelerating the market rebalancing efforts without delay. It reminded all Participating Countries to remain vigilant and flexible given the uncertain market conditions.
The Meeting noted, with gratitude, the significant additional voluntary supply adjustment of 1 mb/d made by Saudi Arabia in April 2021 and a ”gradual return” of these volumes in May, June and July 2021, given the prevailing uncertainties surrounding the pace of the oil demand recovery.
The Meeting observed the destocking trend of commercial OECD inventories, but noted that they increased by 14.4 mb in March 2021 and were 77.4 mb above the 2015-2019 average.
Under the referred circumstances, the Ministerial Meeting decided on the continued implementation of the production adjustment decision of the 15th OPEC and non-OPEC Ministerial Meeting (in the months of June and July as per the attached table).
It was decided that the 30th JMMC Meeting and the 17th OPEC and non-OPEC Ministerial Meeting will take place on 1 June 2021.
A little good news, the Louisiana Offshore Rig Count increased by 20% from the previous week, the bad news is it is only 12% above it’s all time low from 1987. Gulfslope’s Tau Prospect is in Louisiana federal offshore waters.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
Crude is holding due to several reasons, a couple being OPEC’s efforts and crude oil inventories declining by 8 million barrels from the previous week.
On April 27th OPEC highlighted the continuing recovery in the global economy, and noted that it is “expected to pick up speed in the second half of the year”.
Also, yes do not give up now WG.
WG’s state of mind, lol:
Yes, that seems to be a pattern with you loading up on GSPE shares during a bloody day. Buy low, right?
I would like to thank you for the recognition you gave me the other day regarding my Gulfslope Energy board contributions.
I know we have not always seen eye to eye so I had to do a double take when I saw my name, Smith199 at the top of your list regarding GSPE contributing posters. I was not sure what list you had put my name on the top of
I take it as a huge complement coming from you, because I believe there is no way you would say that unless you really thought those things of someone.
I want to finally reciprocate by saying thank you for being a Gulfslope Energy moderator all these years. You have been around for a good while. I am still wet behind the ears in comparison to you.
I probably speak for many GSPE board readers when I say, thank you for the Gulfslope information you have supplied, coordinated, analyzed, and clarified over the years.
Reminder, I am not saying “I am your number one fan on the board”, but I do appreciate dedication and quality information.
Take care my friend,
Mrs. Smith
No problem, anyone can make a mistake. Not too long ago someone referenced the wrong company. I am usually not one to point fingers but it was a pretty “big goof”. Fortunately for us they promptly corrected their error. Even I have made a few boo-boos but very rarely on my spreadsheets.
Take care,
Mrs. Smith
Most know by now I am invested in Gulfslope Energy for the long haul. It does not amaze me that this stock is continually capable of attracting all type of investors. I had no doubt Gulfslope would do well on OTC Pink and continue to provide their Quarterly SEC filings. Some may have had their doubts, but many like me know it is due to Mr. Seitz and his Gulfslope team. Prior to Gulfslope Energy, he and his associates had already experienced billion dollar discoveries which they successfully brought to fruition.
Mr. Seitz and everyone he has surrounded himself with has the character of not being a quitter. That is evident by their strong bond as a team, and their ability to thrive during some of the most difficult years in the oil and gas industry. I am not saying that character trait alone will make success, but they have many and an investor has to take a risk to receive a reward.
For example, take an investor who believed in Walmart in 1970 and bought 100 shares for $1,650 that 100 shares with splits would be worth over 4 million dollars today. McDonald’s is very similar it has made over 90,000 percent not 100 percent.
Of course, we all have gone through poor stocks to get to some of the gems, but if you don’t take the risk you will never receive the reward. Gulfslope with it’s Tau 2 drill well could be the goose that laid the golden egg.
Just a hunch,
Mrs. Smith
I answer Delek Group is still in on a Tau 2 drill well.
That might just be my “glass is half full” sunny disposition talking, I do not think so.
The understructure for a Gulfslope drilling campaign is gaining a foothold in 2021.
By the way, things are clearly shaping up for Delek Group the 24% capital shareholder of Gulfslope Energy and 75% working interest partner in the Tau prospect. They stayed true to their word, and Ithaca Energy the 100% owned subsidiary of Delek Group will commence in June 2021 exploration/drilling on a 60% owned oil asset in the North Sea.
Delek has been recovering admirably and successfully from 2020, and they did it all own their own. The same could be said of Gulfslope Energy in 2020, Gulfslope even weathered 2015-2016 when larger oil and gas companies did not. It is more than just “faith” in Mr. Seitz. They both have “taken a licking and kept on ticking”.
I will be in the right locale to strike when the irons hot!
Mrs. Smith
American Petroleum Institute ‘March Monthly Statistical Report’ (MSR) 4/15/2021 release date.
Link to entire report underneath:
https://www.api.org/-/media/Files/News/2021/04/Monthly_Statistical_Report_March_2021.pdf
One Excerpt from the MSR:
EXECUTIVE SUMMARY
API’s primary data for March 2021 suggest that petroleum markets demonstrated a measured recovery following the winter emergency disruptions that affected oil supply, trade and inventories beginning in mid- February.
Highlights:
• Total U.S. petroleum demand of 19.1 million barrels per day (mb/d) decreased seasonally but showed resounding strength in rural gasoline demand that increased by 632,000 barrels per day over February.
• Refining and petrochemical demand for other oils – naphtha, gasoil, propane/propylene – remained solid and represented 27.3% of total U.S. petroleum demand in March.
• Refining throughput of 14.5 mb/d recovered and increased by 8.1% from February.
• The U.S. remained a petroleum net importer for the month, as imports rose by more than exports.
• Inventories were little-changed in total but reflected lower refined products stocks and higher crude oil
stocks, as refineries resumed operations after the February disruptions.
• Leading economic indicators improved broadly in March, and API’s Distillate Economic IndicatorTM signaled
continued industrial production gains (please see the following chart for details).
Demand
• U.S. petroleum demand (19.1 mb/d) – a typical seasonal monthly decrease.
– Rural America drove gasoline demand upwards.
– Trucking and industrial demand deceased seasonally.
– Jet fuel deliveries were at their lowest for March since 1986.
– Residual fuel oil demand doubled versus March 2020.
– Strong other oils demand continued despite the cold snap disruptions.
Prices & Macroeconomy
• With increased crude oil prices, gasoline prices rose to their highest since May 2019.
• Strong industrial gains; stimulus checks helped to boost consumer sentiment.
Supply
• U.S. crude oil and natural gas liquids production increased with drilling activity. International trade
• U.S. petroleum net imports expanded. Industry operations
• Refining activities recovered from winter emergency disruptions in February.
Inventories
• Inventories of crude oil rose, but those of products receded.
WTI 63.01/bbl May contract as of 4/15/2021, 10:49 am CST
Crude Oil Inventories continued to decline the week ending 4/9/2021, and demand is up.
Mrs.Smith
OPEC Monthly Oil Market Report “Video” for April 2021. Video link below and PDF link on attached post.
https://players.brightcove.net/34306109001/default_default/index.html?videoId=6248859396001
OPEC.org finally uploaded the MOMR video. I know some enjoy the visual aids way more than just text, it really does produce a clearer picture.
Mrs. Smith
I believe they are two different individuals.
Looks like V-ger got off to a slow start but now is firing on all cylinders!
Mrs. Smith
OPEC April 2021 Monthly Oil Market Report - PDF Link below:
https://momr.opec.org/pdf-download/res/pdf_delivery_momr.php?secToken2=accept
They should load the video version later today.
OIL MARKET HIGHLIGHTS
Crude Oil Price Movements
Spot crude prices rose for the fifth-consecutive month in March on the back of continuing supportive oil market fundamentals. The OPEC Reference Basket (ORB) increased $3.51 or 5.7% m-o-m to average $64.56/b, the highest on monthly terms since January 2020. In the first three months of 2021, the ORB was up by $8.82, or 17.2% to average $60.22/b. Crude oil futures prices were higher in March extending previous monthly gains. The ICE Brent front month rose by $3.42 in March, or 5.5%, to average $65.70/b, and NYMEX WTI increased by $3.30, or 5.6%, to average $62.36/b. Consequently, the Brent-WTI spread widened to $3.34/b on a monthly average. The backwardation structure of Brent and WTI markets eased over the month, specifically in the front of the forward curve. In contrast, backwardation strengthened for DME Oman and Dubai. Hedge funds and other money managers liquidated part of their bullish positions in the second half of March after market sentiment softened.
World Economy
The global economic contraction estimate in 2020 is reduced after a better-than-expected actual performance by a number of economies in 2H20. As a result, global economic growth now shows a decline of 3.5% y-o-y in 2020. For 2021, additional US stimulus measures and an accelerating recovery in Asian economies are expected to continue supporting the global economic growth forecast, which is now revised up to 5.4%. However, this forecast remains clouded by uncertainties, including, but not limited to, the spread of COVID-19 variants and the speed of the vaccine rollout. In addition, sovereign debt levels in many regions, inflationary pressures, and central bank responses are key factors to monitor. After a contraction of 3.5% in 2020, US economic growth in 2021 is now expected to reach 5.7%. The GDP growth forecast for the Euro-zone in 2021 remains at 4.3%, which follows a contraction of 6.8% last year. Japan’s GDP growth forecast remains at 3.1% for 2021, after a contraction of 4.9% in 2020. Following growth of 2.3% in 2020, China’s GDP is forecast to increase by 8.4% in 2021. India’s 2021 GDP growth forecast is revised up to 9.8%, compared to a contraction of 7% in 2020. Brazil’s growth forecast remains unchanged at 3.0%, with government estimates showing Brazil’s economy contracted by 4.1% in 2020. Russia’s growth forecast for 2021 remains at 3%, after contracting by 3.1% in 2020.
World Oil Demand
The global oil demand contraction in 2020 is revised lower by about 0.1 mb/d compared to last month’s MOMR, now showing a contraction of about 9.5 mb/d y-o-y, with total world oil demand at 90.5 mb/d. In 2021, world oil demand growth is expected to increase by about 6.0 mb/d y-o-y, representing an upward revision of about 0.1 mb/d from last month’s report. Indeed, oil demand in the 2H21 is projected to be positively impacted by a stronger economic rebound than assumed last month, supported by stimulus programmes and a further easing of COVID-19 lockdown measures, amid an acceleration in the vaccination rollout, largely in the OECD region. Nevertheless, oil demand was adjusted lower in 1H21, mainly taking into account the recent developments related to COVID-19 measures in OECD Europe and sluggish 1Q21 oil demand data from the non-OECD region. As a result, global oil demand is expected to average about 96.5 mb/d in 2021.
World Oil Supply
Non-OPEC liquids supply in 2020 is estimated to average 62.9 mb/d, showing a contraction of 2.5 mb/d y-o-y, which is an upward revision of 0.04 mb/d m-o-m. The majority of the decline came from Russia and the US. Non-OPEC liquids supply for 2021 is revised down by 0.03 mb/d from last month and is now forecast to grow by 0.9 mb/d to an average of 63.8 mb/d. In the US, higher prices could potentially translate into a higher level of production in 2021, with the drilling and completion trend indicating possible future robust monthly growth. However, the US liquids supply forecast in 2021 is expected to remain unchanged at growth of 0.16 mb/d y-o-y. The other main drivers for supply growth in 2021 are expected to be Canada, Norway and Brazil. OPEC NGLs are forecast to grow by around 0.1 mb/d y-o-y in 2021 to average 5.2 mb/d, following an estimated contraction of 0.1 mb/d in 2020. OPEC crude oil production in March increased by 0.20 mb/d, m-o-m, to average 25.04 mb/d, according to secondary sources.
Product Markets and Refining Operations
Refining margins showed diverging trends in March. In the USGC margins jumped, as product markets continued to benefit from the recent rise in unplanned outages, as well as low refinery output levels due to heavy maintenance. This led to a tighter overall product balance and bullish product market sentiment, which helped keep fuel prices sustained. In Europe, refinery margins also rose, but rather moderately. On the other hand, margins in Asia performed negatively as refining economics saw losses as pressure came mainly from the middle of the barrel as the market remained well supplied.
Tanker Market
Dirty tanker spot freight rates picked up in March, as gains in Suezmax and Aframax outpaced a further slight decline in VLCCs. Increases in the these vessel classes were driven by tighter tanker supply as the blockage of the Suez Canal kept ships waiting on both sides of the waterway amid uncertainties regarding when the disruption would be resolved. After the container ship ‘Ever Given’ was dislodged at the end of the month, rates fell back toward the lower levels seen at the start of the year. The impending emergence of 2Q refinery maintenance in Asia also reduced support by the end of the month. Clean tanker rates in March saw an improved performance East of Suez, while West of Suez routes around the Med eased from the higher levels seen last month.
Crude and Refined Products Trade
Preliminary data shows that US crude imports were flat in March at around 5.7 mb/d for the fourth month in a row, while US crude exports declined for the third month in a row, averaging 2.7 mb/d, the lowest since July 2019. US product imports surged in March to average 2.5 mb/d, the highest since July 2019, as weather disruptions supported inflows. Japan’s crude imports were broadly stable at the stronger levels seen over the past two months, averaging 2.6 mb/d in February. Product imports were the highest in over three years, averaging 1.3 mb/d in February. China’s crude imports achieved a four-month high in February, averaging 11.8 mb/d, impacted by the Lunar New Year Holidays and stronger buying by independent refiners. Product exports edged up 3% to average 1.5 mb/d, the highest since April 2020, driven by gasoil and jet fuel. India’s crude imports declined sharply in February, averaging just under 4 mb/d, the lowest in four months, as COVID-19 impacts and higher prices weighed on demand. Product imports rebounded in February, to average 1.2 mb/d, the highest in 13 months, driven by LPG inflows, part of a government programme to promote clean cooking.
Commercial Stock Movements
Preliminary data shows that total OECD commercial oil stocks fell by 44.9 mb m-o-m in February. At 2,978 mb, inventories were 94.1 mb higher than the same month a year ago, 29 mb above the latest five-year average, and around 57 mb above the 2015-2019 average. Within the components, crude stocks rose by 6.1 mb, m-o-m, while product stocks fell by 51.0 mb. OECD crude stocks were 30.8 mb above the latest five-year average and 42.0 mb above the 2015-2019 average, while product stocks exhibited a deficit of 1.7 mb to the latest five-year average, but were 15.5 mb above the 2015-2019 average. In terms of days of forward cover, OECD commercial inventories declined m-o-m by 1.1 days in February to stand at 68.0 days. This is 6.7 days lower than the year-ago level, 2.6 days above the latest five-year average, and 5.6 days above the 2015–2019 average.
Balance of Supply and Demand
Demand for OPEC crude in 2020 is revised up by 0.1 mb/d from the previous month to stand at 22.5 mb/d. This is around 6.8 mb/d lower than in 2019. For 2021, demand for OPEC crude is revised up by 0.2 mb/d from the previous month to stand at 27.4 mb/d. This is 4.9 mb/d higher than in 2020.
FEATURE ARTICLE: ‘Summer Oil Market Outlook’
Global oil demand in 2021 is forecast to grow by around 6.0 mb/d y-o-y. The year started with new waves of COVID-19 infections, necessitating renewed lockdown measures in many OECD economies. Therefore, the bulk of consumption growth is expected to take place in 2Q21 and 3Q21, with global demand y-o-y growth projected at 12.0 mb/d and 6.5 mb/d, respectively. Gasoline is projected to be the key driver for oil demand recovery beginning with the onset of the summer driving season. Diesel will also provide support, mostly based on economic improvements stemming from the implementation of fiscal stimulus programmes.
As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programmes, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility in various parts of the world, especially in OECD regions. In the US, data for 1Q21 showed that total gasoline consumption losses are smaller compared to previous months, implying that the impact of COVID-19 on gasoline demand is starting to fade, while data for jet fuel consumption remains far below normal levels. Moreover, the easing of restrictions and increased demand expected in the traditional summer driving season should lift global gasoline requirements even further. Despite projections
showing a marked improvement in gasoline demand compared to 2020, consumption in the summer months is still not expected to surpass 2019 levels due to COVID-19 related challenges. Global gasoline demand is estimated at 24.0 mb/d in 1Q21, forecast at 25.6 mb/d in 2Q21, 26.7 mb/d in 3Q21 and 25.4 mb/d in 4Q21.
On the other hand, diesel consumption is projected to be driven by positive developments supported by sizeable stimulus programmes in many economies, most notably the US. These programmes are expected to encourage growth in industry and infrastructure, particularly in Asian economies, including construction of buildings and roads along with increased demand for agricultural products. The demand for diesel is estimated at 26.3 mb/d in 1Q21 and projected at 26.6 mb/d in 2Q21, 27.4 mb/d in both 3Q21 and 4Q21 (Graph 1). Nonetheless, diesel consumption is also expected to remain below pre-COVID-19 levels for the entire year.
On the refining side, the recent crude run cuts due to cold weather and maintenance have supported refining margins, mainly in the US, while remaining more or less sustained in Europe (Graph 2). Following refinery turnarounds scheduled for April, transport fuel demand, particularly gasoline and on- road diesel, is expected to rise steadily over the summer months, causing refinery intakes to show significant improvement and move closer to pre- COVID-19 levels. Nevertheless, refining capacity continues to exceed demand and is expected to exert pressure on margins going forward.
With regard to global inventory levels, there have
been sizeable drawdowns since the middle of 2020
and these are expected to continue in the coming
months, mainly due to the successful efforts undertaken by the OPEC and non-OPEC countries participating in the Declaration of Cooperation (DoC) to voluntarily adjust production in response to the unprecedented demand contraction witnessed since 1Q20. These reductions in surplus inventories as well as an expected pick up in product demand will pave the way for a cautious recovery of oil market balance in the summer months, supporting refining margins and throughputs.
Nevertheless, the large uncertainty surrounding the fragile recovery from the unprecedented impact of COVID-19 continues to require vigilant monitoring of market developments, despite the wide-ranging stimulus measures and early signs of a return to normalcy as progress continues on vaccination programmes in many major economies. The joint efforts of the OPEC and non-OPEC countries participating in the DoC continue to contribute to market stability to ensure efficient, economic and secure supplies of oil to consumers, with a fair return on invested capital.
Mrs. Smith
To “track” the progress of the House of Representatives (HR -1325) ‘More Energy More Jobs Act’ legislation introduced by Representative Kevin Bradley on 2/24/2021 click on the link below.
Currently the “status” on the legislation is in the beginning stages of just being introduced. You can view the “tracker” from the link underneath to monitor it’s progress. The next steps will be to pass the “House”, Senate” then on to the “President” before becoming “Law”. You can signup for email alerts too. See all links below.
Link to the actual ‘More Energy More Jobs’ Legislation:
https://www.congress.gov/117/bills/hr1325/BILLS-117hr1325ih.pdf
Link to “Tracker”
https://www.congress.gov/bill/117th-congress/house-bill/1325?q=%7B%22search%22%3A%5B%22Hr+1325%22%5D%7D&s=4&r=1
Link to “Get Email Alerts”
https://www.congress.gov/account/register
Mrs.Smith
Mrs.Smith
Federal Reserve Chairman Jerome Powell gave an exceptional interview to “60 Minutes” on how the US economy is rebounding. Gain access to Powell’s 60 Minutes interview “video” by way of the 4/12/2021 cbsnews.com article link below:
https://www.cbsnews.com/news/60-minutes-jerome-powell-federal-reserve-economy-update-2021-04-11/
A few excerpts from the 4/12/2021 CBS news article, correspondent Scott Pelley:
A broad economic recovery is suddenly gathering speed, calling millions of Americans back to work. That's the message tonight of Jerome Powell, the chair of the Federal Reserve. The "Fed," as it's known, regulates our economy by controlling the supply of money, setting interest rates and overseeing major banks. We sat down with Chairman Powell in his Washington headquarters this past Wednesday, one year after the COVID crash wiped out 22 million jobs.
Scott Pelley: Is the economy still in jeopardy?
Jerome Powell: I would say this. What we're seeing now is really an economy that seems to be at an inflection point. And that's because of widespread vaccination and strong fiscal support, strong monetary policy support. We feel like we're at a place where the economy's about to start growing much more quickly and job creation coming in much more quickly. So the principal risk to our economy right now really is that the disease would spread again. It's going to be smart if people can continue to socially distance and wear masks.
Scott Pelley: You seem to be saying, not about COVID, but about the economy, that we're out of the woods.
Jerome Powell: Well, I'd say that we and a lot of private sector forecasters see strong growth and strong job creation starting right now. So really, the outlook has brightened substantially.
Scott Pelley: What are your projections for growth and employment?
Jerome Powell: If you look at what private sector forecasters are saying or what forecasters who sit around this table who are on the Federal Open Market Committee, our rate setting committee, what they're forecasting is growth for this year in the range of 6% or 7%, which would be the highest level in, you know, 30 years. Or even maybe a little bit higher. And forecasting unemployment to move down substantially from 6%, where it is now, maybe to between 4% and 5%.
Scott Pelley: It seems like you're not expecting a recovery, you're expecting a boom.
Jerome Powell: Well, I would say that this growth that we're expecting in the second half of this year is going to be very strong.
Jerome Powell, who prefers to be called "Jay" is 68—a lawyer who made a fortune on Wall Street. He was appointed to the Federal Reserve board by President Obama and elevated to chairman by President Trump.
Mrs. Smith
Energy “Slide Show”, Federal Reserve Bank of Dallas, Updated 4/5/2021 - Link underneath:
https://www.dallasfed.org/-/media/Documents/research/energy/energycharts.pdf?la=en
Dallas Fed Energy “Survey”, First Quarter, Released 3/24/2021
Oil and Gas Activity Expands Strongly; Outlook Improves Dramatically
What’s New This Quarter
Special questions this quarter include an annual update on breakeven prices by basin, expected changes in employee head counts for 2021, expectations for changes in service pricing this year and the impact of changing federal regulation on profitability.
Activity in the oil and gas sector expanded strongly in first quarter 2021, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—soared from 18.5 in the fourth quarter to 53.6 in first quarter 2021, reaching its highest reading in the survey’s five-year history. Exploration and production (E&P) and oilfield services firms both experienced a strong expansion in activity.
Oil and gas production increased, according to E&P executives. The oil production index rose from 1.0 in the fourth quarter to 16.3 in the first quarter. Likewise, the natural gas production index turned positive and increased 18 points to 15.9.
The index for capital expenditures increased from 12.5 to 31.0, indicating an acceleration in capital spending among E&P firms. Additionally, the index for the expected level of capital expenditures next year came in at 49.5, signaling firms have increased their capital spending plans for 2022.
Oilfield services firms reported improvement in all indicators. The equipment utilization index surged, jumping 57 points to 63.2 in the first quarter. Operating margins improved, with the index moving into positive territory—increasing from -31.9 to 14.0. The index of prices received for services also turned positive, jumping from -29.7 to 20.0. However, the index for input costs also rose notably—from -4.3 to 36.0—suggesting mounting cost pressures.
After seven consecutive negative readings that indicated contracting payrolls, the aggregate employment index turned positive, rising from -11.7 to 8.4. Employment growth was driven primarily by oilfield services firms. The employment index was 23.5 for services firms versus 1.0 for E&P firms. The employee hours index moved into positive territory, rising from -6.9 to 22.8. The aggregate wages and benefits index also turned positive—from -12.4 to 14.8.
Six-month outlooks improved notably, with the index rising from 21.6 last quarter to 70.6—the highest reading in the survey’s five-year history. Additionally, firms noted less uncertainty around their outlook this quarter than last; the aggregate uncertainty index fell eight points to -22.2. This is the lowest reading for the uncertainty index since its inception in first quarter 2017.
On average, respondents expect a West Texas Intermediate (WTI) oil price of $61 per barrel by year-end 2021; responses ranged from $45 to $85 per barrel. Survey participants expect Henry Hub natural gas prices of $2.80 per million British thermal units (MMBtu) at year-end. For reference, WTI spot prices averaged $64 per barrel during the survey collection period, and Henry Hub spot prices averaged $2.59 per MMBtu.
Next release: June 23, 2021
Data were collected March 10–18, and 155 energy firms responded. Of the respondents, 104 were exploration and production firms and 51 were oilfield services firms.
The Dallas Fed conducts the Dallas Fed Energy Survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District. Firms are asked whether business activity, employment, capital expenditures and other indicators increased, decreased or remained unchanged compared with the prior quarter and with the same quarter a year ago. Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the previous quarter. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the previous quarter.
Dallas Fed Energy Survey First Quarter - Link underneath:
https://www.dallasfed.org/research/surveys/des/2021/2101.aspx
Mrs. Smith
I conceive my attached post is worth mentioning again. I will repeat it underneath.
The revised estimated “Current Ratio” without “Related Party” items I referenced from Gulfslope’s Balance Sheet as of 9/30/2020 still holds true as of 12/31/2020.
I am not saying Gulfslope’s Balance Sheet is squeaky clean, but it is not bad!
By the way, I noticed on Guflslope’s latest 10-Q Domenica Seitz CPA, related to John Seitz, who has provided accounting services to the Company through September 30, 2020 as a consultant became an employee as of October 2020. Not sure if it was all related to the “Paycheck Protection Program”, but I do not attribute it to that.
Linkback post no. 4368:
I had a quick moment this afternoon and was reevaluating a couple of Gulfslope Balance Sheet items. Seeing them from a different perspective, so to speak.
Gulfslope did PR on 10/30/2020 that Virtually all “Third-Party” debt would be retired in 2020. See link below:
https://ir.gulfslope.com/press-releases/detail/153/gulfslope-energy-corporate-update
Gulfslope’s most recent Balance Sheet as of 9/30/2020 reflects NO Long-term Liabilities either.
Looking at Gulfslope’s “Current Ratio” (Liquid Assets covering Short-term Liabilities) of 0.26:1 based off their most recent 9/30/2020 Balance sheet it appears unfavorable, but taking a deeper dive into the numbers I see things a little different this morning.
I did a rough calculation removing Mr. Seitz, Gulfslope’s CEO “Related Party Items” from the “Current Ratio” and came up with a 1.56:1 ratio. Anything in the range of 1.2 and 2 is considered positive.
Mr. Seitz still does not take a salary from Gulfslope Energy.
A little history on Gulfslope’s Convertible Promissory Notes of $8.7 mm with Mr. Seitz. It all started back in 2013 with the notes being due on demand. Not once has Mr. Seitz demanded partial payment of the his notes from Gulfslope since it’s inception, even after Gulfslope received the $7.5 million under the Tau insurance claim. Also, $5.3 mm of the notes are convertible into shares of CS at a conversion price of $0.12 per share.
”Current Ratio” Rough Estimate Calculation w/o “Related Party” items:
(for example purposed only)
Current Assets as of 9/30/2020:
Total Current Assets $ 3,640,720
Current Liabilities as of 9/30/2020:
Total Current Liab.’s $13,972,312
Less: Related Party Payable $ 417,984
Less: Accrued Interest Payable $ 2,500,000
($2.5mm of the total $2.6mm)
Less: Loans from Related Parties - Mr. Seitz $ 8,725,500
Revised Total Current Liabilities $2,328,828
“Revised” Current Ratio Removing “Related Party” items for Example Purposes ONLY:
1.56:1
Just playing around with some Gulfslope numbers during a quick break today.
Mrs. Smith
Absolutely T!
We might not always see eye to eye regarding Gulfslope Energy, but I hold a tremendous amount of respect and appreciation for spec machine’s contributions. He says he has been around since or before the internet. I can not compete with that.
Gosh, he has even taught me a few things on this GSPE board.
Take care,
Mrs. Smith
The 4/9/2021 Weekly GOM Rig Count Report dropped by 21% from the previous week. The GOM Rig Count fell from 14 to 11 rigs for a total of 10 for Federal Offshore Louisiana waters and 1 for Texas waters. Gulfslope’s Prospects are GOM Louisiana shallow water.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
Obviously the market does not like what it sees because WTI has hunkered down below $60/bbl these days.
Perchance there will be some agreeable news next Tuesday, April 13th when OPEC releases their ‘Monthly Oil Operating Report’.
The good news is Crude Oil Inventories fell by 3.5 mm barrels the week ending April 2, 2021. I anticipate more of the same on next week’s report.
Mrs. Smith
The “IBox” a/k/a “Intro” is where the board is introduced to other Users. Currently it’s being maintained by Mr. spec and it’s located at the very top of the GSPE message board.
Mrs. Smith
Agreed, the geophysical modeling and interpretation appraised value of the 5% working interest Texas South Energy (TXSO) conveyed to Gulfslope Energy should be calculated at a greater amount, than TXSO's $3.6 mm settled outstanding debt amount.
I disagree that I made a boo-boo on my "napkin math". The line item description for the $3.6 mm was for Texas South Energy's 5% conveyed dollar amount to Gulfslope Energy.
My spreadsheets are in perfect form I sure hope your V-ger is. How is it doing after the recent resuscitation?
Take care my friends,
Mrs. Smith
Thanks spec for the Gulfslope Energy Ibox updates they could make the "winner of an ugly contest" look gorgeous or not.
No moaning here welcome back my opponent.
Mrs. Smith
So there is a “raft of current information for the I-box” to “resuscitate project V-ger”?
“Recent developments not directly related to GSPE” Well then by all means put me on that PM list too to receive your compilations, interpretations, and summaries from project V-ger.
Once I review your Gulfslope information I can not promise to “blush like a politician”, but it might cause my toes to curl, probably not!
I definitely will have questions after I review your GSPE data, but then the wise always do.
Thanks for all your efforts,
Mrs. Smith
EIA Short Term Energy Outlook (STEO) Released 4/6/2021
https://www.eia.gov/outlooks/steo/report/
FORECAST HIGHLIGHTS
Global liquid fuels
The April Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply during the past year and will continue to affect these patterns in the future. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 5.6% in 2021 and by 4.2% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.
For the 2021 summer driving season (April–September), the U.S. Energy Information Administration (EIA) forecasts U.S. regular gasoline retail prices will average $2.78 per gallon (gal), up from an average of $2.07/gal last summer (Summer Fuels Outlook). Higher forecast gasoline prices reflect higher forecast crude oil prices, higher wholesale gasoline refining margins, and higher U.S. consumption of motor gasoline. For all of 2021, we expect U.S. retail prices of regular-grade gasoline to average $2.66/gal and retail prices for all grades to average $2.78/gal, which would result in the average U.S. household spending about $480 (31%) more on motor fuel in 2021 compared with 2020.
EIA expects U.S. gasoline consumption to rise in response to growing levels of GDP and employment. In addition, as COVID-19 vaccines are more widely distributed, we expect that driving will increase, causing gasoline consumption to rise. We forecast that U.S. gasoline consumption in 2021 will average 8.6 million barrels per day (b/d), which is up from consumption in 2020 of 8.0 million b/d, but down from consumption in 2019 of 9.3 million b/d.
Brent crude oil spot prices averaged $65 per barrel (b) in March, up $3/b from February and up $33/b from March 2020, the onset of the COVID-19 pandemic in the United States. Rising Brent prices in March continued to reflect expectations of rising oil demand as both COVID-19 vaccination rates and global economic activity have increased, combined with ongoing crude oil production limits from members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+). EIA forecasts that Brent prices will average $65/b in the second quarter of 2021, $61/b during the second half of 2021, and $60/b in 2022.
EIA expects global oil inventories to fall by 1.8 million b/d in the first half of 2021. Forecast increases in global oil supply will contribute to a mostly balanced market during the second half of 2021. However, the forecast depends heavily on future production decisions by OPEC+, the responsiveness of U.S. tight oil production to oil prices, and the pace of oil demand growth, among other factors.
EIA expects OPEC crude oil production will rise from an average of 25.1 million b/d in the first quarter of 2021 to 25.8 million b/d in the second quarter. The increase is the result of the April 1 OPEC+ announcement to begin raising production targets in May. It also reflects Saudi Arabia unwinding voluntary cuts of 1.0 million b/d between May and July. We expect OPEC crude oil production will rise to almost 27.9 million b/d in the second half of 2021.
EIA estimates that the world consumed 96.0 million b/d of petroleum and liquid fuels in March, an increase of 4.7 million b/d from March 2020.. We forecast that global consumption of petroleum and liquid fuels will average 97.7 million b/d for all of 2021, which is up by 5.5 million b/d from 2020. We forecast that consumption will increase by 3.7 million b/d in 2022 to average 101.3 million b/d. We revised growth in global liquid fuels consumption in 2021 higher from last STEO The higher forecast is primarily a result of higher global GDP growth forecasts from Oxford Economics, which increased 0.4 percentage points from the March STEO to 6.2% for 2021.
According to EIA’s most recent data, U.S. domestic crude oil production averaged 11.1 million b/d in January 2021. We estimate that U.S. domestic crude oil production declined by 0.8 million b/d in February, mostly because of cold temperatures that affected much of the country, particularly Texas. We forecast crude oil production will average 10.9 million b/d in the second quarter of 2021 and increase to almost 11.4 million b/d by the fourth quarter of 2021. We expect U.S. crude oil production will average 11.9 million b/d in 2022. The forecast of rising U.S. crude oil production is the result of our expectation that West Texas Intermediate crude oil prices will remain above $55/b through the forecast period.
Natural Gas
In March, the U.S. benchmark Henry Hub natural gas spot price averaged $2.62 per million British thermal units (MMBtu), which is down from the February average of $5.35/MMBtu. The Henry Hub price declined primarily because the cold weather and related high demand and market disruptions that drove prices to recent highs in February abated in March. EIA expects Henry Hub spot prices will average $2.73/MMBtu in the second quarter of 2021 and will average $3.04/MMBtu for all of 2021, which is up from the 2020 average of $2.03/MMBtu. We expect that continued growth in liquefied natural gas (LNG) exports, with only a slight corresponding increase in dry natural gas production, will contribute to the average Henry Hub spot price rising to $3.11/MMBtu in 2022.
EIA expects that U.S. consumption of natural gas will average 82.9 billion cubic feet per day (Bcf/d) in 2021, down 0.4% from 2020. The decline in U.S. natural gas consumption is a result of less natural gas consumed for electric power generation because of higher natural gas prices compared with last year. In 2021, we expect residential and commercial natural gas consumption will rise by a total of 1.1 Bcf/d from 2020 and industrial consumption will rise by 1.4 Bcf/d from 2020. Rising consumption outside of the power sector results from expanding economic activity and colder temperatures in 2021 compared with 2020. We expect U.S. natural gas consumption will average 82.1 Bcf/d in 2022.
EIA estimates that natural gas inventories ended March 2021 at nearly 1.8 Tcf, which is 2% lower than the five-year (2016–20) average. The winter of 2020–21 had more natural gas withdrawn from storage than the five-year average largely as a result of the cold February temperatures that occurred amid low natural gas production. We expect that rising natural gas production and lower natural gas consumption for power generation than in the past two summers will contribute to storage injections outpacing the five-year average in 2021. We forecast that natural gas inventories will end the 2021 injection season (end of October) at more than 3.7 Tcf, which is equal to the five-year average.
EIA forecasts that U.S. production of dry natural gas will average 91.4 Bcf/d in 2021, which is about the same as the 2020 average. In our forecast, dry natural gas production falls to a low point of 90.8 Bcf/d in May 2021 before steadily increasing through most of the remainder of 2021, reaching a high of 92.4 Bcf/d in November 2021. The increase in production in 2021 reflects higher forecast natural gas prices as well as higher forecast crude oil prices, which we expect will contribute to more associated natural gas production, especially in the Permian region.
Electricity, coal, renewables, and emissions
EIA forecasts that electricity consumption in the United States will increase by 2.1% in 2021 after falling 3.8% in 2020. We forecast electricity sales to the industrial sector will grow by 4.2% in 2021. We forecast that retail electricity sales to the residential sector will grow by 2.3% in 2021. This increase is primarily a result of colder temperatures in the first quarter of 2021 compared with the same period in 2020. We expect retail sales of electricity to the commercial sector will increase by 0.7% in 2021. Much of the increased electricity consumption across the sectors reflects improving economic conditions in 2021. For 2022, we forecast that U.S. electricity consumption will grow by another 1.3%.
EIA expects that the share of electric power generated with natural gas in the United States will average 36% in 2021 and 35% in 2022, down from 39% in 2020. The forecast share for natural gas declines in response to a 39% increase in the price of natural gas delivered to electricity generators from an average of $2.39/MMBtu in 2020 to $3.31/MMBtu in 2021. The higher expected natural gas prices cause the forecast share of generation from coal to rise from 20% in 2020 to 22% this year, and to 23% next year. New additions of solar and wind generating capacity contribute to our forecast that the share of U.S. generation from renewable energy sources will rise from 20% in 2020 to 21% in 2021 and to 22% in 2022. The nuclear share of U.S. generation declines from 21% in 2020 to 20% in 2021 and to 19% in 2022, reflecting the retirement of capacity at some nuclear power plants.
EIA forecasts that planned additions to generating capacity from wind and solar energy in 2021 and 2022 will contribute to increasing electricity generation from those sources. We estimate that the U.S. electric power sector added 14.5 gigawatts (GW) of new wind capacity in 2020. We expect 16.1 GW of new capacity will be added in 2021 and 5.8 GW in 2022. U.S. utility-scale solar capacity rose by an estimated 10.4 GW in 2020. Our forecast for added utility-scale solar capacity is 15.8 GW in 2021 and 14.9 GW in 2022. In addition, about 5 GW of small-scale solar (projects with less than 1 megawatt of capacity) are added annually over the 2021–22 STEO forecast.
EIA expects U.S. coal production to total 585 MMst in 2021, 46 MMst (9%) more than in 2020. In 2022, we expect coal production to grow by an additional 16 MMst (3%). We expect that coal used to generate electric power will increase by 13% to 495 MMst in 2021 and by 4% to 514 MMst in 2022. The increase in coal production in 2021 will be the largest on a percentage basis in the Interior region, owing to increased domestic electricity generation. In 2022, EIA expects it will be largest in the Appalachia region, partly as a result of metallurgical coal exports rising to 54 MMst next year, up 27% from 2020 levels.
EIA estimates that U.S. energy-related carbon dioxide (CO2) emissions decreased by 11% in 2020. This decline in emissions was the result of less energy consumption related to the economic contraction resulting from the COVID-19 pandemic. In 2021, we forecast energy-related CO2 emissions will increase by about 5% from the 2020 level as economic activity increases and leads to rising energy use. We also expect energy-related CO2 emissions to rise in 2022, but by a slower rate of 2%. We forecast that after declining by 19% in 2020, coal-related CO2 emissions will rise by 13% in 2021 and by 4% in 2022.
$59.04/bbl WTI May Contract 4/7/2021 7:55 am CST
$62.54/bbl Brent May Contract 4/7/2021 7:55 am CST
$61.39/bbl LLS Wholesale Spot Price 4/6/2021
Mrs. Smith
My impression from the BOEM regional office in New Orleans was all sides would be heard and represented in the ‘Comprehensive Review’ not just stakeholders. They’re making sure all the t’s are crossed and i’s dotted so the “review” is well received by the new administration allowing the turn around on a decision to come promptly, hopefully lifting the pause.
Mrs Smith
The BOEM GOM OCS Lease sale 257, Record of Decision (ROD), that was scheduled for March 17, 2017 was rescinded in February and put on pause until further data can be collected for a comprehensive review, which will then be supplied to the Biden administration. Source: BOEM Gulf of Mexico Regional Office New Orleans
The good news is the pause is ONLY for new leases, Permitting CONTINUES on ALL current GOM leases.
The following are two links to the DOI’s 3/25/2021 and 3/26/2021 Press Releases on the “Public Forum” for the Federal Oil and Gas Program.
https://www.doi.gov/news/secretary-haaland-delivers-remarks-interiors-public-forum-federal-oil-and-gas-program
https://www.doi.gov/news/interior-departments-virtual-forum-features-robust-discussion-oil-and-gas-program
Hope this helps,
Mrs. Smith
We shall see, but don’t count on a free lunch!
Mrs. Smith
Corporate “Tax Hike Buzz” under the new administration.
Gulfslope’s Accumulated Net Operating Losses of 58 million dollars against any future taxable income just got a little sweeter.
Mrs. Smith
Weekly GOM Rig Count decreased by 1 this week to 13. Link underneath:
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
Total US Oil and Gas Journal Rig Count at 402 dated March 12, 2021. Link underneath:
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
Link to the 3/12/2021 FRAC Spread Count Video from Primary Vision Network, which has more than a mouthful of National and Global WTI tidbits
OPEC Monthly Oil Market Report issued March 11, 2021 OPEC MOMR PDF and Video Link Below::
https://momr.opec.org/pdf-download/res/pdf_delivery_momr.php?secToken2=accept
https://players.brightcove.net/34306109001/default_default/index.html?videoId=6239050651001
OIL MARKET HIGHLIGHTS
Crude Oil Price Movements
Spot crude prices surged by more than 13% in February to their highest monthly average since January 2020. Oil prices were supported by ongoing improvements in oil market fundamentals and a futures market that remained bullish in anticipation of a recovery in demand amid restrained global oil supplies. Oil prices extended gains after severe winter weather triggered a supply disruption in the US. The OPEC Reference Basket (ORB) gained $6.67, or 12.3%, to average $61.05/b for the month. Similarly, crude oil futures prices increased sharply in February on both sides of the Atlantic, with the ICE Brent front month up $6.96, or 12.6%, to average $62.28/b while NYMEX WTI rose $6.96, or 13.4%, to average $59.06/b. Consequently, the Brent-WTI spread was unchanged in February, averaging $3.22/b. The forward curve of the three main futures prices – Brent, WTI and Dubai – steepened further last month as the market rebalancing process continued. Meanwhile, hedge funds and other money managers were bullish on the outlook for oil prices, further increasing combined futures and options net long positions linked to ICE Brent and NYMEX WTI to their highest point in more than a year.
World Economy
The contraction in the global economy in 2020 is reduced after the better-than-expected actual performance by key economies in 2H20. As a result, the global economy now shows a decline of 3.7%, y-o-y. For 2021, additional stimulus measures in the US and an accelerating recovery in Asian economies are expected to raise the global economic growth forecast to 5.1%. However, this forecast remains surrounded by uncertainties including but not limited to COVID-19 variants, the effectiveness of vaccines, sovereign debt levels in many regions, inflationary pressures, and central bank responses. After a contraction of 3.5% in 2020, US economic growth in 2021 is now expected to reach 4.8%. The forecast for the Euro-zone in 2021 is raised to 4.3%, following a contraction of 6.8% last year. Japan’s GDP in 2020 is officially reported at a contraction of 4.9%, while it is forecast at 3.1% for 2021. Following growth of 2.3% in 2020, China’s GDP is forecast to increase by 8% in 2021. Official data shows India’s economy contracted by 7.0% last year but the country’s growth in 2021 is expected to reach 9%. Government estimates show Brazil’s economy contracted by 4.1% in 2020 but the growth forecast for 2021 is expected to be at 3%. After contracting by 3.1% in 2020, Russia’s growth forecast for 2021 is expected to remain at 3%.
World Oil Demand
World oil demand in 2020 shows a contraction of 9.6 mb/d, to stand at 90.4 mb/d. OECD oil demand contracted by 5.6 mb/d, while non-OECD demand declined by 4 mb/d. For 2021, world oil demand is expected at 5.9 mb/d, to stand at 96.3 mb/d. Oil requirements in 1H21 are adjusted lower, mainly due to extended measures to control COVID-19 in many key parts of Europe. In addition, elevated unemployment rates in the US slowed the recovery process. In contrast, oil demand in 2H21 is adjusted higher, reflecting expectations for a stronger economic recovery with the positive impact of vaccination rollouts. In regional terms, OECD oil demand is expected to increase by 2.6 mb/d in 2021 to stand at 44.6 mb/d, while non-OECD demand is seen rising by 3.3 mb/d to average 51.6 mb/d.
World Oil Supply
Non-OPEC liquids production is estimated to average 62.9 mb/d in 2020, a contraction of 2.6 mb/d, y-o-y. Non- OPEC oil supply in 2020 declined in Canada, Colombia, Kazakhstan, Malaysia, the UK and Azerbaijan, but increased in Norway, Brazil, China, and Guyana. Non-OPEC liquids supply for 2021 is forecast to grow by almost 1 mb/d to average 63.8 mb/d. The US liquids supply forecast remains unchanged, with growth of 0.16 mb/d in 2021, although uncertainties persist. The main contributors to supply growth are expected to be Canada, the US, Norway, Brazil and Russia. OPEC NGLs are forecast to grow by 0.08 mb/d in 2021 to average 5.2 mb/d, following a decline by 0.13 mb/d last year. In February, OPEC crude oil production decreased by 0.65 mb/d, m-o-m, to average 24.85 mb/d, according to secondary sources.
Product Markets and Refining Operations
Refinery margins showed diverging trends in February. In the US Gulf Coast and Asia, a rise in planned maintenance, unplanned outages and a subsequent decline in refinery intakes led to bullish market sentiment and provided support for fuel markets. Europe showed negative performance as refining economics experienced slight losses. The negative impacts of higher feedstock prices and higher product output, given the extension of mobility restrictions in some countries, have completely overshadowed support provided by robust product exports.
Tanker Market
Dirty tanker rates picked up in February, as a more than 20% increase in both Suezmax and Aframax spot freight rates outpaced a 6% decline in VLCCs. Weather was a key factor in boosting rates with weather delays in the Turkish straits and around the Mediterranean, lifting rates West of Suez amid a pickup in chartering activity. Unusual freezing weather in the US which struck in the middle of February led to disruptions in US crude and product trade flows, providing further support for Aframax as well as Suezmax rates amid limited availability in the Atlantic basin. Rising bunker fuel prices also provided some momentum for higher rates.
Crude and Refined Products Trade
A plunge in temperatures disrupted trade flows of US crude and products in February. US crude imports fell back from the strong levels seen in January, and hence crude exports were down around 1 mb/d in the second half of February relative to the first half due to the freezing weather and power outages on the US Gulf Coast. Meanwhile, Japan’s crude imports were stable in January, averaging 2.6 mb/d. A jump in heating demand for kerosene and fuel oil led to higher product imports and reduced exports. China’s crude imports surged above 11 mb/d in the first two months of 2021, as independent refiners returned to the market armed with fresh quotas. Net product exports were sharply higher. In India, crude imports remained at healthy levels in January, although lower m-o-m and y-o-y, averaging 4.6 mb/d. Product imports and exports also fell back from the strong performance seen the month before.
Commercial Stock Movements
Preliminary data shows that total OECD commercial oil stocks fell by 11.3 mb, m-o-m, in January. At 3,052 mb, inventories were 138.7 mb higher than the same month a year ago and 92.2 mb above the latest five-year average, 125.7 mb above the (2015-2019) average. Within the components, crude stocks declined by 17.7 mb, m-o-m, while product stocks increased by 6.4 mb over the same period. OECD crude stocks stood at 46.3 mb above the latest five-year average, 61.3 mb above the (2015-2019) average while product stocks exhibited a surplus of 45.9 mb, 64.3 mb above the (2015-2019) average. In terms of days of forward cover, OECD commercial inventories declined by 1.1 days, m-o-m, in January to stand at 69.6 days. This is 0.2 days lower than the year-ago level and 5.5 days above the latest five-year average, 7.8 days above the (2015-2019) average.
Balance of Supply and Demand
Demand for OPEC crude in 2020 is estimated at 22.4 mb/d, around 6.9 mb/d lower than in 2019. Demand for OPEC crude in 2021 is forecast to stand at 27.3 mb/d, around 4.9 mb/d higher than in 2020.
Crude Oil Pricing shifting from its recent highs, WTI $65.69/bbl.
Mrs. Smith
EIA’s Short-term Energy Outlook for March 2021, 3/9/2021 Release date.
https://www.eia.gov/outlooks/steo/report/index.php
Forecast Highlights
Global liquid fuels
The March Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply during the past year and will continue to affect these patterns in the future. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 5.5% in 2021 and by 4.2% in 2022, compared with an assumption of 3.8% in 2021 and 4.2% in 2022 in last month’s STEO. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.
Brent crude oil spot prices averaged $62 per barrel (b) in February, up $8/b from January’s average and up $7/b from February 2020. Rising Brent prices in February continued to reflect expectations of rising oil demand as both COVID-19 vaccination rates and global economic activity have increased, combined with ongoing petroleum supply limitations by the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+). In addition, disruptions to petroleum supply from extreme winter weather in the United States (notably in Texas) put upward pressure on crude oil prices during February.
The U.S. Energy Information Administration (EIA) expects OPEC crude oil production will average 25.3 million barrels per day (b/d) in April, which is similar to expected production for March and down 1.6 million b/d from EIA’s forecast for April OPEC production in last month’s STEO. EIA expects OPEC crude oil production will rise to 26.6 million b/d in May. This increase reflects Saudi Arabia ending voluntary cuts of 1.0 million b/d, along with the relaxation of cuts that were extended through April at the March 4 OPEC+ meeting. This forecast assumes OPEC will produce 27.9 million b/d on average in the second half of 2021, as OPEC+ generally increases crude oil output to supply rising global oil consumption.
The OPEC+ extension of existing supply cuts through April added significantly to near-term upward oil price pressures. Following the meeting, the Brent crude oil spot price settled at $67/b on March 4, up 4% from the day before. EIA expects Brent prices will average between $65-$70/b during March and April, more than $10/b above EIA’s expectation last month. EIA continues to expect downward crude oil price pressures will emerge in the coming months as the oil market becomes more balanced. Brent crude oil prices in the forecast average $58/b in the second half of 2021.
EIA’s forecast of declining crude oil prices and a more balanced oil market reflect global oil supply surpassing oil demand during the second half of 2021. Although EIA expects inventories to fall by 1.2 million b/d in the first half of 2021, increases in global oil supply will contribute to inventories rising by almost 0.4 million b/d in the second half of 2021 and a mostly balanced market in 2022. However, the forecast depends heavily on future production decisions by OPEC+, the responsiveness of U.S. tight oil production to higher oil prices, and the pace of oil demand growth, among other factors. EIA expects Brent prices will average $59/b in 2022.
EIA estimates that the world consumed 95.9 million b/d of petroleum and liquid fuels in February, which is down 1.6 million b/d from February 2020. If confirmed by final consumption data, the 1.6 million b/d decline would represent the smallest year-over-year decline since the COVID-19 outbreak began affecting oil consumption in January 2020. EIA forecasts that global consumption of petroleum and liquid fuels will average 97.5 million b/d for all of 2021, which is up by 5.3 million b/d from 2020. EIA forecasts that consumption will increase by another 3.8 million b/d in 2022 to average 101.3 million b/d.
EIA estimates that U.S. crude oil production averaged 10.4 million b/d in February, which is down 0.5 million b/d from estimated January production. Most of the decline reflects the cold temperatures that affected much of the country, particularly Texas. Unlike the relatively winterized oil production infrastructure in northern areas of the country, infrastructure in Texas, such as wellheads, gathering lines, and processing facilities, are more susceptible to the effects of extremely cold weather. Following the freeze-offs, EIA forecasts crude oil production will rise to almost 11.0 million b/d in March. EIA expects U.S. crude oil production will average 11.1 million b/d in 2021 and 12.0 million b/d in 2022. In 2020, production averaged 11.3 million b/d, down from 12.2 million b/d in 2019. EIA’s current forecast for U.S. crude oil production in 2022 is 0.5 million b/d higher than in last month’s STEO because of higher expected crude oil prices.
March 2021 EIA Data and Analysis Links below:
https://www.eia.gov/outlooks/steo/marketreview/crude.php
https://www.eia.gov/outlooks/steo/marketreview/petproducts.php
https://www.eia.gov/outlooks/steo/marketreview/natgas.php
https://www.eia.gov/outlooks/steo/tables/pdf/1tab.pdf
https://www.eia.gov/outlooks/steo/tables/pdf/3dtab.pdf
https://www.eia.gov/outlooks/steo/tables/pdf/3atab.pdf
https://www.eia.gov/outlooks/steo/tables/pdf/3btab.pdf
https://www.eia.gov/outlooks/steo/tables/pdf/3ctab.pdf
EIA Macroeconomic Indicators Table:
https://www.eia.gov/outlooks/steo/tables/pdf/9atab.pdf
The EIA’s STEO forecasts seem to be getting more positive each month,
Mrs. Smith
Quote: “Why would one be picking up shares at this point?”
Answer: Do you want to be on the Backside of Gulfslope Partnership/Spud news or Out in Front?
My thought is it would never be 1 for 100 anyway. I don’t believe Gulfslope would ever do a split that immediately hit the top of the range, that’s just not good business sense.
Should a R/S occur your personal total GSPE investment account value would not change just your total shares.
Remember, it’s a range at a ratio of not less than 1-for-2, and NOT greater than 1-for-100 with the exact ratio to be set within such range”
Mrs. Smith
Could WTI Crude Oil Futures penetrate $70/bbl shortly?
Despite the strong US dollar WTI March Contract set a 30 month high today of $67.95/bbl. Brent set a 21 month high today of $71.35/bbl.
Total nonfarm payroll employment rose by 379,000 in February 2021. Link underneath:
https://www.bls.gov/news.release/pdf/empsit.pdf
OPEC+ extended output cuts into April 2021.
Mrs. Smith
Thanks spec for sharing this relevant piece of information on the board.
‘More Energy More Jobs Act of 2021’ Link to the actual “Bill” underneath.
https://kevinbrady.house.gov/uploadedfiles/more_energy_more_jobs_act.pdf
BSEE issued 3 additional Drilling Permits today for a total of 12 this week. 2 of the 3 were for “Revised New Well” - Shallow water, the other one was for “Revised New Well” - Deep water .
Crude holding firm in the mid $60’s. The market likes what it sees so do I.
WTI $66.09/bbl March Contract 3/5/2021 16:25 pm CST
Brent $69.60/bbl April Contract 3/5/2021 16:26 pm CST
I hope the path to the Tau “Twin Well” No. 2 will continue to be unyielding.
Take care my friends,
Mrs. Smith
WTI 66.01/bbl that is a high for the past 24 months guys. (March Contract)
There might be some profit taking today and it drop a little per barrel, but I think we are getting closer to where we need to be. It just keeps rising this morning.
Brent $69.15/bbl (April Contract) that would be a high for the past 13 months.
EIA Wholesale Spot Pricing as of 3/4/2021:
WTI $63.81/bbl
Brent $67.32/bbl
And My Favorite LLS $66.11/bbl
Gulfslope might not have to be on intravenous fluids for long, just saying.
Mrs. Smith