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Major Oil Rally Could Be On The Horizon

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This year has been a true rollercoaster ride for the U.S. stock market, but it is increasingly looking to end on a high note.
The S&P 500 has climbed nearly 11% in the first two weeks of November as the world moves closer to vanquishing one of mankind’s biggest threats in modern history.
Oil is anything but dead.
And here are two reasons to stick with oil: Barely a week after pharmaceutical giants, Pfizer and BionTech gave the world hope of an effective Covid-19 vaccine, peer Moderna Inc. has unveiled a potentially better cure.
Moderna has reported that its COVID-19 vaccine candidate, mRNA-1273, has demonstrated efficacy rates of 94.5% in early tests and remains stable at 2° to 8°C (36° to 46°F), or roughly the same operating temperature of a standard home or medical refrigerator, for at least a month.
In contrast, Pfizer’s vaccine needs a much cooler temperature of -94 degrees Fahrenheit (-70° C) and up to -109 degrees Fahrenheit for shipment for the vaccine to remain viable, which could pose a major challenge in some locations.
Not surprisingly, the energy sector—one of the hardest hit by the pandemic—has been on a tear since the Pfizer vaccine hit news feeds, jumping 23.4% over the past week alone.
The oil and gas industry has been deeply out of favor over the past few years, and trying to call a bottom on the bear market might be a fool’s errand. However, the latest developments offer hope to the incurable optimists that the worst might finally be in the rearview mirror for the industry.
Other than his never-ending tweetstorm, Trump has mainly kept a low public profile after losing to Biden in one of America’s most divisive elections in modern history. But a few days ago, he came out and publicly accused Pfizer of delaying its Covid-19 vaccine ostensibly in a bid to ruin his chances at re-election.
Well, guess what, it appears several other pharmaceutical companies are guilty of the same curious timing of their own—maybe even better—vaccines.
CureVac’s says its CVnCoV vaccine is stable for three months at +5 Celsius, or the standard refrigerator temperature. The vaccine remains stable for up to ready-to-use room temperature for 24 hours.
Sanofi and GlaxoSmithKline’s have announced that their two-dose recombinant protein vaccine can be stored between 2°C- 8°C.
Johnson & Johnson also has a Covid-19 vaccine in the pipeline, which, if successful, could be stable at refrigerated temperatures of 2°C – 8°C for at least three months and up to two years at -20 °C.
In short, there seems to be no shortage of Covid-19 vaccine candidates that are potentially even more stable than the Pfizer/BionTech vaccine.
That’s music to the ears of the oil and gas market, coming after a second wave of Covid-19 infections effectively killed the oil rebound.
Better still, the Pfizer and Moderna vaccines could go into mainstream distribution in a matter of weeks. Indeed, broad vaccine access is expected by mid-2021.
That might be just in time to validate OPEC’s latest projections, which have called for the oil market to bounce back next year at a historically quick pace. According to the July report, OPEC sees oil demand spiking ~25% to 29.8 million barrels per day in 2021, slightly above levels recorded in 2019.
Obviously, a lot of that will hinge on OPEC’s ability to maintain production discipline, but so far, the coalition has remained committed after the harsh lessons of the past few months.
That said, a solid recovery in oil demand might take months, even in the event of a successful vaccine. The IEA has predicted a recovery in oil demand of 5.8 million barrels per day in 2021, only ~300,000 barrels per day higher than its forecast a month ago after Pfizer announced its vaccine.
No matter how massive the hydrogen hype is, or how much money is being poured into this as the answer to our clean energy future, it’s still not a near-term solution.
It’s science fiction to imagine that oil and gas will suddenly disappear because of renewable energy progress. This is all longer term, even if the media makes it seem like it’s going to happen tomorrow.
It’s been clearly established that natural gas will be the bridge to a clean energy transition, especially since electricity will likely end up being one of our most important energy sources, and natural gas is at least cleaner-burning than oil.
For the near to medium-term, it’s only the COVID demand culling that’s really trouncing oil, and all the positive vaccine news will likely continue to drive forward momentum. And in the meantime, if oil demand starts to slow compared to pre-COVID rates as we bolster renewables, natural gas demand should emerge stronger still.

Kimani first published this article in the London-based Oilprice.com

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Oil & Energy

NSCDC Parades Five Suspects Over 24,000 Litres Of AGO 

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The Nigeria Security and Civil Defence Corps (NSCDC) last Friday paraded five suspected oil thieves caught with over 24,000 litres of illegally refined Automotive Gasoline Oil (AGO) concealed in sack bags in Rivers State.
Rivers State Commandant of NSCDC, Michael Besong Ogar, while parading the suspects, reiterated that there was no room for illegal oil bunkering activities in Rivers State, warning that perpetrators would be smoked out of their hideouts.
Ogar said the newly-reconstituted anti-vandal team has made successes in the relentless war against vandalism of oil pipelines and illegal dealings in petroleum products through massive arrests and subsequent prosecution of cases in the court.
“The Commandant General, Ahmed Abubakar Audi, has promised that in a short while there would be a drastic reduction and possible eradication of illegal dealings in petroleum products across the nation
“Our major task is to massively arrest oil pipelines vandals and their sponsors as we take the Anti-vandalism war to the enemies’ domain.
“The nation is losing millions of dollars per barrel due to the increase in pipelines vandalism and illegal oil bunkering, but I can assure you that this menace would be a thing of the past because we are fully committed to the mandate of the Corps’ in safeguarding all critical national assets and infrastructures.
“The suspects will be charged for contravening the Anti-sabotage Act, the Petroleum Act and the Miscellaneous offences Act 2004, laws of the Federation.
“They are: Ifegbu Uche ‘m’ aged 42years, Obinna Ogbonna ‘M’ 42years, Emmanuel Smart ‘m’ 19 years, Lawrence Gibson ‘m’ 35years, and Emeka Desmond ‘m’ 35years, who were arrested while conveying about 24,000 litres of illegally refined AGO concealed in sack bags and carefully packed in a Toyota Sequoia with plate number AbujaGWA386GVA; a Volkswagen Bus with Registration Number: Lagos APP 831 XX, which was intercepted at Abuloma Community in Port Harcourt, a Truck DA1700 with number plate KadunaXE653KA impounded at Abonnema Wharf, and a Ford E- 250 intercepted in Etche respectfully.
“We also intercepted and impounded another short white Mercedes truck with unquantified litres of illegally refined AGO along Ozuoba-Rumuigbo axis in Obio/Akpor LGA, Port Harcourt Rivers State.
“We are very excited that the court has resumed session as the suspects would definitely have their time in Court while application for forfeitures of the products and mode of conveyance would be made and proceeds be remitted in the Federal Government coffers,” NSCDC said.

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Eni Decries Production Loss From Bayelsa Gas Pipeline Explosion 

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Eni, the Italian parent company to the Nigerian Agip Oil Company (NAOC), has said the impact of the Ogboinbiri/OB-OB gas pipeline explosion on gas output was significant.
Production data from NAOC shows that the incident cut Agip’s gas exports by 5million standard cubic meters per day.
Media Relations Manager, in charge of African Operations at Eni, Mr Domenico Spins, said the gas leak has been brought under control.
Spins in a statement announced that the incident was caused by sabotage and third-party interference.
“Eni confirms that a third party’s interference hacksaw cut caused a gas leak at the Ogbainbiri-Ob/Ob gas pipeline.
“The line is depressurised and is currently being repaired. Production losses due to the shutdown are important,” Eni stated.
The Director-General of the National Oil Spills Detection and Response Agency (NOSDRA), Dr Idris Musa, who confirmed the pipeline blast, said the agency would lead an investigation into the incident as soon as it is safe to do so.
NOSDRA had also directed NAOC to shut down the oil and gas wells feeding the breached pipeline to extinguish the pressure and pave the way for a Joint Investigative Visit.

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FG Confiscates 20m Litres Of Illegally Refined AGO

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The Federal Government says the continued efforts by security agencies has led to the confiscation of over 20.2million litres of illegally refined Automotive Gasolme Oil (AGO), otherwise known as diesel.
Minister of Information and Culture, Lai Mohammed, disclosed this in Port Harcourt while carrying out an aerial survey of illegal refinery sites and hotspots along the Nembe Creek Trunk Line and the Trans-Niger Pipelines’ right of way on Friday.
Mohammed said over 210 suspects have been arrested in its efforts to combat crude oil theft in the Niger Delta region, lamenting that the activities of vandals and economic saboteurs have severely impacted the country’s crude oil production.
The Minister said over 461,000 litres of Premium Motor Spirit, 843,000 litres of Dual-Purpose Kerosene, and 383,000 barrels of crude oil have also been confiscated.
He said an additional 365 illegal refining sites were destroyed, with about 1,054 refining ovens, 1,210 metal storage tanks, 838 dugout pits, and 346 reservoirs also destroyed.
“Since the post-covid pandemic recovery of crude oil prices, Nigeria has been unable to meet its OPEC Production quota, hurting the Nigerian economy.
“Due to the nefarious activities of vandals, Nigeria has been losing out on producing approximately 700,000 Barrels of oil daily. This volume is split between crude stolen and production deferment (shut-ins) due to legitimate fear of losing substantial volumes in transit.
“Terminal receipts have persistently declined, leading to decisions such as the Force Majure declared at the Bonny Oil and Gas Terminal in March 2022,” he said.
The Minister also disclosed that the NNPC Ltd had set up a new security architecture to serve as a solid response to detect, deter, and respond to the activities of vandals.
He said the security architecture leveraged collaboration between the Upstream operators, Industry Regulators, Government Security Agencies, and Private Security Contractors.
He further said NNPC Ltd.’s Command and Control Centre has been set up for round-the-clock monitoring of petroleum operations and activities within the Nigerian Exclusive Economic Zone.
According to him, all vessel movements within the Nigerian Exclusive Economic Zone as well as all Ship-to-ship activities within the same zone are now monitored.

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