According to Governor Wolf PA will become more COVID-19 green in the upcoming weeks. This is a great relief t0 areas residents, who are compelled to wonder has the upset been worth the lives saved or the knowledge gained. It is frustrating to realize one may never truly know. Reality in the energy sector is no different, the mixed messages continue. Energy serves as a barometer for the global economy. Across the world forecasters and traders track daily oil prices inching back to $40 dollar a barrel as a rebound signal in the global economy. The world spins on, as does energy news.
According to Reuter’s news, this week oil prices dipped by 6%, after China’s top policy meeting didn’t set an annual economic growth target because of “great uncertainty” of the recovery from the coronavirus. WTI Crude went down to $32, and Brent Crude to $34.
As China’s National People’s Congress (NPC) met analysts were expecting to see economic growth targets for 2020 and stimulus to bolster the economy. By ditching the GDP target for this year, China frustrated earlier market expectations and raised fears of slower-than-expected economic and oil demand recovery.
From London, some analysts and banks predict, recovering demand as coronavirus lockdowns ease combined with output cuts by top producers could balance global oil markets as soon as June. “Bullish sentiment continues to gather momentum as we move closer to June, when ... the global crude balance is set to reach net short territory,” JBC Energy said.
From Moscow, Russian President Putin and the Saudi Crown Prince agreed during a phone call on May 27, for further “close coordination “on oil output restrictions two weeks before the next OPEC + group online oil conference. Russia’s energy minister Alexander Novak was quoted as saying that a demand rise should help cut a surplus by June or July.
Leaders from some of the world’s largest oil and gas companies, including BP Plc, Exxon Mobil Corp. and Saudi Aramco, pledged in an open letter, continued efforts toward climate change initiatives despite facing challenges presented by the COVID-19 pandemic.
The letter, issued and signed by the CEOs of all the member companies of the Oil and Gas Climate Initiative (OGCI) on May 26, stated that the unprecedented challenges has sharpened their focus on “what really matters. “Our immediate priority, as CEOs, is to do everything we can so that our people and communities are safe and capable of confronting the pandemic effectively.” “We will work to help the world recover from the economic shock.”
From Texas, Oil and Gas Climate Initiative; Shutterstock.com reports the biggest independent shale oil groups in the U.S. reported a record combined loss of $26 billion in the first quarter as the sector braces itself for a wave of bankruptcies over the next two years. The collapse in crude demand brought about by the coronavirus pandemic forced more than $38 billion in write-offs among top producers, according to analysis by Rystad Energy.
More from Reuters, In Washington D.C, The Trump administration has lowered royalties for several drilling companies producing oil and gas on federal lands, according to a government database, as the industry seeks help weathering low energy prices. Drillers are taking the government up on its offer to consider royalty cuts on a case-by-case basis after rejecting industry calls for blanket relief covering all federal leases. The cuts in many cases lower royalty rates companies must pay on the value of their production from the typical 12.5% to 5%.
Following the Main Street Lending Facility’s expansion to larger companies, (under 5 Billion in Revenue and 15,000 employees) and a move to buy up to 1 MMbbl of crude for the emergency petroleum reserve, U.S. Energy Department officials say they plan to continue efforts to help struggling oil & gas producers, especially small ones.
In Montana a U.S. judge has thrown out a Trump administration directive that weakened an Obama-era policy aimed at protecting a threatened Western bird, the Sage Grouse, invalidating hundreds of oil and gas leases on federal land in Montana and Wyoming.
Closer to home, EQT Corp. said May 26 it closed a multimillion-dollar transaction to sell certain non-strategic assets. Diversified Gas & Oil Plc, agreed to purchase the Appalachia assets for initial consideration of $125 million. “These assets sit outside our core focus area and the divestment will enable a heightened focus on our core asset portfolio,” said EQT CEO Toby Rice.
The EQT assets comprise about 8,500 net acres located in Pennsylvania and West Virginia. In Pennsylvania the sale includes wells in Cameron, Clarion, Clearfield, Elk, Indiana, Jefferson and Tioga Counties. Some of the wells in the EQT deal are unconventional and prospective for the Marcellus and Utica shale’s.
To close, local natural gas prices at the well head remain well below $2.00. Expectations are we will drive more to help oil demand. How many open businesses on Main Street will we pass is the disconcerting question.