Brent oil jumps to nearly 3-year high above $80 before turning negative

Published

3 years ago

September 28, 2021

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Oil derrick pumps operate at the Inglewood Oil Field in Culver City, California, on Sunday, July 11, 2021.

Kyle Grillot | Bloomberg | Getty Images

International oil benchmark Brent crude advanced for a sixth straight session on Tuesday, jumping above $80 per barrel for the first time since October 2018 as demand rebounds and supply remains tight.

West Texas Intermediate crude futures, the U.S. oil benchmark, also rose for a sixth straight day, advancing about 1% to a more than two-month high of $76.28 per barrel. Both contracts are coming off five straight weeks of gains, and each is up more than 50% for 2021.

“A persistent supply deficit is leading to an ever tighter oil market, with OECD inventories likely to end the year at the lowest level of demand cover in decades,” analysts at Barclays wrote Tuesday in a note to clients. The firm hiked its 2022 targets for WTI and Brent to $74 and $77 per barrel, respectively.

Brent last traded 0.77% higher at $80.14 per barrel, and Goldman Sachs envisions the contract hitting $90 by the end of the year as demand continues to recover. The firm hiked its target on Sunday to $90 after previously forecasting Brent at $80 by the end of the year.

In April 2020 as the pandemic sapped worldwide demand for petroleum products, briefly sending WTI plunging into negative territory, producers implemented historic output cuts. OPEC and its allies removed nearly 10 million barrels per day from the market, and while the group has slowly opened the taps, the members are still holding back production.

A similar story played out in the U.S. Wells were shut-in and producers have been slow to kick up output. Instead, they’ve focused on shoring up balance sheets, paying down debt and returning money to shareholders.

Demand has since recovered amid the widescale rollout of the vaccine, all while supply remains constrained. This is especially true after years of under-investment in the sector.

Oil is also getting a boost amid the eye-popping rally in natural gas prices, which could prompt utilities to switch from gas to oil.

Natural gas futures jumped more than 9% on Tuesday to $6.26 per million British thermal units, the highest level in at least 7.5 years. The contract is now up more than 40% for September with inventory below historical levels heading into the winter.

“Global natural gas markets are very tight now, with inventories much below normal in both Europe and U.S.,” said Ed Morse, global head of commodities at Citi. “Thus, prices should continue to stay at current elevated levels globally in the upcoming winter, with the potential for further price spikes triggered by much colder-than-normal weather, unless winter weather turns out to be mild.”

The energy sector is by far the best S&P 500 group for September, up more than 10%. The second-best sector is financials, which is up just 1%.

The Energy Select Sector SPDR Fund advanced over 1% during premarket trading on Tuesday.

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Environment

Daily EV Recap: Tesla’s AI training tile

Published

5 hours ago

May 3, 2024

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Daily EV Recap: Tesla’s AI training tile

Listen to a recap of the top stories of the day from Electrek. Quick Charge is now available on Apple Podcasts, Spotify, TuneIn and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded Monday through Thursday and again on Saturday. Subscribe to our podcast in Apple Podcast or your favorite podcast player to guarantee new episodes are delivered as soon as they’re available.

Stories we discuss in this episode (with links)

Why gas bikes just can’t compete with electric motorcycles in the summer

Tesla’s next-gen Dojo AI training tile is in production

The US just proposed 18 GW of new offshore wind sales

There’s a new trend making electric bike batteries safer

Toyota goes large on hydrogen with new US headquarters

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Coterra’s smart pivot to oil from natural gas leads to an excellent first quarter and sweeter outlook

Published

7 hours ago

May 2, 2024

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Coterra's smart pivot to oil from natural gas leads to an excellent first quarter and sweeter outlook

Permian Basin rigs in 2020, when U.S. crude oil production dropped by 3 million a day as Wall Street pressure forced cuts.

Paul Ratje | Afp | Getty Images

Coterra Energy topped Wall Street expectations Thursday with first-quarter results that further proved the Club holding’s nimble production strategy is the right one for shareholders.

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A fully-electric 10,000 ton container ship has begun service equipped with over 50,000 kWh in batteries

Published

8 hours ago

May 2, 2024

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A fully-electric 10,000 ton container ship has begun service equipped with over 50,000 kWh in batteries

Chinese state-owned company COSCO Shipping has launched what it calls the “world’s largest” river-to-sea electric container ship. The Green Water 01 is a 10,000-ton+ fully electric vessel that sets a new benchmark in sustainability in the marine logistics industry.

China Ocean Shipping (Group) Company, or COSCO for short, is a state-owned multinational conglomerate headquartered in Shanghai specializing in marine transport. Not to be confused with Costco, COSCO Shipping was founded as a subsidiary in 2016 following an approved merger between COSCO and China Shipping.

The COSCO Group is the largest liner carrier in China, transporting hundreds of container vessels daily while also providing ships to Chinese automakers to help them export their electric vehicles to new markets overseas, including Europe.

To adapt to the times, COSCO has developed a massive, fully electric container ship, which has now officially begun service in China.

COSCO’s electric container ship begins service in China

According to a WeChat post from COSCO Shipping, which features reports from China’s CCTV, the company’s Green Water 01 electric container ship arrived safely and was berthed in the Port of Yangshan by the local maritime safety administration.

The Green Water 01 sails at a total length of 119.8 meters, a molded width of 23.6 meters, a molded depth of 9 meters, a design draft of 5.5 meters, and a maximum speed of 19.4 km/h (12 mph). COSCO Shipping says the Green Water 01 electric container ship presents multiple firsts for the marine industry, including total length, width, container capacity, deadweight tonnage (10,0000 tons), and battery capacity (50,000+ kWh).

Speaking of batteries, the electric container ship is powered by a large-capacity battery combining for over 50,000 kWh. However, COSCO says the number of battery modules can be configured depending on the length of the voyage at sea. For example, additional 20-foot battery boxes offering 1,600 kWh of electricity can be loaded onto the container for extra range.

This ship’s captain, Wang Jun, told CCTV that when the Green Water 01 is equipped with 24 battery boxes, the electric container ship can complete trips that consume 80,000 kWh of energy, equivalent to approximately 15 tons of fuel for a similar journey in a traditional container ship.

COSCO Shipping also shared that the new Green Water 01 can save 3,900 kg (8,600 pounds) of fuel for every 100 nautical miles traveled, cutting carbon dioxide emissions by 12.4 tons. Following the successful launch, the Green Water 01 has commenced weekly service between Shanghai and Nanjing.

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