2021. Another Year of Uncertainty?

By Alexander Bencini

The Mid-Week Energy Blog - 3 March 2021

In this article: 

Uncertainty. Welcome to 2021. Although there is continued hope and positivity on the vaccine front, in the oil markets; the global wave of uncertainty continues over how much supply producing countries will push to restore to the market while the coronavirus pandemic persists. If only someone had the answer! OPEC+ are due to meet tomorrow, and latest insights are that they expect extra production to be absorbed by the market with some lockdowns showing signs of easing as vaccination campaigns step up.

Vaccination campaigns are fully underway in Texas, but its already 'masks off' in the Lone Star State, with Texas becoming the biggest US state to lift COVID-19 mask mandate thus far. So much for uncertainty... as workers return to offices, restaurants reopen and children head back to school, there is hope that these reopenings are a sign of better months ahead, but uncertainty over new Covid-19 strains and waves loom large. One hospital executive in Houston said he told his staff they would need more personnel and ventilators.

So what's next? No one truly knows. Projections and scenarios are available from all corners of the earth, but at the end of the day, what the rest of this year will truly entail is anyone's guess. — Just keep swimming.

Price Check: WTI Crude is now $60.72 (10:03am CST) having sat comfortably above $50 since January 5th 2021 but seeing a steep drop on Monday 1st March and since then rising back up to around the $60 mark. Brent sits at $64.28 (10:03am CST). Whilst also seeing a dip over the past 7 days, it's pumped up itself upwards of $64 over the past 24 hours.

Here are this Week's Energy Headlines:

Oil prices rose on Wednesday, boosted by expectations that OPEC+ producers might decide against increasing output when they meet this week, while signs of progress in the coronavirus vaccine rollout in the United States gave further support. Brent Oil was up $1.28, or 2%, to $63.98 a barrel. U.S. WTI crude rose $1.17, or 2%, to $60.92 a barrel. “The fundamentals of the oil market suggest further strength as oil demand grows with the recovery and leisure and travel activity is likely to bounce,” said Norbert Rücker, analyst at Swiss bank Julius Baer. “We see oil prices pushing temporarily above $70 by mid-year,” he added. Read the full article on CNBC.

New Oil Investment Critical To Meet Future Energy Demand. Hess Oil boss tells CERAWeek attendees a healthy oil industry will push green energy investment. “One of the drivers for stronger oil demand is the push to renewables because you are going to need oil and gas to support the investment of that push,” said Hess. “The push to cleaner energy is going to require oil and gas to be successful.” Read the full article by Blake Wright in JPT.

Other Articles I'm Reading:

• Saudi Arabia to ship gas to South Korea and take back the CO2 (Arabian Business)
• Volvo says it will be ‘fully electric’ by 2030 and move car sales online (CNBC)
• From U.S. domination to energy transition, two years that changed oil (Hellenic Shipping)
• Houston’s Big Oil Conference Goes Green as Energy Transition Accelerates (WSJ)
• Low carbon oil to play central role in energy transition: Adnoc Group CEO (Khaleej Times)
• Hong Kong energy fund sues Japan in groundbreaking case (Financial Times)

This Week on SPE Live:

Upcoming Broadcasts:

Thursday, 4 March — Oil & Gas Asia Pacific — License to Operate

Sunday, 6 March — Annual Energy Outlook 2021 — EIA Fireside Chat

Recent Broadcasts:

Tuesday, 2 March — Join us for this SPE Live Tech Talk, streamed directly to LinkedIn earlier this week, where Schlumberger provided exclusive insights into how they are taking well construction beyond automation and into autonomy.

If you're not following the series already, take a look at our Live and On-Demand content.

For Entertainment Purposes: 

Music on Right Now:

Nikos Vertis — Thelo na me nioseis

Funnily enough, its deciding which song should be included in this blog that takes up the most time. I quite like the opportunity to share international music, so for this week... enter Nikos Vertis — One of Greece's most successful singers. It's difficult sharing a house with an east Mediterranean and not having a week go by without his music playing at least once, or not finding halloumi (the real Cypriot one) in the fridge.

In My Video Queue: 

The Mauritanian - Cinemas - March 2021

You might have missed it, but the Golden Globes took place this week (virtually...) and Jodie Foster walked away with the Golden Globe Award for Best Supporting Actress – Motion Picture for her role in the Mauritanian. A legal drama at the core, The Mauritanian is based on the 2015 memoir Guantánamo Diary by Mohamedou Ould Salahi, which depicts the true story of Salahi's experience of being held for fourteen years without charge in the Guantanamo Bay detention camp.

That's it for this week.

Wherever you are in the world, thank you for reading and keep safe.

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Alexander Bencini, a multimedia producer for the Society of Petroleum Engineers, based in Dubai and proudly European, enjoys following the ever changing dynamics of the global energy markets. When he's not putting together this blog or brainstorming with his colleagues, Alex enjoys supporting his two football teams - Bayern Munich and the Indianapolis Colts.