The Energy Transition and Oil Rallies...

By Alexander Bencini

The Mid-Week Energy Blog - 10 February 2021

In this article: Not a week passes in 2021 without reading about Big Oil's financial struggles, the acceleration of the energy transition, oil price rallies or what you could buy with Jeff Bezos' wealth. Actually, forget Jeff Bezos for now - all eyes are on Elon Musk. Everyone thinks its cool to say they're going to buy a Tesla as their next car, until they realise the actual upfront cost of purchasing a Tesla and then question whether double hinged gull-wing doors are really necessary, let alone the company's lingering quality problems. There is no denying that the energy transition is upon us and we need to act together as a society, but I'm afraid we keep forgetting that all options are on the table to achieve this. It doesn't make sense for us all to buy electric cars and charge up those vehicles from our domestic electricity if it is generated solely from inefficient sources. If you can afford a Tesla today, then congratulations - you will also get preferred parking at many of the shopping malls here in the UAE, but I'm more interested in a hybrid Jeep Wrangler myself. Fast forward another year, and Toyota will still be making over 10million units a year, but the percentage of electric vehicles within this mix will increase. Hydrogen is still being touted as a buzzword and as a zero carbon fuel, it'll be interesting to follow investments into the sector throughout 2021. Have you ever thought of running your future car on hydrogen paste? POWERPASTE is an interesting concept alleviating the need for heavy, high pressure hydrogen tanks in the cars of tomorrow.

Oil prices have continued a stable rally over the last week and a half, supported by the global vaccine drive (Russian vaccine Sputnik enters the mix) expected to cause a recovery in demand and producer supply cuts finishing off the equation. Chinese stockpiles are expected to be nearing empty and according to a Bloomberg survey and U.S. crude inventories dropped last week for an eighth time in the last nine weeks. Let's not forget cold winters which have also driven up global demand and as some of us look to plan some 'holidays that involve airplanes' (if you remember what those are), global demand will only be set to increase more; risking supply deficits.

Finally, unless you have been living on Mars, Tom Brady won another Superbowl (spoiler alert). If you have been living on Mars, then congratulations - the UAE will be visiting you soon.

Price Check: WTI Crude is now $58.50 (10:02AM CST) having sat above $50 since January 5th 2021. Brent sits at $61.33 (10:02AM CST). Hanging on above $60 since February 8th 2021.

Here are this Week's Energy Headlines:

So far, so good; oil has yet to lose its shine this week, yet caution is on the cards. Brent has now risen for nine sessions in a row and some analysts say a pullback may be on the cards. 'There is no doubt that oil prices have gone too far and too fast, which means a retracement is certainly due,' said Naeem Aslam, chief market analyst at Avatrade. Read the Full Article on Reuters

Is action finally aligning with all the talk? Stephen Rassenfoss explores the energy transition this week, diving into the latest signs that companies in the oil business are actually making the transition into renewable energy. BP has won two leases in the Irish Sea for wind farms that it said will someday supply wind for 3.4 million households in the UK, and the company now known as Total Energies also picked up a large block. Read the Full Article on JPT

Other Articles I'm Reading:

• Could Oil Prices Break $100 Next Year? (OilPrice.com)
• EIA revises crude price forecasts higher amid Saudi-tightened supply outlooks (S&P Global Platts)
• Oil major Total’s full-year profit falls 66% as Covid pandemic hits fuel demand (CNBC)
• Russian Energy Stocks Get Boost From Biden’s Green Push (Bloomberg)
• Kuwait oil giant announces biggest ever gas discovery (Arabian Business)
• IEA: India is on ‘cusp of a solar-powered revolution’ (Carbon Brief)
• Amazon unveils its largest single renewable energy project ever (ZDNet)

This Week on SPE Live:

Recent Broadcasts:

Tuesday, 9 February - Reservoir Sampling, Why? When? Where and How?

As conventional oil becomes a scarcity, new discoveries bring deeper, hotter, and more critical fluids. The wrong fluid assessment can render a falsely thought economical project to be non-economical. Gehan Megahed, Event Manager, SPE sat down with Mohamed Hashem, Managing Director of XShell.bv to explore the importance of a representative sample of reservoir fluid. Check out the on-demand video below.

Upcoming Broadcasts:

Thursday, 11 February - What’s Next for Computer Vision Systems and Data Analytics?

Sunday, 14 February - What Lies Ahead for the Future of CCUS?

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

Virtual International Drilling Conference and Exhibition:

Registration is now open, with Early Bird registration set to close on the 14 February. If you haven't already booked your place, then click right here!

MemberSPEak:

From Scotland to Romania, this week we met SPE members Ritika Pawar and Gabriel Grubac. A truly international conversation, hear how Ritika and Gabriel have maintained their learning through SPE's online offerings and how they have kept active during the COVID-19 pandemic. From learning about Highland cows and mentorship-to-friendship, it was a real pleasure to welcome them both to the series.

For Entertainment Purposes: 

Music on Right Now:

Beatenberg - Beauty Like A Tightened Bow

There's something special and nostalgic about discovering music when traveling abroad. I discovered Beatenberg on the radio during a trip to South Africa. With a similar sound to Vampire Weekend, their laid back music was the perfect accompaniment for a drive through Chapman's Peak. For those seeking something more suited to a Thursday/Friday night 'socially distanced one-person house party', it's worth checking out David Guetta's set from Dubai last week. The visuals of Dubai are worth the watch alone.

In My Video Queue: 

Rose Island - Streaming on Netflix

I'll continue my shameless promotion of Netflix by promoting a film that aired at the beginning of this year, but I'm sure many of you missed it, given it's an Italian production. Based on a true story from the 1960s, this film focuses on the creation of a micronation in the Adriatic sea. If utopian ideals and self-made declarations of independence are your kind of thing, then this film is definitely worth a mid-week watch.

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.