Optimism is an Eight Letter Word...

By Alexander Bencini

The Mid-Week Energy Blog - 3 February 2021

In this article: Google 'optimism' today and you'll be flooded with articles on the oil price, stock markets, vaccine distribution and efficiency. 'Efficiency' could probably be the word for next week, although it will probably find itself in close competition with everyone's new favorite word; efficacy. What a great word—I challenge everyone reading this to use the word in a sentence this week—without combining it in the same sentence as vaccine.

During these difficult times, optimism is a key attitude to have and to live by. The markets may be positively optimistic today—gone tomorrow, but we shouldn't follow suit. A positive mental approach to the next eleven months of 2021 is key.

Right—onto the headlines. Oil continued to rise steadily over the past week, with WTI gaining above $55 for the first time since January 2020. The price surge is cheered on by COVID-19 vaccines (albeit still a somewhat slow global roll out) and supply curbs from OPEC+ in the hope that global stockpiles will continue to decrease. BP and ExxonMobil both posted large financial losses, with the latter reporting its first annual loss for at least 40 years; this week.

Over the past week, a social media Reddit thread resulted in an army of day traders causing billions of dollars of losses for hedge funds who had bet on GameStop shares declining. A little later, the world's richest person; Elon Musk had changed his twitter description to include #bitcoin and everyone was positively optimistic that bitcoin would be the 'new GameStop'. I'll let the experts and market watchers explain the ins-and-outs of what happened in the financial markets this week.

Finally, Pete Buttigieg has been confirmed as US Transport Secretary this week and is expected to take a strong lead with Biden's infrastructure and clean energy plan which includes a proposal of placing 500,000 charging stations along US highways and making federal vehicles—all electric. With Pete having Mediterranean roots, I simply had to include this announcement in this blog. To make up for it, I am more than happy to provide complimentary advice on pronouncing his surname; anytime.

Price Check: WTI Crude is now $55.38 (07:34 CST) having sat above $50 since January 5th 2021.

Here are this Week's Energy Headlines:

Optimistic is how OPEC+ felt three weeks ago when it estimated a 5.9 million bpd oil demand increase for 2021. Three weeks later and this number has been re-assessed to 5.6 million bpd. Staying on theme, SG of OPEC, Mohammad Barkindo provided an optimistic view during the JTC (Joint Technical Committee) held on Tuesday 2nd February; “With the crude oil market currently switching into backwardation, we are hopeful that 2021 will be a good year for overall demand.' Read more on OilPrice.com

Did the oil and gas industry just do enough to keep ahead of the curve in 2020? Judy Feder, Technology Editor for the SPE's JPT caught up with the SPE Technical Directors to hear their thoughts on the industry’s transformation in 2020 and what the future may hold in store.

Digitalization, long a controversial topic among many in the upstream sector, is now being called essential by the directors across the six SPE technical disciplines they lead. Automation is mentioned frequently in the directors’ comments as a growing contributor to efficiency and risk reduction. Read the Full Article on JPT

Other Articles I'm Reading:

• ADNOC CEO seen steering NOC to survive energy transition, monetize assets (S&P Global Platts)
• China’s 2060 carbon neutral pledge ‘incompatible’ with expansion of oil and gas pipelines (South China Morning Post)
• Shell targets power trading and hydrogen in climate drive (Reuters)
• BMW Group becomes first customer for EGA’s CelestiAL aluminium, made with solar power (Emirates News Agency)
• BP reports $5.7bn loss as Covid-19 pandemic hits oil demand (The Guardian)
• Pandemic pushes Exxon to historic annual loss, $20 billion cut in shale value (Reuters)

This Week on SPE Live:

Recent Broadcasts:

Tuesday, 2 February - Gaia Talk | The Economics of Building Net Zero

Of particular interest to readers may be the Tuesday 2nd February SPE Live, given its lively discussion on how to achieve Net-Zero and what CCS (Carbon Capture and Storage) opportunities lie ahead in the future. Five years after the Paris Agreement, society is still not on track to meet global commitments on CO2 emissions. What role can CCS play towards making up for lost time? How do we demonstrate the effectivity of strategy and scale? What are the roles, obligations and opportunities for Oil & Gas?

Upcoming Broadcasts:

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

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

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

PetroBowl:

SPE Oklahoma University, were crowned as the Virtual PetroBowl Champions 2021. This year's win now makes them four-time winners of the PetroBowl Championship. A truly international and virtual competition also saw the SPE Universiti Teknologi PETRONAS Student Chapter finish in second place, followed by SPE Universidade Federal do Rio de Janeiro finishing in third place.

Missed the Championship? Catch the Virtual Championship Finals on-demand here.

MemberSPEak:

This week we met two members who both started off their SPE journey as students. Discover what role pizza and mentoring played in the early days for both of our guests and what online platforms they have recently found most useful during the COVID-19 pandemic. Check out the video below.

For Entertainment Purposes: 

Music on Right Now:

Drew Sycamore - I Wanna Be Dancing

'Feel good music' has taken a priority over anything else in my music playlists over the last year. So here is a 2020 feel good tune from Denmark. I have a soft spot for people who are are blank when asked what their favorite genre of music is, as I'm one of those people! I'm known to be one of those annoying people who constantly changes the song in the car and knows all the lyrics to songs that just came out yesterday. Some call it annoying, I prefer to call it a hidden talent.

In My Video Queue: 

The Dig - Streaming on Netflix

With Netflix raising its fees this year, ($18 a month over here in the ME) at least a barrage of new content on the platform has followed suit. Before studying law at University, I had once dreamt of being an archaeologist (I guess there is still time to change, as I creep towards my mid-30s). The Dig explores a dramatized version of the Sutton Hoo discovery and is a must-watch for anyone who is the least bit interested in Anglo-Saxon history, Ralph Fiennes, or those who just want to refresh what they were taught in school).

Positive Thought for the Week:

"Optimism does not mean being blind to the actual reality of a situation. It means maintaining a positive spirit to continue to seek a solution to any given problem. And it means recognizing that any given situation has many different aspects—positive as well as problematic." - Dalai Lama XIV

That's it for this week.

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

About the Society of Petroleum Engineers

SPE is the largest individual-member organization serving managers, engineers, scientists and other professionals in the upstream segment of the oil and gas industry.

Learn more at https://www.spe.org/en/.

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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.