Global demand remains a major concern
Uncertainty is ruling the energy world. “Crude producers continue to grapple with huge uncertainty about where this goes from here,” Tim Gould, the International Energy Agency (IEA) head of energy supply outlooks and investment, told the press last week. The Organization of Petroleum Exporting Countries (OPEC) agrees. “Uncertainties remain high going forward with the main…
With the COVID-19 recession and the expansion of Chinese influence, it’s urgent that Canada take the initiative and position itself in new markets
In November, China and 14 Asia-Pacific countries including Japan and South Korea signed a free-trade deal covering 2.2 billion people and nearly 30 per cent of international trade. This Regional Comprehensive Economic Partnership shows that the Pacific region continues to reinforce its place as the world’s leading trade hub. Canada and, more precisely, the Prairie…
It is a mistake to think Canada can thrive without the export wealth generated by the energy sector
By Mark Milke and Lennie Kaplan Canadian Energy Centre You may have heard the persistent worldwide narrative that oil and natural gas are dead, or soon will be, and can easily be replaced with other forms of energy. The latter claim is simply false. Read the work of energy transition expert Vaclav Smil, professor of…
Until recently, the nation has insisted it wouldn’t unilaterally cut output until others agreed to contribute. All that has changed
Saudi Arabia is back in its role as the swing crude oil producer of the world. Until recently, the nation has insisted it wouldn’t unilaterally cut output until others, including Russia, agreed to contribute. But all this changed – almost overnight. On Jan. 4, while the ministers from Organization of Petroleum Exporting Countries and its…
Even if the vaccines remain effective against the new COVID-19 mutants, a true crude oil market rebound is still a long shot
Strong headwinds continue to disrupt crude oil markets in the new year. In 2020, COVID-19 triggered demand destruction, with some insisting that global oil demand may have already peaked. Lifestyles changed – apparently forever. Working from home became the new norm, commuting to the workplace became extinct and flying became less prevalent. All these factors…
Opposing interest groups are endeavouring to sway crude oil market sentiments. The global oil industry needs some $12.6 trillion in investments through 2045 to meet the demand, Organization of Petroleum Exporting Countries (OPEC) secretary general Mohammed Barkindo said at a videoconference. This declaration came despite the fact that earlier the month in its Monthly Oil…
And the rush to monetize crude oil assets is on
The halcyon days of crude oil are over. The reality of the transition is dawning on stakeholders. From the Organization of Petroleum Exporting Countries (OPEC) and Russia, to the major oil companies, all are beginning to recognize, appreciate and react to this changing global energy kaleidoscope. Russia was denying the reality. No more. “The peak…
It was a political decision, a compromise between the differing oil producers. Last Thursday, after extended deliberations, debate and heated arguments, the Organization of Petroleum Exporting Countries (OPEC) and its allies in the extended OPEC+ finally opted to increase their crude oil output by 500,000 barrels per day (bpd) from January 2021. And every month…
The rush to monetize oil and gas assets gathers momentum as major debt problems rise for many oil-producing countries
Climate change is at the top of U.S. president-elect Joe Biden’s priority list. By nominating a person of the stature of former secretary of state John Kerry as the special presidential envoy on climate change, Biden has spelled out his intentions. The message is getting loud and clear to stakeholders. Consequently, the rush to monetize…
The viability of OPEC as an effective organization is now in question
Gloom continues to cloud crude oil markets. With a COVID-19 vaccine unlikely to ride to the rescue of the global oil market for some time, the combination of weaker demand and rising oil supply provides a difficult backdrop to the meeting of the Organization of Petroleum Exporting Countries (OPEC) and their allies later this month,…
The $493 billion in oil and gas revenues paid to governments since 2000 is more than family allowance and children’s benefits since 1970
By Mark Milke and Lennie Kaplan Canadian Energy Centre Humans are wired to respond to stories that paint a relatable picture of an issue at hand. And those stories are easier to remember. If we repeat a Rex Murphy story about how out-of-work cod fishery workers from Newfoundland saved their homes and marriages by moving…
Canada can supply oil and natural gas to world markets for decades, while driving down emissions and bolstering our economic recovery
Imagine a global $800-billion natural gas and oil investment market and the opportunity that represents for Canada. Canadians should be very interested in what it would mean for our country’s economic recovery if we market the strengths of our vast natural gas and oil industry, and capture an increasing share of those billions of investment…
Crude oil demand is under the cloud. Not long ago, global demand was expected to peak around 110 million barrels per day (bpd). And in 2007, the Organization of Petroleum Exporting Countries (OPEC) forecast world demand for crude oil would reach even higher – 118 million bpd by 2030. But that was a different world.…
Global energy players and major stakeholders are out with their keenly-awaited and immensely researched outlooks
Energy outlook season is here. And it’s not rosy. Global energy players and major stakeholders are out with their keenly-awaited and immensely researched outlooks. COVID-19 has turned 2020 into an unusual year, carrying long-term ramifications for the energy world. The Paris-based International Energy Agency has termed the pandemic a disruption not seen since the “world…
This is not business as usual. With the second pandemic wave around the corner and a significant drop in global capital spending, big oil is on a job-cutting spree. Job losses in the Canadian natural resources sector hit an all-time high in the second quarter of 2020. Currently, it stands at 43,000. Pipeline giant TC…
Plan requiring projects to describe how they will achieve net-zero emissions may not even be feasible
By Alex Whalen and Elmira Aliakbari The Fraser Institute Newfoundland and Labrador’s energy sector, already struggling from the downturn in world oil markets and the COVID-19 recession, has taken another blow – this time directly from the federal government. The Liberal government of Prime Minister Justin Trudeau recently imposed new rules – known as the…
The importance of oil and gas extraction to Canada’s GDP, jobs, incomes or tax revenues can’t be understated
By Mark Milke and Lennie Kaplan Canadian Energy Centre No matter how you slice it, Canada’s oil and natural gas sector has been one of the nation’s most significant contributors to jobs, gross domestic product (GDP) and tax revenues over the decades. Even in down years, such as 2016, the oil and gas extraction sector…
Desperation is creeping into the crude oil industry. With crude oil prices stuck at around $40 a barrel, S&P Global Ratings has estimated that the total government budgetary deficits of the oil-producing countries of the Co-operation Council for the Arab States of the Gulf could reach $490 billion cumulatively between 2020 and 2023. At the…
Zinc is a critical ingredient in a variety of products, including soap. In the midst of a pandemic, we need to ensure supply
Zinc is an important ingredient in disinfectants such as soap, so it plays an important role in preventing the spread of COVID-19. As we know, the twin pillars of COVID-19 prevention are social distancing and washing your hands properly. So mining this bluish-white metal is important to Canada’s strategy for addressing the pandemic at home.…
The energy industry is in flux. A new face of the industry is still being carved out as new variables come into play, impacting the crude oil scenario. On Sept. 22, at its Battery Day, Tesla unveiled plans to develop an in-house “tabless” battery. This battery would improve the range and power of its electric…
Elections will turn us away from dealing with the real issues. And we don't seem to have the means to conduct safe voting
We would really like to have many things right now, even though the prospect of getting them any time soon is rather low. A vaccine against COVID-19 is likely at the top of the list. A bit more certainty about our work and social prospects is probably a close second. Instead of dealing with the…
The world is past the era of growing crude oil demand and it may never recover to pre-pandemic levels
The crude games continue. While crude oil markets continue to be sloppy, despite the possibility of a small bull run just before the weekend, the Organization of Petroleum Exporting Countries and their allies in OPEC-plus are opting to keep their cards close to their chests. Avoiding any hint about their next steps, after their virtual…
By Mark Milke and Lennie Kaplan Canadian Energy Centre When forecasting future oil consumption around the world, many people have opinions and agendas. Forecasts rooted in facts and technological capabilities are more rare. An example of an informed opinion comes from Vaclav Smil, professor emeritus of the University of Manitoba’s Faculty of Environment. Smil is…
The crude oil demand picture remains murky at best. The U.S. Energy Information Administration (EIA) has cut its 2021 demand growth outlook to 6.5 million barrels per day (bpd), 500,000 bpd lower than projected last month. Based on patterns, the EIA now expects Chinese demand to grow by one million bpd next year rather than…
Despite some oil industry analysts and observers looking at the glass as half full, there still seems to be ample reasons for gloom
Forecasting crude oil markets remains a matter of perspective. Global oil demand growth is expected to taper off, journalist and analyst Julianne Geiger says, referencing the latest report from energy consultancy IHS Markit. Crude oil demand sits at 89 per cent of pre-pandemic levels, IHS Markit says. It’s expected to rise, then level off at…
Supported by all these bullish factors, Brent crude spot prices rose. Yet oil markets also face bearish pressures
Faced with gloom and some good news at the same time, crude oil markets continue to be in a quandary. Retrenchment and lack of capital investment could eventually lead to crude shortages, argued David Messler in a piece in Oilprice.com in June. The shortage could result in firming up of oil prices. Messler also points…
The game is up: Oil and gas companies can no longer mask their financial frailty
The decline in oil demand accelerated by Covid-19 may be a sign of the future. Forty publicly-traded U.S. oil producers wrote down a collective $48 billion worth of the value of their assets in the first quarter of 2020, the U.S. Energy Information Administration reported. Quoting Deloitte, Oilprice.com points out that the collapse in crude…
As the fight against this unprecedented global pandemic continues, a renewed focus on delivering a realistic plan that will support Canada’s economic recovery has never been more important. Canada has worked hard to contain the spread of COVID-19. This is a credit to the leadership our public health officers across Canada have provided, and to…
Opinion remains divided but, to be fair, the crude oil market is not out of woods. Fatih Birol, the executive director of the International Energy Agency, is endeavouring to take a positive posture. Politically, he needs to stay positive. Global oil demand is likely to recover to above pre-pandemic levels, Birol said on July 6.…
But a true recovery in oil prices will require an economic recovery, whose timing remains unclear
While there’s certainly carnage and woe in the oil and natural gas sectors at the moment, reports of the death of the industry are exaggerated. Many climate change activists and their sympathizers have been cheered by the dramatic drop in oil prices that coincided with, and were partly caused by, the COVID-19 pandemic. Prominent among…