Can oil really hit $150? (And more!)

As the current crude oil trading year enters its final two months marked by festive breaks and potentially higher consumer demand as the Northern Hemisphere's winter approaches - thoughts inevitably turn to what price levels we will likely encounter in 2024.

With hostilities in the Middle East failing to lift crude prices despite all the talk of risk premiums and potential supply disruptions, being bullish about oil early in 2024 is proving hard. That's because concerns over crude demand are outweighing concerns over supply. 

We're talking muted demand from the economic powerhouses of Germany and China, lower consumer confidence levels in key OECD markets and elevated interest rate levels kept there by major global central banks, especially the US Federal Reserve. 

It therefore came as a surprise to The Oilholic when the World Bank opined that crude prices could hit $150 if hostilities in the Middle East escalate! Here are this blogger's thoughts on that via Forbes. Simply put - don't hold your breath! 

And let's not forget, Brent hasn't even capped a more realistic $100 per barrel level the bulls crave. The benchmark's January 2024 contract is barely higher than current levels, and contracts further out into the summer of next year are even lower. That implies Brent remains in backwardation mode.

Away from the crude price, the latest quarterly earnings posted by energy majors provided plenty of talking points. More so, after the return of megadeals as ExxonMobil swooped for Pioneer Natural Resources and Chevron swooped for Hess Corp. 

Other deals may follow as the energy majors fish for viable plays. It's led many, including this blogger, to wonder if a supermajor itself could be vulnerable? The prime candidate for finding itself in this position is BP; a chronically undervalued supermajor in the Oilholic's opinion. More on the subject here via Forbes. 

Is it possible? Yes, especially in a industry built on big ticket deals. Will it happen? Probably no, not least down to BP's $100 billion plus valuation (however discounted that may appear to some). But as yours truly noted on Forbes - that the company has had to bat away questions about being a takeover target is pretty extraordinary and indicative of how far it has fallen. Well that's all for now folks. Keep reading, keep it here, keep it 'crude'!

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© Gaurav Sharma 2023. Photo: Oil pump jack model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma October 2023. 

The challenge of producing more industrially with less

Last week The Oilholic had a hectic, but fruitful and amazing trip to AVEVA World 2023 in San Francisco. Much of the discussion at the event was about one profound question - how to do more with less for the energy and industrials complex, and finding answers via the deployment of technologies such as artificial intelligence (AI), industrial internet of things (IIoT), digital twins and enhanced data analytics. 

From the standpoint of the hosts - industrial software solutions and consulting firm AVEVA - the pathway forward is all about creating a connected industrial ecosystem. One that offers a gateway to an unlimited world of data analytics, including third party analytics, with everything focused on one key priority - how to efficiently, safely and diligently improve throughput whilst using less energy and resources.

AVEVA's corporate take goes along the lines of "working to build a new industrial ecosystem, defined by agility, resilience and sustainability. By connecting [clients'] teams with trusted information and insights, powered by the cloud, and finding new ways to deliver life’s essentials – while driving responsible use of the world’s resources."

You deploy solutions to do that, and by default you lower your carbon footprint - a mantra this blogger saw repeated often by the company executives from the exhibition floor to the main auditorium, from keynotes to panel discussions, and much else in between. 

While AVEVA's age-old business mainstay may well have been in the oil and gas business, today it provides software solutions for most segments of the global commerce and industry all of which are under pressure to lower their carbon footprint. In keeping with this, the event had several breakout streams and content on a range of subjects. 

These included sessions for process industries (chemicals, pulp and paper, manufacturing, etc.), infrastructure, power and utilities, and of course oil, gas and energy. Each of these touched on advanced solutions and practices for improving efficiencies and finding that low to zero carbon horizon. And if numbers are your thing, we're talking more than a dozen industry tracks, keynotes, and an immersive expo.

There was also plenty of chatter on deriving multifaceted value from AI, and viewing it as an ally or enabler rather than a threat. Both AVEVA and its customers, including the likes of Mitsubishi Power, Yinson and Henkel, appeared to be pretty candid about the constructive deployment of AI. Read more about it in The Oilholic's latest Forbes post here. 

In summation, to quote AVEVA CEO Caspar Herzberg (pictured here at an analysts' briefing on October 25, seated third from left): "The true benefits go beyond the numbers: connected digital insight and technologies enable you to turn volatility into commercial opportunity by transforming industrial production into digital insights, so you can boost efficiency, resilience, and sustainable impact, and realize your boldest aspirations."

Part of being bold or having bold aspirations - especially for the energy, oil and gas sector - is embracing the technological solutions of our age provided by the likes of AVEVA, and of course, its peers. Going by the interest AVEVA's software products suite generated in San Francisco and the number of energy players in town, The Oilholic reckons that the message is cutting through big time. Well that's all for now folks. Keep reading, keep it here, keep it 'crude'!

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© Gaurav Sharma 2023. Photo 1: AVEVA logo at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. Photo 2: AVEVA World 2023 Expo Floor. Photo 3: AVEVA CEO Caspar Herzberg (third from left) speaking at an analysts' briefing at AVEVA World 2023. © Gaurav Sharma October 24-25, 2023. 

Connected energy solutions at AVEVA World 2023

The Oilholic is delighted to be back in San Francisco for AVEVA World 2023 - the annual client fixture for technology consulting and industrial software company AVEVA. It's also the company's first major event since being taken over by Schneider Electric in January 2023.

A content packed start to the conference, being held at San Francisco's Moscone Center, has seen wide ranging discussions on connected solutions in the industrial software space, cloud-based applications and how the energy industry can turn volatility and challenges over meeting sustainability targets into opportunities. Afterall, the sector is pursuing a deep transformation to become more sustainable as well as ensure that the world's needs are met. Technology provides many, if not all, of the answers.

Kicking off proceedings, Caspar Herzberg, CEO of AVEVA, talked of exploring use cases for a sustainable industrial ecosystem - one that's connected and utilizes the power of big data and a seemingly unlimited world of data analytics. And of course, placing the company's platform agnostic AVEVA Connect product suite at the heart of this connected industrial ecosystem. 

"Those that master this art [of a connected, sustainable industrial ecosystem] will outperform other systems," Herzberg said in his keynote. The AVEVA boss' pitch is a clear and simple one to energy, heavy industrials, mining, metals, companies, and indeed other sectors - tie in process efficiencies, improved throughout and sustainability, take learnings from data using AI solutions, and the results would become evident.

Those results include energy efficiency pathways that are 20% better and would invariably help in lowering carbon emissions. One enabling solution is digital twin technology. Read more about it and this blogger's conversation with AVEVA's Head of Research and Innovation Simon Bennett on Forbes.

There's more to come from AVEVA World 2023 - an event Herzberg himself described on Tuesday as one of the largest gathering of industrial software professionals and specialists in the world. That appears to be around 2,500 attendees and counting.

Away from the event, here is the Oilholic's latest piece for The Motley Fool on BP's share price direction, and how significant the appointment of its next CEO could be. That's all for now folks. Keep reading, keep it here, keep it 'crude'!

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© Gaurav Sharma 2023. Photo: Caspar Herzberg, CEO of AVEVA, speaks at AVEVA World 2023 at the Moscone Center, San Francisco, US on October 24, 2023. © Gaurav Sharma 2023. 

'Crude' chat with Afentra Plc CEO Paul McDade

Crude oil benchmarks have been bouncing up and down for over 10 days in the wake of geopolitical tension in the Middle East. Predictably, much of the market analysis community is obsessing over where the risk premium might go, and how to square it against the wider crude oil supply and demand dynamic. 

Here are some thoughts via Forbes on what may or may not move the risk premium needle, and it must be noted that crude benchmarks are still way short of the perma-bull pipedream level of $100 per barrel. 

As volatility bites, what do industry operators do to cut out the noise? The Oilholic recently turned to one industry stalwart for his thoughts on the near to medium-term direction of the crude market and approach to a volatile pricing environment - Paul McDade, CEO of West Africa focussed Afentra Plc (LON: AET), and former boss of Tullow Oil.

According to McDade there's no such thing as an optimum or ideal oil price. "I often get asked what is the right oil price assumption for my business, and my answer is wherever our carefully considered hedging strategy takes us. I place a lot of faith in hedging because we operate in a cyclical industry. 

"We see hedging [or shall I say our hedging program] not as a tool for market bets but rather as a form of business insurance, and it all depends on the payback period. If the payback period is a year, you are OK to assume a base of $80 per barrel. But if its five years you would be crazy not to be a little bit conservative, workout what does the downside looks like and be prudent."

More generally speaking, McDade is bullish on the oil price for 2024 and indeed the next five years. "However, there will always be market noise and volatility that's typically associated with our industry. So if you ask me, could oil slip down to $60 per barrel at some point in 2024? Yes that's likely, but the upside would ultimately go further." 

To read the Oilholic's full interview with McDade for Forbes, and learn more about Afentra's journey please click here. More on market developments to follow over the weekend, but that's all for now folks. Keep reading, keep it here, keep it 'crude'!

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© Gaurav Sharma 2023. Photo: Paul McDade, CEO of Afentra Plc (left) with Gaurav Sharma, September 2023.

Media missives from ADIPEC 2023

With ADIPEC 2023 drawing to a close last week, the Oilholic capped a fascinating and engaging week with a rounding off piece for Forbes on the criticality of scaling up technology - and, of course, backing it up with petrodollars and willpower, if a meaningful energy transition is to be achieved. To this end, this blogger had great conversations with ABB, AiQ, AspenTech, AVEVA and Avaada Group. (More here)

Yours truly also hit the airwaves to discuss the various soundbites coming out of the conference and various developments in Abu Dhabi, all in the midst of a very volatile crude oil market riddled with demand concerns, supply-side tightening and geopolitical complications. The final broadcasting call before departing was with Asharq Bloomberg News, with this blogger's week out in Abu Dhabi peppered with plenty of other missives via the keyboard for Forbes, the Motley Fool, and of course via this blog. 

All blog entries for each ADIPEC day may be found here. 

Some commentary on Shell's share price direction via the Motley Fool may be found here. And here are selected Forbes copies in chronological order based on soundbites and insight from ADIPEC 2023. 

• Emirati COP28 President Calls For A "Just, Orderly, Equitable And Responsible" Energy Transition, October 2, 2023.
• India "Will Manage" And Won't Panic If Oil Rises Above $100, Says Energy Minister, October 3, 2023.
• Abu Dhabi To Unveil World’s Fourth Largest Solar Farm "Very Soon", October 4, 2023.
• Oil Futures Slump Further On Uncertain Global Demand Outlook, October 5, 2023.
• Abu Dhabi In First Wind Farm Launch As 2GW Solar Project Nears Completion, October 8, 2023.
• 4 Middle East Geopolitical Scenarios That May Hike Oil Market Risk Premiums, October 9, 2023.
• Scaling Technology And Willpower Critical For 'Fast-Tracking' Global Energy Transition, October 10, 2023.

And that's a wrap. Keep reading, keep it here, keep it 'crude'!

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: Gaurav Sharma on Asharq Bloomberg TV on October 4, 2023 © Asharq Bloomberg 2023.

ADIPEC Day IV: Reflections at sunset in Abu Dhabi

The final and fourth day of ADIPEC 2023 has reached its conclusion as the sun sets here in Abu Dhabi with the show on a likely track to beat all its previous records (and quite possibly way more than the figure of 160,000 attendees it marketed). 

And that makes sense, as there is likely to be immense interest and intrigue when you bring together the various energy strands of oil, natural gas and renewables; and discuss everything from power markets to the future of shipping, whilst at the same time deliberate the obvious need to decarbonise. 

We came together on day one with the rallying cry of "Decarbonising. Faster. Together", we conclude proceedings perhaps with a call for evolution, understanding and collaboration. 

Evolution, as we explore new horizons offered by the spirit of human ingenuity in coming up with solutions for a low carbon economy. Understanding, that oil and gas will have to play a role for a good few decades yet, if not more, to ensure that energy poverty doesn't become the by-product of a slapdash rush to decarbonise. As for collaboration, need the Oilholic spell it out? Because if we don't work together, collaborate, partner and prepare for the road ahead, we will fail. 

Away from these pensive thoughts, this blogger also took time out on the final day to visit ADIPEC's wonderful Marine & Logistics Zone. It's here that the crew of ADNOC's support shipping fleet took one around a number of vessels currently being run on biodiesel, made from used and recycled cooking oil collected from restaurants around Abu Dhabi! Thank you to all the crew who spared their valuable time for the trip, and it was an experience the Oilholic will treasure. 

Paid a visit to @ADNOCGroup's biodiesel powered fleet of support vessels outside #ADIPEC2023's Maritime & Logistics Zone just before event ends. Had a very interesting talk / walk around vessel Ameer Alkouloub with the crew. Thank you! #OOTT #sustainablefuels #EnergyTransition pic.twitter.com/QNYC2yhwrf

— Gaurav Sharma (@The_Oilholic) October 5, 2023

With the time of departure here, this blogger would like to say that it was great to be back at ADIPEC after a three-year hiatus caused by the briefest of forays into the world of banking. It was great seeing old friends and making new ones in the buzz of this amazing event once again, and a privilege to be a part of it. Finally, and most importantly, my sincere thanks to the amazing team at dmg events who made it all happen and for their most wonderful hospitality. 

Well that's a wrap from Abu Dhabi folks. It'll be time for the big flying bus home to London Heathrow. Keep reading, keep it here, keep it 'crude'!

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: Sunset over Abu Dhabi NEC, the venue of ADIPEC 2023 © Gaurav Sharma 2023.

ADIPEC Day III: On partnerships, progress & more

As Day III of ADIPEC gathered momentum and crowds grew bigger still, global crude oil markets were greeted with the news that Saudi Arabia and Russia would maintain their joint oil production cuts of 1.3 million bpd until the end of the year. However, that didn't stop global oil benchmarks from sliding lower faced with an uncertain demand picture and an ever stronger US dollar. 

Inside the conference halls, and away from the din of the global crude market, various speakers called for heathy and meaningful cross-sector partnerships to open viable energy transition pathways. These may ideally involve stakeholders from across energy industries, financiers, technologists, governments, academia, and, of course, the end-consumer. 

As Niall Hannigan, Chief Financial Officer of Masdar, noted in a panel on fast tracking finance and prioritising investments for the energy transition. "Investors need scale. They want to see a clear policy framework within a geography, underpinned by a stable, transparent regulatory regime. Governments won’t attract investors alone – we need regulators, developers, development banks and commercial banks in the room together to create a programme. That collaborative conversation is essential.”

For his part, the Oilholic marked Day III with a tech heavy outing. It included concluding one's final speaking engagement at ADIPEC 2023's Digitalisation in Energy conference stream with a one-on-one discussion with Saravan Penubarthi, CTO of AiQ, on the future of cybersecurity solutions for energy systems. 

Wrapped up my moderating duties at #ADIPEC2023 with a final Digitalisation in Energy session earlier today with Saravan Penubarthi, CTO of AiQ, on the future of #cybersecurity solutions for #energy systems. Great session, lovely audience at @Chevron Hall 14 #EnergyTransition pic.twitter.com/WDIc77ekQk

— Gaurav Sharma (@The_Oilholic) October 4, 2023

With panel sessions concluded, yours truly also took some time out to have a walkabout in the wider exhibition area spread over several halls. 

Getting going on Day III of @ADIPECOfficial 2023. Here's @Yokogawa's display on #decarbonizing, @ABB_Energy's EV charging station mock-up (& @bakerhughesco talk on sustainable solutions) in the background #ADIPEC2023 #EnergyTransition #OOTT pic.twitter.com/Im6PLyz1p0

— Gaurav Sharma (@The_Oilholic) October 4, 2023

And...also said goodbye to Chevron's Boston Dynamics robotic dog(s) this blogger has been walking by for the past few days :) 

And that's all for Day III, more tomorrow! Keep reading, keep it 'crude'!

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© Gaurav Sharma 2023. Photo: (1) ADIPEC 2023 exhibition floor, Abu Dhabi, UAE, (2) Chevron's Boston Dynamics Robotic Dogs © Gaurav Sharma 2023.

ADIPEC Day II: On techies, ministers, sessions & more

Day II of ADIPEC in Abu Dhabi, UAE began on an even busier note and one group that's making quite a lot of the noise is the techies. Microsoft, Google, Amazon Web Services - you name it - are all here! Spokespersons and sales people of many are telling yours truly that "big data" is the new oil, and well ...err .... doubly so for oil, gas and energy companies clubbed together. 

Much of the chatter they are offering is about utilising cloud computing, and, of course, pitching innovations in new areas such as machine learning, artificial intelligence (AI), Internet of Things (IoT) and serverless computing for energy operations. Not to be left behind, hardware sellers are offering the energy sector custom-designed processors, chips, workstations, platforms and advanced robots.

Parking the noise from the techies aside, the day also saw yet more ministers and officials offer soundbites and rub shoulders with energy CEOs, movers and shakers. Before the final Day IV is out on October 5, around 40 odd ministers would have spoken here. Among them India's Energy Minister Hardeep Singh Puri who said on Tuesday that his country can cope with a $100 oil price should it happen but the development was likely to be "recessionary" for the rest of the world. (More here on Forbes)

Among other developments, ADIPEC delegates were also told that Abu Dhabi would soon be taking its 2GW capacity solar farm located in its Al Dhafra region online. When it does go online, the farm might well be the fourth largest in the world (More here on Forbes)

Meanwhile, Ashraf Al Ghazzawi, Executive Vice President of Strategy and Corporate Development at Aramco opined that the energy transition is far from straightforward, particularly for a nation like Saudi Arabia. 

"First, you have to appreciate the global energy system's scale and magnitude. You're talking about a global energy system of about 270 million barrels of oil equivalent. This system energises a $100 trillion global economy. If you fast forward to 2050, the global economy will double to $200 trillion with, give or take, two billion additional energy consumers coming.

"So any discussion, any plan on energy transition, will have to acknowledge the complexity and the magnitude but also understand that our assumptions and premises have to be underpinned with realistic expectations, realistic solutions and realistic paths towards the energy transition."

And finally, the Oilholic participated in another two sessions on the day. The first of these - held under ADIPEC's Decarbonisation Strategy Conference Stream - was titled "Carbon tax vs. subsidies: what is the best regulatory method to accelerate emissions reduction?" As the title suggests, a lively discussion on the two policy measures that can be used to accelerate emissions reduction followed, and of course free market solutions too. 

Panellists included (left to right), The Oilholic, Dr Carole Nakhle, CEO of Crystol Energy,  Arne Peder Blix, CEO of ICA Finance, Emmanuel Givanakis, CEO of ADGM Financial Services Regulatory Authority, Georges Tijbosch, CEO and Board Member of MiQ and Thomas McMahon, Co-CEO & Co-Founder of ACX.

Later on a busy afternoon, yours truly also hosted a second session under the Digitalisation in Energy stream titled "EV charging: Driving new energy business models powered by data insights." 

It involved a discussion of how energy retailers are leveraging data insights to generate new EV business models and drive the energy transition. The all star cast of this pivotal discussion included Fiona Howarth, CEO of Octopus Electric Vehicles, Amr Adel, Regional VP for Asia at Shell Recharge, Alaa El Huni, Chief Business Officer of CAFU and Dr. Fan Zhu, Chief Technology Officer, Bayanat. 

All in all, a hectic but rewarding Day II of ADIPEC. And that's a wrap. More to follow soon. Keep reading, keep it 'crude'!

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© Gaurav Sharma 2023. Photo: (1) ADIPEC 2023's theme of  "Decarbonisation. Faster. Together" on marquee at Abu Dhabi NEC, UAE (2) ADIPEC's Decarbonisation Strategy Conference Stream panel on "Carbon tax vs. subsidies: what is the best regulatory method to accelerate emissions reduction?" © Gaurav Sharma 2023.

ADIPEC Day I: "Decarbonising. Faster. Together"

The Oilholic is delighted to be back at ADIPEC 2023 after a gap of four years, and one virtual ADIPEC (2020) during the Covid pandemic. The tagline this year is rather unique "Decarbonising. Faster. Together" - and one that yours truly, and one suspects 160,000-plus delegates who'd be visiting the event are unlikely to miss. 

It's on banners, flags, posters, flyers, magazines, websites and broadcasts - in short if you are in town, you are unlikely to miss it. 

But what does it all mean? For Sultan Ahmed Al Jaber - ADNOC's boss and the country's Minister of Energy and Advanced Technology, and one might add the President-designate of COP28 - it all about an energy transition that's "just, orderly, equitable and responsible." More on that here via this blogger's latest Forbes post. But kudos from a branding perspective as "Decarbonising. Faster. Together" is just as catchy in 2023, as "Oil and Gas 4.0" was back in 2019. 

Something's of course never change. China has yet again sent a humongous delegation to town with a number of exhibitors, major energy outfits, businesspersons, subject matter experts and dignitaries whose presence you simply cannot miss. 

There are also another 29 country pavilions to visit. Around 1,600 speakers are in town, present company included, and 10 parallel conference streams, two of which the Oilholic will have four sessions in (More details here). The "Make It In The Emirates" theme - encouraging the UAE's domestic industry and manufacturing - also looms large and proud around ADIPEC corridors. 

This blogger also hosted the first of his panel sessions at ADIPEC 2023, titled: "The twin transition: policy alignment between the green and digital agendas," i.e. the simultaneous shift towards a more sustainable and digital economy. 

This engaging discussion included panellists Andrei Covatariu, Co-Chair, Task Force on “Digitalization in Energy” and Vice-Chair of the Group of Experts on Energy Efficiency, United Nations Economic Commission for Europe; Allyson Anderson Book, Chief Sustainability Officer, Baker Hughes and Leonid Zhukov, VP of Data Science, BCG-X and Director of BCG Global AI Institute. 

That's all for the moment folks as we're just getting started in Abu Dhabi. More to follow soon! Keep reading, keep it 'crude'!

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: (1) Entrance to ADIPEC 2023, Abu Dhabi, UAE, (2) Pavilions of companies from China. © Gaurav Sharma 2023.

ADIPEC panel sessions to be hosted by yours truly

The Oilholic will be moderating and speaking on the following panel sessions at ADIPEC 2023. Join if you can for some fantastic industry dialogues with great subject matter experts. 

October 3, 2023: Decarbonisation Strategic Conference 

Tuesday, October 3, 2023 @11:45am UAE

Carbon tax vs. subsidies: What is the best regulatory method to accelerate emissions reduction?

(Click image to enlarge for details)

---------------------------

October 2-4, 2023: Digitalisation in Energy Innovation Sessions

Monday, October 2, 2023 @13:00pm UAE

The twin transition: policy alignment between the green and digital agendas

Panel:

Andrei Covatariu, Co-Chair, Task Force on “Digitalization in Energy”, Vice-Chair of the Group of Experts on Energy Efficiency, United Nations Economic Commission for Europe

Allyson Anderson Book, Chief Sustainability Officer, Baker Hughes 

Leonid Zhukov, VP of Data Science, BCG-X and Director of BCG Global AI Institute, BCG

Gaurav Sharma, Energy Market Analyst & Senior Contributor, Forbes

---------------------------

Tuesday, October 3, 2023 @14:00pm UAE

EV charging: driving new energy business models powered by data insights

---------------------------

Wednesday, October 4, 2023 @14:30pm UAE

Future cyber security solutions: towards a ‘zero-trust’ energy system

1-on-1 discussion: 

Saravan Penubarthi, CTO, AIQ

Gaurav Sharma, Energy Market Analyst & Senior Contributor, Forbes

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photos: © Adipec, dmg events 2023.

Oil in the $90s, Reimagining BP without Looney & more

What a difference a fortnight makes - for this blogger was musing end-August on how oil benchmarks were pretty much staying rangebound in the absence of drivers and looking for direction. That driver arrived in the shape of an extension of Saudi-Russian output cuts till the end of 2023 merely a few weeks later. 

Whatever their motivation might be, Riyadh and Moscow have decided that they will not let the market go into surplus mode as the Northern Hemisphere's winter approaches. End result - even the WTI front-month futures contract is finding support above $90 per barrel, and for its part Brent is flirting with $94/95 levels. 

Should we therefore conclude that a return of $100 oil prices is imminent for the first time since July 2022 despite a high interest rate climate, tepid economic activity in China and wider consumer anxiety? The short answer is - yes (barring an unforeseen macroeconomic upheaval), and particularly so, for global proxy benchmark Brent.

In fact, the question right now shouldn't be whether oil will get to $100 levels, but rather whether it would stay there? Of that, one is not too sure. Current price levels of futures contracts six month out point to a different story, and different a demand (and supply) dynamic for Q2 2024. Here are the Oilholic's thoughts on market direction via Forbes. 

Away from the direction of the oil price, the market for blue chip energy stocks got a shock after BP's social media loving CEO Bernard Looney suddenly resigned late on Sept 12 over his failure to fully disclose details of "past relationships" with colleagues! What might follow next for BP could be pivotal - will it continue down the path set by Looney or mark a return in focus to core oil and gas operations? (More here.)

Finally, this blogger also found the chance for two exclusive Forbes interviews earlier this month with Jim Johnson, CEO of engineering group Hunting Plc, and Christopher Hudson, President of dmg events. Click on the hyperlinks above should you wish to read these. But that’s all for now, for the moment folks! Keep reading, keep it crude!

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: Kristina Kasputienė from Pixabay2

Crude oil stuck in the $80s, Europe's LNG woes & more

We're four months from the end of crude trading year 2023 and oil prices appear to be stuck at $80+ per barrel levels. And for all the market chatter of $100 per barrel oil prices, a July and early August rally, tightness in the physical market and all else in between - there seems to be no convincing bullish or bearish pattern either way. So here are one's musings on the direction of travel and what hedge funds are up to via Forbes. 

The global crude market for all intents and purposes remains challenging. Tight physical supply in the wake of Saudi and Russian cuts, unexpected industry outages and summer demand can only do so much to support higher prices when the wider economic climate remains dicey in a high interest setting. Simply put, as long as global central banks remain hawkish, the crude market is unlikely to fire up to levels (shall we say three figures) the perma-bulls hope for. 

Away from crude prices, here are some thoughts on the Europe's LNG woes, the jet fuel market and the rapidly dwindling 'war windfall' of oil and gas majors. Away from musings on Forbes, the Oilholic is busy getting back on the speaking circuit, resuming dialogues with energy industry movers and shakers for market insights, offering analysis on international broadcasts, and more. All in all - it's been a hectic four weeks. But fear not, blogging here will also pick up pace shortly. Just getting a few things on track for the exciting road ahead. That's all for now folks! More soon! Keep reading, keep it 'crude'!

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To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Image by Terry McGraw from Pixabay. 

On Guyana & other 'crude' musings

As the month of July comes to a close, it seems the Saudis have indeed achieved near-term success with global oil benchmarks - Brent and WTI - now above $80 per barrel. It's a price level that Riyadh can live with. Although it is worth wondering at what cost (i.e. the good old debate about losing market share vs propping up the market without the help of friends / foes)? 

On a related note, while for much of OPEC+ the recent uptick in crude prices may come as a relief, for one new non-OPEC kid on the crude exploration block it has the makings of a spectacular boost in fortunes - Guyana. Here are the Oilholic's thoughts via Forbes on this micro-state in Latin America, with a population of less than a million people, and its full-blown oil boom. 

Guyana's headline crude production which came in at less than 100,000 barrels per day (bpd) as recently as 2020 has grown nearly four-fold to just shy of 383,000 bpd in 2023, and is still growing, according to the country's Ministry of Natural Resources. That said all the market chatter of it either joining or being asked to join OPEC is a load of nonsense that been denied by the oil producers' organization itself.

Elsewhere in the Oilholic's world, yours truly offered his perspective market perspectives on CGTN and Asharq Business News following the conclusion of the OPEC International Seminar earlier this month, and noted OMV's potential recoverable natural gas find of approximately 48 TWh, or 28 million barrels of oil equivalent. This discovery carries the potential to alter the natural gas market in Central Europe, and is Austria's largest gas discovery in the last 40 years. So watch this space! That's all for the moment folks! Keep reading, keep it 'crude'!

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To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Image by Omni Matryx from Pixabay. 

On crude demand & the OPEC seminar’s conclusion

On a calmer second and concluding day of the OPEC Seminar, participants and deliberators' thoughts moved away from obsessing about the oil price and market stability, to pragmatic discussions on a more just and equitable energy transition. And, of course, to the energy sustainability trilemma (sustainability, security and affordability) - i.e., how focusing on one aspect at the cost of the other could have - in the words of many participants - "disastrous" consequences.

Of course, many spokespersons representing developing world producers at the gathering felt they need no lectures from the developed nations; and had every right to tap into the wealth of their hydrocarbons to improve their economic fortunes. No doubt an emotive subject for many, especially since no one can convincingly call time on hydrocarbons anytime soon.

The way the Oilholic views it – human mobility, mainly ground transportation, is unquestionably and increasingly heading in the direction of electric mobility. However, there are no obvious solutions or substitutes for petrochemicals, for aviation, for heavy mining and industry, for the cosmetics value chain, and many other facets of the global economy. So renewable energy, and electric mobility are the low hanging fruits, but what and where next, and how fast? 

BP’s Boss Bernard Looney told the seminar: “Oil and natural gas will continue be a part of the world’s energy mix for several decades to come.” How then do you balance investments in hydrocarbons versus the capex involved in moving away from them, at what pace, and using what proportionalities?

For instance, as the United Arab Emirates' Energy Minister Suhail Al Mazrouei pointed out – current
global oil demand is north of 100 million barrels per day (bpd), and every year the energy industry needs to invest to prevent the depletion of around 8 million bpd.

OPEC puts the figure at $12.1 trillion to 2045 or $500 billion per year. Projection figures can vary from forecaster to forecaster. It's not the amount of money that’s the subject of the most heated debates both in Vienna and beyond, it’s what approach to take over the coming decades. For that there is neither a unified approach nor any sort of magic wand solution. And so the debate rages on, as it did at the OPEC Seminar, and as COP28 approaches with United Arab Emirates, a major hydrocarbon producer being the host nation (as were coincidentally the last two – Egypt and Scotland). So plenty to ponder over. 

And on that note, it’s time to bid goodbye to Vienna. Just before one takes your leave, here’s the Oilholic’s latest Forbes missive on how/why Saudi Arabia remains committed to unilateral cuts, and why the oil price isn’t quite firing up. More analysis to follow over the airwaves in the coming days on what was discussed here, but that’s all for now. Keep reading, keep it crude! 

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To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Gaurav Sharma, July 7, 2023.

All about crude "market stability"

The Oilholic arrived at the first day of the OPEC International Seminar to find the oil producers' group in a belligerent mood led by kingmaker Saudi Arabia. The kingdom's energy minister Prince Abdulaziz bin Salman said recent OPEC+ actions demonstrate the strength of the partnership and teamwork with Russia. 

Furthermore, he uttered two words that shaped the entire day - "market stability". Addressing delegates, Abdulaziz said his country will do whatever it takes to ensure it, and looks like Riyadh is not ditching its stance of unilateral voluntary oil production cut of 1 million barrels per day (bpd) in a huff. Though Abdulaziz did go to some length to say the Kingdom's current stance does imply it was returning to its 1980s swing producer status.

His address followed that of several of his OPEC ministerial peers repeatedly mentioning the need for "market stability" - cue a higher crude price, perhaps one that's above $81 per barrel the Saudis need to balance their budget. UAE Energy Minister Suhail Al Mazrouei chimed in by adding that if anything OPEC deserves an even larger market share in a "balanced" energy market, and added that market commentary on the group's intentions had been a tad er....unbalanced. 

And not to be outdone, Azerbaijan's Minister of Energy Parviz Shahbazov quipped that if OPEC+ or OPEC didn't hypothetically exist as groups, "we would need to create them" across the energy value chain, and not just oil, in the interests of well, you guessed it - "market stability". 

But one of the main reasons a higher oil price that OPEC+ craves is proving elusive is down to the 6 million bpd of Russian oil that is still finding its way to the market despite a near absence of Western buyers, and India and China duly obliging by importing copious amounts it. 

Canada, Guyana, US, Brazil and Norway are all also pumping more. But the biggest weight on the crude price is the uncertain economic climate and the hawkish stance of global central banks, especially the US Federal Reserve. More to follow from Vienna, but that's all for the moment folks! Keep reading, keep it crude! 

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To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Gaurav Sharma, July 5, 2023.

Back on a road (err...flight path) well travelled!

It's nearly time for BA706 - a very familiar British Airways flight number as far as the Oilholic's travels go. For after a gap of over three years in earnest, the Oilholic is back on a 'crude' road (err...flight path) well travelled and heading to the 8th International OPEC Seminar in Vienna, Austria. The core subject for deliberations is "Towards a sustainable & inclusive energy transition" and yours truly is looking forward to a fascinating few days of international dialogues. 

One must say, waiting for a flight to the Austrian capital once again for an OPEC gathering after gap years spent in the "in-house" corporate world brings a renewed sense of excitement and anticipation, eagerness to reconnect with old friends in energy analysis community and make new friends. 

Prevalent energy market conditions are miles apart from where we were in a pre-Covid world in March 2020 (scene of the last crime....err...visit). And who can forget the negative WTI oil price that followed in April 2020. Furthermore, energy transition is high on the agenda in a changed (hopefully pragmatic) world. So cheers to it all. 

To warm up, and prior to embarking on this journey, yours truly has fired a few missives via Forbes. Based on the Oilholic's reading of the current market situation and macroeconomic climate, oil prices remain rangebound and stuck in $70s for Brent (More here). 

And here are yours truly's thoughts on Shell's dividend hike and return to 'crude' basics. If sustainable investment trusts, learning more about Scope 1, 2 & 3 emissions and OPEC's June meeting are topics of interest, you can find your way there via the Oilholic's Forbes profile (details below). But that's all for now, and for the moment folks. Am BACK! So keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here. 

To follow The Oilholic on Forbes click here. 

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To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Gaurav Sharma, July 4, 2023.