Newsletter No. 57
Hello,
It is Thursday, March 14, 2024. There is a lot of oil and gas news to talk about. So, I am going to jump right into some of the highlights.
This Week’s Headlines
- Oil Prices Jump 2% on Russian Refinery Attacks and Strong Demand
- BP and ADNOC Halt $2 Billion Israel Gas Deal
- EIA Predicts Lower Gas Production, Higher Demand in 2024
- Texas Challenges Biden’s Methane Rule After Significant Emissions Reduction Efforts in Permian Basin
- At the Intersection of Innovation and Insight: Entrepreneur Chart Westcott Unbound
- Shell to Slash 20% of Jobs in M&A Unit
Global Oil & Gas News
Oil Prices Jump 2% on Russian Refinery Attacks and Strong Demand
Oil prices surged 2% due to Ukrainian attacks on Russian refineries, signaling potential supply disruptions. This, along with strong demand indicators and hopes for Federal Reserve interest rate cuts, boosted oil market sentiment. Brent crude rose to $83.44 a barrel, while U.S. West Texas Intermediate (WTI) crude increased to $79.18. Falling U.S. crude oil and fuel inventories, along with OPEC’s forecast of robust demand growth, also supported the rally. Market sentiment remained positive, expecting that higher U.S. inflation wouldn’t hinder interest rate cuts, which could further boost oil demand.
Automakers Pull Back on Electric Cars Amid Softening Demand
As consumer interest in electric vehicles (EVs) falls short of projections, automakers are recalibrating their plans. They’re stepping back from the all-in push toward EVs, opting for a more balanced approach that includes hybrids alongside electric models. This adjustment reflects a recognition of the slower pace of EV adoption than previously anticipated, prompting a reevaluation of ambitious targets set for transitioning to electric mobility.
EIA Predicts Lower Gas Production, Higher Demand in 2024
The Energy Information Administration (EIA) forecasts a decrease in U.S. dry natural gas production for the remainder of the year, primarily due to ongoing low natural gas prices. Production is expected to hold steady around 104 Bcf/D (billion cubic feet per day) in March before slightly declining for the rest of 2024. Despite this, production is not projected to return to December 2023 levels. The EIA also anticipates a rise in domestic gas consumption. This outlook marks the first decline in gas output since 2020, largely attributed to reduced drilling activity following the historic winter months and the impact of low prices on resource additions.
Texas is contesting the Methane Rule recently published by the Environmental Protection Agency (EPA), stating it poses a significant threat to the state’s vital oil and gas sector. The Railroad Commission of Texas (RRC) has initiated legal action against the rule, highlighting concerns about its potential impact on jobs and the economy. Texas, leading in oil and natural gas production, has made substantial strides in emissions reduction through technology and innovation, notably reducing methane emissions by over 76% in the Permian Basin. RRC officials argue that arbitrary regulation could hinder progress and disproportionately affect small producers, jeopardizing jobs, and essential revenue streams. They emphasize the importance of sensible regulation to balance economic growth with environmental protection.
The Jay Young Show
At the Intersection of Innovation and Insight: Entrepreneur Chart Westcott Unbound
I recently was lucky to interview Chart Westcott, Co-Founder and Chief Operating Officer at Ikarian Capital, LLC, on The Jay Young Show. Chart shared invaluable perspectives on innovation and entrepreneurship that resonated deeply with me. One key takeaway was the importance of maintaining curiosity and continuously seeking knowledge from diverse sources.
Chart’s emphasis on resilience as a crucial factor in navigating challenges in the business world reaffirmed my belief in the power of perseverance.
Overall, the interview was a remarkable exploration of the mindset and strategies needed for success in the dynamic realm of innovation and business. You can watch the episode below. You can also subscribe to The Jay Young Show on Apple or Spotify, and you can watch many of the episodes on YouTube.
MOVEs to Watch
Shell to Slash 20% of Jobs in M&A Unit
Shell is set to cut around 20% of jobs in its mergers and acquisitions (M&A) unit as part of its ongoing efforts to streamline operations and reduce costs. The oil and gas giant, which employed over 90,000 people in 2022, has been focusing on creating a leaner organization to achieve larger cost savings. Following previous job cuts in its low-carbon energy division, Shell has now expanded reductions to its M&A team. The move reflects the company’s strategy to prioritize profitable projects while optimizing its workforce. The job cuts are expected to be communicated to affected employees in April, according to sources familiar with the plans.
BP and ADNOC Halt $2 Billion Israel Gas Deal
BP and ADNOC have stopped talks to buy a 50% stake in Israel’s NewMed gas producer due to ongoing uncertainty from the Gaza conflict. The deal, valued at $2 billion, aimed to tap into the Eastern Mediterranean’s gas reserves. However, discussions were disrupted by the conflict in October. Both companies remain interested, but talks will stay on hold until the situation improves, according to NewMed’s statement.
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Recommended Reads
ADNOC kicks off early EPC activities for low-carbon Ruwais LNG project
Another Russian Refinery Is Ablaze After Ukrainian Drone Attack
Venezuela rushes to mend Iran relationship as US sanctions loom
Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don’t hesitate to reach out.
All the best,
Jay
