Another week and oil prices are once again on the minds of many in the industry. With WTI settling in around $50 and Brent near $60, the question for many is once again, is this going to be the new normal?
Next week will (hopefully) provide more answers as OPEC and its allies meet in Vienna. Saudi Arabia—the de facto leader of the cartel—says it will not cut production to stabilize global production on its own. Instead, it seeks a unified front on cuts. The wild cards—Russia and Nigeria—which have both said it is still too early to determine if they’d join in making cuts.
Two companies who aren’t sweating the drop in oil prices are BP and Equinor, both of which said this week that their spending plans are unaffected by the 25% drop in oil prices since October. BP CEO Bob Dudley told reporters in Edinburgh, Scotland, “We’re planning the future of BP and always have through the cycle on $50 and $60, so it is not changing our capital investment plan.”
Meanwhile, Dudley also said at the Edinburgh conference that he believes President Donald Trump remains a “friend of the oil and gas industry.” That’s despite the president’s repeated calls for lower oil prices. Dudley pointed to Trump’s deregulation efforts and said doing anything in the U.S. now is simpler and quicker.
LNG Canada has another buyer. Project shareholder Petronas signed an initial sales deal with trading house Vitol. Asian utilities Tokyo gas, Toho gas and Korea Gas Corporation are already buyers for LNG Canada, committing to offtake around 2.4 mtpa, collectively.
In A&D news, WhiteWater Midstream is reportedly exploring a sale that its private equity owners hope will value the U.S. pipeline operator at more than $2 billion, including debt. The move shows how operational pipeline systems in the Permian Basin have become highly prized assets, as production has outpaced the ability of the industry to move product to market.
Finally, Brazilian state-controlled oil company Petrobras sold rights to more than 30 oil fields for more than $800 million as part of a longstanding divestment plan to reduce the company’s debt.
Comments from executive contrast with company’s previous statements.
Iran vows to continue to export oil, but statistics indicate economic pressure.
Oil fell further from 2019 highs on March 22, but was set for a third straight week of gains due to supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela.