The price of oil rose on Tuesday afternoon when Saudi Arabia pledged deeper cuts in March, while Russia was the biggest partner to the deal and did not stick to the agreed cuts

Diagram of the week

(Click to enlarge)

According to the EIA, US ethane exports rose from almost nothing in 2013 to an average of 260,000 bpd in the first ten months of 2018.
– Ethane is a critical raw material for petrochemical manufacturing, with plastics as the main purpose.
– The increase in the production of oil and natural gas liquids has led to a growing supply of ethane. This has led to a petrochemical boom on the US Gulf Coast.
– But it has also led to a rapid increase in ethane exports. The US surpassed Norway in 2015 and became the world's largest exporter of Ethan (Norway is the only other country to supply Ethan internationally).

Market Movers

• TransCanada (NYSE: TRP) The assembly line remained partially closed on Monday after a leak was discovered near St. Louis, MO. TransCanada has still not determined the cause and has not provided an estimated schedule for a reboot.
• Area Resources (NYSE: RRC) The share price rose more than 5.5 percent on Monday after proven reserves increased 18 percent at the end of 2018.
• BP (NYSE: BP) said gas production was absorbed by its second phase of the West Nile Delta in offshore Egypt. By April, peak production of around 700 mcf / d is expected.

Tuesday, February 12, 2019

The oil price rose sharply during early trading on Tuesday, when it announced that OPEC had cut production sharply in January.

Production of OPEC drops in January by almost 800,000 bpd. Production of OPEC decreased by 797,000 bpd in January compared to the previous month, averaging only 30.81 mb / d. Saudi Arabia, the United Arab Emirates and Kuwait contributed the most reductions. Nevertheless, Russia has reduced production by just 90,000 bpd, well below the 230,000 bpd promised in the December deal. Saudi Arabia said production will be further reduced. Production is expected to drop to 9.8 mb / d in March or be about half a million barrels a day lower than it had promised. Oil prices jumped in the news.

India stops selling refined products to Venezuela. The two leading refining companies in India will continue to buy crude oil from Venezuela, but according to US sanctions they will refrain from selling refined products, according to Argus Media. PDVSA boss Manuel Quevedo showed up at a conference in New Delhi. India could remain one of the few major buyers of oil from the increasingly isolated regime of Nicolas Maduro. Quevedo said PDVSA was planning to double exports to India to 300,000 bpd. John Bolton threatened India with a veiled threat not to cooperate with Maduro's regime Twitter "Nations and companies that support Maduro's theft of Venezuelan resources will not be forgotten."

Citgo in the sights of the creditors. The US government is trying to keep Citgo, the US subsidiary of PDVSA, alive so that it can be turned over to Juan Guaidó and a new Venezuelan government. Creditors, however, swarm the company to claim claims to parts of the company as the Maduro regime falls apart. "Citgo is the big prize," said Francisco Monaldi, a fellow Latin American energy policy student at Rice University's Baker Institute for Public Policy, opposite the Houston Chronicle. "I said before that there will be a sharkfest of payments to the creditors, but now there seems to be a bigger actor stopping the sharks, this is the US government." Related topics: South Africa Oil Discovery could be a game changer

PDVSA urges joint venture partner. PDVSA urges its joint venture partners to declare whether they will continue operating in the country after US sanctions. Chevron (NYSE: CVX) pledged to stay in Venezuela. Chevron received a waiver from the US government to continue working in the country until July 27. Chevron is trying to make a fine line, pledging to stay in Venezuela while bailing out its bets, indicating collaboration with the US government and a potential change to Venezuela's government. "It's a liquid environment," said Chevron CEO Mike Wirth. "Our firm intention is to stay grounded in Venezuela and be part of a better future for the people of Venezuela," Wirth told Bloomberg. "We have very close coordination with several agencies within the US government."

World will be Saudi Aramco's "playground". Saudi Aramco will be entering international oil and gas exploration for the first time, says Saudi oil minister Khalid al-Falih. "We will no longer look inward and focus only on monetizing the resources of the kingdom," al-Falih told FT. "The world forward will be the playground of Saudi Aramco." The plans also run counter to the plans of Crown Prince Mohammed bin Salman to diversify the economy of the kingdom.

Slate industry worried about fracture hits. A recent slate conference in Texas discussed how damage to shale wells can be minimized by "frac hits" when the close-knit will hinder the production of both shafts. This type of well interference can reduce the productivity of the newer "child wells" by 20 to 40 percent and even do more damage to the original "mother well". The industry collects data on how and when catastrophic losses can occur, but only at the beginning of a problem with the problem. This is important because shale drilling is increasingly dominated by children's wells.

Climate groups are threatening legal action against Shell. A coalition of environmental groups is preparing legal action against Royal Dutch Shell (NYSE: RDS.A) in the Netherlands to force the company to transfer oil. The groups say that Shell deliberately "hampers" climate action.

Trump's tariffs kill 8,000 solar jobs. The solar industry lost 8,000 jobs last year, the second consecutive year of decline. One of the main reasons for job losses and lower growth was the Trump government's 30 percent tariff on imported solar cells. Nevertheless, the solar industry employs around 242,000 people, more than in the coal industry. Related: The Renewable Revolution has a lithium problem

Moscow shoots OPEC + talk. The Kremlin rejected the reports that Russia and the OEPC were discussing a formal agreement. Russia's Energy Minister Alexander Novak said in December that a formal OPEC + architecture would pose risks. Recently, reports surfaced that both sides were approaching an agreement, but the Russian government slowed speculation on Tuesday.

The raw exports of the USA to Europe are increasing. US sanctions against Iran have opened the door to further US crude oil exports to Europe. Sanctions against Venezuela could also lead to more crude oil being delivered to the US. Europe imported a record 630,000 bpd from the US in January.

Shell, Eni, Exxon gain blocks in Egypt. Egypt had tendered for oil and gas exploration and Royal Dutch Shell (NYSE: RDS.A) won the most (three for oil and two for gas). ExxonMobil (NYSE: XOM) debuted in Egypt. BP (NYSE: BP) and Eni (NYSE: E) also won some concessions. Egypt is becoming an important natural gas hub in the eastern Mediterranean.

We invite you to read some of the latest articles we have published that may be of interest to you:

By Tom Kool of Oilprice.com

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