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In this week's Trillion Dispatch
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Goldman anticipates commodity supercycle
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Andurand: Oil prices to reach $140
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Fink: Oil & gas vital for energy needs
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The Big Idea...
Goldman Sachs expects commodities supercycle
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LAUSANNE, Switzerland, March 21 (Reuters) - Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy markets and investment this month after concerns triggered by the banking sector, the U.S. bank's head of commodities said.
"As losses mounted, it spilled into commodities," Jeff Currie, global head of commodities for Goldman Sachs, told the Financial Times Commodities Global Summit on Tuesday.
"Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher."
Oil prices tanked to 15-month lows as a crisis at Switzerland's second-biggest bank Credit Suisse, which followed the collapse of two U.S. lenders, led to a takeover by bigger Swiss rival UBS.
Currie emphasised the hit was to the supply side rather than demand and he remains very bullish on copper.
"The deposits have already left ...Cash is going into money markets not into the banks."
"On copper, the forward outlook is extraordinarily postive. We'll be at the lowest observable inventories that have ever been recorded at 125,000 tonnes. We have peak supply occuring in 2024...Near term we put (the copper price) at $10,500 and longer term our price target is $15,000 a tonne."
His remarks echoed those of major copper trader Trafigura which said the price could top $12,000. Copper hit a record high $10,845 in March 2022.
By: Julia Payne for Reuters
© 2023 Reuters.
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Latest in...
Pierre Andurand: Oil Prices Will Hit $140 This Year
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Oil prices will surge to $140 per barrel by the end of this year, hedge fund manager Pierre Andurand said on Tuesday, adding that the recent slump was speculative on the back of the banking sector troubles.
Oil demand, even when it peaks around the end of this decade, will not head for a fast decline, Andurand said at the FT Commodities Global Summit.
"Even when we peak, oil demand won't fall down so fast. We will reach peak demand towards 110 million barrels per day and then a slow decline from there," the hedge fund manager said at the summit, as carried by Reuters.
Early this year, Andurand said that oil could exceed $140 per barrel yet this year if China's economy fully reopens.
At the FT Commodities Global Summit today, Amrita Sen, Director of Research at Energy Aspects, also expressed a bullish view on oil demand for the second half of 2023.
Demand in China is very consumer-driven after the reopening, Sen said at the summit, adding that gasoline and jet fuel demand are set to rebound.
"Jet is going to be the big story this year," Sen added.
Oil prices slumped by $10 per barrel in one week as the markets were roiled by the collapse of two banks in the United States and the near-collapse of Credit Suisse, which was subsequently saved by a takeover by domestic rival UBS.
By: Tsvetana Paraskova for Oilprice.com
© OilPrice.com
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Latest in...
Blackrock CEO Fink: Oil & Gas Is Vital In Meeting Energy Needs
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In his annual letter to businesses, BlackRock CEO Larry Fink emphasized that climate risk remains a major investment risk, but stated that the company will continue to support the oil and gas industry as part of a low-carbon energy transition.
In what sounds like a change of tune, Fink recognized the role of oil and gas in the energy transition, stating that “Different countries and industries will move at different speeds, and oil and gas will play a vital role in meeting global energy demands through that journey,”.
The CEO of the $10 trillion behemoth said that BlackRock would “work with energy companies globally that are essential in meeting societies’ energy needs” and this would include fossil fuel and natural gas companies, provided they are taking steps to mitigate their emissions.
While energy transition-focused investments will clearly remain a priority for the asset manager, the message is much more in line with what we have seen in both the financial world and the energy industry in recent months, a focus on shareholder value creation and energy security.
Oilprice.com’s Irina Slav recently wrote that the growing backlash against ESG investing has become a material risk for the profits of asset managers and private equity firms active in that sort of investing.
By: Tom Kool for Oilprice.com
© OilPrice.com
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Latest in...
Spain Urges LNG Importers To Diversify Away From Russian Supply
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(Bloomberg) -- Spain, the biggest European buyer of liquefied natural gas from Russia, is urging importers not to sign new contracts with Moscow as it seeks to crimp revenues for the Kremlin’s war machine.
LNG importers in Spain received a letter from the government asking companies not to sign up to new purchases from Russia, according to people with knowledge of the matter. The Spanish government’s request isn’t binding as there are no sanctions in place, and only refers to new contracts, according to the people, who declined to be named.
Europe’s pipeline gas flows from Russia have fallen to historic lows since the invasion of Ukraine last year. But to make up for the shortfall, LNG shipments from all over the world have surged — including from Russia.
Spain has almost doubled imports of Russian LNG since the outbreak of the war, highlighting how dependent Europe still is on Moscow.
Read more: EU Is Hooked on Russia LNG and Paying Billions to Keep It Coming
Naturgy Energy Group SA, Repsol SA, TotalEnergies SE, Axpo Holding AG, Pavilion Energy, Enagás SA, Met Energy, Enet Energy, Energias de Portugal SA, Compañía Española de Petroleos SA and BP Gas & Power Iberia were sent a letter on March 14 by Deputy Prime Minister Teresa Ribera, who’s in charge of Spain’s energy policy.
The letter, seen by Bloomberg News, doesn’t explicitly mention spot contracts but makes a general plea to “intensify the diversification of supply of liquefied natural gas and do without those from Russia.” Ribera confirmed in an emailed response to questions that she sent the letter 10 days ago and several companies replied.
By: Stephen Stapczynski, Thomas Gualtieri and Anna Shiryaevskaya, Bloomberg News
©2023 Bloomberg L.P.
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Latest in...
EU Looks To Extend Natural Gas Consumption Cuts For Another Year
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The European Commission on Monday proposed extending the emergency measure which targets a 15% reduction in the bloc’s natural gas consumption by another 12 months to the end of the 2023/2024 winter heating season.
The existing regulation to have natural gas demand cut by 15% expires at the end of this month.
Today’s proposal from the European Commission for another year of gas savings will be discussed by energy ministers at the Transport, Telecommunications and Energy Council (TTE) Council on March 28. EU Commissioner for Energy Kadri Simson already signaled to Ministers in February that a proposal along these lines was to be expected.
Despite the coming end to this winter’s heating season and the historically high levels of gas in storage across Europe, global natural gas markets are expected to remain tight in the months ahead, with a number of possible risks and challenges, including weather, global LNG demand, and macroeconomic conditions, the European Commission said today.
“Commission analysis finds that, in order to fully compensate for the permanent decrease in Russian gas, a continuation of the gas demand reduction is needed to complement the additional LNG and pipeline gas sourced from other countries, and new renewable capacity installed since early 2022,” it added.
By: Michael Kern for Oilprice.com
© OilPrice.com
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WEEKLY DRILLING REPORT MARCH 23, 2023
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WELL: West Akcakoca-1
- Days since move: 36
- Progress: 0 metres
- Measured Depth: 3839 metres
Week Summary:
- 7” casing liner cemented
- Clean wellbore for packer and completion
- Lay down drill pipes
- Run cement log
- Run completion string and set production packer
- Nipple down BOP and nipple up Christmas tree (wellhead system)
- Dummy run prior to perforations (without explosives)
Further Activities:
- Perforate and test West Akaçakoca-1 well.
- Skid back over to Guluc 2 to perforate, test and turn over to production
Gas revenue generated from South Akcakoca-2 and Akcakoca-3 for February amounted to US$1.9 million, which was received on March 20th. Gas flow is set to double once West Akçakoca-1 and Guluc-2 commence production next week.
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Trillion Energy Announces 2022 Year-End Reserve Report
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Trillion's Net Present Value of Proven and Probable natural gas reserves has surged 426% from $82 million to $432 million USD *net to Trillion, while Net Present Value of Proved Reserves increased from 20.1 BCF to 48.6 BCF
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Trillion Energy is an oil and gas producing company with multiple assets throughout Turkey and Bulgaria. The Company is 49% owner of the SASB natural gas field, one of the Black Sea’s first and largest-scale natural gas development projects; a 19.6% (except three wells with 9.8%) interest in the Cendere oil field; and in Bulgaria, the Vranino 1-11 block, a prospective unconventional natural gas property
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Dispatch is a weekly newsletter curated by Trillion Energy which offers a curated selection of articles that shape the world of oil and gas.
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