Oil to hit $40 by 2030 if climate goals are met -consultancy
Global oil prices could drop to around $40 a barrel by 2030 if governments push to reduce fuel consumption in step with U.N.-backed plans to limit global warming, a leading energy consultancy said on Thursday. In a report outlining a scenario where the world acts decisively to tackle greenhouse gas emissions by electrifying transport and industry, Edinburgh-based Wood Mackenzie said oil consumption would begin a steep drop as early as in 2023. The decline in demand would accelerate to a rate of 2 million barrels of oil per day (bpd) to reach 35 million bpd by 2050, accounting for a 60 per cent drop in carbon emissions from oil use from today’s levels. Oil consumption hit a record of around 100 million bpd in 2019 and is expected to recover strongly this year after cratering last year due to the coronavirus epidemic. As a result, oil prices would begin to slip later this decade, WoodMac said in its report. Under its Accelerated Energy Transition scenario, it expects Brent crude prices to average $40 per barrel by 2030, compared with current prices of around $65 a barrel. By 2050, Brent may slide to $10 to $18 a barrel. “If we move to keep global warming to the 2 degrees Celsius limit set by the (U.N.-backed) Paris Agreement, the energy matrix will change – and change profoundly,” said WoodMac’s Ann-Louise Hittle. The world’s current policies are nevertheless far from aligned with the Paris agreement, with temperatures currently on course to rise by 3 degrees Celsius from pre-industrial levels by 2100, WoodMac stressed. A rapid decline in demand also means that existing sources of oil supplies would be sufficient to meet all future demand, with only limited need for new oifield developments, WoodMac said. A sharp fall in oil demand and prices in the coming decades would have a profound impact on major oil producers such as members of the Organization of the Petroleum Exporting Countries, WoodMac said. “The steep fall in demand prevents those key oil producers from managing the market and supporting prices in the way it does today. Despite losing their price-setting ability, however, low-cost Middle East OPEC producers remain core providers of oil.” Natural gas, the least polluting fossil fuel, would, however, fare better than oil by replacing coal for power generation, particularly in fast-growing Asian economies, the report added. As oil prices declined, gas would eventually trade at a premium to oil under WoodMac’s scenario. Benchmark U.S. Henry Hub prices are forecast to trade at $3 to $4 per thousand cubic feet (mcf) under WoodMac’s scenario. Gas demand in Asia would increase on average by 1.5 per cent a year through to 2050, offsetting declines in more mature markets, which would be switching to renewables from gas.
Transporters’ body terms 16 paise cut in petrol, diesel rates ‘ostentatious’, seeks more reduction
Transporters’ body AIMTC on Friday termed the recent 14-16 paise per litre cut in petrol and diesel prices across major cities as “ostentatious”, and said there is still a room to reduction their prices by up to Rs 40 per litre. In a statement, the All India Motor Transport Congress (AIMTC), which claims representing over 95 lakh truckers and entities, said it is an open fact that this small cut in the petrol and diesel prices has a bearing on the election in four states – West Bengal, Tamil Nadu, Kerala and Assam. All India Motor Transport Congress Chairman (Core Committee) Bal Milkit Singh said, “We welcome the miniscule decrease in prices of petrol and diesel prices by about 14-16 paise per litre across major cities, which is on account of a correction in the price of Brent crude to about USD 62 per barrel in early April 2021 from a peak of USD 70 a barrel in early-March 2021. Currently, the prices of petrol and diesel in the national capital stand at Rs 90.40 and Rs 80.73, respectively, he said. “This suggests that there is still a room for reduction of over Rs 40 in each case.” Singh said the reduction in prices is “cosmetic in nature and too little to make any tangible difference in the current scenario”. Bringing them down further by over Rs 40 “is the need of the hour and the people of the country need relief from the adverse fall-out of second wave of the coronavirus pandemic”, he added. AIMTC also said that in May 2014 when the international crude oil was USD 105 per barrel, the petrol price was Rs 71.41 and diesel price was Rs 56.71. “In December 2020, when crude oil was at USD 47.58 a barrel, petrol in India increased to Rs 90.34 and dielsel Rs 80.51,” he said. The current crude prices is of July 2009 level when crude oil was around USD 64.82 per barrel and the petrol prices in the country was Rs 40.62 and diesel price was Rs 30.86, Singh said in the statement.
Petrol, diesel price revision on hold again a day after cut in rates
Fuel prices in the country remained unchanged on Friday a day after oil marketing companies decided to cut the retail price to pass the benefit of softer global oil prices to the consumers. Accordingly, pump price of petrol and diesel remained at Thursday’s level of Rs 90.40 a litre and Rs 80.73 a litre respectively in Delhi. The price of the two auto fuels had fallen by 16 paise and 14 paise per litre respectively on Thursday after a 15 day break when OMCs kept its prices static. Across the country as well the petrol and diesel prices remained unchanged on Friday but its retail levels varied depending on the level of local levies on respective states. Premium petrol, however, continues to remain over Rs 100 a litre in Mumbai and several other cities across the country. The OMCs went on a price cut for the first time this year on two consecutive days — March 24 and 25 after keeping oil prices steady for the past 24 days. It again reduced the price on March 30. Thereafter, fuel prices have remained unchanged for the past 15 days before falling again on April 15. Earlier, petrol and diesel prices increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre respectively so far this year. With global crude rising again and crossing $ 67 a barrel mark, OMCs may have to revise fuel prices upwards again. OMCs benchmark retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate.
Oil falls amid surging coronavirus infections in India, other countries
Oil prices fell on Monday amid mounting concerns that surging caseloads of coronavirus infections in India and other countries will lead to stronger measures and hit economic activity, along with demand for commodities such as crude. Brent crude was down 43 cents, or 0.6%, at $66.34 a barrel by 0139 GMT, after rising 6% last week. U.S. oil was down 42 cents, or 0.7%, at $62.71 a barrel, having gained 6.4% last week. “With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi. India reported 261,500 new coronavirus infections on Sunday, taking cases to nearly 14.8 million, second only to the United States, which has reported more than 31 million infections. India’s deaths from COVID-19 rose by a record 1,501 to reach a total of 177,150. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement late on Sunday. Japanese companies believe the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for a further blow to business, a Reuters monthly poll showed. Japan has had far fewer COVID-19 cases than many other major economies, but concerns about a new wave of infections are rising fast, according to their responses in the poll. A slower rollout of vaccinations compared with other Group of Seven advanced countries and the lack of a sense of crisis among the public will trigger a new wave of infections, some companies wrote in the poll.
Natural gas leading source of EU’s power emissions: analysis
Gas power plants overtook lignite coal plants in 2020 to become the European Union’s largest single source of emissions from electricity, an analysis of the bloc’s Emissions Trading Scheme showed Friday. Gas plants produced 231 million tonnes of carbon dioxide across the continent in 2020 according to the analysis conducted by energy think tank Ember. Emissions from coal plants meanwhile plunged, with lignite emissions falling 23 percent in 2020 compared with 2019. Charles Moore, Ember’s European programme lead, said gas was now the biggest emitter thanks to cheaper renewables and carbon pricing squeezing coal out of the market. But he warned that nations investing heavily in gas infrastructure risked losing out as the price of renewables such as wind and solar continues to fall over time. “Nations making short-term decisions to switch coal for gas have ignored the mega-trend from fossil fuels to renewables,” Moore told AFP. “Investments in new large gas plants now, with normal lifetimes of 25 years, will already become stranded assets in the 2030s.” If emissions from hard coal power plants are factored in, total coal power emissions in the EU are now 58 percent below levels registered in 2013. The analysis showed that overall emissions from the power sector were responsible for just over 50 percent of the total emissions covered by the Emissions Trading Scheme, down one percent from 2019. In absolute terms, power sector emissions fell 140 million tonnes, or 17 percent, year-on-year in 2020. – ‘Pace of change’ – Natural gas produces roughly half the carbon pollution as lignite coal per unit of energy produced. While emissions from lignite and hard coal combined were higher than natural gas, they were considered as separate fuels in the analysis given the divergence on cost and emissions intensity. Low gas prices last year and robust carbon pricing meant that gas was cheaper even than the historically inexpensive lignite last year. In 2020 gas plants accounted for 33 percent of power sector emissions in the ETS, up from 16 percent in 2013. Gas in 2020 was the largest emitting fuel used in 11 EU countries, the analysis found, including in Britain, France, Spain, Belgium, Austria, the Netherlands, Italy, Malta, Latvia and Ireland for the first time. The EU is expected next week to finalise its criteria for what constitutes sustainable investments, with some states, particularly from the east of the bloc, pushing for natural gas to be included. Moore said these countries had “not yet understood the pace of change” in renewable energy prices. “As the deployment of renewables accelerates to deliver Europe’s climate targets, gas will follow coal into Europe’s history,” he said.
Asian spot LNG prices rise as China replenishes inventories
Asian spot prices for liquefied natural gas (LNG) rose this week as China, Japan and South Korea sought supply in an early move to stock up for winter, industry sources said. The average LNG price for June delivery into Northeast Asia was estimated at about $7.60 per million British thermal units (mmBtu), traders said. Last week, cargoes for May delivery were about $7.30 per mmBtu. “Companies are stocking up earlier for the next winter, after all the supply disruptions from the past months,” a London-based trader said. A colder than average winter in the northern hemisphere and a ship congestion at the Suez canal, the fastest route between Asia and Europe, have boosted prices since December. Japan Petroleum Exploration Co Ltd was seeking a cargo for delivery between May 22 and June 13 to the Soma terminal. Distributor ENN Energy Holdings Ltd. bought at least 12 cargoes for delivery between July and February in China, traders said. Pavilion Energy said on Thursday it had imported Singapore’s first carbon-neutral LNG cargo. Europe is also storing up gas as a cold spell sustained heating demand and slowed stock replenishment, which are below historical levels for this time of the year, traders said. The amount of gas flowing to U.S. LNG export plants averaged 11.0 bcfd so far in April. The volume would top March’s monthly record of 10.8 bcfd, as low internal prices compensate for the cost of liquefying and transporting the super-chilled fuel to Asia, traders said Analysts, however, said they do not expect LNG feedgas to break March’s record in April because flows were expected to decline this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc’s Corpus Christi facility in Texas and Cameron LNG’s plant in Louisiana.