Dennis U. Atuanya - Comments
Chief Executive Officer at Industrad Limited
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Latest Comments
Peak Oil Demand Is On The Horizon
6 months ago

Well, while that may be inferred, I'm always cautious about "cyclical" processes especially as a basis for investment.

In this article: XOM, CVX, OXY, ECA, PXD
Peak Oil Demand Is On The Horizon
7 months ago

I do share a three-phase process to the decline of oil demand: an initial decline, a plateau and a final decline to a base. That said, the gradient of the first and last phases, as well as the duration of the plateau phase will be determined by factors such as policies, regulations and technology. It may therefore be a little premature to assign well-defined timelines to these.

It is however worthy of note that even OPEC in its recent World Oil Outlook report, projects growth to fall from 1.4 million barrels per day (bpd) in 2018 to about 0.5 million bpd by the end of the next decade.

In a post four days ago, I itemized the challenges facing the US tight (shale) oil industry: and those will be instrumental in shaping the future of oil.

In this article: XOM, CVX, OXY, ECA, PXD
Shale Oil Revolution: The Challenges Ahead
7 months ago

Production from both tight oil and conventional oil resources would probably not be ending any time soon. However, both face challenges going forward. For tight oil, especially shale, the days of frenzied output as seen just a few years ago, are most likely coming to an end.

In this article: USO
Crude Crashes As Saudis Signal Intolerance To OPEC 'Partners' Cheating
7 months ago

For years, OPEC was the world's "swing oil producer" in the sense that it had both high output and spare capacities and that meant that with just a turn of the spigots, oil prices would spike or fall depending on the direction of that turn. However, the massive ramp-up in US shale output has seen that country become the world's largest producer and a swing producer too.

That said, the frenzied US shale output is facing formidable headwinds (I have discussed them in a post to be published shortly) and could see a significant decline if those headwinds endure. In addition, two of the US "shale boom" pioneers recently stated that they do not expect to see those boom years again.

Why Oil Demand Won’t Follow Coal’s Death Spiral
7 months ago

With regard to "third world" countries, it is interesting to note that in what is seen as a pilot program for country and region, Rwanda, which has a German automobile (VolksWagen) assembly plant, is partnering another German energy company (Siemens) among others to develop an e-mobility platform. The assembly plant will be rolling out EVs while charging infrastructure will be provided by Siemens.

Crude Crashes As Saudis Signal Intolerance To OPEC 'Partners' Cheating
7 months ago

Well, OPEC hasn't really had its influence on the global oil market challenged to this degree. However, one factor that may work in its favor is the projection by two shale pioneers, of the decline in US tight oil output.

Crude Crashes As Saudis Signal Intolerance To OPEC 'Partners' Cheating
7 months ago

OPEC is really at "the" crossroads. In its recent World Oil Outlook report, it notes that growth in non-OPEC oil supply will exceed that in global demand by 2024. Further supply cuts by the cartel will only lead to further loss in market share in addition to revenue losses. Maintaining the status quo would probably not bring much relief.

Congress To Lift Four Decade Oil Export Ban: Will It Impact Crude Prices?
4 years ago

Energy issues in the United States legislature are very emotive and almost always divisive. This deal however will most likely be of little effect in the near term. First because in addition to arbitrage issues, U.S. crude grades will be competing with well-established ones of similar grade (e.g. Bonny Light, Qua Iboe Light which sell at premiums to international benchmark Brent). Secondly, in a low oil price regime, the U.S. producers may be unable to offer refiners the necessary price discounts to enable them come on board quickly.

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