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Hurricane Delta shuts most U.S. offshore oil output in 15 years By Reuters

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© Reuters. FILE PHOTO: Hurricane Delta passes through Cancun

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HOUSTON (Reuters) – A large and powerful Hurricane Delta dealt the greatest blow to U.S. offshore Gulf of Mexico production in 15 years, halting most of the region’s oil and nearly two-thirds of its output.

Delta was packing 120 mile-per-hour (195 km) winds Friday as it churning through the Gulf’s prime oil-producing area toward landfall on coastal Louisiana in the evening. It was about 160 miles south of Cameron, Louisiana, according to a 7 a.m. CDT update from the U.S. National Hurricane Center.

Delta has shut 1.67 million barrels per day, or 92% of the Gulf’s oil output, the most since 2005 when Hurricane Katrina destroyed more than 100 offshore platforms and hobbled output for months.

Oil prices eased in London trading on Friday, but were on track for gains of about 10% for the week, boosted by outages in the Gulf of Mexico and a labor dispute in the North Sea. The two combined have removed 2 million barrels per day from the market.

U.S. natural gas prices on Friday were on track to close at the highest since November 2019 on the shut-ins. Front-month gas futures rose 11 cents, or 4.3%, to $2.74 per million British thermal units.

Workers had evacuated 279 offshore Gulf of Mexico facilities and producers moved 15 drilling rigs away from Delta’s large and strong windfield. Tropical force winds stretched up to 160 miles from its center, the NHC said, a sign of its large size.

Delta’s force will decrease as it approaches the coast but is expected to remain at or near a Category 3 storm on the 5-step Saffir-Simpson scale. It will bring a 4- to 11-foot (1.2-3.3 meters) storm surge to the coast near landfall, the NHC said.

In addition to oil, producers have halted nearly 62% of the region’s natural gas output, or 1.675 billion cubic feet per day. Offshore Gulf of Mexico fields produce about 15% of oil and 5% of its natural gas production.

Total SA (NYSE:) on Thursday began shutting an oil processing unit at its 225,500 barrel-per-day (bpd) Port Arthur, Texas, refinery because of the threat from Hurricane Delta, people familiar with plant operations said.

Royal Dutch Shell (LON:) Plc said it would continue operating its refineries in Convent, Geismar and Norco, Louisiana, through the storm.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Commodity Tracker: 6 charts to watch this week

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Libyan oil flows have resumed but their stability remains uncertain, while India’s coal powered generation has dipped, granting gains to renewables. S&P Global Platts editors and analysts also discuss the latest Chinese actions on coal imports, Norwegian gas flows to Europe, and separate challenges faced by power markets in the UK and California.

1. Libya’s fragile oil return complicates market outlook

 

Libya oil production timeline 2019 2020

Click to enlarge

What’s happening? Light sweet Libyan crude is starting to trickle through after an eight-month hiatus as rival groups agreed a tentative truce. The prospect of over 1 million b/d hitting the market in the coming months coincides with a brittle demand outlook amid a second wave of coronavirus infections.

What’s next? Libya’s crude output is poised to rise to over 500,000 b/d soon following the restart of the 300,000 b/d Sharara field. But the return is likely to be gradual and prone to delays due to the shakiness of the peace deal and presence of armed groups at key oil infrastructure. The key eastern oil terminals of Ras Lanuf and Es Sider remained closed as stateowned NOC has not lifted force majeure from these ports due to the presence of armed groups there. But loadings from the 250,000/d Zawiya terminal will resume very soon. Most analysts are now expecting Libyan crude output to reach 650,000-700,000 b/d by year-end but many have warned that longer term stability remains uncertain.

Go deeper: Infographic – Libya’s oil infrastructure, output trend and exports

2. Is Indian coal generation proving less ‘sticky’ than expected?

 

Coal in India power mix

What’s happening? India, one of the world’s largest coal consuming countries, has seen a sharp drop in the coal share of power generation this year. Historically, coal made up over 75% of India’s power mix as the country’s energy demand grew rapidly on account of urbanization and economic development, and domestic coal reserves were cheap and abundant. But this year, for the first nine months, coal has accounted for around 69% of the grid-connected generation mix on average, with its lowest at around 63% for June and August, the lowest in years, according to S&P Global Platts Analytics. This is due to the overall drop in power consumption as the COVID-19 pandemic triggered lockdowns, but also because other energy sources like renewables increased in a big way in recent years, but only began to show results during the pandemic.

What’s next? The drop in coal consumption is a huge win for clean energy advocates, as India’s coal addiction has been hard to dislodge, even as major Asian nations like Japan and China begin to move towards long-term de-carbonization. Renewable energy still has the scope to make big inroads into India’s power sector, natural gas is only getting started and there is some optimism that slower growth in coal consumption could be a steady long-term structural trend.

 

3. Australian coal exports to China could be hit by ban in 2021

 

China coal arbitrage

What’s happening? Chinese coal consumers received verbal notice from China’s customs to stop importing Australian thermal and coking coal with immediate effect due to political tensions between the two countries, S&P Global Platts reported Oct. 9. Producer BHP later said its Chinese customers had asked to defer coal deliveries due to the reported order.

What’s next? China has not yet confirmed details formally, but Australia is taking the news seriously, as coal is a major export commodity for the country. S&P Global Platts Analytics has been saying for many months that China will enforce its annual coal quota, despite a large seaborne coal price arbitrage window being open since April, likely in an attempt to encourage domestic buying of coal to help stimulate the economy. While politics are involved, the year-on-year increase in Australian coal exports to China so far this year is a key factor. Any official announcement of a ban should not  affect Australian coal exports to China for the rest of 2020 as coal port import quotas are being enforced. However, it could mean close to a third of China’s Q1 2021 imports displaced and Chinese buyers having to source coal from other markets. Any import ban is likely to affect Chinese steel mills more than power utilities.

 

4. Norwegian gas flows rebound after setbacks

 

Norway gas exports to Europe UK

What’s happening? Norwegian gas flows have rebounded following the end of strike action in early October, with exports now back at highs not seen since the end of March. It has been a volatile few weeks for Norwegian gas, with the strike impacting some 40 million cu m/d of supply, a heavy maintenance schedule in September and a fire at the Hammerfest LNG plant that forced its closure.

What’s next? Norwegian flows to Europe are traditionally higher in the peak-demand winter months, and with day-ahead prices having recovered to Eur14/MWh in recent weeks from their lows below Eur4/MWh in May, operators may look to maximize flows. How Norwegian gas fares in the coming weeks may depend, however, on the reliability of its offshore assets and whether any unplanned outages could impact flows.

 

5. California heat, wind boosting power prices…

 

California power prices

What’s happening? The California power grid operator called for voluntary electricity conservation Oct. 15 with high temperatures driving up cooling demand. Pacific Gas and Electric Company had already de-energized certain electrical lines to about 53,000 customers as part of a Public Safety Power Shutoff. The SP15 pricing point on-peak day-ahead power price was $86.78/MWh for Oct. 15 delivery, a 15% day-on-day jump.

What’s next? Daily high temperatures are forecast to fall this week compared to last in Northern California from the high 70s Fahrenheit into the mid 60s, according to the National Weather Service. However, any return to hot, windy weather could threaten power infrastructure and lead to additional power price spikes.

 

6. … while in UK loss of CCGTs, ageing nuclear pose risks to winter supply

 

UK power price spikes October 2020

What’s happening? The Winter Outlook for UK power supply is generally comfortable, according to National Grid in its annual update Oct. 15. While generation capacity margins are down year on year, they remain well above government guidelines based on a loss of load risk of three hours a year. The reassuring tone of the report, however, was at odds with the state of the system Oct. 15-16, when tight margins due to low wind, rising demand, reduced generation availability and reduced import capacity pushed hourly prices up dramatically, spiking over GBP180/MWh for the evening peak.

What’s next? Power traders believe any recurrence of high pressure weather systems this winter, reducing wind speeds across regions, will prompt further bouts of scarcity pricing similar to those seen last week and in mid-September. For the UK the problem has been exacerbated by Calon Energy’s decline into administration, taking two large CCGTs out of the market at short notice. Add to this an ageing, unreliable UK nuclear fleet and delays to new interconnection capacity, and the expectation is for more capacity warnings from the Grid at short notice, initiating a scramble for flexible supply from gas and, if prices rise over GBP100/MWh, diesel gensets.

Reporting and analysis by Matt Boyle, Eric Yep, Stuart Elliott, Andre Lambine, Henry Edwardes-Evans and Jared Anderson



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Oil Down, With China Reporting Smaller-Than-Expected GDP Growth By Investing.com

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© Reuters.

By Gina Lee

Investing.com – Oil was down on Monday morning in Asia, giving up earlier gains after China released data showing a smaller-than-expected rise in GDP during the third quarter.

were down 0.37% to $42.77 by 11:51 PM ET (3:51 AM GMT) and fell 0.41% to $40.95. Both Brent and WTI futures remained above the $40 mark, with WTI futures rolling over to the December contract on Oct. 18.

China reported 4.9% growth in year-on-year for the third quarter earlier in the day, smaller than the 5.2% growth in forecasts prepared by Investing.com. However, other indicators showed a strong recovery overall for the world’s second largest economy. grew 6.9% year-on-year and grew 3.3% year-on-year in September. The was 5.4%, down from the previous quarter’s rate of 5.6%.

Investors had hoped that positive data from China, a top oil importer, would be indicative of recovery and outweigh ongoing concerns over fuel demand as the number of global COVID-19 cases continues to increase, as well as increasing supply. Chinese oil purchases are expected to slow down during the current quarter as the country continues to fight a COVID-19 outbreak in the city of Qingdao, and as independent refiners face high inventories as well as limited import quotas.

Adding to the black liquid’s woes was the bleak outlook for the oil market presented by OPEC+ during the previous week’s discussions.

The body’s Joint Technical Committee reportedly warned that a prolonged second wave of COVID-19 cases in Europe and a jump in Libyan output could lead to oversupply in 2021, in the worst-case scenario. The gloomy outlook could see changes to OPEC+’s plans to ease output cuts, which would see 2 million barrels per day added to the market in 2021.

Meanwhile, U.S. House of Representatives Speaker Nancy Pelosi set a Tuesday deadline for Congress to pass the latest stimulus measures ahead of the Nov. 3 presidential elections, around two weeks away. President Donald Trump also renewed his offer to increase the measures’ price tag.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Gold Down, Expectations for U.S. Stimulus Rises By Investing.com

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© Reuters.

By Gina Lee

Investing.com – Gold was down on Monday morning in Asia, with China reporting a smaller-than-expected growth in GDP for the third quarter and expectations growing for the U.S. Congress passage of the latest stimulus measures ahead of the Nov. 3 presidential election.

edged down 0.11% at $1,904.30 by 12:29 AM ET (4:29 AM GMT), remaining above the $1,900 mark.

Data released earlier in the day showed a 4.9% growth in year-on-year foe the third quarter, lower than the predicted 5.2% growth in forecasts prepared by Investing.com. However, grew 6.9% year-on-year and grew 3.3% year-on-year. The of 5.4% was down from the previous quarter’s rate of 5.6%.

Although bullion demand saw little demand recovery during the Chinese Golden Week holidays at the beginning of the month, Meanwhile, Indian physical gold dealers are continuing to stock up ahead of a festival expected to increase demand.

Elsewhere, Bank of Japan Governor Haruhiko Kuroda said on Sunday that the central bank would not likely change its inflation target nor its forward guidance despite the Federal Reserve and the European Central Bank reviewing their respective policy frameworks to seek better ways to prop up economic growth amid rising numbers of COVID-19 cases.

Expectations of the U.S. Congress passing the latest stimulus measures before the Nov. 3 presidential election also saw investors cautiously retreating from safe-haven assets such as the yellow metal. House of Representatives speaker Nancy Pelosi has set a Tuesday deadline for Congress to pass the measures and was optimistic that the deadline could be met. President Donald Trump has also renewed an offer to increase the measures’ price tag.

Investors are also eyeing the progress of post-Brexit talks between the U.K. and the European Union, due to be revived on Monday after the previous week’s attempts to reach an agreement failed.

Holdings in SPDR Gold Trust (P:), the largest gold-backed exchange-traded fund globally, were down 0.27% to 1,272.56 tons on Friday, with the U.S. Commodity Futures Trading Commission saying on the same day that speculators decreased their bullish positions in COMEX gold and silver contracts in the week to Oct. 13.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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