Good morning. Crude prices are continuing to benefit from OPEC’s supply cut. Meanwhile the drop-off in oil flows from Venezuela is creating opportunities for other sovereign producers to sell their heavy crude but some like Canada are finding it difficult to take advantage of the situation.
Let us know what you think of this newsletter by emailing EnergyJournal@wsj.com.
Did someone forward you this email? Sign Up Here
OIL PRICES EDGE UP
Crude prices neared a three-month high on Thursday on a combination of positive macroeconomic signals and falling output from major crude producers including Saudi Arabia, reports the Journal’s Sarah McFarlane.
Brent crude, the global oil benchmark, was trading up 1.2{01de1f41f0433b1b992b12aafb3b1fe281a5c9ee7cd5232385403e933e277ce6} at $64.34 a barrel on London’s Intercontinental Exchange, having earlier peaked at $64.81, and the highest level since November.
West Texas Intermediate futures, the U.S. oil standard, were up 0.4{01de1f41f0433b1b992b12aafb3b1fe281a5c9ee7cd5232385403e933e277ce6} at $54.29 a barrel on the New York Mercantile Exchange.
CANADA CAN’T CAPITALIZE ON CRUDE SHORTFALL CREATED BY VENEZUELA SANCTIONS
U.S. sanctions on Venezuela have American refiners scrambling to find new sources for the dense crude oil they need to make fuel, but Canadian producers are finding the opportunity too expensive to exploit, write Vipal Monga and Rebecca Elliott.
The U.S.’s northern neighbor, the world’s fourth-largest oil producer, would be a natural candidate to make up for the loss of Venezuelan supply. But much of Canada’s heavy crude is landlocked because of a shortage of pipeline capacity.
Canadian producers have been getting around the pipeline bottlenecks by using trains to carry more crude to the U.S., moving an average of more than 320,000 barrels into the U.S. daily as of November, according to the Energy Information Administration.
But recent data suggest Canada-to-U.S. rail shipments—which cost more than moving oil through pipelines—are now decreasing sharply because they aren’t economically viable at current oil prices.
U.S. AIRLINES HAVE BEEN SLOW TO GO GREEN
Virgin Atlantic Airways flew the first biofuel demonstration flight in 2008. Eleven years later, no airline has done much more than that, writes the WSJ’s Scott McCartney.
The problem: biofuel use is but a drop in a very big bucket. United Airlines, ahead of most airlines in green initiatives, burned 1 million gallons of biofuel in 2017 out of 3.36 billion gallons of jet fuel, or 0.03{01de1f41f0433b1b992b12aafb3b1fe281a5c9ee7cd5232385403e933e277ce6}.
Improvements in new airplanes have reduced emissions significantly, but with more airplanes flying more people, overall tonnage of carbon emitted by commercial aviation has been inching higher.
NASA CALLS IT QUITS FOR OPPORTUNITY MARS ROVER AFTER 15-YEAR MISSION
After hundreds of unanswered calls, NASA mission engineers abandoned efforts to revive the Opportunity, the space agency’s most durable Mars robot rover, writes the Journal’s Robert Lee Hotz.
It lasted longer than any other robot sent from Earth to another planet, agency officials said. Mission engineers made their last attempt to contact it Tuesday night after it become unresponsive last year likely due to massive dust storm that smothered the solar panels that power the craft in dust.
Launched as one in a pair of rovers in 2003, Opportunity touched down after a six-month voyage inside a giant impact crater just south of the Martian equator on terrain that scientists suspected might once have been a lake.
Loaded with three spectrometers, three cameras, a microscope and a rock hammer, the Opportunity robot was a working field geologist, studying rocks and minerals in its path.
NASA’s Mars Curiosity rover, which has been crawling across the surface of Mars since 2012, is plutonium-powered and wasn’t affected.
BIG NUMBER 0.5
Oil traders are dealing with the loss of 0.4–0.5 million barrels per day of Venezuelan heavy crude exports to the U.S. due to Washington’s sanctions on the Latin American country. Additionally “regular buyers such as India and Russia are finding it increasingly hard to lift their regular volumes, let alone absorb the volumes diverted from the U.S., “ said analysts for Energy Aspects in a recent report.
FUTURECURVE
Feb. 26 – 28: The International Petroleum Week takes place in London. Speakers include Bob Dudley the chief executive officer for BP and the chief executive of Saudi Aramco Amin H. Nasser.
SOURCE: MoneyBeat – Read entire story here.
