BP Still Bullish on Long-Term Oil
August 4, 2021
The following are comments from BP’s CEO, Barry Looney in an update after a profitable quarter: Global demand is expected to recover to above 2019 levels by the end of 2021 and LNG demand will increase as a result of higher Asian imports. However, BP added that it is difficult to predict when all current supply and demand imbalances will be resolved and what the ultimate impact of COVID-19 will be. Longer-term, BP has a more bullish outlook on oil over the next 5-10 years on the back of supply constraints.
Looney said, BP raised its oil price assumption to $60 per barrel out to 2025 due to tight supply, up from a forecast of $50 per barrel. Lower investment in oil supply will have an impact on prices over time. He also said BP plans to spend $2 billion out of this year’s $13 billion CAPEX budget on low carbon business.
The API reported that total US crude oil stocks fell by only 879,000 barrels for the week ending July 30th. The expectation for today’s DOE inventory update is for crude stocks to be down 4 million barrels. The API reported gasoline fell by a big 5.8 million barrels and the DOE today is estimated at be down 1.1 million barrels. If the DOE come in close to a 5.8 decline it will be a bullish number and likely turn the current dip around. Distillates were down 717,000 barrels and the estimate for today is for them to be down 755,000.
Private companies added 330,000 jobs in July according to the ADP well below the estimate for 653,000 new jobs.
HollyFrontier Corp and its pipeline partner will buy almost all of Sinclair Oil’s assets in two deals totaling around $2.6 billion dollars, adding new refining, pipeline, and storage assets to their portfolio. A new company HF Sinclair Corp will replace HollyFrontier as the public company trading on the New York Stocks Exchange.
According to Rystad Energy, US tight oil producers have depleted their inventory of drilled but uncompleted wells in the county’s oil regions as of June to 2,381, the lowest level since 2013.
The estimate for today’s propane inventory update is for supplies to build by 1.623 million barrels. The five-year average is a build of 1.083 million barrels.