The oil and gas industry has enjoyed a golden era under the Trump administration, but it may only be temporary.
Finding enough appetite in the market for a Saudi bond sale is still an issue. Geopolitical risks and concerns about the internal stability of the Saudi royal family could decrease the appetite of major financial institutions. The Kingdom might be listed on several emerging markets indexes (FTSE/MSCI), but investment appetite is being constrained by the impact of the Khashoggi murder, increased volatility in oil markets and pressure on the position of the Crown Prince.
So far, there is no clear data or evidence that that the lithium demand narrative is about to slowdown, let alone reverse. On the contrary, certain emerging trends in the industry suggest just the opposite.
The ballooning number of uncompleted wells has repeatedly fueled speculation that a sudden rush of new supply might come if companies shift those wells into production. The latest crash in oil prices once again raises this prospect.
Oil traders are still awaiting more definitive clues about the supply/demand balance, but volatility is likely to stick around for a while. In the short run, oil prices will likely follow global stock markets up or down on any given day until the fundamentals reveal a more discernable pattern.
Iran’s oil exports are likely to remain limited in 2019, with a significant negative impact on Iran’s economy.
Saudi Arabia has its problems but it could withstand lower oil prices without feeling too much of a pinch.
A price increase from current levels hinges on action from OPEC+. Saudi Arabia has already signaled that it intends to lower exports by 500,000 bpd in December, and that further action might be forthcoming from OPEC+.
If the US shale oil industry is still not profitable – after a decade of drilling, after major efficiency improvements since 2014, and after a sharp rebound in oil prices – when will it ever be profitable?
Oil prices posted steep losses just as the bulls were back on the march. WTI briefly topped $70 per barrel in recent days and Brent was flirting with $80. But the rally was kneecapped by a variety of factors, and it could be challenging to break above those key pricing thresholds in the near future.