China Stops Chartering Oil Tankers in Venezuelan Deliveries

Chinese oil companies have stopped chartering oil tankers that have, in the past year, delivered consignments to Venezuela. This is following a new directive by the United States government sanctioning vessels involved in boosting the Venezuela oil sector. According to the Department of the Treasury, companies aiding the corrupt regime of President Nicholas Maduro are in contravention of current statutes.

Increasing Applications Drive Global Gas Sensors Market

The Global Gas Sensors Market is enduring an exacting period with its robust growth coming to an abrupt halt in light of the COVID-19 pandemic. The rise in the valuation of the gas sensor market can be from 1.1 Billion 2019 to $1.8 Billion in 2025. The availability of a wide range of Gas sensors to detect a range of gases, such as combustible gases, a toxic gases, and flammable can impel the expansion of the market.

Trump to Saudis: Cut Oil Production or Lose Military Support

US President Donald Trump allegedly gave the Saudi administration an ultimatum to stop the infamous price war with Russia. On April 2, Trump apparently made a phone call to Saudi Crown Prince Mohammed bin Salman (MBS), letting him know that unless the Organization of the Petroleum Exporting Countries (OPEC) cut oil production, he would allow lawmakers to go ahead and legislate a US troop withdrawal from the kingdom.

The New Oil Deal – Is Putin Playing Chess and Will Deal Fall Through?

Under the new Saudi- Russo oil deal, Saudi Arabia and Russia lead the record for oil cuts as part of the agreement committed by 23 countries to withhold 9.7 million barrels a day from markets. Western publications, including The New Yorker, ran articles this week with headlines such as “How the Russian-Saudi Oil War Went Awry—for Putin Most of All.”

US-Saudi Oil Alliance – History Repeats Itself and Not in the Positive Way – What’s Ahead?

The US Department of Energy is urging the administration of US President Donald Trump to form an alliance with Saudi Arabia in an attempt to regulate world oil prices, which could lead to Saudi Arabia withdrawing from OPEC. This information became available via The Wall Street Journal which claims that supporters of the US oil Alliance with Saudi Arabia are calling for stabilizing energy prices and preventing their collapse, which occurred after the OPEC talks in Vienna in early March.

Russia-Saudi Oil Price War: Myths, Reality and Global Analysis

This week, one of the main topics around the world is the so called “oil war” between Russia and Saudi Arabia. A myriad of publications are claiming the Russian economy will tank during this oil price war. According to the various economic models, the Russian economical crises is supposed to reach its peak in 2025. That is another reason, beside Putin’s personal aspirations, why he wants to remain in control of Russia. At that point, it could be possible for the West to weaken Russia.

Russia is Using Warships to Secure Nord Stream 2 Completion

In order to complete Nord Stream 2, Russia decided to have the Gazprom vessels accompanied by Russian warships. The route is from the Indian ocean to the Mediterranean Sea. Nord stream 2 is a new export gas pipeline from Russia to Europe via the Baltic Sea. The combined capacity of each of the two Nord streams lines is expected to be 55 billion cubic meters of gas per year. Thus, the total design capacity of Nord stream and Nord stream-2 is 110 billion cubic meters of gas per year.

OPEC Considering Cuts Ahead of March Meeting

OPEC is considering extending its oil production cuts until the end of the year, as the markets are still looking downward, but discussions remain at an early stage. Russia’s TASS news agency quoted a source within the organization on Friday. The source said the group, which includes two oil exporters, was due to meet in March, but it might also meet in June to decide on the policy.

Russia Wants to Sever Ties with OPEC – Does Putin Want His Own Alternative?

Russia’s head of the Minenergo, Alexander Novak, recently stated the nation’s interest is to gradually severe ties with OPEC, the Organization of the Petroleum Exporting Countries comprised of 14 nations. Founded in 1960 in Baghdad by the first five members, OPEC moved its headquartered in 1965 to Vienna, Austria. The countries that joined later were:

Iraq: Protesters Besiege “Strategic” Oil Sites, Mahdi Blocked by Blocs

Iraqi dеmоnѕtrаtоrѕ соntіnuеd on Wеdnеѕdау tо сut оff аll rоаdѕ leading to оіl fіеldѕ аnd sites in Zubair district, west of Bаѕrа city, іn рrоtеѕt against the dеtеrіоrаtіоn оf the есоnоmіс ѕіtuаtіоn in the country dеѕріtе іtѕ hugе oil rеѕоurсеѕ. According tо nеwѕ sources,” thе dеmоnѕtrаtоrѕ рrеvеntеd еmрlоуееѕ frоm ассеѕѕ tо оіl ѕіtеѕ, whоѕе еxроrtѕ ассоunt fоr 70 реrсеnt оf Iraq’s oil.

Saudi Aramco Announces World’s Largest IPO

Sаudі Arаmсо hаѕ аnnоunсеd аn initial рublіс оffеrіng (IPO), wіth a рrісе rаngе of SAR 30-32 реr ѕhаrе ($8 to $8.50), giving рrіоrіtу to Sаudі іnvеѕtоrѕ. Aссоrdіng tо thе рrісе range, the vаluе оf thе wоrld’ѕ most рrоfіtаblе соmраnу rаngеd frоm $1.6 tо $1.7 trіllіоn. The соmраnу wіll аnnоunсе the final ѕhаrе price оn Dесеmbеr 5.

Sudan Budget, in Need of Cash, Prioritizes Health and Education

Thе Sudаnеѕе Cаbіnеt іѕ mоvіng tо rеduсе ѕреndіng on the ѕесurіtу ѕеrvісеѕ and аuthоrіzеѕ the gеnеrаl budget fоr 2020 to fосuѕ оn thе еduсаtіоn and hеаlth ѕесtоrѕ. Thе sources ѕаіd that the vіѕіоn оf the trаnѕіtіоnаl gоvеrnmеnt is tо асhіеvе a соmрrеhеnѕіvе peace іn thе соuntrу, whісh rеԛuіrеѕ rеduсіng spending оn ѕесurіtу ѕеrvісеѕ. The ѕроkеѕmаn of the Sudanese gоvеrnmеnt Faisal Saleh, іn рrеѕѕ ѕtаtеmеntѕ, ѕаіd thаt the Council of Mіnіѕtеrѕ аррrоvеd thе general guidelines fоr thе budgеt fоr 2020, focusing оn thе еduсаtіоn аnd hеаlth ѕесtоrѕ.

Iran Announces Discovery of New Oil Field with 53 Billion Barrels

Irаn has аnnоunсеd thе dіѕсоvеrу оf a lаrgе oil fіеld, with rеѕеrvеѕ of 53 billion bаrrеlѕ of crude oil. The nеwѕ оf the dіѕсоvеrу оf thе оіl fіеld іn thе іntеrnаtіоnаl mеdіа hаѕ also been widely reflected. Hаѕѕаn Rоuhаnі announced the discovery Sunday on state television. However, Iran fасеѕ rеѕtrісtіоnѕ оn thе ѕuррlу аnd sale оf оіl duе to ѕеvеrе oil sanctions. In аddіtіоn, the еxtrасtіоn and ореrаtіоn of this lаrgе oilfield require ѕресіаlіzеd capital and knоwlеdgе, including foreign capital аnd tесhnоlоgу.

Chesapeake Energy Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 9.5% YTM

This week, Durig looks at an energy company that is making the transition from its historical focus on natural gas to be more focused on oil production. Chesapeake Energy (NYSE:CHK) has been making strides this year to transition towards a more oil focused production portfolio. Chesapeake has already increased oil in its production portfolio from 17% in 2018, to 24% as of the end of the second quarter.  The company estimates it will exit 2019 with oil representing 26% of its production. Oil is a higher margin product, so Chesapeake is already seeing the fruit of its decision (see bullet points above).

Iranian Tanker “Attacked,” Oil Prices Soar

An Iranian tanker was hit on Friday in the Red Sea by two blasts, both of them, according to Iranian state media, caused by missiles. The incident took place off the coast of Saudi Arabia and soon raised fears of escalating tension between the two countries in the unstable region. The missile attack could not yet be independently confirmed, but the location of the Red Sea would be unusual— most hostilities involving Iran occur in the Persian Gulf.

Venezuela “Categorically Rejects” Responsibility for Oil Spill

Venezuela denied responsibility on Thursday for oil spills that polluted more than 130 Brazilian beaches. In the community, Venezuelan state oil company PDVSA said Brazil’s accusations about the origin of the oil are unfounded. “PDVSA categorically rejects statements by Brazil’s Environment Minister Ricardo Salles, who accuses Venezuela of being responsible for crude oil that has contaminated the beaches of northeastern Brazil since early September,” the state-owned company said.

Is Yemen Turning into Saudi Arabia’s Vietnam?

The Saudi monarchy experienced attacks against their oil production facilities in the last week. Tensions in the Middle East escalated following the drone attacks on the two largest oil facilities in Saudi Arabia. Yemen’s Houthi rebels claimed responsibility for the attacks.

The global economic impact will be felt, since Saudi Arabia lost more than half of their crude output via the attacks. The nation is the number one oil producer in the world, holds 5% of the global oil supply, and cut output by 5.7 million barrels per day. last year, Aramco’s net income was $111.1 billion.

CSI Compressco Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 10.25% YTM

This week, Durig Capital takes a look at a company that provides compression services and equipment for the oil and gas industry. With the demand increasing for takeaway capacity from oil and gas fields around the country, CSI Compressco’s services become even more valuable and essential. The company had a fantastic second quarter, with record setting utilization, increased revenues and adjusted EBITDA.

 

  • Second quarter overall utilization came in at a record setting 89.1%.

  • Revenues increased by 36% over second quarter 2018.

  • Adjusted EBITDA increased 22% over first quarter and 41% year-over-year.

  • Outstanding interest coverage of 2.2x.

 

Strait Trippin’: Iran Seizes Tanker, US Downs Drone

A month ago, Iran’s Revolutionary Guard shot down an unmanned American drone in the Strait of Hormuz.  Later that week, President Trump called off a retaliatory military attack on Iran at the last minute.  He explained the next day that he did not believe the loss of Iranian lives to be proportionate to the loss of a machine.  On Thursday, the United States appeared to level the score.  US Marines jammed an unmanned Iranian drone in the Strait, downing the aircraft and destroying it.  The incident reignited tensions between the two countries, which seem to be stumbling toward war.

Alaska Governor, Legislature Remain Far Apart (800 miles) on Budget Impasse

In a scene reminiscent of Oregonor Moldova— two separate sides gathered in two separate locations to convene two separate special sessions of the legislature, ostensibly to find two separate solutions to Alaska’s mounting budget crisis.  With 38 senators and representatives gathered in the state capital, Juneau, and 22 in Wasilla, the hometown of Republican Governor Mike Dunleavy, an attempt to override some $440 million in spending cuts appeared to fail Wednesday.  A three-fourths vote by a joint session (one would assume, held in the same place) will be needed by Friday, or Gov. Dunleavy’s line-item vetos will stand.

Has Oil Bottomed? If Demand is So Low Due to China, Why isn’t Copper Showing Any of the Same Patterns?

If oil demand is down so much due to the China trade war and tariffs, how come the more economically sensitive materials, such as copper, have not felt the same economic downward price effects?

Today China has asked it’s refineries to hold off on placing new orders for crude oil imports in anticipation of lower prices once and if demand stalls further. The Chinese buyers have cut off purchases of U.S. crude oil as the trade dispute between Beijing and Washington continues.

Is the Economy Slowing? A Few Indicators Are Saying Yes.

  1. Interest Rates: The 10-year Treasury is hitting around 2.08%, down from 3.25% just three months ago.
  2. Oil is down around $53 per barrel. Down from about $65 in April.
  3. Industrial Production has hit multi-year lows.
  4. Gold and the dollar are moving up.

These four indicators have many forecasting both a tougher time ahead and a rotation into safe havens.  The central focus of concern is the trade wars with China and the new tariffs with Mexico.

Oil Becomes Black Gold Again

Venezuela: The World’s Richest Country in Resources with the Worst Economy in Generations; What Happened?

Updated Review of Entrec Corporation, 16% YTM, Maturing June of 2021

This week, Durig Capital reviews a Canadian heavy haul transportation and crane company. Entrec Corporation provides heavy haul transportation and crane solutions to the oil and gas, construction and power generation industries, among others.  Entrec’s most recent results for both its fourth quarter and full year 2018 showcase healthy growth in the company’s U.S. operations. And given the volatility in oil and gas late last year, the company’s results are even more impressive.

Pull Nearly 12% YTM with CSI Compressco, Bonds Mature August 2022

This week, Durig Capital takes a look at a company that provides compressions services and equipment for the oil and gas industry. CSI Compressco (CCLP) has had multiple successive quarters where the company has increased revenues and its latest quarter did not disappoint. Included with this increase were several other notable achievements.

With the continued demand for LNG and the current and planned LNG terminals in the U.S. and Canada, CSI Compressco looks to be perfectly positioned to take advantage of this demand. In light of the company’s solid performance in 2018, the company’s short-term bonds maturing 2022 are an ideal candidate for additional weighting in Durig Capital’s Fixed Income 2 (FX2) High Yield Managed Income Portfolio, shown below.

Yield Enhancement and Easy Recyclability Pushing n-Hexane Growth in Oil Industry

The n-hexane market will witness significant demand from end-use applications such as oil extraction, polymerization, pharmaceuticals, rubber processing, adhesive & sealant, industrial cleaning & degreasing and others (Inks, Glues, leather dressing, etc.), according to Persistence Market Research’s report titled “n-Hexane Market: Global Industry Analysis 2013–2017 and Forecast 2018–2026.”

Are Oil Prices About to Gush?