Natural Gas Daily: April 21st, 2020
WTI Front-Month Crude Slides into Negative for First Time
The Nymex front-month contract for West Texas Intermediate (WTI) slid into the negative for the first time in history on April 20, closing at minus $37.63/b, because of a lack of storage.
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The Big Picture:
- "For May WTI, the problem is compounded because the contract is settled by physical delivery at Cushing. Storage at the Oklahoma facility is expected to be full within weeks," consultancy Wood Mackenzie said.
Dutch NAM Starts Groningen Closure
The operator of the giant Dutch Groningen gas field, NAM, has begun the work of removing the ten gas wells from the Uiterburen site, marking the start of the decommissioning process, it said April 20.
The Big Picture:
- The field, the cornerstone of Europe's gas industry since its discovery by the Shell-ExxonMobil joint venture, has been brought to an early closure as the production of gas damaged buildings in the vicinity.
- Gas worth tens of billions of euros will be left in the ground when the field is put out of action in a couple of years.
Sonatrach Inks MoU with ExxonMobil
Algeria's national oil and gas firm Sonatrach has signed a memorandum of understanding (MoU) with ExxonMobil on potential joint activities in the country's upstream sector, it said on April 20, shortly after reaching similar agreements with Russia's Zarubezhneft and Turkey's TPAO.
The Big Picture:
- The Algerian company used its latest statement to again draw attention to the merits of its new hydrocarbon law, which came into force in January. The law has reduced the tax burden for subsoil users by over 20%, it said.
British Power Market to See More Negative Prices
Wind now represents a more substantial proportion of Great Britain's energy mix, while gas-fired power stations have to operate at lower load factors. This has resulted in not only record low wholesale prices but a surge in negative pricing events where conventional generators have to pay to dispose of the excess, according to analysis by Cornwall Insight.
The Big Picture:
- Up until April 17 there had been 13 negative price events this year. In 2019, there was only one negative day-ahead occurrence recorded in December (the first-ever recorded).
Halliburton Swings into the Red in Q1
US oilfield services giant Halliburton swung to a $1.02bn loss in the first quarter, it reported on April 20, from a $152mn profit a year earlier.
The Big Picture:
- Hardest hit by the oil market collapse was Halliburton's North American business, with revenues slumping 25% to $2.5bn.
TAP Joins EU Capacity Booking Platform
European pipeline and storage capacity booking platform Prisma and Swiss Trans Adriatic Pipeline have signed an agreement that will open up TAP's future transportation capacity marketing activities, Prisma said.
The Big Picture:
- The 878-km long pipeline connects with the TransAnatolian Pipeline (Tanap) at the Turkey-Greek border in Kipoi, crosses Greece and Albania and the Adriatic Sea, before coming ashore in southern Italy.
