Oil And Gas News

(Oil Price) – If Big Oil was starting to feel good about its government-sponsored climate-era glow-up, they may be in for a rude awakening, with the U.S. Energy Department reportedly preparing to pull the plug on nearly $10 billion in clean-energy funding, according to new memos seen by the Wall Street Journal.

The DOE’s move could put everything from hydrogen hubs to carbon capture collaborations in the crosshairs—yes, even those buzzy projects with ExxonMobil and Occidental.

According to internal memos making the rounds, the cuts could gut two key DOE offices tasked with steering the country’s most ambitious decarbonization efforts. That includes government contracts already inked or in the pipeline, which means a whole lot of projects might suddenly find themselves without a dance partner—or a checkbook.

The irony is rich. For over a year, energy giants like Exxon, Chevron, and Occidental have begged Washington for clarity and consistency in clean energy policy. “Just give us the rules and we’ll play,” they said. So D.C. gave them money instead. Now? Cue the nervous glances as the rules—and the funding—start evaporating.

It’s not just the oil titans who could take a hit. Solar players like First Solar, SunPower, and Shoals Technologies are all on the list of possible collateral damage. So are energy storage hopefuls, hydrogen dreamers, and the handful of carbon-capture firms still convincing investors that this time it’s for real.

If finalized, the cuts would signal a sharp pivot in how the federal government views its role in energy innovation. The gaping divide between the two political parties in the United States is set to dish out a dose of whiplash. One minute, the government is dishing out IRA billions, and the next minute, a new administration is ghosting clean-tech suitors mid-date.

For companies banking on Uncle Sam’s backing to meet emissions targets—or just stay afloat—this is a sudden reality check.

For those who feel like the green gold rush is still on in the United States, it may be wise for companies to at least bring their own wallet.

By Julianne Geiger for Oilprice.com

(BOE Report) – BP’s board is up for re-election at its annual general meeting on Thursday as the group faces activist shareholder Elliott Management and climate-focused investors who have called for a vote against Chair Helge Lund.

BP, whose stock has been underperforming rivals such as Shell and Exxon, has come under increased pressure to boost its share price after U.S. hedge fund Elliott Management built up a nearly 5% stake in recent months.

CEO Murray Auchincloss and Lund supported previous chief Bernard Looney’s 2020 plan to slash BP’s oil and gas output by 40% this decade and invest heavily in renewables. A few months later BP started backtracking.

In a bid to regain investor confidence, Auchincloss, who was finance chief under Looney, in February announced BP would completely abandon the plan and renew its focus on oil and gas.

“The company pursued too much while looking to build new low carbon businesses. And some existing businesses did not operate with the expected reliability and efficiency. I can assure you lessons have been learned from this,” Lund told shareholders at Thursday’s meeting.

Some climate-focused investors are unhappy that BP is not offering a vote on the strategy U-turn.

In addition to smaller investors, Legal & General, a top-10 BP shareholder according to LSEG data, has called for a vote against Lund.

Lund announced this month he would step down likely in 2026, but a poor turnout from his supporters at Thursday’s meeting might expedite his exit. Board members need 50% of votes to be elected and typically achieve tallies near 100%.

Influential proxy advisors Institutional Shareholder Services Inc (ISS) and Glass Lewis have recommended that shareholders vote in favour of the re-election of BP’s 12-member board.

(Reporting by Shadia Nasralla; editing by Ed Osmond and Emelia Sithole-Matarise)

(BOE Report) – A steep drop in crude oil prices largely due to U.S. President Donald Trump’s tariffs will squeeze budgets of emerging market oil exporters, analysts said, while the potential economic slowdown could also curb any benefits for importers.

Concerns about the impact of a tit-for-tat trade war on global growth and demand for oil sent Brent crude prices plummeting by more than 20% within a week to a four-year low after Trump announced his sweeping tariffs on April 2.

Prices have since recovered some ground to around $66 per barrel from below $60.

Turkey, India, Pakistan, Morocco and much of emerging Europe relying on oil imports are set to see some benefits from lower prices of crude. But oil exporting states including Gulf countries, Nigeria, Angola, Venezuela and to some degree Brazil, Colombia and Mexico will feel the pain of losing a chunk of hard-currency revenues, investors said.

“Losers will be hit relatively harder than the upside seen in importing countries,” said Thomas Haugaard, portfolio manager for emerging market debt at Janus Henderson Investors.

“Oil exports often contribute considerably to public finances which will spill over into credit risk premiums.”

Current oil prices are well below the average budget assumptions of $69 across main oil exporters’ year-ahead projections, as calculated by Morgan Stanley, flagging Angola and Bahrain as the countries most sensitive.

Angola is already feeling the pinch.

It had to pay $200 million last week after JPMorgan issued a margin call on the southern African nation’s $1 billion total return swap, the finance ministry said. The total return swap is a loan issued by the lender last December, backed by Angola’s dollar bonds.

“The current context has affected the commodities market and emerging market Eurobonds, including the trading level of Angolan Eurobonds, and has triggered a margin call. Angola fulfilled its obligation on time and in cash,” the ministry told Reuters on Monday.

Angola opted for the collateralised loan to manage liabilities at a time when its Eurobond market access faced uncertainties due to high external debts to a range of foreign creditors including China and other commercial lenders.

Like other so-called frontier issuers, average yields on Angola’s dollar bonds have surged to double digits in the selloff of risky assets following the U.S. tariffs.

The International Monetary Fund classifies Angola’s debt as being at risk of high debt distress, but the Angolan government said the country’s debt trajectory remains solid and on a stable path.

SOME DEBT TRADES UNRAVEL

The drop in the price of crude is also undoing frontier markets debt trades that had held up for at least a year, JPMorgan said in a research note.

It cited the Nigerian carry trade, which involved investing in the oil exporter’s Treasury bills on bets the naira currency will not depreciate quickly against the dollar. Investors now risk incurring losses if the lower crude price hits the naira.

“The central bank has had to increase its dollar sales interventions in order to avoid convertibility risks and limit a disorderly move,” JPMorgan said in a note to investors.

A sustained drop in the price of oil could undermine recent progress on economic reforms, and even reverse progress, said analysts.

Oil accounts for about 90% of Nigeria’s exports and crude earnings were set to fund 56% of this year’s budget. The government forecast oil at $75 a barrel in the 2024 budget but has been forced to change its plan.

“We are going back to the drawing board to look at our budget all over again,” Finance Minister Wale Edun told reporters last week.

Gulf oil producers like Saudi Arabia and the United Arab Emirates could weather the storm better given higher reserve levels, relatively low debt and some strides in economic diversification, economists said.

Still, a drop in revenue could complicate their ability to spend on new projects, including de facto OPEC leader Saudi Arabia.

On paper, emerging market oil importers should enjoy benefits from lower import bills, improved current account deficits and a positive impact on inflation pressures – but they also face risks.

“The lower oil price outlook is positive for oil importers, albeit unlikely to counterbalance the significant headwinds from the trade war and the significant downside risks,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

(Reporting by Duncan Miriri in Nairobi and Macdonald Dzirutwe in Lagos; Additional reporting by Migual Gomes in Luanda; Editing by Karin Strohecker and Emelia Sithole-Matarise)

(World Oil) – Vista Energy has acquired Petronas’ 50% stake in a region of the Vaca Muerta shale basin in a deal valued at $1.5 billion USD. The purchase price is comprised of US$ 900 million in cash, US$ 300 million in deferred cash payments and 7,297,507 American Depositary Shares.

LACh spans across 46,594 acres in the black oil window of Vaca Muerta. As of December 31, 2024, it had 247 wells on production. In addition, as of December 31, 2023, LACh had 280 million barrels of oil equivalent (MMboe) of P1 reserves according to the Argentine Secretary of Energy (at 100% working interest). During the fourth quarter of 2024, LACh produced 79,543 barrels of oil equivalent per day (boed) at 100% working interest, of which 71,471 barrels per day (bpd) were oil, according to the Argentine Secretary of Energy.

Vista estimates LACh could potentially hold 400 new well locations to be drilled in its inventory (at 100% working interest). The remaining 50% of LACh is held by operator YPF S.A.

“With this acquisition we gain significant scale in Vaca Muerta with a premium block that has growing production and low operating costs, enabling the acceleration of our long-term plan and strengthening our free-cashflow profile,” said Miguel Galuccio, Vista’s Chairman and CEO. “The acquisition both increases our profitability and enhances our portfolio of ready-to-drill locations in the core area of Vaca Muerta. Importantly, in the current global macro and oil price environment we are consolidating a high- margin, low- breakeven asset, with strong synergies with our ongoing operation, reflecting our constructive long-term view on crude oil demand and supply dynamics. I firmly believe this represents a unique opportunity to create long-term value for our shareholders.”

(Investing) – WASHINGTON  – U.S. President Donald Trump is open to making a trade deal with China but Beijing should make the first move, White House press secretary Karoline Leavitt said on Tuesday.

“The ball is in China’s court: China needs to make a deal with us, we don’t have to make a deal with them,” Leavitt told a press briefing, saying Trump had given her that statement directly in an Oval Office meeting to use.

“China wants what we have … the American consumer, or to put another way, they need our money,” Leavitt said.

China raised its tariffs on imports of U.S. goods to 125% on Friday in a retaliatory move to Trump, who effectively raised U.S. tariffs on Chinese goods to 145%, while putting a pause on planned levies for other countries’ goods.

Responding to the U.S. comment on Wednesday, the Chinese foreign ministry said Washington should stop its practice of “maximum pressure” and give up threats and blackmail if it truly wants dialogue and negotiation.

“This tariff war was initiated by the U.S. side… China does not want a fight, but it is not afraid of one either,” ministry spokesperson Lin Jian told a regular press conference.

Trump has described Chinese President Xi Jinping in admiring terms, but neither man has backed down in an escalating trade war between their two countries.

“The president, again, has made it quite clear that he’s open to a deal with China. But China needs to make a deal with the United States of America,” Leavitt said.

Trump has said he expects something positive to come out of the trade tensions between the world’s two largest economies. But, unlike multiple other nations who have responded to his plans for tariffs by seeking deals with Washington, Beijing has raised its own levies on U.S. goods and not sought talks.

 

 

(Oil Price) – Mexico has temporarily suspended imports of fuels from the United States by truck as it is stepping up inspections of permits in a bid to clamp down on illegal fuel trades, sources with knowledge of the matter have told Reuters.

As Mexico is stepping up cargo inspections, trucks loaded with diesel and gasoline are currently not being allowed to cross the Texas border into Mexico, according to one of Reuters’ sources involved in the delivery of fuels by truck.

Mexican authorities have not yet given a timeline on when fuel trade by road would resume, the sources told Reuters.

Only fuel trade by road is affected, and there aren’t any problems with railway or seaborne fuel deliveries from the United States to Mexico, per the anonymous sources.

The lucrative illegal fuel trade between the U.S. Gulf refining hub and Mexico has prompted Mexican authorities to issue a decree in 2023 establishing measures to combat the illicit fuel market.

Because of its ageing refining capacity and systems, Mexico depends on U.S. fuel imports despite being a major crude oil producer. Mexico is the largest export market for U.S. petroleum products, and petroleum products accounted for 87% of the total energy exports from the United States to Mexico in 2023, according to EIA data.

U.S. petroleum product exports to Mexico averaged 1.2 million barrels per day (bpd) in 2023, up by 1% from the previous year.

However, illegal fuel trade is depriving both the U.S. and Mexico of the revenues and taxes of the legal trade, and Mexican authorities appear determined to crack down on cross-border fuel smuggling.

Last month, the Mexican government said it had seized 10 million liters of diesel stored on “the land of a freight company” in the city of Altamira, in the northeast of the country. The seizure of the fuel at the end of March was followed by the confiscation of another eight million liters of diesel in Ensenada, Baja California, the week prior.

By Charles Kennedy for Oilprice.com

(Oil & Gas 360) – While Recession Worry Is High, Stock Prices Suggest It Has Happened. Stock Prices & Data Also Indicate A Great Natural Gas & Oil Buy-Low Opportunity.  

The S&P 500 dropping 1,312.39 (21.3%) and the NASDAQ dropping 5,420.55 (26.8%) from their highs sure looks like a recession has happened.  Tariff tactics adding to fear and uncertainty had the S&P 500 (Figure 1, blue line) drop to a 4,835.04 intraday low Monday, down 1,312.39 (-21.3%) from its 6,147.43 intraday high February 29.  The NASDAQ (green line) dropping to its 14,784.03 intraday low Monday is down 5,420.55 (-26.8%) from its 20,204.58 intraday high December 16, 2024.  While the S&P 500 down 210 today is a big loss, 5,245 is up 8.5% from Monday’s low.

This stock market drop now looks like the drop with the Coronavirus Recession dictated back in 2020.  Great, great fear of the Coronavirus around this time in 2020 had the S&P 500 (Figure 2, blue line) and the NASDAQ (red line) drop quickly and much.  Energy stocks dropped much also (bold line, red line and line).  Nevertheless, that big recession drop proved to be a very attractive Buy-Low opportunity.

Although tariff fear is a new and large fear, we credit very much needing to be done for no indication of a recession in U.S. employment data.  Five years ago the Coronavirus Recession dropped U.S. employment 25.529 million (Figure 3, green dash).  From 158.714 million in February of 2020 to 133.185 million that April.  7.895 million jobs were lost with Crash 2008, 145.908 million in May of 2008 (red dash) dropped to 138.013 million in December of 2009 (blue, dot-dot-dash).  Last Friday’s report has 163.508 million employed last month (red line), 201,000 more than February.  While both are down from January, they are up much from December.

The number of job openings, becoming employed and unemployed also show no signs of recession, yet.  The Job Openings and Labor Turnover Report (JOLTS) released April 1^st shows 7.658 million job openings in February (Figure 4, bold line).  While that is down much from the post Coronavirus Recession jump and 104,000 fewer than January, it is up in economic growth territory and 246,000 more than June.  5.396 million hired in February (line) is 25,000 more than January and 308,000 more than June.  And while the number unemployed is up much from the Coronavirus Recession rebound low (red line), 7.083 million in March is only 31,000 more than February and 14,000 fewer than July.  Much needing to be done and notable job losses from new trends already happening (like working from home, repairing cars instead of buying new ones and continuing to live with Mom and Dad) have us continue to predict growth, UP, is the direction we head.

Crude oil inventory increasing has helped encourage bearish, recession thinking.  U.S. crude oil  inventory declining to multi-year lows in January (Figure 5, red line) helped tug the price of West Texas Intermediate (WTI) crude oil above $80 per barrel (Figure 9).  Inventory increasing since encouraging uncertainty, recession fear and bearishness has dropped it towards $60 and the current month futures contract price below $60.

 

By oilandgas360.com contributor Michael Smolinksi with Energy Directions

The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Oil & Gas 360. Please consult with a professional before making any decisions based on the information provided here. The information presented in this article is not intended as financial advice. Contact Energy Directions for the full report. Please conduct your own research before making any investment decisions.