LONDON: Oil prices slumped again on Monday on concerns over scarce storage capacity, especially in the United States, and global economic doldrums from the coronavirus pandemic.
US oil futures led losses, falling by more than $3 a barrel on fears that storage at Cushing, Oklahoma, could reach full capacity soon.
US West Texas Intermediate June futures fell $3.61, or 21.3%, to $13.33 a barrel by 1215 GMT.
Brent crude was down $1.17, or 5.5%, at $20.27 a barrel. The June Brent contract expires on Thursday.
Oil futures marked their third straight week of losses last week, with Brent ending 24% down and WTI off about 7%. Prices have now fallen for eight of the past nine weeks.
The June WTI contract’s price fall may have been triggered partly by investors moving to later months after the May contract lapsed into negative territory for the first time before its expiry last week.
The front-month contract was trading at lower than usual volumes.
“The market is very concerned about a repeat of negative pricing as the Cushing storage and delivery hub saturates,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum. “The shift of open interest away from June will have negative consequences for the liquidity of the contract, potentially leading to greater volatility in its price.” he added.
US crude inventories rose to 518.6 million barrels in the week to April 17, near the record 535 million barrels set in 2017.
Cushing, the delivery point for WTI, was 70% full in mid-April, though traders said all available space was already leased.
Global economic output is expected to contract by 2% this year — worse than the financial crisis — while demand has collapsed by 30% because of the pandemic.
In the United States, a record 26.5 million Americans have filed for unemployment benefits since mid-March and the Congressional Budget Office predicted that the economy would contract by nearly 40% annually in the second quarter.
“The current oil balance is simply awful, and no improvement is anticipated until after June due to (the) massive fall in global oil demand,” said oil broker PVM’s Tamas Varga.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, this month pledged to cut output by an unprecedented 9.7 million barrels per day in May and June.
Kuwait and Azerbaijan are coordinating oil output cuts, while Russia is set to reduce its western seaborne exports by half in May.
Oil prices resume slide on oversupply and storage concerns
https://arab.news/6nuvg
Oil prices resume slide on oversupply and storage concerns
- Crude in US storage near record high
- Brent ended last week down 24%; WTI off around 7%
‘The future is renewables,’ Indian energy minister tells World Economic Forum
- ‘In India, I can very confidently say, affordability (of renewables) is better than fossil fuel energy,’ says Pralhad Venkatesh Joshi during panel discussion
- Renewables are an increasingly important part of the energy mix and the technology is evolving rapidly, another expert says at session titled ‘Unstoppable March of Renewables?’
BEIRUT: “The future is renewables,” India’s minister of new and renewable energy told the World Economic Forum in Davos on Wednesday.
“In India, I can very confidently say, affordability (of renewables) is better than fossil fuel energy,” Pralhad Venkatesh Joshi said during a panel discussion titled “Unstoppable March of Renewables?”
The cost of solar power has has fallen steeply in recent years compared with fossil fuels, Joshi said, adding: “The unstoppable march of renewables is perfectly right, and the future is renewables.”
Indian authorities have launched a major initiative to install rooftop solar panels on 10 million homes, he said. As a result, people are not only saving money on their electricity bills, “they are also selling (electricity) and earning money.”
He said that this represents a “success story” in India in terms of affordability and “that is what we planned.”
He acknowledged that more work needs to be done to improve reliability and consistency of supplies, and plans were being made to address this, including improved storage.
The other panelists in the discussion, which was moderated by Godfrey Mutizwa, the chief editor of CNBC Africa, included Marco Arcelli, CEO of ACWA Power; Catherine MacGregor, CEO of electricity company ENGIE Group; and Pan Jian, co-chair of lithium-ion battery manufacturer Contemporary Amperex Technology.
Asked by the moderator whether she believes “renewables are unstoppable,” MacGregor said: “Yes. I think some of the numbers that we are now facing are just proof points in terms of their magnitude.
“In 2024, I think it was 600 gigawatts that were installed across the globe … in Europe, close to 50 percent of the energy was produced from renewables in 2024. That has tripled since 2004.”
Renewables are an increasingly important and prominent part of the energy mix, she added, and the technology is evolving rapidly.
“It’s not small projects; it’s the magnitude of projects that strikes me the most, the scale-up that we are able to deliver,” MacGregor said.
“We are just starting construction in the UAE, for example. In terms of solar size it’s 1.5 gigawatts, just pure solar technology. So when I see in the Middle East a round-the-clock project with just solar and battery, it’s coming within reach.
“The technology advance, the cost, the competitiveness, the size, the R&D, the technology behind it and the pace is very impressive, which makes me, indeed, really say (renewables) is real. It plays a key role in, obviously, the energy demand that we see growing in most of the countries.
“You know, we talk a lot about energy transition, but for a lot of regions now it is more about energy additions. And renewables are indeed the fastest to come to market, and also in terms of scale are really impressive.”
Mutizwa asked Pan: “Are we there yet, in terms of beginning to declare mission accomplished? Are renewables here to stay?”
“I think we are on the road but (its is) very promising,” Pan replied. There is “great potential for future growth,” he added, and “the technology is ready, despite the fact that there are still a lot of challenges to overcome … it is all engineering questions. And from our perspective, we have been putting in a lot of resources and we are confident all these engineering challenges will be tackled along the way.”
Responding to the same question, Arcelli said: “Yes, I think we are beyond there on power, but on other sectors we are way behind … I would argue today that the technology you install by default is renewables.
“Is it a universal truth nowadays that renewables are the cheapest?” asked Mutizwa.
“It’s the cheapest everywhere,” Arcelli said.
