Investment

Middle East Upstream Wins On Investment Dollars, New Jobs

Published

10 months ago

November 20, 2023

A recent World Energy Employment report by the International Energy Agency (IEA) has revealed that jobs in the global oil and gas industry have now fully recovered, and even exceeded, pre-pandemic levels. According to the report, the global upstream oil and gas sector now employs 11.5 million people, with growth being particularly robust in the LNG sector where jobs have increased 33% since 2021 thanks to an abundance of fresh investments. Availability of employment opportunities has, however, been very uneven with National Oil Companies (NOCs) employing about three times as many workers per dollar invested in upstream oil than International Oil Companies (IOCs).

On a regional basis, the Middle East has recorded the strongest growth, a trend that dates back to 2019. The Middle East also stands out as the only region where upstream oil and gas investments have exceeded pre-pandemic levels. Overall, global employment in the energy sector increased by 3.4 million over pre-pandemic levels to 67 million in 2023. Interestingly, many of the new jobs in the energy sector are in construction and manufacturing, which represent over half of the energy jobs today after growing by 2.6 million jobs since 2019.

Another finding: the world is not about to run out of oil and gas due to underinvestment with global research and consultancy group Wood Mackenzie saying that the current global upstream investment clip of around $500 billion per annum is sufficient to meet peak oil demand in the 2030s. According to WoodMac, the global energy sector will generate enough oil and gas through 3 main routes: the development of giant low-cost oil resources, relentless capital discipline and a transformational improvement in investment efficiency. WoodMac has predicted peak oil demand at 108 million barrels per day (bpd) in the early 2030s before entering a phase of terminal decline.

Clean Energy Creating More Jobs Than Oil & Gas

Another important trend has emerged whereby the clean energy sector is creating more jobs than fossil fuels. The IEA report says that the clean energy sectors added 4.7 million jobs globally in the post-pandemic period with the sector now employing 35 million people. In contrast, fossil fuels jobs have only recovered slowly after the epic layoffs in 2020 and remain around 1.3 million below pre-pandemic employment levels, at 32 million.

The report outlines five major sectors of the energy industry that have created the most jobs post-pandemic. These are solar PV, wind, electric vehicles (EVs) and battery manufacturing, heat pumps, and critical minerals mining. These five sectors employ around 9 million people currently. Solar PV has emerged as the largest job creator with 4 million jobs currently. However, EVs and EV battery manufacturing have been the largest source of growth.

Clean energy has seen robust job growth in nearly all the major geographical regions of the world. In contrast, many regions have recorded a decline in fossil fuel jobs, with the global figure only managing to increase due to strong growth in the Middle East, India and Indonesia.

As you might expect, job growth in China’s booming clean energy sector has been robust, with 60% of the country’s energy workforce currently working in the sector compared to 50% just four years ago. China’s clean energy manufacturing employs 3 million people, particularly in solar PV and EV battery sectors.

Clean Energy Investments Surpass Fossil Fuels’

But it’s not just in job creation that clean energy is trouncing fossil fuels. Back In May, the IEA reported that clean energy investments are on track to hit $1.7 trillion in the current year, with solar set to eclipse oil production for the first time in history. IEA has forecast that the coal, gas and oil sectors will receive $1.1 trillion in investments in 2023.

Global clean energy investment is expected to grow 24% between 2021 and 2023, mainly driven by renewables and electric vehicles, significantly higher than the 15% rise in fossil fuel investment over the same period. The IEA says that 90% of this increase has come from advanced economies and China, with China becoming ever more dominant. Low-emissions electricity technologies are expected to account for almost 90% of investment in power generation. Meanwhile, global heat pump sales have seen double-digit annual growth since 2021 while EV sales are expected to surge 33% in the current year.

“Clean energy is moving fast – faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels. For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time,” IEA Executive Director Fatih Birol has said.

By Alex Kimani for Oilprice.com

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

1 week ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

Published

2 weeks ago

August 29, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

Published

1 month ago

August 5, 2024

Harry Miller

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.