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The 10 Most Important Oil Market Trends For 2020 – OilPrice.com

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The 10 Most Important Oil Market Trends For 2020 – OilPrice.com


As a busy 2019 in the oil and gas industry ends, analysts are busy issuing predictions about next year and what they would mean for oil markets and prices.

This year saw a mix of some of the more predictable events—such as OPEC and Russia extending their cooperation pact, twice—and a ‘black swan’ such as the September attacks on Saudi oil facilities which cut off 5 percent of daily global oil supply for weeks.

As black swans are, by definition, unpredictable, analysts focus on predicting the ‘knowns’ in the market for 2020 as they see them at the end of 2019.

There are many factors to watch in oil markets next year, both in the U.S. and globally.

For the sake of simplicity, here are 10 of the most important predictions and factors to watch in the oil and gas industry in the United States and worldwide.

Independent energy analyst David Blackmon has summed up some predictions, concerning mostly the U.S., for Forbes.

And these are:

1) U.S. shale production will continue to grow

 U.S. shale growth is slowing down, but all analysts and organizations still expect oil supply from the United States to continue to rise in 2020. Growth may be slower, due to reduced capex from drillers, but U.S. will still be the main contributor to non-OPEC supply growth next year.

2) Rig count will remain stable

Despite the fact that the U.S. oil and rig count declined by more than 250 units this year to December 20 compared to the same time last year, the number of active oil rigs last week saw an increase of 18 rigs—the first double-digit growth since the beginning of April, according to Baker Hughes data. Related: Why Hasn’t Hydrogen Gone Mainstream?

3) U.S. oil and LNG exports will continue to rise

Exports of U.S. oil and liquefied natural gas (LNG) are expected to grow with the increase in infrastructure capacity in 2020.

The United States exported more crude oil and petroleum products than it imported in September 2019—the first month in which America was a net petroleum exporter since monthly records began in 1973, the U.S. Energy Information Administration (EIA) said earlier this month.

Total U.S. crude oil and petroleum net exports are expected to average 570,000 bpd in 2020 compared with average net imports of 490,000 bpd in 2019, according to EIA’s latest Short-Term Energy Outlook (STEO).

4)  Oil and gas prices will remain range-bound in 2020

 Rising production from non-OPEC nations not part of the OPEC+ deal, driven by the U.S., Brazil, and Norway, is expected to keep a lid on oil prices, while OPEC+ cuts and an expected pick-up in global economic and oil demand growth will keep a floor under prices.

5) Sudden supply outages will have smaller impact on oil prices

Due to the growing non-OPEC supply, unexpected and short-lived outages are likely to have a smaller impact on oil prices than they would have on markets five or ten years ago, analyst Blackmon says.

Case in point—the mid-September attacks on critical Saudi infrastructure sent oil prices soaring—with WTI Crude touching a five-month high of $62.90 a barrel—but just for one day, as slowing demand growth and a protracted trade war weighed on prices.

6)  Bankruptcies in the U.S. shale patch are set to grow

The number of bankruptcies and companies seeking protection from creditors is expected to rise in 2020, continuing the trend from 2019.

Haynes and Boone estimated at end-September that the U.S. oil and gas industry had 33 filings year to date in September, more than the number of filings in each of 2017 and 2018, at 24 and 28 filings, respectively. 

With reduced capital availability in equity and debt markets, more of the smaller companies could struggle through the next year.

7) U.S. oil and gas mergers & acquisitions are poised to rise

 A growing number of distressed U.S. oil and gas firms and few funding options could mean that the ‘smaller guys’ could be acquired by bigger shale players or the smaller guys could team up to scale operations and cut costs.

Signs of consolidation in U.S. shale have already started to emerge, and the wave is expected to continue in 2020. Related: Bullish Sentiment Remains Despite Oil Price Dip

Shareholders of Callon Petroleum and Carrizo Oil & Gas approved an all-stock merger last week.

Two months ago, Parsley Energy and Jagged Peak Energy announced that Parsley would buy Jagged Peak in an all-stock transaction valued at US$2.27 billion, including Jagged Peak’s debt.

“The inevitable consolidation in the Permian has started and Jagged Peak made a decisive move to team up with the right partner,” said S. Wil VanLoh, Jr., a Jagged Peak director and the founder and CEO of Jagged Peak’s controlling shareholder, Quantum Energy Partners.

In its Q3 2019 Oil & Gas deals insights, PwC said:

“In the quarters ahead, we expect to see more companies merging to create scale, companies continuing to focus on generating positive cash flows and shareholder value, while struggling companies will become more amenable to being acquired or seeking restructuring through bankruptcy.”

Internationally, the key factors to watch in oil markets will be:

8) How oil demand growth will fare as the U.S.-China trade dispute de-escalates

Oil prices hit a three-month high on December 13 amid growing optimism of a phase-one trade deal. In the days following the announcement that a phase-one deal had been reached, China removed six chemicals and oil derivatives from its list of tariffed U.S. imports.  

9) How OPEC+ cooperation will proceed after March 2020

Another key factor to watch is what OPEC and its Russia-led non-OPEC partners will do after March 2020, when the current agreement for deeper cuts expires. The next move by the cartel and its allies will largely depend on how oil demand growth will fare in the typically low-demand growth season in Q1. The move will also depend on how much oil OPEC and friends will have managed to withhold from the market compared to plans—that is, whether all members will have fallen in line and stopped cheating.

10) Sudden supply outages in restive regions

Oil market participants will continue to monitor developments in Libya and Iraq, which could suddenly tighten the market more than anyone had intended to. 

By Tsvetana Paraskova for Oilprice.com

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The 5 Big Banks in Canada

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Banks in Canada

The Big Five Banks is a term used in Canada to describe the five largest banks: Royal Bank, The Bank of Montreal, Canadian Imperial Bank of Commerce, The Bank of Nova Scotia, and TD Canada Trust.

Occasionally, the term “Big Six Banks” is used, with the sixth bank referring to the National Bank of Canada. As of March 2008, the Big Six Banks and Laurentian Bank of Canada are the largest banks in Canada. The Five Big Banks hold over $100 billion in assets, and they are all based in Toronto. World Atlas provides the following data on each of the Big Five Banks.

1. Royal Bank of Canada

The Royal Bank of Canada is the largest of the Big Five with respect to net revenue (C$12.431 billion in 2018) and capitalization (C$150.35 billion as of early 2020). The Royal Bank of Canada has over 16 million clients worldwide, over 74,000 full-time employees and over 1,300 branches. Founded in 1864 in Halifax, Nova Scotia, the bank financed the lumber and timber industries. It was known as the Merchants Bank of Halifax. The Royal Bank of Canada gives 1% of its income to charity.

2. Toronto-Dominion Bank

The second-largest bank in Canada, the Toronto-Dominion Bank has the most assets, which are valued at C$1.4 trillion as of July 2019. This bank has over 22 million clients worldwide, 85,000 full-time employees and over 1,100 branches. The bank was the result of a merger of the Bank of Toronto and the Dominion Bank in 1955.

3. Bank of Nova Scotia

The Bank of Nova Scotia, or Scotiabank, is the next largest bank in Canada with assets valued at C$998 billion as of late 2019, the revenue of C$28.8 billion in 2018 and capitalization of C$87.55 billion. The bank has over 23 million customers worldwide, 89,000 full-time employees and over 1,000 branches in Canada. This bank offers to trade on both the New York and Toronto Stock Exchanges.

Also founded in Halifax, Nova Scotia—this one in 1832—the bank moved its headquarters to Toronto in 1900 to improve the transAtlantic trade industry.

4. Bank of Montreal

The Bank of Montreal is the fourth largest Canadian bank with C$852.2 billion worth of assets in late 2019, the revenue of C$22.8 billion and capitalization of C$64.81 billion as of early 2020. The bank has over 7 million clients in Canada and 939 branches. The bank has over 47,000 employees. It was founded in 1817 and is the oldest bank in Canada. Throughout crises such as World War I, the Great Depression, World War II, and the 2008 Global Financial Crisis, the Bank has consistently met dividend payments.

5. Canadian Imperial Bank of Commerce

The Canadian Imperial Bank of Commerce has C$597 billion in assets, the revenue of C$17.834 billion for 2018, and capitalization of C$48.01 billion. The bank has over 11 million clients worldwide, 1,100 branches in Canada and over 44,000 full-time employees worldwide. The bank was formed in 1961 when the Canadian Bank of Commerce and the Imperial Bank of Canada merged.

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U.S. lawmakers press GM CEO on California emissions

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U.S. lawmakers press GM CEO on California emissions

General Motors Chief Executive Mary Barra faced questions from U.S. lawmakers on Wednesday on a workers’ vote at a company plant in Mexico and the company’s support for emissions reductions.

Barra met with House of Representatives Speaker Nancy Pelosi and other senior Democrats on Capitol Hill, and touted the company’s decision announced earlier in the day to boost spending on electric and autonomous vehicles to $35 billion through 2025.

“We’re committed to an all-EV future,” Barra said in brief comments to Reuters after the meeting. “We had a lot of conversations about a lot of things that we can do to enable EV adoption.”

Until November, GM backed the Trump administration’s effort to block California from setting tougher emissions standards than the federal government.

Pelosi had expressed disappointment with GM’s support for Republican President Donald Trump’s position on the emissions rules, a source briefed on the matter said, and she urged GM to work with California and the Biden administration to reach the strongest possible vehicle emissions standards.

The administration of Democratic President Joe Biden is set to unveil revised vehicle emissions rules in July.

GM said last week it backs emissions reductions outlined in a 2019 deal struck between California and other major automakers, but wants the federal government to endorse changes to speed the adoption of electric vehicles.

Barra also faced questions about a delayed worker vote at a GM plant in Silao, Mexico.

Mexico’s Labor Ministry scrapped an initial union-led vote in April, citing “serious irregularities,” and later ordered the GM union to hold a new ballot within 30 days of its May 11 statement. No vote has been scheduled

The U.S. Trade Representative’s Office in May asked Mexico to review potential labor abuses at the Silao plant under the United States-Mexico-Canada Agreement (USMCA).

Last month, U.S. Representatives Dan Kildee, Bill Pascrell and Earl Blumenauer, all Democrats, pressed GM to answer questions about potential abuses in Mexico.

“We want to see some real demonstration of embracing the labor standards in Mexico — more than compliance,” Kildee told Reuters after the meeting. “The situation in Silao — I raised that with Mary — that’s a problem.”

The Democrats urged GM to commit to providing workers with physical copies of the contract, publicly posting contracts and to meet other requirements.

Kildee offered additional steps GM could take to support workers and meet USMCA requirements, and the three lawmakers followed up with a written list of suggested actions, congressional aides said.

The suggestions “would be tangible demonstrations of GM’s commitment to lead on compliance with the new labor standards,” Kildee told Reuters.

Earlier Wednesday, some House lawmakers on a trade panel, including Kildee, had a virtual meeting with Mexico’s ambassador to the United States in which the GM labor issued was raised.

 

(Reporting by David Shepardson; Editing by Leslie Adler)

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Presenting Your Professional Experience: Numbers Are Your Friends

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B.C. has met its goal of hiring more than 1200 contact tracers

Numbers rule the business world—revenue, headcount, process time, value increase, number of clients, inventory count, profit margin, credit rating, customer satisfaction score. Numbers indicate and measure success or failure, whether a business activity is positive or negative to the bottom line. You’d be hard-pressed to find a business decision made without some factoring in of “the numbers,” be it stats, cost, the potential return on investment.

 

Hiring is a business decision.

 

To make a strong case for yourself (Envision your selling features.) throughout your resume use numbers, the language of business, to quantify your results and establish yourself as someone who can bring value to an employer. Using numbers shows you understand how companies operate and that they exist to make a profit. Most importantly, using results-achieved numbers displays your value.

 

Which job seeker displays better value?

 

Candidate 1: Duties included taking field measurements and maintaining records, setting up and tracking project using Microsoft Project.

 

Candidate 2: Spearheaded the Hazzard County water decontamination project, finishing $125,000 under budget due to a 25% decrease in staff allocation time.

 

Which job seeker gives a clearer picture of their responsibilities?

 

Candidate 1: Supervised team leaders.

 

Candidate 2: Supervised 3 team leaders, collectively responsible for 40 CSRs answering 1,750 – 2,500 calls daily.

 

Which job seeker shows their work ethic?

 

Candidate 1: Completed first editing pass on articles.

 

Candidate 2: Reviewed and evaluated 50 – 75 articles per week, deciding whether to reject the article, forward it to the editorial team, or send it back to the author with revision suggestions.

 

Information quantified means something. Information not quantified is just an opinion. Most resumes are just a list of opinions, thus quantifying your professional experience will set you apart from your competition.

 

TIP: Always use bullets, not paragraphs, to describe your professional experiences.

 

For each position you list on your resume, ask yourself:

 

  • Did I increase my employer’s revenue? How?
  • Did I save my employer money?
  • Did I save time?
  • Was my boss(es), colleagues, staff, customers, vendors, and leadership team members happier because of me?
  • How did I contribute to improving my employer’s business?

 

When answering these questions, quantify (percentage, range, monetary, frequency, before/after comparison, ratio). Creating a resume that WOWs requires filling it with quantified results-rich statements.

 

  • Reduced customer complaints by 47% by implementing a formal feedback system.
  • Improved product delivery time 22% after assigning clarified monthly job tasks to team members.
  • In 2020, grew revenue 33%, and improved gross margin by 22%, by standardizing business operating procedures.
  • Produced $1.75M in cost-savings after renegotiating the company’s supply and service contracts (14 vendors).
  • Built sales organization from the ground up, hiring and training 15 sales representatives within 6 months.
  • In 2019, generated over $7.25M in additional revenue by identifying, pursuing, and securing 4 new international contracts.

 

As I mentioned a few columns back, your resume must clearly and succinctly answer one question: How did you add or bring value to your employers? When it comes to answering this question, numbers are your friends.

 

Something to keep in mind: The king of numbers, the only metric in business that matters, the one that keeps a business alive and profitable, is revenue. As much as possible, throughout your resume and cover letter, demonstrate the results you’ve achieved that were added value to your employer’s financial success.

 

Don’t write on your resume what’s become a cliche, “result-oriented.” Don’t write it on your LinkedIn profile. Don’t say it during an interview. Show your results! “In 2017, I increased sales by 29% by creating upsell opportunities for my 8-member sales team to offer.”

 

Additional tips when bulleting your professional experience:

 

  • Employment dates need to be month/year. Only indicating years is a red flag you’re trying to cover up employment gaps.
  • Under 2 Lines. Your bullets shouldn’t be more than 2 lines.
  • The first 5 – 8 words are critical. When skimming a resume, the reader will likely read the first few words of a bullet then, unless their interest is piqued, move on to the next bullet. The first few words need to be captivating.

 

Next week I’ll cover presenting your education, skills, and certifications. These need to demonstrate your career path, not that you simply attended classes.

______________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at artoffindingwork@gmail.com.

 

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