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The Biden administration used the COP28 climate summit in Dubai Saturday as a platform to announce a final methane rule for U.S. oil and gas producers aimed at cracking down on methane leaks and banning routine flaring of natural gas produced by newly drilled oil wells.
Also, Vice President Harris touted a U.S. commitment to contribute $3B toward a United Nations fund meant to help developing countries cut greenhouse gas emissions.
Earlier this week, governments reached an agreement on the architecture of a United Nations fund to pay for climate-related damage in poor countries.
Darren Woods was the first Exxon Mobil (XOM) CEO to ever attend a COP climate summit since the meetings began in the early 1990s, and he led a pledge by 50 oil and gas producers including Saudi Aramco and Shell to cut emissions from their own operations.
Exxon’s (XOM) balance sheet and technical know-how mean the company can contribute to the climate discussion and a global energy transition that must involve a range of solutions, Woods said, while rejecting the International Energy Agency’s recent claim that using wide-scale carbon capture and storage technology to fight climate change was an implausible “illusion,” and reiterating his belief that oil and gas will play an “important role” in the world through 2050.
Crude oil prices fell for the sixth straight week, with front-month Nymex crude (CL1:COM) for January delivery closing -1.9% to $74.07/bbl this week and front-month February Brent crude (CO1:COM) settling -2% to $78.88/bbl, with both benchmarks losing ground after OPEC+’s voluntary production cuts announced Thursday only served to prompt skepticism about whether they will actually be delivered.
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Analysts are questioning whether this week’s move is effectively OPEC’s last roll of dice and whether the group would be capable of cutting further if the price of oil continues to soften.
“Traders either aren’t buying that members will be compliant or don’t view it as being sufficient,” OANDA analyst Craig Erlam said, according to MarketWatch, adding the “lack of formal commitment hints at fractures within the alliance, which could impact its ability to hit its targets, let alone cut further if necessary.”
TD Securities strategist Daniel Ghali attributed the two-day oil price downturn to “poor communication” from the OPEC+ meeting, but “as the dust settles, we estimate that the agreement may nonetheless be sufficient to skirt an expected surplus over the coming months.”
The oil and gas sector, as represented by the Energy Select Sector SPDR Fund (NYSEARCA:XLE), finished roughly flat for the week.
This week’s top 10 gainers in energy and natural resources: Fluence Energy (FLNC) +36.6%, Plug Power (PLUG) +30.8%, Scully Royalty (SRL) +28.4%, Rex American Resources (REX) +27.5%, Top Ships (TOPS) +23.7%, Ferroglobe (GSM) +22.9%, Silvercorp Metals (SVM) +19.3%, Silvercrest Metals (SILV) +17.4%, Bloom Energy (BE) +16.4%, AngloGold Ashanti (AU) +16.3%.
This week’s top 5 decliners in energy and natural resources: Net Power (NPWR) -15.5%, Atlas Lithium (ATLX) -13.3%, Contango Ore (CTGO) -11.2%, Frontline (FRO) -10.8%, Braskem (BAK) -9.7%.
Source: Barchart.com