The Oilholic has spent the last two days watching frantic motorsport action of a different kind here in the Big Apple accompanied by background vroom that's milder, greener, zero-emission and most certainly less audible compared to petrohead outings.
Welcome to Formula E – the world's first fully electric global motor racing series – with several ex-Formula 1 converts both in and outside the drivers' cockpit. The 2.37km racetrack with 14 turns in Brooklyn's Red Hook neighbourhood, adjacent to the cruise ship terminal, saw twenty-two cars compete for 45 mins plus a final lap in the championship's concluding race in Sunday.
After all the racing, crashing, jostling and competing was done and dusted, Dutchman Robin Frijns claimed the race victory, while Briton Alexander Sims, and Swiss driver Sebastien Buemi finished in second and third respectively.
Of course, the day in the New York sunshine belonged to Frenchman Jean-Eric Vergne of Team DS Techeetah, who became the first double Formula E champion at the season's finale.
Going into Sunday's (July 14) race, Mitch Evans and Lucas Di Grassi were championship contenders, and both needed at least a race win to claim the title. However, Di Grassi's attempt to overtake Evans ran them both into the wall, handing their rival the advantage. The action certainly delighted the competition's backers.
Not least, Swiss electrification and robotics giant ABB; the headline sponsor of the Formula E circuit. The company feels the sport is a joy for motoring purists. Consider this - the 2019 championship had eight different winners in the first eight races, although Vergne ultimately surged ahead with a second victory of the season in Monaco.
From ABB's perspective, the obvious brand equity and exposure aside, the company is using its track connections and participation as a "fertile testing ground" for global mobility's inexorable march to a low carbon, zero-emission future.
Frank Muehlon, Managing Director, EV Charging Infrastructure at ABB, told the Oilholic that the company's association with the sport is not just a routine sponsorship but a vital partnership. "From the circuit safety cars to all the teams, our charging infrastructure is at the heart of it all."
The company is offering bespoke high power charging equipment to the racing teams and sister races such as Jaguar Land Rover's i-Pace e-trophy, which runs teams of its I-Pace electric SUV model before most, if not all of the Formula E races.
"Advanced data gathered at this very race, and others over the course of the season, feed into our research and development efforts run from three global labs (two in Europe and one in China)."
Muehlon added that ABB is automaker "agnostic."
"We are an equal partner to all, and by that I don't imply just the teams you see on track, but anyone in the global automaking world who is getting serous about electric vehicles. Let's face it, that's pretty much every global automaker these days."
At the heart of it all is promoting e-mobility, bringing down charging times and enhancing battery performance. On the latter point at least, Formula E offers a case in point. Not that long ago the drivers needed to change cars midway through the race as the battery could not cope with the rapid drain on it.
However, with an enhanced battery life and back up charging technology, the current Generation 2 Formula E cars last the length of a 45 minute race plus an additional lap.
Looks like we are in for an 'electrifying' progression ahead when it comes to electric mobility, both on and off-track, ABB is certainly counting on it. That's all from the Brooklyn racetrack folks with no petroheads around.
The Oilholic finds himself back in New York for the finale of the ABB Formula E 2019 season. But before watching the FIA-backed electric-mobility powered thrill ride, this blogger paid a visit to the Big Apple's iconic 30 Rockefeller Plaza building known to most locals as 30 Rock, rather than its relatively new christening as the Comcast Building.
Most visitors head to the "Top of the Rock", i.e. the building's observation deck to soak in views of the City's amazing urban sprawl and spectacular skyline. But unlike most, yours truly headed to the bottom to get a glimpse of a fascinating endeavour in energy efficiency.
You won't need to be an engineer to work out that the 30 Rock, and by extension the wider Rockefeller Center – a large complex of 19 buildings covering 22 acres between 48th and 51st Streets – consume copious amounts of power, more so in the summer months with air conditioning on full blast. For a City that consumes close to 15,000 MW of power, keeping things in check is a matter of priority starting right with its Skyscrapers.
It is with this objective that the good folks at 30 Rock set about it using ice! The concept is simple yet brilliant in equal measure – a solution to the summer's searing heat by freezing water at night (when power is cheaper, produced efficiently and loads are lighter) and then using it to cool the building as it melts the next day during peak load periods.
Much of that infrastructure is housed below 30 Rock glanced at by the Oilholic, courtesy of ABB, with the electrification and robotics giant inheriting a legacy service and maintenance contract for 30 Rock from General Electric, following the Swiss company's takeover of its American counterpart's industrial solutions unit GEIS in 2018.
Dubbed "IceBank(s)" by their manufacturer Calmac, the ice freezing and melting units now form the centrepiece of innovation at the heart of 30 Rock's legacy power systems dating back to the 1930s.
According to ABB's Senior Manager in-charge of the contract James Payne, the system's thermal energy storage premise lessens stress on the power infrastructure since consumption during the critical peak hours (which for 30 Rock would be between 11-1pm and 4pm and 5pm), and shifts the demand dynamic to the night-time.
Away from prying eyes, legacy systems intertwined with state-of-the-art digital systems and a maze of pipes, pumps, tanks, wires and fuses get to work day in / day out for a building that has some pretty demanding tenants – not least broadcaster NBC. For them, not just the lights must stay, on but the news must stay on too.
The ICE system has seen constant improvements since 2012 has proved itself to be pretty reliable. As for the sheer numbers, according to a spokesperson, the Rockefeller Center as a whole is served from its 30 Rock hub by a central chilled water plant containing 14,500 tonnes of steam and electric driven chillers.
The water is distributed around the entire building campus through a "main water loop" which travels around the perimeter of the site. Six primary pumps are located in the main plant, four having 6,000 GPM capacity at 125hp and two having 2,000 GPM capacity at 50hp. Each individual building has pumps which then draw off of the primary loop and send the main plant's chilled water to heat exchangers located within each building.
There are seventeen of "primary chilled water riser pumps" which range in size from 1000 GPM at 40hp up to 3500 GPM at 200hp. The secondary side of the heat exchangers have pumps which serve the air handlers and fan coils which serve the tenant spaces, and individual building pumps draw chilled water to heat exchanges located within each building.
If all that sounds a bit heavy, then simply consider this – power costs have come down by as much as 30% on annualised basis using such thermal storage techniques. The concept is not new and has been around for nearly 15 years, but New York is getting seriously serious about it these days.
Beyond the Rockefeller Center, Goldman Sachs, Morgan Stanley and Bank of America towers have all gone down the thermal storage route, with rising take-up in the last five years. ABB, which has been growing it footprint in New York state, says advanced digitisation can work alongside legacy power systems to create an efficient, serviceable power ecosystem incorporating thermal storage, as more and more buildings opt for sustainable solutions and work towards lowering their carbon footprint.
ABB's viewpoint is shared by real estate firm Tishman Speyer, ventilating and cooling systems maker Trane and of course IceBank manufacturer Calmac – all of whom are drivers of thermal storage adoption at 30 Rock. Let's see where the market goes, but the next five years should be interesting. That's all from 30 Rock folks, its time for the Formula E racetrack now!
As widely anticipated, OPEC did indeed rollover its ongoing oil production cuts of 1.2 million barrels per day (bpd), set in place with 10 other non-OPEC producers for another nine months to March 2020.
The announcement was accompanied by a "charter of co-operation", even a poem about that charter (see left, click to enlarge), in-house conjecture that US shale production would eventually decline like the North Sea but not much by way of how the cartel intends to exit from its current output cuts strategy.
Here is the Oilholic's analysis via Forbes. More to follow via other forums and publications. In a nutshell, one's price outlook for crude remains bearish and 2020 could get even more ugly. There is also little on the horizon to ditch $65-70 per barrel average price range for Brent, and $55-60 per barrel price range for WTI, with both likely to be at the lower range rather than the upper range. That's all for the moment folks! Keep reading, keep it 'crude'!
As far as OPEC meetings go, the Oilholic hasn't missed a single one since 2008. Alas, the run had to come to an end at some point and the 176th OPEC Ministers Meeting on July 1-2 will be that point.
However, it is not for lack of trying. In farcical circumstances, OPEC postponed the meeting twice, from April to June to finally the stated July date. Other business, family and personal commitments, as well as business meetings already penned in Vienna around OPEC's June dates (of June 25-26) could not be rearranged for a second time running.
Hence, the Oilholic found himself in the Austrian capital the week before with the rare luxury of not having to spend most of his time camped at OPEC's hub of Helferstorferstrasse 17. Instead, a stroll past Katholische Kirche St. Peter (St. Peter's Catholic Church) nearby admiring its entrance in 35 C sunshine was a nice short distraction from 'crude' matters this week.
Nevertheless, and not to digress, this blogger does not believe he will be missing anything too dramatic. A rollover of OPEC's ongoing 1.2 million barrels per day (bpd) cuts along with 10 Russia led non-OPEC producers is more or less guaranteed. Not least because the organization lacks a clear exit strategy for the cuts, as one opined on Rigzone.
If OPEC ditches the cuts, the result would be bearish for the oil market. If it expands the cuts, the result would be bullish over the short-term, only to boost further non-OPEC production accompanied by a subsequent bearish drag further down the line.
Fellow industry analysts, academics and researchers, the Oilholic interacted with here in Vienna, are of a similar mindset; and inventory rebalancing – the official line for instituting the cuts – remains as rocky as ever while OPEC continues to bleed market share as it produces fewer barrels.
Data agregators say OPEC production is at its lowest since in quite a while. According to a Reuters survey, OPEC pumped 30.17 million bpd in May, down 60,000 bpd from April and the lowest output total on record since 2015.
The Oilholic expects at least a six-month rollover at the stated cuts level of 1.2 million bpd with Saudi Arabia, as usual, carrying most of the burden. At some point, something has got to give. However, the July 1-2 summit will not be that point.
Away from OPEC chatter, the Oilholic also visited Austrian giant OMV's imposing headquarters in Vienna to discuss market permutations, the evolving global fuel mix and the company's take on the energy landscape.
That's all from Vienna folks. Some post-OPEC analysis to follow from London next week! Keep reading, keep it 'crude'!
Addendum I (30.06.19): Upon his arrival in Vienna, well before the meeting has even begun Saudi Oil Minister Khalid Al-Falih has already said he is in favour of a “6 to 9 month” rollover of the output cut, and preferably "9 months."
Addendum II (30.06.19): Remember that bit of about risking market share, well here’s some analysis by Bloomberg, ahead of the ministers’ meeting suggesting that OPEC’s output is on track to slide below 30% of the global market for the first time in three decades. Q.E.D.
Addendum III (30.06.19): OPEC members’ compliance rate with oil production cuts stood at 163% in May, according to S&P Global Platts.
The Oilholic is just about to end his latest visit to Oslo, Norway following a two-day energy technology event but decided to stop en route to the airport to admire the calm waterfront off the Fornebu business district. Here's a view of the Fornebukta. Its serenity is as far removed from the ongoing kerfuffle in oil market as can be.
Both Brent and WTI ended the month of May some 11% lower, with the market just not buying the geopolitical risk angle following attacks on tankers off the Port Of Fujairah.
Now it seems two more tankers have been attacked in the region, but apart from a brief uptick, the bears are still in control. The WTI is well below $60 per barrel, and Brent is struggling to hold the floor at $60. That's because regardless of the market discourse over geopolitical risks in the Middle East and US-Iran tensions; what's actually weighing on the market is the trade tension between US and China.
Were that to be resolved, it would in the Oilholic's opinion be a much bigger bullish factor than skirmishes in the Middle East. Another factor is what is OPEC going to, or rather isn't going to, do next? Its ministers' meeting for April was postponed to June 25-26, and now it seems that going to postponed again to July. All of that at a time when the market remains cognisant of the fact that the cartel does not have an exit strategy for the cuts drive.
Here is this blogger's latest take on the subject for Rigzone published overnight. OPEC is doing a balancing act of compromising its market share in a bid to support the price; but its a temporary stance that can be prolonged, but one that cannot become a default position give US production is tipped to rise over the short-term.
Additionally, should the Russians call off participation in the ongoing OPEC and non-OPEC cuts of 1.2 million barrels per day (bpd); the desired effect of any standalone cuts made by the cartel of the sort it made in the past, would not be quite the same given the ongoing cooperation in itself is extraordinary in nature, and has held firm since December 2016, for the market to price it in as such.
Many fellow analysts here in Oslo share the same viewpoint. OPEC's production came in at a record low of 30.9 million bpd in May, according to the latest S&P Global Platts survey. That's the lowest level since February 2015, before Gabon, Equatorial Guinea and Congo joined, and when Qatar was still a member.
How the cartel reasserts its credibility is anyone's guess but all things considered, it remains difficult to see crude oil benchmarks escape the $50 to $70 price bracket anytime soon. That's all from Oslo folks! But before this blogger take your leave here's another view of the scenic, albeit rain-soaked Oslofjord (above right). It was a pleasure visiting Norway again, reconnecting with old friends and contacts and making yet newer ones. Keep reading, keep it 'crude'!
The Oilholic has spent the last two days in Oslo, Norway attending energy software firm Cognite's annual Ignite 2019 conference at the City's H3 Arena.
Founded by entrepreneur John Markus Lervik, this energy software start-up majority-owned by Norwegian investment firm Aker, has been making waves in the oil and gas industry as a provider of advanced data and digitization services.
The firm's industry solutions and analytics bank on operations and equipment sensors that help boost efficiency, throughput and reduce costs by several multiples – something oil and gas players can easily relate to especially in the current volatile oil price climate and pressure for lower breakevens.
Within just over three years (and counting) of its founding, Cognite has bagged nearly 30 customers including big names such as OMV, Aker BP and Lundin Petroleum. Ignite 2019 was the company's attempt at showcasing what it can offer and trigger debates and dialogues about process efficiencies and optimisation.
Inevitably, in the age of advanced analytics and artificial intelligence, much of the discourse centred on 'Big Data for 'Big Oil'. The conference was supported by companies such as Cognizant, Google, Framo, Siemens, National Instruments and Aker BP to name a few. Nikolai Astrup, Minister of Digitalization of Norway, started proceedings declaring "data is gold."
The minister went on to note: "If we refine, manage and share data appropriately it will lay the foundation for better and more effective public services, new industry successes and create jobs.
"The Norwegian government has just launched an ambitious digitalization strategy, making us a pioneer in creating good public services for citizens, businesses and the voluntary sector."
Following an evening of networking over some fun music and drinks on day one, day two brought more efficiencies discussions to the fore, not necessarily digressing from the oil and gas industry theme but including renewables and low carbon as vital topics.
As were the subjects of advanced data analytics and cloud computing, with Darryl Willis, VP Oil, Gas & Energy at Google Cloud, telling Ignite 2019 delegates that every industry, including energy, will be grappling with data as the new common denominator. "Data science to real time monitoring aided by cloud computing and data analytics would only be to the industry advantage."
Plenty more articles coming up from the deliberations for Forbes, Rigzone and Energy Post over the next few weeks, but that's all from Ignite 2019 on that note. After a few more meetings in Oslo, it'll be time for the big bus home. Keep reading, keep it 'crude'!
Two charts real quick while waiting for OPEC to make an announcement - (1) Direction of the OPEC price basket (including Qatar) and (2) Where the oil benchmarks ended last week (Friday, 30 November)! Let's see what the movement is like by the time this week is done! (Click to enlarge both charts)!
It's the usual manic start to the 175th OPEC Ministers' Meeting here in Vienna, Austria. For those unfamiliar with the drill, here we go - a long queue of analysts and journalists, the Oilholic included, waiting to get in, followed a long queue to go up to see the ministers in the summit's conference room, followed by a mad dash to see them, followed by a media gang b..., I, er media scrum, and the security chucking everyone out! True to form manic wires and tweets follow, and Thursday (6 December) was no different.
Here are some highlights from the Oilholic's attendance and questioning of ministers in two media scrums - that of Saudi Oil Minister Khalid Al-Falih and UAE Oil Minister and current OPEC President Suhail Al Mazrouei - embedded below via his twitter account:
What a commotion we had in the oil markets last week, when Tuesday's (November 13) session saw an intraday decline of 8% for the West Texas Intermediate, and a near similar drop for the Brent front-month contract.
Long calls unravelled in higher numbers as the market increasingly came to the realisation that there was still plenty of crude oil in the market regardless of the Trump versus Iran situation. Of course, as it tends to happen, when the market oversells or overcorrects, a recovery run follows. As it were, come Friday, Brent was down by 4.87% and WTI was down 6.19% on the previous week’s closing position.
If nothing else, what the selloff did was ensure a puncturing of bullish illusions and flag up the fact (again!) that three crude oil producers alone – US, Saudi Arabia and Russia – were pumping more than all of OPEC, albeit with very different geopolitical agendas of their own. The sudden decline also makes for an interesting OPEC meeting scheduled for December 6.
Nonetheless, the proof is in the 'crude' pudding – i.e. the latest CFTC and ICE data which points to a decline in global net-long positions. Starting with Brent contracts – for the week ending November 13, money managers' net long positions fell 17% to 214,832 contracts; the lowest level on record in nearly 18 months.
Concurrently, WTI net-long positions fell 5.2% to 151,984 futures; the lowest since August 2017. Anyone for $100? That's all for the moment folks! Keep reading, keep it ‘crude’!
Market chatter over US oil production appears to be all the rage these days, with many forecasters predicting 2019 to be another record year for the Americans. Some are even predicting US production to be as high as 13.4 million barrels per day (bpd) in 2019.
At the moment, its lurking around 12.3 million bpd according to the EIA. However, the chart below sums it up, and kinda explains why some commentators are so upbeat, given the trajectory of official data and related projections. Please click to enlarge chart. That's all for the moment folks, as the Oilholic is in Oslo, Norway for a conference. More from here shortly! Keep reading, keep it 'crude'!