The oil price is expected to push above US$60 per barrel also due to a convergence of interests between OPEC and Russia, both of which have declared their intention to limit production levels. However, with a rising US production this is not necessarily sustainable on the long run. Saudi Arabia has indeed a short-term interest to push up the oil price in order to better valorize Saudi Aramco’s partial privatization.
In the long-run however, the Kingdom, with the world largest low-cost oil reserves and aware of the importance of energy transition worldwide and the risk of sitting on stranded reserves, will have a clear interest to fight for market shares and not for price. Oil prices are hence expected to remain between US$50 and US$80 per barrel until around 2030. For short periods of time, the price may spike in any direction, responding to short term economic, financial and/or political events, rather than fundamental long-term market realities. The current oil price of US$60-70/b already incorporates in our opinion a geopolitical risk premium of some US$10-20/b.
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According to the United States Energy Information Administration (EIA), US liquefied natural gas (LNG) export capacity is slated to reach 8.9 bcf/d (251 mcm/d or 91.7 bcm/year) by the end of 2019, making it the third largest in the world after Australia and Qatar. The current US export capacity (as of early December 2018) stands at 3.6 bcf/d (101 mcm/d or 37.2 bcm/year) and will near 4.9 bcf/d (50.6 bcm/year) at the end of the year, when two LNG trains will start operations.
The French Environment and Energy Management Agency ADEME (Agence de l’environnement et de la maîtrise de l’énergie) has outlined a study regarding the possible trajectories for the evolution of the 2020-2060 French electricity mix. It compares the complete cost of several evolutions in the French electricity system between 2020 and 2060, taking into account the latest national objectives set in the energy planning (Programmation Pluriannuelle de l’Energie): raising the share of electricity in the energy mix, cutting the share of nuclear to 50% of power generation by 2035 and raising the share of renewables in the power mix to 36.5-40% by 2030.
The German Association of wind park operators BWO (Bundesverband der Windparkbetreiber Offshore) has welcomed the government's plans to instruct the Federal Maritime and Hydrographic Agency (BSH) to assess the possibility of increasing the country’s 2030 offshore wind capacity target from 15 GW to 20 GW. According to the organisation, the current 15 GW target does not meet the objective of covering 65% of Germany's power generation with renewable energies by 2030. The BWO estimates that the expansion targets have to be raised across all renewable energies with at least 20 GW set aside for offshore wind.
The United Nations Framework Convention on Climate Change (UNFCCC) 24th session of the Conference of the Parties (COP 24) has begun in Katowice (Poland) under the presidency of the Polish government. It will be a crucial time for the implementation of the landmark 2015 Paris Agreement on climate change.