Civil Aviation To Clean Up The Skies lweb.es/f1831 11.11.2016
The International Civil Aviation Organization (ICAO) announced the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), designed to serve as a global market-based measure to control increases in CO2 emissions from international aviation operations. CORSIA will increasingly require international airspace users and others to measure, verify and report their greenhouse gas emissions to ICAO. CORSIA’s main goal is to allow operators to offset unavoidable aircraft emission growth with a reduction in activities elsewhere by allowing operators to buy carbon credits and outsource the process of reducing emissions.
Mexico and Brazil want a slice from a shrinking pie as international drillers limit their investments during a time of depressed oil prices. Mexico will hold its first-ever deepwater auction December 5th, offering up 10 areas in the Perdido area, near its maritime border with the U.S.; in the southern gulf’s Cuenca Salina; and a separate bid for the joint-venture with Pemex in Trion field. Brazil’s tender, set for 2017, will include “unitized” blocks that extend from already discovered pre-salt areas previously awarded to concession holders. 
Crude oil inventories are near record high levels and are rising on a year-on-year basis. Gasoline and ultra-low-sulfur diesel inventories are increasing to a lesser extent. Inventories of all three remain near seasonally-adjusted record highs. However, the pace of this increase – even though still growing – is slowing rapidly, and this is, on balance, welcome news for energy producers and those who have financial exposure to them. It’s a sign that energy supply and demand are moving more closely into alignment.
Donald Trump’s Energy Plan: Make America energy independent, Conserve our natural habitats, reserves and resources,Declare American energy dominance a strategic economic and foreign policy goal, Unleash American untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves, Become totally independent of any need to import energy from OPEC or any nations hostile to our interests, Open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits, Encourage the use of natural gas and other energy resources that will reduce emissions, reduce the price of energy, and increase our economic output, Rescind all job-destroying Obama executive actions, Reduce and eliminate all barriers to responsible energy production. 
The oil market has experienced structural changes since prices peaked in June 2014. Prices have been driven down by supply-side factors that are principally increased production from U.S. shale and Saudi Arabia’s market share defence. At the same time operational efficiency has been increased, as for example with the companies in the U.S. shale areas, thus begging the question of whether OPEC still matters. Within this context of change it looks to be that the conventional wisdom with regard to the global oil market no longer applies. 
OEF REVIEW:The Brookings report “Lower Oil Prices and the U.S. Economy: Is This Time Different?” explores the effect on U.S. real GDP growth of the sharp decline in the global price of crude oil and hence in the U.S. price of gasoline after June 2014. This decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit. However, the net stimulus since June 2014 has been effectively zero. No evidence of an additional role for frictions in reallocating labor or the price of gasoline in explaining the sluggish response. Neither was there evidence of lower oil costs stimulating other business investment, nor an increase in household savings, nor of households deleveraging.
OEF REVIEW:China’s crude oil output is at a 6-year low as the country’s state-run energy companies continued to pump less from aging, high-cost fields. Production during August dropped 9.9 percent and during the first eight months of the year output dropped 5.7 percent. The country is forecast to lead production declines across Asia, helping tighten the global market as the world’s largest consuming region relies more on overseas supplies. China’s imports rebounded last month to the highest since April. Nomura Holdings Inc. in Hong Kong pointed out that ”China’s crude output won’t see an apparent rebound unless Brent recovers to $60 a barrel level, as most of China’s aging oilfields can’t make a profit below this price,” adding that ”Massive capital expenditure cuts have translated to more oil supply destruction.”
OEF REVIEW:According to the IEA the oil glut in global oil markets will persist into late 2017 as demand growth slumps and supply proves resilient. Stocks of oil in OECD countries are swelling to levels never seen before. The combination of faltering demand and increased OPEC output pushed oil inventories in developed nations to a record in July. BNP Paribas considers that “OPEC’s long game got a little longer”, and also with regard to OPEC Petromatrix GmbH says that the organization is “trapped” since “Non-OPEC supply has been able to adjust better than expected to the lower oil prices.” 
OEF REVIEW:Oil analysts are looking to next year for a rebound. Crude has plunged as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins. Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. “We’re looking at a market that’s still in a very slow process of rebalancing and we don’t think that you’ll get a sustainable deficit until the second quarter of 2017,” said Michael Hsueh. Oil companies’ capital expenditure reductions are set to reach $1 trillion by 2020 and this lack of investment “will have a big impact on global supply,” said Hans Van Cleef who forecast Brent will reach $70 next year. 
OEF REVIEW:After a long period of dwindling demand, China’s oil consumption showed first signs of stabilizing in June. Total apparent oil demand in the world’s second-largest oil consumer averaged 11.32 million barrels a day that month, up 4% from May. Beijing does not release official data on oil demand and stocks, but Platts, by adding refining output as reported by the National Bureau of Statistics, and net imports as reported by the customs department, apparent demand for gasoil of 3.39 million barrels a day in June was down 6.4% year-on-year but up from the 70-month low of 3.14 million barrels a day in May. Fuel oil demand in June dropped 31.6% year on year to 765,000 b/d, and was 10.9% lower from May levels, and apparent demand for gasoline in June recovered from May, with a 4.6% month-on-month rise to 2.81 million barrels a day, which was also 2.6% higher than the same month last year. 
OEF REVIEW:Crude could return to $100 a barrel because the two-year market downturn has curbed investment. Except during the financial crisis in 2008, average Brent prices increased every year from 2002 to 2012, and topped $100 a barrel from 2011 to 2014 and leading companies into higher-costs projects and capacity building that outstripped demand leading eventually to a collapse in prices.