We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
The world’s largest oil traders are rushing to plough billions of dollars into renewable energy projects in the next five years, as they speed up preparations for a dramatic shift in the world’s energy mix.
Marco Dunand, chief executive of Swiss commodity trader Mercuria, said the company was investing $1.5bn into projects in North America with private equity partners, while Torbjorn Tornqvist, chief executive of Gunvor, said he planned to commit 10 per cent of the company’s equity — hundreds of millions of dollars — over the next two years.
“If you want to exist in 10 years’ time and don’t want to be in renewables then I think it is going to be tough,” Mr Dunand told the FT Commodities Global Summit. “We don’t have a choice” but meet the Paris climate goals, he said, calling it the world’s “biggest challenge”.
The moves illustrate how trading houses that are deeply entwined in the oil market now want to play a bigger role in solar, wind and hydrogen, which are expected to meet a growing chunk of energy demand over the next decade.
“Over the next five years we should have about 50 per cent of our investments into renewables,” said Mr Dunand.
Vitol and Trafigura, who round out the “Big Four” independent trading houses, are also looking to bulk up in renewables and power.
Twice weekly newsletter
Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here.
The trading houses still caution, however, that they do not expect an imminent peak in oil demand, despite projections from companies such as BP that consumption is close to topping out, because they believe developing economies will keep driving growth over the next 10 years.
That is leading them to pursue a twin-track where the core oil trading business still accounts for the vast majority of their revenue but where they are making preparations for a shift should demand growth falter.
“I don’t believe in a zero-carbon future; that is a target that just won’t work,” said Mr Tornqvist, highlighting that 80 per cent of the world’s energy mix is fossil fuels-based. “We need to look for a low-carbon future, not zero-carbon because you are going to aim for something that is impossible [to achieve].”
Russell Hardy, chief executive of Vitol, said the company already had about 500 megawatts of investments in renewables that were either operational or set to come online and a “similar pipeline we’ll invest in over the coming years”.
Recommended
Nick Butler
How oil majors bought into green energy
At the weekend Trafigura revealed plans to build or buy 2 gigawatts of solar, wind and power storage projects over the next few years. It expects to invest roughly $2bn by 2025 in partnership with a big infrastructure investor.
https://www.ft.com/content/394bf3d1-95c9-45e9-ae81-6434d441e237
Hi Mwall. I think you are misguided on the efficacy of hydrogen fuel cells. With renewable energy (after capex) it becomes a clear winner plus an environmental cost must be taken into consideration. With BPs massive infrastructure capabilities the change to a hydrogen transport system is a no brainer. Many be not for small inner city journeys/deliveries but for mainstream transport. ATB Speedy
Hkt123,
Thanks. Some valid points, as with others.
Mindful that markets tend to look ahead, as soon as we have a more substantial likely timeline for a vaccine & ditto forecasts for recovery of the global economy, this sector will enjoy a substantial bounce. No doubt about that. But personally speaking, I'd be surprised if that was before 2021 due to testing requirements for all new vaccines. Otherwise many people will simply refuse taking it.
But I think there's enough evidence that at least the FED prefers a Trump win again as he's more business & market friendly. If Biden wins he'll increase corporation tax. Hence the FED's recent approach to keep rates low, print more stimulus & weaken the dollar, which tends to boost their stock markets. Hence US markets made new record highs only a few weeks ago, despite COVID-19.
By comparison, most of the FTSE 100 has been a huge disappointment. BP is far from alone. Not that I'd expect it to be over 7000. But that it struggles to even hold 6000 is poor considering it began 2020 at well over 7600. But if we can expect anything, it's that markets can be irrational as often as not. - Cheers.
The bottom isn't far off. Hydrogen is a non-starter, due to the energy returned on energy invested. EVs are the future trend, but it's just not primetime yet. Hydrocarbons will be with us for this decade anyway, plus they're used in just about everything that you can think of. As for certain commodities, prices will pick up again. The time-frame is uncertain, but I would say over the next few years, tying in with widespread shortages due to all these dumbo climate-change inspired lockdowns and general supply chain carnage.
Hi Jack,
Totally agree, i still do think its a strong buy and hold (for people like myself) but can get a little frustrating when you don't see much light for over a month. I do think markets will improve when the lockdowns ease.....this bring me onto the interesting topic of a vaccine.
I am not one for conspiracy theories etc but i like to keep my mind open to different opinion on the current situation. I read somewhere that we could have a vaccine either before the presidential election (to help Trump) or just after the election to (to cement victory). If i was to pick one id pick the latter but who knows?!
I do however believe we will have a vaccine this year.
Hi All. How further has this to fall? BP is a large component in many pension funds. The effects of this sell off will be hurting many people now. I must disagree with the heading though, BP is not a joke it is the backbone of pension funds and the quicker the BODs get a grip of the situation the better. Merger with RR to bring about the Hydrogen revolution? ATB Speedy
Hi Hkt123,
It's disappointing to me too, as to any holder. We're close to 25 year lows. But since lockdown measures have tightened again, meaning less travel, so less demand for fuel, no surprise that the entire sector has been hit. In fact, most commodities have fallen back.
Much agree there'll be a VG recovery here in tandem with the global economy. But that'll be delayed as long as many governments policies all over are curtailing economic activity. Anyone's guess how long this will go on for without a vaccine? So BP still a strong buy, but not for those seeking quick profits. - GL.
Sad to see this on the decline again! making a bit of a loss on this but i honestly think it will bounce back - not sure when though! it is taking the p**s a though!
This thing has had it ... the pattern looks dire