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TotalEnergies SE: aviation contributes to rising oil prices

Aviation has begun to contribute to pushing oil prices up, with the continuous improvement of flights after the collapse of that industry due to the Covid-19 pandemic, said the company TotalEnergies SE.

Initially, the steady recovery in demand for oil to pre-crisis levels, with the exception of jet fuel, led to almost continuous price increases reaching $ 85 a barrel in mid-October, close to a high of seven years.

Aviation

Controlled increases in OPEC + production, continued reduction in crude inventories, and strong investment discipline in oil and gas supported the increase.

In addition, an increase in demand for fuel from the aviation sector is beginning to materialize, also supporting high prices.

In parallel, the growth of gas markets, which began in the first half of the year, accelerated considerably in the third quarter, reaching record levels in Europe and Asia.

Barring an exceptionally mild winter, low gas inventory and expected sustained demand are likely to keep gas prices in Europe and Asia at high levels through the second quarter of 2022, according to TotalEnergies SE.

Given the outlook for OPEC + quotas and seasonal gas demand in the fourth quarter of 2021, TotalEnergies expects hydrocarbon production in the fourth quarter of 2021 to be in the range of 2.85-2.9 Mboe/d.

The company anticipates that oil price increases in 2021 will have a positive impact on its average LNG sales price over the next six months, given the lag effect on pricing formulas. It is expected to be above $ 12/Mbtu in Q4 2021.

TotalEnergies maintains its cost discipline, and net investments are expected to be close to $ 13 billion in 2021, including $ 3 billion dedicated to renewables and electricity.

The company confirms its cash flow allocation priorities: invest in profitable projects to implement TotalEnergies transformation strategy into a sustainable multi-energy company.

The Company confirms its cash flow allocation priorities: investing in profitable projects to implement TotalEnergies’ transformation strategy into a sustainable multi-energy company.

 

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