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Tumbling US oil price transforms trading

Call it a taste of things to come.  As the benchmark US oil price has slumped over the past month, so has the cost of crude in the Gulf of Mexico , one of the largest refining hubs in the world. The sharp price moves reflect the slow creep of the US shale revolution from remote oilfields in North Dakota and Texas to the coasts of the US, and by extension the international crude oil market of which they form a key part. The low prices in the Gulf of Mexico are dramatically altering the incentives to move crude around North America and into the US. And as new trading patterns emerge, they invite scrutiny of one of their underlying causes – the effective ban on the export of crude oil from the US to countries other than Canada. “The entire US crude market is disconnecting from global prices […]

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Brent Crude Traders Claim Proof BFOE Boys Rigged Market

Four longtime traders in the global oil market claim in a lawsuit that the prices for buying and selling crude are fixed — and that they can prove it. Some of the world’s biggest oil companies including BP Plc , Statoil ASA , and Royal Dutch Shell Plc conspired with Morgan Stanley and energy traders including Vitol Group to manipulate the closely watched spot prices for Brent crude oil for more than a decade, they allege. The North Sea Brent benchmark is used to price the majority of the world’s crude and helps determine where costs are headed for fuels including gasoline and heating oil. The case, which follows at least six other U.S. lawsuits alleging price-fixing in the Brent market, provides what appears to be the most detailed description yet of the alleged manipulations and lays out a possible road map for investigators. The traders who brought it […]

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Utilities in Pain Selling Renewable Assets at Record Rate

Wind farms and solar parks are changing hands at record rates, signaling both an increased taste for the assets among pension funds and hard times for utilities that are the biggest sellers. About 43 percent of the 275 deals completed in the power industry in the first nine months were for renewable generators, up from 37 percent in the year-earlier period, according to data compiled by Ernst & Young LLP. The value of all the deals increased to $104 billion from $93 billion. Buyers from insurer Aviva Plc (AV/) to Danish fund PFA Pension A/S are seeking yields averaging about 6 percent on wind and solar, according to data compiled by Bloomberg. Utilities such as France ’s GDF Suez (GSZ) SA, Iberdrola SA (IBE) of Spain and Dong Energy AS have unloaded plants to build cash cushions as power prices slumped and competition increased from independent generators. Utilities “simply […]

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Report: Door closing on easy climate solutions

BRUSSELS, Nov. 5 (UPI) — A U.N. report on greenhouse gas emissions shows combating climate change requires an international effort, the European Union’s climate commissioner said. The U.N. Environment Program published a report Tuesday saying the door is closing on an easy way out of the climate crisis. “Even if nations meet their current climate pledges, greenhouse gas emissions in 2020 are likely to be 8 to 12 gigatons of CO2 equivalent above the level that would provide a likely chance of remaining on the least-cost pathway,” the report said. European Commissioner for Climate Action Connie Hedegaard said the report shows that developing countries account for about 60 percent of the global emissions. This means the fight against climate change needs to extend beyond industrialized nations. ”This is yet another call for climate action which shows the world is not getting its act together fast enough,” she said in […]

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Concentrations of warming gases breaks record

Oil refinery By Matt McGrath Environment correspondent, BBC News 6 November 2013 Last updated at 10:07 The WMO says that fossil fuel related activities such as oil refining are driving atmospheric levels of CO2 to record highs The levels of gases in the atmosphere that drive global warming increased to a record high in 2012. According to the World Meteorological Organization (WMO), atmospheric CO2 grew more rapidly last year than its average rise over the past decade. Concentrations of methane and nitrous oxide also broke previous records Thanks to carbon dioxide and these other gases, the WMO says the warming effect on our climate has increased by almost a third since 1990. The WMO’s annual greenhouse gas bulletin measures concentrations in the atmosphere, not emissions on the ground. Carbon dioxide is the most important of the gases that they track, but only about half of the CO2 that’s emitted […]

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Iran Oil-Export Capacity Slides 22% According to Ship Signals

The combined carrying capacity of oil tankers leaving Iranian ports last month dropped 22 percent from September, vessel-tracking data compiled by Bloomberg show. The implied capacity of departing ships declined to the equivalent of 1.02 million barrels a day from 1.30 million barrels, according to signals gathered by IHS Maritime, a Coulsdon, England-based research company. The data may be incomplete because not all ship transmissions are captured. U.S. and European sanctions are curbing Iran ’s oil exports in an effort to pressure the Middle East country’s leaders to stop their nuclear program. Shipments dropped from more than 2 million barrels a day in 2011, before the latest rules took effect, according to figures from the website of the Joint Organizations Data Initiative. The table below shows estimated vessel capacities in millions of barrels a day, based on signals from tankers that stopped at Iranian ports as well as movements […]

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Iranian prosecutor killed in restive border region

AP Photo TEHRAN, Iran (AP) — Iranian media say a state prosecutor has been killed in the restive southeast region near the Pakistani border, where an attack by militants less than two weeks ago killed 14 border guards. Sixteen “rebel” prisoners were later hanged there in reprisal. It was not immediately clear whether the latest killing was linked to the region’s unrest, which includes clashes with drug smugglers and battles with an armed faction that claims to fight on behalf of Iran’s Sunni minority. The semi-official Fars news agency says unknown attackers on Wednesday killed Mousa Nouri, a prosecutor in the town of Zabol near the Pakistan border. Another news agency, ISNA, quoted the region’s judiciary chief, Ebrahim Hamidi, as claiming the slaying was not connected to the October hangings. © 2013 The Associated Press . All rights reserved. This material may not be published, broadcast, rewritten or redistributed. […]

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Iran frustrated with gas line for Pakistan

TEHRAN, Nov. 5 (UPI) — Pakistan needs to live up to its end of the bargain for a cross-border natural gas pipeline planned from Iran, Iranian Deputy Oil Minister Ali Majedi said. Majedi was quoted by Iran’s semiofficial Fars News Agency as saying the Iranian government wasn’t going to help cover the cost of building the pipeline in Pakistani territory. “We did not make such a commitment to help Pakistan with $2 billion for the construction of the pipeline,” he said Monday. Iran has expressed concern about the project, in the planning stages for decades, because of economic uncertainty from its Pakistani counterparts. Iranian Oil Minister Bijan Namdar Zanganeh was quoted by Fars as saying last week the nullification of the contract “for supplying gas to Pakistan is likely.” Iran’s Western adversaries oppose the pipeline because of the economic benefits it would bring Tehran. Washington, in particular, favors a […]

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Iranian Minister Says Nuclear Deal Is Possible This Week

PARIS — Two days before negotiations resume in Geneva between Iran and the United States and other Western powers aimed at ending a fight over the disputed Iranian nuclear program, the country’s foreign minister sounded an optimistic note on Tuesday, saying a deal was possible as soon as this week. “I believe it is even possible to reach that agreement this week,” Foreign Minister Mohammad Javad Zarif said in an interview with France 24, a major television network here, before meeting with the French foreign minister, Laurent Fabius. “But I can only talk for our side,” Mr. Zarif added. “I cannot talk for the other side.” Iran has been on an outreach mission since the June election of Hassan Rouhani, who appears to have made getting rid of painful economic sanctions a centerpiece of his policy. The country now appears willing both to discuss the enforcement of more comprehensive […]

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Labor strikes halt Libyan oil production

TRIPOLI, Libya, Nov. 5 (UPI) — A teachers’ strike in Zawia, Libya, spilled over to the region’s oil refinery, with oil workers leaving their stations, an employee said. The Libya Herald reports roughly 2,000 people work at the plant in western Libya, which has the capacity to process 125,000 barrels of crude oil per day. “They are letting people out but not letting anyone go back in,” one employee told the newspaper Monday. Libya has struggled to return to a pre-civil war oil production level in excess of 1 million bpd. Labor strikes and national security issues have crippled the energy sector since the end of the war in 2011. Rival groups in the east of the country announced last weekend they declared independence for the region known as Cyrenaica. The region hosts some of Libya’s key oil terminals. The Libyan National Oil Co. last week ended a blockade […]

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Ending a war – but not the bloodshed

US troops patrol Fallujah, Iraq, in 2003 By Tara McKelvey BBC News, Washington 6 November 2013 Last updated at 00:12 “We invaded Iraq to change the way the greater Middle East works,” says Andrew Bacevich. “From that point of view the war is a catastrophic disaster.” Above, US troops patrol Fallujah during a sandstorm in 2005 In September President Barack Obama said, “I was elected to end wars, not start them.” Yet ending wars, as he has discovered, can be as hard as waging them. The former US ambassador to Iraq, James Jeffrey, left Baghdad on a hot day in June 2012. He flew away in a special forces helicopter, as he recalls, and looked down at villas and swimming pools. “It was quiet and peaceful,” he says. He describes his departure as an “emotional” moment – and says that at the time he felt pleased with the outcome […]

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Saudis round up thousands of illegal immigrants

DUBAI (Reuters) – Saudi authorities rounded up thousands of illegal foreign workers at the start of a nationwide crackdown ultimately aimed at creating more jobs for locals, media reported on Tuesday. Hundreds of thousands of workers have already left the kingdom following a grace period of seven months during which authorities told expatriates that if they did not fix their legal status they had to leave the country or face jail. The government hopes that reducing the number of illegal workers will create opportunities for Saudi job-seekers. The official Saudi unemployment rate is 12 percent but excludes a large number of citizens who say they are not seeking a job. However, the majority of the kingdom’s nine million foreigners are unskilled laborers or domestic workers, jobs usually shunned by Saudis. "Since early (Monday) morning, the security campaign got off to a vigorous start as inspectors swung into action," Nawaf […]

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Diplomats Fail to Agree on Details for Syria Peace Talks

GENEVA — Senior diplomats from the United States, Russia and the United Nations failed on Tuesday to agree on a date for convening a long-awaited peace conference aimed at settling the Syria conflict, acknowledging it would not take place this month and possibly not this year. The diplomats adjourned after meetings in Geneva that could not resolve the most basic obstacles: which countries would attend such a conference, who would represent the fractious Syrian opposition and what role — if any — would be played by President Bashar al-Assad of Syria, whose polarizing effects have proved among the most difficult issues to overcome. Lakhdar Brahimi , the United Nations special envoy on Syria, told reporters: “We were hoping that we would be in a position to announce a date today. Unfortunately we are not.” He added, “We are still striving to see if we can have a conference before […]

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Australia's mining sector is expected to suffer from China's economic downturn, says a new report.

SYDNEY, Nov. 5 (UPI) — Australia’s mining sector is expected to suffer from China’s economic downturn, says a new report. “With China’s economy on course for a rude slowdown over the coming years,” says the report, released Monday by London-based research consultants Business Monitor, “Australia’s mining sector is set to suffer the painful spillover effects of a sharp investment slowdown.” The report notes that Australia has been among the biggest beneficiaries from the China-led commodities boom over the past decade. The value of the Australia’s mining industry had increased more than six-fold from $24 billion in 2003 to $147 billion in 2012, boosted by a sharp rise in the value of Australia’s mineral exports, particularly iron ore and coal. While Business Monitor predicts the value of Australia’s mining sector to reach $181 billion by 2017, the average annual growth rate is expected to be 4.3 percent through 2017, compared […]

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Australia’s mining sector is expected to suffer from China’s economic downturn, says a new report.

SYDNEY, Nov. 5 (UPI) — Australia’s mining sector is expected to suffer from China’s economic downturn, says a new report. “With China’s economy on course for a rude slowdown over the coming years,” says the report, released Monday by London-based research consultants Business Monitor, “Australia’s mining sector is set to suffer the painful spillover effects of a sharp investment slowdown.” The report notes that Australia has been among the biggest beneficiaries from the China-led commodities boom over the past decade. The value of the Australia’s mining industry had increased more than six-fold from $24 billion in 2003 to $147 billion in 2012, boosted by a sharp rise in the value of Australia’s mineral exports, particularly iron ore and coal. While Business Monitor predicts the value of Australia’s mining sector to reach $181 billion by 2017, the average annual growth rate is expected to be 4.3 percent through 2017, compared […]

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China's Slower Growth Puts a Drag on Western Profits

Just as European economies are showing signs of stabilizing and the U.S. economy is waking up, some companies are running into obstacles in a market long considered their brightest hope: China. U.S. and European companies invested heavily in recent years to expand in China, seeking to tap into its flourishing middle class and fast economic growth. Since the global recession, China has helped offset the free fall in sales and profits in the euro zone and stagnant revenue in the U.S. But the latest set of quarterly earnings results reveal that for many companies, China has been a drag. While some industries did well, the combination of slower economic growth, plus government crackdowns that have put fresh scrutiny on the way companies win new business, hurt sectors from technology to luxury goods to pharmaceuticals. As a result, the sluggish global sales that persisted through much of the recovery aren’t […]

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China’s Slower Growth Puts a Drag on Western Profits

Just as European economies are showing signs of stabilizing and the U.S. economy is waking up, some companies are running into obstacles in a market long considered their brightest hope: China. U.S. and European companies invested heavily in recent years to expand in China, seeking to tap into its flourishing middle class and fast economic growth. Since the global recession, China has helped offset the free fall in sales and profits in the euro zone and stagnant revenue in the U.S. But the latest set of quarterly earnings results reveal that for many companies, China has been a drag. While some industries did well, the combination of slower economic growth, plus government crackdowns that have put fresh scrutiny on the way companies win new business, hurt sectors from technology to luxury goods to pharmaceuticals. As a result, the sluggish global sales that persisted through much of the recovery aren’t […]

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China’s Leaders Confront Economic Fissures

WUHAN, China — The two-story employment complex here, like job centers across China, is crowded with educated young people who are trying to figure out their futures in a country where the job market still prizes assembly-line workers willing to labor monotonous hours on backless stools. Among them is Zheng Yilong, who graduated from a university three months ago and refuses to consider a factory job even though his degree is in machinery design. He seeks a desk job instead. Sitting at the employers’ booths are much older factory managers like Jin Tao who despair of finding the workers they need. “I see the problem mostly as an education mismatch problem,” Mr. Jin said. “I’m willing to pay more than 3,000 renminbi a month, which is more than what fresh college graduates are getting.” (That’s about $500.) “I’m also willing to give training, but the young people now with […]

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CA not enjoying TX-sized boom in revenues from oil

October 31, 2013 By Wayne Lusvardi   Monterey Shale California increased its revenues last year by $8 billion a year, through passing the Proposition 30 and Proposition 39 tax increases. Texas has added even more to its revenues, but did so a different way. The fracking boom added $28.6 billion in revenues to the Texas state budget during the last three years, or $9.3 billion a year. Yet it’s a Los Angeles-based oil company, Occidental Petroleum, which owns 1.2 billion barrels of oil (or its equivalent) in Texas’ Permian Basin .  Sixty percent of Oxy’s oil and gas extraction comes from carbon dioxide flooding, which is used when water injection and pumping no longer works. Oxy has successfully used C02 hydraulic fracturing of rock — called fracking — in the Permian Basin in Texas since 2011, when the West Texas Intermediate benchmark crude oil price went over $100 per […]

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Oil Industry May Invoke Trade Law to Challenge Export Ban

The U.S. oil industry, riding a domestic energy boom, is preparing to challenge restrictions on crude exports, possibly by arguing that limits designed to keep petroleum in America may violate international trade rules. “Export issues are something we’re going to have to address,” John Felmy, the chief economist for the American Petroleum Institute trade group said in an interview. “It’s a debate we have to have.” He declined to discuss lobbying strategy or trade rules, though a June planning document on API letterhead obtained by Bloomberg News says the group has begun to develop “the necessary legal analysis” to support export approvals. API is planning to “highlight potential violations of the World Trade Organization rules against export restrictions,” according to the draft document, prepared for the group’s executive committee meeting. Industry officials say the push is just starting to lift the 1970s-era restrictions, and they acknowledge it will be […]

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Eni buys into Texas shale oil

FORT WORTH, Texas, Nov. 5 (UPI) — Italian energy company Eni said Tuesday it signed a deal to explore the oil potential in shale reserves in western Texas. Eni signed a deal with Quicksilver Resources to evaluate, explore and develop shale oil resources in the Leon Valley in west Texas. Quicksilver said in a separate statement the Italian company agreed to pay $52 million and pay all of the costs associated with drilling in its 52,500 gross acre license area in Texas. Eni said the agreement calls for a seismic survey of the area to get a better understanding of the resource potential. It plans to drill as many as five exploration wells in the Delaware oil basin as part of its agreement with Quicksilver. Eni said the current level of oil produced from conventional and shale oil reservoirs in the region is nearly 500,000 barrels of oil equivalent […]

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Alberta and British Columbia Cancel Pipeline Meeting Amid Strife

Alberta Premier Alison Redford and her British Columbia counterpart Christy Clark canceled a meeting scheduled for today in Vancouver amid a disagreement on how economic benefits of pipeline projects should be shared. Redford and Clark have clashed over British Columbia’s opposition to Enbridge Inc. (ENB) ’s proposed Northern Gateway pipeline, as landlocked Alberta seeks to move its oil-sands crude to Pacific energy markets. Senior officials from both provinces met yesterday in Vancouver. “We remain hopeful that common ground will be found between our two provinces on moving energy resources to new markets,” Redford said yesterday in an e-mail statement. “Given the ongoing work between our provinces, the meeting between Premier Clark and I will be postponed.” Calgary-based Enbridge, Canada ’s largest oil pipeline operator, is proposing to build a 1,177-kilometer (731-mile) conduit through British Columbia from Alberta to transport bitumen to Asian customers. Alberta contends that British Columbia should […]

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Mexico Seeks Deeper Revamp of Energy Sector

MEXICO CITY—President Enrique Peña Nieto is negotiating a deeper revamp of the country’s nationalistic energy laws than his initial proposal this summer, aiming to put Mexico’s laws on a par with other top oil producers and to attract greater interest from private oil companies. Top government officials and their counterparts in the conservative National Action Party, or PAN, are in advanced talks to seal a deal that would give private energy firms a share in oil production and licenses designed to tap shale gas deposits and ultra deep-water oil, said three people involved in the negotiations, who cautioned that hurdles remained. Mr. Peña Nieto this summer became the first Mexican president in decades to formally propose changing the country’s constitution to end the state monopoly on oil and gas. That monopoly dates back to 1938, when former President Lázaro Cárdenas expropriated the oil industry and turned petroleum in a […]

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The next Mexican revolution in oil and gas

Nick Butler is Visiting Professor and Chair of the Kings Policy Institute at Kings College London. He spent 29 years with BP, including five years as Group Vice President for Policy and Strategy Development at BP from 2002 to 2006. He has also served as Senior Policy Adviser at No 10, Chairman of the Centre for European Reform and Treasurer of the Fabian Society. Nick Butler is an investor in, and an adviser to a number of companies and institutions in the energy business. The views expressed are solely those of Mr Butler. This material is not intended to provide and should not be relied upon for investment advice or recommendations. Readers are urged to seek professional advice before making any investment.

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EU optimistic over latest Russian, Ukrainian gas spat

KIEV, Ukraine, Nov. 5 (UPI) — Neither party to the latest natural gas row between Ukraine and Russia seems interested in revisiting past conflicts, a European commissioner said. Gazprom Chief Executive Alexei Miller said last week Ukraine has yet to pay its August natural gas bill of $882 million. Gazprom cut natural gas supplies to Ukraine most recently in 2009 because of payment concerns. European Energy Commissioner Gunther Oettinger said he was upbeat about the prospects for a resolution. “I am sure everyone is interested that the year 2009 [is not repeated] again,” he was quoted as saying in a Tuesday report from the National News Agency of Ukraine. He stressed the onus may be on Russia to resolve the issue because of its reliance on natural gas revenue from members of the European Union. European countries get about 20 percent of their natural gas needs met by Russia, […]

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Great Expectations, Deferred

Great1.png Page added on November 5, 2013 Still waiting for large, economy-wide job increases from the “shale revolution” From Goldman Sachs, “Is the Economy Gaining “Fracktion?”” (not online): There is little evidence of significant “induced” employment growth in downstream manufacturing industries. Similarly, cap-ex in energy intensive sectors that might be expected to benefit most from the shale boom has not outperformed cap-ex in other sectors during the recovery, although it did decline by less during the recession. On top of fears that the surge in unconventional oil and natural gas will not be enduring [1] [2] [3] , there remains some doubt that the development of fracking will be the game-changer that many have claimed – at least with respect to macroeconomics. (Prominent studies include IHS (2012) , McKinsey (2013) .) Below I turn first to a discussion of employment growth in core oil and gas extraction. Then I […]

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The propaganda campaign against peaking fossil fuel production

Page added on November 5, 2013 (Paper produced after a presentation at the Fenner Conference on Population, Resources and Climate Change: Implications for Australia’s Near Future , Canberra, October 2013) A formal definition of “energy” is “the capacity to do work”. The overwhelming majority – ~80%) of the work done in our advanced technological society (i.e. the “economic activity”) is done using the energy released by burning fossil fuels [1]. In fact, even a large part of the work done by humans themselves can be attributed to fossil fuels since 30% of all fossil fuel use is for growing, processing, distributing and cooking the food that powers human bodies [2]. Of course, food production is vital when considering the future of our nation of Australia and of world civilization. The act of people living in cities (the origin of the word “civilisation”) is only possible when farmers produce food […]

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We’re running out of water to grow food, Lester Brown warns

Page added on November 5, 2013 Forget peak oil. It’s peak water we should worry about, says Lester R. Brown. “Water is far more important than oil,” according to the prolific author, founder of the Worldwatch Institute, and now president of the nonprofit Earth Policy Institute. Brown, whose early warnings about the dangers of climate change and resource overuse have made him a respected elder of the environmental movement, focused on the looming water shortages while promoting his memoir, “Breaking New Ground: A Personal History,” the latest of his 50-plus books. He spoke Friday at the Harvard University Center for the Environment. His point: It’s not that we will run out of water to drink; it’s that we won’t have enough to grow the food to feed the world. “Water supply may be the principal constraint on the production of food. There’s a lot of land to produce food, […]

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Unfortunately, peak oil is not at hand

Consumption A Citi Research report on so-called peak oil demand has been drawing a lot of attention lately . Understandably: what could be bigger news for anyone concerned with climate change, energy security, etc.? The report comes out hot right from the start, suggesting “The End is Nigh” and we are “Approaching a Tipping Point” on global oil demand. Unfortunately, though, it’s less than persuasive. The first thing that ought to raise an eyebrow or two is how wildly Citi’s analysis diverges from that of established data information centers like the International Energy Agency and the US Energy Information Administration —not to mention our own Roadmap Model , or Exxon Mobil , or really anyone else at all—on the demand for oil from transportation and other global activity, based on known business-as-usual practices, vehicle ownership and activity, technology trends, and adopted policies. One explanation for that divergence is that […]

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Oil Trades in Narrow Price Range; WTI Under $95/bbl

By Eric Yep Crude-oil futures traded within a tight price range in Asian trading hours on Tuesday as rising U.S. oil supply weighed down Nymex crude and markets waited for more macroeconomic indicators. On the New York Mercantile Exchange light, sweet crude futures for delivery in December traded at $94.74 a barrel at 0647 GMT–up $0.12 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange rose $0.20 to $106.43 a barrel. Brent is supported by uncertainty over Libyan supply and the premium of Brent crude over West Texas Intermediate remains around $12 a barrel. Libyan protesters continue to block the country’s main oil facilities cutting production to 250,000 barrels a day–down from 1.5 million barrels a day before the demonstrations, news reports citing Libya’s National Oil Corp. said. Estimated unplanned production losses from OPEC countries in October were around 2.3 million barrels a day–almost half […]

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WTI Crude Fluctuates Near Four-Month Low on U.S. Supplies

West Texas Intermediate swung between gains and losses near the lowest price in more than four months amid speculation crude inventories increased for a seventh week in the U.S., the world’s biggest oil consumer. Futures fluctuated after rising 1 cent yesterday from the lowest close since June. Crude stockpiles expanded by 2.2 million barrels to 386.1 million last week as production climbed to a 24-year high, according to a Bloomberg News survey of analysts before data from the Energy Information Administration tomorrow. Libya prepared to resume crude exports at its Hariga terminal amid protests involving armed guards. “What’s happening with fresh U.S. supplies coming onstream seems to have caught the market a little by surprise,” David Lennox , a resource analyst at Fat Prophets in Sydney, said by phone. “We saw WTI react to that with a fairly sharp fall, and now it’s stabilized somewhat.” WTI for December delivery […]

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Average Retail Gasoline in U.S. Falls to Lowest Price This Year

The average price of gasoline at the pump for U.S. drivers fell to the lowest level of the year as wide spreads between U.S. and European oil benchmarks have driven American refiners to produce more fuel than ever for this time of year. The average retail price fell 2.9 cents to $3.265 a gallon in the week ended today, the lowest level since Dec. 4, the Energy Information Administration reported on its website. Prices are 22.7 cents below a year earlier. U.S. refineries produced 9.434 million barrels a day of gasoline the week of Oct. 25, the highest seasonal level in weekly EIA data going back to 1982. The discount of Light Louisiana Sweet, the U.S. Gulf benchmark crude, to European Brent, the internatonal benchmark, averaged $6.54 a barrel in October, the widest on record, according to data compiled by Bloomberg. “The U.S. has finally let go of wanting […]

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Natural-Gas Futures Slip on Forecasts for Warmer-Than-Usual Weather

–Natural-gas futures fall for sixth straight day –Futures settle down 6.8 cents, lowest settlement price since Aug. 20 –Warmer-than-average weather forecasts weigh on prices By Nicole Friedman NEW YORK–Natural-gas futures declined to their lowest settlement price since August as weather forecasts for unusually warm temperatures lowered expectations for gas-powered heating demand. Natural gas for December delivery settled down 6.8 cents, or 1.94%, at $3.445 a million British thermal units on the New York Mercantile Exchange, sinking to their lowest price since Aug. 20. Natural-gas prices have fallen for three straight weeks as traders digest the bearish weather outlooks. About half of U.S. households use the fuel as their primary heating source, according to the Energy Information Administration. MDA Weather Services, a Gaithersburg, Md., weather forecaster, said earlier Monday that temperatures will be warm in the eastern and central U.S. through mid-November. “Over the weekend, a few different weather models […]

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EIA: U.S. Weekly Retail Gasoline Price Down 2.9c, Still Lowest in Nearly 13 Months

By Brett Philbin NEW YORK–The national average retail price of regular gasoline fell 2.9 cents to $3.265 a gallon in the week ended Monday, the Energy Information Administration said. That is second straight week that prices have hovered at the lowest level since Dec. 24, 2012. The drop follows a slide of 6.6 cents a week earlier, which was the steepest in a month. Retail gasoline prices are 22.7 cents, or 6.5%, below what they were a year ago. The decline in pump prices comes as gasoline futures fell to their lowest level since Dec. 19, 2011 on Monday. The sharp drop comes on higher supplies and weak gasoline demand. Fewer Americans are taking trips during the winter months, and refiners continue to earn fat profits from the high use of diesel fuel in Europe and Latin American countries. Current gasoline prices are 21% below the record national average […]

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Ethanol’s Discount to Gasoline Tightens on Exports, Lower Stocks

Ethanol’s discount to gasoline tightened on speculation that export demand is preventing the highest production rates in 16 months from refilling stockpiles of the gasoline additive. The spread between December contracts narrowed 1.02 cents to 88.62 cents a gallon as the most recent Energy Information Administration data shows stockpiles declining and the pace of foreign deliveries, as of August, at the highest since March. “We have seen stockpiles hit a record low,” said Chris Krukowski, an ethanol broker at SCB & Associates LLC in Chicago. “In general we are seeing tightness.” Denatured ethanol for December delivery fell 0.7 cent, or 0.4 percent, to $1.642 a gallon on the Chicago Board of Trade. Prices have fallen 21 percent this year. The November contract, which expires tomorrow, slumped 5 cents to $1.72. Gasoline for December delivery slipped 1.72 cents, or 0.7 percent, to $2.5282 a gallon on the New York Mercantile […]

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Big Oil's Tricky Mix of Shale and Scale–Heard on the Street

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell’s partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted “elephant” fields with huge reserves in deep-water locations or far-flung countries. This played to their strengths. Huge balance sheets and solid credit ratings allowed them to finance megaprojects. Bob Brackett, analyst at Sanford C. Bernstein, characterizes the majors’ model as deploying capital and technical teams with “lots of command and control.” One advantage: This model scales […]

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Big Oil’s Tricky Mix of Shale and Scale–Heard on the Street

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell’s partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted “elephant” fields with huge reserves in deep-water locations or far-flung countries. This played to their strengths. Huge balance sheets and solid credit ratings allowed them to finance megaprojects. Bob Brackett, analyst at Sanford C. Bernstein, characterizes the majors’ model as deploying capital and technical teams with “lots of command and control.” One advantage: This model scales […]

Posted On : Published By : Tom Whipple
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Iran Talks Tread Tricky Line on Sanctions

U.S. officials head to Geneva this week for a pivotal new round of discussions with Iran over its nuclear program. So you can be sure some tricky talks lie just ahead for the Obama administration. Tricky negotiations with the Iranians, of course. But also tricky negotiations with Congress and with Israel over the future of economic sanctions against the Iranian regime. The administration and its partners among big world powers—Britain, France, Russia, China and Germany—believe they are moving toward a two-phase agreement with Iran designed to rein in its nuclear program before it becomes capable of producing nuclear weapons. Under the first phase of that deal, Iran would freeze elements of its nuclear program immediately in return for what officials say would be “modest” relief from some of the broad and crippling sanctions the West put in place. And that’s where the rub comes in. That first phase, the […]

Posted On : Published By : Tom Whipple
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British Columbia's LNG industry to face stiff competition for Asian gas markets

Houston (Platts)–4Nov2013/541 pm EST/2241 GMT Developers of proposed liquefied natural gas terminals on the west coast of Canada’s British Columbia province will have to move quickly to secure supply contracts if they want to beat the competition to ship gas to Asian markets, the co-author of a study on the subject said Monday. “That means they need to act aggressively, they need to compete effectively and they need to be in the market to lock down the contracts that will underpin their projects,” said Len Coad, director of the Calgary-based Center for Natural Resource Policy. The province’s developing LNG industry “must move nimbly and quickly to beat out the competition and capture market share in Asia,” according to the 21-page study, released last week by the Canada West Foundation. Article continues below… Request a free trial of: LNG Daily LNG Daily LNG Daily is essential reading as LNG supply […]

Posted On : Published By : Tom Whipple
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British Columbia’s LNG industry to face stiff competition for Asian gas markets

Houston (Platts)–4Nov2013/541 pm EST/2241 GMT Developers of proposed liquefied natural gas terminals on the west coast of Canada’s British Columbia province will have to move quickly to secure supply contracts if they want to beat the competition to ship gas to Asian markets, the co-author of a study on the subject said Monday. “That means they need to act aggressively, they need to compete effectively and they need to be in the market to lock down the contracts that will underpin their projects,” said Len Coad, director of the Calgary-based Center for Natural Resource Policy. The province’s developing LNG industry “must move nimbly and quickly to beat out the competition and capture market share in Asia,” according to the 21-page study, released last week by the Canada West Foundation. Article continues below… Request a free trial of: LNG Daily LNG Daily LNG Daily is essential reading as LNG supply […]

Posted On : Published By : Tom Whipple
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US Shale Boom Will Boost LPG Exports and Bring Down Prices

More US Shale Boom Will Boost LPG Exports and Bring Down Prices LONDON, Nov 4 (Reuters) – A U.S. energy drilling boom is revolutionizing the niche market for liquefied petroleum gas (LPG), bringing down global prices and challenging established exporters in the Middle East. The changes are the latest sign of the global impact of a drilling renaissance in the United States that has already hit oil and natural gas. And like oil and gas, it is U.S. producers of LPG who are set to gain most while established exporters may struggle with new competition in a suddenly altered landscape. Unconventional oil and gas drilling, including shale gas extraction from fracking, is controversial because it requires large amounts of water and chemicals to be pumped at high pressure into the earth, and some countries such as France and Bulgaria have banned the technology. In the United States, however, shale […]

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Iran Burning Gas Worth Billions Set to Lead Exporters Group

Iran will lead a club of the world’s biggest natural gas exporters as its own shipments abroad are hampered by U.S. and European Union sanctions that force the country to burn off billions of dollars worth of the fuel. Mohammad Hossein Adeli , the country’s former deputy foreign minister, was elected secretary-general of the Gas Exporting Countries Forum , whose 13 member countries hold 60 percent of the world’s reserves, the group said yesterday in a statement. Adeli, who will replace Leonid Bokhanovsky of Russia next year, vowed to turn the Persian nation into a “major player among the gas exporting countries,” he told reporters after a group meeting in Tehran. U.S. and EU trade sanctions over Iran’s nuclear program have cut the Persian nation’s crude exports, its largest revenue source, by half since 2011 and are stifling projects to export some of its gas reserves, the world’s largest. […]

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Iran urges elimination of all nukes ahead of talks

UNITED NATIONS (AP) — Iran’s U.N. ambassador called nuclear weapons the greatest threat to present and future generations on Monday, just days before Tehran resumes talks with six world powers aimed at reining in its suspect nuclear program. Mohammad Khazaee told a meeting of the General Assembly’s disarmament committee that “the total elimination of these inhuman weapons is the only absolute guarantee against their threat or use.” The election of President Hassan Rouhani, viewed as a moderate, has led to a revival of talks in Geneva aimed at allaying Western fears that the real aim of Iran’s nuclear enrichment program is producing nuclear weapons, not nuclear energy and medical isotopes as it claims. For years, Iran has insisted that its nuclear program is purely peaceful, and that it opposes nuclear weapons, but Khazaee’s comments were especially strong. “Before they consume us all together, we must consume them all together,” […]

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Iranian official says Iran doing its part on gas pipeline to Pakistan

TEHRAN, Nov. 4 (UPI) — Iran has done most of the work needed to get a troubled gas pipeline developed for the Pakistani market, Iranian Oil Minister Bijan Zanganeh said. “Iran has done a major part of the work [necessary] for the implementation of the project and now Iran’s gas has reached near the border with Pakistan with a high capacity,” Zanganeh was quoted as saying in a Press TV report Sunday. Zanganeh questioned the prospects for the pipeline last week, saying Pakistan was having trouble financing construction of the pipeline in its territory. Iran’s Fars News Agency quoted Pakistani lawmaker Ijaz Hussain Jakhrani as saying the pipeline “must be completed.” Pakistan’s aging infrastructure and energy sector mismanagement have left most the country without a reliable source of electricity, observers say. The U.S. government warned Pakistan earlier this year the pipeline would violate sanctions targeting Iran’s energy sector. U.S. […]

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Iraq mulls prospects for oil pipeline from Kurdish north to Turkey

ERBIL, Iraq, Nov. 4 (UPI) — Building a pipeline to carry oil from the Kurdish north of Iraq to Turkey will take longer than Kurdish officials say, a Turkish Energy Ministry spokesman said. The unidentified spokesman told the Platts energy news service in an article published Friday it’s not possible to build a oil pipeline in the time expected by Kurdish officials. Ashti Hawrami , natural resources minister for the semiautonomous Kurdistan Regional Government, said last week it would take less than two years to build a pipeline to carry 1 million barrels of oil per day from Kurdish fields through Turkey. Pipelines in northern Iraq have been the target of frequent terrorist attacks. Officials in the semiautonomous Kurdish north of Iraq blamed al-Qaida for a string of bombings in Erbil, the Kurdish capital, that left six people dead and more than 40 others injured in late September. The […]

Posted On : Published By : Tom Whipple