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Diesel Futures Rally to Four-Month High

European crude futures dipped Friday although the price gap with U.S. WTI narrowed, with few upward price signals for Brent and plenty of demand for U.S. products as the cold weather continues. The spread, or price difference, between WTI and Brent has closed in to the narrowest point since early November, as a North American cold snap supports demand for oil products and drives up the price of the raw material used by refiners. Brent crude for March delivery fell as much as 131 cents, or 1.2%, at $106.26 a barrel on ICE Futures Europe. U.S. crude-oil futures were down 63 cents, or 0.6%, at $96.4 a barrel on the New York Mercantile Exchange. In Thursday’s Energy Information Administration report, distillates stocks decreased by more than expected, by 3.2 million barrels. BNP Paribas, in a note to clients, said stocks remain "below the bottom of the five year range." […]

Posted On : Published By : Tom Whipple
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Natural gas soars as cold grips homes, drillers

The frigid winter of 2014 is setting the price of natural gas on fire. Friday, the price in the futures market soared to $5.18 per 1,000 cubic feet, up 10 percent to the highest level in three and a half years. The price of natural gas is up 29 percent in two weeks, and is 50 percent higher than last year at this time. Record amounts of natural gas are being burned for heat and electricity. Meanwhile, it’s so cold that drillers are struggling to produce enough to keep up with the high demand. So much natural gas is coming out of storage that the Energy Department says supplies have fallen 20 percent below a year ago – and that was before this latest cold spell. "We’ve got record demand, record withdrawals from storage, and short-term production is threatened," says energy analyst Stephen […]

Posted On : Published By : Tom Whipple
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Natural Gas Tops $5 for First Time Since 2010

Natural-gas prices hit $5 a million British thermal units for the first time in 3 ½ years on expectations that continued cold weather would keep demand high for the heating fuel. Natural gas for February delivery rose as high as $5.026/mmBtu on the New York Mercantile Exchange before pulling back slightly. The February contract recently traded up 26.4 cents, or 5.6%, at $4.994/mmBtu. The rally highlights concerns about supply, after several years of booming U.S. production. The amount of gas stored in the U.S. has dwindled in recent weeks as heating demand has ramped up. Inventories as of Jan. 17 stood at 2.423 trillion cubic feet, 13% below the five-year average for the week. Natural-gas prices have climbed more than 15% for the week, the largest weekly gain since October 2010, as frigid weather has increased demand for indoor heating across the Midwest and the East Coast. About […]

Posted On : Published By : Tom Whipple
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EIA: U.S. crude oil imports dropped below 7 million barrels per day

The U.S. Energy Information Administration said oil imports into the United States dipped below 7 million barrels per day for the second time in 14 years. The EIA said the last time crude oil imports into the United States dropped below that figure, which was for the week ending Jan. 10, was in January 2000. In a weekly report published Thursday, the EIA attributed the decline in imports to the rise in domestic crude oil production. It said data from its weekly petroleum status report show U.S. crude oil production averaged 8.1 million bpd for the four weeks ending Jan. 17. The EIA said higher domestic crude oil production has resulted in a steady decline in crude oil imports — at least since domestic production reached the 5.7 million bpd mark in 2011. It said refinery issues contributed to the decline in imports. "While […]

Posted On : Published By : Tom Whipple
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Kerry Presses Iranians to Prove Nuclear Work Is for Peaceful Purposes

Secretary of State John Kerry said Friday that “an era of American diplomatic engagement” is following a decade defined by force. One day after Iran’s president took the stage here seeking to assure the world that his country did not aspire to develop nuclear weapons, Secretary of State John Kerry pushed back on Friday, challenging him to demonstrate that the Iranian nuclear program was peaceful. “He told you that Iran has no intention of building a nuclear weapon,” Mr. Kerry said in a speech to the World Economic Forum. “Starting now, Iran has the opportunity to prove these words beyond all doubt to the world.” Mr. Kerry laid down several requirements for the comprehensive nuclear agreement that Iran and six world powers are now preparing to negotiate, saying that Tehran must accept extensive verification, abandon plans to build a heavy-water reactor […]

Posted On : Published By : Tom Whipple
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Iran’s Message at Davos Has Eerie Echo

When President Hassan Rouhani of Iran commandeered the spotlight this week in Davos, Switzerland, with a message of peaceful intentions and a desire for dialogue, it was an eerie echo of 10 years ago, when Iran’s last would-be change agent, Mohammad Khatami, delivered the very same message at the World Economic Forum . Comparing their appearances demonstrates how much Iran has changed in the last decade, but also how fragile the current diplomatic opening is, and how little time Mr. Rouhani may have to negotiate a nuclear deal, while holding Iran’s hard-liners at bay. Iran, Mr. Rouhani said Thursday, was determined to pursue “constructive engagement” with the world and had no intention of acquiring a nuclear weapon. In 2004, Mr. Khatami said, “Anywhere that we sense and feel that the other side respects us and does not force anything upon us, we are prepared to talk.” He, […]

Posted On : Published By : Tom Whipple
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Iraq's Oil War

A long-simmering controversy over control of Iraq’s massive oil reserves flared into the open Friday as one of the country’s most powerful ministers threatened to take legal action against Iraqi Kurdistan, Turkey and any foreign companies that helped the Kurds export oil without permission from Baghdad. Iraqi Oil Minister Abdul Kareem Luaibi told reporters that Baghdad considered the Kurds to be trying to sell "smuggled" Iraqi oil and would sue both the Kurdish and Turkish governments if any planned export deals moved forward. Luaibi also threatened to blacklist Turkish companies from doing business in Iraq if they helped the Kurds move the oil out of their semi-autonomous region in northern Iraq. "If Turkey allows the export of oil from the region, it is meddling in the division of Iraq, and this is a red line," Luaibi told reporters in Baghdad. The harsh words from Luaibi come as the security […]

Posted On : Published By : Tom Whipple
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Iraq’s Oil War

A long-simmering controversy over control of Iraq’s massive oil reserves flared into the open Friday as one of the country’s most powerful ministers threatened to take legal action against Iraqi Kurdistan, Turkey and any foreign companies that helped the Kurds export oil without permission from Baghdad. Iraqi Oil Minister Abdul Kareem Luaibi told reporters that Baghdad considered the Kurds to be trying to sell "smuggled" Iraqi oil and would sue both the Kurdish and Turkish governments if any planned export deals moved forward. Luaibi also threatened to blacklist Turkish companies from doing business in Iraq if they helped the Kurds move the oil out of their semi-autonomous region in northern Iraq. "If Turkey allows the export of oil from the region, it is meddling in the division of Iraq, and this is a red line," Luaibi told reporters in Baghdad. The harsh words from Luaibi come as the security […]

Posted On : Published By : Tom Whipple
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Kurds' oil deal with Turkey 'endangers Iraq's budget'

The feud between Iraq’s central government and the minority Kurds’ semiautonomous enclave over oil is reaching critical mass, the head of parliament’s treasury committee says. Haidar Al Abadi, a senior legislator, has warned the government’s projected 2014 budget will fall apart if Kurdistan does not hand over revenue from independent oil exports to northern neighbor Turkey that began recently. Such action by the Kurdistan Regional Government, which is defying the Baghdad regime of Prime Minister Nouri al-Maliki by pursuing its own oil and gas exports outside the Oil Ministry’s control, will leave the central authority no option but to halt all state spending in the enclave. Kurdistan’s share amounts to around 17 percent of overall state expenditure. The loss of that revenue could be crippling, unless the KRG, which the federal government accuses of acting illegally, can generate enough income from oil sales to […]

Posted On : Published By : Tom Whipple
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Kurds’ oil deal with Turkey ‘endangers Iraq’s budget’

The feud between Iraq’s central government and the minority Kurds’ semiautonomous enclave over oil is reaching critical mass, the head of parliament’s treasury committee says. Haidar Al Abadi, a senior legislator, has warned the government’s projected 2014 budget will fall apart if Kurdistan does not hand over revenue from independent oil exports to northern neighbor Turkey that began recently. Such action by the Kurdistan Regional Government, which is defying the Baghdad regime of Prime Minister Nouri al-Maliki by pursuing its own oil and gas exports outside the Oil Ministry’s control, will leave the central authority no option but to halt all state spending in the enclave. Kurdistan’s share amounts to around 17 percent of overall state expenditure. The loss of that revenue could be crippling, unless the KRG, which the federal government accuses of acting illegally, can generate enough income from oil sales to […]

Posted On : Published By : Tom Whipple