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Crude-Oil Impurities Are Probed in Rail Blasts

After three fiery accidents involving trains carrying crude oil out of North Dakota’s Bakken Shale, regulators and industry officials are trying to figure out why the oil is exploding. Crude is flammable, but before being refined into products such as gasoline it is rarely implicated in explosions. Yet earlier this week, when a BNSF Railway Co. train hauling 104 tank cars filled with Bakken crude struck another train, some of the cars exploded one after the other, releasing fireballs that blazed several stories above the frozen prairie. "Crude oil doesn’t explode like that," said Matthew Goitia, chief executive of Peaker Energy Group LLC, a Houston company that is developing crude-by-rail terminals. The blast in Casselton, N.D., 25 miles west of Fargo, is just the latest explosion involving crude pumped out of the Bakken. Federal investigators and railroad and energy-company officials are probing whether additives to the oil or mislabeling […]

Posted On : Published By : Tom Whipple
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For U.S. Drillers, the Days of Easy Money End

Since 2008, deep-pocketed foreign investors have subsidized the U.S. energy boom, as oil and gas companies spent far more money on leasing and drilling than they made selling crude and natural gas. But the rivers of foreign cash are running dry for U.S. drillers. In 2013, international companies spent $3.4 billion for stakes in U.S. shale-rock formations, less than half of what they invested in 2012 and a tenth of their spending in 2011, according to data from IHS Herold, a research and consulting firm. It is a sign of leaner times for the cash-hungry companies that have revived American energy output. The value of deals involving U.S. energy producers plunged 48% this year from 2012, to $47 billion, the first annual decline since 2008, according to an IHS report to be published Thursday. So U.S. oil and gas producers have started to slash spending. "The days of easy […]

Posted On : Published By : Tom Whipple
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Russia's 2013 Oil Output Rises 1.3%

Russian oil output rose for the fifth year in a row in 2013 reaching a record high for the post-Soviet era, driven by continuing strength in global oil prices, the country’s energy ministry said Wednesday. Oil production rose 1.3% to 10.508 million barrels a day, from the previous high of 10.375 million barrels reached last year, news agency Interfax reported, citing the ministry’s statistical arm. Russia’s crude production rose to about 523.3 million tons, from 518 million tons in 2012. The Soviet-era record for daily crude output was 11.4 million barrels in 1987. In 1994, output had slumped to six million barrels but has since steadily increased, and Russia now vies with Saudi Arabia and the U.S. as the world’s top oil producer. Exports to countries outside of the former Soviet Union declined by 2.2% to 206.782 million tons, the data showed. State-run oil producer OAO Rosneft saw output […]

Posted On : Published By : Tom Whipple
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Russia’s 2013 Oil Output Rises 1.3%

Russian oil output rose for the fifth year in a row in 2013 reaching a record high for the post-Soviet era, driven by continuing strength in global oil prices, the country’s energy ministry said Wednesday. Oil production rose 1.3% to 10.508 million barrels a day, from the previous high of 10.375 million barrels reached last year, news agency Interfax reported, citing the ministry’s statistical arm. Russia’s crude production rose to about 523.3 million tons, from 518 million tons in 2012. The Soviet-era record for daily crude output was 11.4 million barrels in 1987. In 1994, output had slumped to six million barrels but has since steadily increased, and Russia now vies with Saudi Arabia and the U.S. as the world’s top oil producer. Exports to countries outside of the former Soviet Union declined by 2.2% to 206.782 million tons, the data showed. State-run oil producer OAO Rosneft saw output […]

Posted On : Published By : Tom Whipple
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Exxon’s Russia Ambitions Show Drilling Trumps Obama-Putin Spats

As Barack Obama and Vladimir Putin argue over human rights in Russia and the fate of fugitive U.S. intelligence analyst Edward Snowden, the countries’ biggest oil companies are preparing to drill for giant oil discoveries together in the Arctic Ocean . Exxon Mobil Corp. (XOM) and OAO Rosneft (ROSN) are set to start their first Arctic well this year, targeting a deposit that may hold more oil than Norway ’s North Sea . It will kick off a series of landmark projects and cement an alliance begun in 2011. They also plan to frack shale fields in Siberia, sink a deep-water well in the Black Sea and build a natural gas-export terminal in Russia’s Far East. “We have a unique partnership,” Glenn Waller, Exxon’s Russian chief, said in an interview in Moscow. “They have the world’s biggest reserves and we have the largest market capitalization.” The deepening alliance shows […]

Posted On : Published By : Tom Whipple
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Oil Futures Retreat But End Higher for the Year

Oil futures finished the year at an eight-session low as traders took profits from a recent price gain ahead of the midweek holiday. Light, sweet crude for February delivery settled down 87 cents, or 0.9%, at $98.42 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 41 cents, or 0.4%, to settle at $110.80 a barrel. U.S. oil futures rose 7.2% in 2013, one of the better performances for any commodity this year. Domestic oil production has surged in recent years as hydraulic fracturing and horizontal drilling techniques have enabled energy producers to access supplies trapped in shale-oil fields. However, the new supplies couldn’t be easily transported to U.S. refineries, and stockpiles built up in storage instead, pressuring prices. U.S. oil futures fell 7.1% in 2012. In 2013, new pipeline routes and increased rail shipping allowed more crude oil to reach […]

Posted On : Published By : Tom Whipple
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Crude oil slides under $99

Crude oil prices slid to less than $99 per barrel on the New York Mercantile Exchange Tuesday, the last trading day of the year. Most equity markets were closed in Europe, the CAC, IBEX and FTSE 100 indexes being the exceptions. The rest were shuttered for the New Year’s Eve holiday. Light, sweet crude on the NYMEX listing shed 60 cents to $98.69 per barrel. Reformulated gasoline blendstock for January gave up 0.19 cents to $2.7858 a gallon. January heating oil dropped 4.69 cents to $3.0772 a gallon while natural gas lost 18 cents to $4.25 per million British thermal units. The national average price of unleaded regular gasoline rose at the pump, climbing to $3.318 a gallon from Monday’s $3.312, the AAA Daily Fuel Gauge Report said. The top Odd News stories of 2013 Shark photobomb? Family photo captures possible shark encounter […]

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Natural Gas Skids But Still Set to Finish 2013 Strong

Natural gas futures pared their gains Tuesday as traders locked in their profits from the year’s best-performing commodity. Natural gas for February delivery fell 8.5 cents, or 1.9%, to $4.342 a million British thermal units on the New York Mercantile Exchange. Natural-gas prices have climbed from less than $3.50/mmBtu in early November, as continued cold weather has led to robust heating demand. About half of all U.S. households use natural gas as their primary heating source, according to the U.S. Energy Information Administration. Natural-gas prices are up almost 30% year-to-date. The commodity is set to end the year with the biggest gains among the 22 commodities in the Dow Jones-UBS Commodity Index, which is down 9.3% for the year. "I think the key is […]

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Hedge Fund Crude Wagers Climb to Highest Since September: Energy

Hedge funds increased bullish bets on crude oil to the highest in three months as stockpiles dropped and the U.S. economy expanded more than forecast. Money managers raised net-long positions , or wagers on rising prices for West Texas Intermediate crude, by 4.4 percent in the week ended Dec. 24, U.S. Commodity Futures Trading Commission data show. It was the fourth consecutive increase, the longest streak since July. WTI topped $100 a barrel for the first time in two months on Dec. 27, propelled by falling inventories in the U.S., the world’s biggest oil-consuming country. The Federal Reserve cited prospects for improved growth for a reduction in its bond-buying program, and a government report showing that the domestic economy accelerated in the third quarter at a faster rate than previously estimated bolstered expectations for strengthening fuel demand. “There’s a strong demand environment here and that’s attracted the interest of […]

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Iran hard-liners join team of nuclear negotiators

Iran has boosted its team in charge of nuclear talks with world powers, adding what are believed to be hard-liners and conservatives in an apparent effort to silence critics of the landmark interim accord reached in Geneva in November. The semi-official news agencies Fars and Mehr reported on Wednesday that new members have joined the high council, which directs strategies in the talks and which is led by the country’s moderate President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif. The agencies did not identify the new members, saying only that representatives of "all branches of power and other senior figures" are now on the council. The development comes a day after Iran and Western negotiators reported they were nearing an understanding on the details of implementing the Geneva accord. The deal puts strong limits on Iran’s uranium enrichment program in return for […]

Posted On : Published By : Tom Whipple