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AAA president: 2014 gasoline prices may be lower but won’t be cheap

AAA President Bob Darbelnet said average gasoline prices in 2014 could be less than last year but drivers should expect increases in the spring. "There is a good chance that average gasoline prices this year will cost less than in 2013 but it is not going to be cheap," Darbelnet said Thursday. "Driving to the gas station could be a lot more frustrating as prices increase this spring," he said. The AAA reported a national average price Friday of $3.26 per gallon, about 5 cents less than one month ago. During the spring, refineries start curbing production to conduct seasonal maintenance and that usually leads to an increase in gasoline prices, but by late June the national average price could be around $3.35, the auto club said. It should taper off as refiners switch back to a winter blend of gasoline in October, which […]

Posted On : Published By : Tom Whipple
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US employment growth disappoints in January

The US economy added just 113,000 jobs in January, as the unemployment rate edged down to 6.6 per cent – dashing hopes of a steady acceleration in the recovery and posing a challenge to Janet Yellen in her first weeks as Federal Reserve chair. After job creation slumped in December, economists were very keen to assess whether that dip was an anomaly or a reflection of a deeper slowdown in the strength of the US economy . With payroll formation in January rebounding only slightly, and well below economists’ expectations of 180,000 new positions, fresh concerns are likely to mount about the US economy entering a new rough patch. But last month’s figures may also be a poor guide, in that bad weather across big portions of the country could have distorted the data . US equity futures were firmer, the dollar weakened and Treasury bond prices rose after […]

Posted On : Published By : Tom Whipple
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Magnolia Expects Strong Production Growth amid More Drilling

More Onshore US-focused junior producer Magnolia Petroleum said Friday that it expects strong production growth in 2014 as drilling activity increases on its already-producing US leases. Magnolia, which has stakes in dozens of producing assets in North Dakota and Oklahoma, reported that it has received a large number of proposals from operators such as Devon Energy, Newfield Exploration, Chesapeake Energy and Kodiak Exploration to drill increased-density (or infill) wells across its portfolio of producing leases. Magnolia said that since the start of the year it has elected to participate in nine increased-density wells. Four of these are Skunk Creek wells targeting the Bakken and Three Forks Sanish formation in North Dakota. In addition, the company is participating in an increased-density well targeting the Woodford formation on the same spacing unit as the producing Conduit 1-5 well in Oklahoma and four increased-density wells on the same unit as the producing […]

Posted On : Published By : Tom Whipple
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A pipeline runs through it

MINUTES after America’s State Department declared on January 31st that a proposed cross-border oil-pipeline would have little environmental impact, Canada’s ruling Conservatives posted an online ad bluntly directing Barack Obama to “approve Keystone XL now”. It is not the first time that Canada has dropped the diplomatic niceties when pressing Mr Obama to approve the Keystone pipeline, which would carry crude from Alberta’s tar sands to refineries on the Texas coast. Stephen Harper, Canada’s prime minister, has previously threatened to sell the oil to Asia, called approval a “no-brainer” and insisted he “would not take no for an answer”. But Mr Obama seems to be in no rush. Developing the tar sands and exporting its oil is a priority for Mr Harper, whose political roots lie in energy-rich Alberta. The pipeline, which would carry up to 730,000 barrels a day (b/d) of Alberta crude and an additional 100,000 b/d […]

Posted On : Published By : Tom Whipple
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U.S. Orders Enterprise to Prioritize Propane Shipments

Enterprise Products Partners LP (EPD) must prioritize propane shipments on a pipeline to the U.S. Midwest and Northeast, where cold weather has caused heating-fuel prices to climb, federal regulators ordered in the first use of their emergency powers. The one-week directive issued late yesterday by the Federal Energy Regulatory Commission is effective immediately and applies to the Enterprise TE Products Pipeline system, which originates in Mont Belvieu, Texas . The agency cited its authority under the U.S. Interstate Commerce Act. Propane in the Midwest soared to a record premium over prices on the Gulf Coast last month as a polar vortex swept across the eastern U.S., dumping snow and ice and causing temperatures to plummet to record lows in cities from New York to Florida . Supplies of the heating fuel in the Midwest tumbled to the lowest seasonal level since at least 1994. “Clearly, it shows that the […]

Posted On : Published By : Tom Whipple
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Fracking in Water-Stressed Zones Increases Risks to Communities – and Energy Producers

Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red). Graphic courtesy of Ceres. Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red). Graphic courtesy of Ceres Even as concerns arise about the threats hydraulic fracturing poses to water quality and human health , a new study released yesterday finds that the water demands of the “fracking” process are adding considerably to localized water depletion, especially in parts of Texas, Colorado, and California. Nearly half of the fracking wells in operation since 2011 are located in regions with high or extremely high water stress, according to the report by Ceres , a non-profit organization […]

Posted On : Published By : Tom Whipple
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Statoil to Postpone 2020 Production Target

Norwegian oil company Statoil AS A has postponed its 2020 production target of 2.5 million barrels a day by three to four years and is reducing its planned capital expenditure, as the company looks to chase margins over big production numbers. Statoil said it would lower its planned capital expenditure to an average of $20 billion a year through 2016, a reduction of 8%, to free up cash. Statoil Chief Executive Helge Lund said in an interview in London that the company will cut costs $1.3 billion a year starting in 2016 in a bid to counter escalating oil sector costs. "We have been working actively with costs for several years and have seen this as a major development, but now we are turning it up a couple notches," Mr. Lund said. "These are still Statoil’s highest investments ever, so this isn’t a defensive plan." The state-controlled company is […]

Posted On : Published By : Tom Whipple
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Exploration success strong in 2013, Statoil says

Norwegian oil company Statoil said Friday it had a successful 2013 in terms of oil and gas reserves generated from its exploration activity. Statoil said Friday it "delivered the best oil and gas exploration results in the industry" last year in terms of conventional oil and gas discoveries. Last year, the company said its Bay du Nord discovery off the eastern coast of Canada was one of the largest for 2013 with at least 300 million barrels of recoverable oil. In its report Friday, it said the Canadian discovery contributed to the addition of 1.25 billion barrels of oil equivalent from exploration activity in 2013. "Our operational performance was good," Helge Lund , Statoil’s president and chief executive officer, said in a statement Friday. The company said it plans to spend $3.5 billion on exploration activity in 2014, though its overall planned investment […]

Posted On : Published By : Tom Whipple
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GRANTHAM: The Great American Shale Boom Is A Dangerous Waste Of Time And Money

Jeremy Grantham, whose GMO LLC investment firm manages $117 billion in assets, says the Great American Shale Boom is a dangerous waste of time and money. Grantham, who started his career as an economist at Shell, recently contemplated attending an anti-Keystone Pipeline demonstration in front of the White House.  In his new letter to clients , Grantham explains why any country, from the U.S. to China, still going down the path of developing fossil fuels is walking into a trap.  First, he argues we are overstating the benefits of switching to natural gas: “Fracking gas,” like all natural gas, is basically methane. Methane unfortunately is an even more potent greenhouse gas than CO2: at an interval of 100 years it is now estimated to be 32 times as bad, and at 20 years to be 72 times worse! If it leaks from well head to […]

Posted On : Published By : ASPO-USA
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Crude-oil Futures Mixed Ahead of U.S. Employment Report

Crude-oil futures were mixed in Asian trading hours on Friday while financial markets wait for the monthly U.S. nonfarm payrolls later in the trading day. On the New York Mercantile Exchange light, sweet crude futures for delivery in March traded at $97.66 a barrel at 0623 GMT–down $0.18 in the Globex electronic session. March Brent crude on London’s ICE Futures exchange rose $0.09 to $107.28 a barrel. The U.S. employment report will give an indication about the health of the U.S. economy and whether the Federal Reserve will continue reducing the bond-buying program which has helped support commodity prices. The unusually bad weather that affected December’s employment data may have a lesser impact on the labor market in January–and a gain in payrolls of 200,000 is expected which should calm nerves and support markets, Capital Economics said. Brent crude was in positive territory extending overnight gain […]

Posted On : Published By : Tom Whipple