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Diesel Futures Climb to 22-Month High on Heating-Oil Supply Tightness

Diesel futures roared to their highest in nearly two years Friday on a continued shortage of heating oil in the Northeast, while crude oil weakened as traders turned toward safer investments. Light, sweet crude for March delivery settled down 74 cents, or 0.8%, at $97.49 a barrel on the New York Mercantile Exchange. Prices rose 0.9% this week but fell for the month. Brent crude on the ICE futures exchange fell $1.55, or 1.4%, to $106.40 a barrel. Prices fell 1.4% this week and 4% this month. Front-month February diesel futures finished up 6.24 cents, or 1.9%, at $3.2794 a gallon, the highest price since March 16, 2012. Diesel futures, which trade as a proxy for heating oil, […]

Posted On : Published By : Tom Whipple
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Natural Gas Futures Decline as Milder Weather Likely to End Cold Snap

Natural gas futures slid Friday, falling for the second straight session, as weather forecasts projected above-normal temperatures in the Northeast U.S. in the next few weeks, potentially reducing demand for the heating fuel. Natural gas for March delivery settled 6.8 cents lower, or 1.4%, to $4.943 a million British thermal units on the New York Mercantile Exchange. Over the past two trading days, Nymex gas plunged roughly 11% after reaching a four-year high. Even with the steep decline, natural gas futures still soared 17% in January and posted their largest monthly percentage gain since September 2012. The sharp volatility underscores fears that natural gas supplies have dwindled as utilities pull near-record amounts of the fuel to meet […]

Posted On : Published By : Tom Whipple
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Storing Up Trouble for Gas Prices

If wintry weather is to blame for natural gas surging to multiyear highs this week , then prices should shed those gains once spring arrives, traders say. The futures market supports the theory: While front-month futures settled Thursday at $5.011 a million British thermal units, contracts for delivery in April and later months are trading below $4.40 a million BTUs. Those lower prices won’t last, argues Teri Viswanath, senior natural-gas strategist for BNP Paribas SA. The market needs to pack away an unusually large amount of natural gas this summer to replenish inventories before next winter. If prices haven’t picked up by summer, she cautions, storage tanks could end up sitting empty instead. Thanks to strong demand for gas-fueled indoor heating, U.S. natural-gas inventories sit 17% below the five-year average for this week, according to the U.S. Energy Information Administration. Natural gas is stored in depleted […]

Posted On : Published By : Tom Whipple
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Chevron's Earnings Fall 32% on Lower Production

Chevron Corp. said its fourth-quarter profit fell 32% as the energy giant reported lower global production and weaker refined products margins. Though profit for the period met Wall Street’s expectations, revenue missed expectations by nearly $9 billion. Chevron’s global oil-equivalent production for the fourth quarter fell to 2.58 million barrels a day from 2.67 million barrels a day a year earlier, hurt by lower production in the U.S. and abroad. Chevron, the second-largest U.S. oil company in market value after Exxon Mobil Corp. , had previously signaled fourth-quarter global oil and gas production was poised to decline from year-ago levels, while commodity prices were also on pace to be slightly lower. "Global crude oil prices and refining margins were generally lower in 2013 than 2012," Chairman and Chief Executive John Watson said. "These conditions, as well as lower gains on asset sales and higher expenses, resulted in lower earnings." […]

Posted On : Published By : Tom Whipple
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Chevron’s Earnings Fall 32% on Lower Production

Chevron Corp. said its fourth-quarter profit fell 32% as the energy giant reported lower global production and weaker refined products margins. Though profit for the period met Wall Street’s expectations, revenue missed expectations by nearly $9 billion. Chevron’s global oil-equivalent production for the fourth quarter fell to 2.58 million barrels a day from 2.67 million barrels a day a year earlier, hurt by lower production in the U.S. and abroad. Chevron, the second-largest U.S. oil company in market value after Exxon Mobil Corp. , had previously signaled fourth-quarter global oil and gas production was poised to decline from year-ago levels, while commodity prices were also on pace to be slightly lower. "Global crude oil prices and refining margins were generally lower in 2013 than 2012," Chairman and Chief Executive John Watson said. "These conditions, as well as lower gains on asset sales and higher expenses, resulted in lower earnings." […]

Posted On : Published By : Tom Whipple
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U.S. Warns Over Limits of Iran Sanctions Easing

U.S. officials are fanning out across the globe, privately warning international executives not to commit too much as they re-engage with Iran during a temporary easing of sanctions. The outreach echoes some of the statements U.S. officials have made in recent weeks cautioning about the limited and temporary nature of the sanctions relaxation. In recent days, senior U.S. officials have also started touring global commercial capitals—including London, Paris and Dubai—and meeting executives from blue-chip companies to hammer home the message. Treasury Secretary Jacob Lew said in an interview on Friday that he has personally taken on the issue in meetings with hundreds of American and international business executives in recent weeks. This effort included meetings he held at the World Economic Forum in Davos, Switzerland last week. "It’s really important that businesses understand that we are continuing to monitor transactions and enforce sanctions," Mr. Lew said. "It’s really been […]

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Lebanon pols battle over energy ministry to control gasfields

As deeply divided Lebanon struggles to form a new government after 10 months of political paralysis, one of the key issues is which faction will control the Energy Ministry and the development of potentially rich offshore gas fields. Indeed, it has become something of a Catch-22 situation that’s blocking progress toward extracting the rich natural gas fields that lie in 2,000 feet under the eastern Mediterranean that could rescue the tiny Mediterranean country from economic collapse. And, like just about everything else in Lebanon, the issue has assumed sectarian overtones with the various sects all wanting to control the financial bonanza that the gas fields, which officials say could hold at least 96 trillion cubic feet, plus 850 million barrels of oil, will bring — if drilling ever starts. Work on the 10 exploration blocks in Lebanon’s Exclusive Economic Zone cannot begin until […]

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U.S. Apache Corp. keen on investing in Egypt, official says

Egypt’s oil and gas resources provide "continued opportunity for profitable investment," said Thomas Maher of Apache Corp. The U.S. company has 27 drilling rigs and 5 million acres targeted for exploration in Egypt’s Western Desert. "Apache sees continued opportunity for profitable investment developing Egypt’s oil and gas resources," Maher, a company general manager for Egypt, said in a statement Thursday. The company, which has headquarters in Texas, said some of its latest operations are already producing, or have discovered, oil and natural gas. Last year, Apache drilled more than 250 wells in the region. For the third quarter, the last full quarter for which data are available, gross production averaged 346,530 barrels of oil equivalent per day,Apache said. British energy company BG Group said Monday it declared force majeure in Egypt, meaning it’s unable to meet certain contractual obligations because of circumstances beyond its […]

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Peru Moving Forward With Energy Project Despite Concern for Native Tribes

Peru is pushing forward with an expansion of the country’s biggest natural gas project despite concerns about its potential impact on indigenous tribes living deep inside a remote Amazon reserve. The Mines and Energy Ministry this week approved a key environmental permit that will allow the Camisea consortium to carry out a $480 million exploration program at its Block 88 concession. The consortium, led by Argentina’s Pluspetrol Norte SA, plans to drill 18 exploration wells and conduct seismic testing in a part of the concession that overlaps with the Kugapakori-Nahua-Nanti indigenous reserve. President Ollanta Humala’s administration is keen on finding new reserves at the Camisea gas fields, which are an important source of tax revenue and seen as a supply of low-cost fuel for the national market. The consortium paid $1.3 billion in royalties in 2013. Camisea produces almost all of Peru’s natural gas from Block 88 and […]

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Study finds Mexico's energy reforms represent 'abundant opportunities'

U.S. energy companies will benefit from "abundant opportunities" as a result of Mexico’s energy reforms, a private economic analysis indicated. Mexico’s energy overhaul, approved by Congress last month, ends the monopoly of state-owned Mexican oil company Petroleos Mexicanos, known as Pemex, and opens all segments of the energy sector to private firms for the first time in 75 years. A report by financial services firm BBVA Compass, based in Birmingham, Ala.., concluded the investment and new projects expected to flow from Mexico’s energy reforms could mean 2.5 million new jobs in Mexico by 2025. "More jobs in Mexico could potentially reduce illegal immigration," BBVA Compass economist Marcial Nava said in a webinar this week, the Houston Chronicle reports. Nava predicts the reforms will pump about $1.2 trillion to the Texas-Northern Mexico region in the next decade. "If these border towns effectively seize the […]

Posted On : Published By : Tom Whipple