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ANALYSIS: Potential sanctions may hit Russian oil, gas sectors long term

While many analysts see the sanctions, as they are proposed currently, only being partially effective, others say they could have much wider implications in the long term, potentially affecting the oil and gas sector too. "Though the scope of the sanctions remains uncertain, the effect could be enormous," Russia’s economist Sergei Guriev said in his column with the Project Syndicate, an online platform for expert opinion. A significant fall in foreign direct investment, "which brings not only money but also modern technology and managerial skills, would hit Russia’s long-term economic growth hard," Guriev said, adding that FDI was estimated to have reached $80 billion in 2013. In the short term, "it is trade that matters much more than investment," he said. Russia’s annual exports, mostly oil, gas, and other commodities, are worth nearly $600 billion, with annual imports totaling almost $500 billion, according to Guriev. The most important source […]

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Merkel Says Russian Trade Impact Limited as Industry Backs Curbs

Chancellor Angela Merkel won industry support as she stepped up her threat of sanctions against Russia , saying that Germany could withstand the economic impact of any measures taken. Merkel, speaking in Munich today, compared the 76 billion euros ($106 billion) in bilateral trade with Russia with the more than 60 billion euros in trade Germany has with its neighbor, the Czech Republic, a nation of 10 million people. Russia has a population of about 142 million. “That shows that there is a dimension there, but not to such an extent that it would have an impact on Germany’s entire economic engagement,” Merkel said. Ulrich Grillo, president of Germany’s BDI industry federation, told the same event that he “fully” supports the chancellor during the crisis in Ukraine . A day after she warned Russia that it risked “massive economic and political harm” if it didn’t change course, Merkel maintained […]

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Russia holds war games near Ukraine; Merkel warns of catastrophe

Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down on plans to annex its neighbor’s Crimea region despite a stronger than expected drive for sanctions from the EU and United States. In an unusually robust and emotional speech, German Chancellor Angela Merkel warned of "catastrophe" unless Russia changes course, while a man was killed in Ukraine in fighting between rival protesters in a mainly Russian-speaking city. At the U.N. Security Council, the United States circulated a draft resolution that would declare illegal Sunday’s planned referendum on independence for Ukraine’s Crimea region. But Russia, one of the Security Council’s five veto-wielding permanent members, made clear it opposed the draft. "Russia announced they will kill it," a senior Western diplomat told Reuters. In Berlin, Merkel removed any suspicion she might try to avoid a confrontation with Russian President Vladimir […]

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Crude-oil futures moved in opposite directions in Asian trading hours Friday as markets kept a close watch on the Ukraine crisis and Chinese economic indicators.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $98.18 a barrel at 0536 GMT, down $0.02 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.18 to $107.57 a barrel. Worries over an economic slowdown in China have pressured industrial commodity prices and wider financial markets this week but the impact on oil has been limited by tensions in Ukraine and Libya. "While a weaker macro outlook would certainly reverberate in the oil market, Chinese demand is still supported by steady activity and a rise of new refining capacity," analyst Sijin Cheng at Barclays said in a note. She said China’s implied oil demand contracted 3.1% on-year in the first two months of 2014 to 9.97 million barrels a day, but imports also surged on stockpiling for new refineries and strategic reserves. Meanwhile, the U.S. is […]

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Natural Gas Continues to Fall Despite Depleting Supplies

Natural gas slumped for a third straight session Thursday as traders expected production levels to rise in the spring, just as demand typically eases for the heating fuel. Natural gas for April delivery settled down 10.7 cents, or 2.4%, at $4.383 a million British thermal units on the New York Mercantile Exchange, its lowest settlement price since Jan. 17. This winter’s unusually cold weather in the central and eastern U.S. has led to record demand for gas-powered heating in homes and offices. About half of U.S. households use natural gas as their primary heating fuel, according to the U.S. Energy Information Administration. Inventories have fallen from 3.834 trillion cubic feet in the first week […]

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EIA projects record US natural gas storage injection in 2014

The US Energy Information Administration’s Short-Term Energy Outlook (STEO) for March forecasts a robust natural gas injection season through April to October with nearly 2,500 bcf added to storage as operators seek to rebuild stocks. US gas inventories will end the current withdrawal season at the end of March below 1 tcf, hitting a 10-year low, after unusually cold weather sparked high demand and forced a record-breaking winter withdrawal. EIA expects relatively high gas production growth and moderate demand growth starting in April that will allow for a record storage build through October. The forecasted electric power consumption of gas from April to October is 23.9 bcfd, essentially flat compared with a year ago. Expected dry natural gas production during this period reaches 68.1 bcfd, up 2% from last year. “The forecasted April-to-October storage build of nearly 2,500 bcf would surpass the previous record injection season net inventory build […]

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OPEC to Cut Exports as Refinery Demand Slows, Oil Movements Says

The Organization of Petroleum Exporting Countries will cut crude exports this month to the lowest level since November as refinery demand slows in Europe and North America, according to tanker-tracker Oil Movements. OPEC, responsible for 40 percent of global oil supplies, will decrease shipments by 1.1 million barrels a day, or 4.6 percent, to 23.6 million a day in the four weeks to March 29, Oil Movements said in an e-mailed note. The figures exclude two of OPEC’s 12 members, Angola and Ecuador . Sailings were last this low in the four weeks to Nov. 16, when an extended maintenance period caused a fall in refinery demand, according to the consultant. “There is a spring low point for refinery demand sometime in April” in Europe and North America, Oil Movements founder Roy Mason , said by phone from Halifax, England . “Demand is going down and sailings respond to […]

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OPEC Production Surges as Iraq Pumps Most in 35 Years, IEA Says

OPEC crude production rose above its target for the first time in five months as Iraq pumped the most in 35 years, according to the International Energy Agency . The 12 members of the Organization of Petroleum Exporting Countries produced 30.49 million barrels a day in February, up from 29.99 million in January, the Paris-based IEA said today in its monthly oil market report. That’s about 300,000 barrels a day higher than the average level required in the second half of the year, according to the agency. Iraqi crude output jumped by 530,000 barrels a day to 3.62 million, driven by upgraded infrastructure in the country’s southern oil-producing region and the reduction of bottlenecks at its Gulf export facilities. That was the highest since 1979. Exports soared by 572,000 barrels a day to 2.8 million. “The exceptional increase in February’s exports has been an unexpected boost for the country, […]

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IEA Highlights Increases in Oil Supply

A relentless increase in oil supply from the U.S. and Canada and a surprise surge in Iraqi crude production last month is offsetting demand pressures bought about by the cold winter in the U.S. and geopolitical concerns over the rising tensions between Russia and Ukraine, the International Energy Agency said Friday. "While international tensions may be on the rise, pressure on oil markets, ceteris paribus, seems set to ease," the Paris-based energy watchdog said in its closely-watched monthly report on the oil market. The cold snap in the U.S., which has seen commercial oil inventories in industrialized countries plummet this winter to hit a whopping 154 million barrels below the seasonal average last month, is abating. Meanwhile, oil supply looks comfortable. The IEA expects supply from outside the Organization of Petroleum Exporting Countries to rise by 2 million barrels a day in the first quarter of […]

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IEA says supply surge to ease oil tensions

The International Energy Agency expects the pressure on global oil markets to ease in spite of rising geopolitical tensions because of surging supply from Iraq and other producers. “While international tensions may be on the rise, the pressure on oil markets . . . seems set to ease”, the Paris-based group said in its widely followed monthly report, noting the extreme cold weather that had dug into US oil stocks in January had abated. US oil prices rose above $100 for the first time in five months in February because of exceptionally cold weather in the US and robust refining demand. Brent, the international marker, also rose, supported by fresh supply outages in Libya and the tensions in the Ukraine. However, in recent weeks prices have eased back. Nymex April West Texas Intermediate is currently trading at $98.36 a barrel, while ICE Brent April is at $107.44. The IEA, which advises Western governments […]

Posted On : Published By : Tom Whipple