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Pemex Seeks to Keep 83% of Proven, Probable Reserves

Mexico’s state oil monopoly Petróleos Mexicanos, or Pemex, is aiming to keep more than four-fifths of the country’s proven and probable oil and gas reserves for its own exploitation as the government prepares to open the state-run sector to private and foreign investment for the first time in 75 years. The energy overhaul passed last year by Congress amended the constitution to allow foreign and private companies to explore for and produce oil and gas under profit-sharing and even production-sharing agreements. It marks the first opening of the state-run industry since the 1938 oil expropriation. The changes, however, give Pemex the first choice of projects that it wishes to be assigned directly under a so-called "Round Zero." The Energy Ministry said Monday that it has until Sept. 17 to decide which of the requested projects will be assigned directly to Pemex, taking into account the state company’s technical […]

Posted On : Published By : Tom Whipple
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Venezuela Takes Steps to Ease Curbs on Currency

Seeking to confront the deep economic problems that have helped fuel weeks of protests here, Venezuela ’s socialist-inspired government took a step on Monday toward easing strict currency controls and opened what it says will be a free market for the sale of dollars to Venezuelans. The new exchange rate mechanism is intended to reduce the black market price of dollars, which had soared in recent months. Yet the impact of the measure, which is similar to a system that was shut down in 2010, depends on how much money the government allows to change hands in the new market and how freely it allows the market to operate. Alejandro Grisanti, an economist for Barclays, said the change “makes the exchange rate system more flexible,” adding, “And in that sense it’s very positive for Venezuela.” The new system will operate in tandem with a base exchange […]

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Weatherford Says Cutting Back Venezuela Operations

Oilfield services provider Weatherford International Ltd said on Monday it was reducing operations in Venezuela and expects its Russian business to grow this year. The Swiss-headquartered company, which competes with Schlumberger and Halliburton, said the "serious liquidity situation in Venezuela" is causing it to pare back services it provides inside the OPEC country, Chief Executive Bernard Duroc-Danner said at the Howard Weil conference in New Orleans on Monday. Weatherford provides drilling and exploration services to Venezuela’s national oil company Petroleos de Venezuela SA , but Venezuela’s currency devaluation and economic instability have prompted payment delays, according to Weatherford’s annual filing with the U.S. Security and Exchange Commission. In Russia, Weatherford expects a "very constructive year," Duroc-Danner told the conference. He did not mention the ongoing tension between Russia and Ukraine over Crimea and how it could affect his business. Last year, revenue in […]

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Energy Needs Put Japan in Difficult Position Over Ukraine

Japan’s increasing reliance on Russian energy has put Tokyo in a difficult position in the dispute over Ukraine and Crimea, with the latest developments gaining close scrutiny from an energy industry that has been disrupted by sanctions on its suppliers in the past. “Japan’s crude imports from Russia have risen sharply in recent years,” noted Petroleum Association of Japan Chairman Yasushi Kimura at his monthly news conference Monday. “While there hasn’t been any impact so far, we’ve been watching developments carefully,” said Mr. Kimura, who is also chairman of JX Holdings Inc., the country’s biggest oil refiner by capacity. Japan imports about 250,000 barrels a day, or 7% of its crude supply, from Russia. Industry minister Toshimitsu Motegi has noted that Russia is a major energy supplier for Japan and has also said he has been watching developments carefully. Russian President Vladimir Putin formally annexed Crimea on Friday. In […]

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Why peak oil signals the world's end, or at least the one we know

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks: November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below). March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, […]

Posted On : Published By : ASPO-USA
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Why peak oil signals the world’s end, or at least the one we know

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks: November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below). March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, […]

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Marathon pins growth strategy to U.S. shale

Marathon Oil Corp. will look to North American shale as a foundation for its 2014 growth agenda, Chief Executive Officer Lee Tillman said Monday. Tillman said at an investment conference in New Orleans his company plans to deploy more than two dozen rigs in the Eagle Ford shale play in Texas, the Bakken reserve area in North Dakota and the Woodford shale area in Oklahoma. "We continue to have high confidence in our ability to deliver on our North America long-term production growth targets," he said in a statement . Last month, Tillman highlighted his company’s production from U.S. shale. Combined, the three reserve areas gave up 144,000 barrels of oil per day on average during the fourth quarter. In December, Marathon said it would invest more than 60 percent of its $5.9 billion in capital expenses next year on developing the Eagle Ford, Bakken […]

Posted On : Published By : Tom Whipple
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Booming U.S. NGL Exports Idled With Houston Channel Shut

The closing of the Houston Ship Channel is idling ships that carried a record amount of U.S. natural gas liquids exports last year, raising questions about the need for geographic diversity in the burgeoning market. Most U.S. capacity to export NGLs is on the channel, said Peter Fasullo, a principal at Houston-based energy consultant EnVantage Inc. The U.S. averaged 475,000 barrels a day of exports in 2013, up from 164,000 in 2010, according to Energy Information Administration data. Two companies, Enterprise Products Partners LP (EPD) and , have channel operations that combine to represent 380,000 barrels a day of export capacity, Fasullo said. “That’s all going to go offline,” Fasullo said. “Ships can’t get into the terminals to get loaded, and those that are loaded can’t get out.” There is no estimate on when the 52-mile (83-kilometer) channel will reopen, U.S. Coast Guard Captain Brian Penoyer said yesterday at […]

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Oil Spill Closes Houston Ship Channel Indefinitely

HOUSTON—A key waterway linking refineries and petrochemical plants with the Gulf of Mexico remained closed indefinitely to ship traffic, two days after a collision triggered an oil spill in Texas’ Galveston Bay. More than a hundred ships were waiting Monday to enter the Houston Ship Channel, a 52-mile waterway that connects the Port of Houston with the open ocean, according to the U.S. Coast Guard. That was up from about 60 ships waiting for access a day earlier, authorities said. Initial hope that limited traffic would be permitted late Monday was dashed when cleanup crews skimming oil from the water’s surface reported recoverable amounts of fuel stuck in the jetties, said Patrick Seeba, program manager with the Houston Ship Channel Security District. The continuing effort to contain the spill, estimated at 4,000 barrels of fuel oil, threatened to further jam ship traffic for days. The situation, if prolonged, could […]

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Russian Oil Seen Heading East Not West in Crimea Spat

The Crimean crisis is poised to reshape the politics of oil by accelerating Russia ’s drive to send more barrels to China , leaving Europe with pricier imports and boosting U.S. dependence on fuel from the Middle East. China already has agreed to buy more than $350 billion of Russian crude in coming years from the government of President Vladimir Putin . The ties are likely to deepen as the U.S. and Europe levy sanctions against Russia as punishment for the invasion of Ukraine. Such shifts will be hard to overcome. Europe, which gets about 30 percent of its natural gas from Russia, has few viable immediate alternatives. The U.S., even after the shale boom, must import 40 percent of its crude oil , 10.6 million barrels a day that leaves the country vulnerable to global markets. The alternatives to Russia also carry significant financial, environmental and geological challenges. […]

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Funds cut Russian holdings after sanctions

Days after Washington imposed sanctions against an additional 20 Russian individuals and a top-20 Russian bank , investors are still reeling from the news and beginning to wonder what the long-term consequences of the heightened geopolitical conflict will be for Russia Inc. Unlike the US’s first group of sanction targets, who were Russian officials with little to no business holdings, the second group includes businessmen who own shares in some of the biggest Russian stocks, many of which are traded in London and New York and sold to US and UK institutional investors. While the sanctions are only meant to target assets which the individuals have control over, many funds are now pondering whether they can justify holding on to stocks, which count such individuals as their minority shareholders. A portfolio manager at a UK asset management group says his fund is “staying clear of any company involved with […]

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Kiev Blamed for Blackout in Capital of Crimea

A power failure plunged much of the Crimean capital, Simferopol, into darkness on Monday, the second partial blackout in two days, as the Ukrainian government in Kiev appeared to retaliate against Russia’s occupation and annexation of the peninsula by sharply cutting electricity supplied from the mainland. Homes and businesses went dark across a large swath of the city, underscoring the vulnerability of the geographically isolated peninsula, which is dependent on mainland Ukraine for many vital services, including electricity and much of its water supply. Officials here and in Moscow had anticipated such a move by the Ukrainian government. In recent days, regional officials said they had acquired 900 generators to provide electricity to vital buildings, including hospitals. It was not immediately clear if those generators were in use. The state-run Ukrainian national energy company, Ukrenergo, issued a statement attributing the blackouts in Crimea to emergency repairs […]

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Russia Is Slowly Turning The NatGas Tap Off To Europe

While Naftogaz (Ukraine’s gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine . This ‘adjustment’ follows increased sanctions by the West as Medvedev’s notable statement this morning that Ukraine owes Russia $16bn. NatGas output is tumbling The good news: Gazprom today said natgas transit to Europe via Ukraine, supplies for Ukrainian consumption   But Pay Up… Ukraine owes Russia $11b after collapse of 2010 deal, Russian Prime Minsiter Dmitry Medvedev says to President Vladimir Putin at Security Council meeting, according to transcript on Kremlin website.   Medvedev adds $3b Ukraine bonds bought in Dec., ~$2b debt to Gazprom for natgas supplies   NOTE: In 2010, Russia agreed to sell natgas at discount in exchange for extending lease to Black […]

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U.S. could start energy war with Russia

Debate has raged over whether the United States can fight Vladimir Putin on the Russian president’s most favourable ground: energy politics. It can, and it should, particularly because there’s an obvious path forward that coincides with American — indeed, world — economic interests. That path is lifting irrational restrictions on exports and making it easier to build natural gas export terminals. For years, Putin has used his nation’s wealth of oil and natural gas as a cudgel to bully his neighbours. At present, the European Union’s large imports of Russian natural gas discourage a forceful Western response to Russia’s aggressive actions in Ukraine. Meanwhile, the United States is tapping massive reserves of unconventional natural gas. […]

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British foreign secretary calls for renewed focus on energy security

British Foreign Secretary said it was time for European leaders to get serious about energy diversity in response to the crisis over Ukraine. "We would need to boost investment in gas interconnections and terminals in Europe, and develop indigenous European energy supplies for countries wishing to develop their own resources, such as shale gas," he wrote in the Sunday Telegraph. European energy consumers get about a quarter of their gas needs met by Russia, though the bulk of that runs through the Soviet-era gas transit network in Ukraine. The turmoil that erupted in November has sparked concerns about the security of European energy supplies. Hague said renewed focus should be on the so-called Southern Corridor, a series of transit networks that would rely in part on gas supplies from Azerbaijan. Envisioned before the most recent crisis, the Southern Corridor is meant to break the Russian grip on the regional […]

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London sees energy security through shale

British Energy Secretary Michael Fallon said the British economy needs to rely more on domestic energy reserves like shale gas for national security’s sake. "We have to develop more home grown energy like shale," Fallon said in an interview with the Sunday Telegraph. The British Geological Survey in June estimated the Bowland shale formation in the north of the country contains 1.3 quadrillion cubic feet of natural gas. The government says shale could ensure energy security for a country where net natural gas imports are on pace to increase from 45 percent of demand in 2011 to 76 percent by 2030. Protesters last year staged several demonstrations to protest shale operations. The practice is seen as a threat to the environment. The newspaper reported the British economy has relied on imported natural gas since output from the North Sea began its decline in 2005. Fallon said Russia’s grip on […]

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Oil Futures Slip Further, WTI Trades Under $100/Bbl

rude-oil futures fell in Asian trading hours Monday as data showing weak manufacturing activity in China and lower demand with easing of a severe U.S winter weighed on trading sentiment. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $99.10 per barrel at 0456 GMT, down 25 cents. May Brent crude on London’s ICE Futures exchange fell 27 cents to $106.65 a barrel. China’s preliminary HSBC Purchasing Managers’ Index was below 50–indicating a contraction in manufacturing–for the third straight month, slipping below expectations for a slight improvement after the effects of the Lunar New Year holiday over the first two months of the year. "This is obviously not supportive for markets," said Yusuke Seta, a commodities broker at Newedge Japan. He added that the U.S crude oil demand has softened with the easing of severe winter conditions. "Demand […]

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Brent Slips for 1st Day in 3 After China Data; WTI Holds

Brent crude dropped for the first time in three days in London after a gauge of factory output in China contracted for a third month. WTI was steady. The European benchmark grade slid as much as 0.4 percent in London. A preliminary China purchasing managers’ index for March from HSBC Holdings Plc and Markit Economics dropped to 48.1, lower than the 48.7 median estimate of analysts surveyed by Bloomberg News . Brent and WTI rose March 21 after Russia completed its annexation of Crimea from Ukraine. “It has been clear for twelve months that manufacturing has been slowing in China,” Guy Wolf, global head of market analytics at Marex Spectron Group in London , said by e-mail. “Deflating a credit bubble is extremely hard to achieve in a measured way. The risks remain that it accelerates to the downside.” Brent for May settlement declined as much as 47 cents […]

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Oil near $99 after China manufacturing drops

The price of oil fell slightly Monday following a drop in China’s manufacturing. Benchmark U.S. crude for May delivery was down 3 cents at $99.43 a barrel at 0825 GMT in electronic trading on the New York Mercantile Exchange. The contract rose 56 cents to $99.46 on Friday. Brent crude, used to set prices for international varieties of crude, fell 28 cents to $106.64 a barrel The preliminary version of HSBC’s purchasing managers’ index for China released Monday showed manufacturing dropped to an eight-month low. The index fell to 48.1 from February’s 48.5 on a 100-point scale. Readings above 50 indicate expansion. Factory output shrank at the fastest pace in 18 months. But Asian stock markets were higher Monday as investors bet that China would introduce economic stimulus measures to prevent a deeper slowdown in the world’s No. 2 economy. Investors are also waiting for data on the U.S. […]

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The Hydraulic Fracturing of Saudi Arabia…

Since the early twentieth century, Saudi Arabia has enjoyed a close relationship with the United States. From the development of the Saudi oil fields,to the First Gulf War, this relationship has been an uneasy cooperation—each side received something out of the alliance while nervously watching the other.  So recently we have the first open break between the two powers culminating in the Saudi’s refusing a seat on the U.N Security Council due to anger with U.S. Middle Eastern policies. Saudi Arabia holds the world’s second largest oil reserves and the sixth largest natural gas fields.  In addition to being located in the most volatile part of the world, these energy assets make the country a strategic interest for any global power. The discovery of vast hydrocarbon reserves in the United States and the ability to harvest them through hydraulic fracturing techniques has radically altered the relationship between the two […]

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Egyptian court sentences 529 Muslim Brotherhood members to death: lawyer

An Egyptian court sentenced 529 members of the outlawed Muslim Brotherhood to death on Monday on charges including murder, a defense lawyer said, in a sharp escalation of a crackdown on the movement. Most were arrested during clashes which erupted in the southern province of Minya after the forced dispersal of two Muslim Brotherhood protest camps in Cairo on August 14. Political turmoil has deepened in Egypt since the army overthrew President Mohamed Mursi of the Muslim Brotherhood last July. Security forces have killed hundreds of Brotherhood members in the street, and arrested thousands of others. "The court has decided to sentence to death 529 defendants, and 16 were acquitted," lawyer Ahmed al-Sharif told Reuters. The ruling can be appealed. The charges against the group, on trial in Minya since Saturday, include violence, inciting murder, storming a police station, attacking persons and damaging public and private […]

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New worries on China growth as flash PMI shows contraction

China’s manufacturing engine contracted in the first quarter of 2014, a preliminary private survey showed on Monday, raising market expectations of government stimulus to arrest a loss of momentum in the world’s second-largest economy this year. The weaker-than-expected survey knocked the country’s main share index and other Asian markets off early highs, and lopped around a quarter of a U.S. cent from the Australian dollar, which is often used as a proxy for Chinese risk. The flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.1 in March from February’s final reading of 48.5. The index has been below the 50 level since January, indicating a contraction in the sector this year. Output and new orders both weakened but new export orders grew for the first time in four months, the survey showed, suggesting the slowdown has been driven primarily by weak domestic […]

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Sinopec Embraces Reform Amid China Push for Private Capital

, Asia ’s biggest refiner, said it will push ahead this year with a government-driven agenda to open up state-controlled industries, as China’s energy companies search for private capital. The company and domestic peer PetroChina Co. are seeking private investors for some units. Sinopec, officially known as China Petroleum & Chemical Corp., will sell as much as 30 percent of its oil retail business, in a sale Barclays Plc (BARC) estimates could raise more than $20 billion. PetroChina and its parent China National Petroleum Corp., are considering opening up areas including pipelines, oil and gas exploration and refining to private capital. “In 2014, the company expects to make significant advances in its development by fully embracing reform, leading to corporate transformation, organizational vigor and stronger corporate values,” Sinopec Chairman Fu Chengyu said yesterday in a statement. The Beijing-based company yesterday reported 2013 net income rose 3.4 percent to 66.1 […]

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South Korea Must Limit U.S. Shale-Gas Imports to 20% of Total, Kogas Says

South Korea must limit the share of U.S. shale gas to one-fifth of its total gas imports to avoid excessive dependence on a single supply source, a senior executive at state-run Korea Gas Corp. said Monday. "In my personal opinion, around 20% of shale gas [liquefied natural gas] is desirable. Too much exposure to shale gas LNG is not too desirable," said Kwon Young-Sik, chief operating officer at Kogas’s resources division. Asian importers of LNG such as South Korea are mulling a number of new supply sources as gas producers in Australia, the U.S., Canada, Russia and East Africa race to get new projects running. South Korea, the world’s second-largest importer of natural gas, imported around 37 million tons of LNG in 2012, according to the International Gas Union. It is positioned to be the first Asian importer of U.S. natural gas, as it has contracted […]

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10 states with the highest gas prices

Gasoline prices have risen steadily the past six weeks through March 18. There was an uptick in gas prices all but one of the past 38 days, and gas is now more expensive than at any point the past six months. In a number of states, the price of gas is now more than $3.75 per gallon, vs. $3.52 nationwide, with gas prices in several other states not far behind. In Hawaii, the price of gas is $4.17 per gallon. There, as in a number of other states, the high price of gas reflects the difficulties involved in transporting oil and refined products to the state. Based on data from AAA’s Daily Fuel Gauge Report , these are the 10 states with the highest average gasoline prices. In an interview with 24/7 Wall St. , Michael Green, public relations manager at AAA, said that seasonal factors played a major […]

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Vital Houston oil tanker routes shut amid spill cleanup

The closure of major Texas shipping channels that deliver crude to more than a tenth of the nation’s refining capacity was set to run into a third day and could continue through the week as crews were still working on Sunday night to clean up after an oil spill. The Houston Ship Channel, which allows oil barges and cargo ships to sail from the Gulf Coast to refiners and terminals further inland, was shut on Saturday following a collision between a Kirby Inland Marine oil barge and a cargo ship, spilling some 4,000 barrels, or 168,000 gallons (636,000 liters), of residual fuel oil. A warning to mariners issued by the U.S. Coast Guard on Sunday said portions of the Houston Ship Channel and its offshoots to Texas City and Galveston, Texas, along with a portion of the Gulf Intracoastal Waterway could be shut through […]

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Movement of About 60 Ships Affected

TEXAS CITY, Texas—The cleanup of an unknown amount of thick, sticky oil that spilled into the Galveston Bay blocked the movement Sunday of about 60 ships, including three cruise ships, between the Gulf of Mexico and one of the world’s busiest petrochemical transportation waterways. A barge carrying nearly a million gallons of marine fuel oil sprung a leak after colliding with a ship Saturday afternoon in the Houston Ship Channel. Officials believe only one of the barge’s tanks—which holds 168,000 gallons—was breached, though Coast Guard spokesman Lt. Sam Danus said Sunday it wasn’t clear how much oil had spilled. Crews were skimming oil out of the water Sunday and about six and half miles of containment booms were being used to protect environmentally sensitive areas, the Coast Guard said. The area is home to popular bird habitats, especially during the approaching migratory shorebird season. Mr. Danus said flights are […]

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Is Eagle Ford Peaking?

This page Texas Oil and Gas Production  was last updated on February 18. However the data on this page has been updated. And the January production has been updated also: Oil and Gas Production Data Query  then check “Lease”, “Both”, Statewide and then punch in the appropriate dates. Then when the next page comes up click on “Monthly Totals”. This brings up the updated monthly totals for Crude, Casinghead Gas, Gas Well Gas and Condensate. There were revisions going back to July 2010 but only 2013 had any major revisions though there were some 2012 revisions also as the chart below shows. <img alt="Texas Revisions" src="http://peakoilbarrel.com/wp-content/uploads/2014/03/Texas-Revisions1.png" width="655" height="437"/> The earlier revisions were smaller and there were some of […]

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U.S. Gas Rises to $3.5572 Per Gallon in Lundberg Survey

The average price for regular gasoline at U.S. pumps rose 4.74 cents in the past two weeks to $3.5572 a gallon, the highest since Sept. 20, according to Lundberg Survey Inc. The survey covers the period ended March 21 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. The average is 15.02 cents below a year ago. “It’s been six weeks of rising prices at the pump but this is a pace that has greatly slowed,” Trilby Lundberg, the president of Lundberg Survey, said yesterday in a telephone interview. Consumers are paying more even as oil and gasoline futures have fallen because the price for ethanol, the government-mandated fuel additive, has risen, Lundberg said. “Higher ethanol prices adds about a nickel at the pump,” Lundberg said. Ethanol prices have jumped 24 percent this month as winter weather and a shortage of rail […]

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Quebec Oil-Train Disaster Report Filed With Prosecutors

Quebec police have finished and filed with authorities their investigation into the Lac-Megantic train disaster that killed 47 people and prompted backlash against the growing practice of transporting crude oil by rail. The report has been sent to Quebec provincial prosecutors, said Claude Denis, a spokesman for Quebec’s provincial police service. A story by the QMI news service on March 22, citing an unidentified police source, said the train’s engineer knew some of the train’s brakes were broken and that police expected prosecutors to file criminal charges. In July 2013, a train operated by closely held Montreal, Maine & Atlantic Railway Ltd. rolled downhill into the small […]

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BlackRock wades into Scottish referendum debate

©AFP BlackRock has written an in-depth report on the expected impact on investors of Scottish independence BlackRock has waded into the debate on Scottish independence , warning that a vote to break away from the UK would create “substantial issues” for investors. The US asset management giant has written an in-depth report, seen by FTfm, on the expected impact on investors of the 306-year union between Scotland and the rest of the UK coming to an end. BlackRock, which opened its first office outside the US in Edinburgh, believes an independent Scotland would create “major uncertainties, costs and risks” for companies and pension schemes based in Scotland and the remainder of the UK. Investors in UK gilts and equities, in particular financial, utility and energy companies, will be most affected, according to the New York-based fund house. Investments in Scottish infrastructure projects are also likely to be put on […]

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Russia Steps Up Economic Pressure on Kiev

KIEV, Ukraine — Russia and Russian state companies have increased the economic pressure on the new pro-Western government in Kiev over the past week, closing the border to most trucks, shutting a Ukrainian factory in Russia and yet again raising the price of natural gas . The actions revive an array of Russian economic foreign policy tools used for years and made possible by Russia’s robust domestic consumer market and the country’s energy exports. About a quarter of all Ukraine ’s exports go to Russia, and factories here have benefited from a growing demand in the defense sector and rising consumer purchasing power. Russia’s manipulation of gas prices under various pretexts has for a decade proved to be a particular headache for pro-Western Ukrainian governments. Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a […]

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Foreign Monitors Enter Ukraine to Observe Political Situation

The first foreign observers permitted by governments in Moscow and Kiev to monitor the political situation and human rights are assembling in the Ukrainian capital and will start fanning out across the troubled region on Tuesday, a spokeswoman said Sunday. Deployment of the first 100 observers — a number that may rise to 500 during the six-month mission — was viewed by some diplomats as the first break in the crisis over Crimea since Russia sent thousands of troops into the peninsula and then annexed it last week. The annexation, considered illegal by the West, followed a public referendum in favor in Crimea on March 16. Moscow expressly barred the monitors from Crimea, and even suggested that the mission constituted foreign recognition that the peninsula was now Russia’s — a notion swiftly dismissed in the West. The monitors are working for the 57-nation Organization for Security […]

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Big climate report: Warming is big risk for people

If you think of climate change as a hazard for some far-off polar bears years from now, you’re mistaken. That’s the message from top climate scientists gathering in Japan this week to assess the impact of global warming. In fact, they will say, the dangers of a warming Earth are immediate and very human. "The polar bear is us," says Patricia Romero Lankao of the federally financed National Center for Atmospheric Research in Boulder, Colo., referring to the first species to be listed as threatened by global warming due to melting sea ice. She will be among the more than 60 scientists in Japan to finish writing a massive and authoritative report on the impacts of global warming. With representatives from about 100 governments at this week’s meeting of the Intergovernmental Panel on Climate Change, they’ll wrap up a summary that tells world leaders how bad the problem is. […]

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World energy use threatens water

Rising demand for energy, from biofuels to shale gas, is a threat to freshwater supplies, according to a United Nations report released Friday. The report urged energy companies to do more to limit their use of water in everything from cooling coal-fired power plants to irrigation for crops grown to produce biofuels. “Demand for energy and freshwater will increase significantly in the coming decades,” U.N. agencies said in the World Water Development Report. “This increase will present big challenges and strain resources in nearly all regions.” By 2030, the world will need 40 percent more water and 50 percent more energy than now, the report said. Water is under pressure from factors such as a rising population, pollution and droughts, floods and heat waves linked to global warming. Around the world, about 770 million of the world’s 7 billion people now lack access to safe drinking water, it said. […]

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U.S. Oil Futures Up as Some Fret About More Sanctions Against Russia

U.S. oil futures climbed Friday as Crimea-related rhetoric between Russia and the West remained a top focus for traders, with some worrying that sanctions against Russia could have economic implications. Light, sweet crude for May delivery settled up 56 cents, or 0.6%, to $99.46 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange gained 47 cents, or 0.4%, to $106.92 a barrel. Geopolitical tensions over Russia’s annexation of Crimea remain high, though some observers said the price increase for Nymex lessened later in the trading session on Friday as concerns about economic sanctions against Russia eased. Andy Lebow, senior vice president for energy at Jefferies Bache LLC, […]

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U.S. Oil Futures Rise

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $98.31 a barrel at 0527 GMT, down $0.59 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange fell $0.39 to $106.06 a barrel. Nymex WTI crude extended overnight losses, dropping below the $100 a barrel mark, as it came under pressure from a strong greenback as markets reacted to U.S. Federal Reserve commentary Thursday that interest rates could start rising in the fall. "The appreciation in the U.S. dollar has inevitably hurt overseas demand for the U.S.-denominated benchmark crudes, resulting in downward pressure," analyst Tan Chee Tat at Phillips Futures said. President Barack Obama ordered a second round of sanctions Thursday on 20 Russians and a St. Petersburg bank, and Russia responded with its own list of punitive measures against six U.S. lawmakers and three White House officials. European […]

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Brent, WTI Rise After Russia’s Annexation of Crimea

West Texas Intermediate and Brent crudes climbed after Russia completed annexing Crimea, escalating the worst standoff with the West since the Cold War . WTI rose 0.6 percent and Brent 0.4 percent. Russian President Vladimir Putin signed legislation needed to absorb the Black Sea peninsula and its port of Sevastopol from Ukraine. Futures retreated from the day’s highs after the Standard & Poor’s 500 Index slipped from a record. “Crude is up on concern that Putin may decide over the weekend that areas of eastern Ukraine might also prefer to be part of Russia,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis , which oversees $1.4 billion. WTI for May delivery advanced 56 cents to settle at $99.46 a barrel on the New York Mercantile Exchange. The April contract expired yesterday after dropping 0.9 percent to $99.43. The volume of all futures traded was […]

Posted On : Published By : Tom Whipple
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NYMEX April gas falls 5.6 cents as traders eye end of winter

April natural gas futures contract fell 5.6 cents Friday to settle at $4.313/MMBtu as traders looked ahead to lower shoulder-season demand in the coming weeks. Over the past four sessions, the contract has shed a total of 22.3 cents, or about 5%. "I think we’re looking like we’re trying to shake off winter," said INTL FC Stone broker Tom Saal. "We are trading for April, and the expectations are that April will probably show less colder weather than March." Article continues below… Request a free trial of: Gas Daily Gas Daily offers the most detailed coverage of natural gas prices at interstate and intrastate pipeline and pooling points in major U.S. markets. Gas Daily keeps you informed about complex state and federal regulations that affect competition in the gas industry. You will also learn about business-critical issues such as storage levels, pipeline […]

Posted On : Published By : Tom Whipple
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Iraq Hit by Wave of Bombings and Attacks

Thirty-seven people were killed on Friday in a wave of bombings and attacks across Iraq, and eight soldiers were kidnapped, security officials said. At dawn, a suicide bomber drove a truck filled with explosives into a police station in northeastern Diyala Province, followed by gunmen who sprayed bullets from speeding S.U.V.s. Eleven police officers were killed, including the commander of the unit, officials said. In the city of Samarra, north of Baghdad, gunmen in S.U.V.s attacked an army unit, took control and killed five soldiers, while kidnapping eight others and bringing them to an undisclosed location, a police official said. A curfew was imposed in Samarra. Jafar al-Jibory, a security analyst and an army officer during the Saddam Hussein era, placed blame for the attacks on militants with the Islamic State of Iraq and Syria, a powerful jihadist group once affiliated with Al Qaeda that is also […]

Posted On : Published By : Tom Whipple
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Libyan army in heavy fighting with oil port rebels

BENGHAZI, Libya (Reuters) – Libyan rebels occupying oil ports clashed with troops on Saturday after attacking an army base where reinforcements were preparing for an offensive to break the blockade, local residents said. Anti-aircraft gunfire and explosions were heard late at night and again after dawn on Saturday in Ajdabiya, the hometown of rebel leader Ibrahim Jathran, whose fighters seized three ports in summer to demand a greater share in Libya’s oil wealth. Fighting broke out just hours before the return to Libya of an oil tanker seized on Sunday by U.S. commandos in the Mediterranean after it had loaded crude at one of the ports Jathran’s men have occupied. The Morning Glory, once a North Korean-flagged vessel, was expected to arrive on Saturday in Libya under U.S. Navy escort and dock at Zawiya, one of the country’s key ports under government control. There was no immediate confirmation from […]

Posted On : Published By : Tom Whipple
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Libya's guns free-for-all fuels region's turmoil

At the heart of the Libyan capital, the open-air Fish Market was once a place where residents went to buy everything from meat and seafood to clothes and pets. Now it’s Tripoli’s biggest arms market, with tables displaying pistols and assault rifles. Ask a vendor, and he can pull out bigger machine guns to sell for thousands of dollars. Libya, where hundreds of militias hold sway and the central government is virtually powerless, is awash in millions of weapons with no control over their trafficking. The arms free-for-all fuels not only Libya’s instability but also stokes conflicts around the region as guns are smuggled through the country’s wide-open borders to militants fighting in insurgencies and wars stretching from Syria to West Africa. The lack of control is at times stunning. Last month, militia fighters stole a planeload of weapons sent by Russia for Libya’s military […]

Posted On : Published By : Tom Whipple
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Libya’s guns free-for-all fuels region’s turmoil

At the heart of the Libyan capital, the open-air Fish Market was once a place where residents went to buy everything from meat and seafood to clothes and pets. Now it’s Tripoli’s biggest arms market, with tables displaying pistols and assault rifles. Ask a vendor, and he can pull out bigger machine guns to sell for thousands of dollars. Libya, where hundreds of militias hold sway and the central government is virtually powerless, is awash in millions of weapons with no control over their trafficking. The arms free-for-all fuels not only Libya’s instability but also stokes conflicts around the region as guns are smuggled through the country’s wide-open borders to militants fighting in insurgencies and wars stretching from Syria to West Africa. The lack of control is at times stunning. Last month, militia fighters stole a planeload of weapons sent by Russia for Libya’s military […]

Posted On : Published By : Tom Whipple
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Oil Limits and the Economy: One Story, Not Two

The two big stories of our day are (1) Our economic problems: The inability of economies to grow as rapidly as they would like, add as many jobs as they would like, and raise the standards of living of citizens as much as they would like. Associated with this slow economic growth is a continued need for ultra-low interest rates to keep economies of the developed world from slipping back into recession. (2) Our oil related-problems: One part of the story relates to too little, so-called “peak oil,” and the need for substitutes for oil. Another part of the story relates to too much carbon released by burning fossil fuels, including oil, leading to climate change. While the press treats these issues as separate stories, they are in fact very closely connected, related to the fact that we are reaching limits in many different directions simultaneously. The economy is […]

Posted On : Published By : Tom Whipple
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US corn-based ethanol production falls 10.76% to 11-month low: EPA

February production of corn-based ethanol in the US lowered by 125.01 million gallons, or 10.76%, to an 11-month low of 1.04 billion gallons, US Environmental Protection Agency data showed Friday. The drop in ethanol production was unsurprising to sources as delayed rail return times to plants forced reduced run rates and a significant drop in production. "If you think those numbers are nuts, wait until March comes out," one trader said. "We’ll be lucky if we hit 900 [million gallons]." US ethanol prices have soared in recent weeks as supply concerns continue to send a resounding bullish sentiment throughout the market. Delayed return times on railcar deliveries, caused primarily by severe freezing weather and a higher demand for railcar space, was the root of the price surge throughout February, sources said. The Platts Chicago Argo ethanol assessment hit $3.24/gal Friday, up $1.1850/gal from a […]

Posted On : Published By : Tom Whipple
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Mexican Oil Rush Is On as Ex-President Gets Black Gold Fever

An event to celebrate the anniversary of the expropriation of Mexico’s oil industry at the Petroleos Mexicanos petrochemical complex in Cosoleacaque, Veracruz, Mexico, on March 18, 2014. Close Close Open Photographer: Susana Gonzalez/Bloomberg An event to celebrate the anniversary of the expropriation of Mexico’s oil industry at the Petroleos Mexicanos petrochemical complex in Cosoleacaque, Veracruz, Mexico, on March 18, 2014. Mexican companies are racing to be first in line to invest in the country’s energy industry even before lawmakers pass final legislation that would end a 76-year state monopoly. Alfa SAB (ALFAA) , owner of Mexico’s largest petrochemicals producer, sold $1 billion of bonds yesterday to help fund its energy business and refinance debt. State-owned Comision Federal de Electricidad plans to take advantage of the legal changes to sell natural gas, Chief Executive Officer Enrique Ochoa said at the Bloomberg Economic Summit in Mexico City yesterday. […]

Posted On : Published By : Tom Whipple
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Venezuela says street protests have caused $10 billion in damage

Venezuela’s president said on Friday that street protests for the past month have caused at least $10 billion in damage, accusing hardline foes of carrying out terrorist acts to sabotage public assets. President Nicolas Maduro did not say how the government arrived at that figure from the clashes between demonstrators barricading roads, pro-government radicals and security forces that have killed at least 31 people. "The minority who want a coup have done so much damage to the country … they burnt a public university where hundreds of young people studied," he said in a nationally televised speech. "This isn’t protest. It’s vandalism. It’s terrorism." Maduro was referring to a military college affiliated with the Venezuelan armed forces that authorities say was torched by demonstrators in the western city of San Cristobal, near the border with Colombia. San Cristobal has been harder hit by the violence than […]

Posted On : Published By : Tom Whipple
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The Challenges Facing Saudi Arabia Include More Than Oil

The Challenges Facing Saudi Arabia Include More Than Oil" alt="The Challenges Facing Saudi Arabia Include More Than Oil thumbnail" align="right" border="0" style="padding: 0px; margin: 5px 0px 10px 15px; width: 226px; height: 170px;"/> The International Energy Agency (IEA) recently issued a call for Saudi Arabia to sustain its current oil output during the upcoming seasonally weak global oil demand period in order to rebuild global crude oil inventories following the harsh winter in the Northern Hemisphere and the uptick in developing country oil needs. The IEA estimates that Saudi oil production in January was 9.76 million barrels a day (b/d), down about 60,000 b/d from December’s output level. Saudi’s sales for January, which includes volumes from storage, averaged 9.92 million b/d, down 70,000 b/d from December. A challenge for the Kingdom may come after March when it shuts down the […]

Posted On : Published By : Tom Whipple