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Oil Futures Post Weekly Gain on Shrinking Cushing Glut

Oil futures edged to a three-week high Friday as market participants assessed falling stockpiles at a key U.S. storage hub and ongoing tension between Russia and the West. Light, sweet crude for May delivery settled up 39 cents, or 0.4%, at $101.67 a barrel on the New York Mercantile Exchange, the highest settlement since March 7. Brent crude on the ICE futures exchange rose 24 cents, or 0.2%, to $108.07 a barrel. Brent posted a 1.1% gain for the week. U.S. prices rose 2.2% for the week. A three-day closure of the Houston Shipping Channel due to a fuel-oil spill on Saturday boosted prices early in the week. After Wednesday, traders focused on falling supplies in Cushing, Okla., a key storage hub where the Nymex contract is priced. A storage glut has built up in Cushing as U.S. oil production rapidly increased without sufficient transportation channels to connect […]

Posted On : Published By : Tom Whipple
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WTI Oil Advances to Three-Week High on U.S. Economic Data

West Texas Intermediate crude reached a three-week high as U.S. consumer spending rose in February by the most in three months. Brent gained on concern that tension in Ukraine will escalate. WTI advanced for the fifth time in six days. Household purchases, which account for almost 70 percent of the economy, climbed 0.3 percent, the Commerce Department said. Russia massed troops along the Ukraine border after annexing Crimea and rejected a United Nations resolution condemning that takeover. “The market’s taking the consumer spending number positively,” said Paul Crovo, a Philadelphia-based oil analyst at PNC Capital Advisors. “The economy will continue to forge ahead. There is a lot of concern about what’s going on in Ukraine and Russia’s possible incursions.” WTI for May delivery rose 39 cents, or 0.4 percent, to $101.67 a barrel on the New York Mercantile Exchange , the highest settlement since March 7. Trading was 33 […]

Posted On : Published By : Tom Whipple
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Ethanol Rises to Highest Price Since July 2006

Ethanol inventories last week were down 10 percent from a year earlier and are at a seasonal record low, data compiled by Bloomberg show. Close Close Open Photographer: Daniel Acker/Bloomberg Ethanol inventories last week were down 10 percent from a year earlier and are at a seasonal record low, data compiled by Bloomberg show. Ethanol rose to the highest price since July 2006 as demand for the biofuel climbed while rail congestion held down production rates. Futures surged 7.8 percent. Distillers are being forced to dial back output because of the availability of trains to transport corn to turn into the biofuel. The same delays are affecting the shipment of ethanol to the population-dense East Coast from the corn-rich Midwest, where about 89 percent of plants are located. “It is logistics, logistics, logistics,” said Julie Ward, an assistant vice president at R.J. O’Brien & Associates, a […]

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Iran launches floating gas export terminal

Iran announced Friday it launched operations at its first-ever floating gas condensate export terminal in the waters of the Persian Gulf. Iran in January exported 878,631 tons of gas condensate. Pirouz Mousavi, managing director of the Iranian Oil Terminals Co., said the facility could help Iran get more oil and gas from a southern economic trade zone. "The terminal, which facilitates the export of 600,000 barrels of gas condensate per day, can help Iran boost its capability to export both crude oil and condensate," he said . Customs officials in Iran say gas condensate accounts for more than 60 percent of the commodities exported from the southern economic zone. Iran has touted its oil and gas export potential since reaching an interim nuclear agreement with Western negotiators in November. Iranian President Hassan Rouhani said Thursday energy products from Iran were re-entering the global market as expected. "As far as […]

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Lukoil Starting New Iraq Oilfield as Output Reaches 35-Year High

OAO Lukoil (LKOH) will start pumping crude from Iraq’s second-largest oilfield tomorrow as the nation boosts output to levels last seen more than three decades ago. Russia’s biggest publicly traded oil producer will start producing 120,000 barrels a day at West Qurna-2 in the south. The field is expected to eventually yield 1.2 million barrels daily, or about a third of the nation’s current output. Iraq is now the second-biggest member of the Organization of Petroleum Exporting Countries behind Saudi Arabia after adding 1 million barrels of output since 2007. Wars and sanctions crippled the country for decades, contributing to four of the 11 biggest global supply shocks in the past 60 years, according to the International Energy Agency in Paris. “Iraq has been the key growth center within OPEC,” said Amrita Sen, the chief oil market strategist at Energy Aspects Ltd. in London. The nation plans to increase […]

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Unrest hurting Libya's oil economy, Europe says

Political conflict in Libya means an economy that’s largely dependent on oil production has no room to grow, the European Union said. A progress report on Libya from the European Commission said a blockade on oil exports by eastern federalists has "severely" affected Libya’s fiscal situation. The report, published Thursday, said the closure of eastern export terminals has cut Libyan oil production from a pre-war level of 1.6 million barrels per day to around 250,000 bpd. With an economy that relies on the petroleum sector for 90 percent of its revenue and more than 70 percent of gross domestic product, the security situation was directly responsible for economic stagnation. "The lack of security has a negative impact on business climate," the progress report said . "With the security situation featuring so prominently on the agenda, thus far little attention has been paid to the diversification of the economy and […]

Posted On : Published By : Tom Whipple
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Unrest hurting Libya’s oil economy, Europe says

Political conflict in Libya means an economy that’s largely dependent on oil production has no room to grow, the European Union said. A progress report on Libya from the European Commission said a blockade on oil exports by eastern federalists has "severely" affected Libya’s fiscal situation. The report, published Thursday, said the closure of eastern export terminals has cut Libyan oil production from a pre-war level of 1.6 million barrels per day to around 250,000 bpd. With an economy that relies on the petroleum sector for 90 percent of its revenue and more than 70 percent of gross domestic product, the security situation was directly responsible for economic stagnation. "The lack of security has a negative impact on business climate," the progress report said . "With the security situation featuring so prominently on the agenda, thus far little attention has been paid to the diversification of the economy and […]

Posted On : Published By : Tom Whipple
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Australia's Woodside balks on Israel's Leviathan field

Australian energy company Woodside Petroluem said a February agreement to sign a deal to enter the Leviathan gas field off the Israeli coast was on hold. Woodside said in a statement the parties to a memorandum of understanding — Noble Energy Mediterranean Ltd, Delek Drilling, Avner Oil Exploration LP and Ratio Oil Exploration — haven’t settled the terms of a deal announced last month. "Discussions continue with the parties and the Israeli government with a view to resolving the remaining issues and executing definitive agreements," the Australian company said in a statement Thursday. The February arrangement would have granted Woodside a 25 percent stake in the field, one of the largest in the world. The company balked over Israeli tax policy, saying its profits from Leviathan should be tax free. The Israeli government, however, said Woodside’s stake should be seen as a capital investment and […]

Posted On : Published By : Tom Whipple
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Australia’s Woodside balks on Israel’s Leviathan field

Australian energy company Woodside Petroluem said a February agreement to sign a deal to enter the Leviathan gas field off the Israeli coast was on hold. Woodside said in a statement the parties to a memorandum of understanding — Noble Energy Mediterranean Ltd, Delek Drilling, Avner Oil Exploration LP and Ratio Oil Exploration — haven’t settled the terms of a deal announced last month. "Discussions continue with the parties and the Israeli government with a view to resolving the remaining issues and executing definitive agreements," the Australian company said in a statement Thursday. The February arrangement would have granted Woodside a 25 percent stake in the field, one of the largest in the world. The company balked over Israeli tax policy, saying its profits from Leviathan should be tax free. The Israeli government, however, said Woodside’s stake should be seen as a capital investment and […]

Posted On : Published By : Tom Whipple
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Statoil wades deeper into Brazilian waters

Norwegian energy company Statoil said Friday it secured formal approval from the Brazilian government to work in the offshore Espirito Santo oil basin. "The new license is another building block for further value creation," Andre Leite, Statoil’s regional manager, said in a statement . "We look forward to working closely together with the operator in the appraisal and further development of the asset." There may be as much as 50 billion barrels of oil offshore Brazil, putting it just behind Venezuela in terms of proven oil reserves in South America. Statoil said the approval extends to the Sao Bernardo discovery in the basin off Brazil’s coast. The company declined to indicate a reserve estimate, but said the area "has an exciting oil potential." Statoil said an appraisal well drilled into the region in 2012 encountered an oil column measuring more than 600 feet thick. The Norwegian said it’s the […]

Posted On : Published By : Tom Whipple