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WTI Crude Drops Most in Three Weeks on Inventories

West Texas Intermediate crude fell the most since March 12 on speculation that U.S. inventories gained for an 11th week and as a gauge of manufacturing rose less than expected. Brent slipped. WTI dropped for a second day. Stockpiles probably climbed 2.5 million barrels last week, according to a Bloomberg survey before a government report tomorrow. The Institute for Supply Management ’s U.S. manufacturing index was 53.7 in March, lower than the 54 forecast in a Bloomberg survey. A separate report showed Chinese manufacturing weakened. “All the news is bearish today,” said Michael Lynch , president of Strategic Energy & Economic Research in Winchester, Massachusetts . “The manufacturing data is not supportive and we are expecting another build in inventories.” WTI for May delivery declined $1.84, or 1.8 percent, to settle at $99.74 a barrel on the New York Mercantile Exchange . The volume of all futures traded was […]

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Natural Gas Slides as Market Looks to End of Supply Drawdowns

Natural gas futures tumbled 2.2% Tuesday as warming temperatures cooled expectations of continued gas-fired heating demand. Gas futures for May delivery fell 9.5 cents to $4.2760 a million British thermal units on the New York Mercantile Exchange, its third straight losing session and fourth out of the past five. The market opened lower but continued the slide throughout the morning. The decline took gas prices to their lowest level since March 24 and 30% below their peak during the depths of winter in mid-February. Some traders had been holding on to bullish positions in the hope that colder-than-normal temperatures across the country would continue. But the most recent forecasts show a warm blast over much of the U.S. in the next few days, followed by cooler temperatures–but not cold enough to drive outsized demand for gas-fired heating. "Without the promise of further extreme weather, traders are […]

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Ethanol Rises to Highest Level Since 2006 on Shipping

Ethanol surged to the highest price in more than seven years as producers struggle to get the biofuel to consumers while demand for it climbs. Futures rose 1.7 percent a day after BNSF Railway said a winter storm in the Midwest would force it to reroute trains there, leading to longer transit times. Ethanol is delivered by rail, truck and barge, and about 89 percent of plants are located in the region. “Rail transport is difficult and that inherent difficulty is compounded by weather,” said Peyton Feltus, president of Randolph Risk Management Inc. in Dallas . “Some plants have slowed down or halted production because they couldn’t do anything with it.” Denatured ethanol for April delivery gained 5.8 cents to settle at $3.517 a gallon on the Chicago Board of Trade, the highest close since July 10, 2006. It was the fourth consecutive advance. Futures have gained 84 percent […]

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Gazprom to raise bills for Ukraine

Russian energy company Gazprom said Tuesday it would raise by $100 per 1,000 cubic meters the amount it would charge Ukraine for natural gas. Ukraine in December secured a 30 percent discount for the amount of gas delivered by Gazprom. The company’s chief executive officer, Alexei Miller , said Tuesday the discount no longer applied and Ukraine could be charged another $100 per 1,000 cubic meters, the standard purchase volume. "In line with the current contract on delivering gas, the price for Ukraine in the second quarter [of 2014] will be $385.50," he said . Gazprom in 2009 cut gas supplies to Ukraine because of contractual disputes. Ukrainian Prime Minister Arseniy Yatsenyuk said the economy is in ruins, though Gazprom said Kiev still has around $1.7 billion in unpaid gas debts. European consumers get about a quarter of their gas needs met by Gazprom, though […]

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Pemex’s March Crude Production Falls to Lowest Level Since 1995

Petroleos Mexicanos’ March oil production slid to its lowest monthly level in almost two decades after output declines accelerated at the world’s fifth-largest crude oil producer. Monthly crude production fell to 2.47 million barrels a day through March 30 as output at the company’s largest Ku-Maloob-Zapp and Cantarell fields dropped from the previous month, state-owned Pemex said today in a preliminary report. March was Mexico City-based Pemex’s smallest monthly output since October 1995 when it produced 1.898 million barrels a day. Pemex is banking on a December law change allowing foreign companies to join the energy industry to boost investment and increase national oil production to 3 million daily barrels by 2018, the government has said. The energy overhaul, which President Enrique Pena Nieto called the most important economic change in 50 years, is expected to raise as much as $30 billion a year in foreign investment, according to […]

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Two percent of Canada's oil gets to overseas markets

Only 2 percent of the crude oil produced in Canada made it to overseas markets last year, the National Energy Board reported. NEB, an independent regulator based in Calgary, Alberta, published its annual review of the Canadian petroleum sector. It said the oil industry is heavily influenced by the United States. "In 2013, approximately 71 percent of Canadian crude production was exported to the U.S. and 2 percent was exported to overseas markets from terminals on the east and west coasts," the report said Monday. Canadian Prime Minister Stephen Harper has tried to add a layer of diversity to an export economy that depends largely on the United States. European governments in particular have expressed concern about the environmental issues associated with bitumen, Canada’s heavier grade of crude oil. An increase in U.S. oil production has led the country to rely less on foreign imports […]

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Two percent of Canada’s oil gets to overseas markets

Only 2 percent of the crude oil produced in Canada made it to overseas markets last year, the National Energy Board reported. NEB, an independent regulator based in Calgary, Alberta, published its annual review of the Canadian petroleum sector. It said the oil industry is heavily influenced by the United States. "In 2013, approximately 71 percent of Canadian crude production was exported to the U.S. and 2 percent was exported to overseas markets from terminals on the east and west coasts," the report said Monday. Canadian Prime Minister Stephen Harper has tried to add a layer of diversity to an export economy that depends largely on the United States. European governments in particular have expressed concern about the environmental issues associated with bitumen, Canada’s heavier grade of crude oil. An increase in U.S. oil production has led the country to rely less on foreign imports […]

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BHP Billiton Signals Confidence in Its Coal Business

Coal being excavated at a U.S. mine earlier this month. Coal mining is one of the activities BHP Billiton still considers a core business. SYDNEY—The head of BHP Billiton Ltd. ‘s coal business signaled confidence in the outlook for the strained global coal industry, forecasting increases in world demand for decades to come. Dean Dalla Valle said he expects most demand growth to come from outside China, which has been the primary driver of global commodity prices in recent years. China currently accounts for about half of the world’s coal consumption. "Over the next couple of decades we expect global growth in demand for both energy coal and metallurgical coal," he said in a speech in Brisbane Wednesday. Although "the likes of India, a country not overly endowed with metallurgical coal, [is] anticipated to be the most significant source of new demand" for coal used in steelmaking, he said. […]

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Federal Polls Push Up India Crude Oil Imports

India’s crude oil imports rose by nearly a quarter in February as demand for fuel products rose ahead of federal polls that begin from next week. The world’s third-biggest crude oil importer after the U.S. and China bought 16.42 million metric tons, or 4.29 million barrels a day of oil, from overseas last month, up from 13.37 million tons a year earlier, according to oil ministry data. Crude oil refiners say the demand for crude is up due mainly to the steady rise in demand for fuel products as political parties burn more gasoline and diesel to power their campaign for the federal elections. Fuel demand in February rose 2.4 per cent to 12.836 million tons from a year earlier. According to a senior government official, imports also rose because local refineries raised crude oil processing volumes to meet their fiscal-year throughput target. The annual crude oil contracts […]

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Itochu Writes Down Samson Investment as U.S. Shale Bet Sours

Japan ’s third-largest trading house, said it booked another writedown on its investment in oil and gas producer Samson Investment Co., as its bet on the U.S. shale boom sours. The latest impairment of 29 billion yen ($279 million) follows charges of about 33 billion yen reported by the Tokyo-based company last year. Itochu has now written down most of the 78 billion yen, worth $1.04 billion at the time, it paid in 2011 for a 25 percent stake in family-owned Samson. The development of shale, which involves extracting hydrocarbons from rock formations through chemical injections, has slapped investors with writedowns in the last two years after U.S. gas prices fell to their lowest level in more than a decade in April 2012. BHP Billiton Ltd., the world’s largest mining company, in August 2012 announced a $2.8 billion writedown of its U.S. shale gas assets. Itochu joined a […]

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Oil Boomtown Williston, N.D., Looks for a Stable Future

This oil boomtown, known for its brawling roughnecks and their spare living conditions, is starting to smooth off its rough edges. But not all of them. Muddy pickup trucks still jam the streets, but they drive past recent additions to town, including more than a dozen new restaurants like . Subdivisions are springing up along the hills and a $73 million recreation center opened last weekend. Williston is working to transform itself into a stable community built for a long future, but remnants of the scrappy oil town remain. Thousands of workers still crowd into so-called man camps. Seedy taverns dot the map. "It’s a boomtown—that’s a fact of life," said Mayor Ward Koeser, "but I believe this […]

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Does Tesla Really Need a $5 Billion Battery?

In a project that is befuddling industry experts and competitors, Tesla Motors Inc. is looking for possible sites for a giant electric-car battery factory in four Southwestern states. The plant, dubbed a "gigafactory" by Tesla Chief Executive Elon Musk , would be the world’s largest factory by a long shot. Mr. Musk has outlined a proposal to spend $5 billion on it, hiring up to 6,500 workers and creating thousands of ancillary jobs. He compares the undertaking to auto-industry pioneer Henry Ford’s early 20th century Rouge complex. It took in iron ore and other raw materials at one end and rolled out completed Model Ts at the other, aiming to control and cut costs at every stage of production. Mr. Musk wants to begin making batteries at the plant in 2017, a timeline that puts pressure on the company to break ground this year. Tesla executives say they need […]

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California Drought Persists, Snowpack Shows

Recent wet weather has failed to break California’s worst drought in decades, according to measurements showing the state’s snowpack stands at about one-third of its normal average. That could result in higher prices nationally for some produce grown in the state, such as nuts, according to food-industry experts. California has seen more precipitation since February, and in recent days storms have blanketed the state’s mountains in several feet of snow. Still, Tuesday’s surveys by the Department of Water Resources showed the there at 32% of normal. While that is a big jump from a reading of 12% at the end of January, state officials say that with the wet season about to wind down, it isn’t enough to end a drought that has prompted mandatory rationing and water cutbacks to farms and cities. "We can hope that conditions improve, but time is running out and conservation is the only […]

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Magellan Midstream to build condensate splitter

Pipeline operator Magellan Midstream Partners LP , Tulsa, reported it will spend $250 million to build a 50,000 b/d capacity condensate splitter and other facilities at its Corpus Christi, Tex., terminal, which serves the Eagle Ford shale. The splitter construction is supported by a long-term commitment from Trafigura AG. Magellan said it could construct an additional 50,000-b/d capacity splitter at the site if demand grows. The Magellan project will include 1 million bbl of storage, dock improvements, and two additional truck-rack bays and pipeline connectivity between Magellan’s terminal and Trafigura’s nearby facility. The splitter is slated for operation in second-half 2016, Magellan said.

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Does_EIA_Drilling_Productivity_Report_Reflect_Real_World

Last October, the Energy Information Administration (EIA) announced it would introduce a new publication that focused on the impact of drilling rig productivity on oil and gas output. This report was developed to assist the EIA in its forecasting of future oil production given that the American shale revolution has altered the historic relationship between active drilling rigs and oil and gas production. Drilling horizontal and hydraulically fracturing shale wells has changed the forecasting landscape. What the EIA concluded was that it could identify the additional barrels of crude oil and thousand cubic feet of natural gas that came from the addition of one average working rig in a basin. It also concluded that measuring this addition would enable the agency to forecast output two months into the […]

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UK’s biggest coal miner on verge of collapse

UK Coal is appealing for government support to stave off a collapse that would cost 2,000 jobs. The largest coal miner in Britain was rescued last year by the Pension Protection Fund , which preserves the pensions of employees whose companies go bust. But it is on the brink of insolvency again. Hargreaves Services , the only other domestic large scale miner , is also in talks to invest in the business, according to people familiar with the situation. Its proposal to buy UK Coal for £20m was rejected by administrators last year in favour of the PPF rescue. Hargreaves could not be reached for comment. In case that bid fails, UK Coal is asking for £10m of government funding to close two of the past three deep pits in Britain and sell off its surface mines. The business, which is burning cash reserves because of the low […]

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Tech Talk – of Wheat and Coal

The release of the latest assessment of the IPCC on the future of the planet, failing their push to cut greenhouse gas emissions, has brought forth headlines and supportive editorials in papers around the world. Yet I could not help but note a couple of things that form the basis for this tech talk. The first was that the report discussed the impacts of climate change (for which I suspect in this case they mean global warming) on agricultural production. They stress the negative impacts on crops such as wheat, and so, being curious, I went to the Wikipedia page that provides a table of wheat production over the past eighteen years, and plotted the data. Figure 1. Global wheat production in millions of metric tons (after the Food and Agricultural Organization via Wikipedia ) Clearly wheat production is growing rather than, as the IPCC report implies, declining with […]

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Oil Futures Range-Bound Before U.S. Inventory Data

Crude-oil futures traded in a narrow price range in Asian hours Tuesday as investors digested China’s manufacturing numbers, and ahead of weekly U.S. oil-inventory reports. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $101.42 a barrel at 0621 GMT, down $0.16 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange fell $0.13 to $107.63 a barrel. China’s official manufacturing Purchasing Managers Index rose to 50.3 in March from 50.2 in February. HSBC’s China manufacturing PMI fell to 48.0 in March from 48.5 in February. The HSBC data is more representative of small businesses while the official PMI better captures large, state-owned enterprises. "That last month’s rise was the smallest March increase on record suggests that both PMIs remain downbeat," economist Julian Evans-Pritchard at Capital Economics wrote in a note. The manufacturing data suggests that […]

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WTI Drops for Second Day on China Economy Concern; Brent Steady

West Texas Intermediate fell for a second day amid concern China ’s economic growth is slowing and estimates that U.S. crude supplies expanded for an 11th week. Brent was steady in London . Futures dropped as much as 0.6 percent in New York after losing 1 percent in March, the most in four months. China’s manufacturing indexes released today pointed to a slowdown in the world’s second-largest oil consumer. U.S. crude stockpiles probably rose by 2.5 million barrels last week to the highest level since November, according to a Bloomberg News survey before government data tomorrow. “Oil demand growth has been dragged down by weakness in China, where the authorities are trying desperately to balance controlling pollution and credit bubbles with maintaining steady economic growth,” Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a consulting company in London, said in a report. “Crude demand has reached its […]

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Egypt: Smartcard Plan to Attack Egypt's Fuel Crisis

; Fuel subsidies in Egypt account for 22 percent of the state’s annual budget, taking funds away from other sectors like health and education. The government believes an ambitious five-year scheme, starting with a fuel smartcard roll-out, will reduce and rationalize fuel consumption, circumvent widespread corruption and phase out fuel subsidies. Estimates for fuel subsidies for this year amount to the equivalent of US$20.1 billion. "We pay for fuel subsidies about seven times more than what we spend on health and three times more than on education," said Haithem Trabeek, a senior strategic and business planning manager with E-Finance, a company owned by the Ministry of Finance and selected by the government to run a new smartcard system that is part of a plan to reform fuel subsidy payments. The cards are initially being used to monitor the distribution of subsidised fuel to help identify fraud and corruption […]

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Egypt: Smartcard Plan to Attack Egypt’s Fuel Crisis

; Fuel subsidies in Egypt account for 22 percent of the state’s annual budget, taking funds away from other sectors like health and education. The government believes an ambitious five-year scheme, starting with a fuel smartcard roll-out, will reduce and rationalize fuel consumption, circumvent widespread corruption and phase out fuel subsidies. Estimates for fuel subsidies for this year amount to the equivalent of US$20.1 billion. "We pay for fuel subsidies about seven times more than what we spend on health and three times more than on education," said Haithem Trabeek, a senior strategic and business planning manager with E-Finance, a company owned by the Ministry of Finance and selected by the government to run a new smartcard system that is part of a plan to reform fuel subsidy payments. The cards are initially being used to monitor the distribution of subsidised fuel to help identify fraud and corruption […]

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Iraqi army battles militants in deadly Anbar siege

An Iraqi special forces patrol moves on foot past ruined homes on the outskirts of Ramadi, a city west of Baghdad where al-Qaida-inspired militants have held off the military for three months. As they head down an alleyway, shots from snipers ring out, followed by grenade blasts. The troops take shelter behind walls and Humvees and return fire. No one is wounded and the operation continues. A short while later the unit is clearing a house. They blow open the outer gate with a charge and a bomb expert goes inside. He pronounces the building safe to enter and calls on the rest of the soldiers to search it. Moments later a huge explosion collapses the building, shakes the ground and sends dust billowing in the air. "God curse Daesh," one junior officer swore, using the Arabic acronym for the Islamic State of Iraq and […]

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Oil Tanker Evades Gunfire Along Most Important Crude Route

Armed men on a skiff fired shots at an oil tanker passing through the Strait of Hormuz , the world’s most important trade route for crude shipments. Unidentified attackers fired twice with an assault rifle at the Aframax tanker Album at about 2:15 p.m. local time yesterday, said Abdul Shahid Khashan, acting security officer at the vessel’s owner Arab Marine Petroleum Transport Co. The attackers, who appeared to be fishermen, probably weren’t seeking to hijack the Album, which evaded the attack, he said. A second tanker, the Stena Supreme, was approached by two skiffs in a separate incident yesterday, Lt. Commander David Benham, a spokesman for the North Atlantic Treaty Organization’s Allied Maritime Command, said today. U.S. and European military authorities are investigating, he said. The Strait of Hormuz, at the mouth of the Persian Gulf , is a transit channel for about 17 million barrels of crude daily, […]

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Russia's Lukoil says Iraqi oil production shows mettle

Starting production at Iraq’s West Qurna-2 oil field shows Russia’s Lukoil views Iraq as one of its most valued assets. Lukoil President Vagit Alexperov said his company positioned itself as a strategic player with the launch of operations at the West Qurna-2 field. "The start of production at West Qurna-2 is strategically important for LUKOIL," he said in a statement Saturday. West Qurna-2 is estimated to hold up to 14 billion barrels of recoverable reserves, making it among the largest undeveloped fields in the world. Lukoil said West Qurna, located near the Iraqi port city of Basra, will begin in phases, with an initial start up volume of around 400,000 barrels of oil per day. A production plateau of 1.2 million bpd is expected to last for nearly 20 years. The Organization of Petroleum Exporting Countries said in its March market report Iraq was one […]

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Russia’s Lukoil says Iraqi oil production shows mettle

Starting production at Iraq’s West Qurna-2 oil field shows Russia’s Lukoil views Iraq as one of its most valued assets. Lukoil President Vagit Alexperov said his company positioned itself as a strategic player with the launch of operations at the West Qurna-2 field. "The start of production at West Qurna-2 is strategically important for LUKOIL," he said in a statement Saturday. West Qurna-2 is estimated to hold up to 14 billion barrels of recoverable reserves, making it among the largest undeveloped fields in the world. Lukoil said West Qurna, located near the Iraqi port city of Basra, will begin in phases, with an initial start up volume of around 400,000 barrels of oil per day. A production plateau of 1.2 million bpd is expected to last for nearly 20 years. The Organization of Petroleum Exporting Countries said in its March market report Iraq was one […]

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Libyan Rebels May Reach Agreement on Oil Ports in One Month

Rebels seeking self-rule in eastern Libya may reach an agreement with the government to restore the nation’s crude exports to full capacity in a month, according to their spokesman. A deal hinges on the central government dropping a threat to attack oil ports under rebel control, said Ali Al-Hasy, spokesman for the self-declared Executive Office for Barqa, or Cyrenaica region. The Barqa group is seeking a share of oil revenue for its region. “The mood is positive, we can see a settlement in a month’s time,” Al-Hasy said in a phone interview from eastern Libya. “If the government withdraws its threat, all will become easy; the oil facilities are in very good shape.” The Barqa rebels, led by former Petroleum Facilities Guards commander Ibrahim Al-Jedran, took control of four of Libya’s nine oil ports in July. Exports halted from the Es Sider, Ras Lanuf, Zueitina and Hariga facilities. The […]

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Berkeley Lab study finds hybrids more fuel efficient in India, China than in US

In a pair of studies using real-world driving conditions, scientists at the US Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) found that hybrid cars are significantly more fuel-efficient in India and China than they are in the United States due to traffic and driving conditions in those countries. They found that driving a hybrid would achieve fuel savings of about 47 to 48% over a conventional car in India and about 53 to 55% in China. In the United States, hybrids are rated to produce a fuel savings of about 40% over their conventional counterparts. Currently hybrid and electric vehicles have a tiny share of the market in India and China and are seen as a higher-end product. Their results were reported in two papers, “Understanding the fuel savings […]

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Nigeria: Litigating Gas Flaring in the U.S

THE history of crude oil production in Nigeria informs us that the Shell Oil Company was the first to discover oil in commercial quantity in Nigeria. The location was Oloibriri (now in Bayelsa State), and the year was 1956. Two years later, Nigeria’s first consignment of crude oil was exported from the Oloibiri oil fields. But what is not well advertised is the fact that gas flaring has been taking place in Nigeria since 1958. The ecological disaster and associated consequences of gas flaring in Nigeria have been well-documented, and do not constitute the main objective in this dispatch from America. As a Vanguard newspaper reporter, I once joined the Nigerian Navy on an exercise in Escravos. As we flew in their helicopter above the off-shore oil rigs at night, we could see what looked like a festival of a million tongues of fire in the ocean. Our Navy […]

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Nigeria: Fuel Scarcity – Marketers Threaten Nationwide Strike Over Shut Down of NIPCO

Some oil marketers on Monday threatened to embark on industrial strike following the shutdown of Nigerian Independent Petroleum Company (NIPCO) by National Union of Petroleum and Natural Gas Workers (NUPENG). The News Agency reports that NUPENG shutdown the NIPCO facilities on March 24. Mr Abidemi Agunbiade, Chairman, a concerned group of IPMAN, expressed worries over the looming fuel scarcity in an interview with the News Agency of Nigeria (NAN) in Lagos. Agunbiade said that the shutdown of the NIPCO had affected over 1,000 marketers who had paid money to load petrol. According to him, over 450 million litres of fuel imported to discharge into NIPCO depot are still on the high seas due to the shutdown of the company. "About four vessels are on the high seas including those of the NNPC. "The stranded vessels are paying demurrage of 15,000 dollars to 20,000 dollars on daily basis due to […]

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South Sudan Ethnic Hatred Drives Rebel Leader’s White Army

Members of the White Army, which is a Nuer militia, as they prepare to travel from… Members of the White Army, which is a Nuer militia, as they prepare to travel from Nasir to fight at Malakal and Paloch, on March 26, 2014. Close Close Open Photographer: William Davison/Bloomberg Members of the White Army, which is a Nuer militia, as they prepare to travel from Nasir to fight at Malakal and Paloch, on March 26, 2014. Dozens of South Sudanese men chanted war songs, blew whistles and brandished AK-47 rifles with a longing for ethnic revenge. All members of the Nuer ethnic group, the troops of the so-called White Army who gathered by the Sobat River in eastern South Sudan are the strike force in rebel leader and former Vice President Riek Machar’s campaign against the government in Juba, the capital. They’re planning to march on […]

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Venezuela issues ID cards to curtail food hoarding

Battling food shortages, the government is rolling out a new ID system that is either a grocery loyalty card with extra muscle or the most dramatic step yet toward rationing in Venezuela, depending on who is describing it. President Nicolas Maduro’s administration says the cards to track families’ purchases will foil people who stock up on groceries at subsidized prices and then illegally resell them for several times the amount. Critics say it’s another sign the oil-rich Venezuelan economy is headed toward Cuba-style dysfunction. Registration begins at more than 100 government-run supermarkets across the country Tuesday, and working-class shoppers who sometimes endure hours-long lines at government-run stores to buy groceries at steeply reduced prices are welcoming the plan. "The rich people have things all hoarded away, and they pull the strings," said Juan Rodriguez, who waited two hours to enter the government-run Abastos Bicentenario supermarket […]

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Venezuela High Court Backs Move to Oust Opposition Leader

Venezuela’s Supreme Court late Monday backed the government’s move to strip a top opposition congresswoman of her title, a move that sparked accusations the court lacks independence in a country roiled by two months of protests. Government allies of President Nicolás Maduro said last week that María Corina Machado would be kicked out of the National Assembly for speaking on Venezuela’s political crisis in front of the Organization of American States in Washington last month as an invited guest of the government of Panama. They say Ms. Machado, among Mr. Maduro’s most vocal critics, violated the constitution, which prohibits parliamentarians from accepting public posts from other countries without the approval of Venezuela’s congress. Ms. Machado didn’t seek such approval before her appearance in Washington. The country’s highest court on Monday backed that view in a statement posted on its website. It said Ms. Machado’s move was "not only detrimental […]

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Heating oil demand follows cold weather into South America

The end of March has the heating oil market turning south as demand in the US follows winter buying into decline, market sources said Monday. Total US stocks of the product have reached 14.39 million barrels, the lowest level since the US Energy Information Administration began tracking the data in 1993. The low comes on the back of a sustained decline, stocks shed 2.74 million barrels in six weeks, according to EIA data. "Stocks are not going to increase going into summer," one broker said, "and with RINs attached, I think refiners will be exporting more." Article continues below… Request a free trial of: Oilgram News Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly […]

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Chinese residents protest against chemical plant

A southern Chinese city government has vowed to listen to public opinion in deciding whether to go ahead with a petrochemical plant after protests by residents turned into violent riots. The protests Sunday centered on a paraxylene project in Maoming city in Guangdong province. Such plants have become a hot-button issue around the country because of health concerns. Photos and videos purportedly posted by Maoming residents on social media sites showed police with batons chasing people, men in a hospital with cuts to their heads, people smashing streetlights and at least one car overturned. An officer from Maoming’s propaganda department said Tuesday that an unspecified number of people were injured. He said a decision on launching the project wouldn’t be made without reaching a consensus with the public.

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China's New Wager: Pulling Energy From the Ocean

;A race is under way to unlock one of the world’s biggest untapped sources of clean energy—the ocean—with China emerging as an important testing ground. That could heighten competition with Western companies, especially if Chinese businesses begin using technologies developed with joint-venture partners to expand rapidly. The European Union so far has led efforts to harness the sea to make electricity, for which there are three principal techniques: underwater turbines that draw power from the ebb and flow of tides, surface-based floats that rely on wave motion and systems that exploit differences in water temperature. The world’s first commercial, grid-connected tidal-flow generator was installed in Northern Ireland in 2008. Germany’s AG , a big investor in wave and tidal power, predicts that tidal currents alone could someday power 250 million households world-wide. France’s SA also is developing the technology. But with 11,000 miles of coastline rich with energy […]

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China’s New Wager: Pulling Energy From the Ocean

;A race is under way to unlock one of the world’s biggest untapped sources of clean energy—the ocean—with China emerging as an important testing ground. That could heighten competition with Western companies, especially if Chinese businesses begin using technologies developed with joint-venture partners to expand rapidly. The European Union so far has led efforts to harness the sea to make electricity, for which there are three principal techniques: underwater turbines that draw power from the ebb and flow of tides, surface-based floats that rely on wave motion and systems that exploit differences in water temperature. The world’s first commercial, grid-connected tidal-flow generator was installed in Northern Ireland in 2008. Germany’s AG , a big investor in wave and tidal power, predicts that tidal currents alone could someday power 250 million households world-wide. France’s SA also is developing the technology. But with 11,000 miles of coastline rich with energy […]

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China’s shadow banks at risk of a property crash

©EPA Delegates from Hong Kong who made the pilgrimage to the mainland to take part in the National People’s Congress in mid-March came away impressed with the capability of Chinese president Xi Jinping, the most powerful leader of China since Deng Xiaoping. “He will never let the economy fall apart,” one delegate said. Their only doubt? The outsized vigour with which Mr Xi is pursuing his anti-corruption campaign . This delegate complained bitterly about being put up at a three star hotel in which even bottled water was not supplied, let alone whisky or fine wine. Meanwhile, across the Pacific, many people have sounded the alarm about Beijing’s ability to rein in credit growth and rebalance the economy more towards domestic demand and services and away from commodity-intensive fixed asset investment. But in Hong Kong and China itself, faith in the ability of the government to correct the excesses […]

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Climate Study Puts Diplomatic Pressure on Obama

High tide in Kiribati, an island nation seen as especially vulnerable to the effects of climate change, like rising sea levels. WASHINGTON — A sweeping new study on the effects of climate change — which the report says is already disrupting the lives and livelihoods of the poorest people across the planet — creates a diplomatic challenge for President Obama, who hopes to make action on both climate change and economic inequality hallmarks of his legacy. The report, published this week by the United Nations Intergovernmental Panel on Climate Change, concludes that the world’s poorest people will suffer the most as temperatures rise, with many of them already contending with food and water shortages, higher rates of disease and premature death, and the violent conflicts that result from those problems. Countries like Bangladesh and several in sub-Saharan Africa that are the most vulnerable to the effects of climate change […]

Posted On : Published By : Tom Whipple
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Monthly Natural Gas Gross Production Report with data for January 2014

The two graphs below show total U.S. and Lower 48 natural gas production on one and the individual State production on the other. Figure Data Figure Data In January, production in the Lower 48 States increased by 0.5 percent or 0.35 billion cubic feet per day (Bcf/d). Texas had the largest volume increase at 2.4 percent or 0.53 Bcf/d mainly due to the completion of maintenance work last month. New Mexico also showed an increase of 2.6 percent or 0.09 Bcf/d as many operators reported small increases. The Gulf of Mexico and Other States both had decreases of 4.2 percent or 0.14 Bcf/d and 0.5 percent or 0.15 Bcf/d respectively, primarily because of freezing weather and maintenance issues. Note: Data presented in the table are monthly natural gas gross withdrawals estimated from data collected on the EIA-914 survey. In 2012, data are from the EIA Natural Gas Annual . […]

Posted On : Published By : Tom Whipple
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Five states and the Gulf of Mexico produce more than 80% of U.S. crude oil

Source: U.S. Energy Information Administration, Petroleum Supply Monthly Note: Crude oil includes lease condensate. Five states and the Gulf of Mexico supplied more than 80%, or 6 million barrels per day, of the crude oil (including lease condensate) produced in the United States in 2013. Texas alone provided almost 35%, according to preliminary 2013 data released in EIA’s March Petroleum Supply Monthly . The second-largest state producer was North Dakota with 12% of U.S. crude oil production, followed by California and Alaska at close to 7% each and Oklahoma at 4%. The federal offshore Gulf of Mexico produced 17%. Total U.S. crude oil production grew 15% in 2013 to 7.4 million barrels per day. Texas and North Dakota led that growth, with their crude oil outputs each increasing 29%, respectively, from 2012. Production gains in both states came largely from shales, especially the Eagle Ford in Texas and the […]

Posted On : Published By : Tom Whipple
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Exxon Sees Little Climate Change Risk to Assets

Exxon Mobil Corp, the world’s largest publicly traded oil company, said on Monday that risks related to climate change pose little risk to its oil and gas reserves because the resources will be needed to meet expected growth in energy demand. Responding to queries from shareholder activists, the company also said it is "confident" that none of its oil and gas reserves will lose value or become "stranded" if governments act to slash carbon emissions. "We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves becoming stranded in the global pursuit of higher living standards and greater economic opportunity," Exxon said in a report released in response to call from activist shareholders. Earlier this month, the Irving, Texas-based company agreed to detail the […]

Posted On : Published By : Tom Whipple
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U.S. Taking on More Saudi Oil Despite Shale Glut

The U.S. Energy Department said imports from OPEC increased year-on-year, with Saudi Arabia accounting for the bulk of additional oil. While oil production from the United States has increased, the data show the global market is still interconnected. The U.S. Energy Information Administration reported the amount of petroleum imported from members of the Organization of Petroleum Exporting Countries was 3.57 million barrels per day in December, the last full month for which data are available from EIA. While only 0.5 percent higher year-on-year, the increase suggests the global energy market is still interconnected despite the success of shale. Imports from Venezuela, the No. 2 OPEC exporter to the United States, declined 22 percent from December 2012 to 846,000 bpd. Petroleum imports from Saudi Arabia in December, however, were 1.5 million bpd, a 47 percent increase year-on-year. For non-OPEC members, the United States imported about 1 million bpd from Mexico […]

Posted On : Published By : Tom Whipple
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Russia hikes gas price for Ukraine

MOSCOW (AP) — Russia on Tuesday sharply hiked the price for natural gas to Ukraine and threatened to reclaim billions previous discounts, raising the heat on its cash-strapped government, while Ukrainian police moved to disarm members of a radical nationalist group after a shooting spree in the capital. Alexei Miller, the head of Russia’s state-controlled Gazprom natural gas giant, said Tuesday that the company has withdrawn December’s discount that put the price of gas at $268.50 per 1,000 cubic meters and set the price at $385.50 per 1,000 cubic meters for the second quarter. The discount was part of a financial lifeline which Russian President Vladimir Putin offered to Ukraine’s President, Viktor Yanukovych, after his decision to ditch a pact with the European Union in favor of closer ties with Moscow. The move fueled three months of protests which led Yanukovych to flee to Russia in February. Radical nationalist […]

Posted On : Published By : Tom Whipple
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Russia Signals It Will Withdraw Troops From Ukraine Border

Russia signaled on Monday it was pulling some troops away from its border with Ukraine, a move that met with skepticism in the West but could represent the Kremlin’s first notable concession after weeks of frantic diplomacy by the U.S. and Europe. It remained unclear just how many troops Russia was withdrawing. The German government said President told Chancellor Angela Merkel by phone that he had "ordered a partial withdrawal" of military forces massing along Ukraine’s eastern border. Russia’s Defense Ministry said an infantry battalion—a relatively small number of troops—had been ordered to return from a position near Ukraine to their base some 800 miles to the east. Ukrainian officials said as many as 20,000 Russian troops had apparently been moved back from the border in recent days, but that some 40,000 remained. U.S. Defense Secretary Chuck Hagel said he couldn’t confirm whether Russian forces were pulling troops back. […]

Posted On : Published By : Tom Whipple
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Will Rising Oil Output Bring Down Prices?

  It’s all about supply and demand—the first, last, and everything for estimating the projected path of prices. Geopolitics can and does intrude, of course. This is oil, after all. But the raw numbers of economics have the last word eventually—even for the world’s most valuable commodity. The price of  Crude Oil has been trending higher this year, but three key events on the supply side will create new headwinds for the bulls. In particular, expectations for higher output in three crucial oil-producing nations: Iraq, Iran, and the US. The catalysts for increased supply are different for each country, but the expected results will be the same: more oil. Say bye-bye to the peak-oil narrative, at least for now. Global production, by the way, has already been bumping up against all-time highs recently, based on the Energy Information Administration’s latest data through October 2013. Total world output of crude […]

Posted On : Published By : ASPO-USA
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On oil-water nexus

In addition to the conventional energy market issues, mainly oil, related to price and production, the industry seems to be gearing for a new worry — how to handle the oil-water nexus. A recent UN Water Day has a very simple message to deliver: Water needs energy and energy needs water. The interdependencies between the two is strengthened and consolidated by the day. After all some 90 percent of power generation is water-intensive. Using various parameters to look into the crystal ball, the world seems to be heading toward increasing its energy consumption by more than a third in only two decades. Such increase requires an additional increase of 85 percent of water consumption according the consumers’ watch dog, the Paris-based International Energy Agency (IEA). With such increase comes completion for supplies as the world population will top 9 billion people, who need an additional 50 percent in agricultural […]

Posted On : Published By : ASPO-USA