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Natural Gas Prices Extend Slide on Stockpile Data

Natural-gas futures fell for a second straight session Friday, with traders still selling after a larger-than-expected increase in stockpiles of the fuel. Prices for the front-month May contract declined 5.8 cents, or 1.2%, to $4.647 a million British thermal units on the New York Mercantile Exchange. It was the largest percentage decline since April 14. Trading on the June contract surpassed May on Friday, the expiration day for May options. May futures expire Monday. The June contract declined 6.5 cents, or 1.4%, to $4.658/mmBtu. Analyst Jim Ritterbusch called it "bearish spillover" from Thursday, when the U.S. Energy Information Administration released weekly storage data. The amount of gas going into stockpiles last week exceeded Wall Street’s expectations by 7 billion cubic feet, easing some of traders’ concern that supply shortages next winter would push up prices. Prices dropped steadily from an eight-week intraday high after the […]

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Global upstream oil and gas spending continues to favor exploration and development

Annual reports from 42 oil and natural gas companies that have reported data on upstream expenditures since 2000 show that spending on exploration and development throughout the world increased by 5% ($18 billion) in 2013, while spending on property acquisition fell by $17 billion. Total upstream spending by these companies was relatively flat in 2013 (plus 0.4%) after a period of strong growth (averaging 11% per year) from 2000 to 2012. The reports, which are filed with the U.S. Securities and Exchange Commission, show that the slight increase in spending in 2013 was driven by expenditures to explore and develop fields acquired in earlier years. In the past two years, flat oil prices and rising costs have contributed to declining cash flow for this group of companies. Continued declines in cash flow, particularly in the face of rising debt levels, could challenge future exploration and development. However, reduced spending […]

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Iraqi Militants Stage Political Rally, Then Bombs Go Off

A campaign rally at a ramshackle old soccer stadium on Friday afternoon began with open-air theater that crossed centuries of Shiite lore, from the martyrdom of a revered religious figure to the fight today against Sunni extremists, played by actors dressed as fighters for the Islamic State of Iraq and Syria, a radical Islamist group. It ended with an outbreak of violence, three explosions, one after the other, in the parking lot, as thousands of people were leaving: a car bomb, a suicide bomber and a roadside bomb. More than 30 people were killed and many others wounded in an attack that the Islamic State of Iraq and Syria said in a statement it had carried out. The bombings struck a rally held by a Shiite militant group, Asaib Ahl al-Haq , that is trying to transform itself into a political force by fielding candidates in Iraq’s […]

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Shiite rally bombing sparks reprisals in Iraq

A multiple bomb attack that killed at least 33 people at a campaign rally for a militant Shiite group likely unleashed a series of apparent sectarian attacks in Iraq, signaling the start of a new wave of Sunni-Shiite bloodletting ahead of elections next week, security officials said Saturday. An al-Qaida breakaway group, the Islamic State of Iraq and the Levant, claimed responsibility for Friday’s attack on the Baghdad rally, which drew about 10,000 backers of Asaib Ahl al-Haq. It said on a militant website that the bombings were to avenge what it called the killing of Sunnis and their forced removal from their homes by Shiite militias. The authenticity of the claim could not be independently verified. A senior Asaib Ahl al-Haq official said the 33 dead included 10 group members who had fought in the Syrian civil war. Its members fight with forces loyal to […]

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Russia's Lukoil eyes new oil in Iraq

Russian oil company Lukoil is considering joining a joint venture to develop the Nassiriya oil field in Iraq, the company’s board of directors said.Lukoil, Russia’s largest private oil company, said its board of directors were considering a joint venture with its counterparts at Russia’s state-owned exploration and production company Zarubezhneft to develop the oil field and help build an associated refinery. Lukoil is already involved in developments of the West-Qurna 2 project in southern Iraq. The company said it recently signed an agreement with the Iraqi Ministry of Industry to estimate the prospects for building a plant that would utilize gas associated with the oil field. First oil was produced from West Qurna-2 in March. It reached a daily production reach of 120,000 barrels and has an estimated 34 billion barrels worth of recoverable reserves. Iraqi oil production from January to February, the last […]

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Russia’s Lukoil eyes new oil in Iraq

Russian oil company Lukoil is considering joining a joint venture to develop the Nassiriya oil field in Iraq, the company’s board of directors said.Lukoil, Russia’s largest private oil company, said its board of directors were considering a joint venture with its counterparts at Russia’s state-owned exploration and production company Zarubezhneft to develop the oil field and help build an associated refinery. Lukoil is already involved in developments of the West-Qurna 2 project in southern Iraq. The company said it recently signed an agreement with the Iraqi Ministry of Industry to estimate the prospects for building a plant that would utilize gas associated with the oil field. First oil was produced from West Qurna-2 in March. It reached a daily production reach of 120,000 barrels and has an estimated 34 billion barrels worth of recoverable reserves. Iraqi oil production from January to February, the last […]

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Iranian natural gas pipeline is 75% complete

Iran is on track to complete construction work on a 100 km pipeline, which will transport natural gas to Iraq, in the next four months. Alireza Gharibi, Managing Director of Iranian Gas Engineering Development Company, stated that the pipeline is now 75% complete, with 80 km already built. Construction work on the Iraqi section will be carried out on schedule. The new pipeline begins in Chahar Meleh village in the Ilam Province, western Iran, and runs to the city of Naftshahr, which is located on the Iran-Iraq border. Gharibi noted that the pipeline would carry 5 million m3/d of natural gas in the first stage and 10 million m3/d in the second stage. Iran signed the first agreement with Iraq for the delivery of natural gas on 21 July 2013 in Baghdad. Rostam Qassemi, former Iranian Oil Minister, signed the agreement for the delivery of 25 million m3/d of gas […]

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Saudi Sniffs at Spreading Health Crisis

The Kingdom is accused of suppressing the spread of news about the deadly MERS virus, but failing to stop the spread of the virus itself Saudi Arabia’s doctors are having no luck stopping the deadly Middle East Respiratory Syndrome (MERS) virus from sweeping the country, but the government is doing much better at preventing news of the disease from spreading. In an effort to  control  information related to the virus spreading across the country, the government has ordered Saudi media outlets to quote only official sources on the disease. In parallel, the Saudi Ministry of Health issued a notice last week threatening health workers with prison for disclosing any health ministry information. With each passing day, the number of reported cases of MERS, known in the kingdom as “coronavirus,” is growing—and along with it, public anxiety. According to experts, over the last month, MERS cases in Saudi Arabia have […]

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Ghana: "Ghana Managing Oil Revenues Well"

A UNITED States non-governmental organization, praised Ghana for managing oil revenues properly. The Revenue Watch Institute, the NGO, has released research indicating that the Ghana Petroleum Funds meet 13 of 16 good governance fundamentals. Researchers concluded that the funds feature clear deposit, withdrawal and investment rules, effective oversight, and other essential attributes of good governance. "Together, the Ghana Stabilization Fund and the Ghana Heritage Fund manage more than US$450 million," said Emmanuel Kuyole, Africa Regional coordinator for Revenue Watch. "Thanks to strong legal provisions, citizens have information on how much is deposited, invested and earned. This transparency is a significant gain. Too much sunshine does not spoil anything." Revenue Watch economic analyst, Andrew Bauer, presented the research in Accra. He said Ghana’s good management of its saved funds demonstrates compliance with the provisions of the Petroleum Revenue Management Act. "This must also extend to the act’s requirement […]

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Ghana: “Ghana Managing Oil Revenues Well”

A UNITED States non-governmental organization, praised Ghana for managing oil revenues properly. The Revenue Watch Institute, the NGO, has released research indicating that the Ghana Petroleum Funds meet 13 of 16 good governance fundamentals. Researchers concluded that the funds feature clear deposit, withdrawal and investment rules, effective oversight, and other essential attributes of good governance. "Together, the Ghana Stabilization Fund and the Ghana Heritage Fund manage more than US$450 million," said Emmanuel Kuyole, Africa Regional coordinator for Revenue Watch. "Thanks to strong legal provisions, citizens have information on how much is deposited, invested and earned. This transparency is a significant gain. Too much sunshine does not spoil anything." Revenue Watch economic analyst, Andrew Bauer, presented the research in Accra. He said Ghana’s good management of its saved funds demonstrates compliance with the provisions of the Petroleum Revenue Management Act. "This must also extend to the act’s requirement […]

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EIA: Oil declines hurting Mexico

Mexico’s financial health is at risk because of a declining oil sector. WASHINGTON, April 25 (UPI) — Mexico’s fiscal health is in jeopardy because of a declining rate of oil production, an analysis from the U.S. Energy Information Administration said.EIA updated its country profile for Mexico, noting the oil sector accounted for 13 percent of the country’s export earnings last year. Mexico is one of the top 10 oil-producing countries in the world, with an estimated 10 billion barrels of proven reserves as of 2013. EIA said Mexico produced an average 2.5 million barrels of crude oil per day, a level that’s more than 20 percent less than its peak from 2004-09. "Notably, crude oil production in 2013 was at its lowest since 1995 and continues to decline thus far in 2014," it said in its Thursday report. EIA said the decline in oil production was having a direct […]

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After ‘Cadmium Rice,’ now ‘Lead’ and ‘Arsenic Rice’

A farmer works her land near a lead smelter in Hunan Province. Soil in China’s leading rice-producing region shows high levels of heavy metal contamination, in a study that suggests that the proximity of mining and industry to agricultural areas is posing serious threats to the country’s food chain. In “ Cadmium Rice: Heavy metal pollution of China’s rice crops, ” researchers for Greenpeace East Asia sampled farmland and uncultivated soil, water and rice grown near a smelter of non-ferrous metals in Hunan Province, China’s top rice producer. In some locations of the study, the researchers found soil containing cadmium levels more than 200 times the national health standard, adding to a growing body of evidence that parts of the country’s soil are heavily degraded after decades of fast industrialization and high economic growth. All but one of the rice samples exceeded the maximum level of cadmium in rice […]

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Profit of China's largest coal producer falls 9.9%

China Shenhua Energy, the country’s largest coal producer, posted a decline in first-quarter net profit compared with a year earlier, citing falling coal prices. Net profit went down 9.9 percent to 10.4 billion yuan (about 1.66 billion U.S. dollars) in the first three months, said a report on the website of the Shenzhen Stock Exchange on Saturday. During the January-March period, Shenhua Energy’s revenue dipped 0.1 percent on an annual basis to 60.9 billion yuan, it added. The Beijing-based company attributed the poor performance mainly to rising production costs and falling coal prices. While the cost of producing every tonne of coal increased 4.6 percent on an annual basis to 127.8 yuan, the Bohai-Rim Steam-Coal Price Index, a key indicator of coal prices in China, plummeted from 631 yuan per tonne at the end of last year to 530 yuan at the end of […]

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Profit of China’s largest coal producer falls 9.9%

China Shenhua Energy, the country’s largest coal producer, posted a decline in first-quarter net profit compared with a year earlier, citing falling coal prices. Net profit went down 9.9 percent to 10.4 billion yuan (about 1.66 billion U.S. dollars) in the first three months, said a report on the website of the Shenzhen Stock Exchange on Saturday. During the January-March period, Shenhua Energy’s revenue dipped 0.1 percent on an annual basis to 60.9 billion yuan, it added. The Beijing-based company attributed the poor performance mainly to rising production costs and falling coal prices. While the cost of producing every tonne of coal increased 4.6 percent on an annual basis to 127.8 yuan, the Bohai-Rim Steam-Coal Price Index, a key indicator of coal prices in China, plummeted from 631 yuan per tonne at the end of last year to 530 yuan at the end of […]

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Baker Hughes to reveal fracking ingredients

Oil services company says it will be able to reveal fracking ingredients without revealing secrets. HOUSTON, April 25 (UPI) — Oil services company Baker Hughes said it could disclose the ingredients of hydraulic fracturing fluids without comprising trade secrets.Energy companies have been reluctant to disclose all of the chemicals used during hydraulic fracturing. The drilling practice, known also as fracking, involves the injection of large volumes of water mixed with abrasives and trace amounts of chemicals to coax oil and natural gas out of shale formations. The oil services company said "it is possible to disclose 100 percent of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations." The disclosure is at odds with other major companies like Schlumberger and Halliburton, who argue their chemical components should be protected. Baker Hughes said Thursday it would take several months before the disclosure policies goes into effect […]

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U.S. lax on rail safety, Nebraska says

The U.S. federal government isn’t meeting its obligations when it comes to the safety of transporting crude oil by rail, North Dakota legislators said.Canada this week ordered older models of DOT-111 railcars out of service in response to a series of derailments, including last year’s accident in Lac-Megantic, Quebec, which left more than 40 people dead. Nebraska Rep. Kevin Cramer said the U.S. federal government, however, wasn’t showing the same level of responsibility as its Canadian counterparts. "Communities and industry have waited more than two years for new rules concerning the DOT-111 tanker, while rail demand continues to accelerate," the Republican lawmaker said Thursday. "The federal government must do better." Cramer, Sens. John Hoeven , R-N.D., and Heidi Heitkamp, D-N.D,. met in Casselton, N.D., with U.S. Transportation Secretary Anthony Foxx to discuss ways to improve rail safety. About 950 barrels of oil spilled when two trains operated by BNSF […]

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A battle is looming over renewable energy, and fossil fuel interests are losing

Wind turbines are silhouetted by the setting sun near Beaumont, Kan. Kansas ranks sixth in the country in wind output, which jumped by a third last year and equalled 19 percent of the state’s electricity. In state capitals across the country, legislators are debating proposals to roll back environmental rules, prodded by industry and advocacy groups eager to curtail regulations aimed at curbing greenhouse gases. The measures, which have been introduced in about 18 states, lie at the heart of an effort to expand to the state level the battle over fossil fuel and renewable energy. The new rules would trim or abolish climate mandates — including those that require utilities to use solar and wind energy, as well as proposed Environmental Protection Agency rules that would reduce carbon emissions from power plants. But the campaign — despite its backing from powerful groups such as Americans for Prosperity — […]

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Second radioactive oil waste site found in North Dakota

North Dakota this week confirmed the discovery of a new radioactive dump of waste from oil drilling. And separately, a company hired to clean up similar waste found in February at another location said it had removed more than double the amount of radioactive material originally estimated to be there. The twin disclosures highlight a growing problem from North Dakota’s booming Bakken oil development, and for other oil and gas operations across the country: the illegal disposal of radioactive material from drilling sites. Rocks deep in the earth contain naturally radioactive material, and when those rocks are drilled for oil and gas the drilling equipment and water can become slightly irradiated. As more drilling occurs across the nation, experts warn of a brewing crisis of leftover radioactive materials. Health officials have said that radioactive filter socks — tubular nets that strain liquids during the oil production process — and […]

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EIA: Marcellus gas production continues to outpace takeaway capacity

Rising production of natural gas in the Marcellus shale play in the Appalachian basin continues to outpace the growth in the region’s pipeline takeaway capacity, which has led to supply backups in the region, the US Energy Information Administration reported in a weekly gas report. Because of this fact, EIA observed, new gas production is unable to flow to areas of high demand, “placing downward pressure on prices in the region.” EIA noted that this phenomenon has also “contributed to a number of natural gas wells in Marcellus remaining backlogged, with a Feb. 28 report from Barclay’s estimating that more than 1,300 wells there are drilled but not completed.” EIA noted that several proposed and recently completed projects will provide additional pipeline infrastructure to relieve some of the Marcellus supply glut. “Projects that have recently come online, such as Transcontinental Pipeline Co.’s (Transco) Northeast Supply Link, have expanded the […]

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Baker Hughes: US drilling rig count leaps to 1,861

The US drilling rig count jumped 30 units to reach a total of 1,861 rigs working during the week ended Apr. 25, Baker Hughes Inc. reported. The US now has 107 more rigs working compared with this week a year ago. Land-based rigs accounted for most of the gain, collecting 28 units to 1,793. The other 2 were offshore rigs, which now total 54. Rigs drilling in inland waters, at 14, were unchanged from a week ago. Oil rigs were up 24 units to 1,534; gas rigs, meanwhile, increased 7 units to 323. Rigs considered unclassified dropped 1 unit to settle at 4. Horizontal drilling rigs shot up 21 units to 1,245. Directional drilling rigs rose 2 units to 218. Canada’s rig count took a 31-unit hit, leaving that country’s total at 168—still 46 more than this week a year ago. The total was almost evenly split between oil […]

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European Firms Seek to Minimize Russia Sanctions

With the showdown over Ukraine escalating and President Obama warning Moscow of a tough new round of sanctions, Russia and its allies in the European private sector are conducting a separate campaign to ensure that they can maintain their deep and longstanding economic ties even if the Kremlin orders further military action. European banks and businesses are far more exposed to the Russian economy than are their American counterparts. Trade between the European Union and Russia amounted to almost $370 billion in 2012, while United States trade with Russia was about $26 billion that year. As a result, they have lobbied energetically to head off or at least dilute any sanctions, making it hard for American and European political leaders to come up with a package of measures with enough bite to influence Moscow’s behavior in Ukraine. Since Russia’s annexation of Crimea , energy companies, exporters, big […]

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Gazprom Says Won't Halt Gas Flows to Europe Over Ukraine Gas Price Row

Russian natural-gas giant OAO Gazprom won’t stop pumping gas to its European customers even if Ukraine doesn’t pay its arrears—-expected to reach $3.5 billion next month—but it can’t guarantee those supplies will reach its intended customers, the company’s Deputy Chief Executive Alexander Medvedev said Friday. Russian state-controlled Gazprom supplies about 30% of Europe’s gas needs, around half of which travels through pipes that cross Ukraine. Any disruption to those flows could have a significant impact on European customers, including utilities in Italy and Germany, and push up prices across the region. But Russia also depends on the revenues from its energy exports which account for around 50% of federal income. Russia has cut off supplies to Ukraine twice in recent years, in 2006 and 2009, in both cases citing pricing disputes. The 2009 shut-off sent prices rising across Europe and triggered some gas shortages in Eastern Europe. Mr. Medvedev, […]

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Gazprom Says Won’t Halt Gas Flows to Europe Over Ukraine Gas Price Row

Russian natural-gas giant OAO Gazprom won’t stop pumping gas to its European customers even if Ukraine doesn’t pay its arrears—-expected to reach $3.5 billion next month—but it can’t guarantee those supplies will reach its intended customers, the company’s Deputy Chief Executive Alexander Medvedev said Friday. Russian state-controlled Gazprom supplies about 30% of Europe’s gas needs, around half of which travels through pipes that cross Ukraine. Any disruption to those flows could have a significant impact on European customers, including utilities in Italy and Germany, and push up prices across the region. But Russia also depends on the revenues from its energy exports which account for around 50% of federal income. Russia has cut off supplies to Ukraine twice in recent years, in 2006 and 2009, in both cases citing pricing disputes. The 2009 shut-off sent prices rising across Europe and triggered some gas shortages in Eastern Europe. Mr. Medvedev, […]

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U.S., Europe Delay Moves to Impose More Sanctions on Russia Over Ukraine

U.S. and European leaders Friday struggled to overcome divisions over how to expand sanctions against Russia, a delay that Ukraine complained has emboldened Moscow to continue fanning separatist sentiment in the country’s east. President Barack Obama spoke Friday with leaders of the U.K., France, Germany and Italy to stress the need for concerted measures, and they agreed on the need for action. At the end of the day, the Group of Seven, which also includes Japan and Canada, issued a statement saying they would move swiftly to impose additional targeted sanctions. They didn’t say when or specify the targets. But U.S. and European officials said earlier they have identified areas of greater common ground and suggested the new sanctions are set to come on Monday. "Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine’s presidential elections, we have committed to […]

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Crimea may play role in Russia's LNG ambitions

The Russian Ministry of Industry and Trade said Friday it was reviewing options to build ships for liquefied natural gas transport at Crimean ports.The government said a number of shipbuilding companies in Crimea and Sevastopol are either idled or working at below capacity. "One of the options for filling the bag orders of the shipbuilding yards is being developed by the Ministry of Industry and Trade, and it is the possibility of building LNG carriers for shipping liquefied natural gas from the Russian arctic oil fields," the ministry said . A former Soviet republic, Ukraine has tilted toward the European Union following a November uprising. Last month, Russian President Vladimir Putin signed a treaty to annex Crimea, a peninsula of Ukraine, and geopolitical and military tensions continue to escalate . Crimean officials have said Russian energy company Gazprom aims to tap into the more […]

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Crimea may play role in Russia’s LNG ambitions

The Russian Ministry of Industry and Trade said Friday it was reviewing options to build ships for liquefied natural gas transport at Crimean ports.The government said a number of shipbuilding companies in Crimea and Sevastopol are either idled or working at below capacity. "One of the options for filling the bag orders of the shipbuilding yards is being developed by the Ministry of Industry and Trade, and it is the possibility of building LNG carriers for shipping liquefied natural gas from the Russian arctic oil fields," the ministry said . A former Soviet republic, Ukraine has tilted toward the European Union following a November uprising. Last month, Russian President Vladimir Putin signed a treaty to annex Crimea, a peninsula of Ukraine, and geopolitical and military tensions continue to escalate . Crimean officials have said Russian energy company Gazprom aims to tap into the more […]

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Ukraine’s DTEK Says Crimea Power Supply at Risk From Debts

DTEK, the Ukrainian energy company led by the nation’s richest man, said customers in Crimea run the risk of power cuts after they didn’t fully pay for electricity they consumed in March. Companies and organizations owe Krymenergo, DTEK’s Crimean unit, 741 million Hryvnia ($64.4 million), the company with offices in Kiev and Donetsk said in a statement on its website today. DTEK is controlled by Rinat Akhmetov , who has a personal fortune of about $11.9 billion, according to data compiled by Bloomberg. “The main condition of supplying power to the peninsula is 100 percent payment in Ukraine ’s currency,” according to the statement. The unit isn’t authorized to supply customers if it hasn’t received payment, Dmitriy Gontar, director for sales at DTEK Krymenergo, said in the statement. The escalating crisis in eastern Ukraine and Russia’s annexation of Crimea last month led to the worst standoff against the U.S. […]

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Oil Holds Onto Gains on Ukraine Tensions

Crude-oil futures held onto overnight gains in Asian trading hours Friday on heightened tensions between Ukraine and Russia that kept global financial markets on edge. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $101.92 a barrel at 0549 GMT, down $0.02 in the Globex electronic session. June Brent crude on London’s ICE Futures exchange fell $0.01 to $110.32 a barrel. Ukrainian forces killed several militants outside a pro-Russian stronghold in eastern Ukraine on Thursday as it attempted to regain control of the region, prompting Russian military exercises on its side of the border. "With Russia warning of ‘consequences’ and Ukraine complaining of Russian ‘interference’ and ‘permanent threats and blackmail,’ worries over the possibility that escalation either via arms or sanctions could disrupt Russian oil and gas exports remained high," Citi Futures analyst Tim Evans said in a note. U.S. President Barack […]

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WTI Set for Weekly Loss on Supplies as Discount to Brent Widens

West Texas Intermediate headed for the first weekly loss in three weeks and its discount to Brent widened as crude stockpiles expanded to an 83-year high in the U.S., the world’s biggest oil consumer. Futures were little changed in New York today and down 2.3 percent this week, the most in more than a month. Crude inventories have increased to 397.7 million barrels, the highest since 1931, Energy Information Administration data show. WTI traded as much as $8.57 a barrel below Brent in London as Russia ’s military began drills near the border with Ukraine , prompting U.S. Secretary of State John Kerry to warn that it could be making “an expensive mistake.” “The expanding stockpiles in the U.S. further widens the spread between Brent and WTI,” Will Yun, a commodities analyst at Hyundai Futures Co. in Seoul , said by phone today. “U.S. crude supplies are expanding, which […]

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Diesel Gains as Ukraine Tension Boosts Crude and Gasoil

Diesel futures advanced for the first time in three days as rising tensions between Russia and Ukraine inflated crude and gasoil prices. Diesel gained as much as 0.8 percent. President Vladimir Putin warned Ukraine against continuing its offensive against pro-Russian separatists after troops killed five rebels in the city of Slovyansk. “Ukraine rhetoric is heating up and we’re seeing the price of oil and gasoil going up,” said Phil Flynn , senior market analyst at Price Futures Group in Chicago . Ultra low sulfur diesel for May delivery rose 1.64 cents, or 0.6 percent, to $2.9973 a gallon at 10:48 a.m. on the New York Mercantile Exchange . Volume was 9.5 percent below the 100-day average. West Texas Intermediate crude for June delivery on the Nymex gained 45 cents to $101.89 a barrel. Brent for June settlement increased 70 cents to $109.81 a barrel on the London-based ICE Futures […]

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Natural-Gas Prices Fall After Larger-Than-Expected Stockpile Rise

Natural-gas futures fell Thursday after a larger-than-expected increase in stockpiles eased some of the concern about a potential shortage of the heating fuel next winter. Natural gas for May delivery fell 2.5 cents, or 0.5%, at $4.705 a million British thermal units on the New York Mercantile Exchange. Prices rose in early morning trading, then fell after the U.S. Energy Information Administration said stockpiles increased last week at a faster-than-expected pace. Producers added 49 billion cubic feet of gas to storage for the week ended April 18, according to the EIA. That is 7 bcf more than what 21 traders, brokers and analysts had forecast in a Wall Street Journal survey. The addition leaves 899 billion cubic feet in storage. While that is more than experts predicted, it is still less than half of the 1.9 trillion cubic feet of gas that is typically in […]

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New pipeline plan could spur Baghdad-Erbil cooperation

Oil from federally controlled oil fields could flow through Kurdistan’s new export pipeline to Turkey within six months. Iraq’s autonomous Kurdistan Regional Government (KRG) has agreed in principle to use its new pipeline to export crude oil produced by the federal North Oil Company (NOC) – an initiative which could strengthen economic ties between Erbil and Baghdad and change the political dynamics of Iraq’s long-running disputes over oil policy.Under the prospective plan, Kurdistan’s Ministry of Natural Resources (MNR) and the NOC would work together to commission a new 36-inch pipeline to connect federal…

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Libya rebels warn Tripoli oil ports to stay closed unless deal implemented

A rebel group in eastern Libya that controls several oil ports said on Thursday it would not reopen the key Ras Lanuf and Es Sider terminals unless the government implemented its part of a recent deal to end the oil blockade. In a sign of further delays to restart vital oil exports from the volatile east, rebels said the Tripoli government had failed to fulfill its part of the accord reached this month. Diplomats expect both sides to implement the deal eventually as the country badly needs the oil revenue but tactical maneuvers and mutual mistrust are likely to cause delays. The row is part of chaos in the North African country where the government cannot control militias who helped oust Muammar Gaddafi in 2011 but have held on to their weapons to make political and financial demands by seizing oilfields or government ministries. "The government […]

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Noble Energy sees remarkable progress offshore Israel

Developments made at the Leviathan natural gas field off the coast of Israel have been "remarkable," Noble Energy Chairman Charles Davidson said Thursday.Noble this year signed export contracts for gas from the Leviathan and nearby Tamar natural gas fields with Jordanian and Palestinian authorities. Davidson said in a quarterly statement Thursday larger contracts are expected to follow during the next several fiscal quarters. "The progress we have made recently regarding the Leviathan project offshore Israel has been remarkable, and we are close to executing a number of domestic and regional export sales agreements to support the field’s development," he said in a statement . Tamar, with an estimated 8.5 trillion cubic feet of gas reserves, entered into production in March 2013. Leviathan, with an estimated 18 trillion cubic feet of gas, should go onstream in 2016. Australian energy company Woodside Petroleum last month balked […]

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World Cup Power Cut Fears Spur Record Brazil LNG Buying

Miguel Abitbol spent almost $4,000 on television equipment to show World Cup soccer matches at his bar and restaurant in Rio de Janeiro . He’s praying there will be enough electricity to power it. Abitbol’s 48-inch (122-centimeter) set is one of 16 million expected to be sold in Brazil this year as it hosts the world’s most-watched sporting event. The kick off in June is looming as the nation contends with a drought that reduced water supply needed for hydroelectric power to near-critical levels. A blackout in February cut electricity to 6 million people. Petroleo Brasileiro SA (PETR3) , the state-owned energy company, is buying record amounts of liquefied natural gas in the spot market to run gas-fired power plants at full capacity and preserve water reserves. Increased competition for the fuel is narrowing the discount of Latin American prices to those in Asia , the costliest, to the […]

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China Shale Boom Seen by Honghua as Pollution Cuts Coal Use

Honghua Group, a Chinese drilling-equipment maker that gets most of its business from overseas, is seeking to expand at home as the nation works to spark its own shale gas revolution. The Chengdu, Sichuan-based company, which has sold rigs for use in U.S. gas fields since 2005, sees an opportunity in China as the country looks to boost production from shale formations to meet growing energy demand and move away from dirtier sources of fuel like coal, Chairman Zhang Mi said in an interview. “It’s highly likely for China to develop shale on a large scale like the U.S.,” Zhang said in Beijing on April 23. “China needs natural gas very badly.” China, the world’s biggest holder of natural gas reserves trapped in shale rocks, has set a national output goal of 6.5 billion cubic meters by 2015 and as much as 100 billion cubic meters by 2020. While […]

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China Takes On Pollution With Biggest Changes in 25 Years

China passed the biggest changes to its environmental protection laws in 25 years, outlining plans to punish polluters more severely as leaders work to limit contaminated water, air and soil linked to economic growth. The amended law “sets environmental protection as the country’s basic policy,” according to a copy posted on the government’s website. The rules hadn’t been changed since first enacted in 1989 as China began consuming more energy and the world’s most-populous country transformed into a global manufacturing hub. Now the world’s biggest carbon emitter, China has moved to address the environmental damage that has been a byproduct of its breakneck economic growth and become a leading cause of social unrest. Government reports and recent comments from top officials about pollution have revealed the extent of the damage and raised new concern about its health effects. The amendments give the public and government “powerful new tools” to […]

Posted On : Published By : Tom Whipple
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Natural Gas Weekly Update

Marcellus gas production backlog spurs pipes heading south as well as north Increasing natural gas production in the Appalachian Basin’s Marcellus Shale play continues to outpace the growth in the region’s pipeline takeaway capacity. This has led to supply backups in the Marcellus region, with new production often unable to flow to areas where gas is in high demand, placing downward pressure on prices in the region. It has also contributed to a number of natural gas wells in Marcellus remaining backlogged , with a February 28 report from Barclay’s estimating that more that 1,300 wells there are drilled but not completed. Natural gas prices at Leidy Hub in central Pennsylvania have continued to trade significantly below the Henry Hub national benchmark spot price. This winter, the Leidy spot price averaged $3.55 per million British thermal units (MMBtu), $1.08/MMBtu below Henry Hub, and lower than the average spot price […]

Posted On : Published By : Tom Whipple
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Extended California fire season confirms severity of climate change

The climate change debate currently pits the  bulk of the scientific community against holdout deniers who don’t believe rising temperatures are the result of human activity. But in California, a state suffering from a historic drought, why the phenomenon is happening is less important than the simple fact that it is. Forecasters and fire agencies have now tossed aside their normal fire calendar – mid-May to mid-October – and prepare for what some call a “new normal” of a greatly extended fire season. They are hiring extra staff and issuing more warnings. Some local officials have warned that fire season in some parts of California is basically a year-round phenomenon now. The National Weather Service has been issuing an unprecedented number of fire forecasts and alerts in the thick of the usually-wet season, months earlier than normal. Its forecast offices have kicked into fire-season mode well ahead of schedule. […]

Posted On : Published By : Tom Whipple
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El Nino Risk Increases as Pacific Gets Warmer: Carbon & Climate

The odds are increasing that an El Nino weather system will form this year, portending drought for Australia and Asia and a warmer winter in the U.S. Northeast. The U.S. Climate Prediction Center now says there’s a 65 percent chance the Pacific Ocean warming pattern will develop after August. It put the odds at 52 percent last month. The Australian Bureau of Meteorology, which expected neutral conditions at the start of the year, says the phenomenon may start as soon as July. The World Meteorological Organization of the United Nations sees an El Nino at midyear. “We should know more clearly in a month exactly whether this is going to wimp out on us or if it’s really going to take off,” Kevin Trenberth , distinguished senior scientist in the climate analysis section of the National Center for Atmospheric Research in Boulder, Colorado , said in an April 14 […]

Posted On : Published By : Tom Whipple
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El Nino Risk Increases as Pacific Gets Warmer: Carbon & Climate

The odds are increasing that an El Nino weather system will form this year, portending drought for Australia and Asia and a warmer winter in the U.S. Northeast. The U.S. Climate Prediction Center now says there’s a 65 percent chance the Pacific Ocean warming pattern will develop after August. It put the odds at 52 percent last month. The Australian Bureau of Meteorology, which expected neutral conditions at the start of the year, says the phenomenon may start as soon as July. The World Meteorological Organization of the United Nations sees an El Nino at midyear. “We should know more clearly in a month exactly whether this is going to wimp out on us or if it’s really going to take off,” Kevin Trenberth , distinguished senior scientist in the climate analysis section of the National Center for Atmospheric Research in Boulder, Colorado , said in an April 14 […]

Posted On : Published By : Tom Whipple
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Chevron Richmond Banks on Middle East Oil

Chevron Corp. (CVX) plans to run higher-sulfur Alaskan and Middle Eastern crudes when it completes work at Northern California’s largest refinery in 2016, not the Bakken oil helping spur the U.S. path to energy independence. Chevron’s 245,300-barrel-a-day Richmond refinery is seeking regulatory approval to replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system. The upgrade will take about two years and could be done as soon as mid-2016 if city officials greenlight the project in June or July, Nicole Barber, a company spokeswoman, said in an interview at the plant yesterday. Richmond imports mostly light, sour crudes from Saudi Arabia , government data show. It will use the same sources after the work, Barber said. The U.S. supplied 86 percent of its own energy needs last year as horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies from shale formations such as […]

Posted On : Published By : Tom Whipple
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Study links California drought to global warming

WASHINGTON (AP) — ‘s not done in real time. Now a study is asserting a link between climate change and both the intensifying California drought and the polar vortex blamed for a harsh winter that mercifully has just ended in many places. The Utah State University scientists involved in the study say they hope what they found can help them predict the next big weird winter. Outside scientists, such as Katharine Hayhoe at Texas Tech University, are calling this study promising but not quite proven as it pushes the boundaries in "one of the hottest topics in climate science today." The United States just came out of a two-faced winter – bitter cold and snowy in the Midwest and East, warm and severely dry in the West. The latest U.S. drought monitor says 100 percent of California is in an official drought. The new study blames an unusual "dipole," […]

Posted On : Published By : Tom Whipple
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Water picture improves for some California towns

While much of California remains in the grips of extreme drought, spring storms have eased pressure slightly and reduced the number of rural communities considered at risk of running dry. In February, the California Department of Public Health listed 17 mostly rural water systems as having less than two months water supply in storage. But in recent weeks that number has fallen to three as February and March rains improved the water picture slightly. Still, the Sierra Nevada snowpack that provides a third of California’s drinking water is at 32 percent of normal as the state heads toward the dry summer months.

Posted On : Published By : Tom Whipple
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Ukraine gets $11 billion gas bill from Russia

Russian energy company Gazprom said Thursday it sent a bill to its Ukrainian partners for more than $11 billion for taking on less gas than contracted in 2013. Alexander Medvedev , deputy chief executive officer at Gazprom, said Ukrainian energy company Naftogaz took on 455 billion cubic feet of natural gas last year, but was contractually obligated to 1.4 trillion cubic feet. "Gazprom on Wednesday billed Naftogaz of Ukraine $11.38 billion for gas shortfall in 2013 under the take-or-pay contract," the Gazprom deputy said . Ukrainian Energy Minister Yuri Prodan said earlier this month the government may challenge a 2009 contract between Naftogaz and Ukraine to an international court of arbitration. Gazprom in 2009 cut gas supplies to Ukraine because of contractual disputes. The deal that ended the dispute saddled Ukraine with some of the highest gas bills in the region. European consumers get […]

Posted On : Published By : Tom Whipple
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Ukraine Still Trying to Find Way to Receive More EU Gas

Ukrainian and Slovak officials Thursday said issues remain with a plan to give Ukraine a new delivery channel for natural gas from the European Union as the country seeks cheaper gas than that being offered by Russia. The officials said they would continue three-way talks Friday and into the weekend in the hope of signing on Monday a memorandum of understanding on the deal. Slovakia is offering Ukraine use of a secondary pipeline with annual capacity of 10 billion cubic meters. But reversing flows in the main Slovak pipeline to allow gas shipments to Ukraine creates legal issues between Slovakia and Russia’s OAO Gazprom , said European Commissioner for Energy Günther Oettinger. Ukraine’s Minister of Energy Yuriy Prodan said legal hurdles can be overcome by negotiations and he reiterated that Ukraine is seeking reverse flows in the main pipeline rather than in the smaller secondary pipeline. New Slovak […]

Posted On : Published By : Tom Whipple
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Ukraine Says Its Efforts to Regain Control of East Will Go On

Defying warnings from Moscow not to confront pro-Russian militants entrenched in towns across eastern Ukraine, the interim government on Friday threatened to maintain efforts to regain control by force that have so far produced little beyond Russian military drills on Ukraine’s border and heightened alarm about Moscow’s next move. In a posting on Facebook, Interior Minister Arsen Avakov of Ukraine declared on Friday that his country’s military operations in the east — known as “ATO,” meaning Anti-Terrorist Operation — had not been suspended. “There has been no suspension of the ATO in connection to the threat of invasion by Russia’s armed forces,” Mr. Avakov said. “The ATO goes on. The terrorists should be on their guard around the clock. Civilians have nothing to fear.” Despite the minister’s warning, there have been no reports of renewed conflict since Ukrainian forces moved briefly against pro-Russian positions on Thursday […]

Posted On : Published By : Tom Whipple
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10 warnings: Big Oil stocks crash 50% by 2020

Yes, we see 10 early warnings that Big Oil stocks are going to trigger an economic collapse by 2020, maybe 50% as gas prices go through your SUV’s sunroof. A contrarian view? Yes, pump prices already shot up 11% this year. Plus Big Oil cherishes its new role as exporter: Bloomberg’s even predicting the U.S. will “surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next two decades, amid booming output.” So why worry? Why contrarian? Because a decade ago the Bush Pentagon predicted that by 2020 “an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge” as global “warfare is defining human life.” But, that’s light years away in today’s twitter-brain world where today’s news is so bullish: “100% of economists think yields will rise within six months,” no recession in […]

Posted On : Published By : ASPO-USA
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Total SA: Peak Oil Is Catching up to Big Oil

With 2013 in the rearview mirror, peak oil is beginning to create big problems for big oil. Free cash flow is like the canary in the coal mine. Earnings can be massaged with accounting magic, but it is more difficult to massage free cash flow. Total (NYSE: TOT ), along with its fellow big oil brethren, has seen its free cash flow fall significantly in 2013. Now is the time to examine the fundamentals and see just what sort of unique risks and challenges big oil faces. Oil prices are stable, but free cash flow is falling TOT Free Cash Flow (TTM) data by YCharts Sometimes, falling free cash flow is a short-term issue. Such was the case after the 2008 oil crash. Oil prices fell, and as a result free cash flow fell as well. The current downturn is different. Oil prices have remained relatively stable and yet free […]

Posted On : Published By : ASPO-USA