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Brent Crude Set for Weekly Gain Amid Ukraine Tension

Brent crude headed for its first weekly advance this month amid speculation that escalating tension in Ukraine may disrupt supplies from Russia , the world’s biggest energy exporter. West Texas Intermediate was set for a second weekly gain after Cushing stockpiles fell. Futures were little changed in London and are up 1.1 percent this week. Ukrainian forces moved to flush separatists from their eastern holdouts as diplomats from the U.S. and U.K. vowed to punish Russia with industry-wide sanctions if this month’s presidential election is undermined. Global demand for OPEC’s crude will be stronger in the second half of 2014 than previously estimated, the International Energy Agency said yesterday. “In the run up to the elections next week the tensions will continue,” Eugen Weinberg , head of commodities research at Commerzbank AG in Frankfurt , said by e-mail. “Even after the presidential elections it’s unlikely to calm down. So […]

Posted On : Published By : Tom Whipple
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Brent Extends Rally

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $101.88 a barrel at 0524 GMT, up $0.38 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange rose $0.16 to $109.25 a barrel. Brent crude extended gains after settling higher for four consecutive sessions. The global benchmark is on its longest winning streak since end-March. "The situation in the Ukraine continues to play a role in energy markets," ANZ said in a report this morning. "Russian and European Union energy ministers are due to meet on May 19 to end a dispute over gas prices and avoid further disruptions of energy supplies from the East," the bank said. Secretary of State John Kerry and his counterparts from Europe have threatened broader sanctions against Russia if Moscow interferes with the presidential vote in Ukraine on May 25. On Thursday, the […]

Posted On : Published By : Tom Whipple
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Oil rises on renewed Ukraine tension, dollar

The price of oil rebounded to near $102 on renewed tension in Ukraine and weakness in the dollar. Benchmark U.S. crude for June delivery was up 15 cents to $101.64 a barrel at 0755 GMT in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close Thursday at $101.50. Brent crude, a benchmark for international oil used by many U.S. refineries, rose 8 cents to $109.14 in London. Russian President Vladimir Putin stoked tensions with Ukraine by warning his country wouldn’t deliver gas to its neighbor unless it receives payment in advance, part of a dispute over an unpaid energy bill. Ukraine is a major conduit for Russian gas deliveries to Europe. The dollar’s weakness against some Asian currencies also helped support crude prices. It fell against the Indian rupee following the pro-business opposition’s election victory in India. Oil, which is priced in dollars, […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Rise Off Six-Week Low on Lower-Than-Expected Stockpile Addition

Natural-gas prices jumped more than 2% on data that showed producers added less gas than expected to stockpiles. U.S. gas inventories rose by 105 billion cubic feet in the week ended May 9, the U.S. Energy Information Administration said Thursday. However, that figure includes 8 bcf that storage operators had previously used to run their facilities, a one-time addition that many traders discounted. The remaining 97 bcf addition was below forecasts. Traders use the data to measure how quickly producers are rebuilding stockpiles depleted during a frigid winter. Inventories now stand at about 1.2 trillion cubic feet, 46% below the five-year average. Gas for June delivery jumped 2.3% to $4.469 a million British thermal units on the New York Mercantile Exchange. Producers need to beat the five year average storage additions by 20 to 35 bcf each week for the next six months in order […]

Posted On : Published By : Tom Whipple
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Global Growth Worries Climb

A spate of worrying economic data Thursday shook stock and bond markets. Economic activity in the 18-country euro zone expanded at a weak annual rate of 0.8% during the first quarter, data released Thursday showed. Excluding Germany, which grew at a robust 3.3% pace, the rest of the euro-area economy contracted slightly during the quarter. European Central Bank officials are now moving toward enacting additional low interest-rate policies to prevent the region from sliding into a lengthy period of economic stagnation, while the U.S. Federal Reserve guardedly tries to wind down a bond-buying program meant to revitalize economic growth. Meantime, Chinese authorities are trying to prod banks to lend more to first-time home buyers shut out of their real-estate market. U.S. officials privately say they expect Chinese officials to act to boost their economy and support banks if growth slows severely, though Chinese officials say they will avoid major […]

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Saudi Gas Reserves Up as Aramco Taps New Shale Deposits

Saudi Arabia ’s natural gas reserves rose last year as it explored for the fuel in the Red Sea and tapped shale gas to free more crude oil for export, according to the kingdom’s state-run oil company. Saudi reserves increased to 288 trillion cubic feet of gas last year from 285 trillion in 2012, Saudi Arabian Oil Co. said today in its annual review. The company is ready to use shale gas to fuel a 1,000-megawatt plant that will feed electricity to a large phosphate mining project, the company known as Saudi Aramco said. “Saudi Arabia will be among the first countries outside North America to use shale gas for domestic power generation,” the company said. “We are actively exploring for unconventional gas resources,” which may be large in scale, it said. The shale gas drive will help the kingdom free more diesel and crude oil for export, the […]

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Pentagon announces $1 billion deal with Iraq

WASHINGTON — The Pentagon has cleared a nearly $1 billion package of aircraft trainers, surveillance aerostats and up-armored Humvees for the Iraqi military. The Defense Security Cooperation Agency (DSCA) notified Congress Tuesday that the State Department approved the sale. The largest part of the deal is 24 Beechcraft T-6C Texan II trainer aircraft. The turboprop aircraft and related services and equipment is estimated to cost $790 million. “The proposed sale of these aircraft, equipment, and support will enhance the ability of the Iraqi forces to sustain themselves in their efforts to bring stability to Iraq and to prevent overflow of unrest into neighboring countries,” a DSCA notice states. Iraq already flies the T-6A trainer. The T-6C has hard points on the wings and advanced avionics. The aircraft are used to train pilots before they move to larger, more sophisticated aircraft. Iraq has already inked a deal to buy 36 […]

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Nigeria April oil revenue down 9% month-on-month on Forcados outage

Nigeria’s oil revenue fell about 9% month-on-month to Naira 474.88 billion ($2.9 billion) in April, due to disruption to oil production and exports at the Shell operated Forcados oil terminal and ExxonMobil’s export terminals, Nigeria’s finance ministry said Friday. "Oil revenue fell to about Naira 474.88 billion in April compared to about Naira 519.99 billion in March. The decline in revenue is due to production shut-in at the Qua Iboe and Yoho terminals as well as the shut down of Forcados," the ministry said in a statement. Consequently, Nigerian government revenue dropped to Naira 584.15 billion in April from Naira 614.35 billion in March. Oil accounts for more than 80% of Nigerian government revenue. But Nigeria’s crude production and exports have declined steadily over the last 12 months because of pipeline problems, production shut-ins and large-scale oil theft. Nigeria’s central bank estimated that the country’s oil production averaged 1.86 […]

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NY Policymakers Seek Ban on Fracking Waste

New York has a pending bill establishing a moratorium on the disposal of fluids used in hydraulic fracturing that occurs outside of the state, according to legislation introduced Tuesday by Democrats in the state Senate. The minority conference released four bills proposing to ban shipping hydraulic fracturing waste product into the state for treatment or disposal as well as ban the waste from being used to melt ice off roads and bar treatment facilities, and landfills from accepting the byproduct. New York, currently holding a moratorium on fracking permits until it completes an environmental impact review that launched in 2008, is reviewing whether fracking should be allowed between its borders. The state Department of Environmental Conservation (DEC) launched its review of large-scale fracturing about 6 years ago. “There is no end in sight for the ongoing 5-year review of fracking in New York,” commented Gov. Cuomo and Dr. Shah […]

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Bakken crude within rail car safety design standards, AFPM study says

Bakken crude oil is well within the safety standards for current rail car designs, an American Fuel & Petrochemical Manufacturers report concluded. The crude is comparable to other light grades and does not pose risks that are significantly different than other crudes or flammable liquids authorized for rail transport, it added. Specifically, Bakken crudes are within pressure, flashpoint, boiling point, and corrosivity standards for use in rail cars approved by the US Department of Transportation, AFPM said in announcing its findings on May 15. It said the report is based on a survey of AFPM members conducted in response to a request by DOT. A third-party auditor collected the data from 17 AFPM member companies on a confidential basis in accordance with federal antitrust laws, the Washington-based trade association noted. “AFPM engaged a former, long-time DOT official with an expertise in hazardous material transportation safety to develop the final […]

Posted On : Published By : Tom Whipple