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Clashes in Eastern Ukraine as Moscow Issues New Warnings

Two days after Ukraine’s interim government declared itself all but helpless to control events in eastern Ukraine, Ukrainian military and police forces on Friday resumed their effort to retake this rebel-controlled city, forcing armed separatists from the city’s outskirts with armored vehicles, helicopters and ground troops. When clashes drew to a close by early afternoon, the Ukrainian troops had advanced, capturing separatist checkpoints and posting infantry and armored vehicles on a bridge overlooking rail lines beside the city’s southern border. In the previously tranquil port city of Odessa, on the Black Sea, 38 people died in a fire related to clashes that broke out between protesters holding a march for Ukrainian unity and pro-Russian activists. The fighting itself left four dead and 12 wounded, Ukraine’s Interior Ministry said. Ukrainian and Russian news media showed images of buildings and debris burning, fire bombs being put together and […]

Posted On : Published By : Tom Whipple
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Energy Minister Questioned Ukraine's Ability to Pay for Russian Natural Gas

Russia’s energy minister on Friday questioned Ukraine’s ability to pay for Russian natural gas and said state-controlled OAO Gazprom will ask that deliveries scheduled in June be paid for upfront, which he said poses a risk of supply disruption to European customers. Ukraine owes more than $3.5 billion for Russian natural gas, said Energy Minister Alexander Novak after meeting his Ukrainian counterpart, Yuriy Prodan and European Union energy Commissioner Günther Oettinger. Kiev and Moscow have long quarreled over the price of natural gas Gazprom charges Ukraine’s state-owned energy firm Naftogaz. As of April 1, Russia nearly doubled what it charges Ukraine to $485.50 per 1,000 cubic meters from $268.50 per 1,000 cubic meters. Mr. Prodan said Kiev isn’t ready to pay the price demanded by Gazprom, which supplies about 30% of Europe’s gas needs, with around half of that traveling through pipes that cross Ukraine. "We have discriminatory gas […]

Posted On : Published By : Tom Whipple
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Energy Minister Questioned Ukraine’s Ability to Pay for Russian Natural Gas

Russia’s energy minister on Friday questioned Ukraine’s ability to pay for Russian natural gas and said state-controlled OAO Gazprom will ask that deliveries scheduled in June be paid for upfront, which he said poses a risk of supply disruption to European customers. Ukraine owes more than $3.5 billion for Russian natural gas, said Energy Minister Alexander Novak after meeting his Ukrainian counterpart, Yuriy Prodan and European Union energy Commissioner Günther Oettinger. Kiev and Moscow have long quarreled over the price of natural gas Gazprom charges Ukraine’s state-owned energy firm Naftogaz. As of April 1, Russia nearly doubled what it charges Ukraine to $485.50 per 1,000 cubic meters from $268.50 per 1,000 cubic meters. Mr. Prodan said Kiev isn’t ready to pay the price demanded by Gazprom, which supplies about 30% of Europe’s gas needs, with around half of that traveling through pipes that cross Ukraine. "We have discriminatory gas […]

Posted On : Published By : Tom Whipple
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Ukraine attacks rebel city, helicopter shot down

Ukrainian forces attacked the rebel-held city of Slaviansk before dawn on Friday and pro-Russia separatists shot down at least one attack helicopter, killing a pilot, in a sharp escalation of the conflict. Describing the use of anti-aircraft missiles as proof of the presence of Russian special forces in the town that has become the military stronghold of the pro-Moscow movement, Ukrainian officials said Slaviansk was "tightly surrounded" and called on separatist leaders to release hostages and surrender. Reuters journalists in the city of 130,000 heard shooting from shortly after 4 a.m. (9 p.m. EDT Thursday) and saw a military helicopter open fire. Ukrainian troops could be in seen in armored personnel carriers in a southern suburb. The SBU security service said one military Mi-24 helicopter gunship had been shot down, killing one airman while a second had been taken prisoner by the rebels. It said […]

Posted On : Published By : Tom Whipple
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Proven Reserves, IOCs and Other News

Not much new data to report this past week but I did try to hammer out a few things of interest. The EIA released their Crude Oil Production report for the US and individual states with data through February 2014. I combined Montana and North Dakota to show their production. Their combined production was 1,027 kb/d. This is still below their production of 1,055 kb/d in November. This is more than just the Bakken as both Montana and North Dakota have production outside the Bakken. Part of the EIA’s plan for 9.6 mb/d of C+C by 2016 has The Gulf of Mexico going to 2 million bp/d by 2016. The GOM does not appear go be going anywhere however. There are new fields coming on line but they are just barely keeping up with those very high decline rates of the deep water fields. The Gulf of Mexico has […]

Posted On : Published By : Tom Whipple
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Citi vs. Chevron: The Oil Price Controversy

The direction of oil prices is once again a hot topic. In a recent , Ed Morse, Citigroup’s head of global commodity research, forecasts a collapse in global oil prices to $75 /b over the next three to five years. By contrast, Chevron has announced that it is budgeting with $110/b oil for 2017, with the company’s CEO John Watson stating, “There is a new reality in our business… $100/bbl is becoming the new $20/bbl in our business… costs have caught up to revenues for many classes of projects.” And for good measure, he adds, “If $100 is the new $20, consumers will pay more for oil.” Thus, two diametrically opposed views of the future are emerging. The international oil companies (IOCs) have been unable to hold liquids production levels even in the face of soaring capital expenditures and rapidly increasing operating costs. Some, like ExxonMobil and Chevron, are […]

Posted On : Published By : Tom Whipple
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Oil Futures Up But Far From April Highs

Oil futures are up this morning, but with Brent still well short of April highs and WTI just above $100 a barrel in a well-supplied market. June Brent crude is up 94 cents, or 0.87%, at $108.70 on ICE Futures Europe. U.S. crude futures for June are up 61 cents, or 0.61%, at $100.03 on the New York Mercantile Exchange. "We began April with the fall-out from the annexation of Crimea and Libyan production uncertainties hanging over the market and we have ended it in exactly the same places with an extra twist," said David Hufton at oil brokerage PVM. The difference between Friday and the start of the month is that the situation in Ukraine has worsened, despite some attempts at diplomatic solutions. Meanwhile, the "twist" in the case of Libya is that Marsa al Hariga, where Sarir crude oil is loaded, has re-opened and […]

Posted On : Published By : Tom Whipple
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WTI Pares Weekly Loss Before Jobs Data; Brent Gains

West Texas Intermediate trimmed a second weekly drop before data forecast to show U.S. employers boosted headcount in April by the most in five months. Brent pared a weekly loss amid tensions between Russia and Ukraine . Futures rose 0.5 percent in New York , curbing this week’s decline to 0.7 percent. Payrolls rose by 218,000 last month after a 192,000 gain in March, according to a Bloomberg survey. Ukraine sent armored vehicles and artillery to retake Slovyansk from pro-separatist forces, defying Russian President Vladimir Putin ’s demand to pull back troops. “The uptick in prices seems to be a bit of adjustment of positions before the upcoming non-farm payroll figure,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark , said by e-mail. “Economic numbers have showed signs of an improving U.S. economy lately.” WTI for June delivery advanced as much as 67 cents to […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Extend Slide on Stockpile Data

Natural-gas futures fell for a second straight session Thursday after a larger-than-expected increase in stockpiles of the fuel eased concerns about the risk of a shortage. Prices for the front-month June contract declined 9.6 cents, or 2%, to $4.719 a million British thermal units on the New York Mercantile Exchange. Natural gas had hit two-month highs earlier this week before it started its retreat Wednesday. Prices dropped because of the year’s largest increase in stockpiles, which Wall Street predicted on Wednesday and the government confirmed on Thursday. Producers added 82 billion cubic feet of gas to storage for the week ended Friday, the U.S. Energy Information Administration said. That is 7 bcf more than what 20 traders, brokers and analysts forecast in a Wall Street Journal survey. "That’s a good sign. But we’re going to need more … " said Tom Saal, a broker at […]

Posted On : Published By : Tom Whipple
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Maliki launches post-election bid to keep power

Prime Minister Nuri al-Maliki launched his post-election bid to hold on to power for a third term on Thursday, saying Iraq had "paid the price in blood" for disunity and calling on rivals to back his bloc to lead the country. Iraq held a democratic national vote in the absence of foreign troops for the first time ever on Wednesday, despite levels of violence unseen since the darkest days of its 2005-08 civil war and a revived al Qaeda-inspired Sunni insurgency. Maliki, a member of the Shi’ite majority, addressed reporters with a confident winner’s air and praised high reported turnout figures as a victory over insurgents who had vowed to kill anyone who voted. The final result will not be clear for weeks. As in past Iraqi elections, parties with sectarian and ethnic agendas are expected to lead the field, with no group coming close to […]

Posted On : Published By : Tom Whipple