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Sanctions Over Ukraine Crisis Create Tangle for BP, Total

On the day the U.S. barred its citizens from conducting business with Russia’s Igor Sechin, BP PLC’s American chief executive was in an uncomfortable spot: sitting at a boardroom table in St. Petersburg, Russia, with the oil executive. BP Chief Executive Bob Dudley is a director of OAO Rosneft , the state-controlled Russian oil company where Mr. Sechin is president and a major shareholder. The British company owns 19.75% of Rosneft. To ensure access to Russia’s vast reserves—and avoid political tangles that can ensnare companies in the country that don’t have Kremlin connections—big Western oil companies including BP, SA and Exxon Mobil Corp. have allied themselves with loyalists of Russian President Vladimir Putin . Mr. Sechin, a former government official, is one of Mr. Putin’s closest allies. Now, those connections are becoming liabilities as Western nations push Russia to by sanctioning some of those same individuals. That means the […]

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Workers Seize City in Eastern Ukraine From Separatists

Thousands of steelworkers fanned out on Thursday through the city of Mariupol, establishing control over the streets and banishing the pro-Kremlin militants who until recently had seemed to be consolidating their grip on power, dealing a setback to Russia and possibly reversing the momentum in eastern Ukraine. By late Thursday, miners and steelworkers had deployed in at least five cities, including the regional capital, Donetsk. They had not, however, become the dominant force there that they were in Mariupol, the region’s second-largest city and the site last week of a bloody confrontation between Ukrainian troops and pro-Russian militants. While it was still far too early to say the tide had turned in eastern Ukraine, the day’s events were a blow to separatists who recently seized control here and in a dozen or so other cities and who held a referendum on independence on Sunday. Backed by […]

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U.S. Warns Russia of Sanctions as Ukraine Troops Advance

The top U.S. and U.K. diplomats vowed to punish Russia with industrywide sanctions if this month’s Ukrainian presidential election is undermined as the Kiev government’s forces moved to flush out separatists in the east. “If Russia or its proxies disrupt the elections,” the U.S. and its allies “will impose sectoral economic sanctions as a result,” Secretary of State John Kerry said in London yesterday after meeting his counterparts from Britain, Italy , France and Germany . Pro-Russian separatists “are literally sowing mayhem,” seeking to “speak for everyone through the barrel of a gun.” Discord over the election risks another round of escalation as the Kiev government and its U.S. and European allies blame Russia for the unrest in Ukraine’s easternmost regions. Russian calls to include rebels in national unity talks that began May 14 were rejected as the meetings opened without separatist leaders’ participation. In eastern Ukraine, government troops […]

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Report: Climate change affecting corporate bottom lines

In response to environmental threats, companies are investing in preventative measures, reducing carbon footprint Climate change isn’t just causing the ice caps to melt, it’s costing corporations big bucks and forcing some to factor its likely impact into their long-term plans. A new report from the Carbon Disclosure Project  (CDP) released Friday says 63 of America’s S&P 500 companies are already paying to counter the effects of climate change. The past few years of extreme drought, stronger hurricanes and severe flooding have caused immense damage to some businesses’ core assets, requiring millions of dollars in repairs and threatening billions more in future profits. "Dealing with climate change is now a cost of doing business" Tom Carnac, president of CDP in North America, said in a news release. "Making investments in climate-change-related resilience planning both in their own operations and in the supply chain has become crucial for all corporations […]

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No Oil in the Lamp

The modern world is totally dependent on a continuing supply of energy from oil and other fossil fuels. However, recent natural disasters, global political upheavals, price hikes in the cost of gas, heating oil and electricity, and the eye-watering cost of filling up a car are signposts toward an unexpected, different, energy-constrained future. The central theme of this book is this: as traditional energy sources and in particular oil start to run short, we are sleepwalking into an energy crisis which will have farreaching effects on every part of the modern world. Christians and the church will have to grapple with these issues if we want to understand the context in which we will live, worship, minister and witness in the years ahead. In this book we aim to raise awareness of ‘peak oil’ and its consequences amongst Christians, and to prepare the church in practical ways for the […]

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Does Peak Oil Matter?

Diving Into Stories of Energy Transition with Chris Nelder Part Two of Four.  Link to Part 1 . A transcript of our interview on Extraenvironmentalist #76  by Scott Bohachyk Editor’s note:  Last time we discussed nuclear power and the potential role it may have in the 21st century energy transition. This time we are discussing the story of peak oil and whether it has any validity. Justin: A core part of the story we were just talking about, in the audio we were playing from the film Pandora’s Promise film is the idea that we’re going to hit 9 or 10 billion people and consume two, three, four times as much energy as we do now, but one story that really counters that is the idea of geology limiting oil output and the peak oil story. Now that we can reflect back on a few years of recession, and […]

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WTI Drops From Three-Week High as Stockpiles Gain; Brent Steady

West Intermediate slid from a three-week high after government data showed crude inventories expanded as production increased to a 28-year peak in the U.S., the world’s biggest oil consumer. Brent was steady in London . Futures fell as much as 0.5 percent in New York , the first drop in four days. Crude stockpiles rose to a near-record last week as climbed to the highest rate since 1986, the Energy Information Administration reported yesterday. Russia has no intention of sending troops into Ukraine, which is sliding into a civil war that will preclude holding legitimate elections, according to Foreign Minister Sergei Lavrov . “Crude inventories are at levels that are historically high,” Jonathan Barratt , the chief investment officer at Ayers Alliance Securities in Sydney, said by phone today. “Anywhere above $102 a barrel is expensive.” WTI for June delivery declined as much as 47 cents to $101.90 a […]

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Oil below $102 after US output hits 28-year high

The price of oil declined Thursday after official figures showed U.S. crude production at a 28-year high. Benchmark U.S. crude for June delivery was down 42 cents to $101.95 a barrel at 0740 GMT on the New York Mercantile Exchange. The contract rose 67 cents Wednesday to close at $102.37. The U.S. Energy Information Administration said Wednesday that domestic crude production reached 8.428 million barrels during the week ended May 9. That was the highest level since October 1986. The decline in oil prices comes after crude climbed above $102 a barrel amid tensions in Ukraine. An industry report also showed crude stocks fell at a key U.S. storage hub. Brent crude was down 20 cents to $109.11 a barrel on the ICE exchange in London. – Wholesale gasoline fell 0.3 cent to $2.948 a gallon. – Natural gas dropped 1.8 cents to $4.349 per 1,000 cubic feet. – […]

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Natural Gas Snaps Five-Session Losing Streak

Natural-gas prices narrowly ended their five-session losing streak Wednesday as bargain shoppers boosted the market on a light trading day. Prices for the front-month June contract rose 0.9 cent, or 0.2%, to $4.367 a million British thermal units on the New York Mercantile Exchange. Prices had fallen 9.2% from the prior five sessions, luring back some buyers who believed the low price would increase demand, analysts said. But mostly traders stayed out of the market on what turned out to be the slowest trading day in at least two years. Trading volume was less than half of what it had been on the previous slowest day of 2014. Recently traders have been hesitant to act before the weekly government update on natural gas stockpiles, which comes out Thursday at 10:30 a.m., analysts said. The update has been playing a critical role in the gas market […]

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IEA Sees Higher Demand for OPEC Crude This Year

Demand for OPEC’s crude will be higher in the second half of the year than previously estimated as inventories in developed economies remain depleted, according to the International Energy Agency . The Organization of Petroleum Exporting Countries will need to provide an average of 30.7 million barrels a day in the second half, or 800,000 a day more than it pumped last month, the IEA said today. This calls for 140,000 more barrels of OPEC crude than the IEA forecast in April as stronger-than-expected demand has kept stockpile levels “tight” in advanced nations, the agency said. OPEC controls about 40 percent of global supplies. “Forecast balances call for a significant rise in OPEC production from current levels for the second half of the year,” the Paris-based adviser to oil-consuming nations said in its monthly report. “While OPEC has more than enough capacity to deliver, it remains to be seen […]

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Highlights of the latest OMR

Welcome to the OMR Subscriber’s website Please check that your usage of this website conforms to the licence you subscribe to at http://www.iea.org/oilmar/licenceomr.html. Please complete our reader survey to win a copy of the MTOMR 2014: www.surveymonkey.com/s/IEA_OMR_Survey Highlights of the latest OMR dated: 15th May 2014 Oil prices rose marginally month-on-month in April, supported by continued tensions between Russia and the Ukraine, supply outages in OPEC and non-OPEC countries and stepped up crude buying as refiners complete seasonal turnarounds. ICE Brent futures were last trading at $109.85/bbl and NYMEX WTI at $102.10/bbl. Forecast global demand growth for 2014 has been raised marginally since last month’s Report , to 1.32 mb/d, on higher 1Q14 data. Baseline adjustments to 2012 add 0.1 mb/d to the historical average and total demand, now pegged at 92.8 mb/d in 2014.  Global supplies rose 700 kb/d month-on-month to 92.1 mb/d in April, with roughly half of […]

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IEA April Estimates Confirm Iran Reducing Its Oil Exports

Iran’s oil exports fell in March after reaching a 20-month peak two months earlier, a top energy watchdog said Thursday, potentially easing concerns Tehran that could breach a six-month cap agreed with the West. In its monthly market report, the International Energy Agency said that "estimated April import volumes [by foreign buyers of Iranian oil] were down by about 180,000 barrels a day to 1.11 million barrels a day." The export numbers, which include condensates, compared with 1.29 million barrels a day in March and a 20-month peak of 1.58 million barrels a day in February, it said. The IEA’s data confirmed statements by Iran’s deputy oil minister for international affairs Ali Majedi to the Wall Street Journal last week that crude exports–which exclude condensates–averaged 1.2 million barrels a day in the past three months. That suggested a reduction from February levels of 1.3 million barrels […]

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Oil Futures Ease Slightly

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $102.06 a barrel at 0548 GMT, down $0.31 in the Globex electronic session. June Brent crude on London’s ICE Futures exchange fell $0.14 to $110.05 a barrel. The highlight of the week has been a surprise move in U.S. oil inventories, which rose while markets expected them to be flat, and gasoline and diesel stocks, which fell while markets expected an increase. This may add some volatility to oil prices, Societe Generale said in a note. It said oil stocks at the delivery hub of Cushing, Okla.–which have dropped for 14 of the past 15 weeks and are now at their lowest since December 2008–remain a big concern. On tap today is the International Energy Agency’s monthly oil market report and investors will be looking for any change in oil demand or supply […]

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Iran Is Exporting 1.5 Million Barrels of Oil a Day, Says Minister

Iran is exporting 1.5 million barrels of oil a day, well above an export cap agreed with the international community last November, Oil Minister Bijan Zanganeh said Thursday. Last week, Mr. Zanganeh told The Wall Street Journal that the country plans to continue to increase exports, despite agreeing to limit international oil sales to one million barrels a day as part of a broader interim deal with six world powers over its nuclear program. Speaking on the sidelines of a gathering of international energy ministers in Moscow, Mr. Zanganeh added that conditions in the oil market are good and no big changes are expected when the Organization of the Petroleum Exporting Countries meets in Vienna next month. The oil producers’ cartel meets twice a year to discuss the oil market and determine its level of production. In recent years, its members have maintained […]

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Libya's El Feel Oilfield Restarts, El Sharara Closed

Libya’s El Feel oilfield has restarted production, National Oil Corp (NOC) said on Wednesday, as it moves slowly to restore some output following protests that closed fields and ports. The government said on Monday it had reached an agreement with protesters to reopen the western El Sharara, El Feel and Wafa oilfields and the pipelines connecting them to the Zawiya port. Expectations and doubts about the return of the oilfields have driven global oil prices this week. The El Sharara oilfield, the largest at 340,000 barrels per day (bpd), was still closed on Wednesday, because protesters had not yet opened the pipeline valve to the port, field manager Hassan Sadiq said. "They (protesters) reopened the valves for the Wafa and El-Feel oil fields but not for Sharara," he said. "We are ready to resume work once the valves are reopened." NOC spokesman Mohammed El […]

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Libya’s El Feel Oilfield Restarts, El Sharara Closed

Libya’s El Feel oilfield has restarted production, National Oil Corp (NOC) said on Wednesday, as it moves slowly to restore some output following protests that closed fields and ports. The government said on Monday it had reached an agreement with protesters to reopen the western El Sharara, El Feel and Wafa oilfields and the pipelines connecting them to the Zawiya port. Expectations and doubts about the return of the oilfields have driven global oil prices this week. The El Sharara oilfield, the largest at 340,000 barrels per day (bpd), was still closed on Wednesday, because protesters had not yet opened the pipeline valve to the port, field manager Hassan Sadiq said. "They (protesters) reopened the valves for the Wafa and El-Feel oil fields but not for Sharara," he said. "We are ready to resume work once the valves are reopened." NOC spokesman Mohammed El […]

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Iraqi forces begin Fallujah offensive

Iraq’s security forces are now waging a massive offensive in Fallujah against militants from the Islamic State of Iraq and al-Sham (ISIS), which is currently controlling most of the city. Government forces have regained control of several villages and neighborhoods on the outskirts of the city, as well as the University of Fallujah, in an apparent effort to cut off ISIS supply lines and isolate militants ahead of a larger ground attack. The campaign to retake Fallujah has been dubbed "Ta… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
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Iraq parties plot for power as vote count drags on

Iraq’s political parties are already maneuvering to form a government nearly two weeks before preliminary results from the elections are due, with Nuri al-Maliki’s bid to retain the premiership hanging in the balance. With violence at its worst in years and many voters dissatisfied over rampant corruption, high unemployment and poor basic services, the incumbent premier faces strong opposition. But Maliki’s bloc is still widely expected to take the largest number of parliament seats from the April 30 vote, even if they do not win a majority, sparking a race between him and his rivals to secure the 165 seats necessary to form a government. Parties from Iraq’s Shiite, and Kurdish communities have already begun to meet to discuss potential alliances, though provisional results are not expected until May 25. "Politics parties … are manoeuvring in the meantime until results are announced," said Ihsan al-Shammari, professor of politics […]

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Revenues should increase from Kurdish oil, Gulf Keystone says

Production revenues from oil produced from the Kurdish north of Iraq should increase this year, Gulf Keystone Petroleum said Wednesday. Gulf Keystone, which has headquarters in London, said it received a gross payment of $6.46 million in May for its first crude oil exports from the Shaikan reserve areas in the Kurdish north of Iraq. "Production revenues are expected to increase significantly in [second half of] 2014," it said . The company issued an interim financial statement Wednesday. It said gross exports by truck totaled 836,205 barrels for the first quarter of the year. Domestic sales from the Shaikan reserve area in the Kurdish north was 24,767 barrels for the quarter. The company estimates the region’s Shaikan field could hold as much as 10.5 billion barrels of oil. The semiautonomous Kurdistan Regional Government has said production could reach 250,000 bpd by 2018. Exports of Kurdish […]

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Car bombing in downtown Baghdad kills 5 people

Officials say a car bombing in a bustling area in central Baghdad has killed at least five people. A police officer says the parked explosives-laden vehicle went off on Thursday morning in Karrada neighborhood, near a commercial area and some government offices. Three civilians and two policemen were killed and at least 12 people were wounded in the explosion. A medical official confirmed the causality figures. Both officials spoke on condition of anonymity because they were not authorized to talk to media. Since last year, Iraq has been seeing the worst level of violence since the nation emerged from Shiite-Sunni bloodletting in 2008. The U.N. says 8,868 people were killed in 2013, and more than 1,400 people were killed in January and February of this year.

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Oil-Rich Mexico Becomes Net Importer of U.S. Petroleum Goods

Mexico has become a net importer of petroleum products in its trade with the U.S. for the first time in at least 40 years, a significant industrial shift for a country that has long been proud of its status as one of the world’s top crude-oil exporters. Mexico still exports more than a million barrels a day of crude oil, but it imports just about everything else: natural gas, gasoline, diesel, liquefied petroleum gas, and petrochemicals. In the first three months of the year, the country posted a petroleum deficit of about $551 million with the U.S., according to recent Bank of Mexico data. The newfound dominance of the U.S. energy sector is relevant for a country that has long been proud of its status as a "petroleum nation," after former President Lázaro Cárdenas nationalized the industry in 1938. The shift comes partly from the U.S. energy boom […]

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China produces and consumes almost as much coal as the rest of the world combined

. Chinese production and consumption of coal increased for the 13th consecutive year in 2012. China is by far the world’s largest producer and consumer of coal, accounting for 46% of global coal production and 49% of global coal consumption—almost as much as the rest of the world combined. As a manufacturing country that has large electric power requirements, China’s coal consumption fuels its economic growth. China’s gross domestic product (GDP) grew 7.7% in 2012, following an average GDP growth rate of 10% per year from 2000 to 2011. The top 10 coal-producing countries supplied 90% of the world’s coal in 2012. China produced nearly four times as much coal as the second largest producer, […]

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China Gets Upper Hand in Russia Gas Deal

Russia’s conflicts on its western frontier are pushing it into the arms of its eastern neighbor. That could finally seal Russia’s long-promised natural gas deal with China—but more on China’s terms. Vladimir Putin is due in Beijing this month, and the conversation between the ex-superpower and the budding one is sure to involve energy. The Ukrainian crisis has Europe, which buys 75% of Russia’s gas exports, talking loudly about finding new sources. That means Moscow needs to court new buyers. It also needs to find new avenues of capital, considering a net $51 billion—equivalent to 2.5% of GDP—flowed out of the country in the first quarter. On both counts, China is Russia’s best bet. With a goal of doubling its gas market by 2020, China is one of the fastest-growing energy markets in the world. Plus, Beijing offers an alternative to Western funding. It has already struck financing deals […]

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Anti-Chinese Violence Turns Deadly and Spreads in Vietnam

Violence against foreign-owned factories spread elsewhere in Vietnam and took a deadly turn, with officials saying Thursday that one Chinese worker had been killed and scores more injured when hundreds of protesting Vietnamese went on a rampage in a factory in the central part of the country. The explosion of violence — initially centered outside the southern metropolis of Ho Chi Minh City — reflected growing animosity in the region as China works to solidify its claims over vast parts of two seas that other nations have long considered their own. In Ha Tinh Province, in the northern part of central Vietnam, hundreds of protesting Vietnamese workers entered the Formosa Plastics Group steel plant on Wednesday afternoon, attacking Chinese nationals contracted to work there, the Taiwan-based company said Thursday. One Chinese worker was killed and 90 were injured in the violence, according to the […]

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More than 20 dead, doctor says, as anti-China riots spread in Vietnam

More than 20 people were killed in Vietnam and a huge foreign steel project set ablaze as anti-China riots spread to the centre of the country a day after arson and looting in the south, a doctor and company officials said on Thursday. A doctor at a hospital in central Ha Tinh province said five Vietnamese workers and 16 other people described as Chinese were killed on Wednesday night in rioting, one of the worst breakdowns in Sino-Vietnamese relations since the neighbors fought a brief border war in 1979. "There were about a hundred people sent to the hospital last night. Many were Chinese. More are being sent to the hospital this morning," the doctor at Ha Tinh General Hospital told Reuters by phone. Local media has, however, said only person was killed. Formosa Plastics Group, Taiwan’s biggest investor in Vietnam, said its upcoming steel plant […]

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BP sees oil production recovery in North Sea

Oil production from the British waters of the North Sea could see its first increase in more than 10 years, a regional director for BP said. Monthly production from key field indices in the North Sea show a decline from 2.02 million barrels of oil per day in 2007 to 1.16 million bpd last year. Since January, however, production has recovered to 1.2 million bpd, BP regional vice president for Europe Peter Mather told a Platts oil summit in London. "This year could be the first in over a decade that U.K. offshore production does not fall, potentially leading to a slight increase in the next few years," he said Tuesday. Oil from the North Sea met around 65 percent of the British oil demand in 2012 and paid nearly $11 million in taxes to the government in 2012-13. The industry employs about 450,000 people. […]

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Bakken Crude Is Highly Volatile, Oil Study Shows

Data released by a lobbying group for oil refiners confirmed that crude from the Bakken shale in North Dakota is very volatile and contains high levels of combustible gases. But the group said the crude, which has been linked to fiery rail accidents, is no more dangerous to ship than oil from other shale regions and is being correctly loaded and transported under existing federal rules. New rules aren’t warranted, the group, the American Fuel and Petrochemical Manufacturers, said Wednesday. U.S. regulators recently called Bakken crude an imminent hazard because of what they believe is its unusually flammable nature, and are in the process of proposing new regulations for the booming business of shipping oil by train. Instead, attention should shift to the rail industry’s safety record, said Charles Drevna, president of the oil-refiner trade group, some of whose members have made big investments in crude-by-rail infrastructure such as […]

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Bakken Update, March Production Data

The Bakken production data , as well as the All North Dakota production data  just came out with their production numbers for March 2014. Bakken production was up 914,003 bp/d, up 25,091 bp/d from February. All North Dakota production was 977,061 bp/d, up 24,006 bp/d from February. That was a new record for the Bakken but not for all North Dakota. They are still 538 bp/d below their November 2013 numbers. The surge in the Bakken really started in July 2011 when they doubled number of additional wells per month. Production continued to climb in pretty much a straight line through October 2012. Then bad weather and other problems started to affect production. They are now about 150,000 bp/d below where they would have been had they continued on that trajectory. (Line on chart.) North Dakota production outside the Bakken declined at about 12% per year until the number […]

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Gas and coal supply challenges raise summer reliability concerns: NERC

The electricity sector’s increasing reliance on natural gas is raising reliability concerns for the coming summer, while at the same time there may be coal supply constraints, the North American Electric Reliability Corp. said Wednesday. NERC, in its annual summer assessment, said that the ongoing and speedy growth of natural gas-fired generation highlights the need "for increased coordination between the gas and electric industries." John Moura, director of reliability assessment at NERC, said that while NERC has been examining gas-electric interdependency issues for quite some time, the resource’s increasing role is raising issues specific to the summer time. Article continues below… Gas Daily offers the most detailed coverage of natural gas prices at interstate and intrastate pipeline and pooling points in major U.S. markets. Gas Daily keeps you informed about complex state and federal regulations that affect competition in the gas industry. You will also learn about business-critical issues […]

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Water concerns could limit US oil, gas development, speakers say

The oil and gas industry needs to respond more effectively to public concerns about safe water supplies if it expects to realize US unconventional resources’ full potential, speakers at Deloitte LLP’s 2014 Washington Energy Conference warned. Hydraulic fracturing and horizontal drilling successfully changed the US from a net natural gas importer to exporter, noted Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy, in her May 13 remarks. “But this is not a given,” she continued. “Emotions are running high. Opponents with scare stories want those resources to stay in the ground. Colorado is at ‘Ground Zero’ with a ballot initiative that would ban all fracing and place setbacks so far that production would be uneconomic.” Following his speech about water’s growing importance in any manufacturer’s plans, Gregory J. Koch, Coca Cola Co.’s global water stewardship director, said, “Your data and government permit […]

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North Dakota breaks state record for oil production

BISMARCK, N.D., May 14 (UPI) –Preliminary data from March show oil production in North Dakota has reached a new all-time high, the state’s Department of Natural Resources said. The North Dakota Industrial Commission, a division within state’s DNR, said March average oil production of 977,051 barrels per day was 2.6 percent higher than for February and an all-time high for the state. The commission said 94 percent of the production came from the Bakken and Three Forks area of the state. NDIC Director Lynn Helms said the number of wells completed from February to March was "up sharply," though the weather in the state was still having an impact on production. March, he said, began with a few days with temperatures below zero degrees Fahrenheit and there was at least a week when wind speeds were too high for work. At the end of the month, he added, 8 […]

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Keystone Delays Fuel Push for Canada East Oil Pipeline

Delays by the U.S. in reviewing Keystone XL are helping build momentum for an oil pipeline to Canada ’s East Coast. TransCanada Corp. (TRP) , the company proposing the $5.4 billion conduit to connect Alberta ’s oil sands with U.S. Gulf Coast refiners, may have an easier path to approval with its alternative to the nation’s Atlantic Coast. The C$12 billion ($11 billion) Energy East would be North America ’s largest oil line, with capacity to ship 1.1 million barrels a day. “We view the Energy East project a step in the right direction,” Thomas Mulcair , leader of the federal New Democratic Party , said at the Bloomberg Canada Economic Summit yesterday in Toronto. The opposition leader prefers the project over Keystone because it would support Canadian “value-added” jobs by supplying refineries in Eastern Canada. While shipping oil-sands crude across the country to the port of Saint John, […]

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As U.S. trucks revved up amid train traffic jam, a capacity crisis revealed

NEW YORK (Reuters) – As a polar vortex snarled North America’s railroads and upended freight flows this winter, everyone from agricultural giant Cargill to Dow Chemical rushed to secure the next-best form of hauling goods: trucks. In what trucking executives described as an unprecedented bidding frenzy, spot market rates surged by as much as 20 percent to record highs in the first three months of 2014 as shippers sought to minimize sometimes weeks-long delays in rail service. "We’ve received letters from CEOs from major chemical companies asking us if we can do more," said Bill Marchbank, vice president of operations at Houston-based Trimac Transportation, a leading bulk shipper of liquid chemicals and industrial minerals. "It’s almost out of desperation." Demand to ship freight on flatbeds outpaced the number of available trucks by a ratio of 37 to 1 in March and kept rising in April, an unusually steep seasonal […]

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Moscow Hosts Summit as Gazprom Warns Ukraine on Gas Cut: Energy

A two-day meeting designed to improve global energy security starts in Moscow today just as Russia threatens to halt natural gas shipments to Ukraine, risking disruption to European supplies. At least 18 ministers from countries including Saudi Arabia, Iraq and Turkey are attending the International Energy Forum’s conference, where Europe will also be represented. They meet days after an ultimatum to Ukraine raised questions about Russia’s reliability as a supplier. The U.K. delegation declined to attend the forum to protest Russia’s role in Ukraine, IEF Secretary-General Aldo Flores-Quiroga said today. “The IEF remains ready to facilitate producer-consumer dialogue regardless of circumstances,” he said. OAO Gazprom (OGZD) , Russia’s state-run gas exporter, threatened to halt June supplies without advance payment, as Kiev has fallen behind in payments for Russian shipments dating from last year. Ukraine is a key transit route for EU gas, with about 15 percent of the region’s […]

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Ukraine Slides Deeper Toward War as Russia Warns on Vote

Russia’s foreign minister said Ukraine is sliding into a civil war that could make it impossible to hold legitimate elections, as Ukrainian leaders and their international allies blamed Russia for the violence. “When Ukrainians kill Ukrainians, I believe it’s as close to civil war as you can get,” Sergei Lavrov told Bloomberg Television yesterday in an interview in Moscow. “In the east and south of Ukraine, there is a war, a real war, with heavy weaponry used, and if this is something that is conducive to free and fair elections, then I don’t understand something about freedom.” The Kiev government and its U.S. and European Union allies blame Russia for the unrest in Ukraine ’s easternmost regions. Pro-Russian separatists there were excluded from national unity talks that began yesterday in the capital to ease tensions as a May 25 presidential vote looms. U.S. and EU leaders say they’ll tighten […]

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Climate change poses threat to national security, report says

Retired U.S. military leaders say armed forces should create long-term plan to counter effects of climate change The effects of climate change — including extreme weather, drought and sea-level rise — pose a serious threat to U.S. national security, according to a report released Wednesday. Because of the effects, the country’s already "stretched" military capacity is being put to the test, it said. “National Security and the Threat of Climate Change,” written by 12 retired military leaders and published by the Center for Naval Analyses, a national security analysis nonprofit, said the U.S. armed forces should create a 30- to 40-year plan to address the risks. “It is not possible to discuss the future of national and international security without addressing climate change,” retired Air Force Gen. Donald Hoffman  said Wednesday  in a press release. “Food shortages, droughts, floods — all directly tied to climate change will be catalysts […]

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De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar

Is the petrodollar monopoly about to be shattered?  When U.S. politicians started slapping economic sanctions on Russia, they probably never even imagined that there might be serious consequences for the United States. But now the Russian media is reporting that the Russian Ministry of Finance is getting ready to pull the trigger on a “de-dollarization” plan.  For decades, virtually all oil and natural gas around the world has been bought and sold for U.S. dollars.  As I will explain below, this has been a massive advantage for the U.S. economy.  In recent years, there have been rumblings by nations such as Russia and China about the need to change to a new system, but nobody has really had a big reason to upset the status quo.  However, that has now changed.  The struggle over Ukraine has caused Russia to completely reevaluate the financial relationship that it has with the […]

Posted On : Published By : Tom Whipple
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Crude Holds Gains Ahead of U.S. Inventories

Crude-oil prices Wednesday built on the sharp gains made in the previous session, ahead of U.S. stockpile data due later in the session. Brent crude for June delivery rose 0.4% to $109.81 a barrel on ICE Futures Europe, its highest price since April 29. "The Brent move may have been prompted by the deteriorating situation in Ukraine and/or the constant failure of promises of port re-openings in Libya to come through," said David Hufton from brokerage PVM. The oil market is watching the situation in Ukraine for signs that sanctions will be extended into Russia’s energy sector. A reported restart of long-shut Libyan oil fields on Tuesday was met with skepticism. U.S. crude-oil futures were also up 0.4%, at $102.18 a barrel on the New York Mercantile Exchange. The price had risen above $102 Tuesday for the first time since April 29 on news that the U.S. government is […]

Posted On : Published By : Tom Whipple
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WTI Rises for Third Day as Cushing Stockpiles Drop

West Texas Intermediate advanced for a third day, the longest rising streak in more than three weeks, after an industry report showed crude stockpiles fell at the biggest U.S. oil-storage hub. Brent gained as an ambush of Ukrainian government troops fanned tension with Russia . Futures climbed as much as 0.5 percent in New York. Crude inventories at Cushing, the delivery point for WTI, shrank by 590,000 barrels last week, the American Petroleum Institute said yesterday. Supplies nationwide were probably unchanged at 397.6 million, near a record high, a Bloomberg News survey showed before Energy Information Administration data today. Ukraine is fighting an “undeclared war” with Russia, according to Acting Defense Minister Mykhaylo Koval. “Prices have gained momentum from reports showing a draw-down in Cushing inventories,” Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London, said by e-mail. The declines are “taking Cushing […]

Posted On : Published By : Tom Whipple
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Oil gains on reports US may lift oil export ban

The price of U.S. oil rose Wednesday following reports that Washington is studying whether to lift a longstanding ban on crude oil exports. Benchmark U.S. crude for June delivery was up 33 cents to $102.03 a barrel at 0550 GMT on the New York Mercantile Exchange. On Tuesday, it jumped $1.11 to $101.70 a barrel, its highest close since April 24. Department of Energy Secretary Ernest Moniz told reporters in Seoul, South Korea that the government was reviewing the issue of crude oil exports, given the mismatch between rising supplies of crude and the U.S. refining capacity, The Wall Street Journal reported. On Wednesday, the Energy Department is expected to report that U.S. crude oil supplies fell last week by 1.5 million barrels, according to a survey of analysts by Platts. It would be the second weekly decline since the nation’s supply of oil reached a record 399.4 million […]

Posted On : Published By : Tom Whipple
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Natural Gas Hits 7-Week Low Due to Abundant Supplies

Natural-gas prices hit their longest losing streak since November as anticipation of healthy supplies pushed prices down for the fifth straight session. Prices for the front-month June contract fell 7.6 cents, or 1.7%, to $4.358 a million British thermal units on the New York Mercantile Exchange. Prices are now down 9.2% since last Wednesday and at their lowest close since April 1. Traders have been selling steadily after inventory additions reported last Thursday beat the market’s expectations for a third straight week. The selling was forced by investors exiting long positions, or bets that prices would rise. A steadily declining prices forced sales to limit losses, analysts said. "People are taking a bath on those long positions, so speculators have to get out of them," said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston. "This is the optimal bearish condition […]

Posted On : Published By : Tom Whipple
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OPEC Update with April MOMR Data Plus Eagle Ford

The new OPEC Monthly Oil Market Report  is out with the April Crude only data. No real big movers. Total OPEC crude production was up 131 kb/d but that was after March production had been revised down 148 kb/d. OPEC 12 crude only production stood at 29,593,000 bp/d. That is just over 2 million bp/d from their recent peaks in July 2008 and April 2012. Iraq was the only big mover, up 102 kb/d from last month. Saudi Arabia was up 23 kb/d but that was after March production had been revised down by 153 kb/d. Updated Charts of all 12 OPEC nations plus a couple of others can be found on the OPEC Charts page. The EIA has just published their latest Drilling Productivity Report . That report tries to guess where all LTO production will be through June. It seems that they have decided to revise their […]

Posted On : Published By : Tom Whipple
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Kurds could opt out of next Iraqi government: president

The president of Iraqi Kurdistan, Masoud Barzani, said Iraq had been led in an authoritarian direction by Prime Minister Nuri al-Maliki and threatened to end the oil-rich autonomous region’s participation in the federal government. Iraq held elections on April 30. The results have yet to be announced but Kurdish support is crucial to Maliki’s ambitions for a third term. The incumbent premier’s rivals, both Shi’ite and Sunni, are hoping Barzani and the Kurds will help them thwart Maliki’s bid to stay in office for four more years. Barzani said Kurdish parties would meet as soon as the results of the election were officially announced, expected in the next few days, to decide how to proceed in negotiations over the government formation. The talks could drag on for months and Barzani declined to give any more details of the Kurds’ […]

Posted On : Published By : Tom Whipple
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Iraqi Kurdistan gambles on oil and Baghdad's benevolence

Iraqi Kurdistan is risking the loss of its share of Iraq’s national budget to secure greater independence and the right to manage its own oil. Although oil exports could net the Kurdistan Regional Government a healthy revenue stream, for now it cannot plug the gap if Baghdad continues to withhold the 17 percent of the national budget that it provides to Kurdistan every year. That revenue makes up the largest chunk of the Kurdish region’s budget, even though the Kurds say they regularly receive much less than promised.  Baghdad began withholding that money in January, and the KRG has already had to delay paying public sector workers’ wages – April’s paychecks still haven’t arrived, and some workers have gone on strike. Officials say they will have to dip into savings. The Kurds, spread across Turkey, Iran, Iraq, and Syria, have long faced persecution and clamored for greater independence in each […]

Posted On : Published By : Tom Whipple
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Iraqi Kurdistan gambles on oil and Baghdad’s benevolence

Iraqi Kurdistan is risking the loss of its share of Iraq’s national budget to secure greater independence and the right to manage its own oil. Although oil exports could net the Kurdistan Regional Government a healthy revenue stream, for now it cannot plug the gap if Baghdad continues to withhold the 17 percent of the national budget that it provides to Kurdistan every year. That revenue makes up the largest chunk of the Kurdish region’s budget, even though the Kurds say they regularly receive much less than promised.  Baghdad began withholding that money in January, and the KRG has already had to delay paying public sector workers’ wages – April’s paychecks still haven’t arrived, and some workers have gone on strike. Officials say they will have to dip into savings. The Kurds, spread across Turkey, Iran, Iraq, and Syria, have long faced persecution and clamored for greater independence in each […]

Posted On : Published By : Tom Whipple
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Al Qaeda's Iraqi offshoot gains ground in Syria amid rebel infighting

A rogue Iraqi offshoot of al Qaeda is now killing more rival al Qaeda fighters every week in Syria than President Bashar al-Assad’s forces as infighting intensifies among opposition gunmen. Clashes this year between al Qaeda’s official Syria wing, the Nusra Front, and the franchise’s disowned offspring, The Islamic State in Iraq and the Levant (ISIL), have killed hundreds of fighters and displaced tens of thousands of civilians. Nusra lost control of Raqqa – the only rebel-held city in Syria – to ISIL fighters in January and intense fighting over the weekend resulted in ISIL making gains in the eastern province of Deir al-Zor, Syria’s oil region. If ISIL can take the province, it will control territory across Syria and into Iraq. Al Qaeda’s leader, Ayman al-Zawahiri, has repeatedly tried to rein in ISIL and this month he appealed to the group to return to Iraq […]

Posted On : Published By : Tom Whipple
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Al Qaeda’s Iraqi offshoot gains ground in Syria amid rebel infighting

A rogue Iraqi offshoot of al Qaeda is now killing more rival al Qaeda fighters every week in Syria than President Bashar al-Assad’s forces as infighting intensifies among opposition gunmen. Clashes this year between al Qaeda’s official Syria wing, the Nusra Front, and the franchise’s disowned offspring, The Islamic State in Iraq and the Levant (ISIL), have killed hundreds of fighters and displaced tens of thousands of civilians. Nusra lost control of Raqqa – the only rebel-held city in Syria – to ISIL fighters in January and intense fighting over the weekend resulted in ISIL making gains in the eastern province of Deir al-Zor, Syria’s oil region. If ISIL can take the province, it will control territory across Syria and into Iraq. Al Qaeda’s leader, Ayman al-Zawahiri, has repeatedly tried to rein in ISIL and this month he appealed to the group to return to Iraq […]

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Cairo: BP to invest big in Egypt

British energy company BP aims to invest about $1.5 billion in the Egyptian oil and gas sector, the Egyptian government said. State-run media in Egypt said Monday representatives from BP met Prime Minister Ibrahim Mahlab and Oil Minister Sherif Ismal in Cairo to discuss work in the Egyptian energy sector. The government said the delegation welcomed Egyptian efforts to overcome "obstacles facing companies working on the Egyptian market." BP’s counterpart, BG Group, expressed concern about its future operations in Egypt, citing continued diversions of natural gas to the domestic market. No cargoes of liquefied natural gas left Egypt during the first quarter of 2014 and the company said it produced 66,000 barrels of oil equivalent per day in Egypt, down 35 percent from fourth quarter 2013. The Egyptian government said BP is investing $1.5 billion in the oil and gas sector during the second half […]

Posted On : Published By : Tom Whipple
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Libyan oil operations closed since March, OMV says

Operations in Libya for Austrian energy company OMV were curtailed sharply by security issues, CEO Gerhard Roiss said Tuesday. OMV said its production for first quarter 2014 was 311,000 barrels oil equivalent higher year-on-year. Roiss said in a statement production from his company’s portfolio in Norway helped offset losses from North Africa. "Libyan operations … were again impacted by security issues and production has been shut in since mid-March," he said in a statement . "We took several steps to further strengthen our upstream portfolio." OMV said the situation in Libya remains "very difficult to predict." Optimism over a rebound in the Libyan oil sector increased last month when the Libyan National Oil Company announced it lifted an emergency declaration on oil operations at its Zueitina terminal in the east of the country. OMV, however, said production from its operations in Libya has been shut […]

Posted On : Published By : Tom Whipple