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WTI Oil Rises as U.S. Jobs Gain Signals Stronger Economy

West Texas Intermediate crude climbed as U.S. payrolls exceeded their pre-recession peak, signaling greater fuel demand. Brent slipped as world leaders at D-Day commemorations in France discussed the Ukraine crisis. Futures rose 0.2 percent in New York after the Labor Department said the number of jobs grew 217,000 in May, following a 282,000 gain in April. Russian President Vladimir Putin met with U.S. President Barack Obama and held his first talks with Ukraine’s new leader, Petro Poroshenko, as France used the 70th anniversary of the Allied landings in Normandy to seek a breakthrough in the Ukraine crisis. “The jobs number is being perceived as a positive sign for the overall economy and bullish for demand,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “We’ll be keeping an eye on events in France today and see if the leaders and officials gathered […]

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Oil Rangebound As Market Awaits US, China Data

Crude-oil futures moved in a narrow price range in Asian trading hours Friday as investors look to today’s U.S. non-farm payrolls report and the weekend’s Chinese trade data for cues. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $102.53 a barrel at 0536 GMT, up $0.05 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange rose $0.11 to $108.90 a barrel. Brent crude added to overnight gains after the European Central Bank cut interest rates and announcing additional stimulus measures, but any major upside is limited by the region’s depressed oil demand. Later Friday, financial markets will focus on the U.S. non-farm payrolls report for May. Over the weekend, Chinese trade data will provide the level of the country’s oil imports, which are likely to be affected by stockpiling and seasonal maintenance at the large refineries operated […]

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Natural Gas Hits One-Month High on Demand Expectations — Update

Natural-gas prices rose to a fresh one-month high Friday on expectations of robust demand for the fuel amid hotter-than-average weather this month. Natural gas for July delivery settled up 0.9 cent, or 0.2%, at $4.710 a million British thermal units on the New York Mercantile Exchange, the highest settlement since May 7. Prices rose 3.7% this week, despite government storage data showing a larger-than-expected increase in supplies. Though producers added more natural gas to storage than analysts had anticipated, supplies are still 37% below the five-year average for the week. Natural-gas stocks were heavily drawn down this winter amid record demand for the heating fuel. Larger-than-average injections will still be needed in the coming weeks and months to replenish supplies to average levels before next winter. "Injections are big but they’re not astronomical — and we’ve […]

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Russia's Lukoil reviews Iraqi pipeline options

Russian energy company Lukoil said it was including pipeline construction in the terms of its contract for the West Qurna-2 oil field in Iraq. Lukoil President Vagit Alekperov met in Baghdad with Iraqi Oil Minister Abdul Kareem al-Luaibi to sign contract revisions. The addendum for the so-called Tuba-Fao pipeline system calls for the construction of two 75-mile long pipelines and associated infrastructure. The system will link the oil field to an export terminal in Basra, situated along the coast of the Persian Gulf. "The construction of the Tuba-Fao Pipeline will provide for a direct connection between the West Qurna-2 field and the country’s largest export terminal, creating opportunities for further production growth from the field," Alekperov said in a statement Thursday. First oil was produced from West Qurna-2 in March. It has since reached a daily production reach of 120,000 barrels and has an estimated 34 billion barrels worth […]

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Russia’s Lukoil reviews Iraqi pipeline options

Russian energy company Lukoil said it was including pipeline construction in the terms of its contract for the West Qurna-2 oil field in Iraq. Lukoil President Vagit Alekperov met in Baghdad with Iraqi Oil Minister Abdul Kareem al-Luaibi to sign contract revisions. The addendum for the so-called Tuba-Fao pipeline system calls for the construction of two 75-mile long pipelines and associated infrastructure. The system will link the oil field to an export terminal in Basra, situated along the coast of the Persian Gulf. "The construction of the Tuba-Fao Pipeline will provide for a direct connection between the West Qurna-2 field and the country’s largest export terminal, creating opportunities for further production growth from the field," Alekperov said in a statement Thursday. First oil was produced from West Qurna-2 in March. It has since reached a daily production reach of 120,000 barrels and has an estimated 34 billion barrels worth […]

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Iraq dislodges insurgents from city of Samarra with airstrikes

Iraqi helicopters bombed the city of Samarra after insurgents overran parts of it early on Thursday, bringing them within striking distance of a Shi’ite shrine the destruction of which in a 2006 attack unleashed a bitter sectarian war. The offensive is part of an escalating conflict between Iraq’s Shi’ite Muslim-led government and Sunni Islamist militants who have been regaining momentum in the past year, particularly in the west of the country bordering Syria. The Iraqi army and SWAT forces had regained control in Samarra, killing dozens of insurgents and forcing the rest to retreat from the city after they moved in overnight, the Samarra Operations Command said. Militants advanced on Samarra in pick-up trucks, raiding checkpoints along the way and blowing up a police station in an attack that killed several policemen, security sources said. After entering the city from the east and west, they […]

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Premier Barzani Denies Oil Exports a Prelude to Kurdish Independence

Kurdistan Region Prime Minister Nechirvan Barzani denied that Kurdish oil exports were a prelude to seeking independence from Iraq, saying Erbil only wanted to ensure it receives the revenues promised to it under the constitution. In a speech to the Kurdistan parliament on Wednesday, Barzani blamed Baghdad for a current row over independent oil exports by Erbil, saying that many problems could have been avoided if the central government had reached an agreement on sharing the revenues from oil sales. “We don’t see this (oil exports) as a way for the independence of Kurdistan. Indeed it is not so!” declared Barzani, who is officially prime minister of a caretaker government until a new Kurdistan Regional Government (KRG) is announced. “We want to implement our constitutional rights within Iraq,” he said, answering questions from […]

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Iraq: Key Shi’ite coalitions urge withdrawal of Maliki’s bid for third premiership

Incumbent prime minister claims to have secured a majority to form government Iraqi Prime Minister Nuri Al-Maliki casting his vote at a polling station in Baghdad’s fortified Green Zone on April 30, 2014. (AFP Photo/Ali Al-Saadi) Baghdad, Asharq Al-Awsat —Rival Shi’ite political blocs have reiterated their strong opposition to Iraqi Prime Minister Nuri Al-Maliki’s bid for a third term in office, amid claims by each side that they secured the majority required to form a government. The National Alliance—comprised of the leading Shi’ite forces, the Islamic Supreme Council of Iraq (ISCI), the Sadrist Movement, the National Congress and the Reform Trend—has urged the State of Law coalition to withdraw the nomination of its leader, Nuri Al-Maliki, to head the new government, according to a statement read out by the coalition’s spokesman, Ibrahim Bahr Al-Ulloum, following a meeting by coalition leaders in Baghdad two days ago. Maliki’s coalition came first […]

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Libya: Oil Output Drops Further

Libya has much of the world’s highest quality crude oil. But since the fall of long-time leader Moammar Gadhafi in 2011, production has been sporadic and on the decline. After assessing Libya’s political instability, violence and armed groups battling for control, John Kingston summed up prospects for the country’s oil industry this way: "There’s essentially no good news there." Kingston is director of news for Platts, which provides information on the global energy, petrochemical, metals and agriculture industries. He said during Gadhafi’s rule, Libya produced about 1.6-million barrels a day. "Their quality of crude is extremely high. So, for production of transportation fuels, like gasoline and diesel, if you lose a barrel out of Libya, you have to produce more than a barrel of heavier crude somewhere else to make up for it. Not all barrels are alike. And a Libyan barrel is more equal than […]

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Report: Exxon May Take Over as Kashagan Operator

U.S. oil major Exxon Mobil is in line to take over as operator of the giant Kashagan field in an attempt to fix the beleaguered $50 billion project offshore Kazakhstan, industry publication Nefte Compass reported on Friday. Discussions are continuing but Exxon could be appointed as soon as at the end of June, the newsletter quoted a senior Kazakh official as saying. Exxon was not immediately available for comments. Italy’s Eni was given the job of operating the project in 2001. It later lost its role as the sole lead operator following major delays and cost overruns. Production finally started last September but was halted in early October after the discovery of gas leaks in the pipeline network. Oil output may now not restart until early 2016, Kazakh Oil and Gas Minister Uzakbai Karabalin said in May, urging foreign partners to start replacing leaky […]

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Indians riot as heat wave prompts power cuts

Thousands of people enraged by power cuts during an extreme heat wave have been rioting across northern India, setting electricity substations on fire and taking power company officials hostage, officials said Saturday. The impoverished state of Uttar Pradesh has never had enough power for its 200 million people – about the population of Brazil – and many receive only a few hours a day under normal conditions, while 63 percent of homes have no electricity access at all. But recent temperatures that soared to 117 degrees Fahrenheit (47 Celsius) have caused power demand to spike at 11,000 megawatts – far higher than the state’s 8,000 MW capacity – triggering blackouts that shut down fans, city water pumps and air conditioners. Thousands of people stormed an electricity substation Friday near the state capital of Lucknow, ransacking offices and taking several workers hostage for 18 hours until […]

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Second Natural Gas Pipeline to Link Russia, China

Russia and China could soon sign another major contract for gas pipeline construction after inking a landmark 30-year gas deal in Shanghai during Russian President Vladimir Putin’s state visit in May, a senior Russian official said Wednesday. “Given the pace of Chinese economic growth … with an agreement on the compromise (gas) price formulas having been achieved, it is very likely that a contract could be signed in the very near future for the construction of a western route (gas pipeline) that will fully cross the Siberian Federal District,” Russian Presidential Administration Chief Sergei Ivanov told reporters in the Siberian city of Novosibirsk. He said the contract on the western route, also called the Altai Natural Gas Pipeline, might be “less capital-intensive” than the eastern one, but “it’s no doubt going to cost us tens of billions of dollars,” ITAR-Tass news agency reported. The official said this project, like […]

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China president vows to limit population growth of largest cities

Chinese President Xi Jinping today promised to impose strict limits on population growth in the country’s largest cities, state media reported, as authorities seek to push migration towards smaller urban centres. Decades of rapid urbanisation in China have seen the proportion of its urban population swell to more than 50 per cent, creating massive conurbations such as Beijing, Shanghai and Guangzhou. Authorities will “strictly control the size of the population in especially large cities”, Xi said at a meeting of a Communist Party policy group, the official Xinhua news agency reported. Migration in China has for decades been limited by the country’s “hukou,” household registration system, which denies countryside residents equal access to health, education and housing benefits when they move to cities. But Xi said urban registration restrictions would be “fully liberalised” in towns and small cities, while relaxing restrictions in middle-sized cities. The report did not provide […]

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China's Nine Dash Line And The Law Of The Sea

Territorial disputes over tiny islands and reefs in the South China Sea are poisoning relations between China and its neighbours in Southeast Asia. "In recent months, China has undertaken destabilising, unilateral actions asserting its claims in the South China Sea," U.S. Defense Secretary Chuck Hagel told an audience in Singapore last month. "(China) has restricted access to Scarborough Reef, put pressure on the long-standing Philippine presence at the Second Thomas Shoal, begun land reclamation activities at multiple locations, and moved an oil rig into disputed waters near the Paracel Islands," Hagel complained at the Shangri-La Dialogue. The defense secretary’s speech drew an angry response from China, which rebuked him for making "harsh, provocative" comments – signalling a further deterioration in the already strained relationship between the two countries. According to Hagel, […]

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China’s Nine Dash Line And The Law Of The Sea

Territorial disputes over tiny islands and reefs in the South China Sea are poisoning relations between China and its neighbours in Southeast Asia. "In recent months, China has undertaken destabilising, unilateral actions asserting its claims in the South China Sea," U.S. Defense Secretary Chuck Hagel told an audience in Singapore last month. "(China) has restricted access to Scarborough Reef, put pressure on the long-standing Philippine presence at the Second Thomas Shoal, begun land reclamation activities at multiple locations, and moved an oil rig into disputed waters near the Paracel Islands," Hagel complained at the Shangri-La Dialogue. The defense secretary’s speech drew an angry response from China, which rebuked him for making "harsh, provocative" comments – signalling a further deterioration in the already strained relationship between the two countries. According to Hagel, […]

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A Cleaner Way Forward in the Eagle Ford Shale Play

With officials of the state of Texas earnestly examining the environmental impact of drilling operations, oil and gas companies are eagerly looking for new ways to make their drilling operations and consequent waste disposal more environmentally acceptable. New attention is being focused on potential contamination from drill cuttings and the oil-based drilling fluids that convey them. This is especially true in the Eagle Ford shale play, where high-performance water-based drilling fluids are emerging as a strong alternative to conventional oil based mud alternatives (OBM). New innovations in water-based fluid formulations allow engineers to provide comparable or even better performance than OBM, while mitigating the need for drill cutting disposal. Drill cuttings produced with conventional OBM must be disposed of via off-site land farming methods, as owners of the properties on which drilling has taken place typically forbid operators from burying the drilling waste on their land. This process results […]

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Canada's Surprise Light Oil Boom Delights Oil Sands Producers

Canada is enjoying an unexpected boom in production of ultra-light crude known as condensate, defying long-held predictions of dwindling supply. This surprising bounty from one corner of Alberta, better known as the home to Canada’s vast tar-like oil sands reserves, is a boon for firms like Vermilion Energy Inc and Chevron who have built up positions in the Duvernay, now hotly tipped as one of North America’s most exciting shale plays with vast reserves waiting to be tapped. It also is fuelling hope of cost relief for traditional heavy oil sands companies such as Cenovus Energy Inc, who in the past have paid premiums of up to $25 a barrel to buy imported condensate used to dilute their viscous oil sands production so that it can flow through pipelines. The change in outlook has been abrupt. A year ago, the Canadian Association of […]

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Canada’s Surprise Light Oil Boom Delights Oil Sands Producers

Canada is enjoying an unexpected boom in production of ultra-light crude known as condensate, defying long-held predictions of dwindling supply. This surprising bounty from one corner of Alberta, better known as the home to Canada’s vast tar-like oil sands reserves, is a boon for firms like Vermilion Energy Inc and Chevron who have built up positions in the Duvernay, now hotly tipped as one of North America’s most exciting shale plays with vast reserves waiting to be tapped. It also is fuelling hope of cost relief for traditional heavy oil sands companies such as Cenovus Energy Inc, who in the past have paid premiums of up to $25 a barrel to buy imported condensate used to dilute their viscous oil sands production so that it can flow through pipelines. The change in outlook has been abrupt. A year ago, the Canadian Association of […]

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Marcellus Remains Driver of US Shale Gas Revolution

The Marcellus shale play remains the driving force behind the North America shale gas revolution , with current production of 12 Bcf/d surpassing production from any shale gas play worldwide, said Jeanie Oudin, Wood Mackenzie Lower 48 analyst who focuses on the Northeast, Rockies and West Coast, at a media briefing Wednesday in Houston. Wood Mackenzie anticipates production to surpass 20 Bcfe/d in 2018, attributing the enormous growth to increasingly productive wells and operators achieving better than expected results through optimal completion methods. The Utica shale play in eastern Ohio also is garnering a lot of attention and capital from the oil and gas industry. Current production from the play is only 1 Bcf/d, but Wood Mackenzie sees production rising above 5 Bcf/d in 2018 as operators apply lessons they’ve learned in the Marcellus to the Utica. These lessons include pairing with midstream partners to ensure that takeaway capacity […]

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US shale boom is over, energy revolution needed to avert blackouts

UK officials have claimed Britain needs fracking for industry to ‘prosper’ and ‘the economy to grow’. Increasing data challenges these claims. Photograph: Brennan Linsley/AP I hate to say I told you so, but… In 2012, the International Energy Agency (IEA) forecast that the US would outpace Saudi Arabia in oil production thanks to the shale boom by 2020, becoming a net exporter by 2030. The forecast was seen by many as decisive evidence of the renewal of the oil age, while informed detractors were at best ignored, at worst ridiculed. Among my many reports exposing the geological and economic fallacies behind the shale boom narrative are this , this , this and this . Even here on the Guardian, one headline declared the IEA report shows that " peak oil idea has gone up in flames ." But the IEA’s latest assessment has proved the detractors right all along. […]

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Baker Hughes: US drilling rig count decreases to 1,860

The US drilling rig count dropped 6 units to 1,860 rigs working during the week ended June 6, Baker Hughes Inc. reported. The decline follows BHI’s report that the average US rig count for May was 1,859, 24 more than April’s count and 92 more than in May 2013. During the week, land rigs declined 5 units to 1,787 and offshore rigs fell 2 units to 58, while rigs drilling in inland waters edged up a unit to 15. Gas rigs decreased 6 units to 320. Unchanged from a week ago were oil rigs at 1,536 and rigs considered unclassified at 4. Directional drilling rigs jumped 9 units to 221. Horizontal drilling rigs edged down a unit to 1,250. Canada’s rig count, meanwhile, increased 16 units to 214, a gain of 62 from this week a year ago. A 17-unit spike in oil rigs to 122 was nicked […]

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Canada Aims to Sell Its Oil Beyond U.S.

The proposed Keystone XL pipeline would ship from oil fields in Alberta, Canada (above) to the Gulf of Mexico, but the project remains uncertain. The Washington Post/Getty Images Last fall, Canadian oil producer Husky Energy Inc. sent a batch of crude on a journey to India. It was just a drop in a sea of global oil transactions, but a step toward reshaping North American energy trading. The million-barrel shipment to Indian Oil Corp. , described by Husky as a test sale, foreshadowed what Canadian producers hope will become many new overseas markets for their oil. "We are doing it opportunistically to have the wheels greased" for more exports far afield if they become feasible, said Asim Ghosh, Husky’s chief executive. Recently, Husky also shipped a batch of oil to Italy’s Eni SpA. While the U.S. debates whether to loosen a decades-old prohibition on shipping its oil overseas, Canada […]

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US coal stockpiles stand at 126 million st, down 32%: Bentek

Washington (Platts)–6Jun2014/440 pm EDT/2040 GMT US coal stockpiles fell to 126 million st for the week ending Friday, down 32% from the five-year average, Bentek Energy said. Bentek, a unit of Platts, said lower coal production and higher coal consumption during the week meant US coal stockpiles have dipped for the second week in a row. At this time last year, US coal stockpiles totaled 176 million st. The decline comes as utilities are also face depleted natural gas inventories, though storage is building. Working gas in storage totaled roughly 1.5 Tcf for the week ending June 6, but inventories are still 37% below the five-year average. Bentek estimates US coal production declined 3% for the week ending Friday to 18.4 million st, while coal consumption increased 6% to 18.3 million st. Coal consumption increased all regions, with the largest increases in ERCOT, PJM and the Southeast. –Andrew Moore, […]

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Increases in U.S. crude oil production come from light, sweet crude from tight formations

U.S. crude oil production has grown rapidly in recent years , primarily from light, sweet crude (a characteristic of crude quality, as measured by API gravity and sulfur content) from tight resource formations. Roughly 96% of the 1.8-million-barrel per day (bbl/d) growth in production from 2011 to 2013 consisted of light sweet grades with API gravity of 40 or above and sulfur content of 0.3% or less. EIA’s new forecast of U.S. crude production by quality indicates that the U.S. supply of light, sweet crude will continue to outpace that of medium and heavy crude through 2015. More than 60% of EIA’s forecasted production growth for 2014 and 2015 consists of sweet grades with API gravity of 40 or above. The growth in this particular type of crude oil (as well as many forecasts for a continuation of this trend) has sparked discussion of how rising crude oil volumes […]

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Oil-by-rail sets U.S. record

More crude oil was delivered on the U.S. rail network during first quarter 2014 than any other quarter in history, the Association of American Railroads said. AAR said 110,164 carloads of crude oil were shipped during the first quarter of the year. "[That’s] 1.4 percent more than in the fourth quarter of 2013 and, by 1,559 carloads, the most ever in any quarter," the association said in a statement Thursday. "In the first quarter of 2014, crude oil accounted for 1.6 percent of total originated carloads for U.S. rail traffic." The U.S. Energy Information Administration, the statistical arm of the Energy Department, said in its latest monthly report total U.S. crude oil production averaged 8.3 million barrels per day in April, the highest monthly average since March 1988. By 2015, the average should reach 9.2 million bpd, the highest level in more than 40 years. The increase in crude […]

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Peak Oil: Facts To Keep In Mind

Good news sells, and doesn’t rock any boats, but policy makers and politicians comforted by rosy forecasts are unable to understand the risks and properly prepare the country for long-term energy sustainability…. A more prudent, conservative US oil forecast would look very different. It would consider that, although surprises are always possible, the most productive fossil fuel resources do tend to be discovered first and produced first. It would take note of the fact that production in fracked wells declines extremely quickly, requiring an accelerating drilling treadmill to maintain—let alone grow—production, with associated collateral environmental impacts. It would assume that most tight oil plays producible at current oil prices have already been discovered and put into production, and that major new resources—if they exist—are unlikely to be forthcoming unless there is a significant rise in oil prices. In short, the forecast would be based on actual data from existing […]

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Crude Oil Prices, Opec And Other Peak Oil Stories

Commodities / Crude Oil When In Doubt, Worry About Oil One of the starkest oil worry pot pourri presentations – ruthlessly mingling fact, fiction and fantasy (but pretending its all fact) – can be had here http://energypolicy.columbia.edu… Steve Kopits is the Managing Director of a known and still-in-business oil and energy forecasting firm, Douglas-Westwood. Both Kopits and D-W would appear to be (still) employable, but for how much longer we can only guess. The Kopits presentation is showcased by the Dublin sustainable economy and development firm FEASTA, with an even more ghastly presentation by David Knight called ‘Peak Oil and Climate Change – Two Sides of the Same Coin?’ FEASTA says that, as it perceives things,  Global Warming and Peak Oil are the two largest threats to the planet, human life and civilization. To be sure this inevitably includes oil prices. Where is any so-called “peak oil induced” takeoff […]

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UN pushes sustainable energy – Peak Oil

On World Environmental Day, United Nations (UN) Secretary-General Ban Ki-moon underscored that sustainable energy is the golden thread that links poverty eradication, equitable economic growth and a healthy environment. Speaking today (5 June)at the first annual Sustainable Energy for All forum, Ban pointed out three goals for 2030: “universal access to modern energy services. Double the global rate of improvement in energy efficiency. Twice as much renewable energy in the global energy mix. Our efforts so far show that these objectives are realistic. Our focus now must be to achieve them.” He said this can bring us closer to our goals of universal energy and a life of dignity and opportunity for all. Ban said “along with its campaign on energy and women’s and children’s health, the Decade can bring us closer to our goals of universal energy and a life of dignity and opportunity for all. Modern energy […]

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Modeling Peak Oil and the Geological Constraints on Oil Production

Geological constraints have the potential to substantially increase the future oil price.” Wow. Talk about the obvious. Northwest Resident on Fri, 6th Jun 2014 3:32 pm  “…geological constraints have the potential to substantially increase the future oil price…” And economic constraints have the potential to substantially sink the future oil price via demand destruction because there is a point at which very few will be able to afford that increased future price. Salaries and government hand-outs don’t increase to keep pace with the rising price of oil. Just exactly the opposite. The higher the price of oil gets, the more businesses can’t afford to continue operations, the more people lose their jobs or don’t get raises, and the less tax revenue the government collects to redistribute to the poor and unemployed. shortonoil on Fri, 6th Jun 2014 4:02 pm  “Our approach […]

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WTI Crude Swings Before Monthly U.S. Payrolls Data; Brent Steady

West Texas Intermediate crude swung between gains and losses before data that may signal strength in the economy in the U.S., the world’s biggest oil consumer. Brent was steady in London. Futures were little changed in New York , poised for a second weekly decline. Payrolls probably rose by 215,000 in May, a Bloomberg News survey shows before a Labor Department report today. That compares with a 288,000 increase in April. Production in Libya , a member of the Organization of Petroleum Exporting Countries, was stable at 171,000 barrels a day as of yesterday, according to National Oil Corp. “Today’s most important economic key number will be this afternoon’s U.S. employment status with the nonfarm payroll and unemployment rate data,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark , said in a report. “Expect volatility in the market around these numbers.” WTI for July delivery […]

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Oil Rangebound As Market Awaits US, China Data

Crude-oil futures moved in a narrow price range in Asian trading hours Friday as investors look to today’s U.S. non-farm payrolls report and the weekend’s Chinese trade data for cues. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $102.53 a barrel at 0536 GMT, up $0.05 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange rose $0.11 to $108.90 a barrel. Brent crude added to overnight gains after the European Central Bank cut interest rates and announcing additional stimulus measures, but any major upside is limited by the region’s depressed oil demand. Later Friday, financial markets will focus on the U.S. non-farm payrolls report for May. Over the weekend, Chinese trade data will provide the level of the country’s oil imports, which are likely to be affected by stockpiling and seasonal maintenance at the large refineries operated […]

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Tug of War Between Natural-Gas Bulls and Bears Intensifies

U.S. data on the amount of natural-gas in storage usually sets a direction for the market. Lately, though, the tug-of-war between natural-gas bulls and bears has been particularly fraught. In three of the past four weeks, including Thursday, the amount of natural gas added to what’s in storage has come in a bit above analyst consensus. The initial market reaction was predictable: Prices of natural-gas futures immediately fell. But then traders in the market had a rethink, and then started to buy again, taking prices higher. Driving the recovery in prices after the initial drop is the idea that, while gas stockpiles are being replenished at a slightly faster-than-expected pace after being depleted last winter, it isn’t clear that they are increasing fast enough. Bentek Energy in Colorado just said Tuesday it revised down its projection for how much natural gas will be in […]

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Natural-Gas Prices Dip on Year's Largest Production Surplus

By Timothy Puko NEW YORK–Natural-gas futures dipped briefly Thursday morning after the federal government reported the largest gas surplus of the year, but not the record some traders wanted. Producers added 119 billion cubic feet of gas to storage for the week ended May 30, the U.S. Energy Information Administration said. That is 2 bcf more than what 21 traders, brokers and analysts forecast in a Wall Street Journal survey. Natural gas for July delivery dropped as much as 5 cents in the minutes after the data release. It climbed back up and recently traded up 0.2 cent, or 0.04%, to $4.642 a million British thermal units on the New York Mercantile Exchange. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that drained them to 11-year lows this winter. The market has been inching up this week in part because stockpiles had […]

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Natural-Gas Prices Dip on Year’s Largest Production Surplus

By Timothy Puko NEW YORK–Natural-gas futures dipped briefly Thursday morning after the federal government reported the largest gas surplus of the year, but not the record some traders wanted. Producers added 119 billion cubic feet of gas to storage for the week ended May 30, the U.S. Energy Information Administration said. That is 2 bcf more than what 21 traders, brokers and analysts forecast in a Wall Street Journal survey. Natural gas for July delivery dropped as much as 5 cents in the minutes after the data release. It climbed back up and recently traded up 0.2 cent, or 0.04%, to $4.642 a million British thermal units on the New York Mercantile Exchange. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that drained them to 11-year lows this winter. The market has been inching up this week in part because stockpiles had […]

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Natural Gas at Highest Price in Nearly a Month as Storage Addition Fails to Impress Traders

By Timothy Puko NEW YORK–Natural-gas futures hit their highest closing price since May 7 after the federal government reported the largest gas surplus of the year, but not the record some traders wanted. Natural gas for July delivery settled up 6.1 cents, or 1.3%, to close at $4.701 a million British thermal units on the New York Mercantile Exchange. It was the fourth straight day of gains, with prices up 3.5% for the week. Producers added 119 billion cubic feet of gas to storage for the week ended May 30, the U.S. Energy Information Administration said. That is 2 bcf more than what 21 traders, brokers and analysts forecasted in a survey by The Wall Street Journal, but not enough to impress investors. The EIA reported stockpiles are still 37.4% below the five-year average for this week of the year. With gas utilities needing to buy to refill storage […]

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NGSA: US gas prices to feel slight upward pressure this summer

06/05/2014 US natural gas likely will feel modest upward pressure this summer from levels a year earlier when Henry Hub prices averaged $3.77/MMbtu, the Natural Gas Supply Association said in its 2014 Outlook for Summer Gas , released June 4. The upward gas price pressure is from summer to summer and does not include data on winter prices, the industry organization said. Using published data and independent analyses, it evaluated the combined impact of weather, the general economy, customer demand, production activity, and storage inventories on the direction of gas prices for the coming summer, it said. “When NGSA weighed all the different factors, the picture that emerged for this summer is one of slightly increased pressure on gas prices, chiefly because of the need to inject a greater than average amount of gas into storage in the wake of an extreme winter,” NGSA Chairman Gregory M. Vesey said. […]

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Iraq dislodges insurgents from city of Samarra with airstrikes

Iraqi helicopters bombed the city of Samarra after insurgents overran parts of it early on Thursday, bringing them within striking distance of a Shi’ite shrine the destruction of which in a 2006 attack unleashed a bitter sectarian war. The offensive is part of an escalating conflict between Iraq’s Shi’ite Muslim-led government and Sunni Islamist militants who have been regaining momentum in the past year, particularly in the west of the country bordering Syria. The Iraqi army and SWAT forces had regained control in Samarra, killing dozens of insurgents and forcing the rest to retreat from the city after they moved in overnight, the Samarra Operations Command said. Militants advanced on Samarra in pick-up trucks, raiding checkpoints along the way and blowing up a police station in an attack that killed several policemen, security sources said. After entering the city from the east and west, they […]

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Kurds accuse Baghdad of oil grab

The Iraqi central government in Baghdad aims to control the issue of oil "completely," the prime minister of the semiautonomous Kurdish government said. The United Leadership , a crude oil tanker, is parked off the coast of Morocco with more than 1 million barrels of Kurdish oil taken last month from a Turkish sea port. The Kurdish and central governments are at odds over who controls what in terms of oil. Baghdad said the export is a violation of the national constitution, though the Kurdistan Regional Government contests the allegation. KRG Prime Minister Nechirvan Barzani told Kurdish lawmakers who controls Iraq’s oil is the "big question" in the country. "[Our] counterparts in Baghdad did not identify ‘right’ or ‘wrong’ KRG actions," he said in remarks published Thursday. "They just wanted to control the issue completely." The central government in Baghdad filed a case at an international […]

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Kurd Crude Tanker That U-Turned Leaves Morocco Without Unloading

An oil tanker hauling crude from Iraq ’s semi-autonomous Kurdish region left Morocco ’s territorial waters without unloading, days after the same ship u-turned in the Atlantic Ocean amid a legal challenge relating to its cargo. “The United Leadership moved into international waters yesterday upon a request from Moroccan authorities,” Nadia Laraki, director general for Agence Nationale des Ports, said by phone today. “The issue is out of our hands. It has not docked and therefore has not unloaded a single cubic meter.” SOMO, Iraq’s oil-marketing company, said June 1 that buyers should not purchase the tanker’s cargo. Iraq’s oil ministry said May 23 it sought arbitration over Kurdish oil sales from Turkey at the International Chamber of Commerce . The Kurdistan Regional Government says it’s abiding by the Iraqi constitution, according to its website. Two calls to KRG officials today weren’t answered. The ship reached its destination, the […]

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German energy company lauds Egyptian success

German energy company RWE Dea said Thursday it’s produced more than 640 million barrels of crude oil during its 30 years of operations in Egypt. The German oil and gas company marked Thursday as the 30th anniversary of work in the Gulf of Suez. It’s been working through the Suez Oil Co., a joint venture established with the Egyptian General Petroleum Corp. The company said production from the Ras Fanar, Zeit Bay and Ras Budran fields in Egypt have yielded 640 million barrels of oil since operations began in 1984. "For 30 years now, we have consistently leveraged new ideas to develop intelligent solutions, using the latest technology, and investing in our infrastructure," Maximilian Fellner, general manager of RWE Dea Egypt, said in a statement . "That’s how we have been able to maintain a high level of oil production from these three fields over an extended period of […]

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IHS: India needs to reform gas prices

Uncertain reform of natural-gas pricing in India, if allowed to move forward, would revive oil and gas investment and help the government balance its accounts, according to a new study by IHS . Although the government has announced plans to allow gas prices to increase this year to $8.50/MMbtu from $4.20/MMbtu, it didn’t act before national elections held last month. A group led by Reliance Industries Ltd. issued a notice of arbitration when a price increase it expected under an agreement with the government covering the deepwater KG-D6 Block in the Bay of Bengal didn’t take effect on Apr. 1 ( OGJ Online, May 12, 2014 ). By weakening investment in exploration and accelerating consumption, the IHS study says, India’s policies on gas prices have increased the country’s reliance on external supply and helped make it the world’s fifth largest importer of LNG. Citing government documents, the study […]

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Eni nabs deal in giant Venezuelan gas field

Italian energy company Eni said it signed an agreement to help develop the Perla gas field in Venezeula, one of the largest offshore finds in recent history. Eni CEO Claudio Descalzi met in Caracas with Venezuelan Energy Minister Rafael Ramiriz and Antonio Brufau , the head of Spanish energy company Repsol, to discuss exploiting the Perla field. Billed as one of the largest gas discoveries in the world, Eni said the Perla field off the coast of Venezuela holds an estimated 17 trillion cubic feet of natural gas. It’s situated about 30 miles offshore in the Cardon IV reserve area, which is operated in part through a joint venture between Eni and Repsol. "These agreements will grant Eni access to Perla’s liquids reserves," the Italian company said in a statement Wednesday. The trilateral agreement envisions a new mixed enterprise controlled by Venezuelan state-owned energy company Petroleos […]

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Venezuela Sacrifices Drinking Water to Pay Bondholders

At a time when Venezuela ’s record $25 billion in arrears to importers has its citizens waiting hours in line to buy drinking water and crossing borders in search of medicine, President Nicolas Maduro is using the nation’s dwindling supply of dollars to enrich bondholders. Venezuela, which imports just about everything, and its state oil producer have paid $2.8 billion in interest to overseas creditors this year, according to Barclays Plc. Including debt principal, bondholder outlays will balloon to almost $10 billion by year-end, the London-based firm estimates. By putting off the local companies responsible for supplying everything from diapers to cancer medications, Maduro can preserve access to debt markets and protect oil shipments that would be vulnerable to bondholder seizure, said Alejandro Arreaza, an analyst at Barclays. Even if that means fanning the world’s fastest inflation and inflaming protests over shortages that have left at least 42 people […]

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India Gas Pricing Change Could Boost Investments, Cut Imports

Analysts are counting on Prime Minister Narendra Modi to raise gas prices in India. European Pressphoto Agency India may soon put a floor under years of sliding investment in natural gas production as the new government is likely to increase the price of the fuel offered to gas producers and explorers. The previous Congress Party-led government had proposed increasing the price of natural gas to $8 per million British thermal units from $4.20 per mmBtu, but this was put on hold ahead of the elections . The current level is about a third of the cost of gas imported into India, with imports meeting 35% of local gas needs. Now that voting is over , analysts are anticipating that the new Bharatiya Janata Party-led government will increase gas prices as it had campaigned on the promise of economic reforms and industrial development. Proponents say this is needed […]

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Moving mountains in China poses environmental threats, report says

Researchers said more collaboration among experts, government, construction companies necessary to avert disaster An environmental report called on China to stop flattening mountains until the effects of the practice can be studied. “Earth moving on this scale without scientific support is folly,”  the report  — titled “Environment: Accelerate research on land creation” and published in the scientific journal Nature — said, adding that the process had not been thought through environmentally, economically or technically. As China’s cities expand as its economy grows, the country has begun running out of land to build on — especially in mountainous areas where one-fifth of the population lives. “Land creation” is done by cutting off mountaintops and moving the massive quantity of dirt into valleys to create flat ground on which construction can begin. Such projects have been carried out in strip mining, notably in the eastern United States, where  residents in the […]

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Study: Removing Export Ban on Crude Will Create Jobs, But Opposition Strong

Texas could gain nearly 41,000 new jobs by 2020, and add $5.21 billion to the state economy during the same time period if the crude oil export ban is overturned, according to a recently released study. A number of other states also stand to gain jobs and a boost to their economy, as well; however, overturning the ban will not be a slam dunk, according to the American Petroleum Institute (API). The study was done by ICF International and EnSys Energy, and it concluded that in addition to the new jobs and the boost to the economies in several states, consumers could save up to an average of $5.8 billion in fuel costs per year between 2015 and 2035 as higher production and more efficient markets boost supplies and lower costs. Besides Texas, 17 other states could gain over 5,000 jobs each in 2020 from exports of U.S. crude […]

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New York's Highest Court to Rule on Towns' Fracking Bans

The New York Court of Appeals, the highest court in the state, heard oral arguments this week in two cases regarding whether municipalities can use local zoning laws to prohibit hydraulic fracturing within the city boundaries, or whether the state’s law regulating oil and gas development within the state preempts a municipality’s local zoning laws. Presenting their cases before the seven judges on the bench, attorneys for the upstate New York towns of Dryden and Middlefield argued on the side of local zoning laws being able to prohibit oil and gas activities within a municipality’s boundaries, while a trustee for Oslo, Norway-based Norse Energy challenged the Dryden ban. Cooperstown Holstein, a dairy farm that leased land for drilling, challenged the ban by Middlefield. Lower courts had found no express or implied preemption. The Appellate Division, Third Department affirmed in May 2013 earlier Supreme Court decisions that dismissed both lawsuits, […]

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New York’s Highest Court to Rule on Towns’ Fracking Bans

The New York Court of Appeals, the highest court in the state, heard oral arguments this week in two cases regarding whether municipalities can use local zoning laws to prohibit hydraulic fracturing within the city boundaries, or whether the state’s law regulating oil and gas development within the state preempts a municipality’s local zoning laws. Presenting their cases before the seven judges on the bench, attorneys for the upstate New York towns of Dryden and Middlefield argued on the side of local zoning laws being able to prohibit oil and gas activities within a municipality’s boundaries, while a trustee for Oslo, Norway-based Norse Energy challenged the Dryden ban. Cooperstown Holstein, a dairy farm that leased land for drilling, challenged the ban by Middlefield. Lower courts had found no express or implied preemption. The Appellate Division, Third Department affirmed in May 2013 earlier Supreme Court decisions that dismissed both lawsuits, […]

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Tight Oil, Shale Gas to Drive Lower 48 Production

A handful of unconventional plays will drive U.S. Lower 48 oil and gas production growth, according to a recent analysis by Wood Mackenzie. Tight oil production is expected to reach 6 million barrels per day (MMbpd) by 2020 in the Lower 48, thanks to production in the Eagle Ford, Bakken and Bone Spring/Wolfcamp plays in the Permian Basin, John Dunn, who manages Wood Mackenzie’s Lower 48 upstream research, told reporters at a media briefing Wednesday in Houston. Overall U.S. liquids production in 2020 is forecast to reach nearly 9 MMbpd. Oil and condensate production from the Eagle Ford play in South Texas is expected to reach 2 MMbpd by 2020, while Bakken production is forecast to hit 1.7 MMbpd by 2020, according to Wood Mackenzie estimates. By 2020, oil and condensate production from the Bone Spring/Wolfcamp play in the Permian Basin – the new kid on the block – […]

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North Dakota Flaring Crackdown May Slow Oil Field Growth

North Dakota is cracking down on flaring, the wasteful burning of natural gas, with strict rules that may stymie development in areas far from pipelines in a state that is one of the fastest-growing U.S. oil fields. The new rules also will effectively reinforce the competitive advantage enjoyed by producers that have already taken steps to curb flaring. The state’s Industrial Commission, a three-member regulator chaired by Governor Jack Dalrymple, changed its policy on June 1 to require energy companies to submit a plan to capture any natural gas that could be released by a new well when filing for permits. Without a plan, applications for new wells will not be approved, state officials said. In addition, new rules for existing wells are slated to be announced July 1. The goal is to reduce the amount of gas flared, an economic and environmental […]

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