Category:

LNG Rally Fading on New Supply as Nukes Set to Restart

The three-year rally in liquefied natural gas is cooling as Asia-Pacific supplies jump and demand slows from Japanese utilities preparing to restart nuclear reactors. LNG shipped to northeast Asia next winter may be sold at the lowest price since 2012 for that time of year, when demand typically peaks, according to a Bloomberg News survey of traders and analysts. Exxon Mobil Corp. and BG Group Plc are bringing new supplies to Asia this year before at least four projects start in 2015, including the first U.S. exports. Prices have doubled over the past three years since the Fukushima disaster in March 2011, as utilities turned to fossil fuels such as LNG to compensate for the loss of the atomic plants. Japan is preparing to restart at least two of 48 nuclear reactors that were shut in the wake of an earthquake and tsunami that hit the country. “We have […]

Posted On : Published By : Tom Whipple
Category:

Gazprom starts clock on Chinese gas pipeline

The first welds of a pipeline meant to deliver Russian natural gas to China should be set within the next two months, the chairman of Gazprom said. Gazprom said it planned to start delivering large-diameter pipes for what it’s calling the Power of Siberia natural gas pipeline to China in July. "We have a particular action plan," Gazprom Chairman Alexei Miller said in a Wednesday statement . "Our objective is to weld the Power of Siberia first joint already this August." The Russian energy company said it started working on the infrastructure necessary for the pipeline almost immediately after signing a contract for gas to China in May. The contract between Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Gazprom has sought entrance into the growing Asian market in an effort to diversify an asset […]

Posted On : Published By : Tom Whipple
Category:

API: US production outpaced petroleum demand in May

US crude oil production in May increased 14.7% from May 2013 to 8.3 million b/d—the highest level for the month since 1987—according to a report from the American Petroleum Institute . Total US petroleum deliveries, a measure of demand, meanwhile, increased 1.9% from last May to average 18.9 million b/d, the highest May deliveries in 6 years. The report comes on the heels of BP PLC’s 63rd annual Statistical Review of World Energy in which the firm said the US recorded the largest increment to global oil consumption in 2013, while recording the largest increase in the world and the largest annual increment in the country’s history for a second consecutive year ( OGJ Online, June 16, 2014 ). “Last month saw a continuation of recent trends, with strong demand and even stronger production resulting in falling import levels,” said John Felmy, API chief economist. Total imports averaged […]

Posted On : Published By : Tom Whipple
Category:

As U.S. Production Increases and Imports Drop, Oil-Exporting Nations Find Another Outlet

With increased domestic production, the U.S. is importing less oil; fortunately for oil-producing nations, Asia looks ready to pick up the slack. Associated Press SINGAPORE—Asia will be able to absorb increasing amounts of crude oil not needed by the U.S. in the years ahead, providing an important outlet for oil suppliers in several regions. With new technology having unlocked vast quantities of North American crude and natural gas previously trapped in shale rock beds, oil suppliers accustomed to selling to the U.S. are already having to search for new customers. They are finding buyers in Asia—particularly China and India. Insufficient Asian reserves and relatively strong economic growth in parts of the region should ease worries among African, Latin American and even Middle Eastern oil producers that they might struggle, or have to offer deep discounts. Producers of displaced oil for now can draw comfort from not having to compete […]

Posted On : Published By : Tom Whipple
Category:

Murkowski wary of Keystone XL oversell

While bipartisan leaders in a Senate committee passed a bill in support of Keystone XL, Sen. warned against overselling the win. Murkowski, R-Alaska, and Sens. Mary Landrieu , D-La., and John Hoeven , R-N.D., moved their bill in support of the pipeline through the Senate Energy and Natural Resources Committee with a 12-10 vote. "I am pleased to move the issue of the Keystone XL pipeline forward, but I think we need to be cautious not to oversell it," Murkowski said in a statement Wednesday. The measure is nearly identical to similar efforts to push Keystone XL past President Obama ‘s desk. Murkowski said her counterparts in the House have already passed similar legislation, but noted Senate Majority Leader Harry Reid , D-Nev., has largely ignored the issue on the Senate floor. Pipeline planner TransCanada issued a permit request for the pipeline more than five years […]

Posted On : Published By : Tom Whipple
Category:

Short-term U.S. oil imports up

| License Photo U.S. crude oil imports are lower than they were last year, though short-term data show an increase, the U.S. Energy Information Administration said. EIA, the statistical arm of the Energy Department, said crude oil imports over a four-week period ending June 13 averaged 7.3 million barrels per day, 6.6 percent less than the same four-week period in 2013. For the week, the United States imported on average 7.2 million bpd, which is up 88,000 bpd from the week ending June 6, EIA said in its weekly petroleum report , published Wednesday. Canada was the top oil exporter to the United States for the week ending June 13. The country sent 2.7 million bpd on average to the U.S. market that week, up 53,000 barrels from the previous week. Saudi Arabia was the No. 2 oil exporter to the U.S. market, sending an average 898,000 bpd to […]

Posted On : Published By : Tom Whipple
Category:

Progress made since Lac-Megantic, Canada says

Canadian transportation officials are making good progress in addressing the safety issues of crude oil transport by rail, the Transportation Safety Board said. The safety board in Canada said progress made on safety since last year’s deadly oil train derailment in Lac-Megantic, Quebec, was satisfactory. Transportation Safety Board Chairwoman Wendy Tadros said her agency was "pleased" with steps taken so far by Transport Canada to reduce the risks. "There are risks to carrying more and more oil by rail and the board’s recommendations are aimed at bringing those risks down," she said in a statement . The Lac-Megantic disaster left more than 40 people dead. Canadian Transport Minister Lisa Raitt in January ordered rail cars designated as DOT-111, or Class-111, out of service. Those type of rail cars were involved in last year’s accident and similar incidents in the United States. Tadros said Canada is leading […]

Posted On : Published By : Tom Whipple
Category:

Rising U.S. Output Seen Curbing Impact of Iraq on Oil

The U.S. shale boom, which has sent the nation’s output to a 28-year high, is curbing the impact of the Iraq crisis on the oil market, said Nansen Saleri, former head of reservoir management at Saudi Arabian Oil Co. Prices would have climbed more this month if techniques such as hydraulic fracturing and horizontal drilling hadn’t bolstered U.S. crude output, said Saleri, who is now chief executive officer of Houston-based consultant Quantum Reservoir Impact. West Texas Intermediate oil, the U.S. benchmark, has climbed $5 to $10 on supply anxiety, he said. “Were it not for the increase in U.S. production, that’s gained close to 2 million barrels a day, we would see a $20 to $30 rise in prices,” Saleri said in a telephone interview. “The surge in U.S. production is a hugely stabilizing factor.” WTI for July delivery rose to $107.68 a barrel on the New York Mercantile […]

Posted On : Published By : Tom Whipple
Category:

As Military and Rebels Clash in Ukraine, Doubt Falls on Cease-Fire Prospects

Fierce fighting raged here on Thursday between the Ukrainian military and pro-Russian separatist rebels, with hours of intense shelling casting grave doubts on the prospects of a unilateral cease-fire that was promised just a day earlier by the new Ukrainian president, Petro O. Poroshenko. As government forces intensified their drive to crush the separatist insurrection that has plunged Ukraine into conflict, explosions rocked villages between Seversk and Krasny Liman, a railroad hub north of the regional capital of Donetsk that could provide a lifeline to the blockaded rebel stronghold of Slavyansk. In another foreboding development, the NATO secretary general, Anders Fogh Rasmussen, said Thursday that Russia had redeployed several thousand troops along the Ukrainian border. A month ago, President Vladimir V. Putin had ordered soldiers withdrawn from the border area in what appeared to be an effort to defuse Ukraine’s crisis, along with statements that Russia […]

Posted On : Published By : Tom Whipple
Category:

Peak Oil: This One Is On Us # 1

General Ideas Mason Inman recently posted an excellent 2012 interview he conducted with James Schlesinger, our nation’s first Secretary of Energy, who passed away shortly before that posting. [Quotes here are from that interview.] There are some lessons available to all of us. Mr. Schlesinger was a bit more direct than I and others have been in urging more effort from the public to recognize the challenges ahead. Sometimes the truth is just the truth, plain as can be. While we’d all like to believe/hope/wish that the bigger problems can be handled by others without our involvement, life tends not to work that way very often. Reality is what it is, and if we are going to prepare ourselves for inevitable changes which will certainly affect each and every one of us even though that may not be at all clear today, then we all need to step up […]

Posted On : Published By : Tom Whipple