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Crude Mixed Ahead of U.S. Inventory Report

Crude-oil futures were mixed in Asian trade Wednesday, with the U.S. oil benchmark supported by an expected drop in weekly oil stockpiles, while Iraq concerns still linger. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $106.52 a barrel at 0608 GMT, up $0.16 in the Globex electronic session. August Brent crude on London’s ICE Futures exchange fell $0.20 to $113.25 a barrel. Late Tuesday, the American Petroleum Institute, a trade body, said its data showed a 5.7-million-barrel drop in U.S. crude stocks for the week ended June 13. The more definitive survey data from the U.S. Energy Information Administration is due later Wednesday and analysts expect oil inventories to have fallen by 1.1 million barrels. "Geopolitical risks to supply remain the key support for Brent crude oil, with ongoing tensions along Ukraine’s eastern border and the instability in Iraq making supplies […]

Posted On : Published By : Tom Whipple
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Oil Futures Diverge as Iraq Remains in Focus — Update

The gap between the benchmark oil contracts diverged to its widest in nearly a month Tuesday as Brent prices continued to rise on uncertainty about Iraqi supply while U.S. prices retreated for a second straight session. Light, sweet crude for July delivery settled down 54 cents, or 0.5%, at $106.36 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 51 cents, or 0.5%, to $113.45 a barrel, the highest price since Sept. 9. The gap between the two contracts expanded to $7.09 a barrel, the largest price difference since May 27. So far, Iraqi oil exports, which mostly come from the country’s south, haven’t been halted. Iraq exports about 2.5 million barrels a day, and an outage would represent a large loss to global supplies. Iraqi government forces turned back Sunni militants […]

Posted On : Published By : Tom Whipple
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Natural Gas Settles Near Flat as Traders Assess Demand

Natural gas barely budged Tuesday as traders expected a heat wave to subside, reducing demand for the fuel in June before above-normal temperatures return in July. Natural gas for July delivery settled up 0.2 cent at $4.709 a million British thermal units on the New York Mercantile Exchange. Forecasters said hot weather covering the Midwest and Eastern Seaboard was expected to pass Tuesday and Wednesday, followed by a return of cool weather over much of the country in the next five to 10 days. The heat wave had been expected to drive gas-fired demand for electricity to power air conditioners, which would divert production to immediate use and impede efforts to rebuild stockpiles depleted by the severe U.S. winter. The Southeast will remain hot and humid next week, but widespread hot temperatures aren’t expected to reach the central and eastern U.S. until […]

Posted On : Published By : Tom Whipple
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OPEC facing 'headwinds,' IEA says

North American oil output is expected to rise at the same time OPEC begins to face strong "headwinds," the International Energy Agency said Tuesday. "By the end of the decade, North America will have the capacity to become a net exporter of oil liquids," IEA Executive Director Maria van der Hoeven said in a statement from Paris . "At the same time, while OPEC remains a vital supplier to the market, it faces significant headwinds in expanding capacity." The Organization of Petroleum Exporting Countries said in its latest market report global oil demand is expected to increase by 1.14 million barrels per day this year. It expects the global economy will need 29.7 million barrels of its crude oil per day in 2014, a decline of 400,000 bpd from the previous year. IEA in its annual five-year outlook report backed OPEC’s estimates, noting global oil demand is expected to […]

Posted On : Published By : Tom Whipple
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OPEC facing ‘headwinds,’ IEA says

North American oil output is expected to rise at the same time OPEC begins to face strong "headwinds," the International Energy Agency said Tuesday. "By the end of the decade, North America will have the capacity to become a net exporter of oil liquids," IEA Executive Director Maria van der Hoeven said in a statement from Paris . "At the same time, while OPEC remains a vital supplier to the market, it faces significant headwinds in expanding capacity." The Organization of Petroleum Exporting Countries said in its latest market report global oil demand is expected to increase by 1.14 million barrels per day this year. It expects the global economy will need 29.7 million barrels of its crude oil per day in 2014, a decline of 400,000 bpd from the previous year. IEA in its annual five-year outlook report backed OPEC’s estimates, noting global oil demand is expected to […]

Posted On : Published By : Tom Whipple
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With War at Doorstep, Iran Sees Its Revolutionary Guards in a Kinder Light

They came to celebrate the short life of Ali Reza Moshajjari, a local boy from a south Tehran neighborhood and apparently the latest Iranian victim of the escalating sectarian conflict in neighboring Iraq and in Syria. He was a member of Tehran’s 209 battalion of the Imam Ali garrison of the Islamic Revolutionary Guards Corps, the Iranian news media said, and representatives of elite units of the corps stood solemnly in a line, as men clad in black entered the mosque. As the service got underway, a chanter’s voice boomed through the mosque, echoing in the lofty dome, lined with blue and green tiles. “Our godless enemies behead our soldiers,” he said. From the women’s quarters, behind a panel segregating them from the men, a loud wailing commenced. Men shook their heads, and some clenched their fists. “Our youth was a special martyr,” the chanter said of […]

Posted On : Published By : Tom Whipple
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Iraq Foretells Oil's Dystopian Future

When things go down in the Middle East, oil prices go up. Even axioms have their nuances, though. Amid what may be the unraveling of Iraq, oil prices characteristically have risen, with Brent crude breaking back above $112 a barrel. Yet Iraq’s real significance for oil may have less to do with what transpires this summer and more over the rest of this decade. The direct threat to the country’s oil exports actually isn’t acute yet. For now, the insurgency is focused in central Iraq, away from the main oil-producing and exporting areas in the south and the largely Kurdish-controlled north . The bigger issue is what the sudden advance of the Islamic State of Iraq and al-Sham means for Iraq’s oil-production growth prospects. In its latest medium-term forecast, released Tuesday, the International Energy Agency cut its supply-growth outlook for Iraq. It now expects Iraq to be […]

Posted On : Published By : Tom Whipple
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Iraq Foretells Oil’s Dystopian Future

When things go down in the Middle East, oil prices go up. Even axioms have their nuances, though. Amid what may be the unraveling of Iraq, oil prices characteristically have risen, with Brent crude breaking back above $112 a barrel. Yet Iraq’s real significance for oil may have less to do with what transpires this summer and more over the rest of this decade. The direct threat to the country’s oil exports actually isn’t acute yet. For now, the insurgency is focused in central Iraq, away from the main oil-producing and exporting areas in the south and the largely Kurdish-controlled north . The bigger issue is what the sudden advance of the Islamic State of Iraq and al-Sham means for Iraq’s oil-production growth prospects. In its latest medium-term forecast, released Tuesday, the International Energy Agency cut its supply-growth outlook for Iraq. It now expects Iraq to be […]

Posted On : Published By : Tom Whipple
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Kurd Oil Supply Seen Growing as Region Grabs Territory

Iraq ’s Kurdish region may be able to gain more autonomy and increase crude exports after taking control of territory around the nation’s fourth-largest oil field, analysts from Saxo Bank A/S and JBC Energy GmbH said. Kurdish troops are protecting the Kirkuk oilfield and surrounding areas after an offensive by Islamist insurgents last week prompted Iraqi central-government forces to flee. The Kurdistan Regional Government plans to double its crude exports next month to as much as 250,000 barrels a day and has built a new pipeline that could ship Kirkuk oil to international markets, Ashti Hawrami , KRG’s natural resources minister, said at a conference in London today. “The current situation could lead to a better environment for exports if the Kurdish region gets more autonomy and can ship its oil, and the south of Iraq continues to grow,” David Wech , managing director at JBC Energy GmbH in […]

Posted On : Published By : Tom Whipple
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Iraq Crude Oil Exports Surge in South While Violence Hits North

Iraq’s crude oil exports from its southern terminals in the Persian Gulf are poised to accelerate at a time when fighting has plunged the country’s north into chaos and Islamist militias are advancing toward Baghdad. Exports of Basrah Light crude , the country’s main grade, may reach about 2.8 million barrels a day next month, according to a preliminary loading plan obtained by Bloomberg News on June 16. That’s 11 percent more than this year’s average and would be close to matching a three-decade high reached in February. OPEC’s second-largest producer shipped 5.43 million barrels from Basrah on June 11, Iraqi Oil Minister Abdul Kareem al-Luaibi said in Vienna the following day. “The only infrastructure that is currently producing and supplying international markets is in the south and will remain untouched,” Kyle Stelma, managing director of Dubai-based Dunia Frontier Consultants, which researches Iraq for clients, said by phone yesterday. […]

Posted On : Published By : Tom Whipple