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Rebounding NYMEX crude settles $1.41/b higher on strong fundamentals

NYMEX October crude settled $1.41 higher at $95.96/barrel Friday amid still-strong fundamentals and a repricing-in of geopolitical risk. ICE October Brent lagged slightly, setting 73 cents higher at $103.19/b. Products finished in positive territory as well, led by NYMEX September RBOB, which settled 3 cents higher at $2.7827/gal. September ULSD closed 79 points higher at $2.8569/gal. "Fundamentals here are very strong, as US inventories continue to decline," Citi Futures Perspectives energy analyst Tim Evans said. "Runs look very strong, and have held up the downtrend in total stocks. And this has persisted longer than many had anticipated." US commercial crude stocks have fallen steadily over the summer amid record refinery runs, and despite expectations that fall maintenance is coming soon, still-high runs represents real crude demand. "There was talk a month ago about runs having peaked, but that hasn’t happened so quickly," Evans said. Total US crude runs did […]

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Oil Prices Snap Four-Week Losing Streak

NEW YORK—Oil prices posted their first weekly gain in five weeks as rising tension in Ukraine made market watchers nervous about additional sanctions on Russia and positive U.S. economic data lifted demand expectations. Light, sweet crude for October delivery rose $1.41, or 1.5%, to $95.96 a barrel on the New York Mercantile Exchange, the highest settlement price since Aug. 20. Prices rose 2.5% this week but lost 2.3% for the month. Brent settled up 73 cents, or 0.7%, at $103.19 a barrel on ICE Futures Europe. Prices rose 0.9% for the week and fell 2.7% this month. The North Atlantic Treaty Organization said Thursday more than 1,000 Russian soldiers are fighting in Ukraine . The death toll has risen dramatically, the United Nations said Friday , with an average of 36 people killed each day between July 16 and Aug. 17 and a total of nearly 2,600 people dead […]

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WTI Crude Oil Caps First Weekly Gain in Six on Economy

West Texas Intermediate crude capped the first weekly gain in more than a month on speculation an improving U.S. economy will boost fuel demand. Prices rose for a fourth day after touching a seven-month low on Aug. 25. U.S. consumer confidence rose in August, the Thomson Reuters/University of Michigan final sentiment index showed today. The economy expanded more than previously forecast in the second quarter, the Commerce Department said yesterday. Brent gained on escalating tension between Ukraine and Russia. “Economic numbers continue to point to a slowly improving economic picture, and it means better fuel demand,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut . “The market kind of overextended itself when it slid to the seven-month low. We do have new concern surrounding the fighting going on in Ukraine.” WTI for October delivery advanced $1.41, or 1.5 percent, to $95.96 a […]

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Natural Gas Rises to Six-Week High Ahead of Hotter Weather

By Nicole Friedman NEW YORK–Natural-gas prices gained for a third straight session as forecasts for hotter weather drove expectations of higher demand in the coming weeks. Natural gas for October delivery settled up 2.1 cents, or 0.5%, at $4.065 a million British thermal units on the New York Mercantile Exchange, the highest price since July 16. Prices gained 4.7% this week and 5.8% this month. Forecasts are calling for a bout of late-summer heat in the southern and eastern U.S. heading into the first week of September, which is expected to boost demand for gas-powered electricity to run air-conditioning units. "Weather patterns have been more favorable recently" to natural-gas demand, said NatGasWeather.com in a note, but "the end of summer is upon us. …Prices are not looking too far into the future." Storage data released Thursday showed that stockpiles grew by 75 billion cubic feet in the week ended […]

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EIA: Tight Oil Stabilizes Brent Crude Prices

Rigzone Staff 8/29/2014 URL: http://www.rigzone.com/news/oil_gas/a/134780/EIA_Tight_Oil_Stabilizes_Brent_Crude_Prices World events that threatened global oil production and distribution are scarcely having an effect on oil prices in the United States. The current period of stability, which contrasts with historic spikes that occurred during periods of strife in other regions, is due largely to the shale revolution, according to the Energy Information Administration (EIA) in a recent report. The price of Brent crude oil has been noteworthy for having fluctuated within a narrow range of $5/barrel (bbl) for 13 consecutive months. This was during a period of significant turmoil in Libya and Iraq. The lack of movement during that time is in sharp contrast with Brent crude oil prices for the period between early 2008 and the middle of 2013, when prices hit a high of $125/bbl in March 2012, and a low of $95/bbl just three months later, the EIA report said. Historically, commodity […]

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IEA: Policy uncertainty hurting renewables

IEA published its third annual mid-term renewable market report , which shows total combined output from renewable energy resources in 2013 was on par with electricity from natural gas. By 2020, renewable energy generation should account for 26 percent of total electricity output, but annual growth in new renewable power begins to stabilize next year. IEA Executive Director Maria van der Hoeven said renewable energy resources are a "necessary" part of global energy security measures, though policy and regulatory uncertainty puts new low-carbon power generation at risk. "This calls for a serious reflection on market design needed to achieve a more sustainable world energy mix," she said in a statement Thursday. Renewable energy in economies outside of North American and Europe are the largest source of growth through 2020, but they only meet 35 percent of the electricity needs. Because some of those economies, notably China, are growing faster […]

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OPEC Oil Output Hits One-Year High in August on Nigeria

OPEC crude oil production increased to a one-year high in August, led by surging output in Nigeria, a Bloomberg survey showed. Production by the 12-member Organization of Petroleum Exporting Countries rose by 891,000 barrels a day to 31.033 million, according to the survey of oil companies , producers and analysts. Last month’s total was revised 80,000 barrels a day lower to 30.142 million because of changes to the Nigerian and Iranian estimates. Nigeria, Saudi Arabia and Angola led gains as new deposits came online, security improved and field maintenance programs ended. Iran and Venezuela were the only members to record production declines. “They are letting it rip,” John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The geopolitical scares out there have supported the market some but any resolution would remove that. We’re heading for a definite […]

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Oil-Field Flows to Libya’s Key Port Resume Despite Conflict

A view of the anchorage at the Es Sider export terminal in Ras Lanuf, west of Benghazi in Libya. Reuters Libya’s largest oil port Es Sider is now receiving supplies from oil fields after the terminal resumed exports despite intense fighting in the capital of Tripoli. An oil official in Tripoli said late Thursday that the Waha Oil Co. was supplying 22,000 barrels a day to the Es Sider terminal in eastern Libya, after oil in storage at the port started to be shipped last week, ending a one-year stoppage. The Waha Oil Co. is a partnership between Libya’s National Oil Co. and U.S. companies Marathon Oil Corp. , Hess Corp. and ConocoPhillips . It had previously been producing about 3,000 barrels a day used for maintenance and small supplies to the neighboring Brega oil terminal, the official said. But all Waha Oil Co.’s oil flows have now been […]

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Libya’s Acting Oil Minister Says He Has Been Reinstated

By Benoit Faucon Libya’s government has cancelled a decision to dismiss its acting oil minister, the official himself and the National Oil Co.’s Facebook page said Friday. The news comes amid mounting political confusion in Libya after a militia that took control of Tripoli’s airport disputed the legitimacy of an interim government now based in the Eastern city of Tobruk. Omar Shakmak, Libya’s deputy oil minister, who was acting as the country’s most senior oil official, said last week he was resigning at the request of Libya’s interim prime minister Abdullah al-Thani. Libyan oil officials said at the time he had been replaced by NOC’s head Mustafa Sanalla on a temporary basis. But Mr. Shakmak, who has headed the oil ministry as a caretaker since the departure of Libya’s former oil minister Abdelbari el-Arousi in January, said he had been asked to return to his position by Mr. al-Thani. […]

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With Iran Talks at Crossroads, U.S. Levels New Sanctions

WASHINGTON—The U.S. imposed a range of sanctions designed to exert new pressure against Iran and deter international business leaders from circumventing Washington’s existing punitive measures as talks continue over the country’s nuclear program. The steps announced Friday come amid growing concern in the Obama administration that Iran isn’t ready to make the concessions needed to clinch a nuclear deal. The U.S. Treasury and State departments said the sanctions will punish a bank that provides U.S. dollar bills to the Iranian government; a group that helped Iran evade sanctions on oil and petrochemicals; several transportation firms that helped deliver weapons and personnel to the Assad regime in Syria; and some individuals and organizations that support Iran’s nuclear program. The new measures put the U.S. in the delicate position of imposing new sanctions at the same time it is rolling back a series of existing measures following initial progress in international […]

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Tanker of Kurdish Oil in Legal Fight Remains Off Texas

A tanker carrying 1 million barrels of disputed Kurdish oil remains off Texas , according to the vessel’s operator. The United Kalavryta, which left Ceyhan, Turkey , on June 23 and arrived off the coast of Galveston July 26, couldn’t be detected earlier this week, with no updates from the tanker’s Automated Identification System’s transponder from early Aug. 26 until today. The tanker is caught up in a protracted legal fight in Iraq over rights to Kurdish oil production and billions of dollars in overdue payments claimed by the Kurds. The U.S. government recognizes Kurdistan as part of Iraq. While a federal judge this week lifted an order that had authorized the seizure of the cargo if it came into U.S. waters, Iraq has more legal options available. “The M/T United Kalavryta is still anchored off Galveston awaiting charterer’s discharge orders,” Lygia Pirounaki, a spokeswoman for Marine Management Services […]

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Kurds raise oil funds for refugees

The Kurdish government of Iraq said it’s expanding a humanitarian initiative tied to oil operations to address the influx of refugees fleeing the Islamic State. The Sunni-led Islamic State, a terrorist group known also as the Islamic State of Iraqi and Syria, has squared off against Kurdish forces as it tries to expand its claims to territory in the region. The semiautonomous Kurdistan Regional Government said Friday it was broadening its Kurdistan Oil and Gas Humanitarian Initiative to extend to new refugees and internally displaced persons. "The Kurdish Ministry of Natural Resources is pleased that a number of oil companies in the Kurdistan region have already asked how they can support humanitarian efforts for the massive new influx of refugees and IDPs," it said in a statement. "With the expansion of KOGHI, companies have an already established framework for providing funds." The Kurdish government says it launched the initiative […]

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Iraqi Kurds Expand Autonomy as ISIS Reorders the Landscape

WASHINGTON — The Islamic State in Iraq and Syria has thrown Iraq into crisis, precipitated the ouster of Nuri Kamal al-Maliki as prime minister and brought the American military back to the country it left more than two years ago. But now Obama administration officials are quietly acknowledging another important consequence: a far more autonomous Kurdistan. The United States still officially opposes Kurdish independence, a decades-old policy that seeks to avoid further inflaming the region and provoking Turkey, Iraq and Iran, three countries with large and restive Kurdish minorities. But the ISIS invasion has fundamentally changed the political geography of Iraq, senior American and Kurdish officials said, physically cutting off most of Iraqi Kurdistan from the rest of Shiite-dominated Iraq and encouraging the Iraqi Kurds in their drive for expanded autonomy. Masrour Barzani, the chief of intelligence for the Kurdish region of Iraq, said that the Obama administration, which […]

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Oil field burns after ISIS retreat

A Kurdish tank faces toward ISIS lines on Aug. 26, 2014, a few kilometers away from the Khazir refugee camp, half way between Erbil and Mosul. (VIANNEY LE CAER/Pacific Press/LightRocket/Getty Images) A Kurdish tank faces toward ISIS lines on Aug. 26, 2014, a few kilometers away from the Khazir refugee camp, half way between Erbil and Mosul. (VIANNEY LE CAER/Pacific Press/LightRocket/Getty Images) Flames have engulfed oil facilities at the Ain Zalah field, in Iraq’s Ninewa province, after extremist militants fled the area following an offensive by Kurdish Peshmerga forces backed by ongoing U.S. air strikes.The Peshmerga also captured the nearby town of Zummar, just west of the Mosul Dam, which sits along a main road between Ain Zalah and Mosul, according to a Peshmerga officer, local residents, and a senior official from Iraq’s state-run North Oil Company (NOC).Militants have co… This content is for registered users. Please login to […]

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Besieged City Faces Destruction by the Islamic State

Forgotten in Iraq The world took notice when the Yazidis needed help. But since June, a Turkmen city in northern Iraq has been under siege by the Islamic State. The death toll continues to mount but, thus far, the people of Amirli have been left to fight the IS on their own. "Every day I receive about 100 patients. Every day there is shelling. Some of the injuries are very complicated, legs amputated, head wounds. But I don’t have the materials to provide serious treatment. There are cases where I have put patients on the helicopter alive and they die when they get to Baghdad." Dr. Khaldoun Mahmoud speaks extremely rapidly, and with good reason. There is only a single place remaining in the northern Iraqi town of Amirli where he still has a modicum of mobile phone reception: at the helicopter landing pad above the village. And with […]

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Iraqi Kurds say their fight is against more than just the Islamic State

Kurdish Peshmerga fighter keeps watch at Omar Khaled village near Tal Afar, west of Mosul August 24, 2014. Old hostilities between Arabs and Kurds exacerbate fighting with the Islamic State. (Youssef Boudlal/Reuters) GWER, Iraq — Kurdish fighters are struggling to hold on to recent gains against Islamic State militants in Iraq in the face of constant shelling and sniper fire. But Kurds say the jihadists have another weapon: local Arab sympathizers. The Kurds suspect area Arabs have backed the militants in battles that have raged in Iraq’s north over the past month, including a stunning advance by the jihadists. The fighting has displaced thousands of families in a region long known as a flash point for Arab-Kurdish violence. Now many Sunni Arab residents are barred from coming home. “The Arabs here stabbed us in the back, and now they are threatening us” from the villages nearby, a Kurdish intelligence […]

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Pemex Raises 2015 Oil Output Goal

MEXICO CITY—State-owned oil firm Petróleos Mexicanos said Friday that it is raising its 2015 goal for crude-oil output to 2.4 million barrels a day. The outlook comes after Pemex was forced last week to reduce this year’s production figures to account for water and other impurities pumped from offshore fields that were erroneously counted as oil. "We are looking at an upward tendency for 2015," said the company’s director of exploration and production, Gustavo Hernández, at a news conference. Pemex, as the company is known, lowered its estimated production for this year to 2.35 million barrels a day from 2.44 million to account for measuring errors at its offshore fields. Equipment at three production areas wasn’t accurately detecting the amount of water and impurities that are a common byproduct of oil production, particularly offshore, Pemex said. Mr. Hernández said its 2015 estimate for next year is for crude that […]

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Athabasca Oil Completes Sale of Stake in Project to PetroChina Co

Athabasca Oil Corp. on Friday said it completed the sale of its 40% stake in a Canadian oil-sands project to one of China’s largest state-run energy companies, putting an end to months of speculation that the deal might not go through. Athabasca said net proceeds from the sale of the Dover project stake will total 1.184 billion Canadian dollars ($1.09 billion), comprising a C$600 million cash payment at closing and three interest-bearing promissory notes for the remaining C$584 million. The company expects to use the proceeds to develop its core light-oil shale assets in the Kaybob Duvernay area of Alberta as well as its Hangingstone oil-sands project southwest of Fort McMurray, Alberta, Chief Executive Sveinung Svarte said in a phone interview. The closing of the Dover transaction is a welcome development for the Calgary-based oil-sands developer. The deal with China National Petroleum Corp.’s publicly traded PetroChina Co. subsidiary was […]

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Athabasca Completes $1.1 Billion Deal With PetroChina

Athabasca Oil Corp. (ATH) closed a C$1.18 ($1.1 billion) agreement with PetroChina Co. (857) to sell the rest of its Dover oil-sands project, ending weeks of speculation about whether the Chinese company would pay. The shares rose. PetroChina’s payment includes C$600 million in cash and C$584 million in promissory notes due through August 2016, backed by guarantees from HSBC Bank Canada, Athabasca said today. The original agreement was for PetroChina to pay in cash. The settlement comes two months after Calgary-based Athabasca had estimated the deal would close after triggering the sale of its 40 percent stake in Dover earlier this year. The payment was delayed as the Chinese government was investigating PetroChina executives over allegations of corruption, according to reports from publications including Beijing-based Caixin. A report in Canada ’s Financial Post was among several suggesting the state-owned company was trying to delay its purchase or claw back […]

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Gas-Rich Marcellus Drilling Boosts Rigs to 5-Month High

Rigs targeting natural gas in the U.S. rose to the highest level in five months after those drilling horizontally for the fuel gained in the Marcellus formation of the eastern U.S. Gas rigs jumped by eight to 338, the highest level since March 14, data posted on Baker Hughes Inc. (BHI) ’s website show. The oil count rose by 11 to 1,575 after sliding by 25 last week, the Houston-based field services company said. The Marcellus formation, the nation’s biggest onshore gas play, added the most rigs, gaining five drilling horizontally for gas and raising its total count to a two-month high. The energy rig count is surging in the U.S. as producers use horizontal drilling and hydraulic fracturing to draw record volumes of oil and gas out of shale formations from North Dakota to Texas. The boom has raised domestic crude production to the highest level in 28 […]

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Shell keeps Alaskan arctic options open

"We continue to take a methodical approach to this exploration phase and will only proceed with a program that meets the conditions necessary to proceed safely and responsibly," a spokesman said in a statement emailed to UPI. The U.S. Coast Guard in April published a 152-page report on Shell’s operations in Alaska . Shell’s drillship Kulluk struck ground off the Alaskan coast in 2012, and the Coast Guard blamed harsh winter conditions and the company’s efforts to escape Alaskan tax laws for the incident. Kulluk’s grounding off the Alaskan coast followed a 2012 exploration season in the arctic waters of Alaska that was complicated by equipment failures. The company in January said it was suspending its efforts to explore Alaskan waters because of costs and court challenges to its exploration campaign. Shell said it submitted revisions to an already-approved plan for the Chukchi Sea to the Bureau of Ocean […]

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U.S. oil pipeline output increasing

The U.S. Department of Transportation updated its freight numbers for commodities traded under the U.S. North American Free Trade Agreement. The value of commodities moving through pipelines in June increased 35.2 percent, the largest percentage of any mode of transportation. "This increase is due, in part, to exports of crude oil by pipeline from the Bakken formation in North Dakota and Montana," the department said Thursday. The North Dakota Industrial Commission oil production in June, the last full month for which data are available, was 1.09 million barrels per day, a record for the state and a 4.8 percent increase from the previous month. Nearly all of the oil produced in North Dakota comes from the Bakken and Three Forks area. Total U.S. oil production has increased to the point that there’s not enough pipeline capacity to handle the glut. The U.S. Energy Information Administration, the statistical arm of […]

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A New Kind of Power From Salt Water

Water is an ancient power source, one usually exploited by harnessing its flow. For decades, though, scientists have been working on another kind of water power—one relying on salt. Yarek Waszul This technique exploits the natural process of osmosis. When fresh water is separated from salt water by a selective membrane, pure water from the fresh side will pass through, leaving the salts behind. The rising water level on the salty side, kept under moderate pressure, can then be siphoned off to run a turbine. This approach is ideal for places where fresh water and salt water come together—where a river meets the sea, for instance. The technology is appealing because it is clean, renewable and reliable. The problem is cost: It takes a vast membrane to obtain any significant amount of electricity. But now researchers at the Massachusetts Institute of Technology and Saudi Arabia’s King Fahd University of […]

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U.S. Utilities Push the Electric Car

As utilities across the U.S. grapple with stagnant electricity sales, many see opportunity in the fledgling need for electric-car charging stations. But some companies’ tactics are spurring complaints from consumer advocates. Electricity companies are asking permission to let them tack on fees to customer bills to fund pilot projects for building networks of charging stations. Critics say the requests are unfair because they would make all customers pay the high cost of experimental equipment even though it would benefit only a few—often affluent—people. In San Diego, Sempra Energy ‘s power utility wants to install 5,500 electric-car chargers at hundreds of office parks, apartment buildings and condominium complexes at a cost of $100 million. The company says convenient, easy-to-use charging stations will encourage more Californians to adopt electric cars, improving air quality for everyone. The utility wants to add a surcharge to all San Diego customers’ bills. The Utility Reform […]

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U.S. retail gasoline prices fall as Labor Day approaches

Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update The U.S. average retail price for regular gasoline was $3.45/gallon (gal) on August 25, the lowest price on the Monday before Labor Day since 2010. The average price at the pump is now $0.25/gal lower than it was at the end of June. Lower North Sea Brent crude oil prices are the main driver of the decline in gasoline prices; the current Brent price is lower than it was last month, and lower than it was on Labor Day weekend last year. The recent decline in gasoline prices largely reflects changes in crude oil prices. In June of this year, the Brent spot price reached its year-to-date high of $115/barrel (bbl), then fell to $102/bbl on August 22. Current Brent prices are below their August average level over the past three years, which ranged between $110/bbl and $113/bbl. Crude […]

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Pennsylvania says 243 private water wells contaminated by gas drilling since 2007

More than 200 private drinking water wells have been contaminated by natural gas drilling activity in Pennsylvania since 2007, according to documents released late Thursday by the Pennsylvania Department of Environmental Protection. The DEP released a list of 243 well contamination complaints that led to investigations and, in most cases, some form of resolution. The number of complaints amounts to 2.8% of the 7,536 unconventional wells drilled since 2009. Between 2009 and 2010, during the land rush to the Marcellus, water complaints nearly doubled from 34 in 2009 to 61 in 2010, the record shows. About half drinking water wells were damaged by conventional drilling and half by unconventional, or horizontal, drilling, DEP Deputy Secretary for Oil and Gas Management Scott Perry said in a statement. Complaints declined 41% in 2011 to 36 contaminated wells and remained at that level until dropping again this year to 1.3% of the […]

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Who’s Got Liquids? plus Further to the Bakken

This is another Guest Post by David Archibald Who’s Got Liquids? An article by Canadian consultant Mike Priaro in the 7th July, 2014 edition of Oil andGas Journal, “Grosmont carbonate formation increases Alberta’s bitumen reserves”, included the following tables: David 1 Mr Priaro’s estimate of Canada’s recoverable bitumen is 818 billion barrels. Almost all of that is in Alberta. Combined with their coal resources, Alberta has the biggest fossil fuel resource on the planet. I have updated my estimate of what some of the major countries have in the way of fossil fuels in this table: David 2 The highest value fuels are those that can be used as liquids in transport. High quality coal produces 2.2 barrels of liquids through a FT plant. In the following graphic I have used a factor of 2x to convert coal to its oil equivalent. Six thousand cubic feet of gas has the […]

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BHI: US rig count recoups last week’s losses, jumps to 1,914

The US drilling rig count jumped 18 units to reach 1,914 rigs working, gaining back the 17 units it lost last week plus one, during the week ended Aug. 29, Baker Hughes Inc. reported. Land rigs, which lost 19 units a week ago, gained 16 back to total 1,838. Offshore rigs were up 2 units to 66. Rigs drilling in inland waters were untouched from a week ago at 10. Oil rigs increased 11 units to 1,575 while gas rigs increased 8 units to 338. Rigs considered unclassified dropped a unit for the second straight week, and now only 1 unit remains. Horizontal drilling rigs were up 9 units to 1,330, more than recouping last week’s 8-unit loss. Directional drilling rigs edged up a unit to 210. For the second consecutive week Canada reported a 4-unit gain to its rig count. A 9-unit jump in gas rigs to 178 […]

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EU wants interim solution to gas crisis

Russian energy company Gazprom this year cut gas supplies to Ukraine, citing mounting debt. Ukraine, for its part, has complained about the terms of its contract and is waiting for a ruling from international arbiters. Oettinger met in Moscow with Russian Energy Minister Alexander Novak to discuss finding an interim price mechanism that’s fair, ensuring all transit obligations are met and negotiating a repayment plan for unpaid gas debt. "Ukraine has to pay an account for the gas to be delivered in the months to come," he said in a statement. Europe gets about a quarter of its gas needs met by Russia, though most of that runs through the Soviet-era transit network in Ukraine. Ongoing crises in Ukraine have put European energy security at risk. "Our main goal is to secure gas supply to the European Union and its citizens, but also to the citizens in Russia, Ukraine, […]

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British shale company Cuadrilla wins in court

A court in Manchester passed an interim measure preventing trespassing on land secured by the company for shale natural gas exploration. Francis Egan, the company’s chief executive officer, said the injunction was a victory in its controversial campaign in the country. "We hope the court’s ruling will help deter this kind of unlawful behavior in the future," he said in a statement Thursday. Cuadrilla last year witnessed rowdy demonstrations in the southern British village of Balcombe. The company’s exploratory drilling program led demonstrators to believe hydraulic fracturing, or fracking, would be next for the site. Local police last year said they were frustrated with "the criminal activities" of some of the protest groups. The British government says shale resources could ensure energy security for a country where imports will account for more than half of the country’s demands in the coming decades. Advocacy groups have expressed concern that some […]

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EU Fails to Broker Russia, Ukraine Gas Truce

MOSCOW—The European Union has failed to broker a truce to resolve the long-running natural gas dispute between Russia and Ukraine at high-profile talks Friday, though the Kremlin said gas supply to Europe should be safe this winter. EU energy chief Günther Oettinger traveled to Moscow to discuss a possible interim deal with Russian Energy Minister Alexander Novak ahead of three-way talks, which it is hoped will take place next week. The talks coincide with a sharp escalation in the conflict between Russia and Ukraine. On Thursday, Ukraine accused Russia of invading the country , saying Russian troops seized the coastal town of Novoazovsk and other villages along the border. At Friday’s gas talks, Russia repeated its previous offer to sell gas to Ukraine at a discount of $100 per 1,000 cubic meters of gas, Mr. Novak said after meeting Mr. Oettinger. The offer puts the price of a 1,000 […]

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Brent Crude Lower

By Cassie Werber Brent crude oil was lower Thursday morning with supplies plentiful and demand limited, with oil for immediate delivery selling particularly cheap. Physical crude oil prices are weak, said VTB analyst Andrey Kryuchenkov, with North Sea grades selling at a discount to dated Brent, the benchmark. In the futures market, meanwhile, the nearest month continues to trade at a notable discount to later months–a market condition known as contango. "We believe Brent prices are well reflective of the current fundamental picture, justified by the comfortable supply-side cushion and weak refining demand in Europe," Mr. Kryuchenkov said. The latest data from the U.S. Energy Information Administration showed a 2.1 million barrel draw in crude stocks. "A crude stock decline was driven by continuing high refinery operations, " BNP Paribas said in a report. However, crude stocks at the Nymex delivery point of Cushing, Okla., rose for a fourth […]

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Natural-Gas Prices Rise on Smaller-Than-Expected Surplus

By Timothy Puko NEW YORK– Natural-gas futures are inching up Thursday after a weekly stockpile report showed a smaller surplus than expected. Producers added 75 billion cubic feet of gas to storage for the week ended Aug. 22, the U.S. Energy Information Administration said. The addition was 2 bcf smaller than the 77 bcf consensus average expectations of by analysts and brokers in The Wall Street Journal survey. Natural gas for October delivery immediately added 1.8% after the data release, on top of gains from early-morning trading. The market pulled back nearly all of that spike, but is still rising on the day, recently trading up 6 cents, or 1.5%, to $4.063 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 past winter. Last week’s […]

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Low-carbon economy necessary, U.N. says

Guy Ryder, director general of the International Labor Organization, and Christiana Figueres , executive secretary of the U.N. Framework Convention on Climate Change, issued a joint statement on the economic benefits of a low-carbon economy. Ahead of the climate summit scheduled later this year in New York City, the leaders said they were putting momentum behind the narrative in response to questions about the job prospects. "If properly managed, environmental sustainability can lead to more and better jobs, poverty reduction and social inclusion," they said Wednesday. "In fact, the transition to the green economy could generate up to 60 million additional jobs over the next two decades." A draft report published this week from the Intergovernmental Panel on Climate Change finds emissions are falling in most Western countries because of an increased use of low-carbon energy resources and improvements in energy efficiency. The rising industrialization of Asian economies, however, […]

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Violence not affecting key Iraqi oil field, says Gulf Keystone Petroleum

Operations at a key oil field in the Kurdish north of Iraq are "essentially uninterrupted" by violence, the top executive of Gulf Keystone Petroleum said. Peshmerga, a Kurdish military force, has fought against the Islamic State, the Sunni-led insurgency group that’s taken control over parts of northwestern Iraq and Syria. Some energy companies operating in the region have suspended operations as a security precaution . John Gerstenlauer, chief executive officer at Gulf Keystone, said operations in the region are still in service . "Our operations in the Kurdistan region … are progressing well with the two existing Shaikan production facilities producing in the range of 20,000 – 25,000 barrels of oil per day and crude oil export deliveries continuing essentially uninterrupted since late November 2013 to date," he said. The company said it sold around 100,000 barrels of oil to the domestic market during the first half of the […]

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Iran vetting oil customers

Iran can sell about 1 million barrels of oil per day on the international market under the terms of an agreement reached with Western powers in exchange for a commitment to curb nuclear research activity. Iranian Oil Minister Bijan Zanganeh said a five-member group vetting future oil contracts is "precise" when determining export destinations. "Many countries are willing to buy Iran’s oil, but when studies are made, we find out that there is not even $1 million in their accounts, not to mention enough money to pay for an oil cargo," he said Wednesday. Zanganeh said the country aims to more than double its crude oil production from 2.5 million barrels per day to 5.7 million bpd within the next three years. Oil sales for the first four months of the year were up 5 percent when compared with last year, the government said.

Posted On : Published By : Tom Whipple
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Pemex Pursuing Tax Reimbursement After Overstating Output

Petroleos Mexicanos is preparing a request for the reimbursement of taxes the state-owned oil company paid on barrels it never produced. Pemex, whose taxes provide Mexico’s government with about a third of its budget, may seek the refund after over-reporting crude output for the first seven months of the year, according to investor relations head Rolando Galindo. Negotiations with the Finance Ministry could be lengthy and might not result in a reimbursement, he said in a telephone interview yesterday. The Mexico City-based producer last week reduced its year-to-date production through July to 2.34 million barrels a day from a previously reported 2.47 million, attributing the difference to water levels and measurement inaccuracies. Earlier yesterday, a person with direct knowledge of the matter said Pemex plans to ask for the reimbursement and is in the process of calculating how much it overpaid. The person asked not to be named because […]

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Peak Oil – Geothermal electrical output approaches 12,000 megawatts worldwide

In 2013, world geothermal electricity-generating capacity grew 3 percent to top 11,700 megawatts across 24 countries. Although some other renewable energy technologies are seeing much faster growth—wind power has expanded 21 percent per year since 2008, for example, while solar power has grown at a blistering 53 percent annual rate—this was geothermal’s best year since the 2007-08 financial crisis. Graph on World Cumulative Installed Geothermal Electricity-Generating Capacity, 1950-2013 Geothermal power’s relatively slower growth is not due to a paucity of energy to tap. On the contrary, the upper six miles of the earth’s crust holds 50,000 times the energy embodied in the world’s oil and gas reserves. But unlike the relative ease of measuring wind speed and solar radiation, test-drilling to assess deep heat resources prior to building a geothermal power plant is uncertain and costly. The developer may spend 15 percent of the project’s capital cost during test-drilling, […]

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U.S. Tightens Rules Amid Worst Barge Spills Since 2008

Tighter regulation of U.S. ships carrying record exports of diesel and gasoline is coming amid the worst year for oil spills from barges since 2008. Coast Guard rules to be issued within the next 90 days would require commercial vessels nationwide to be equipped with Automatic Identification System, or AIS, technology, which uses transponders and electronic chart displays to alert pilots to neighboring ships, according to trade group American Waterways Operators. A pending inspection regulation would bring ships more in line with trains and trucks that carry similar cargo. Growing amounts of shale oil that’s made the U.S. the world’s biggest energy producer moves through inland waterways on ships almost twice as long and that carry 10 times the load of vessels plying the same routes in the 1960s. Export traffic on the Houston Ship Channel in 2013 rose 8.8 percent to a record 109.2 million metric tons. Towing […]

Posted On : Published By : Tom Whipple
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Marcellus booming, Wood Mackenzie says

Energy consultant group Wood Mackenzie describes Marcellus as the largest natural gas basin of its kind in the world when based on production. The group said there may be more than $90 billion left in value in the play based on projected output from new wells. Jonathan Garret, a researcher in the exploration and production market in the United States, said the top 20 operators in Marcellus are expected to generate $86 billion in shale value. "These operators are forecast to spend nearly $110 billion in the play and to drill over 25,000 Marcellus wells through 2035," he said in a statement Wednesday. By 2020, Wood Mackenzie estimates Marcellus, centered largely in Pennsylvania, should produce an average of 20 billion cubic feet of equivalent per day, which it said would represent 25 percent of the total U.S. natural gas supply . Wood Mackenzie says the number of active rigs […]

Posted On : Published By : Tom Whipple
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Energy Department says gas prices should fall after Labor Day

The Energy Information Administration, which crunches numbers for the Energy Department, said a decline in the price of Brent crude oil, the global benchmark, was the main driver behind lower gasoline prices in the United States. Oil prices account for more than half of the price at the pump. Brent as of Monday was priced at $100.49 per barrel, up about $1 from the previous week. For Thursday, Brent was priced at $102.72. Nationally, motor club AAA said the price for a gallon of gasoline was $3.43 per gallon, two cents lower than Monday. EIA said Monday’s price was the lowest price on the Monday before Labor Day in four years. Looking ahead, EIA said the monthly average price per gallon is expected to keep falling through the end of the year to reach $3.30 by December. "Gasoline prices often fall after Labor Day as seasonal demand wanes and […]

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Texas reviews seismic link to fracking

A Texas energy regulator said it was reviewing industry practices for hydraulic fracturing brought into question after a series of seismic events in the state. The city of Azle, which lies in the area of the Barnett shale natural gas field, has reported nearly two dozen tremors since November. A regional profile from the U.S. Geological Survey says so-called induced earthquakes , those caused by injecting fluid underground for the purpose of extracting oil or natural, may be at play in parts of Texas. Ramona Nye, a spokeswoman for the Texas Railroad Commission, told energy news website Rigzone the agency was serving as the facilitator in talks between those in the industry and researchers from Southern Methodist University. "[They] are the ones directly investigating whether there is a link between North Texas Azle area oil and gas disposal wells and seismic events in that area," she said Wednesday. The […]

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Energy Industry Will Flourish in Independent Scotland, Says Minister

The role and future of oilfields off Scotland and their revenue streams have been a source of debate in the run-up to the Scottish independence referendum. BP ETAP (Eastern Trough Area Project) oil platform in the North Sea, pictured here in February, is around 100 miles east of Aberdeen, Scotland. Agence France-Presse/Getty Images ABERDEEN, Scotland—Scotland votes next month on whether to split from the U.K., and Scottish Energy Minister Fergus Ewing is trying to reassure oil companies that the country’s large energy industry will flourish after independence. "Our (energy) policy has been primarily designed by industry," Mr. Ewing said in a recent interview, promising that won’t change in an independent Scotland. Britain’s oil and natural-gas reserves, much of them off Scottish shores in the North Sea, have become a particularly fraught flash point in the debate over independence, which culminates in a Sept. 18 referendum. Recent polling suggests Scots […]

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Rail deliveries of U.S. oil continue to increase in 2014

Source: U.S. Energy Information Administration, based on Association of American Railroads Note: Values in graph represent monthly averages of weekly rail carloadings. The amount of crude oil and refined petroleum products moved by U.S. railroads increased 9% during the first seven months of this year compared with the same period in 2013. In July, monthly average carloadings of oil and petroleum products were near 16,000 carloads per week, according to the Association of American Railroads (AAR). The increase in oil volumes transported by rail reflects rising U.S. crude oil production, which reached an estimated 8.5 million barrels per day in June for the first time since July 1986. AAR estimates that more than half of the nearly 460,000 carloads tracked in its petroleum and petroleum products category from January through July consisted of crude oil, up from around 3% in 2009. With the average rail tank car holding around […]

Posted On : Published By : Tom Whipple
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BP confirms fire at Whiting refinery

HOUSTON, Aug. 28 08/28/2014 An overnight fire at BP PLC’s 413,000-b/d refinery in Whiting, Ind., has resulted in only minimal interruptions to operations at the site, the company said. The fire, which broke out at about 9:00 p.m. on Aug. 27 following an “operational incident” at an unidentified process unit on the north end of the complex, was extinguished at 10:55 p.m. by the refinery’s in-house fire department, BP said. No serious injuries have been reported as a result of the incident, and an employee that was taken to a local hospital as a precautionary measure has since been released, the company said. The incident has minimally impacted operations at the Whiting complex, and production of petroleum products at the refinery remains ongoing, said BP. Details regarding the precise nature of the operational incident that caused the fire or the exact unit involved were not disclosed. Last year, BP […]

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Crisis deepens as Ukraine says Russian troops back rebel advance

KIEV (Reuters) – Ukrainian President Petro Poroshenko said on Thursday that Russian forces had entered his country and the military conflict was worsening after Russian-backed separatists swept into a key town in the east. Poroshenko said he was cancelling a visit to Turkey and conferring with defense chiefs because of the "rapidly deteriorating situation" in the eastern Donetsk region, "as Russian troops have actually been brought into Ukraine". A NATO military officer said: "We assess well over 1,000 Russian troops are now operating inside Ukraine… They are supporting separatists (and) fighting with them." Russia says it has no involvement in the conflict between pro-Moscow rebels and the Ukrainian military, in which more than 2,200 people have been killed since April. It denies sending in weapons or troops, despite the capture of 11 soldiers inside Ukraine this week who Moscow said had probably crossed the border by accident. Russia’s envoy […]

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Ukraine Accuses Russia of Invasion

Ukrainian President Petro Poroshenko said Russian forces had entered Ukraine and seized the coastal town of Novoazovsk, putting a diplomatic response to the crisis in doubt. Photo: Agence France-Presse/Getty Images Ukraine on Thursday accused Russia of invading the country, dashing hopes of progress toward a diplomatic resolution and challenging the West to respond. A senior official of the North Atlantic Treaty Organization said that more than 1,000 Russian troops were fighting alongside pro-Russian separatists in eastern Ukraine, by far the largest such force ever reported by the Western alliance. But he stopped short of calling it an invasion, saying it represented an "incursion" apparently aimed at preventing Kiev’s forces from defeating pro-Russian rebels, rather than a broader assault on Ukraine. Kiev said Russian forces have seized the coastal town of Novoazovsk and several villages near the border with Russia. Ukraine’s President Petro Poroshenko called an emergency meeting with his […]

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EU to Broach Interim Russia-Ukraine Gas Deal in Meeting Friday

BRUSSELS—The European Union’s energy chief will be on a mission to broker a truce in the long-running natural-gas feud between Russia and Ukraine, and avert gas shortages in Europe this winter when he travels to Moscow Friday. After more than two months of gridlock, Günther Oettinger will discuss a possible interim deal with Russian Energy Minister Alexander Novak ahead of three-way talks as early as next week. The talks coincide with a sharp escalation in the conflict between Russia and Ukraine. On Thursday, Ukraine accused Russia of invading the country, saying Russian troops seized the coastal town of Novoazovsk and other villages along the border. During his visit, Mr. Oettinger will warn that the "worsening of the situation is counterproductive to a solution of the gas talks and could potentially harm long-term energy relations with the Russian Federation. These talks are of common interest for all sides, also for […]

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US Energy Boom Better Than Sanctions Against Russia

Hess To Form MLP For North Dakota Oil, Gas Transport Assets This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. U.S. oil production is surging, and it’s helping to cripple the Russian economy. It’s a win-win situation With 40 percent of the Russian economy hinging on oil and gas sales, America’s oil and gas boom is doing more to bring President Vladimir Putin to his knees than any of the sanctions being imposed by the U.S. and Europe. Competition in the form of increased U.S. energy exports is the last thing Putin wants to see, so that’s exactly what we should do. Russia is currently the third-largest oil producer and the top exporter of natural gas, and you better believe that Putin uses these advantages to push his agenda regionally and globally. Russia needs oil prices to stay above $110 […]

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Oil Futures Slightly Lower in Subdued Trading

By Eric Yep Crude-oil futures fell slightly in Asia Thursday as trading remained subdued in a well-supplied market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $93.57 a barrel at 0523 GMT, down $0.31 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange fell $0.13 to $102.59 a barrel. Nymex crude-oil prices didn’t react much to data that showed U.S. oil stocks fell 2.1 million barrels to 360.5 million barrels–the lowest level since Jan. 31–in the week ended Aug. 22. "A crude stock decline was driven by continuing high refinery operations," BNP Paribas said in a report. However, crude stocks at the Nymex delivery point of Cushing, Okla., rose for a fourth successive week, by 500,000 barrels. "Record-setting liquid fuels production growth in the United States has more than offset the growth of unplanned global supply disruptions […]

Posted On : Published By : Tom Whipple