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Demand for Sand Takes Off Thanks to Fracking

Frackers are expected to use nearly 95 billion pounds of sand this year. A sand mine in Garnavillo, Iowa. Stephen Mally for The Wall Street Journal Sand prices are rising and companies are racing to build new mines in South Dakota and other locations as demand intensifies for the silica crystals that energy companies use to frack oil and gas wells. Sand is a key ingredient in items from solar panels to smartphones, but in recent years billions of pounds of it have been poured down wells to help coax more fuel out of the ground. In hydraulic fracturing, sand is mixed in a slurry of water and chemicals, then pumped down a hole to crack open dense rocks so oil and gas can escape to the surface. Frackers are expected to use nearly 95 billion pounds of sand this year, up nearly 30% from 2013 and up 50% […]

Posted On : Published By : Tom Whipple
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Low Rates Have Helped Fund Drilling; Tighter Policy May Not Choke Off Boom

The oil patch has run up the mother of all tabs. So will rising interest rates choke off the shale boom? Between 2006 and 2012, U.S. exploration and production companies clocked almost $1 trillion in capital expenditure, far above operating cash flow of $670 billion, according to Raymond James. Companies have proven adept at filling that funding gap, not least by raising debt. The E&P sector in 2007 was carrying $28.84 of net debt per barrel of oil equivalent produced, according to data from IHS , roughly equal to operating cash flow. By last year, net debt per barrel had jumped 36% to more than $39, while cash flow was essentially flat. That should provide fuel for those who doubt the shale boom’s longevity, as rising debt levels choke off returns and the capacity to invest in new wells to keep production growth going. Moreover, as the Federal Reserve […]

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Oil Sector's Cash Recovery Isn't Total Success

Europe’s major oil companies are starting to pay their own way. The sector has beaten the market so far this year in the hope that spending cuts and improving operations would mean companies could cover their investment and dividends from operating cash flow. Covering its out-goings should shore up investors’ faith in the sector’s ability to churn out healthy payouts to shareholders, after years where funds were shoveled into grandiose capital projects, depressing returns. Now the sector finally seems to be making progress. Visitors pass the Total corporate pavilion during the 21st World Petroleum Congress in Moscow on June 16. Total will struggle to hit its target of $10 billion in free cash flow for 2015. Bloomberg News Europe’s biggest oil and gas companies—Royal Dutch Shell, BP , Total , Eni and Statoil —generated nearly $32 billion of operating cash flow in the second quarter, notes Morgan Stanley, up […]

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Oil Sector’s Cash Recovery Isn’t Total Success

Europe’s major oil companies are starting to pay their own way. The sector has beaten the market so far this year in the hope that spending cuts and improving operations would mean companies could cover their investment and dividends from operating cash flow. Covering its out-goings should shore up investors’ faith in the sector’s ability to churn out healthy payouts to shareholders, after years where funds were shoveled into grandiose capital projects, depressing returns. Now the sector finally seems to be making progress. Visitors pass the Total corporate pavilion during the 21st World Petroleum Congress in Moscow on June 16. Total will struggle to hit its target of $10 billion in free cash flow for 2015. Bloomberg News Europe’s biggest oil and gas companies—Royal Dutch Shell, BP , Total , Eni and Statoil —generated nearly $32 billion of operating cash flow in the second quarter, notes Morgan Stanley, up […]

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Shale Energy Driving a Reassertive America

President Richard Nixon of the United States of America is probably the most infamous of all the American presidents to ever hold office. His involvement in the Watergate scandal and the Vietnam War are all that’s left of him in the memory of most Americans today. However in 1973, at the peak of the oil crisis, when national oil reserves were depleting and oil prices per barrel had increased by more than 300%, he made his famous address to the people in November, where he said “ Restating our overall objective. It can be summed up in one word that best characterizes this nation and its essential nature. That word is ‘ independence ’.” Today, nearly 40 years after the oil crisis crippled America, they are one step closer to Nixon’s ambitious plan of full energy independence. On July 31st, 2014; an oil tanker, the BW Zambesi , set […]

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How the U.S. got mixed up in a fight over Kurdish oil — with a unified Iraq at stake

The oil tanker SCF Byrranga, which was renamed the United Kalavrvta in March, is seen near the Isle of Arran, Scotland. The tanker is currently off the coast of Texas, carrying $100 million worth of Kurdish crude oil. (Tom Duncan/Reuters) Sixty miles off the coast of Texas sits a crude-oil tanker fully loaded with years of antagonism between the Kurdish region of Iraq and the central government in Baghdad. The United Kalavrvta, a tanker the length of three football fields, is carrying about 1 million barrels of crude oil from the Kurdish region of Iraq. It set sail for Galveston, but it never got there. The central government of Iraq, despite recent military setbacks, dispatched its American lawyers to do battle in the federal court in southern Texas, where a judge ruled that the tanker’s cargo, worth about $100 million, should be seized if it came within Texas state waters. […]

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Bakken fuels North Dakota’s oil production growth

The Bakken counties total exceeds the North Dakota state total because the Bakken counties include crude oil production from some counties in eastern Montana. North Dakota production is for the entire state, not just counties in the Bakken Region. North Dakota crude oil production surpassed 1.0 million barrels per day (bbl/d) in April and May (the latest data available). This record is the result of increasing crude oil production from the Williston Basin’s Bakken and Three Forks formations in North Dakota and eastern Montana. Although Bakken oil production initially began in the 1950s at Antelope Field in North Dakota, large-scale production growth did not begin until after the discovery of the Parshall Field in 2007. Since then, advances in drilling methods and technology, a better understanding of the geology of the Bakken, higher crude oil prices, […]

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Shale gas: ‘The dotcom bubble of our times’

Public opinion has been divided very starkly indeed by the government’s invitation to energy companies to apply for licences to develop shale gas across a broad swathe of the United Kingdom. On the one hand, many environmental and conservation groups are bitterly opposed to shale development. Ranged against them are those within and beyond the energy industry who believe that the exploitation of shale gas can prove not only vital but hugely positive for the British economy. Rather oddly, hardly anyone seems to have asked the one question which is surely fundamental: does shale development make economic sense? My conclusion is that it does not. That Britain needs new energy sources is surely beyond dispute. Between 2003 and 2013, domestic production of oil and gas slumped by 62pc and 65pc respectively, while coal output decreased by 55pc. Despite sharp increases in […]

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Bakken Shale Gas Flaring Highlights Global Problem

High rates of natural gas flaring in the Bakken shale formation are symptomatic of infrastructure limitations that prevent this gas from reaching a market. Although various technical options could reduce flaring from high-output well sites, none matches the benefits of developing large-scale outlets for the gas. The Wall St. Journal recently reported on the high rate at which excess natural gas from wells in North Dakota’s Bakken shale formation is burned off, or “flared.”  The Journal cited state data indicating 10.3 billion cubic feet (BCF) of gas were flared there during April 2014. That represented 30% of total gas production in the state for the month. North Dakota’s governor attributed the high volume of gas flared in his state to the great speed at which the Bakken shale has been developed, outpacing gas recovery efforts. Oil output ramped up from 200,000 barrels per day five years ago to just over […]

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Ukraine’s army positioning to move on rebels in Donetsk

A pro-Russian separatist guards a checkpoint near the Ukrainian village of Rozsypne in the Donetsk region Monday. The Ukrainian government appeared to be readying an assault on Donetsk, which is held by separatists. (Sergei Karpukhin/Reuters) KIEV, Ukraine — The Ukrainian military on Monday appeared to be readying a long-awaited major assault on the rebel stronghold of Donetsk, warning civilians to leave as troops tightened their ring around the city amid heavy fighting. Extra evacuation corridors were set up for cars bearing white flags, said Andriy Lysenko, a military spokesman. The Donetsk city government posted the corridor routes on its Web page and noted: “As practice shows, such messages are distributed before the start of active combat operations.” Lysenko also announced that troops had taken the town of Yasynuvata, home to a key railway control center between Donetsk and Luhansk. The military has almost encircled the two large cities, where […]

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Buildup Makes Russia Battle-Ready for Ukraine

WASHINGTON — Russia has roughly doubled the number of its battalions near the Ukrainian border, Western officials said Monday, and could respond to the Kiev government’s gains there by launching a cross-border incursion with little or no warning. Over the past several weeks, Russia has built up 17 battalions — totaling 19,000 to 21,000 troops, according to one Western estimate — into a battle-ready force of infantry, armor, artillery and air defense within a few miles of the border. In addition, it has vastly expanded its firepower, increasing the number of advanced surface-to-air missile units to 14 from eight, and deploying more than 30 artillery batteries, according to the officials. The Kremlin’s intentions in increasing its military abilities remain unclear. President Vladimir V. Putin of Russia could be seeking to pressure Ukraine and the United States to agree to a political settlement that would grant the eastern provinces of […]

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Germany cancels defence contract with Russia

The Vladivostok warship, a Mistral class…The Vladivostok warship, a Mistral class LHD amphibious vessel ordered by Russia to the STX France shipyard in Saint-Nazaire, western France, leaves for her first trial on March 5, 2014. The Vladivostok warship is one of two navy ships ordered from France by the Russian army and it will take part in a sea trial. AFP PHOTO / FRANK PERRYFRANK PERRY/AFP/Getty Images France is coming under further pressure to cancel its contract with Russia for three Mistral war ships Germany on Monday cancelled a contract to supply Russia with a €120m combat simulation centre, amid an escalating row among European partners about arms sales to Moscow, including France’s €1.2bn warship contract. In Russia the decision by Germany to withdraw authorisation for the three-year contract is expected to accelerate moves to cut dependence on imported military technology, which have already been boosted by last week’s […]

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Peak oil proponents still dancing around reality

The debate over whether we are running out of oil sometimes resembles the medieval controversy over how many angels could dance on the head of a pin. By redefining the size of the pin and the agility of the angels, today’s “peak oil” proponents have managed to continue the argument. The characters have changed though. Matthew Simmons, author of Twilight in the Desert, casting doubt on Saudi oil production, died in August 2010, and the Oil Drum website closed down last September. New disputants, including economist James Hamilton from the University of California, and Stephen Kopits, the managing director of the consultancy Douglas-Westwood, argue that oil production is limited by geology and is a severe drag on economic growth. These factors will ultimately drive up the oil price if they are right. On the other side of the argument, voices such as the Reuters columnist John Kemp, who states […]

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Oil Futures Steady, Brent Trades Near $105/bbl

Crude-oil futures are stable in Asian trade Monday after dropping sharply last week, with Brent holding up around $105 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $97.98 a barrel at 0541 GMT, up $0.10 in the Globex electronic session. September Brent crude on London’s ICE Futures exchange rose $0.20 to $105.04 a barrel. Nymex crude last week posted its largest one-week percentage decline since the week ended Jan. 3, falling 4.12%, and has been down for four of the past six weeks. Brent crude lost 3.28% last week and has been down for five of the past six weeks. "Although there’s room for the flow of selling to continue, the decline of the past six weeks certainly means that the market has become more conservatively valued, no longer overbought, and with much less of a […]

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Brent Trades Near Four-Month Low Before Economic Data; WTI Holds

Brent crude traded near the lowest price in four months before economic data from the U.S., the world’s biggest oil consumer. West Texas Intermediate held near a six-month low. Futures were little changed in London and New York today after declining last week. The Markit Economics purchasing managers index for U.S. services is due tomorrow, while factory order data is also scheduled this week. In Iraq , militants seized control of two oil fields and some predominantly Kurdish towns in the north after clashes, according to Northern Oil Co. “Though geopolitical factors show no signs of improvement, markets seem to be turning to economic data and the supply-demand situation for direction,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middlefart, Denmark , said in a report. The U.S. data “could cause some volatility.” Brent for September settlement rose 13 cents, or 0.1 percent, to $104.97 a barrel […]

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Oil Bears Bet Right as Futures Retreat to Six-Month Low

Oil speculators bet right on prices after a fire at a refinery supplied by the biggest U.S. crude hub curbed demand and drove futures to a six-month low. Hedge funds and other money managers trimmed their net-long position again in the week through July 29, extending the drop from this year’s peak in June to 22 percent, U.S. Commodity Futures Trading Commission data show. West Texas Intermediate crude fell 6.8 percent in July, the most in more than two years. CVR Energy Inc. (CVI) shut the Coffeyville refinery in Kansas after a fire July 29, reducing purchases from Cushing, Oklahoma , the delivery point for New York futures. Refiners cut back operating rates as gasoline demand dropped and fuel stockpiles increased. “Coffeyville strikes right at the heart of Cushing and it’s going to have an outsized impact on Cushing inventories,” said John Kilduff , a partner at Again Capital […]

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Peshmerga in Ceasefire with IS South of Kirkuk at Tribal Behest

Kurdish Peshmerga forces have declared a three-day unilateral ceasefire south of Kirkuk after a demand by Arab tribal chiefs in the area. Peshmerga military officials in the town of Daquq told Rudaw that Arab tribes had asked for the ceasefire – that started Saturday evening —  to give them a chance to try and persuade Islamic State (IS/ISIS) militants to leave the area. The tribes fear that a resumption of fighting between the Peshmerga and IS would cut off the Kirkuk-Tuz Khurmatu highway and affect many ethnically-mixed villages that lie in the frontlines. Meanwhile, Kurdish commanders said they fear that the Islamic militants might use the truce to regroup and bring in reinforcements from elsewhere. Until now the Sunni militants, who have declared an Islamic State straddling large parts of Iraq and portions of Syria, had locked in sporadic clashes with […]

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Sunni Extremists in Iraq Seize 3 Towns From Kurds and Threaten Major Dam

Sunni extremists seized control of three towns in northern Iraq on Sunday after fierce battles with Kurdish security forces, sending thousands of people fleeing to the nearby mountains and threatening the country’s largest dam. In the darkness of Sunday morning, the Sunni fighters swept in to take one of the towns, Sinjar, and set about their method of conquest, which is as familiar as it is brutal: They destroyed a Shiite shrine, executed resisters, overran local security forces and hoisted the black flag of the Islamic State in Iraq and Syria, or ISIS, above government buildings. Hours later, as the militants demanded that the city’s residents swear allegiance to ISIS or be killed, the group’s social media campaign was underway, with photos posted online showing militants patrolling the city. The United Nations representative in Baghdad, Nickolay Mladenov, issued a statement on Sunday, citing reports he had that […]

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Iraq's Yazidi minority flees militant threat

Tens of thousands from Iraq’s minority Yazidi community have fled their homes after Sunni militants captured their towns in the latest offensive to expand the territory of their self-styled caliphate. As Kurdish fighters struggled to hold back the onslaught of the Islamic State militants on Iraq’s north, some 40,000 Yazidis, a minority religious sect, fled the northern towns of Sinjar and Zumar, said Jawhar Ali Begg, a spokesman for the community. "Thousands of Yazidi people have been killed," he said. The militant group gave the Yazidis, who follow an ancient religion with links to Zoroastrianism, an ultimatum to convert to Islam, pay a tax or face death, Begg added. Iraq is facing its worst crisis since the 2006 civil war when the Islamic State group, an al-Qaida breakaway faction with a strong presence in Syria, captured large swaths of land in the country’s west and […]

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Iraq’s Yazidi minority flees militant threat

Tens of thousands from Iraq’s minority Yazidi community have fled their homes after Sunni militants captured their towns in the latest offensive to expand the territory of their self-styled caliphate. As Kurdish fighters struggled to hold back the onslaught of the Islamic State militants on Iraq’s north, some 40,000 Yazidis, a minority religious sect, fled the northern towns of Sinjar and Zumar, said Jawhar Ali Begg, a spokesman for the community. "Thousands of Yazidi people have been killed," he said. The militant group gave the Yazidis, who follow an ancient religion with links to Zoroastrianism, an ultimatum to convert to Islam, pay a tax or face death, Begg added. Iraq is facing its worst crisis since the 2006 civil war when the Islamic State group, an al-Qaida breakaway faction with a strong presence in Syria, captured large swaths of land in the country’s west and […]

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Iraqi Militants Capture Two Oil Fields in North, Kurdish Towns

Militants from Islamic State, a breakaway al-Qaeda group, took control of two oil fields and some predominantly Kurdish towns in northern Iraq following clashes, according to the Northern Oil Co. The Ain Zala and Batma oil fields, which together have an output of 30,000 barrels per day, are under full control of the group, according to a statement by the state-run Northern Oil Co. The Sunni Islamist militants last month occupied the Qayyara oil field north of Baghdad. Islamic State, which was previously known as Islamic State in Iraq and Levant, has seized territory in northern and western Iraq, taking over oil wells and fighting for control of refineries. Islamic State fighters continued their advance yesterday, taking over the village of Wana, south of the Mosul dam, according to Hisham al-Brefkani, a member of the provincial council of Nineveh. A retreat by Kurdish fighters from the village was a […]

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Special Report : The doubt at the heart of Iraq's Sunni 'revolution'

Sheikh Ali Hatem Suleiman, one of the leaders of the Sunni revolt against the Shi’ite-led government of Iraq, sat cross-legged on a couch last month, lit another Marlboro Red, and discussed the struggle with visitors from his home city of Ramadi, where the uprising began late last year. Instead of taking delight in the rebellion’s progress, though, the 43-year-old crown prince began lamenting the fact that Iraq’s patchwork quilt of ethnicities and religions was being torn apart. "How do we guard what we still have?" he asked his visitors. The revolutionary sheikh’s doubts may seem surprising. Over the past seven months the Sunni armed factions which Suleiman helps lead, and their allies in the far more extreme al Qaeda offshoot known as Islamic State, have captured most of the north’s largest Sunni cities. The battle against Prime Minister Noori al-Maliki in Baghdad has spread north […]

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Special Report : The doubt at the heart of Iraq’s Sunni ‘revolution’

Sheikh Ali Hatem Suleiman, one of the leaders of the Sunni revolt against the Shi’ite-led government of Iraq, sat cross-legged on a couch last month, lit another Marlboro Red, and discussed the struggle with visitors from his home city of Ramadi, where the uprising began late last year. Instead of taking delight in the rebellion’s progress, though, the 43-year-old crown prince began lamenting the fact that Iraq’s patchwork quilt of ethnicities and religions was being torn apart. "How do we guard what we still have?" he asked his visitors. The revolutionary sheikh’s doubts may seem surprising. Over the past seven months the Sunni armed factions which Suleiman helps lead, and their allies in the far more extreme al Qaeda offshoot known as Islamic State, have captured most of the north’s largest Sunni cities. The battle against Prime Minister Noori al-Maliki in Baghdad has spread north […]

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Tripoli Clashes Toll Rises by 22 as Libya Crisis Deepens

Britain dispatched its navy to evacuate its nationals from Libya as 22 other people were killed as a result of militia feuds near Tripoli’s international airport that have plunged the oil producer deeper into chaos. The U.K.’s move came as the government announced the latest death toll today, a day after most members of the North African country’s new legislature met in the city of Tobruk near the Egyptian border. It was their first meeting as a unit since elections were held to replace the General National Congress. The choice of venue for the House of Representatives’ first session, which was delayed until Monday, reflects concerns about the collapse of security in Tripoli and in Benghazi, the nation’s second-largest city. More than two weeks of fighting between rival militias, and pro- and anti-Islamists have left about 200 dead and hundreds more wounded, according to state media. The violence marks […]

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Libya Says Tripoli Fuel-Tank Fire Spreads, Warns of Disaster

Libya warned Sunday of the risk of a humanitarian and environmental disaster after eight fuel tanks caught fire amid heavy fighting near Tripoli’s international airport between rival militias, pushing the oil producer deeper into chaos. Rockets fired by one of Libya’s militias hit Tripoli’s main fuel depot near the airport Saturday, setting a gasoline tank ablaze, but firefighters deployed to tackle the fire were forced back by the militia fighting. The fire rapidly spread to seven other tanks, increasing the risk of an explosion at the site, which contains 90 million liters (almost 24 million gallons) of fuel and cooking gas. "Since the morning firefighters from Brega Petroleum Marketing Co. have been trying to enter the depot to control the fire […]

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British Citizens Flee Tripoli on Ship as 25 Libyans Are Reportedly Killed in Fighting

A British Navy ship on Sunday evacuated about 100 British citizens from the Libyan capital, Tripoli, as 25 Libyans were reported killed in the fighting between rival militias that has torn apart the city and destroyed its airport. The scenes of anxious foreigners fleeing by boat recalled the mayhem at the start of the Libyan uprising under Col. Muammar el-Qaddafi in 2011, though Tripoli residents say the violence has now become more severe than at any time during the revolt or since. What began three weeks ago as a relatively isolated battle for the airport has spread to round-the-clock skirmishes in pockets throughout the city. More than 200 are believed to have died in the fighting. The battle in the capital is part of a sharp escalation in a national struggle between the allies and opponents of the political Islamist movement. The contest is already dividing the […]

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German Business Looks to Renew Iran Contacts

German businesses are cooling on Russian investments amid anger over Russia’s role in the Ukrainian conflict while simultaneously warming on another big country hit by Western sanctions: Iran. Companies across Germany have quietly rekindled once-strong commercial ties with Iran, industry officials said. The shift, also occurring in other European countries, is possible because Western governments—working to prevent Iran from developing nuclear weapons—in November granted it some relief from sanctions. Talks on a broader deal continue, sparking hope among some businesses that Iran’s market of 77 million potential consumers could soon open to them. "The market will explode when the embargo gets lifted," predicted Stephanie Spinner-König, managing director of high-tech component maker Spinner GmbH and a participant in one of two German business delegations that visited Iran this year. While German companies see opportunities in Iran, few want to discuss it publicly. Many fear talking up the pariah country could […]

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Africa Oil State Hooked on U.S. Fuel: Chart of the Day

First the U.S. shale-oil boom took away Nigeria ’s biggest crude-export market. Now Africa ’s biggest economy is depending on American fuel to power its vehicles and planes. The CHART OF THE DAY shows how U.S. imports of Nigerian crude have almost converged with American sales of refined-petroleum cargoes like gasoline and kerosene shipped in the opposite direction. The U.S. gets less than 2 percent of its oil from Nigeria, compared with 7 percent in 2011, Energy Department data show. Nigeria imported more than half of its fuels from America at times in 2013, from less than a fifth three years ago, according to IHS Inc., a consulting firm. Surging oil output in the U.S., most of it banned from export under decades-old laws, hands refiners on the Gulf Coast inexpensive feedstock to process into cargoes such as gasoline for sale overseas. Nigeria’s growing dependence highlights its […]

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India Runs Short on Coal, Despite Global Price Slump

India’s reliance on domestic coal has left many of its power stations starved for fuel, forcing electricity cuts throughout the country, even as the price of coal imports slumps. Despite having the world’s third-largest coal reserves, according to the International Energy Agency, a quarter of India’s 100 coal-fired power stations are short of supply with stocks of less than four days, and some hanging onto even lower stockpiles, official and trade data showed. A prolonged summer and below-normal monsoon rains have exacerbated the situation by raising electricity demand. At the same time, global coal prices have fallen to their lowest levels in years, with ANZ predicting in a report last week that prices will drop 10% more over the next two to three years as China slows spending. […]

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Dispute Flares Over Burned-Off Natural Gas

It isn’t every day that an energy company tries to give away cash, but one of the biggest oil producers in North Dakota is trying to do just that. Continental Resources Ltd. says it wants to pay state taxes and make royalty payments on natural gas it improperly burned off at dozens of wells in recent years. The company is asking state regulators to approve its plans, including the value it is assigning to the gas that was burned in the controversial practice known as flaring. "We believe we’re the first operator out there asking to be allowed to pay royalties and taxes," said Brooks Richardson, Continental’s director of risk enterprise management. Continental and other North Dakota drillers say they were forced to burn off gas they would have rather […]

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Shale industry scales back potential in region

From The Grand Junction Daily Sentinel (Gary Harmon): An oil shale industry in Colorado, Utah and Wyoming is likely to be about one-third the size it had been envisioned, an industry association said. Instead of a 1.5-million barrel-per-day industry, the more likely scenario is a 500,000-barrel-per-day industry, according to estimates by the National Oil Shale Association. The estimates were dramatically reduced “in light of a more pragmatic view of what an industry might look like in 50 years or so,” the association said, in an estimate that also noted that oil shale production would demand less water than had been previously believed. The United States in 2013 consumed 6.89 billion barrels of petroleum products or 18.89 million barrels per day, according to the U.S. Energy Information Administration. The oil shale association’s estimate is based on production of 225,000 barrels per day from in-situ means, or heating shale deep below […]

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New War Risk on Russia Fringes Amid Armenia-Azeri Clashes

The leaders of Armenia and Azerbaijan plan to meet this week in a bid to defuse escalating tensions between the two countries after at least 18 soldiers were killed in the worst clashes in two decades. The fighting in the past week in the disputed region of Nagorno-Karabakh has been the deadliest since the two former Soviet states signed a cease-fire in 1994. Armenian President Serzh Sargsyan will hold talks with his Azeri counterpart Ilham Aliyev in the Russian city of Sochi on Aug. 8-9, Armenian Prime Minister Hovik Abrahamyan said on the government’s website. “We hope that serious arrangements will be reached during the meeting,” Abrahamyan said. “We are not afraid of war, I just think it is not clever to solve problems with wars in the 21st century.” The skirmishes between the South Caucasus countries, which border Turkey and Iran , flared amid the worst geopolitical standoff […]

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Oil Heads for Biggest Weekly Drop in 7 Months on Demand

West Texas Intermediate crude capped its biggest weekly decline in seven months on concern that demand will fall as refineries slow operations. Brent’s premium over WTI narrowed from a one-month high. Prices dropped for a fifth day as the refinery utilization rate fell last week for the first time in more than a month, according to government data. The rate may slip further because of a fire that shut CVR Refining LP (CVRR) ’s Coffeyville refinery in Kansas and the beginning of seasonal maintenance. Gasoline also slumped. “Weak fundamentals seem to be weighing on the market,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut . “Refineries are entering into the maintenance season and demand for WTI will drop off.” WTI for September delivery declined 29 cents, or 0.3 percent, to $97.88 a barrel on the New York Mercantile Exchange, the lowest settlement […]

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Oil Futures Prices Extend Losses

Oil futures prices extended their losing streak on Friday, falling in tandem with equity markets, as a key refinery outage in the U.S. was expected to weigh on commercial crude-oil demand. Light, sweet crude for September delivery fell 29 cents, or 0.3%, in price to $97.88 a barrel on the New York Mercantile Exchange, the lowest closing price since Feb. 6. The global Brent crude-oil contract fell $1.18, or 1.1%, to settle at $104.84 a barrel on the ICE Futures Europe exchange. It was the fifth-consecutive losing session for Nymex crude and the fourth in a row for Brent. Friday’s losses prolonged a six-week slump for crude-oil prices, which fell 6.8% on the Nymex and 5.6% on ICE in July. Analysts and traders said a host of factors were at work in pressuring down prices, from logistical hiccups in the pipeline and refinery system that would […]

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Natural Gas Prices Fall Again as Supply Exceeds Demand

Natural gas prices dropped slightly Friday as weather forecasts suggest demand won’t keep up with record supply. Prices for the front-month September contract settled down 4.3 cents, or 1.1%, at $3.798 a million British thermal units on the New York Mercantile Exchange. The contract gave back most of Thursday’s gains and landed 5.1 cents above the eight-month low closing price set earlier this week. Gas fell back this week immediately after both of its two winning sessions with analysts saying the overall supply-demand dynamic is too bearish to be broken by one-day market maneuvering. Prices jumped 1.5% Thursday when stockpile additions were smaller than expected, but ultimately they were still nearly double the average addition for this time of year. "There’s no demand for it at this point," said John Woods, president of JJ Woods Associates and a Nymex floor trader. "This market is basically […]

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NYMEX September gas futures settle 4.3 cents lower as traders eye strong output

NYMEX September gas futures settled 4.3 cents lower Friday to $3.798/MMBtu as the market continues to witness strong storage injections in light of cooler-than-normal weather in large parts of the US and continued supply growth. "Natural gas remains well supplied with the May gross production number released yesterday showing a 6.2% year-over-year increase and storage injections running consistently above the five-year average benchmark rate," said Tim Evans, analyst at Citi Futures Perspective. "However, the warming trend in the 11- to 15-day temperature forecast is at least something of a relative support within what remains a bearish fundamental trend," he added. Aaron Calder, analyst at Gelber & Associates, also focused on the production report, adding that it "placed a damper on bullish enthusiasm." "The current Northeast basis suggests, and the backward-looking production report confirms, that there is a ton of new production coming out of the Marcellus right now," Calder […]

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Risks Remain to Libya's Oil Supply Despite Reopening of Ports, Fields

The reopening of Libyan oil fields and ports this month has been a key factor behind a steady fall in international oil prices recently, with U.S. prices falling to a four-month low on Thursday. But markets may be overlooking resurgent risks to the North African country’s oil supply. Over the past week fighting for control of the airport in Tripoli, Libya’s capital, has set ablaze part of a storage facility holding 90 million liters (almost 24 million gallons) of oil during the worst violence in the country since the 2011 civil war that led to the downfall of former leader Moammar Gadhafi. The oil tank blazes and fighting in Tripoli and the eastern city of Benghazi have led to "serious doubts" about […]

Posted On : Published By : Tom Whipple
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Risks Remain to Libya’s Oil Supply Despite Reopening of Ports, Fields

The reopening of Libyan oil fields and ports this month has been a key factor behind a steady fall in international oil prices recently, with U.S. prices falling to a four-month low on Thursday. But markets may be overlooking resurgent risks to the North African country’s oil supply. Over the past week fighting for control of the airport in Tripoli, Libya’s capital, has set ablaze part of a storage facility holding 90 million liters (almost 24 million gallons) of oil during the worst violence in the country since the 2011 civil war that led to the downfall of former leader Moammar Gadhafi. The oil tank blazes and fighting in Tripoli and the eastern city of Benghazi have led to "serious doubts" about […]

Posted On : Published By : Tom Whipple
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Tunisia seals Libya border after violence

Tunisia has closed its main border crossing with Libya after thousands of stranded Egyptian and foreign nationals, fleeing ongoing fighting and violence in Libya, tried to break through the passage, the Tunisian news agency said. The unrest erupted on Friday when thousands of Egyptians, barred from entering Tunisia because they had no visa, held a protest then broke through part of a fence at the Ras Ajdir crossing, Tunisian security officials said. The news comes as Tunisia urged its estimated 50,000 to 60,000 nationals living in Libya to leave "as soon as possible" because of violence that has raged there since mid-July. "The ministry of foreign affairs urges Tunisians who find themselves in Libyan territory to return home as soon as possible," a ministry statement said. The border clashes on Friday was the second incident at the border in as many days, as thousands of Libyans stream into neighbouring Tunisia, along with foreign […]

Posted On : Published By : Tom Whipple
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Gaza Cease-Fire Collapses; Israeli Soldier Is Captured

A newly reached cease-fire in the Gaza conflict quickly collapsed on Friday as the Israeli military announced that two soldiers had been killed and a third captured by Palestinian militants who emerged from a tunnel near Rafah in the southern Gaza Strip. The Israelis responded with fierce assaults that left dozens more Palestinians dead. The United States and United Nations, which had orchestrated the cease-fire, joined with Israel in condemning the capture, and President Obama asserted that the soldier must be freed in order to salvage a halt to the 24-day-old crisis. Gaza health officials said more than 35 Palestinians were killed and more than 100 wounded as Israeli forces bombarded the Rafah area. Palestinian witnesses said by telephone that Israeli tank shells had hit eastern Rafah as residents returned to inspect homes they had evacuated. Each side accused the other of violating the 72-hour truce, which […]

Posted On : Published By : Tom Whipple
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One Kurdish Tanker Waits Off Texas, Another Heads to U.S.

As a tanker filled with disputed Kurdish oil sits off the coast of Texas for a fifth day, another shipment may be making its way to the East Coast. The Minerva Joy left Dortyol, Turkey, a port used to export oil trucked from the Kurdish region of Iraq , on July 23 and is due to dock in Paulsboro, New Jersey, on Aug. 11, according to shipping data compiled by Bloomberg. It would be the sixth vessel carrying Kurdish oil to the U.S. Shipping and U.S. customs data show that two of those earlier shipments may have been delivered to LyondellBasell Industries NV (LYB) ’s refinery in Houston. The London-based petrochemical company said yesterday it will stop purchasing Iraqi crude after an ownership dispute arose associated with the recent shipments it purchased. “We have canceled further purchases and will not accept delivery of any of the affected crude until […]

Posted On : Published By : Tom Whipple
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'No U.S. ban' on Iraqi oil, spokeswoman says

There is no ban in the United States on the sale or transfer of oil from any part of Iraq, a spokeswoman for the U.S. State Department said. The crude oil tanker United Kalavryta, carrying 1 million barrels of crude from the Kurdish north of Iraq, is at anchor off the coast of Texas out of U.S. jurisdiction. The federal Iraqi government filed a case in the U.S. courts against the possible unilateral sale of oil from the semiautonomous Kurdish north of Iraq in the U.S. market. Washington has sided with Baghdad in the assertion that sales of Iraqi oil must go through the federal Iraqi government, arguing Kurdish oil sales are in violation of the Iraqi constitution. State Department spokeswoman Marie Harf told reporters Thursday the government’s policy position was clearly in line with Baghdad’s. The issue should be resolved in a manner consistent with the Iraqi constitution, […]

Posted On : Published By : Tom Whipple
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‘No U.S. ban’ on Iraqi oil, spokeswoman says

There is no ban in the United States on the sale or transfer of oil from any part of Iraq, a spokeswoman for the U.S. State Department said. The crude oil tanker United Kalavryta, carrying 1 million barrels of crude from the Kurdish north of Iraq, is at anchor off the coast of Texas out of U.S. jurisdiction. The federal Iraqi government filed a case in the U.S. courts against the possible unilateral sale of oil from the semiautonomous Kurdish north of Iraq in the U.S. market. Washington has sided with Baghdad in the assertion that sales of Iraqi oil must go through the federal Iraqi government, arguing Kurdish oil sales are in violation of the Iraqi constitution. State Department spokeswoman Marie Harf told reporters Thursday the government’s policy position was clearly in line with Baghdad’s. The issue should be resolved in a manner consistent with the Iraqi constitution, […]

Posted On : Published By : Tom Whipple
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U.S. gas prices should continue drop, AAA says

Retail gasoline prices in the United States should be lower for August in part because of higher refinery output, a spokesman for AAA said. The motor club reports a national average price for a gallon of regular unleaded gasoline for Friday of $3.51, nearly 3 cents lower than one week ago and 12 cents cheaper year-on-year. Early season prices had increased in part because of the Sunni-led insurgency in Iraq. On the domestic front, AAA spokesman Avery Ash said gasoline prices were lower in the United States because of the increased production and higher refinery output. "Falling gas prices are nearly the opposite to what we usually see this time of year," he said in a statement Thursday. "Refineries are running at full tilt and there is more than enough gasoline in the market, which has helped bring down prices despite multiple overseas conflicts." Ash said […]

Posted On : Published By : Tom Whipple
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Fifth cargo of Kurdish crude oil from Ceyhan completes loading, heads south

The tanker carrying the fifth cargo of Kurdish crude to load out of the Turkish port of Ceyhan is currently heading south through the eastern Mediterranean with a destination of Port Said in Egypt, according to Platts vessel-tracking software c-Flow. The crude tanker Kamari finished loading its cargo of 1 million barrels of medium sour crude from the Kurdish region of northern Iraq on Thursday. Cardiff Tankers, owners of the Kamari, declined to comment. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more The flow of crude from Kurdistan has not yet been restarted following the lifting of the fifth cargo, an official from Turkey’s energy ministry said Friday. The official said […]

Posted On : Published By : Tom Whipple
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Chinese local gov'ts to be graded on pollution reduction

Chinese local governments will be graded for their achievements in reducing PM 2.5 and PM 10, both being indicators of air pollution, according to plans unveiled on Friday. Local governments will be graded for two tasks: improving air quality, and preventing air pollution. They will be given percentage grades for both tasks, with 100 as the maximum, according to the plan posted on the website of the Ministry of Environmental Protection (MEP). Reductions of average PM 2.5 and PM 10 density will be the major determinant of governments’ grades for improving air quality. If both density readings rise compared to the previous year, the responsible governments will be graded zero. Governments’ grades on preventing air pollution will be determined by a string of indicators measuring factors including industrial restructuring and clean production. The plan was put forward by the MEP, the National Development and […]

Posted On : Published By : Tom Whipple
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Chinese local gov’ts to be graded on pollution reduction

Chinese local governments will be graded for their achievements in reducing PM 2.5 and PM 10, both being indicators of air pollution, according to plans unveiled on Friday. Local governments will be graded for two tasks: improving air quality, and preventing air pollution. They will be given percentage grades for both tasks, with 100 as the maximum, according to the plan posted on the website of the Ministry of Environmental Protection (MEP). Reductions of average PM 2.5 and PM 10 density will be the major determinant of governments’ grades for improving air quality. If both density readings rise compared to the previous year, the responsible governments will be graded zero. Governments’ grades on preventing air pollution will be determined by a string of indicators measuring factors including industrial restructuring and clean production. The plan was put forward by the MEP, the National Development and […]

Posted On : Published By : Tom Whipple
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Refinery Fire Eases Concern Cushing Stockpiles Will Sink

The announcement that a refinery in Kansas will be shut for longer than expected has eased concern that oil supplies at the main U.S. trading and storage hub will sink to minimal operating levels. The plant in Coffeyville may remain idle for four weeks after a July 29 fire, CVR Refining LP (CVRR) Chief Executive Officer Jack Lipinski said yesterday on an earnings call. The 115,000-barrel-a-day plant receives most of its crude from Cushing, Oklahoma , the delivery point for West Texas Intermediate crude futures traded in New York. Supplies at the hub have fallen by more than half this year. “The shutdown will have a noticeable impact on supply at Cushing,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Plunging Cushing supplies have been a major supportive factor for WTI. Inventory levels should start to reverse.” WTI for […]

Posted On : Published By : Tom Whipple
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Two LNG export deals get U.S. nod

A facility along the Texas coast was cleared for exports of liquefied natural gas sourced from domestic supplies, the Federal Energy Regulatory Commission said. Freeport LNG Development is to build a plant capable of processing 1.8 billion cubic feet of natural gas per day for exports to countries with and without free-trade agreements with the United States. The federal government must weigh trade to non-FTA countries against the public’s interest. FERC in a statement Thursday said the Freeport LNG is required to adhere to more than 80 conditions to mitigate potential environmental impacts. Supporters of LNG exports say it will be a source of domestic economic stimulus while enhancing U.S. leverage overseas. Opponents say it could lead to higher natural gas prices at home and lead to more hydraulic fracturing, a controversial drilling practice seen as harmful to the environment. Conditional approval was given Thursday by the U.S. Energy […]

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Enbridge Sees New Pipeline To US Gulf Operating In October

Enbridge Inc’s new 450,000 barrel-per-day Seaway Twin pipeline, to carry Canadian oil sands crude to North America’s largest refining complex on the U.S. Gulf Coast, will likely start operating in October, the company said on Friday. Enbridge, Canada’s biggest pipeline company, said mid October is most likely when the Seaway Twin will be filled with crude from the company’s new 600,000 bpd Flanagan South pipeline. Seaway Twin will carry crude from Cushing, Oklahoma, to oil tanks near Houston, and although the pipeline was mechanically completed in early July, it will not start operating before Flanagan South, which will run from Illinois to Cushing, is finished in early October. Traders have been closely monitoring the progress of the two pipelines, which will give Canadian oil sands producers another direct link to the Gulf Coast. "The plan had been, and still is, to do line fill for […]

Posted On : Published By : Tom Whipple