Category:

Robert Rapier: Why Natural Gas Prices Collapsed

Over the course of the next two columns, I plan to finish up the recent look at BP’s  Statistical Review of World Energy 2014 . The final two columns will focus on renewable energy, and carbon dioxide emissions. Today I want to provide an update on the natural gas picture, as prices declined sharply at the end of July. I have laid out the argument since last winter that because of the deep inventory hole that developed over the course of the exceptionally cold winter, natural gas prices would remain high relative to last year, and that as a result natural gas producers would likely report higher year-over-year profits. (For background on the inventory picture, see my February column Natural Gas Inventories are Headed Toward Zero ). First, let’s look at what natural gas prices have done since winter. The chart below from the Energy Information Administration (EIA) shows […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Tumble as Demand Flags

NEW YORK—The U.S. is staging airstrikes in Iraq, Russian troops are amassing on the Ukraine border and Israel and Hamas are at war. All three conflicts have the potential to threaten oil output. But investors and traders say they are worried less about oil supplies and more about soft demand. They have sent Brent crude, the benchmark for world oil prices, tumbling this week. Brent hit a 13-month low during intraday trading Wednesday before recovering to end at $104.28 a barrel. Prices have gradually ticked lower since mid-June, retreating more than 9%. The drop has helped bring relief at the pump for U.S. drivers, who are paying an average $3.47 for a gallon of regular gasoline, down from $3.62 a month ago, according to AAA. The most recent losses came after the International Energy Agency on Tuesday lowered its demand forecast for 2014, citing weaker-than-expected second-quarter economic growth in […]

Posted On : Published By : Tom Whipple
Category:

Brent Oil Rebounds From 13-Month Low; WTI Holds Steady

Brent oil rose from a 13-month low on speculation prices decreased more than justified given supply threats and the ability to ship excess barrels. West Texas Intermediate advanced. Futures climbed 1.2 percent in London after falling below $103 for a second day. Brent has slipped in the past month as Libyan and West African production has rebounded. Kurdish forces fought to retake positions overrun by Islamic State fighters in northern Iraq as Prime Minister Nouri al-Maliki tried to cling to power. The Energy Information Administration reported that U.S. crude supplies rose last week while fuel stockpiles fell. “The Brent market is oversold,” Harry Tchilinguirian , the head of commodity markets strategy at BNP Paribas in London, said by phone. “The correction was overdone given that the surplus supplies in the Atlantic basin can be moved to Asia given how much prices have fallen. North Sea maintenance is reducing supply, […]

Posted On : Published By : Tom Whipple
Category:

Brent Rises On Supply Risks, US Crude Down As Stockpiles Build

Robert Gibbons & Anna Louie Sussman 8/13/2014 URL: http://www.rigzone.com/news/oil_gas/a/134525/Brent_Rises_On_Supply_Risks_US_Crude_Down_As_Stockpiles_Build NEW YORK, Aug 13 (Reuters) – Brent crude oil rose by nearly $1 per barrel in choppy trading on Wednesday, recovering from a 13-month low as turmoil in Iraq and Libya kept concerns about potential supply disruptions in focus. The sale of several Nigerian cargoes in the West African cash crude market also gave Brent prices a lift. U.S. crude prices edged higher, paring earlier modest losses after the U.S. Energy Information Administration (EIA) reported crude oil inventories rose 1.4 million barrels last week, against expectations stocks would be lower. The U.S. crude oil stocks build included a 418,000-barrel increase at the Cushing, Oklahoma, delivery point for the U.S. crude contract traded on the New York Mercantile Exchange. Ahead of the front-month September contract’s expiration on Thursday, Brent crude rose $1.26 to settle at $104.28 a barrel. The session low of […]

Posted On : Published By : Tom Whipple
Category:

EIA Sees US 2014 Natgas Output Up 5.3% From 2013's Record

Aug 12 (Reuters) – The U.S. Energy Information Administration on Tuesday raised its estimate for U.S. natural gas production in 2014 to 5.3 percent over 2013’s record high levels. In its August Short-Term Energy Outlook (STEO), the EIA said it expects marketed natural gas production in 2014 to rise 3.71 billion cubic feet per day (bcfd) from 2013 to 73.89 bcfd, up a bit from last month’s forecast increase. That would be the fourth straight annual record as strong increases in Texas and the Marcellus states offset declines in the Gulf of Mexico, EIA said, noting production in 2015 is expected to grow by 2.1 percent over 2014. EIA also forecast gas consumption in 2014 will rise 1.24 bcfd, or 1.7 percent, from 2013 to 72.57 bcfd, up a bit from last month’s forecast increase. Consumption gains were led by the industrial sector, EIA said. EIA projected working gas […]

Posted On : Published By : Tom Whipple
Category:

EIA Sees US 2014 Natgas Output Up 5.3% From 2013’s Record

Aug 12 (Reuters) – The U.S. Energy Information Administration on Tuesday raised its estimate for U.S. natural gas production in 2014 to 5.3 percent over 2013’s record high levels. In its August Short-Term Energy Outlook (STEO), the EIA said it expects marketed natural gas production in 2014 to rise 3.71 billion cubic feet per day (bcfd) from 2013 to 73.89 bcfd, up a bit from last month’s forecast increase. That would be the fourth straight annual record as strong increases in Texas and the Marcellus states offset declines in the Gulf of Mexico, EIA said, noting production in 2015 is expected to grow by 2.1 percent over 2014. EIA also forecast gas consumption in 2014 will rise 1.24 bcfd, or 1.7 percent, from 2013 to 72.57 bcfd, up a bit from last month’s forecast increase. Consumption gains were led by the industrial sector, EIA said. EIA projected working gas […]

Posted On : Published By : Tom Whipple
Category:

Libya Plans to Resume Exports From its Largest Oil Port Next Week

CAIRO—Libya plans to restart exports from its largest oil port Es Sider next week after a one-year interruption, people familiar with the matter said Wednesday. The news, which comes after shipments restarted this week from another key terminal, Ras Lanuf, shows Libyan oil exports are set to gain momentum after a slower-than-expected restart. On July 1, rebels who had occupied Ras Lanuf and Es Sider in Eastern Libya for nearly a year agreed to let oil exports resume after a deal with the central government. Despite oil prices falling by $5 a barrel amid expectations of increased exports, they had not restarted from the two ports until now as Libya struggled to find buyers. But Libya’s state-owned National Oil Co. is planning to restart exports at the Es Sider port, which can load 340,000 barrels a day, next week, according to people familiar with the matter. The first 600,000 […]

Posted On : Published By : Tom Whipple
Category:

US credits strikes with allowing Iraqis to escape

EDGARTOWN, Mass. (AP) — Crediting U.S. airstrikes and humanitarian aid, the Obama administration said Wednesday many trapped Iraqis have fled a mountain where they had sought refuge from militants, making it less likely the military would have to carry out a potentially dangerous rescue mission. The assessment came after U.S. troops secretly scouted Sinjar Mountain Wednesday, revealing far fewer people than originally thought. Defense Secretary Chuck Hagel said six days of U.S. airstrikes against militant targets in the region gave many people an opportunity to get off the mountain. He also said the food and water supplies the U.S. airdropped to the refugees helped to sustain them during the ordeal. U.S. officials said only several thousand refugees remained on the mountain, far lower than the tens of thousands that had been reported earlier. As a result, a rescue mission is "far less likely now," Hagel said Wednesday night, adding […]

Posted On : Published By : Tom Whipple
Category:

Iran says no oil trade deal with Russia yet

The chief of staff for Iran’s president said oil and natural gas contracts with Russia were on the table, though formal deals would evolve in the future. Mohammad Nahavandian, chief of staff for Iranian President Hassan Rouhani , said Iran was eager to strengthen its economic ties with Russia . "Both sides will try to sign agreements in different fields, including in the oil and natural gas sector," he said Tuesday. Western governments had expressed concern over the possibility that Iran was working on an oil-for-goods swap deal with Russia. Iranian Oil Minister Bijan Zanganeh said the government had endorsed such a deal, but nothing was formalized. "We do not have any oil barter trade deal between Iran and Russia," he said in a statement. Both sides already cooperate in a variety of fields, with Russia supplying fuel for Iran’s nuclear reactor at Bushehr . The president’s chief of […]

Posted On : Published By : Tom Whipple
Category:

Exclusive: Islamic State militants grab new weapon – Iraqi wheat

BAGHDAD/ABU DHABI (Reuters) – After seizing five oil fields and Iraq’s biggest dam, Sunni militants bent on creating an Islamic empire in the Middle East now control yet another powerful economic weapon – wheat supplies. Fighters from the Islamic State have overrun large areas in five of Iraq’s most fertile provinces, where the United Nations food agency says around 40 percent of its wheat is grown. Now they’re helping themselves to grain stored in government silos, milling it and distributing the flour on the local market, an Iraqi official told Reuters. The Islamic State has even tried to sell smuggled wheat back to the government to finance a war effort marked by extreme violence and brutality. International officials are drawing uneasy comparisons with the days of hardship under dictator Saddam Hussein, when Western sanctions led to serious shortages in the 1990s. "Now is the worst time for food insecurity […]

Posted On : Published By : Tom Whipple