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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 […]

Posted On : Published By : Tom Whipple
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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 […]

Posted On : Published By : Tom Whipple
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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 […]

Posted On : Published By : Tom Whipple
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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.

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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, […]

Posted On : Published By : ASPO-USA
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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 […]

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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