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Oil Production In Permian Causes Pipeline Bottleneck In Texas

NEW YORK, Aug 12 (Reuters) – Oil production from the burgeoning Permian Basin of West Texas is outpacing pipelines’ ability to transport oil to the Gulf Coast, causing coastal refiners to pay an additional premium to acquire oil. On Monday, that bottleneck caused oil for delivery at Midland, Texas <WTC-WTM> to trade at nearly $20 a barrel less than Gulf Coast benchmark Light Louisiana Sweet <WTC-LLS>, the deepest discount in 17 months. It was little changed on Tuesday. The deep discount is a consequence of the U.S. shale revolution, which has unleashed a revival in U.S. production, unlocking billions of barrels of reserves of crude oil, boosting the economy and potentially outstripping domestic demand. In shale formations in the Permian Basin of Texas and New Mexico, the rate of growth for oil production is set to increase for the sixth consecutive month in September, according to data from the […]

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Ukraine to Block Russian Aid Trucks as It Tightens Noose Around Rebels

A convoy Russia says is loaded with humanitarian assistance for rebel-held areas of Ukraine headed for the border, as the government in Kiev set conditions for letting the aid in and the Red Cross demanded more details. Russia’s government said 280 trucks with 2,000 metric tons of donated food, medicine and water left Moscow yesterday and would proceed into Ukraine under the auspices of the Geneva-based International Committee of the Red Cross. Viktor Shcherbanyuk, a spokesman for the Ukrainian Red Cross in Kiev, said today there were was no agreeement for the convoy’s entry either with his organization or with the ICRC. The convoy was on its way to the Russian city of Belgorod about 70 kilometers (43 miles) from the Ukrainian city of Kharkiv, RIA Novosti said today. Related: Russia Stocks Fluctuate as Aid Convoy Rekindles Ukraine Tensions Ukraine expressed fears the convoy is carrying military equipment to […]

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Repsol Wins Final Permit to Drill for Oil Off Canary Islands

Spain’s government gave Repsol SA (REP) final authorization to begin exploring off the Canary Islands , capping the energy company’s 12-year quest for permission to tap what may be the nation’s biggest oil find. The Industry Ministry approved the project in a resolution dated Aug. 11 and published today in the Official Bulletin. The Spanish company’s partners are Woodside Energy Ltd. of Australia and German power company RWE AG. Should the drilling be successful, Madrid-based Repsol has estimated it will spend as much as 7.5 billion euros ($10 billion) to develop the site in waters near the Canary Islands of Fuerteventura and Lanzarote off Africa’s west coast. Spain’s largest oil company, which was held up for more than a decade by environmental challenges and delays by the government, has said it expects to begin work before year-end. Geologists have estimated the area between the Canaries and Morocco may hold […]

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Norway Oil Services See Russia Sanctions Risking Arctic Push

Aker Solutions ASA (AKSO) , the offshore engineering company controlled by billionaire Kjell Inge Roekke, could miss opportunities to expand into Russia ’s Arctic region if Europe and the U.S. uphold sanctions on the country. “If the political situation continues and the sanctions are long-term, they will mean lost market opportunities,” Chairman Oeyvind Eriksen said in Oslo yesterday. While the Fornebu, Norway-based company isn’t currently involved in any large projects in Russia, it’s “ready to consider” opportunities when the restrictions are lifted, he said. Aker Solutions , which has experience of the Arctic through projects it’s worked on off Norway , is seeking to expand into new markets as the company splits to focus on its subsea and engineering businesses to cut costs and improve shareholder returns. The company’s owners, which include Roekke’s investment company Aker ASA (AKER) and the Norwegian state, approved the split at a meeting in […]

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Gazprom Neft posts strong profits

The oil arm of Russian gas company Gazprom said Tuesday it made $2.4 billion in net profits in the first half of the year, up 13 percent from 2013. Gazprom Neft released its report for the first half of the year. On top of a boost in net profits, the company said an increase in hydrocarbon production helped drive sales up 13.9 percent year-on-year. "Hydrocarbon production volumes in the first half of the year increased 4.1 percent year-on-year to 234.18 million barrels of oil equivalent," the company said in a statement. The company last month announced a subsidiary started drilling into the arctic Dolginskoye field , where it estimates reserves at more than 200 million tons of oil equivalent. It June, the company started preliminary oil production from the Badra oil field in Iraq, which has estimated reserves of 3 billion barrels of oil. The U.S. Energy Information Administration, […]

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Russia Sends Aid Convoy to Eastern Ukraine

A convoy of 280 trucks near Moscow left for Ukraine on an international humanitarian relief mission on Tuesday morning. Ukrainian and Western leaders have expressed concerns that Russia could use an aid mission as cover for sending troops into rebel-held territory. (Photo: AP) MOSCOW—Russia sent a convoy of 280 trucks carrying what it said was humanitarian aid for war-torn cities in eastern Ukraine on Tuesday, setting off diplomatic tension over efforts to ease civilian suffering there. Ukrainian officials said that they had been notified by Moscow of the column and that it was expected to cross the border at a post near Kharkiv, under the control of Ukrainian authorities and the International Red Cross. But Kiev said the cargo would have to be transferred from the Russian trucks to Red Cross vehicles at the border, warning that any unilateral attempt to deliver aid would be viewed as an act […]

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Ukraine Crisis Takes Toll on Germany’s Economy, Powerhouse of the Eurozone

PARIS — An important reading on the health of the eurozone economy is expected to show this week that growth stagnated in the most recent quarter as German output faltered, confirming the assessment of many analysts that a lasting recovery remains out of reach for the region. Economists are expecting that in the 18-nation currency bloc, gross domestic product expanded 0.1 percent in the second quarter compared with the first quarter, equivalent to an annual rate of growth of 0.4 percent. The eurozone eked out quarterly growth of 0.2 percent in the first three months of the year. The eurozone G.D.P. report, to be released Thursday by the European Union statistical agency, Eurostat, is based on data from before the latest tensions over Ukraine, and before the sanctions against Russia for its involvement in the crisis began to be felt. That means there are plenty of questions hanging over […]

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Oil-price moves were muted Monday

Oil-price moves were muted Monday as clashes in the Middle East and Eastern Europe appeared to have a limited potential effect on supplies. Light, sweet crude for September delivery rose 43 cents, or 0.4%, to settle at $98.08 a barrel on the New York Mercantile Exchange. The global Brent crude contract fell 34 cents, or 0.3%, to $104.68 a barrel on the ICE Futures Europe exchange. The market appeared to be stabilizing after a slide that has knocked about 8% off barrel prices in the U.S. and 9% globally since mid-June highs, with the U.S. benchmark touching a six-month low last week, said Gene McGillian, a broker at wholesale brokerage Tradition Energy. The market reached a crescendo then as traders speculated that violence in Iraq, Ukraine and Libya would interrupt global crude flows, but traders have since sold bullish positions to their lowest level since January after those disruptions […]

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Crude Rises for Third Day as U.S. Inventories Seen Lower

West Texas Intermediate gained for a third day on estimates that U.S. oil inventories dropped as refineries processed record amounts of crude for this time of year. Brent slipped. Stockpiles may have declined for a seventh time in the week ended Aug. 8, according to a Bloomberg survey before an Energy Information Administration report on Aug. 13. Refineries used 16.4 million barrels of oil a day in the week ended Aug. 1, the most since EIA began weekly data in 1989. Brent narrowed its premium over WTI on speculation that U.S. air strikes in Iraq diminished the threat to oil supplies posed by insurgents. “We are still seeing that trend here in the U.S. in terms of strong refinery demand,” said John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “There is a bit of an argument for WTI to […]

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Hedge Funds Unfazed by Iraq as Bullish Brent Bets Cut

Hedge funds cut bullish bets on Brent crude to the lowest level in six months last week, another signal that traders expect supplies from Iraq to remain safe from an Islamist insurgency in the north of the OPEC member. Brent futures traded near a nine-month low in London today as U.S. air strikes against Islamic State militants in northern Iraq reassured investors that oilfields in the adjacent Kurdish region would stay unaffected. Supplies from southern Iraq, home to about 85 percent of the nation’s output, continue to flow undisturbed by violence in the north, with Oil Minister Abdul Kareem al-Luaibi saying that exports will exceed 2.5 million barrels a day in August. “For me, it’s justified,” Torbjoern Kjus, an analyst at DNB ASA in Oslo said of the pull-back by traders. “I wouldn’t be putting on any new positions. It’s going to be a mess in Iraq for a […]

Posted On : Published By : Tom Whipple