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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 […]

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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 […]

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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, […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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U.S. Breaks Siege on Iraqi Mountain, Defense Officials Say

WASHINGTON — Defense officials said late Wednesday that United States airstrikes and Kurdish fighters had broken the siege on Mount Sinjar, allowing thousands of Yazidis trapped there to escape. An initial report from about a dozen Marines and Special Operations forces who spent the last 24 hours on the mountain said that “the situation is much more manageable,” a senior defense official said in an interview. “A rescue effort now is much more unlikely,” the official said. Defense officials could not say how many Yazidis remained on the mountain, but Defense Secretary Chuck Hagel was expected to make an statement later Wednesday night. The announcement came after American military advisers landed on Mount Sinjar early Wednesday to begin assessing how to organize the evacuation. The United States had said it would consider using American ground troops to assist in the rescue if recommended by the military team.

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Maliki Plans to Carry Bid for Power to Iraq Courts

BAGHDAD — Prime Minister Nuri Kamal al-Maliki said Wednesday that he would press ahead in the Iraqi courts with his increasingly unlikely bid to retain power, and would not turn to the army. With so many political forces now aligned against Mr. Maliki, including the United States and Iran, and with his retreat from veiled threats to use force, the political crisis that has gripped Baghdad in recent days diminished in intensity, though it has not been completely resolved. In his weekly speech, Mr. Maliki said he was refusing to step aside because “we are defending the right of those who have voted” in the country’s election in April, in which his Shiite-led bloc won the most seats, though not a majority, in Parliament. “They voted in difficult conditions, because they are aware that Iraq cannot be built unless the right people come to office,” Mr. Maliki said, referring […]

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The forgotten front

Outside the zone of American air strikes, Kurdish forces are reeling as insurgents advance in Jalawla, extending their control into a key pocket of land between Kirkuk, Sulaimaniya, Baghdad and Iran. The forgotten front Kurdish Peshmerga pray at an outpost in Jalawla on July 9, 2014, one month into the fight against ISIS. (FERIQ FEREC/Anadolu Agency/Getty Images) Peshmerga forces are continuing to lose ground to extremist militants in northeastern Iraq, highlighting critical vulnerabilities of Kurdish defenses outside the limited zone of U.S. air strikes.The five-day American bombing campaign has blunted the momentum of insurgents on the western half of Kurdistan’s 1,000-kilometer border with the so-called Islamic State (formerly the Islamic State of Iraq and al-Sham, or ISIS).But to the east, near the border with Iran and along a strategic route… This content is for registered users. Please login to continue. If you are not a registered user, you may […]

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Mexico Outlines Plan to Open Oil Fields to Private Companies

Workers perform maintenance on the Laurus oil-drilling rig operated by Petroleos Mexicans (Pemex) at Campeche Bay off the coast of Ciudad del Carmen, Mexico, earlier this month. Bloomberg News MEXICO CITY—Mexico on Wednesday set aside the bulk of its currently active oil fields for Petróleos Mexicanos but said private companies will be allowed to bid on four-fifths of prospective resources as the government ends the national oil firm’s seven-decade monopoly. Officials hope that the bidding, starting as soon as next year, will spark an energy boom. Pemex’s chief executive said the new competition will help the company, making it more efficient. "Pemex has been waiting for these changes for decades," CEO Emilio Lozoya said in an interview at its headquarters here. "We’re committed to making sure that Pemex continues to be not only the largest company in Mexico, but to regain the largest spot in Latin America and be […]

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Pemex Granted All Probable Reserves Sought in Oil Opening

Petroleos Mexicanos , preparing for the end of its 76-year state oil monopoly, was granted rights to all the proved and probable oil reserves it sought for development as Mexico opens its doors to foreign competition. Pemex, as the state-owned company is known, will maintain 83 percent of the country’s so-called 2p reserves and 21 percent of potential reserves, Energy Minister Pedro Joaquin Coldwell said today in Mexico City. Mexico’s investment in fields will be $50 billion in 2015-2018, he said during a presentation of the non-competitive bidding known as round zero. The opening of Mexico’s energy industry to private investment is considered to be on a scale with the North American Free Trade Agreement in terms of economic significance, Alberto Ramos , chief Latin America economist at Goldman Sachs, said in an Aug. 7 research note. The energy ministry will now prepare for the first round of open […]

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Only 9 Chinese Cities Pass Clean Air Test

Photo A street scene in Beijing, where 20 million residents regularly experience unhealthy levels of pollution. A street scene in Beijing, where 20 million residents regularly experience unhealthy levels of pollution.Credit Wang Zhao/Agence France-Presse — Getty Images If you are looking for a Chinese city with clean air, your best bets would be Shenzhen, Zhuhai, Zhoushan, Zhanjiang, Yunfu, Beihai, Haikou, Sanya or Lhasa, according to the Ministry of Environmental Protection. Those are the only nine out of 161 monitored cities that met China’s new air quality standards in the first half of this year, the ministry announced on Wednesday. The stricter standards were rolled out by the government in 2012 as part of a continuing battle with air pollution in the country, the state news agency Xinhua reported . Chinese leaders have vowed a “war” on pollution as one of its most visible forms, smog, regularly envelops the country’s […]

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Ukraine races to beat Russian humanitarian aid convoy

epaselect epa04351827 A picture made available 13 August 2014 shows the Russian convoy carrying humanitarian aid for residents in rebel eastern Ukrainian regions moving along a road in the city of Voronezh, about 530 km from Moscow, Russia, 12 August 2014. Ukraine said that any foreign humanitarian aid will have to be delivered by the International Committee of the Red Cross, dealing a blow to a large Russian convoy en route to the country’s embattled east. The Ukrainian government fears the Russians could be supplying arms to separatists, under the guise of supplying 2,000 tons of food and medicine to civilians in the rebel-held areas. EPA/KIRILL USOLTSEV/MOE-ONLINE.RU The Russian convoy moves along a road in the city of Voronezh, about 530 km from Moscow on Tuesday. The convoy was still there on Wednesday. The road forks at the city, allowing two routes into Ukraine Kiev sent its own convoy […]

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U.S. oil production at 27-year high

The Energy Information Administration, the statistical arm of the Energy Department, said in its monthly short-term market report total U.S. crude oil production reached 8.5 million barrels per day in July, the highest monthly level since April 1987. EIA said oil production for full year 2014 should hold to the July level before rising by 9.3 million bpd in 2015, which would be the highest annual average level of production since 1972 . The highest annual average was 9.6 million barrels per day in 1970. EIA said in its report oil production from the Gulf of Mexico is expected to increase 15 percent from last year to finish 2014 at 1.44 million bpd, as nearly a dozen new projects come on stream. The rise in domestic oil production in turn means lower imports of foreign crude oil. EIA said imports nearly halved from 2005 to average 33 percent of […]

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Enno Peters’ post + EIA DPR Report

The first half of this post is a guest post by Enno Peters. The second half is taken from the latest EIA Drilling Productivity Report. GEOGRAPHICAL ANALYSIS OF WELL QUALITY IN NORTH DAKOTA by Enno Peters SUMMARY I was interested in doing a geographical analysis of the oil production in North Dakota. Detailed information made freely available by the NDIC allowed me to analyze how, geographically, wellperformance has been changing over time, in the area of North Dakota where most oil is produced. RESULTS In the following animated gif, you will see part of North Dakota. It contains the North West corner that borders Montana and Canada. The scale is in miles, with a rather arbitrary origin. Projected on this map is a contour map. The numbers of these contours are the cumulative 1 year returns for wells drilled within that area, and the unit is 1000 barrels of […]

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Russia sees EU gas production waning

A report Wednesday from Russia’s National Energy Security Fund finds gas production from EU member states declines 43 percent over the next 12 years when compared with 2013 levels. The research note finds the reduction in gas production is equivalent to the total annual consumption rate of Italy. It says the EU currently is able to meet only 35 percent of its domestic demand for gas and has few export partners outside Russia. A report from Eurostat, the EU statistics office, finds more than 40 percent of the region’s production of energy came from the combined contribution from renewable energy resources and coal. The share of natural gas in the energy mix of the 28 member states was 16.8 percent, while crude oil accounted for the rest. Eurostat said Russian exports of natural gas to EU members declined from 45.2 percent to 29.5 percent between 2002-10, but this trend […]

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Schlumberger expects loss from Russian sanctions

Oil services company Schlumberger said it expects to take a financial hit as a result of Western sanctions targeting the Russian energy sector. The United States, European and Canadian governments are among those targeting the Russian energy sector with sanctions in response to Moscow’s policies in eastern Ukraine and Crimea. Schlumberger said it was monitoring the events to make sure its activities are in line with applicable regulations regarding Russia’s energy sector. The company said the financial impacts should be limited to about 3 cents of earnings per share. "The sanctions are placing some restrictions on the engagement of certain people and equipment in our Russian operations which in the short term will have an impact on operational efficiency and costs in Russia," Schlumberger said in a statement Tuesday. British energy company BP said in July sanctions on the Russian energy sector, particularly oil company Rosneft, could impact business […]

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Ukraine accuses Russia of cynicism over convoy; death toll rises sharply

KIEV/VORONEZH Russia (Reuters) – Ukraine denounced Russia’s dispatch of a humanitarian aid convoy now advancing towards the border as an act of unbounded cynicism serving pro-Russian separatists, and the UN said the death toll in fighting had doubled in the last two weeks to over 2,000. Kiev said the trucks would not be allowed to pass. "First they send tanks, Grad missiles and bandits who fire on Ukrainians and then they send water and salt," Prime Minister Arseny Yatseniuk said at a government meeting on Wednesday. The comments reflected suspicions in Kiev and Western capitals that passage of the convoy onto Ukrainian soil could turn into a covert military action to help pro-Russian separatists now losing ground to government forces. The convoy of 280 heavy trucks rumbled out of Moscow region on Tuesday and traveled some 500 km (300 miles) to the southwestern Russian town of Voronezh. There it […]

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Ukraine Open to Russian Aid If Distributed by Red Cross

Ukraine opened the door to a compromise over humanitarian aid arriving on hundreds of trucks from Russia, saying it could accept the supplies if the Red Cross distributed them in the nation’s war-torn eastern regions. Ukraine also demanded that its own customs and border officers examine the shipments first near a checkpoint into the Luhansk region, where pro-Russian separatists have been battling government troops for months. Maria Zakharova, spokeswoman for Russia’s Foreign Ministry, didn’t answer a call to her mobile phone seeking comment outside of office hours in Moscow. There were conflicting reports on the location of the truck convoy. “A decision was taken to accept aid for Luhansk to avoid a full-scale invasion from Russia ,” Svyatoslav Tsegolko, a spokesman for President Petro Poroshenko, told reporters yesterday in Kiev. The Organization for Security and Cooperation in Europe would also be involved in checking the cargo that left Moscow […]

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Germany Puts Curbing Russia Ahead of Commerce

BERLIN — Over recent months, something significant has happened in Europe: In the crisis over Ukraine, Germany has assumed leadership not just in its familiar fashion of trying to coax Russia away from belligerence and bluster, but in standing firm and imposing sanctions on Moscow even if they hurt German business. Perhaps even more remarkable is that Germans, long anxious to preserve commercial, energy and cultural ties with their vast eastern neighbor, have gone along. Seventy percent of 1,003 adults polled last week by Infratest dimap for the public broadcaster ARD approved of stricter sanctions; just 15 percent viewed Russia as a reliable partner in a poll with a three-percentage-point margin of sampling error. In marked contrast to France’s leadership, Chancellor Angela Merkel and her government — a united “grand coalition” of center-right and center-left — have kept German businesses apprised of any shift in thinking and made it […]

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Russia vulnerable as oil prices hit nine-month low on IEA 'glut' warnings

A worker of Gujarat State Petroleum Corporation checks oil flow of well PK-2 during its inauguration at Ingoli village, about 40 kilometers (25 miles) southwest of Ahmadabad, India Oil prices have fallen to a nine-month low as surging supply from Opec and the US floods the market and fresh demand wilts, leading to an “oil glut” in the Atlantic region despite the twin crises in Iraq and Russia. The International Energy Agency (IEA) cut its forecast for the rise in global consumption to just 1m barrels a day (b/d) this year due to near recession conditions in Europe and as pervasive weakness in the world economy disappoints. This comes as supply rises by a further 300,000 b/d beyond what was already planned. The warning sent Brent crude prices tumbling to $104 a barrel, the lowest this year. The sudden shift in the balance of the market has allowed the […]

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Russia vulnerable as oil prices hit nine-month low on IEA ‘glut’ warnings

A worker of Gujarat State Petroleum Corporation checks oil flow of well PK-2 during its inauguration at Ingoli village, about 40 kilometers (25 miles) southwest of Ahmadabad, India Oil prices have fallen to a nine-month low as surging supply from Opec and the US floods the market and fresh demand wilts, leading to an “oil glut” in the Atlantic region despite the twin crises in Iraq and Russia. The International Energy Agency (IEA) cut its forecast for the rise in global consumption to just 1m barrels a day (b/d) this year due to near recession conditions in Europe and as pervasive weakness in the world economy disappoints. This comes as supply rises by a further 300,000 b/d beyond what was already planned. The warning sent Brent crude prices tumbling to $104 a barrel, the lowest this year. The sudden shift in the balance of the market has allowed the […]

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Oil Extends Losses, Brent Hits 13-Month Low

By Neena Rai Brent crude oil futures hit a 13-month low in Europe on Wednesday as markets remain well supplied despite geopolitical tensions. Brent crude traded at its lowest since early July 2013 after the International Energy Agency cut global demand forecasts Tuesday for both 2014 and 2015 and said markets remain well supplied, despite events in the Middle East and Ukraine. The U.S. Energy Information Administration also cut its forecast for global oil consumption in 2014 and 2015 in its monthly short-term energy outlook published Tuesday, although it noted slowing oil production growth by countries outside the OPEC cartel. September Brent crude on London’s ICE Futures exchange was down 0.4% at $102.60 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September were flat at $97.30 a barrel. "The IEA’s monthly report certainly did not help already downbeat sentiment on Tuesday," said […]

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Brent Falls to 13-Month Low Amid Signs China Is Slowing

Brent crude fell to its lowest intraday level in 13 months after slower industrial output and a plunge in new credit indicated the recovery is at risk in China , the second-biggest oil user. West Texas Intermediate was steady. Futures slipped as much as 0.6 percent in London . China’s broadest measure of new credit plunged to the lowest since the global financial crisis, while the National Bureau of Statistics in Beijing said growth in factory production slowed to 9 percent in July from 9.2 percent in June. U.S. government data today may show crude supplies shrank last week, according to a Bloomberg News survey. Libya exported the first oil cargo from Ras Lanuf port since it was closed by rebels a year ago. “The demand side has potential for a bearish surprise as we have growing uncertainty,” said Frank Klumpp, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany […]

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Stocks firmer as oil prices plumb 13-month low

LONDON (Reuters) – World stock markets ticked higher on Wednesday as brighter corporate results offset gloomy economic news from Asia and as oil prices plumbed 13-month lows as ample supply offset disruption risks posed by tensions in Iraq and Libya. European shares gained ground, helped in part by forecast-beating results from bellwethers such as Swiss Life (SLHN.VX) – whose stock jumped 3.5 percent after the open. The FTSEurofirst 300 .FTEU3 index of top European shares was up 0.4 percent, with MSCI’s world stock index .MIWD00000PUS up 0.6 percent. Recent market anxiety over the standoff between Russia and Ukraine ebbed slightly after Polish Foreign Minister Radoslaw Sikorski said late on Tuesday that the possibility of Russia’s military invading eastern Ukraine has receded after Moscow agreed to send in humanitarian aid under Red Cross auspices. Russian shares rose 0.4 percent on the reports that the aid convoy would cross the border […]

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Natural Gas Rising Again as Weather Forecasts Show More Heat Coming

By Timothy Puko (Adds price tables.) NEW YORK–Natural-gas prices closed barely higher Tuesday, with traders continuing their tenuous push as forecasts show a heat wave on the way. The front-month September contract settled up 0.9 cent, or 0.2%, at $3.974 a million British thermal units on the New York Mercantile Exchange. It narrowly advanced a three-week high set Monday and was the market’s sixth gain in seven sessions. Only two of those gains have been larger than 1%. Several forecasts grew notably warmer Tuesday, causing the early buying, analysts said. Heat causes people to turn on air conditioning and use more gas-fired electricity, and the pattern developing for the weekend includes some of the strongest heat in what has been a mild season. Above-normal temperatures should cover nearly all of the country by Monday, according to MDA Weather Services. The record pace of production had dropped gas prices about […]

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Highlights of the latest OMR

Welcome to the OMR Subscriber’s website Please check that your usage of this website conforms to the licence you subscribe to at http://www.iea.org/oilmar/licenceomr.html. Highlights of the latest OMR dated: 12th August 2014 Crude prices fell in July and early August as weak OECD refinery runs in June offset concerns about escalating conflicts in Iraq, Libya and Ukraine. At the time of writing, ICE Brent was below $105/bbl on hopes that US air strikes would lower disruption risks in major OPEC producer Iraq. WTI was around $98/bbl. The global oil demand growth forecast for 2014 has been lowered to 1.0 mb/d on lower-than-expected 2Q14 deliveries and a weaker GDP outlook from the IMF. Growth is set to accelerate to 1.3 mb/d in 2015 as the economy improves. Baseline demand estimates have been raised to reflect new 2012 non-OECD annual data. OPEC crude oil supply rose by 300 kb/d to 30.44 mb/d in […]

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World Awash in Oil Shields Markets From 2008 Price Shock

Fighting across Iraq, Libya , Ukraine and Gaza, and an accelerating economy, should mean higher oil prices . Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s. Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low. What’s changed is the shale fracking boom. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The International Energy Agency said yesterday that a supply glut is shielding the market from disruptions. Bank of America Corp., Citigroup Inc. and BNP Paribas SA concur. “ North America has pushed out an incredible amount of crude oil that […]

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IEA Lowers 2014 Oil Demand Growth Forecast

By Summer Said World oil demand will rise less than previously thought in 2014, due to a lower outlook for the global economy and demand growth in the second quarter falling to its lowest level in more than two years, the energy watchdog said Tuesday. In its monthly oil-market report, the International Energy Agency–which advises industrialized nations on oil policies–trimmed its projection for growth in global demand this year to 1 million barrels a day, down 180,000 barrels a day, citing weaker-than-expected demand in the second quarter. "Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin," the report said. "Remarkably low oil deliveries in both Europe and North America helped slash this report’s estimate of global demand growth for the second quarter of 2014 to less than 700,000 barrels a day […]

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With Natural Gas Byproduct, Iran Sidesteps Sanctions

Iran is finding a way around Western sanctions to export increasing amounts of an ultralight oil to China and other Asian markets, expanding the value of its trade by potentially billions of dollars a year. The exports come during a slight thaw in Iran’s relations with the West as negotiations over its nuclear program continue, and energy experts say it is counting on the United States and Europe to tolerate an increasing export stream. According to Iranian customs data, the country in recent months has exported 525,000 barrels a day of the ultralight oil, known as condensates, over two times more than it did a year ago. In the last three months, the sales have generated as much as $1.5 billion in extra trade — a rate of about $6 billion a year — based on Iranian trade figures and market prices, analysts said. The result has been an […]

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IEA: Oil demand growth forecast lowered on downgraded economic outlook

HOUSTON, Aug. 12 08/12/2014 The global oil demand growth forecast for 2014 has been curtailed since last month’s report to a more modest 1 million b/d, according to the International Energy Agency’s most recent Oil Market Report . The revision was primarily due to lower-than-expected second-quarter deliveries and downgraded macroeconomic outlook from the International Monetary Fund (IMF). Demand growth is forecast to accelerate in 2015 to 1.3 million b/d as the economy improves. Global oil supply in July averaged 93 million b/d, up 230,000 b/d from a month ago and 840,000 b/d from a year ago. With a boost from Saudi Arabia and a tentative recovery in Libyan output more than offsetting losses in Iraq, Iran, and Nigeria, production from members of the Organization of the Petroleum Exporting Countries rose by 300,000 b/d to 30.44 million b/d in July, a 5-month high. The “call” on OPEC crude and stock […]

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Short-Term Energy Outlook

Highlights The market’s perception of reduced risk to Iraqi oil exports and news regarding increasing Libyan oil exports contributed to a drop in the Brent crude oil spot price to an average of $107 per barrel (bbl) in July, $5/bbl lower than the June average. EIA projects Brent crude oil prices to average $107/bbl over the second half of 2014 and $105/bbl in 2015. West Texas Intermediate (WTI) crude oil prices fell from an average of $106/bbl in June to $104/bbl in July, despite record levels of U.S. demand for crude oil . The WTI discount to Brent, which averaged $11/bbl in 2013, is expected to average $8/bbl and $9/bbl in 2014 and 2015, respectively, both $1/bbl lower than projected in last month’s STEO. Regular gasoline retail prices fell to an average of $3.61 per gallon (gal) in July, 8 cents/gal below the June average. Regular gasoline retail prices […]

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Expats Flee Iraq’s Oil Boomtown as Islamic State Attacks

Marc Kolber, a native of Long Island , has spent more than three years overseeing the construction of offices for foreign oil companies in Iraqi Kurdistan . Now he’s joining an exodus of expatriates from the capital, Erbil. “The expat community in Erbil was thriving, it was a very welcoming and inclusive society,” Kolber said in a telephone interview as his employer made arrangements to evacuate staff. “But now about 80 percent of expats have left.” The Kurdistan region of Iraq has attracted hundreds of foreigners in the past five years, enticed by a mixture of oil, security and growing prosperity. The autonomous region, largely free from the violence that’s plagued the rest of the country, has some of largest untapped oil fields in the world. Related: Islamic State fighters are battling Kurdish troops just 50 miles (80 kilometers) from Erbil, threatening the energy boom that’s brought a thriving […]

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Militants Hold Seven Iraq Oil Fields After Syria Blitz, IEA Says

Islamic State fighters have captured seven oil fields in Iraq with a total output capacity of 80,000 barrels a day, adding to energy deposits they seized earlier in neighboring Syria, the International Energy Agency said. The insurgents, who swept into northern Iraq in June, grabbed the Ain Zalah and Batma fields in Nineveh province this month, the IEA said today in its monthly oil market report. They already controlled the Najma, Qayara, Himreen, Ajeel and Balad fields, the agency said. The potential flow of oil from deposits they hold in Iraq would fetch about $8.4 million a day on international markets, based on yesterday’s closing price for benchmark Brent crude of $104.68 a barrel. The militants, tapping oil fields to supply their own fuel needs and generate revenue by smuggling, have advanced toward Iraq’s self-governed Kurdish region and its capital Erbil, the IEA said. They were about 30 kilometers […]

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U.S. Weighs Military Rescue Mission for Yazidi Refugees

Displaced Iraqis from the Yazidi community gather to receive food at a camp in Syria on Tuesday. Associated Press WASHINGTON—The U.S. is weighing a military mission in Iraq to rescue thousands of Yazidi refugees, a move that risks putting American forces in direct confrontation with Sunni fighters for the Islamic State. The proposal is still under development and hasn’t been approved by President Barack Obama . U.S. officials said the rescue mission is one of many options the U.S. military is weighing after dropping food and water to dying refugees over the past six days. "People are looking at ways to do something more than just drop water and supplies," one senior U.S. official said. "You can only do that for so long." Since last week, the U.S. has sought to halt the militants’ advance on the Kurdish city of Erbil and to relieve Yazidis trapped by the fighters […]

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Iraq crisis: US military advisers arrive in Erbil

Secretary of Defense Chuck Hagel addresses the Marines assembled in a hangar at Camp Pendleton on Tuesday Aug. 12, 2014. Hagel announced the deployment of another 130 U.S. troops to Iraq in remarks to Marines at this Southern California base on the final stop of a weeklong, around-the-world trip that also took him to India, Germany and Australia. (AP Photo/The Orange County Register, Paul Rodriguez) The US decision to send another 130 military advisers to Iraq comes amid speculation that Washington could commit ground troops in an attempt to rescue tens of thousands of people trapped by insurgents in the north of the country as part of a wider international mission. Announcing the deployment of the extra troops in California late on Tuesday, US defence secretary Chuck Hagel, insisted there were no plans for a full-scale intervention. More On this story On this topic IN Iraq “This is not […]

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In Increase, U.S. to Send 130 Advisers to Aid Iraqis

WASHINGTON — The Pentagon has sent an additional 130 military advisers to northern Iraq to help plan the evacuation of thousands of displaced people trapped by Sunni militants on Mount Sinjar, Defense Department officials said Tuesday, raising the possibility that a larger American force may eventually be needed in the rescue attempt. While military officials said the Pentagon planned to continue aid drops of food and water, United States officials said they believed that some type of ground force would be necessary to secure the passage of the stranded members of the Yazidi group. The military is drawing up plans for consideration by President Obama that could include American ground troops in what is expected to be an international effort to rescue the refugees, a senior administration official said. Mr. Obama has insisted, most recently on Monday, that he will not send American ground troops back to Iraq. But […]

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Iran endorses Haider al-Abadi as Iraq’s new prime minister, spurning Nouri al-Maliki

BAGHDAD — Iran endorsed Iraq’s prime minister designate on Tuesday, striking a decisive blow against incumbent Nouri al-Maliki as a wide spectrum of domestic factions — and even his most loyal militia — also turned their backs on the country’s longtime leader. Maliki’s growing isolation raised hopes of a relatively smooth transfer of power after a tense two-day standoff during which the desperate incumbent deployed security forces to strategic points across the capital. The Iranian leadership, which wields significant influence in Iraqi politics, joined a range of Iraqi political groups — including Kurds, Sunnis and Shiites — in backing Shiite politician Haider al-Abadi’s efforts to form a new government. The United States and many Iraqis see the creation of a new, more inclusive government as crucial to peeling away support for the Sunni extremists of the Islamic State . Maliki, a Shiite, had marginalized the country’s Sunni minority, pushing […]

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Britain Offers ‘Small Number’ of Helicopters for Iraq Campaign

LONDON — Facing a mounting drumbeat of calls on Wednesday for stronger military action in northern Iraq, the British authorities have agreed to send a “small number” of Chinook helicopters and to transport military equipment supplied by other countries to Kurdish fighters in the American-led campaign against Sunni militants, officials said. But the government continued to insist that it was focused on humanitarian relief efforts, notably to get water and other supplies to thousands of Yazidis besieged on the arid, baking heights of Mount Sinjar, rather than on offering direct military involvement. In recent days, with many government leaders including Prime Minister David Cameron on vacation, Britain has slowly stepped up its relief effort, sending three Tornado warplanes on surveillance missions to support airdrops by C-130 military cargo planes. “Our focus remains the humanitarian situation, particularly those trapped on Mount Sinjar,” Mr. Cameron’s office said in a statement . […]

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Iraq crisis: France to deliver arms to Iraqi Kurds

France will supply arms to Iraq’s Kurds "in the coming hours", French President Francois Hollande has announced. France has received approval from authorities in Baghdad for the decision, French media reports say. Kurdish forces have been fighting militants from the Islamic State (IS) group. The conflict has displaced thousands of people. The US has also reportedly begun supplying weapons to the Kurdish forces, known as Peshmergas. A statement from Mr Hollande’s office said the move was "in response to the urgent need expressed by the regional authorities in Kurdistan". Earlier the US announced it had sent 130 more military advisers to the Kurdish region. The marines and special operations forces will assess the humanitarian situation and will not be engaged in combat, a US defence official said. The US has been carrying out air strikes against IS fighters in northern Iraq. More on This Story

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US sends 130 more military advisers to Iraq

Another 130 US military personnel have arrived in Iraq on what the Pentagon described as a temporary mission to assess the scope of the humanitarian crisis facing thousands of displaced Iraqi civilians trapped on Sinjar Mountain. Chuck Hagel, the US defense secretary, announced the deployment on Tuesday, saying that "this is not a combat boots on the ground kind of operation". Another defense official, speaking on condition of anonymity, said the extra troops were Marines and special operations forces whose mission was to assess the situation in the Sinjar area and to develop additional humanitarian assistance options beyond current US efforts there. The 130 troops, who are in addition to 250 US military advisers already in Baghdad and Erbil, arrived on Tuesday in the city of Erbil, well east of Sinjar. They are to work with representatives of the State Department and the US Agency for International Development to […]

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Oil and Erbil

Oil and Erbil To the defense of Erbil: this was the main cause that drew President Obama back to combat in Iraq last week, two and a half years after he fulfilled a campaign pledge and pulled the last troops out. After Mazar-i-Sharif, Nasiriyah, Kandahar, Mosul, Benghazi, and a score of other sites of American military intervention—cities whose names would have stumped most American “Jeopardy!” contestants before 2001—we come now to Erbil. One can forgive the isolationist: Where? Erbil has an ancient history, but, in political-economic terms, the city is best understood these days as a Kurdish sort of Deadwood, as depicted in David Milch’s HBO series about a gold-rush town whose antihero, Al Swearengen, conjures up a local government to create a veneer of legitimacy for statehood, all to advance his rackets. Erbil is an oil-rush town where the local powers that be similarly manipulate their ambiguous sovereignty for […]

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Syrian Forces Advance on Aleppo, Rebels Fear Another Siege

A Syrian man outside the rubble of a building after an alleged bombing by Syrian government forces on Monday in Aleppo. Agence France-Presse/Getty Images REYHANLI, Turkey—Syrian government forces have nearly encircled Aleppo, preparing a siege to wrest control of the city from rebels in what would be the biggest blow yet to the three-year uprising. The fall of Aleppo, Syria’s largest city and economic hub before the fighting, could also bolster the ranks of Islamic State militants who continue to make gains across the country, as defeated members of the Western-backed Free Syrian Army switch to their side. Rebel commanders in Aleppo say they are stockpiling goods as aid groups step up food deliveries—crates of lentils, rice, ketchup and baby formula—seeking to prevent the same kind of mass starvation that forced them to surrender the much smaller city of Homs in May. Losing Homs, once dubbed the capital of […]

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Libya Restarts Third-Biggest Port as IEA Warns of Surplus

Libya loaded the first oil cargo from the port of Ras Lanuf since it was closed by rebels a year ago, just as the International Energy Agency said the North African nation is struggling to find buyers in an oversupplied market. A tanker will soon leave port with 680,000 barrels of crude and head to Italy , Ibrahim Al-Awami, the Oil Ministry’s Director of Measurement, said by phone today from Tripoli. While state-run National Oil Corp. plans to double exports this month, crude traders are more concerned that the additional supply will depress prices than the risk of production being disrupted by further unrest, the IEA said. “Even though you have fighting in Tripoli, Libya seems to be able to provide volumes higher than the previous month’s,” Alexander Poegl, an analyst at JBC Energy GmbH in Vienna, said by phone. “Libya is one piece among a lot of pieces […]

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Islamic State seizes more territory in Syria: monitor

BEIRUT (Reuters) – Islamic State insurgents have seized several towns and villages from rival Islamist groups in the Syrian province of Aleppo, opening the way for further westward advances, an organization monitoring the war in Syria said on Wednesday. Already in control of large areas of northern and eastern Syria, Islamic State’s latest gains include the towns of Turkmen Bareh and Akhtarin, 50 km (30 miles) northeast of Aleppo, the Syrian Observatory for Human Rights, which is based in Britain, reported. Islamic State’s advance in Syria has accelerated since the group seized control of the Iraqi city of Mosul in June, declaring a caliphate in areas under its control in a bid to redraw the borders of the Middle East. Diplomats and rebels said the Syrian government, which is fighting rebels across the country, launched attacks on towns run by the group only after its militants advanced into neighboring […]

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