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Crude Oil Rebounds From Near Two-Year Low

Crude oil rebounded Tuesday, after coming close to two-year lows in the previous session. Commerzbank said that, after weeks of falling prices, money managers were displaying "extremely negative sentiment towards Brent." In the latest available data, speculators cut their net bets that crude would rise by the biggest margin in three years. Brent had been falling on high supply and a strengthening dollar, which make the commodity more expensive to those who trade outside the U.S. There may not be much left for the contract to fall further, said Commerzbank, which could help account for Tuesday’s bounce. The gap between oil prices on either side of the Atlantic is closing , said analysts at Energy Aspects. "The narrowing of the WTI-Brent spread was long overdue," they said. A combination of factors has kept U.S. benchmark WTI high as Brent has fallen, Energy Aspects noted, including later-than-expected refinery maintenance in […]

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Oil Heads for Biggest Quarterly Drop Since 2012 on Ample Supply

Brent and West Texas Intermediate headed for the biggest quarterly decline in more than two years as abundant crude supplies offset the risk of disruption from conflict in the Middle East . Futures were up 0.4 percent in London, trimming a drop of 13 percent since the beginning of July. The U.S. and its European and Arab allies have conducted thousands of air missions since starting a bombing campaign to counter Islamic State militants in Syria and Iraq, OPEC’s second-largest producer. U.S. crude stockpiles probably expanded by 1.5 million barrels last week, a Bloomberg News survey shows before an Energy Information Administration report tomorrow. “There’s plenty of supply but no demand,” said Michael Hewson , a London-based market analyst at CMC Markets Plc, who forecasts that Brent could drop to $90 a barrel and WTI fall as low as $85 next quarter. “We have weak growth, with China and […]

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WTI Narrows Discount to Brent as U.S. Economy Strengthens

West Texas Intermediate crude narrowed its discount to Brent to the least in more than a year as U.S. economic growth outpaced that of Europe , bolstering demand for the American benchmark oil. The spread between WTI and Brent shrank to $2.63 at today’s close, the smallest gap since Aug. 9. 2013. The U.S. economy expanded in the second quarter at the fastest rate since the fourth quarter of 2011, government data showed Sept. 26. The improving American outlook contrasts with Europe, where a gauge of economic confidence published today slipped to the lowest level since November. “It’s a tale of two cities,” John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The respective demand environments in the U.S. and Europe have diverged and that’s being reflected in the price.” WTI’s discount to the European grade was […]

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WTI Rises to Two-Week High on Economy; Brent Gap Shrinks

West Texas Intermediate rose to the highest in almost two weeks on speculation stronger U.S. economic growth will boost demand for oil. WTI’s discount to Brent narrowed to a one-year low. Futures climbed 1.1 percent after a government report showed consumer spending in the U.S. rebounded in August. Gasoline advanced for the fourth time in five days on concern refinery shutdowns will reduce production. Both WTI and Brent are headed for their biggest quarterly loss in more than two years as supply gains shield the market from the U.S.-led military campaign against Islamic State. “The fact that the U.S. economy looks bullish and the gasoline price is elevated is pulling up oil prices ,” said Michael Lynch , president of Strategic Energy & Economic Research in Winchester, Massachusetts. WTI for November delivery increased $1.03 to $94.57 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. […]

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Natural-Gas Futures Rally as Market Catches Glimpse of Autumn

By Christian Berthelsen Natural-gas prices rose to their highest levels in more than two months on Monday as forecasts for cold weather over the northern Midwest in the coming weeks prompted expectations of the season’s first gas-fired heating demand. Natural gas for November delivery rose 12.5 cents, or 3.1%, to $4.1540 a million British thermal units on the New York Mercantile Exchange. The settlement was the highest since July 9, and the day’s rally was the largest since June 12. The market has gained nearly 9% in the last four trading sessions. The market opened higher with the adoption of November as the new front-month contract, since it was trading higher than the just-expired October contract, and gained momentum as prices broke through levels where they previously stalled. "The market takes on strength in reaction to chatter about seasonal demand," said Gene McGillian, an analyst with wholesale brokerage Tradition […]

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Iran’s oil exports ‘acceptable,’ oil minister says

Iranian Oil Minister Bijan Zanganeh says oil exports and revenue at acceptable levels. UPI/Maryam Rahmanian TEHRAN, Sept. 29 (UPI) — Iranian Oil Minister Bijan Zanganeh said Monday oil exports from the Islamic republic were "acceptable" and revenue was on the rise. Iran, under the terms of a November 2013 agreement with Western powers, secured relief from some of the sanctions targeting its energy sector in exchange for a pledge to cut back on its nuclear research activity. The U.S. Treasury Department in July extended that relief through November. Iran can export around 1 million barrels of oil per day under the deal. "Iran’s oil exports are acceptable and growing currently, and revenues are higher than the previous estimates," the oil minister said. The International Monetary Fund in April said inflation and unemployment are both high in the Iranian economy and the outlook was "highly uncertain." Constraints on oil revenues […]

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Dana Gas wins exploration rights in Egypt

Emirati energy company Dana Gas taps deeper in Egypt’s Nile Delta region. UPI/Maryam Rahmanian SHARJAH, United Arab Emirates, Sept. 29 (UPI) — Emirati energy company Dana Gas said Monday it was the successful bidder for two onshore license areas in the Nile Delta region onshore Egypt. Regional subsidiary Dana Gas Egypt was awarded the rights to operate in the North el-Salhiya and el-Matariya onshore areas in the Nile Delta . "We are extremely pleased to have been awarded these two new blocks," Dana Gas Chief Executive Officer Patrick Allman-Ward said in a Monday statement. "The area is particularly well known to Dana Gas, given its long-term commitment to the Nile Delta." Dana is the sixth largest energy company working in Egypt . Overall, its share of production has reached 39,100 barrels of oil equivalent per day. Dana will hold 100 percent of the interest in the North el Salhiya […]

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BP, Shell in running for Emirati oil fields

BP, Shell in top running for onshore licenses in the United Arab Emirates. UPI/Maryam Rahmanian LONDON, Sept. 29 (UPI) — British energy company BP and Dutch supermajor Shell are in the running for oil prizes in the Persian Gulf region, the Emirati minister of energy said Monday. Close to a dozen international energy companies are competing for the rights to tap in to onshore oil fields in the region. BP and Royal Dutch Shell have a decades-old partnership with the Abu Dhabi Co. for Onshore Oil Operations, already pumping 1.5 million barrels of oil per day. Suhail al-Mazrouei, minister of energy for the United Arab Emirates, told The Telegraph both companies are in the top running for onshore licenses . "Shell and BP are amongst those companies that submitted bids," he said in an interview published Monday. "They have been legacy partners, and we hope they will have a […]

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Islamic State Draws U.A.E. Into Fight Against Extremists

For the desert cities of Dubai and Abu Dhabi , luxury, prosperity and security in a region torn by conflict are things worth protecting. In a country known more for building glitzy shopping malls and trophy skyscrapers than battling terrorists, the United Arab Emirates is involved in the fight against Islamic militants like never before. It took part last week in U.S.-led airstrikes against Islamic State, underlining the scale of the perceived threat from the extremists after they took cities in Iraq and this month gained ground in Syria . “This is more than a red line for them and that is why they are pro-actively taking part in those strikes,” said Ghanem Nuseibeh, founder of Cornerstone Global Associates, which advises clients on risk in the Middle East. Islamic State has “the ability to expand whereas al-Qaeda did not,” he said. The U.A.E. and fellow Gulf Arabs regard Islamist […]

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Petrobras Slumps Most Since 2008 as Rousseff Support Grows

Petroleo Brasileiro SA (PETR4) fell the most in almost six years as President Dilma Rousseff gained support in a voter poll, sinking wagers that a new government will reduce intervention in the state-owned oil company . Shares of Petrobras slumped 11 percent to 18.60 reais at the close of trading in Sao Paulo , the biggest decline since November 2008. That loss contributed the most to the 4.5 percent drop in the benchmark Ibovespa today. Rio de Janeiro-based Petrobras had gained 95 percent from its lowest level this year in March through Sept. 2 as support for opposition candidate Marina Silva increased. “There was a moment in the past weeks when a victory by the opposition was almost a certain thing, but this expectation seems now more and more distant,” Marcelo Varejao, an analyst at the brokerage firm Socopa, said in a phone interview from Sao Paulo. “The way […]

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Human-Related Climate Change Led to Extreme Heat, Scientists Say

The savage heat waves that struck Australia in 2013 were almost certainly a direct consequence of the human release of greenhouse gases, researchers said Monday. It is perhaps the most definitive statement climate scientists have made that ties a specific weather event to global warming. Five groups of researchers, using distinct methods, analyzed the heat that baked Australia for much of last year and continued into 2014, shutting down the Australian Open tennis tournament at one point in January. All five came to the conclusion that last year’s heat waves could not have been as severe without the long-term climatic warming caused by human activity. “When we look at the heat across the whole of Australia and the whole 12 months of 2013, we can say that this was virtually impossible without climate change,” said David Karoly, a climate scientist at the University of Melbourne who led one research […]

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Volcanoes May Be Next Hurdle for Nuclear Restarts in Japan

The volcanic eruption of Japan’s Mt. Ontake over the weekend may strengthen the argument of activists campaigning to keep the country’s 48 reactors shut. Japan’s atomic plants are off-line for safety checks as a result of the earthquake and tsunami that caused the meltdown of three reactors in Fukushima more than three years ago. The Nuclear Regulation Authority has said two reactors at a plant run by Kyushu Electric Power Co. (9508) in southern Japan meet new safety standards, indicating they are closest to restarting. Kyushu Electric’s plant, known as Sendai, is about 50 kilometers (31 miles) from another active volcano called Sakurajima. It’s also not far from a cluster of calderas, volcanic craters caused by past eruptions. “The NRA has been criticized for not taking the elevated risk of volcanic eruption into account,” Stephen Church, a Tokyo-based partner at equity researcher JI Asia, said in a note yesterday. […]

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US FERC Approves Dominion’s Cove Point LNG Export Facility

WASHINGTON, Sept 29 (Reuters) – U.S. federal regulators on Monday approved construction of Dominion Resources Inc’s liquefied natural gas export project in Cove Point, Maryland. Cove Point is the fourth U.S. LNG export project to get the green light to begin construction from the Federal Energy Regulatory Commission. It will be able to export up to 5.75 million metric tons of LNG a year when fully operational. Dominion’s facility is one of about two dozen projects that hope to ship a growing bounty of domestic natural gas to countries in Asia and Europe. The Cove Point site, a little more than an hour’s drive southeast of Washington, D.C. on Chesapeake Bay, boasts four large storage tanks and a pier built in the 1970s to import LNG from Algeria, underscoring just how much U.S. market dynamics have changed. "We are pleased to receive this final approval that allows us to […]

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Study finds solo hybrid drivers in California HOV lanes amplify congestion

« Honeywell Global Turbo Forecast projects 49M turbocharged vehicle sales, $12B revenue per year by 2019 | Main 30 September 2014 Allowing single-occupant low-emission cars in California to use high-occupancy vehicle (HOV) lanes on congested highways exacerbates the congestion and causes up to about $4,500 per car in adverse social costs annually, including increased commute times and carbon dioxide emissions, according to a new study in the American Economic Journal: Economic Policy. The authors, from Cornell University, University of Colorado, UC Irvine and UC Berkeley, calculated that the Clean Air Vehicle Stickers (CAVS) policy results in a best-case cost of $124 per ton of reductions in greenhouse gases; $606,000 per ton of nitrogen oxides reduction; and $505,000 per ton of hydrocarbon reduction—exceeding those of other options readily available to policymakers. The California law enabling single-occupant access to the HOV lanes was meant to stimulate sales for fuel-efficient, ultra low-emission […]

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Conoco Uses Exemption to Export Crude to South Korea

ConocoPhillips (COP) is shipping a cargo of Alaska North Slope crude to Asia, making rare use of a Bill Clinton-era exemption to U.S. oil export restrictions. Conoco, Alaska’s largest oil producer, will deliver the cargo to Asia in the fourth quarter, Houston-based company spokesman Daren Beaudo said by e-mail. The shipment was first reported by Louisville, Kentucky-based Genscape Inc., an energy intelligence firm. The Polar Discovery, a 140,000-deadweight ton oil tanker, left the oil port of Valdez in Alaska on Sept. 26 after filling with cargo, according to vessel tracking data compiled by Bloomberg. The ship reported today that its destination is Yeosu, South Korea. It’s scheduled to arrive Oct. 10. “ConocoPhillips has the capability to export a limited amount of its Alaska North Slope (ANS) crude oil production to non-U.S. customers as allowed by law,” Beaudo said. “This will enable the state of Alaska and ConocoPhillips to potentially […]

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New Eagle Ford wells continue to show higher production

Source: U.S. Energy Information Administration, based on Drillinginfo Increased drilling and improved drilling efficiency have led to significant crude oil production increases in the Eagle Ford region in southern Texas. These increases have occurred despite the region’s relatively high well decline rates. However, by offsetting the natural declines through the use of new recovery techniques, further production increases are possible. Horizontal drilling combined with an increasing number of hydraulic fracturing stages in tight formations like the Eagle Ford typically enhance initial production rates when compared to past results. These higher initial production rates are often accompanied by initially larger decline rates, before gradually leveling off to a consistent level of decline for the remaining years of the well life. While initial production rates have steadily increased since 2009, first-year decline rates in the Eagle Ford have fluctuated between 60% and 70%. Most notably, decline rates over the second year […]

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The EIA’s Petroleum Supply Monthly

The EIA has just published their Petroleum Supply Monthly  with US production, and other data, for July 2014. US C+C production fell by 3,000 barrels per day in July. After a big leap in April things have slowed down considerably in the last three months. US production in July was 8,537,000 barrels per day This is US production since 1920. We are just over 1.5 million barrels per day below the monthly high of 1,044,000 barrels per day of in November 1970. GOM Production Up or Down Total Production Total US -3,000 8,537,000 Texas 28,000 3,102,000 New Mexico 22,000 332,000 North Dakota 18,000 1,111,000 Oklahoma 10,000 353,000 Montana 5,000 332,000 California -4,000 442,000 West Virginia -7,000 17,000 Colorado -7,000 228,000 Gulf of Mexico -8,000 1,406,000 Alaska -63,000 422,000 The EIA expects the Gulf of Mexico to hit 2 million barrels per day i the next couple of years. I […]

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US poised to become world’s leading liquid petroleum producer

Drilling in the Eagle Ford Shale in Webb County, Texas The US is overtaking Saudi Arabia to become the world’s largest producer of liquid petroleum, in a sign of how its booming oil production has reshaped the energy sector . US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries. More On this story On this topic IN US Economy With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991. Riyadh has stressed that the rise of the US should not detract from its own critical role in oil markets. It says it has the ability to increase its output by 2.5m b/d if […]

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Encana becomes major Permian shale player

Canadian energy company Encana becomes major Permian shale player with acquisition of Texas rival. UPI/Gary C. Caskey CALGARY, Alberta, Sept. 29 (UPI) — Canadian energy company Encana Corp. said Monday it acquired Texas rival Athlon Energy to become one of the largest oil players in the Permian shale basin. "This transformative acquisition further accelerates our strategy and provides us with a prime position in what is widely acknowledged as one of North America’s top oil plays," Encana President and Chief Executive Officer Doug Suttles said in a statement. Ecanana paid cash for the acquisition, giving the Canadian company control over 140,000 net acres in the Permian shale basin in Texas. Permian production increased 58 percent from 2007 to reach 1.35 million bpd last year, which represents 18 percent of total U.S. crude oil production. In a July brief, the U.S. Energy Information Administration said the Permian basin has exceeded […]

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More initial oil coming from Eagle Ford shale

U.S. Energy Department assesses oil production from Eagle Ford shale in southern Texas. UPI/Gary C. Caskey WASHINGTON, Sept. 29 (UPI) — Oil production from the Eagle Ford shale play should increase with improved drilling efficiency, though the area is prone to declines, analysis Monday finds. The U.S. Energy Information Administration, a division of the Energy Department, said the increase in drilling and improvements in drilling efficiency have led to more oil from the Eagle Ford shale region in southern Texas. "These increases have occurred despite the region’s relatively high well decline rates," an EIA briefing said. "However, by offsetting the natural declines through the use of new recovery techniques, further production increases are possible." The Texas government said oil production in July, the last full month for which data are available, increased more than 25 percent year-on-year to around 2.15 million barrels per day thanks in part to production […]

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Refinery Failures Spur Bets on Higher U.S. Gasoline

Speculators increased wagers on higher U.S. gasoline prices by the most since February as refinery closures constricted supply. The net-long position jumped 45 percent from a four-year low as hedge funds pared record short bets and added long wagers for the first time in six weeks, weekly U.S. Commodity Futures Trading Commission data through Sept. 23 show. Refineries in eastern Canada and Texas shut gasoline units for unplanned repairs as others began seasonal maintenance. Futures contracts for October traded at the highest premium to November since 2012, reflecting heightened concern about supply. The closures threaten the retreat at the pump that has drivers paying the lowest late-September prices since 2010. “People have covered their positions or moved away from short to long,” Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London, said by phone Sept. 26. “There’s a huge amount of FCC outages in North America at […]

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Permian Producers Get No Relief as BridgeTex Start Seen Slow

Producers in the largest U.S. oil field got little relief from a pipeline startup as bottlenecks in West Texas make it difficult to transport surging crude production to market. West Texas Intermediate crude in Midland, Texas, weakened by 75 cents relative to the same grade in Cushing, Oklahoma , to a discount of $8 a barrel at 1:55 p.m., according to data compiled by Bloomberg. Midland is the pricing point for the Permian Basin, which produces 1.76 million barrels of oil a day, Energy Information Administration data show Magellan Midstream Partners LP (MMP) and Occidental Petroleum Corp. (OXY) started delivering crude today to Houston from Colorado City, Texas. The pipeline wasn’t able to alleviate prices because of a lack of capacity remaining between Midland and Colorado City, about 80 miles apart. Plains All American Pipeline LP (PAA) plans to start the Sunrise pipeline between the two cities by Jan. […]

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Russia ready should Kiev, EU renege on energy deals

Kremlin says it’s ready should agreements with European Union and Kiev falter. (UPI Photo/Sergey Starostenko) MOSCOW, Sept. 29 (UPI) — Russia is ready to respond should its Ukrainian or European Union partners renege on trilateral energy agreements, a Kremlin spokesman said Monday. Kremlin spokesman Dmitry Peskov said the Russian government is operating under guidelines spelled out last week during trilateral talks in Berlin. "Russia is guided by the agreements reached at the three-party talks, but at the same time is ready to defend its position," he said. Negotiating partners last week outlined the terms of an interim agreement that sees Ukraine paying the $3.1 billion it owes Russian energy Gazprom. Ukraine, in return, gets a price discount and assurances of adequate winter natural gas supplies. European Energy Commissioner Gunther Oettinger said that, with both sides sparring over contracts in international courts, an interim deal is necessary for short-term energy […]

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Rosneft claims united oil win in arctic

Russian oil company Rosneft announces oil find in arctic reaches of Kara Sea. UPI/Jeremy Potter/NOAA MOSCOW, Sept. 29 (UPI) — Russian oil company Rosneft said the discovery of oil in an arctic license area came as the result of a united effort with its Western energy partners. Rosneft estimates the discovery at an area in the Prinovozemelskiy-1 license area in the Kara Sea holds at least 700 million barrels of oil. "This is an outstanding result of the first exploratory drilling on a completely new offshore field," Rosneft Chief Executive Officer Igor Sechin said in a statement Saturday. "This is our united victory; it was achieved thanks to our friends and partners from ExxonMobil, Nord Atlantic Drilling, Schlumberger, Halliburton, Weatherford, Baker Hughes, [and others]." The company said the entire area could hold as much as 87 billion barrels of oil. Greenpeace activists this year trailed some of the international […]

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Russia’s Gazprom and Ukraine are in a gas dispute as winter approaches

Workers walk through Ukraine’s Dashava natural gas facility. (Sean Gallup/Getty Images) KIEV, Ukraine — The frigid water that comes out of the “hot” faucet of Alexander Korniienko’s shower in Kiev is a warning for his nation: After months without natural gas shipments from Russia, Ukraine may be facing a chilly winter. Ukrainians are layering their sweaters in preparation for yet another tough confrontation with the Kremlin, this time over energy. It is a replay of previous wintertime gas cutoffs by Russia that led to accusations that the Kremlin was using its bountiful energy supplies as a political weapon. This year, any wintertime shortfall could be far more serious for Ukrainians already contending with the dire effects of a separatist war. Korniienko has been on the vanguard of those facing the latest gas cutoff , since Kiev eliminated city-provided hot water in July as a conservation measure. Now he bathes […]

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Schlumberger Said to Pull Expat Managers From Russia

Schlumberger Ltd. (SLB) , the biggest oilfield services provider, is withdrawing employees who are citizens of the U.S. and the European Union from Russia amid sanctions, two people with knowledge of the matter said. About 20 mid-level and senior managers will be pulled, one of the people said. Both asked not to be identified because they aren’t authorized to discuss the matter. The U.S. and the EU targeted Russia’s oil industry by banning exports of some equipment and technology after Russia annexed Crimea and allegedly stoked a separatist insurgency in eastern Ukraine. The sanctions have forced Exxon Mobil Corp. to suspend some projects with Russia’s OAO Rosneft, threatening a project where the state-run company announced a billion-barrel crude discovery in the Kara Sea last week. Exploration and production companies were expected to spend $51.7 billion in Russia this year, according to estimates from Barclays Plc. A large part of […]

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Exxon says it’s safe from Russian sanctions

Russian Far East project shielded from sanctions, Exxon spokesman says. (UPI Photo/Tiffini M. Jones/U.S. Navy) MOSCOW, Sept. 30 (UPI) — Exxon Mobil can operate freely with Russian energy company Rosneft at a Far East energy project without fear from sanctions, a spokesman said. The Sakhalin-1 project envisions the development of three oil and natural gas fields located in extreme sub-Arctic conditions off the coast of Sakhalin in Russia’s Far East. Alan Jeffers, a spokesman for project partner Exxon Mobil, said Monday the company was isolated from the economic impact of Western pressure . "The Sakhalin-1 project is not impacted by U.S. sanctions," he told state news agency RIA Novosti. Western governments blacklisted Rosneft and other Russian energy companies in response to the Kremlin’s stance on the separatist campaign in eastern Ukraine. In mid-September, the European Union took additional steps by barring Russian oil company Rosneft and its counterparts Transneft […]

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The Oil Head-Fake: The Illusion that Lower Oil Prices Are Positive

I’ve described the dynamic of structural imbalances of supply and demand leading to lower prices for crude oil as the Oil Head-Fake:  high global production (supply) continues while demand declines due to global recession, and the resulting imbalance of supply and demand triggers a major decline in price. But this drop is not positive; it’s a temporary response that triggers a variety of disruptive consequences. There’s nothing fancy about a basic supply-demand pricing model; if the world is awash in crude oil and demand slides, price will eventually follow. The interesting parts of the Oil Head-Fake Dynamic arise from the supply side, not the demand side.  Demand for oil is famously inelastic, meaning that easy substitutes are not readily available, and the primacy of oil in the global economy insures a steady demand. Yes, natural gas can be substituted for vehicles that have been converted to burn natural gas, […]

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How Far Will the Shale Boom Go?

How Far Will the Shale Boom Go? The shale energy revolution has already upset the “peak oil” forecast, which predicted that the world will soon reach the point of highest physical oil output and thereafter global production will begin an inexorable decline. Now, in the context of the worsening political situation in the Middle East and Eastern Europe, its impact is being discussed in terms of America’s ability to secure its own energy supplies and assist its allies with theirs. The near-term enthusiasm for shale energy is understandable, but what are its longer term prospects? Energy markets are notoriously difficult to predict. In the 1970s, as U.S. oil production reached a historic high point and turmoil in the Middle East produced two spikes in crude prices, there was talk of imminent scarcity. While global output stood at around 60 million barrels per day (mbd), some analysts declared that the […]

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Ready Or Not… The Unsustainable Status Quo Is Ending

Ready Or Not… The Unsustainable Status Quo Is Ending ~ Walking straight in a hall of mirrors I have to confess, it’s getting more and more difficult to find ways of writing about everything going on in the world. Not because there’s a shortage of things to write about — wars, propaganda, fraud, Ebola — but because most of the negative news and major world events we see around us are symptoms of the disease, not the disease itself. There are only so many times you can describe the disease, before it all becomes repetitive for both the writer and the reader. It’s far more interesting to get to the root cause, because then real solutions offering real progress can be explored. Equally troubling, in a world where the central banks have distorted, if not utterly flattened, the all important relationship between prices, risk, and reality, what good does […]

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Oil Futures Subdued, Brent-WTI Spread Stays Under $4/bbl

By Eric Yep Crude-oil futures were lower in Asian trading hours Monday with the premium of Brent crude over Nymex WTI still under $4 a barrel after narrowing sharply last week. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $92.97 a barrel at 0450 GMT, down $0.57 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange fell $0.29 to $96.71 a barrel. Oil prices ended on a mixed note last week resulting in the Brent-WTI spread narrowing to $3.46 a barrel on Friday. Nymex WTI crude gained 2.06% last week and has been up for two consecutive weeks, while Brent crude lost 1.41% last week and has been down five of the past seven weeks. "We expect to see WTI-Brent spreads remain at this level provided PMI remains strong and U.S. stockpile data shows continued drops in […]

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WTI Falls as Ample Supply Offsets Disruption Risks; Brent Drops

West Texas Intermediate crude fell from the highest price in seven days as concern eased over the risk of a supply disruption in the Middle East . Brent declined in London . Futures dropped as much as 0.8 percent in New York. Prices capped a second weekly increase on Sept. 26 to trade at the smallest discount to Brent in a year as ample oil supplies shielded the global market from the U.S. military campaign against Islamic State. In the latest strikes conducted over the weekend, aircraft from the U.S., Saudi Arabia and the United Arab Emirates attacked four modular refineries in Syria controlled by the extremist group, U.S. Central Command said. “The gain in front-month WTI was so big that we can now see some profit taking,” Ken Hasegawa , an energy trading manager at Newedge in Tokyo , said by phone today. “A lot of longs were […]

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Turkey Wants Secure Syria Zone as Militants Strike Kurds

Turkish President Recep Tayyip Erdogan called for the establishment of a “secure zone” inside Syria to repatriate Kurdish refugees who fled to Turkey to escape an Islamic State onslaught. Erdogan, speaking at the World Economic Forum in Istanbul last night, said Turkey “can’t stay out” of the U.S.-led coalition against the al-Qaeda breakaway. He said any offensive strategy must also strengthen rebels fighting Syrian President Bashar al-Assad, whom Turkey seeks to oust. His remarks capture the clashing interests that have kept Turkey out of the alliance so far and strained relations with Turkish Kurds that he has labored hard to repair. While Erdogan says he wants to see the al-Qaeda breakaway vanquished, that could come at the cost of benefiting Assad and strengthening the hand of Kurdish separatists on both sides of the border. Kurds in Turkey suspect Erdogan wants to create a militarized buffer zone along part of […]

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Israel’s Top Oil Supplier Endures Gaza as Azeri Ties Grow

What started as a marriage of convenience has netted Israel its closest Muslim ally. The majority Shiite nation of Azerbaijan is the biggest supplier of oil to Israel, which reciprocates by selling sophisticated arms including missile systems and drones. While the flow of oil in exchange for advanced weapons is the backbone of the alliance, a confluence of interests is propelling the former Soviet republic on the Caspian Sea closer to Israel, often in defiance of discontent at home and dismay among neighbors Iran and Turkey. Tested by Israel’s 50-day military offensive in the Gaza Strip , which sparked protests among Azeris, President Ilham Aliyev is throwing his lot in with Israel to maintain a military edge in a quarter-century-long conflict with Armenia . Azerbaijan, which together with Armenia also buys Russian weapons, benefits from access to advanced technology from Israel as part of $3.7 billion in annual spending […]

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Kenya: The Next Big Oil Exporter

Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 and discovery after discovery has made this the hottest and fastest-paced hydrocarbon scene on the continent. When it comes to new oil and gas frontiers, today it’s all about Africa. And more specifically, it’s all about the eastern coast, with Kenya the clear darling–not just because it’s outpacing neighboring Uganda by leaps and bounds, but also because despite some political instability hiccups and the threat of militant al-Shabaab, it’s still one of the safest venues in the region. Six of the last 10 biggest finds have been in Africa, where—all told–there are some 130 billion barrels of crude oil waiting to be tapped by more than 500 companies, according to a recent report by PriceWaterhouseCoopers. Topping this list are Kenya’s Anza […]

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Refinery Failures Spur Bets on Higher U.S. Gasoline

Speculators increased wagers on higher U.S. gasoline prices by the most since February as refinery closures constricted supply. The net-long position jumped 45 percent from a four-year low as hedge funds pared record short bets and added long wagers for the first time in six weeks, weekly U.S. Commodity Futures Trading Commission data through Sept. 23 show. Refineries in eastern Canada and Texas shut gasoline units for unplanned repairs as others began seasonal maintenance. Futures contracts for October traded at the highest premium to November since 2012, reflecting heightened concern about supply. The closures threaten the retreat at the pump that has drivers paying the lowest late-September prices since 2010. “People have covered their positions or moved away from short to long,” Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London, said by phone Sept. 26. “There’s a huge amount of FCC outages in North America at […]

Posted On : Published By : Tom Whipple
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Russia Oil Chief Says Sanctions No Bar to Arctic Drilling

The most powerful man in Russia’s oil industry says U.S. sanctions won’t prevent the development of discoveries in the Arctic Ocean. Igor Sechin, chief executive officer of state oil producer OAO Rosneft (ROSN) and a long-time ally of President Vladimir Putin, spent two days traveling by plane, ship and helicopter last week to announce a billion-barrel crude strike in the iceberg-prone Kara Sea region of Russia’s Arctic Ocean. “We will continue working no matter what,” Sechin said in an interview on board a polar research vessel as he prepared to unveil the find he named Victory. “We will plan the work for next season. As I said, now we’ve drilled only the first structure — at Universitetskaya. There are more than 30.” But Sechin has a problem. The first well, the costliest yet drilled in Russia, relied on money and expertise from Exxon Mobil Corp. (XOM) , Rosneft’s partner […]

Posted On : Published By : Tom Whipple
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Why Peak-Oil Predictions Haven’t Come True

Have we beaten "peak oil"? For decades, it has been a doomsday scenario looming large in the popular imagination: The world’s oil production tops out and then starts an inexorable decline—sending costs soaring and forcing nations to lay down strict rationing programs and battle for shrinking reserves. U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t predict: It started rising again in 2009, and hasn’t stopped, thanks to a leap forward in oil-field technology. To the peak-oil adherents, this is just a respite, and decline is inevitable. But a growing tide of oil-industry experts argue that peak oil looks at the situation in the wrong way. The real constraints we face are technological and economic, they say. We’re limited not by the amount of oil in the ground, but by how inventive […]

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Geneva Report warns record debt and slow growth point to crisis

Growth in China has slowed from double digits to 7.5% A “poisonous combination” of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday. The 16th annual Geneva Report , commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a “very, very long” time to enable households, companies and governments to service their debts and avoid another crash. The warning, before the International Monetary Fund ’s annual meeting in Washington next week, comes amid growing concern that a weakening global recovery is coinciding with the possibility that the US Federal Reserve will begin to raise interest rates within a year. More On this story On this topic IN Global Economy […]

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The Return To $30 a Barrel Oil

While the world starts to understand that behind the evil behind ISIS there is also another element to it, greed. US airstrikes hit mobile oil refineries in Syria that was help fund the terrorist group. Ideology is always best suited when it is being funded with oil and to strike at these mobile units is a step in destroying this ISIS terror threat. That was clear that when they were fighting over the Brega refinery in Iraq they went to great measures to kill people but save the refinery. While the Brent Crude fell hard against the WTI as Libyan oil comes back on line a late surge led by RBOB gasoline as refinery glitches and a larger than expected drop in US crude supply brought the market back. Yet with a soaring dollar it is hard to be too excited about the long side of almost any commodity. […]

Posted On : Published By : Tom Whipple
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NYMEX RBOB rally ends as October contract settles more than 5 cents lower

New York (Platts)–26Sep2014/633 pm EDT/2233 GMT NYMEX October RBOB corrected sharply Friday, settling 5.61 cents lower at $2.6619/gal, partly erasing a two-day rally that saw the prompt contract trade as high as $2.7577/gal. Prompt RBOB traded as low as $2.6308/gal early in Friday’s session. NYMEX November crude settled up $1.01 at $93.54/barrel, despite strong headwinds in the form of a stronger US dollar. ICE November Brent settled unchanged at $97/b. The prompt Brent/NYMEX crude spread settled at $3.46/b. NYMEX October ULSD settled near flat, up 47 points at $2.7005/gal. Article continues below… Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude and products and more than 200 end-of-day assessments. RBOB’s downward move could be related to the expiration of October options Thursday, signaling that any squeeze play in the market was likely tied to […]

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Iranian President Sees Little Progress on Nuclear Dispute

With a blunt demeanor that bordered on pessimism, President Hassan Rouhani of Iran said Friday that he was unhappy over the lack of progress in resolving his country’s protracted nuclear dispute with the major powers, less than two months before their self-imposed deadline for reaching a comprehensive agreement. “The progress realized thus far has not been significant,” Mr. Rouhani said at a news conference concluding his five-day visit to the United Nations General Assembly annual meeting, his second as president. He said any movement toward an agreement had been “extremely slow.” Mr. Rouhani also questioned the motives of the United States and its allies over what he described as their newfound concern with the Islamic State, the extremist group roiling Syria and Iraq. He expressed deep skepticism that “a few aerial bombardments” like those undertaken by an American-led coalition could eradicate the Islamic State and its affiliates. He repeatedly […]

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Oil Caps Biggest Weekly Gain in a Month; Discount Narrows

West Texas Intermediate crude capped its biggest weekly gain in a month on speculation stronger U.S. economic growth will increase demand. WTI narrowed its discount to Brent to a one-year low. The U.S. economy expanded in the second quarter at the fastest rate since the last three months of 2011, the Commerce Department said. Brent dropped for a third week in four as ample supplies shield the oil market from the U.S. military campaign against Islamic State. Gasoline tumbled after reaching this month’s high yesterday. “Improving U.S. economic conditions should improve the fundamental outlook here,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut . “The market is trying to stabilize. We still have a lot of supply out there and that’s weighing on the overall market.” WTI for November delivery rose $1.01, or 1.1 percent, to settle at $93.54 a barrel on […]

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Rouhani: Courage needed to clinch nuclear deal

Rouhani: Courage needed to clinch nuclear deal Iran President Hassan Rouhani said Friday “courageous decisions” must be made to clinch a long-term nuclear agreement and that any deal without the lifting of all sanctions against Tehran was “unacceptable.” Speaking to reporters in New York on the sidelines of the annual U.N. General Assembly, he added that progress in the latest round of talks between Iran and six world powers has been “extremely slow.” “We must look forward to the future and make the courageous decisions vis-a-vis this problem,” Rouhani said. “ Iran will never surrender its legal right to civilian nuclear activities,” he added. “Enrichment will continue on our soil.” “Sanctions should be lifted totally and altogether and any agreement that does not have that will not be acceptable for Iran. This agreement will be beneficial for Iran, the P5+1 and for stability in the region,” he said. A […]

Posted On : Published By : Tom Whipple