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Low Oil Prices: Sign of a Debt Bubble Collapse, Leading to the End of Oil Supply?

Oil and other commodity prices have recently been dropping. Is this good news, or bad? Figure 1. Trend in Commodity Prices since January 2011. Brent spot oil price from EIA; Australian Coal from World Bank Prink Sheet; Food from UN’s FAO. I would argue that falling commodity prices are bad news . It likely means that the debt bubble which has been holding up the world economy for a very long–since World War II, at least–is failing to expand sufficiently. If the debt bubble collapses, we will be in huge difficulty. Many people have the impression that falling oil prices mean that the cost of production is falling, and thus that the feared “peak oil” is far in the distance. This is not the correct interpretation, especially when many types of commodities are decreasing in price at the same time. When prices are set in a world market, the […]

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Paul Krugman’s Errors and Omissions

In a New York Times op-ed published September 18 titled “ Errors and Emissions ,” economist-columnist Paul Krugman took a swipe at my organization, Post Carbon Institute, lumping us together with the Koch brothers as purveyors of “climate despair.” No, the Koch brothers are not in despair about the climate; apparently our shared error is that we say fighting climate change and growing the economy are incompatible. And, according to Krugman, a new report from the New Climate Economy Project (NCEP) and a working paper from the International Monetary Fund (IMF) show that the falling cost of renewable energy means this is happily not the case. But in our view Krugman himself is guilty of five critical errors, and three equally serious omissions. First the errors: 1. He mistakes post-growth realism for anti-growth activism. While Krugman linked to my book The End of Growth , it seems he may […]

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Brent Crude Declines Before China Manufacturing Data; WTI Drops

Brent crude declined for the third time in four days before manufacturing data from China, the world’s second-biggest oil consumer. West Texas Intermediate fell in New York . Futures dropped as much as 0.6 percent in London . An index of China’s factory output probably fell to 50 in September, a Bloomberg News survey showed before a preliminary reading from HSBC Holdings Plc tomorrow. That would be down from 50.2 for August. Libya was pumping 700,000 barrels a day of crude after it cut output at the Sharara field, National Oil Corp. said. “There’s some downward momentum in the market’s outlook for the Chinese economy at the moment,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The news has been consistently weak recently.” Brent for November settlement slid as much as 63 cents to $97.76 a barrel on the London-based ICE Futures Europe […]

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Secretary of State Kerry Meets With Iranian Counterpart in New York

NEW YORK—U.S. Secretary of State John Kerry met his Iranian counterpart Javad Zarif on Sunday for talks on Iran’s nuclear program and the threat posed by Sunni extremist group Islamic State, a senior State Department official said. The discussions on Syria come as Washington and Tehran have both insisted they won’t cooperate militarily in the fight against Islamic State in Iraq or Syria. The U.S. is building an international coalition to fight Islamic State but so far has excluded Iran from that group, although the two countries have discussed events in Iraq a number of times in recent weeks. Mr. Zarif has slammed the U.S.-led group as "the coalition of the repenters," saying many of the countries now pledging to fight the Sunni extremists have been supplying or assisting them over the past few years. A State Department official said Mr. Kerry and Mr. Zarif met for over an […]

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Exclusive: Iran seeks give and take on Islamic State militants, nuclear program

UNITED NATIONS (Reuters) – Iran is ready to work with the United States and its allies to stop Islamic State militants, but would like more flexibility on Iran’s uranium enrichment program in exchange, senior Iranian officials told Reuters. The comments from the officials, who asked not to be named, highlight how difficult it may be for the Western powers to keep the nuclear negotiations separate from other regional conflicts. Iran wields influence in the Syrian civil war and on the Iraqi government, which is fighting the advance of Islamic State fighters. Iran has sent mixed signals about its willingness to cooperate on defeating Islamic State (IS), a hard-line Sunni Islamist group that has seized large swaths of territory across Syria and Iraq and is blamed for a wave of sectarian violence, beheadings and massacres of civilians. Iran’s Supreme Leader Ayatollah Ali Khamenei said recently that he vetoed a U.S. […]

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Egypt militants claim blast near foreign ministry

CAIRO (AP) — An Egyptian militant group claimed responsibility for Sunday’s bomb blast in a busy downtown Cairo street near the Foreign Ministry that killed two senior police officers and wounded several other policemen. Ajnad Misr, or Soldiers of Egypt, which has claimed previous attacks on police, said in a statement posted late Sunday on its Twitter account and on a militant website that it had used an explosive device on "officers of the criminal apparatus" as part of its campaign against security forces. It said a group of its members carried out "a new penetration operation to reach the foreign ministry’s perimeter and plant the explosive device." It did not say how they detonated the explosives. It said the attacks will not stop until "the ruling tyrants fall and God’s Shariah is established … and that when a hero dies he will be replaced by several heroes who […]

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Some 130,000 Syrians reach Turkey, fleeing IS

ANKARA, Turkey (AP) — The number of Syrian refugees who have reached Turkey in the past four days after fleeing the advance of Islamic State militants now totals 130,000, Turkey’s deputy prime minister said Monday. Numan Kurtulmus warned that the number could rise further but insisted that Turkey was ready to react to "the worst case scenario." "I hope that we are not faced with a more populous refugee wave, but if we are, we have taken our precautions," Kurtulmus said. "A refugee wave that can be expressed by hundreds of thousands is a possibility." The refugees have been flooding into Turkey since Thursday, escaping an Islamic State offensive that has pushed the conflict nearly within eyeshot of the Turkish border. The conflict in Syria has pushed more than a million people over the border in the past 3 1/2 years. The al-Qaida breakaway group, which has established an […]

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Turkey clamps down on Syria border after Kurdish unrest

On Sunday, Turkish troops fired tear gas at the Syrian border, as Mark Lowen reports Continue reading the main story Turkey has begun to close some of its border crossings with Syria after about 130,000 Kurdish refugees entered the country over the past two days. On Sunday Turkish security forces clashed with Kurds protesting in solidarity with the refugees. Some protesters were reportedly trying to go to Syria to fight Islamic State (IS). Most refugees are from Kobane, a town threatened by the advancing militants. IS has taken over large swathes of Iraq and Syria in recent months. Before the latest influx, there were already more than one million Syrian refugees in Turkey. They have fled since the start of the uprising against Syrian President Bashar al-Assad three years ago. Some of the new arrivals are being sheltered in overcrowded schools, as Turkey struggles to cope with the influx. […]

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Dangers Aside, Railways Reshape Crude Market

Railroad tank cars are filled with oil at the Musket Corp. Windsor Crude Terminal in Windsor, Colo. Bloomberg In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma. Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: "crude by rail." Today, 1.6 million barrels of oil a day are riding the rails, close to 20% of the total pumped in the U.S., according to […]

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California gov. signs laws to boost clean-air vehicles, bike use

Gov. Jerry Brown has signed into law several bills designed to boost use of clean-air vehicles and bicycles in California. One bill signed Sunday allows 15,000 additional electric and partial zero-emissions vehicles, or 70,000 total vehicles, to get green stickers that allow driving in carpool lanes even when solo. Another requires freeway high-occupancy toll lane operators to allow clean air vehicles to drive for free or reduced rates. Such roads exist in Orange and Riverside counties, and the San Francisco area. Another bill requires a property owner, rather than the person leasing it, to install an electric vehicle charging station and its infrastructure in most cases. He also signed a bill that would allow local governments to ask voters to approve an annual $5 fee on their vehicle registration for bicycle projects , according to the Sacramento Bee . Two-thirds of voters would have to approve the fee, which […]

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South Sudan: Fighting Threatens Oil Fields in Upper Nile

Fighting has erupted around Renk, a key border town in Upper Nile state. South Sudan says opposition forces supported by the Sudanese government are making a push towards oil fields further south. According to a source within the government, forces loyal to former Vice President Riak Machar launched attacks on government troops near Agon-Bar, northeast of Renk on September 18. The rebel attack initially forced government troops to withdraw from the area. The South Sudanese troops then counterattacked, forcing the rebels to withdraw toward the Sudanese border. Renk sits near several oil fields in Upper Nile state, the largest of which is Palouge. The state is responsible for around 80 percent of South Sudan’s oil production. Fighting has since spread to oilfields near Palouge, according to sources in the area. A Member of Parliament, who is from the region and asked for his name not to be used, accused […]

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Texas RRC Data September Report

The Texas RailRoad Comission released their Oil & Gas Production Data  with production data through July 2014. The data was actually released Thursday but was all messed up. They corrected their mistake Friday except for condensate. Then yesterday they updated everything. As I have stated before, the RRC data, for the last several months, is incomplete. Nevertheless we can gather some indication of what is happening. Texas C+C Texas C+C is still increasing at a pretty hefty clip. The EIA data is just an estimate of course but I think it is pretty close to what the data will show when it is all in. I have included six months of data to show how it is increasing month to month. Texas Crude Only Texas crude only was down in October and November but has been up every month since. The declines in the last few months is due […]

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Russia Pledges State Funds to Business as Sanctions Limit Growth

Russia will remain committed to developing its market economy as the state offers billions of dollars of aid to help the country’s biggest companies weather sanctions imposed by the U.S. and Europe. Prime Minister Dmitry Medvedev met with business leaders to discuss state aid to cope with the strain as Russia’s economic slowdown is exacerbated by the sanctions, Economy Minister Alexei Ulyukayev said today at an investment forum in the Black Sea city of Sochi, site of the Winter Olympics. The government is trying to revive its $2 trillion economy, growing at its slowest since a contraction in 2009 as U.S. and European Union sanctions compound cooling consumption and falling oil prices. Concerns that the arrest of billionaire Vladimir Evtushenkov, the richest Russian to face criminal charges since Mikhail Khodorkovsky a decade ago, signal an attack on private business have intensified outflows. The ruble weakened to a record against […]

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Merkel’s Taste for Coal to Upset $130 Billion Green Drive

When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation. More than a decade later, Europe ’s biggest economy is on course to miss its 2020 climate targets and greenhouse-gas emissions from power plants are virtually unchanged. Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, the highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago. The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. RWE AG, the nation’s biggest power producer, last year reported its […]

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UK weather: Britain must be prepared for ‘worst droughts in modern times’

The UK must prepare for “the worst droughts in modern times” experts will warn this week at a major international conference to discuss the growing global water crisis. As the population continues to grow and water is increasingly scarce, suppliers across Britain simply “cannot afford to fail”, according to Trevor Bishop, the Environment Agency’s deputy director. “We need to have more resilience, we need to be able to deal with tougher situations, and we cannot afford to fail. The consequences of failure would be very substantial,” he said. “In the past we have planned for our water resources to cope with the worst situation on record but records are only 100 years long,” he explained. “We may get a situation that is worse than that – with climate change that is perfectly possible.” He is expected to outline five key solutions the UK needs to embrace to avoid critical […]

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As World’s Population Booms, Will Its Resources Be Enough for Us?

There are some-more than 7 billion people on Earth now, and roughly one in 8 of us doesn’t have adequate to eat. The doubt of how many people a Earth can support is a long-standing one that becomes some-more heated as a world’s population—and a use of healthy resources—keeps booming. This week, dual opposing projections of a world’s destiny race were released. As National Geographic’s Rob Kunzig  writes here , a new United Nations and University of Washington  study in a biography Science says it’s rarely expected we’ll see 9.6 billion Earthlings by 2050, and adult to 11 billion or some-more by 2100. These researchers used a new “probabalistic” statistical process that establishes a specific operation of doubt around their results. Another investigate in a journal  Global Environmental Change projects that the global population will arise during 9.4 billion after this century and tumble next 9 billion by 2100, formed on a consult […]

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U.S. Oil Futures Slip on Supply, Firmer Dollar

NEW YORK–U.S. and global oil prices diverged Friday as supply concerns weighed on U.S. prices, though both contracts posted slight gains for the week. Light, sweet crude for October delivery settled down 66 cents, or 0.7%, to $92.41 a barrel on the New York Mercantile Exchange. Prices rose 0.2% this week. Brent rose 69 cents, or 0.7%, to $98.39 a barrel on ICE Futures Europe and rose 0.4% on the week. The dollar traded near multiyear highs against a basket of currencies Friday on the potential for U.S. interest-rate increases in the future. Oil is traded in dollars, so a stronger dollar makes oil more expensive to buyers using other currencies. "The U.S. dollar is helping the crude market go down," said Tariq Zahir, managing member of Tyche Capital Advisors in New York, adding that he has been betting on lower oil prices. U.S. prices have seen some support […]

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WTI Falls Third Day on Dollar Strength as Supply Rises

West Texas Intermediate crude fell for a third day on rising U.S. inventories as a stronger dollar weighed on commodity prices. Brent futures rose on supply risks. Stockpiles increased last week for the first time since Aug. 8, according to the Energy Information Administration. The dollar gained as the Federal Reserve moves closer to raising interest rates . Brent widened its premium to WTI on signs of lower OPEC output. Gasoline futures jumped on surging Gulf Coast spot prices. “Oil continues to come under pressure from the idea that we have ample supplies,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford, Connecticut. “The dollar is throwing pressure on oil.” WTI for October delivery dropped 66 cents, or 0.7 percent, to end at $92.41 on the New York Mercantile Exchange . The volume of all futures traded was about 5.8 percent below the 100-day average. […]

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US Crude Falls On Worries About Glut, Brent Gains

NEW YORK, Sept 19 (Reuters) – U.S. crude oil and Brent traded in opposite directions on Friday as a sell-off ahead of Monday’s expiration kept U.S. prices down, while discussions of OPEC cutting output put strength into the market overseas. With the two crudes trading lower in the morning, analysts and traders said much of the sell off in the WTI contract was a result of liquidation of long positions before the expiration on Monday. However, Brent saw a number of rallies through the day, pushing the arbitrage between the two grades to $6.74 <CL-LCO1=R>, the widest since Sept. 8. U.S. crude fell 66 cents to settle at $92.41 a barrel while Brent rose 69 cents to settle at $98.39 a barrel. "I think overall talk about OPEC cutting back production is giving some strength on Brent. The cuts are inevitable but who and how," said Carl Larry, chief […]

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Cheap Oil and Expensive Oil Tankers: This Is Contango

Energy During the last half of 2008, as the global economy ground to a halt, the price of oil fell from an all-time high of $145 a barrel to less than $40. A lot of people lost a lot of money. Just as in the stock market, though, the oil crash presented a chance to buy crude cheaper than it had been in years and might ever be again. If you had a place to store that cheap oil, you could make a lot of money when prices rebounded. Thus was born the booming demand for oil tankers, or any other place to stash low-cost crude. By January 2009, with prices still hovering around $50 a barrel, there were some 90 million barrels of crude in floating storage. The futures markets had entered something traders call contango, a fancy commodities term for the expectation that prices will rise in […]

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Natural Gas Prices Edge Lower on Strong Supply, Comfortable Weather

By Timothy Puko NEW YORK–Natural-gas prices closed lower on Friday for a second day, as big surpluses of the fuel and expectations of lower demand encouraged selling. Prices for the front-month October contract fell 7.3 cents, or 1.9%, to $3.837 a million British thermal units on the New York Mercantile Exchange. After a rally above $4/mmBtu to start the week, two days of losses have brought gas back toward the bottom of a 32-cent range in which it has traded for nearly all the past two months. Traders began selling on Thursday, after the U.S. government reported stockpiles grew last week faster than expected. That selling continued into Friday, traders and analysts said. Producers are refilling storage at a record rate, fast enough to get storage levels back to nearly normal, even though they started the spring at an 11-year low, according to the U.S. Energy Information Administration. Weather […]

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U.S. Hopes Face-Saving Plan Offers a Path to a Nuclear Pact With Iran

Over the years, the United States has shown considerable ingenuity in its effort to slow Iran ’s production of nuclear fuel: It has used sabotage, cyberattacks and creative economic sanctions. Now, mixing face-saving diplomacy and innovative technology, negotiators are attempting a new approach, suggesting that the Iranians call in a plumber. The idea is to convince the Iranians to take away many of the pipes that connect their nuclear centrifuges, the giant machines that are connected together in a maze that allows uranium fuel to move from one machine to another, getting enriched along the way. That way, the Iranians could claim they have not given in to Western demands that they eliminate all but a token number of their 19,000 machines, in which Iran has invested billions of dollars and tremendous national pride. And if the plumbing is removed, experts at America’s national nuclear laboratories have told the […]

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Iran Nuclear Talks Resume After Gap

NEW YORK—The first full round of nuclear talks between Iran and six world powers resumed Friday in New York after a two-month gap, with Western officials saying the coming days are critical to reaching a deal by the Nov. 24 deadline. The talks are taking place to the backdrop of the annual United Nations General Assembly meeting, meaning leaders and foreign ministers from Iran and the six powers will be in town. Western officials say they hope that will inject some needed momentum into discussions and help them answer their biggest question of whether Iran’s negotiating team has political cover to accept a major cut in Tehran’s current nuclear-enrichment program under a final deal. "We are entering the crucial phase of the…negotiations with Iran," German Foreign Minister Frank-Walter Steinmeier told reporters Friday. "There is no more room for Iran to play for time. We are willing to offer Iran […]

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Iran, 6 powers seek to unblock nuclear talks

UNITED NATIONS (AP) — With little more than two months to deadline, Iran and six world powers on Friday launched a fresh effort at narrowing stubborn differences on what nuclear concessions Tehran must agree to in exchange for full sanctions relief. The talks once again bring Iran to the negotiating table with the United States, Russia, China, Britain, France and Germany. But this time they are taking place on the sidelines of the U.N. General Assembly. That means U.S. Secretary of State John Kerry and his counterparts will likely join in, adding their diplomatic muscle to the meeting. With the clock ticking down, German Foreign Minister Frank-Walter Steinmeier said the talks had entered a "crucial phase," and suggested Iran would be to blame if the sides failed to seal a deal. "There is no more room for Iran to play for time," he told reporters, urging Tehran to "move […]

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Nigerian Oil Unions Halt Strike After Pension Dispute

Nigeria’s oil unions called off a four-day strike, averting a threat to exports from a nation whose shipments equate to about 2 percent of global demand. The Pengassan union that represents managers and blue-collar Nupeng oil union suspended industrial action after talks with Petroleum Minister Diezani Alison-Madueke and state-owned Nigeria National Petroleum Corp. “The strike action embarked upon by Nupeng and Pengassan is hereby suspended,” according to a joint e-mailed statement today by the minister, labor leaders and NNPC. The strike started on Sept. 16 in a dispute over pensions and unions representing workers at NNPC. Nigeria is the continent’s largest oil producer and relies on the commodity for more than 70 percent of government revenue and 95 percent of foreign-exchange income. The West African nation pumped 2.3 million barrels a day of oil in August, the most since 2006, according to data compiled by Bloomberg. “The strike didn’t […]

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Mexico’s oil hedging deal exposed

Bloomberg Photo Service ‘Best of the Week’: Workers prepare drilling pipe on the Petroleos Mexicanos (Pemex) La Muralla IV deep sea crude oil platform in the waters off Veracruz, Mexico, on Friday, Aug. 30, 2013. Gulf of Mexico crudes strengthened on concern that the conflict in Syria might spread and threaten imports from the Middle East. Photographer: Susana Gonzalez/Bloomberg Mexico’s oil hedging programme – a highly secretive deal that is the largest single trade in crude markets – appears to be unfolding in public for the first time, according to traders. The public disclosure of a large options trade on a new database has led to speculation that the country’s government has locked in a price for most of its oil exports next year. More On this topic IN Commodities Put options locking in the sale of 5m barrels of crude for at least $80 per barrel were this […]

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With 38% of Global Shale Gas Located in Regions of Water Stress, More Oversight of Fracking is Urgently Needed

Natural gas rig in the Piceance Basin in Colorado. Fracking in water-stressed areas poses risks to energy producers and communities. Photo: Energy Tomorrow/Creative Commons 2.0. As more data emerge, shale gas increasingly appears to be in the cross-hairs of the water-energy nexus, and far too little is being done to defuse impending conflicts. While  hydraulic fracturing  (or “fracking”), the process used to unleash natural gas from shale deposits, has raised serious concerns about  groundwater contamination , less attention has been given to the added competition for limited water supplies the process can bring. Each fracking well can require up to 25 million liters (6.6 million gallons) of water. A new  study  by the  World Resources Institute  (WRI), a research group based in Washington, DC, attempts to fill this knowledge gap by overlaying known recoverable resources, or “plays,” of shale gas onto maps of water stress.   The results raise concerns. […]

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Oil Companies Eye Crude Price Drop But Keep Drilling

Hess To Form MLP For North Dakota Oil, Gas Transport Assets HOUSTON, Sept 19 (Reuters) – A 13 percent slide in crude oil prices since June has eroded some of the allure of drilling U.S. shale resources and raised investor concerns, but companies are pushing ahead as prices are still above the breakeven levels that might prompt a slowdown. U.S. light sweet crude traded in New York has dropped to around $93 per barrel from $107 in late June as supplies pumped from oily rocks in Texas and North Dakota grow and a strong U.S. dollar makes imports more attractive. On Thursday, shares of Bakken operator Continental Resources Inc stumbled as much as 8 percent after the company raised its capital budget for this year by $500 million to $4.55 billion and said some well completion techniques would be costlier. The company also replaced a key executive. But oil’s […]

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BHI: US drilling rig count holds steady at 1,931

The US drilling rig count was unchanged at 1,931 rigs working during the week ended Sept. 19, Baker Hughes Inc. reported. A 4-unit rise in land rigs to 1,856 was offset by a 4-unit decline in offshore rigs to 62. Rigs drilling in inland waters were unchanged at 13. Oil rigs were up 9 units to 1,601, which was nullified by a 9-unit drop in gas rigs to 329. The one rig considered unclassified remains unmoved from last week. Directional drilling rigs fell 5 units to 212 while horizontal drilling rigs edged down a unit to 1,341. Canada’s rigs count lost 28 units during the week, settling at a total of 377, down 11 units compared with this week a year ago. Oil rigs comprised a majority of the loss, falling 20 units to 202. Gas rigs dropped 8 units to 175. Major states, basins Activity in the major […]

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API: Oil imports at historic low

WASHINGTON, Sept. 19 (UPI) — API said in its monthly report on trends in the U.S. energy sector crude oil imports of 7.6 million barrels per day in August, the last full month for which data are available, was 6.2 percent less than last year and the lowest level for August since 1996. Total imports of petroleum productions were down 10.2 percent year-on-year. August crude oil production of 8.6 million bpd, meanwhile, was the highest for the month in nearly three decades. Production was boosted largely by output from North Dakota and Texas. In terms of demand, API said its petroleum delivery metric showed a 1 percent increase year-on-year to 19.3 million bpd, the highest in three years. "Petroleum demand last month showed slow but steady growth, mirroring economic indicators for domestic manufacturing, air travel and job creation," said API Chief Economist John Felmy . Production of gasoline in […]

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Exxon grabs more Permian shale

IRVINE, Calif., Sept. 19 (UPI) — Exxon Mobil said it added to its portfolio in the Permian shale basin in Texas in exchange for a portion of its field operations in California. Exxon under the terms of a non-monetary exchange with LINN Energy gets 17,000 net acres in the Permian basin in exchange for 500 acres at its Belridge field in California. Permian production increased 58 percent from 2007 to reach 1.35 million barrels per day last year, which represents 18 percent of total U.S. crude oil production. Exxon said the Belridge field is producing approximately 3,400 bpd. The Permian area will be operated by Exxon’s subsidiary XTO Energy Inc. "We continue to expand our leasehold position in a prolific area that is poised for profitable volumes," Randy Cleveland, president of XTO Energy, said in a Thursday statement. For LINN, it said it would examine 300 potential future drilling […]

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House wants more energy in era of record production

| License Photo WASHINGTON, Sept. 19 (UPI) — A bill that passed through the U.S. House of Representatives will bring relief to consumers feeling the "squeeze" of high gasoline prices, backers say. The House of Representatives passed a measure largely along party lines that supporters said would lower energy prices and expand U.S. energy production. House Natural Resources Committee Chairman Doc Hastings , R-Wash., said the bill came in response to bureaucratic red tape getting in the way of true U.S. energy potential . The measure is "a common sense" approach to "provide relief to hardworking Americans who are feeling the squeeze of higher gasoline and electricity prices, reduce burdensome government barriers to American energy production, and increase America’s energy security," he said in a statement Thursday. The American Petroleum Institute, which represents the business interests of the energy sector, said permits for everything from the Keystone XL oil […]

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Surging Gas Supply Masks Risk of Winter Price Shock

Gas traders betting that ample supply will limit price gains risk a repeat of last winter’s rally as forecasts for another frigid season raise the specter of supply constraints. AccuWeather Inc. and Commodity Weather Group LLC predict below-normal temperatures for much of the U.S. this winter. The price difference between gas for delivery in October and January is the narrowest for this time of year since 2000, a sign that the market views stockpiles as adequate to meet peak heating demand. Goldman Sachs Group Inc. cut its forecast for average gas prices in the fourth quarter of this year and throughout 2015 to $4 per million British thermal units from $4.25, citing a mild summer and rising production. Last winter, a polar vortex left gas supply at an 11-year low and sent futures to a five-year high. Gas inventories will enter the heating season at the lowest level for […]

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No means yes for Scotland, energy companies say

| License Photo LONDON, Sept. 19 (UPI) — After a "no" vote, British energy company BP said Friday it would work closely with the governments in Edinburgh and London to boost North Sea recovery. More than half of the voters taking part in a Thursday referendum for independence from the United Kingdom chose to continue on with 307 years of unity. BP said it would stay on with its commitments in the North Sea . "BP will continue to work closely with both the UK and Scottish governments to realize our shared ambition of maximizing economic recovery from the North Sea," the company said. Scotland said independence would have drawn in substantial oil and gas wealth in the North Sea, with power coming from renewable resources. Edinburgh touted the revenue potential on the day of the referendum. Analysis this week from Wood Mackenzie found that while most of the […]

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Exxon Gets U.S. Sanctions Extension to Shut Russian Arctic Well

Exxon Mobil Corp. (XOM) said the U.S. government is giving the company more time to shut its Russian Arctic well beyond the deadline for sanctions aimed at halting the $700 million project. Exxon asked Washington for an extension to allow it to continue performing shut-down work on the Universitetskaya-1 (University-1) well in Russia ’s Kara Sea to make sure the well was safe before it’s temporarily abandoned. The Irving, Texas-based company already had ceased drilling the offshore well after U.S. sanctions set a Sept. 26 deadline for ending the work. “The U.S. Treasury Department, recognizing the complexity of the University-1 well and the sensitive Kara Sea arctic environment, has granted a license to Exxon Mobil and other U.S. contractors and persons involved to enable the safe and responsible winding down of operations related to this exploration well,” Exxon said in a statement today. The most-recent round of sanctions intended […]

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EIA: Russia diversifying energy production

WASHINGTON, Sept. 19 (UPI) — Russia is looking to develop energy in hard-to-reach areas as legacy production falls from its peak, the U.S. Energy Information Administration found. EIA said Russia typically depends on oil and gas fields in West Siberia. Production there has fallen from peak production levels in the 1980s and companies like Rosneft and Gazprom Neft are looking at new prospects. Last year, Russia was the largest producer of crude oil and condensate and the second-largest producer of natural gas. Oil production in 2013 increased 1.3 percent and gas by 2.1 percent. "However, new technologies, growing Asian markets, and Western sanctions have the potential to shift the regional balance of Russian oil and natural gas production in the long term," EIA said. Last week, Russian oil company Gazprom Neft said it reached a milestone with the production of its 1 millionth barrel of oil from the arctic […]

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Gazprom: Europe our top priority

MOSCOW, Sept. 19 (UPI) — Though China is becoming an important business partner, the European market is the prime destination for Russian gas, the CEO of Gazprom said Friday. Chief Executive Officer Alexei Miller said Russian gas would account for 64 percent of European imports this year, up 17 percent from four years ago. "The European market is No. 1 for us, and we are Europe’s No. 1 gas supplier," he said. Gazprom officials have expressed interest in moving deeper into a growing Asian economy in an effort to offset a stagnant European Union. Construction started this month on the 2,500-mile Power of Siberia natural gas pipeline to carry Russian gas to China. A contract between Russian natural gas company Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Russia’s role in the European energy sector […]

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Russian bank boss feeling sanctions pain

MOSCOW, Sept. 19 (UPI) — Last week, the European Union enforced a new round of sanctions targeting Russian energy efforts in shale, arctic oil and deep waters. The U.S. and European governments already have imposed punitive sanctions on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine. Herman Gref, the director of Russian bank Sberbank, told Rossiya-24 television the sanctions, which extend into the banking realm, were taking their toll . Russian Prime Minister Dmitry Medvedev said earlier this month the government had a responsibility to support companies like Rosneft , controlled in part by the Kremlin. The European Bank for Reconstruction and Development said sanctions "have negatively affected business confidence in Russia."

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Exxon winds down Russian Arctic drilling campaign

Cold world: sanctions against Russia have raised questions on the future of expensive projects in the Kara Sea north of Siberia Cold world: sanctions against Russia have raised questions on the future of expensive projects in the Kara Sea north of Siberia ExxonMobil , the US oil company, is winding down its drilling campaign in the Russian Arctic , making it the biggest corporate casualty of sanctions announced by the US and EU this month, by putting its $700m project on indefinite hold. The company said on Friday that the US Treasury had granted it a short term licence “to enable the safe and responsible winding down of operations”, but said there would be no further extensions. More On this topic IN Oil & Gas It added that it would be bringing to an end all activities associated with the project, a joint venture with Russia’s Rosneft , “as […]

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Russia looks beyond West Siberia for future oil and natural gas growth

Russia was the world’s largest producer of crude oil (including lease condensate) and the world’s second-largest producer of dry natural gas in 2013. In 2013, production of crude oil and lease condensate grew by 1.3%, and production of dry natural gas grew by 2.1%. Most of Russia’s crude oil and natural gas production occurs in West Siberia, a part of central Russia that stretches from the northern border of Kazakhstan to the Arctic Ocean. However, new technologies, growing Asian markets, and Western sanctions have the potential to shift the regional balance of Russian oil and natural gas production in the long term. In 2013, production of oil and natural gas in West Siberia totaled 6.2 million barrels per day of crude oil and 21.1 trillion cubic feet (Tcf) of natural gas, respectively, down from peak production levels in the 1980s. Russian energy companies Rosneft and Gazprom Neft have increased […]

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Western Oil Companies to Continue in Russia Despite Sanctions

SOCHI, Russia—Western oil companies have pledged their readiness to continue working in Russia despite Western sanctions, which have already put a brand new project into question. Speaking at an investment conference in Russia’s southern port of Sochi, Olivier Lazare, the president of Shell Russia, said the company’s strategy in Russia hasn’t changed because of the sanctions. "But of course we have to comply with the sanctions," he said, adding that the company is seeking clarification on what the sanctions mean for its business in Russia. General director of Total E&P Russie, Jacques de Boisseson, also said the company is committed to work in Russia. "We have continued to work in spite of sanctions, this is about consistency, about long-term work, about trust with our partners," he said. "Yes, we are used to work with sanctions. No, we don’t like to do that." Western countries have imposed sanctions against Moscow […]

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Oil Heads for Weekly Gain on Speculation OPEC May Cut Production

Brent and West Texas Intermediate crude headed for this month’s first weekly increases as the Organization of Petroleum Exporting Countries considers cutting its production target next year. Futures were little changed in London and poised for a 0.6 percent increase this week. OPEC, supplier of about 40 percent of the world’s oil, may reduce its daily quota by 500,000 barrels to 29.5 million in 2015, Secretary-General Abdalla El-Badri said in Vienna on Sept. 16. Libya halted output from the Sharara field after an attack at the Zawiya plant. “The market appears to have formed a bit of a base,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “We may also be getting close to a level where the market is a little nervous about taking more risk premium out of oil prices . There’s not a lot in there now and that leaves […]

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Oil-Price Quirk Sends Crude Out to Sea

Sinopec leased the 3.2 million-barrel supertanker TI Europe, above, to hold crude in storage, and plans to pick up more cargoes in the coming days. Euronav Big oil companies and traders are stashing millions of barrels of crude on massive tankers bobbing in the ocean, in a bid to profit from a quirk in oil markets. Instead of moving crude from one port to another, a growing number of tankers are serving as floating warehouses for companies including Sinopec Ltd. and Vitol Group, according to people with knowledge of their operations. Other companies such as Mercuria Energy Group are using the tankers to haul crude to on-shore storage facilities, these people said. In a rare split, crude is cheaper in the spot market than in the futures market, where bets are made on where prices will be in the months ahead. By buying physical stocks of oil and immediately […]

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Natural-Gas Prices Fall on Larger-than-Expected Surplus

By Timothy Puko NEW YORK–Natural-gas futures closed lower Thursday after a weekly stockpile update showed a larger-than-expected surplus. Prices for the front-month October contract settled down 10.3 cents, or 2.6%, at $3.91 a million British thermal units on the New York Mercantile Exchange. The retreat put natural gas back in the middle of a 32-cent range it has traded in for nearly all of the past two months. Producers added 90 billion cubic feet of gas to storage for the week ended Sept. 12, the U.S. Energy Information Administration said. The addition was larger than the 89 bcf consensus average expectations of analysts and brokers in The Wall Street Journal survey. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that drained them to 11-year lows this winter. Last week’s addition refilled stockpiles to 2.9 trillion cubic feet, about 13% below the five-year […]

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Islamic State Brings Saudi-U.S. Ties Into Line After Discord

Saudi and U.S. leaders have been speaking in harmony about the threat posed by Islamic State, after a period in which the allies of 70 years frequently sounded discordant notes. The breakaway al-Qaeda group’s rampage through northern Iraq and eastern Syria has persuaded the U.S. to launch air strikes and seek Arab support for a broader campaign. Saudi Arabia hosted a coalition-building summit last week for Secretary of State John Kerry and 10 Middle Eastern states. After that session, and more than two hours of talks with King Abdullah, Kerry told reporters that “you could not have heard a more fulsome commitment to doing anything that is necessary.” Such solidarity hasn’t always characterized ties between the nations since 2001, when Saudi citizens were involved in the Sept. 11 attacks. A decade later, they split again over the Arab revolts, with Saudis blaming the U.S. for abandoning allies such as […]

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Iraqi oil exports down more than 2 percent

BAGHDAD, Sept. 18 (UPI) — Oil ministry spokesman Assim Jihad said Thursday oil exports from the southern port city were sent to nearly three dozen international companies. August exports were down more than 2 percent from the 75.7 million barrels sent from southern port cities the previous month. SOMO is the only entity authorized to export oil from Iraq, the federal government in Baghdad says. The semiautonomous Kurdish government has exported oil taken from its northern provinces at least since May, to the frustration of Baghdad. The Oil Ministry said Thursday exports to Ceyhan from a pipeline from the restive northern Iraqi city of Kirkuk have been idled since May because of terrorist actions. Militants from the Islamic State, referred to often as ISIS or ISIL, claimed in June they took over the Baiji oil refinery , the largest in Iraq. Oil Minister Adil Abdel Mahdi visited the Baiji […]

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Iraq’s Fight Against ISIS May Fall to Provinces

ERBIL, Iraq — Gov. Atheel al-Nujaifi wants his province back. Since early June, when jihadist militants swept into Nineveh Province in northern Iraq and seized control of its capital , Mosul, Mr. Nujaifi has been a man without a home. As Iraqi forces and various militias, backed by American airstrikes , have sought to beat back fighters calling themselves the Islamic State, Mr. Nujaifi has pursued his own military response, narrowly tailored toward reclaiming Mosul. He is trying to assemble a 3,000-person militia of Sunni Muslims from Nineveh Province to deploy against the militant group, also known as ISIS. “We want to give a new image to the people: that Mosul will fight ISIS with people mainly from Mosul,” he said. “The people will not accept a return of the Iraqi Army.” There are countless hurdles to this project, not least of which is that the central government in […]

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U.S. Official Says Nuclear Talks With Iran Were Constructive

NEW YORK—The U.S. team negotiating a comprehensive nuclear deal with Iran were "not very optimistic" about the chances of a breakthrough in the talks, a senior U.S. official said Thursday, but bilateral discussions with Iran over the last 24 hours have been "constructive." "Coming into New York, many of us were not very optimistic," the official said. However, after discussions with Iran Wednesday evening and Thursday morning, "it is clear that everyone has come here to go to work." The official said U.S. President Barack Obama is "open to" meeting with Iranian President Hasan Rouhani on the sidelines of the United Nations General Assembly next week but that there was no meeting scheduled. The official said "the choice is really Iran’s." Mr. Obama and Mr. Rouhani held a historic 15-minute phone conversation at last year’s annual General Assembly meeting. Iran is negotiating a nuclear deal with the U.S. and […]

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Nigeria’s Power Woes Slow to Abate After Privatization

Award-winning Nigerian sculptor Olu Amoda took eight months to complete The Sunflower, a giant artwork of steel and metal spoons, in his studio in Lagos, Africa ’s biggest city, because of electricity shortages. Amoda could have finished the piece in several weeks if he lived in a country with a steady power supply, such as the U.S., where he has presented works at the New York Museum of Art and Design. But he lives in Nigeria , which produces a 10th of the amount generated in South Africa even though its population of 170 million is more than three times larger. Blackouts are a daily occurrence. “In some places people ask ‘how’s the weather’,” he said. “Here my friends ask, ‘how is electricity in your area’.” While the government last year sold its power distribution monopoly and the hydro- and natural gas-powered plants it ran to attract investment needed […]

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