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Ukraine gas supplies in doubt as Russia seeks EU payment deal

BRUSSELS (Reuters) – Ukraine’s efforts to unblock deliveries of Russian gas as winter sets in were deadlocked on Thursday as Moscow’s negotiators were quoted demanding firmer commitments from the European Union to cover Kiev’s pre-payments for energy. EU-hosted talks were adjourned after running late into the night, Energy Minister Alexander Novak and the head of Russian gas firm Gazprom ( GAZP.MM ) told Russian news agencies. They would resume later in the day if Ukraine and the EU had a firm financing deal in place, Gazprom head Alexei Miller said. Ukrainian and EU officials were not available. A spokeswoman for Energy Commissioner Guenther Oettinger issued a statement cancelling a news briefing that had been tentatively set for 8:30 a.m. (0730 GMT) in the event of an agreement. There has already been agreement on the price Kiev will pay for gas over the winter, the amount to be supplied and […]

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Why Oil Prices Went Down So Far So Fast

Print Back to story The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China , Mideast violence that threatened to disrupt supplies and never did. After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices. “That, for me, was the giveaway,” Carbone said in an Oct. 28 phone interview from his New York office. “Once it started going, it was relentless.” The 29 percent drop since June of the international price caught traders and forecasters by surprise. After a steady buildup of supply and weakening demand, the outbreak of an OPEC price […]

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Oil Futures Stable Ahead FOMC Meeting, Stockpile Data

By Eric Yep Crude-oil futures were stable in Asian trading hours Wednesday ahead of the U.S. Federal Reserve meeting and a final reading on U.S. oil inventories due later in the day. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $81.71 a barrel at 0504 GMT, up $0.29 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange rose $0.39 to $86.42 a barrel. Most investors were on the sidelines as the Federal Open Market Committee’s statement is expected to set the tone in wider financial and commodity markets. The vast majority of analysts expects the Fed to finish its tapering program and should help anchor sentiment for Asian markets today, Singapore’s OCBC Bank said. Late Tuesday, the American Petroleum Institute, a trade group, said U.S. crude stockpiles rose 3.2 million barrels last week. The more closely-watched inventory […]

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WTI Rises Second Day as Fuel Demand Seen Expanding; Brent Climbs

West Texas Intermediate crude rose for a second day on speculation that fuel demand is increasing amid signs of an improving economy in the U.S., the world’s biggest oil consumer. Brent gained in London. Futures climbed as much as 0.7 percent in New York. U.S. gasoline inventories probably fell by 900,000 barrels to 203.5 million last week, according to a Bloomberg News survey before Energy Information Administration figures today. Stockpiles dropped by 3.7 million, the American Petroleum Institute was said to have reported yesterday. Consumer confidence in the country advanced to a seven-year high in October, data from the Conference Board showed. “Oil prices have been supported by better-than-expected economic indicators we’ve been getting from countries including the U.S. and Japan ,” Hong Sung Ki, a senior commodities analyst at Samsung Futures Inc. in Seoul, said by phone today. “We can’t expect a strong rebound in oil but I’d […]

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Crude Rises First Time in Three Days on Consumer Optimism

West Texas Intermediate and Brent crudes advanced for the first time in three days after a report showed that confidence among U.S. consumers rose in October to a seven-year high as gasoline prices dropped. The Conference Board’s index climbed to 94.5 this month, the highest since October 2007, from a September reading of 89 that was stronger than initially estimated, the New York-based private research group said today. WTI prices have slipped 11 percent this month on signs that global oil production is growing faster than demand for fuel. “The consumer confidence numbers were very encouraging,” Michael Lynch , president of Strategic Energy & Economic Research in Winchester, Massachusetts , said by phone. “It’s another sign that the U.S. economy is looking strong. A major reason for the rise in confidence was probably the drop in gasoline prices.” WTI for December delivery rose 42 cents, or 0.5 percent, to […]

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Natural Gas Rallies as Bears Collect Profits

By Christian Berthelsen Natural gas futures gained Tuesday despite revised forecasts for warm weather to last into mid-November, as traders squared their books ahead of the November-delivery contract’s expiration. The contract rose 8.8 cents, or 2.5%, to end at $3.649 a million British thermal units on the New York Mercantile Exchange. Options on the November contract expired with the close of trading Tuesday and the contract itself expires Wednesday. Most of the volume in the market has moved forward into the December contract, which settled up 2.6% at $3.731/mmBtu. Analysts and brokers said the pending expirations drove trading, particularly investors closing out bearish trades against the market by buying futures to cover their positions. "The market sold down hard over the last two weeks," said Tom Saal, a broker with INTL FCStone. "There’s short-covering, and we’re rolling into a new front-month." Short-covering comes when a trader cashes out of […]

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Barclays Cuts Oil-Price Forecasts on World Supply Surplus

Barclays Plc cut its oil-price forecasts for the second time this month, citing expectations that OPEC won’t cut supplies sufficiently to remove a global surplus. The bank reduced its 2015 estimate for the average Brent price to $93 a barrel from $96, and for West Texas Intermediate to $85 from $89. Still, oil has probably reached its lowest point for this year as the oversupply temporarily diminishes and “should recover modestly” during the rest of the quarter, the bank said. “OPEC supply-side adjustments are expected, but these are unlikely to be sufficient to overcome a lackluster demand picture in the first half of the year,” analysts Miswin Mahesh and Michael Cohen wrote in a report today. Oil has collapsed into a bear market amid rising global supplies as leading members of the Organization of Petroleum Exporting Countries resisted calls to cut production. The supply glut, which dwindled in the […]

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Energy groups left bruised as falling oil prices bite into profits

©Getty Tumbling oil prices have hit the earnings of two big London-listed energy companies, in one of the first tangible signs of how the oil supply glut is reverberating across the global economy. FTSE 100 oil and gas producers BP and BG Group both reported a fall in third-quarter profits on Tuesday, in part due to the drop in the oil price over the period. More On this story Oil price fall dents Mexican budget BP stands by cash target as profit falls BG reports 29 per cent profits fall Oil rallies sharply after near 4-year low On this topic IMF urges Gulf states to restrain spending Comment Commodities as a pump primer Oil rises on claims of Saudi supply cut Trading Post Deflation fear underpins oil-equity link IN Commodities Fall in copper stocks points to rally Cofco unveils plans for joint venture IPO Chinese coffee attracts Swiss traders […]

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Benchmarks play an important role in pricing crude oil

Source: U.S. Energy Information Administration, from Bloomberg Note: Dubai/Oman price calculated by taking the average of Dubai and Oman spot prices. When energy analysts and the media discuss the price of crude oil, they are typically referring to one of a small group of specific types of crude oil that are widely and actively bought and sold. The use of such benchmark crudes makes it easier for buyers and sellers to price the variety of crudes that are produced around the world. The most widely used benchmarks are associated with crude oil that has four common qualities: stable and ample production; a transparent, free-flowing market located in a geopolitically and financially stable region to encourage market interactions; adequate storage to encourage market development; and/or delivery points at locations suitable for trade with other market hubs, enabling arbitrage (profit opportunities) so that prices reflect global supply and demand. Other types […]

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Oil Gives Kurds a Path to Independence, and Conflict With Baghdad

KIRKUK, Iraq — Roughly two dozen huge oil tankers are idly turning figure eights around the Mediterranean or on the high seas, loaded with oil pumped from wells in Iraqi Kurdistan but with nowhere to legally offload it. The oil fleet is a costly gamble, to the tune of millions in fees each month, by Kurdish officials who are desperately trying to sell the oil abroad, even as the Iraqi government and the United States are blocking their attempts. To Iraqi officials, the tankers are carrying contraband — oil that by law should be marketed only by the Iraqi Oil Ministry, with the profits split: 83 percent for the Baghdad government, 17 percent for the Kurdish autonomous government in the north. Fearing that Iraqi Kurdistan will use oil profits to fuel a bid for independence, the Iraqi government has threatened to sue any country or company that buys Kurdish […]

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Iranians Hope for Nuclear Deal With West to Kick-Start Economy

TEHRAN — Mohammad Heydarian, an Iranian contractor, still has work finishing off a single-family home. But things look bleak after that, he said. He has already fired his workers, and is struggling to make ends meet, providing for his wife and two teenage children. “My life became a fight trying to prevent regression, but I lost,” said Mr. Heydarian, 46. For more than a year, President Hassan Rouhani has been dangling the prospect of a bright economic future before the middle classes that elected him, promising to complete a deal with the West to limit Iran’s nuclear program and end the sanctions hobbling the Iranian economy. While the deadline of Nov. 24 is fast approaching, it is far from clear whether the two camps will agree on a pact. What seems certain, analysts say, is that with oil prices falling seemingly daily — and projected to drop even further […]

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Noble gas output from Israel up 21 percent

Houston-based energy explorer Noble Energy sees output growing from Israeli offshore gas basins. (File/UPI/A.J. Sisco) HOUSTON, Oct. 28 (UPI) — Energy explorer Noble Energy said Tuesday production during the third quarter soared because of advancements off the coast of Israel. Noble, a partner in the development of the Tamar and Leviathan gas basins, said gas sales volumes from its Israeli assets were up 21 percent from the second quarter and up 3 percent year-on-year. Tamar managing partners Noble and Israel’s Delek Group estimate the field holds as much as 10 trillion cubic feet of natural gas. Last week, they said they were negotiating the sale of at least 175 billion cubic feet of natural gas per year over the next three years with Egyptian buyer Dolphinus Holdings Ltd. During the third quarter, the company said the "debottlenecking" of Tamar facilities led to a peak product of more than 1.1 […]

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Algeria Bucks OPEC-Discount Trend With Venezuela Oil Sale

Algeria raised its oil price for November to the highest in five months after adding fellow OPEC member Venezuela , holder of the world’s largest crude reserves, to the list of its mostly European customers. The North African country will sell its Saharan Blend crude at a premium of 70 cents a barrel to Dated Brent, the North Sea benchmark, according to a price list obtained by Bloomberg. That’s the highest level since June and an increase from 20 cents in October. The first supertanker of Algerian crude arrived in Venezuela on Oct. 25, according to ship tracking data. “It’s primarily due to its sales to Venezuela” that Algeria has been able to raise premiums, Amrita Sen, chief oil market analyst at Energy Aspects in London , said by e-mail today. “Otherwise demand for light crudes has been super weak.” The Organization of Petroleum Exporting Countries’ biggest producers, including […]

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Nigeria: Govt Insists On Fuel Subsidy Removal

Related Topics Nigeria Nigeria: Synagogue Victims Died of Crush Inju… Petroleum Nigeria: NASS, FG Disagree Over N1.2 Trillion… Ads by Google WORRIED about the slow growth of the downstream oil and gas sector due to what it considered as a result of the regulated regime in the industry, the Federal Government yesterday stressed the need to eliminate price subsidy and stimulate competition. Besides, the country’s downstream sector requires investments of about $20 billion (N3.2 trillion) yearly to support the sector. This came as the House of Representatives assured stakeholders that the long-awaited Petroleum Industry Bill (PIB) would be passed into law before May 2015. The Minister of Petroleum Resources, Diezani Alison-Madueke, who spoke at the ongoing eighth oil trading expo in Lagos, said that to provide a competitive market environment and sustain supply, the downstream sector should be fully deregulated. According to her, more investments in the sector will […]

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Mexico’s State-Owned Oil Giant, Pemex, Is in Uncharted Waters

LA MURALLA IV, Gulf of Mexico — The computer screens lining the bubblelike control room on this giant floating platform monitor pressure levels in a narrow shaft cut through bedrock to a reservoir of valuable natural gas three miles below sea level. For six months, an international team hired by a contractor for Petróleos Mexicanos, Mexico’s state-owned oil monopoly, has been drilling an exploratory well here. Now, the work is nearly done. Drill pipes are stacked like sentries. An underwater robot has been pulled back up from the deep seafloor. A wireline sensor is gathering data to determine how much oil and gas lie below. An operation like this would attract little attention in the northern part of the gulf, where dozens of deepwater platforms are part of the mosaic fueling America’s energy boom. On the Mexican side, though, the search is just beginning . Pemex is counting on […]

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Pirates Target Oil Tankers in Asia Trade Route as Attacks Climb

Hijackings of small oil tankers by armed gangs are increasing in Southeast Asia , home to the shortest sea-trade route between the Middle East and China, even as pirate attacks globally fell for a third year. Five of the six vessels seized worldwide in the third quarter were in Southeast Asia , said the International Maritime Bureau and International Chamber of Commerce . There’s been 178 global piracy incidents so far this year, down from 352 in 2011, they said in an e-mailed report today. Gangs of thieves armed with knives and guns are making Southeast Asian waters increasingly dangerous for small tankers carrying fuels such as gasoil or marine diesel, according to the report. The region includes the Malacca Strait connecting the Indian Ocean with the South China Sea and the Pacific that’s been described by the U.S. Energy Information Administration as one of the world’s “most strategic […]

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World Bank: China needs reform, not growth targets

AP Photo/Andy Wong BEIJING (AP) — China’s growth could decline to close to 7 percent next year but Beijing should focus on overhauling its economy instead of trying to stick to official growth targets, the World Bank said Wednesday. To avoid a sharper slowdown, Beijing needs to promote competition and efficiency by reforming its labor and real estate markets and its state-run financial system, the Washington-based lender said in a report. Trying to stick to short-term official targets might set that back by prompting officials to pump credit into the economy and disrupt the development of markets, said the report’s chief author, economist Karlis Smits. "The policy focus should be on reforms rather than on meeting specific growth targets," said Smits at a news conference. The World Bank report adds to urging by reform advocates who say the government of President Xi Jinping needs to move ahead with ambitious […]

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Inflated exports cast doubt on Chinese trade outlook

This picture taken on March 7, 2014 shows a man working in Qingdao port in Qingdao, east China’s Shandong province. China recorded an unexpected trade deficit of 22.98 billion USD in February, official figures showed on March 8, with authorities blaming the country’s holiday season for the weak performance. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images) ©AFP Inflated Chinese export data are back. The ruse of puffed-up export invoices to convert extra foreign currency into renminbi is on the rise again, casting doubt on recent strong export data. Chinese exports hit a high of $214bn in September, well ahead of forecasts. Growth of 15.3 per cent from a year earlier was also the swiftest pace in 20 months. That looked like good news for an economy where fixed-asset investment, traditionally the biggest growth driver, is slowing on the back of a weak property market. But economists […]

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PM2.5 density in Chinese cities drops

BEIJING, Oct. 29 (Xinhua) — PM2.5 density, a main measure of air pollution, dropped by 7.9 percent in 74 major Chinese cities in the first half of 2014 compared with the same period last year. The density of PM10, particles under 10 microns in diameter, was down by 6.5 percent, according to a report on the enforcement of the Law on the Prevention and Control of Atmospheric Pollution, which was submitted to the National People’s Congress (NPC) Standing Committee, China’s top legislature, for deliberation on Wednesday. China has vowed to strengthen air pollution control. Smog-prone Beijing will adopt a special air pollution control plan for the upcoming APEC meetings, featuring temporary closure of factories in the event of a pollution warning. Shen Yueyue, NPC Standing Committee vice-chairwoman, told lawmakers that China has continuously increased charges for emissions of major pollutants, with charges in key cities such as Beijing and […]

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Five-Year Outlook: North Dakota Oil Production to Grow Steadily

On average, North Dakota oil production, which surged past the 1 million b/d mark earlier this year, will continue to grow steadily at a rate of about 18,000 b/d each month through 2019, according to a study completed in September for the state legislature. Commissioned last year by state lawmakers (see Shale Daily , Oct. 14, 2013 ), Bismarck-based engineering/planning firm Kadrmas, Lee & Jackson (KLJ) completed the work in partnership with North Dakota State University, concluding that daily production could hit the 2 million b/d level during the period. KLJ and the university used three approaches to forecast the sustainability of oil and gas production: economic analysis of the Bakken/Three Forks shale formation; projections on population, employment and housing needs; and potential for enhanced oil recovery (EOR). The study showed that even at $70/bbl oil prices, economic payback times can be kept relatively short (four years and under) […]

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Petrofac goes ultra-deep for Nova Scotia

British oil services company Petrofac to study ultra-deep water reserves off the coast of Nova Scotia. UPI/A.J. Sisco. Nova Scotia tap into potential oil prospects offshore. The provincial government awarded Petrofac with a contract to examine the prospects of oil trapped in the deep waters off the eastern Canadian coast. Nova Scotia’s government estimates there may be as much as 120 trillion cubic feet of natural gas and 8 billion barrels of oil offshore. Petrofac said the region is geologically similar to oil basins off the northwest coast of Africa, though reserves offshore Nova Scotia are thought to lie nearly 2 miles below the sea bed in mile-deep waters. Craig Muir, a engineering consultant for Petrofac, said the contract could provide significant returns for the provincial government. "The potential outcomes of this study are of strategic importance for the Nova Scotia government and a great step forward for Petrofac […]

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ONEOK lays foundation in Permian shale

ONEOK buys shale pipeline assets from Chevron affiliates to lay foundation in Texas basin. (UPI/Shutterstock/smereka) Oklahoma-based shale company ONEOK Partners said it gained a solid footprint in the Permian shale basin after buying pipeline and other assets from Chevron. ONEOK Partners paid around $800 million to acquire roughly 2,600 miles of gas pipelines extending from the Permian basin in southeastern New Mexico and East Texas from Chevron Corp. affiliates. ONEOK President and Chief Executive Officer Terry Spencer said the acquisition establishes his company as one of the prime players in the Permian shale . "We are adding another rapidly growing producing region to our operating footprint," he said in a Monday statement. ONEOK describes the Permian basin as the largest shale oil and natural gas basin of its kind in the United States, three times larger than the Bakken formation in North Dakota.

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AAA: High oil production means low gas prices

More than a dozen U.S. states reporting gasoline prices below the $3 mark, motor club AAA reports. (UPI Photo/Ismael Mohamad) WASHINGTON, Oct. 28 (UPI) — Retail gasoline prices have moved steadily lower despite geopolitical tensions thanks in part to high U.S. oil production, motor club AAA reports. AAA reports a national average price of $3.03 per gallon, the lowest national average price in nearly four years and more than 30 cents less than one month ago . Crude oil prices represent about 60 percent of the price at the pump. Both prices would typically rise because of heightened tensions overseas. "Continuing unrest in Iraq and geopolitical tensions in Eastern Europe have taken a backseat to an emerging belief by many market watchers that global supply, including significantly higher oil production in the United States, is outpacing global demand growth," the motor club said in a Monday report. The United […]

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Continental Resource’s Harold Hamm on Falling Oil Prices – Videos

Continental Resources, the Bakken’s second largest producer, will not change its course on new drilling immediately due to falling oil prices, according to its CEO Harold Hamm. In a Platt’s Energy Week interview on Sunday, Hamm said prices would have to fall another 20% before Continental would significantly cut back its operations. Hamm has been making the rounds on TV, also appearing on CNBC, talking about what he believes are some of the reasons behind the drop in oil prices. Hamm points the finger sharply at OPEC, accusing the Saudi’s of using rhetoric to dictate price. Since June of this year, oil prices have been falling, and the reasons why have to do with supply v. demand. The shale oil boom, for instance, has increased the supply of oil worldwide, and demand has gone down in China, the world’s second largest oil consumer. But the main reason oil prices have dropped can […]

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Kerry Wants Keystone Pipeline Decision ‘Sooner Rather Than Later’

OTTAWA, Oct 28 (Reuters) – U.S. Secretary of State John Kerry said on Tuesday during a visit to Canada that he would like to make a decision soon on TransCanada Corp’s Keystone XL crude oil pipeline. TransCanada has waited more than six years for the Obama administration to make a decision on the line, which would take as much as 830,000 barrels per day of Alberta tar sands crude to refineries on Texas’ Gulf Coast. The State Department is now awaiting the results of a court challenge on the line’s routing through Nebraska and completing its own study on the need for the line before it makes a final recommendation to President Barack Obama on whether to grant the project a presidential permit. The permit would allow the line, which faces critcism from environmentalists, to cross from Canada into the United States. While Kerry said he would like a […]

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Kemp: Divided By Shale, Only Some US States Win

John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Oct 27 (Reuters) – Thanks to shale, energy-producing states have been the strongest economic performers in the United States over the past decade, sharply improving their position compared with the energy-consuming states. Only 13 of the 50 states produced more energy than they consumed in 2010, the latest year for which comprehensive data is available, according to the U.S. Energy Information Administration (EIA). The other 37 were all net energy consumers, relying on some combination of interstate commerce or imports to meet the shortfall. The shale revolution and the renaissance in U.S. oil and gas production have resulted in a stark contrast between the fortunes of the two groups. Eight of the 13 energy-producing states improved their relative position between 2003 and 2013 when ranked by per capita gross domestic product. They accounted for almost […]

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BP to close TANAP deal by year’s end

BP confirms it will close on deal to take stake in Turkish natural gas pipeline by the end of the year. UPI/Alexis C. Glenn LONDON, Oct. 28 (UPI) — BP confirmed Tuesday an agreement to take a 12 percent stake in a Turkish pipeline carrying Azeri gas to Europe will close by the end of the year. BP-Azerbaijan in January 2013 signed a framework agreement to take on a 12 percent stake in the Trans-Anatolian natural gas project. The State Oil Co. of Azerbaijan Republic has a majority stake in the pipeline. "We expect to take a 12 percent stake in TANAP by the end of the year," a BP spokesman confirmed to UPI. BP has awarded more than $1 billion in development contracts since selecting the Trans-Adriatic pipeline as its option to carry natural gas from the Shah Deniz field off the coast of Azerbaijan last year. The […]

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EU climate policies work, commissioner says

European report finds emission reductions on course to pass goals for 2020. UPI/Stephen Shaver The commission and the European Environment Agency estimated total greenhouse gas emissions from members of the European Union in 2013 fell 1.8 percent from the previous year. That means 2013 emissions were their lowest since 1990. EU members have agreed to cut emissions by 20 percent of the 1990 benchmark by 2020. The commission said the data show the EU is on pace to surpass the target. EU Climate Action Commissioner Connie Hedegaard said the emission declines show European climate policies work. "Delivering on 2020 climate goals shows that Europe is ready to step up its act," she said. "And better, still: it shows that the EU is delivering substantial cuts." Members of the European Union agreed last week to cut greenhouse gas emissions by 40 percent, increase the renewable energy footprint by 27 percent […]

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BP Enhances Dividend as Profit Beats Estimates on Margins

BP Plc (BP/) ’s quarterly profit beat estimates as underlying production increased and refining margins improved. Europe ’s third-largest oil producer said it would pay stockholders a higher dividend for the period. Net income adjusted for one-time items and inventory changes fell 19 percent to $3 billion in the third quarter from $3.7 billion a year earlier, the London-based company said today in a statement. That beat the $2.93 billion average of 14 analyst estimates compiled by Bloomberg. BP will pay a dividend of 10 cents a share, a 5.3 percent increase from a year earlier. “BP is steadfastly continuing on its road to recovery,” said Richard Hunter , head of equities at Hargreaves Lansdown Asset Management Ltd. in London . “BP has been able to generate strong cash flow partly through an improved downstream performance.” While the refining business helped BP beat estimates, the overall decline in profit […]

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BP hurt by Russian economic downturn

Economic cloud hanging over Moscow hurts BP’s bottom line for third quarter 2014. UPI/Alex Volgin BP reported its third quarter profits were off 63 percent. Revenues for the third quarter dropped more than 3 percent year-on-year to $94.8 billion. From its operations related to Russian oil company Rosneft, BP said net income for the quarter was $110 million compared with $808 million during the same period last year. "The depreciation of the ruble against the dollar over the period had a significant impact on the result," the company said in its quarterly statement. The Russian currency hit an all-time low last week, trading at 42 rubles to the dollar. Western sanctions on its energy sector imposed in response to crises in Ukraine, coupled with record-level inflation and low oil prices, have hit the Russian economy hard. In its statement for the second quarter , BP warned any "future erosion" […]

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Europe Strives to Overcome Its Reliance on Russian Gas

LONDON — In the early 1980s, the Reagan administration warned its West European allies about their growing dependence on Russian gas. The Europeans paid no heed. They had found the Soviet Union to be a reliable supplier of gas over the previous decade, and they all — Margaret Thatcher included — refused to comply with a United States demand to stop their companies from selling technology with American origins to build new pipelines to bring more gas to Western Europe from Siberia. Now, the Ukraine crisis has opened up a deep political rift with Russia, Europe’s largest single foreign supplier of not only gas, but also oil , coal and nuclear fuel — and that long-ago warning by the United States looks prescient. For Europe, growing reliance on imported fossil fuels is a fact of life that will not change greatly for years. Europe’s domestic production of oil, gas […]

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The Cost of Cheap Oil

Printer-friendly The world price of oil – Brent Crude – fell below $84 per barrel on October 15.  This was 26% less than the $115 it had reached in June, just four months before.  The rise during the spring had many explanations:  global tensions in Ukraine, the South China Sea and especially the Middle East with the emergence of the Islamic State, plus a capital crunch challenging the health of the U.S. shale fracking boom.  Then suddenly in June, prices started dropping, reaching levels unseen since 2010 (though still high by historical standards – twice that of 10 years ago). What is going on?  Why does the price of oil matter to financial advisors?  What might these fluctuations mean to the price and supply of oil for the rest of the decade?  Isn’t oil just another commodity? A primer on oil prices Oil is unique. There is a tight […]

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Population explosion is unstoppable

4607 Votes Not even a third world war or a lethal pandemic, leave alone a one child policy globally, will be able to slow down the planet’s rocketing population rise, scientists say. New multi-scenario modeling of world human population has concluded that even stringent fertility restrictions or a catastrophic mass mortality would not bring about large enough change this century to solve issues of global sustainability. Scientists concluded that even a world-wide one-child policy like China’s, implemented over the coming century would still likely result in 5-10 billion people by 2100. There are currently about 7.1 billion people on earth, and demographers estimate that this number could rise to about 9 billion by 2050. Professor Corey Bradshaw and Professor Barry Brook from the University of Adelaide’s Environment Institute said that the locked-in population growth means the world must focus on policies and technologies that reverse rising consumption of natural […]

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Oil Price: Beginning Of A Downtrend

4607 Votes Summary The IEA’s Mid-Term Oil Market Balance may be the only chart you need, to assess longer-term oil suply-demand. Based on abundand supply and slow demand growth, the recent drop in oil price is likely the beginning of a downtrend. Investment implicaitons: exposures to crude oil and oil producer stocks are not recommended. Crude oil prices recently plummeted to around $80 per barrel of the WTI contract, from the recent peak around $105 in June – a more than 23% drop. The Brent contract price stands around $86, even a steeper drop from its peak. This came as a surprise to many energy experts, given ongoing serious geopolitical issues in oil-producing regions such as ISIS advances in Iraq and Syria, and sanctions on Russia. The lower WTI price has negative consequences for earnings of U.S. oil producers. And, while lower oil price is a net-positive for the […]

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Oil Subdued Ahead Weekly U.S. Stockpile Data

By Eric Yep Crude-oil futures were subdued in Asian trade Tuesday as market participants expected yet another increase in weekly U.S. oil inventories to add to the current global oversupply. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $80.62 a barrel at 0501 GMT, down $0.38 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.52 to $85.31 a barrel. Oil markets are still gloomy after Goldman Sachs slashed price forecasts for next year overnight, but investors are likely to shift focus to U.S. inventory data this week. The American Petroleum Institute, a trade body, will publish its survey of weekly U.S. oil stockpile data later Tuesday. The more closely watched inventory data from the U.S. Energy Information Administration is due on Wednesday and analysts expect a significant increase. Oil producers, particularly from U.S. shale have […]

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WTI Trades Near 3-Day Low as Supplies Seen Rising

West Texas Intermediate traded near the lowest closing price in three days amid speculation crude stockpiles increased to the highest level since July in the U.S., the world’s biggest oil consumer. Brent fell in London . Futures were little changed in New York after falling just 1 cent yesterday. Crude inventories are forecast to have expanded by 3.8 million barrels to 381.5 million last week, a Bloomberg News survey showed before government data tomorrow. OPEC is unlikely to reduce its production target when it meets next month, Mohsen Qamsari, a director for international affairs at National Iranian Oil Co., said yesterday according to the Oil Ministry’s news service. “It’s clear that the supply situation is at a record in terms of stockpiles, so it’s going to take some time to clear that excess,” Michael McCarthy , a chief strategist at CMC Markets in Sydney, said by phone today. With […]

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Crude at $80 a Barrel? No Sweat, Say Oil Producer CEOs

U.S. energy companies are shrugging off a 24 percent plunge in oil prices , confident they can adapt and still make money. Amid predictions that the biggest drop in crude prices since the global financial crisis six years ago will choke off cash flow and slow drilling, industry leaders are reassuring investors they still have the means to return ample profits. Improved technology is bringing down costs and most shale producers operate in multiple basins, allowing them to shift work to the most profitable sites. The industry is used to price swings, Halliburton Co. (HAL) Chairman and Chief Executive Officer David Lesar said in an interview in his Houston office. When prices climb above $100 a barrel, oil companies are “printing money like crazy,” he said. When prices fall below $80, the “doomsdayers start to come out. ‘‘If it floats between $80 and $100, our sector will be fine,’’ […]

Posted On : Published By : Tom Whipple
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Oil Slides on Weak Long-Term Outlooks

By Nicole Friedman And Cassie Werber NEW YORK–U.S. oil prices dropped below $80 a barrel Monday after a major U.S. bank slashed its price forecasts for the first half of the coming year. Goldman Sachs cut its oil forecasts for the first quarter of 2015 in a note released Monday. The bank’s Brent forecast is now $85 a barrel for the first two quarters of 2015, down from $100 a barrel previously. Its forecast for the U.S. benchmark is now $75 for the first quarter, down from $90 a barrel. Light, sweet oil for December delivery recently fell $1.38, or 1.7%, to $79.63 a barrel on the New York Mercantile Exchange, the lowest intraday price since June 2012. The U.S. benchmark price has dipped below the psychologically important $80-a-barrel level in intraday trading several times this month, but it has always bounced back. Brent recently traded down $1.31, or […]

Posted On : Published By : Tom Whipple
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WTI falls below $80 per barrel, Brent sheds gains

Brent, West Texas Intermediate erase rally on lowered forecast on futures from Goldman Sachs. UPI/Dennis Van Tine Goldman Sachs pushed oil prices downward. West Texas Intermediate crude oil for December delivery pushed below $80 per barrel, dropping more than $1.20 to $79.76 in early Monday trading. Brent, the international benchmark price, fared no better , shedding $1.25 early Monday to post $84.86 for the December contract. A lackluster European economy was in part dragging on oil prices, though much of the demand growth was coming from Asian economies outpacing their rivals in terms of gross domestic product gains. The European Central Bank concluded Sunday that most of the largest banks servicing the European economy would be able to survive a major financial crisis . A note Monday from Goldman Sachs, however, erased much of the confidence in an oil market recovery from the bear market that emerged in June. […]

Posted On : Published By : Tom Whipple
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Goldman Slashes 2015 Oil Price Forecast As Glut Grows

Oct 27 (Reuters) – Goldman Sachs has slashed its 2015 oil price forecasts, making it the most bearish among major financial institutions, adding pressure on Monday to crude futures that have already tanked near 25 percent over the past five months. The U.S. investment bank said rising production will outstrip demand, joining other oil analysts who predict consumption will be dented by slower global economic growth and lead to a supply glut. Goldman analysts said in a report released late on Sunday that they expect U.S. benchmark West Texas Intermediate (WTI)crude to fall to $75 a barrel and Brent to $85 a barrel in the first quarter of 2015, both down $15 from their previous forecast. WTI could fall as low as $70 in the second quarter and Brent as low as $80, when oversupply would be the most pronounced, before returning to first-quarter levels, Goldman said. Goldman is […]

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NYMEX November gas contract hits one-year low with $3.561/MMBtu settle

Home | News & Analysis | Latest News Headlines | NYMEX November gas contract hits one-year low with $3.561/MMBtu settle Washington (Platts)–27Oct2014/428 pm EDT/2028 GMT The NYMEX November natural gas futures contract closed at a one-year low Monday after dropping 6.2 cents to settle at $3.561/MMBtu, without any weather-related demand in sight to prop up prices. The contract traded in a range between $3.547/MMBtu and $3.644/MMBtu Monday. The last time the front-month gas contract settled lower was October 28, 2013, at $3.61/MMBtu. Analysts agreed that $3.50/MMBtu is the nearest support level, as prices below that mark will encourage coal-to-gas switching in the power generation sector. "The market continues to grind lower," said Tradition Energy senior analyst Gene McGillian. "We don’t have enough seasonal demand to make up for all the gas coming out of the ground." "Ultimately, you need something weather-related to move the market," enerjay principal Jay Levine […]

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US crude stocks likely rose 2.8 million barrels last week

Home | News & Analysis | Latest News Headlines | US crude stocks likely rose 2.8 million barrels last week New York (Platts)–27Oct2014/407 pm EDT/2007 GMT US commercial crude stocks are expected to have increased 2.8 million barrels in the reporting week that ended October 24, according to a Platts analysis and survey of oil analysts Monday. The American Petroleum Institute will release its weekly stocks data at 4:30 pm EDT (2030 GMT) Tuesday and the US Energy Information Administration is scheduled to release its weekly data at 10:30 am EDT (1430 GMT) Wednesday. The EIA five-year average shows inventories typically rising 1.9 million barrels this reporting week. Refineries tend to enter into maintenance when summer driving season concludes, causing stocks to accumulate through late October, stabilize for a few weeks, and then draw down as demand returns in mid-November. US crude stocks are well supplied by recent historical […]

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Natural Gas Loses Ground as Warm Weather Hangs Around

By Christian Berthelsen Natural-gas futures slid to their lowest close in nearly a year on Monday after weather forecasts signaled a late-season blast of warm weather into November, raising doubts about demand for gas-fired heating. Natural gas for November delivery fell 6.2 cents, or 1.7%, to $3.5610 a million British thermal units on the New York Mercantile Exchange, their lowest close since Nov. 19, 2013. Futures have fallen in eight of the last 10 trading sessions as robust production and lackluster demand have erased fears of a heating-season supply deficit. "The way the weather outlooks are leaning, it’s no surprise to see we’re selling off again," said Matt Smith, an analyst with utility company Schneider Electric. "Any concerns the market had about supplies have just evaporated." Weather forecasts indicate an above-normal temperature formation over much of the Midwest and stretching as far south as Texas as late as Nov. […]

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Natural Gas Weakens as Weather Stays Mild

By Nicole Friedman NEW YORK–Natural-gas prices slipped near 11-month intraday lows Monday as forecasts for mild weather extended into the second week of November. Futures have fallen for weeks on expectations that above-normal temperatures would damp demand for natural gas, which is used as a heating fuel. Updated weather forecasts call for "a rather mild stretch of weather or lack of cold across a vast portion of the nation" in the next 11 to 15 days, according to Andover, Mass.-based forecaster WSI Corp. Natural-gas production has been more robust than expected this summer. "More supply is anticipated to be available this winter to meet peak heating demand requirements," Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas SA, said in a note. Natural gas for November delivery recently fell 6 cents, or 1.7%, to $3.563 a million British thermal units on the New York Mercantile Exchange, […]

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Low Prices Lure China into Oil Market

By Eric Yep China is on a buying spree in the global oil markets as prices slumber near the lowest in years. The trading unit of state-run China National Petroleum Corp. has bought 36 cargos of crude oil in the open market so far in October, the largest purchase ever in a single month, Singapore traders familiar with the transactions said. The purchases show how China, the world’s second largest consumer of oil after the U.S. , is taking advantage of the energy glut to stock up on oil used for making transportation fuels like gasoline and diesel. It’s also a change from usual buying patterns as Beijing normally secures its oil needs through long-term contracts with fixed prices–and is rarely a big player in the Singapore spot market, Asia’s biggest oil trading hub. The 36 cargoes were bought by China National United Oil Corp., or Chinaoil, and are […]

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Libyan strife highlights the perils of even-handedness

By their unseemly alliances with jihadis, Libya’s Islamists are courting disaster Retired general Khalifa Haftar ©EPA F or months the international community has been acting as if both sides in Libya’s multi-faceted civil war  are equally to blame for the unfolding tragedy, in effect justifying standing back and doing nothing, much like in Syria. Such even-handedness is symptomatic of the failings of international policy with regard to Libya, reflecting an exasperation with the complexity of the conflict that could potentially lead to further disastrous results. More On this topic Allure of Isis attracts Libya’s jihadis Fighting erupts between Libyan factions Libyan Islamists push hardline agenda Shared heritage helps drive Turkish business despite Libyan risk Global Insight Synod setback shows Pope’s limitations US experts fear Russia sanctions blowback India’s Congress party stares into the abyss Turkey struggles with Isis reverberations Governments of the UK, US, France, Germany and Italy issued […]

Posted On : Published By : Tom Whipple