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BP To Restart North Sea Gas Field Half-Owned By Iran

BP will restart the Rhum gas field in the UK North Sea, half-owned by Iran’s National Oil Company, four years after the field was shut down due to Western sanctions, a BP spokesman said on Friday. Production from the field, which supplied 4 percent to 5 percent of Britain’s demand before its shutdown, is expected to begin this weekend. BP received approval from the British government to resume production after the government put the field under a temporary management scheme whereby all revenue due to Tehran will be held until sanctions are lifted, the spokesman said. The field started pumping gas in December 2005 and cost 350 million pounds ($565.6 million) to build. The British government gave the green light for the resumption late last year in order to avoid damage to the high pressure, high temperature gas field.

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Oil Markets Steady but Traders Unsure Prices Will Hold

By Eric Yep Oil markets took a breather in Asian trade Friday and stayed in positive territory, stemming further losses, but traders were still wary of calling a bottom. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $82.99 a barrel at 0501 GMT, up $0.29 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange rose $0.62 to $86.44 a barrel. "We expect today’s increase in prices to be just an adjustment to the recent drop in oil prices earlier in the week, and thus, unlikely to continue," Daniel Ang, analyst at Phillip Futures said. He expects Nymex WTI crude to hover around $80 a barrel for a while and Brent to remain sticky at the $83 level. Investors are waiting for the meeting of the Organization of the Petroleum Exporting Countries in Vienna next month for guidance […]

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WTI Rises From Drop Below $80 as Goldman Disputes Glut

West Texas Intermediate crude held gains above $80 a barrel as Goldman Sachs Group Inc. said the market isn’t oversupplied. Brent was steady in London . Futures fluctuated in New York after rebounding 1.1 percent yesterday. Prices are headed for a third weekly loss, having slid into a bear market amid speculation that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries will hold off from supply cuts. The decline is “too much, too early” because a glut is yet to materialize, according to Goldman Sachs. Oil is paring its collapse as banks including BNP Paribas SA and Bank of America Corp. predict the rout may be over. They’re counting on OPEC reducing output as the U.S. pumps the most oil in almost 30 years and world demand growth slows. Saudi Arabia and Kuwait indicated the price fall doesn’t warrant immediate production cuts, bolstering concern the […]

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With Brent falling below $90 / barrel, panic seems to be gripping the oil community, from the majors to the frackers.

It’s time for a bit of perspective. Start with supply.  Libya has added 550 kpbd of supply in just the last three months.  That’s a 2 mbpd / year pace, plenty to tank prices without other considerations.  That country could still boost production by a similar amount over the next year in the better case (and there are worse cases, too), but once it puts capacity back on line, Libyan production will no longer depress oil prices. On the unconventional  side, US shales and Canadian oil sands continue to power overall supply growth.  But keep in mind that the US independents were free cash flow negative at $105 WTI, and they’re going to be even more negative at $84 / barrel.  If they can’t fill the funding gap, they’re going to have to slam on the breaks on E&P spending, and that should show up in production–or at least production growth–pretty fast. […]

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

By Timothy Puko NEW YORK–Natural gas closed below $3.80 a million British thermal units for the first time in more than a month as a larger-than-expected addition to stockpiles pushed down prices. The front-month November contract settled down 0.4 cent, or 0.1%, to $3.796 a million British thermal units on the New York Mercantile Exchange. It was the lowest closing price since Sept. 5. Prices had dipped to nearly a two-month low in the morning, but rallied in the afternoon as buyers again showed they want in when prices fall below $3.80/mmBtu. Prices have largely stayed between $3.80/mmBtu and $4/mmBtu since mid-July. Record supply has capped them, but fear about a sharp increase in winter demand keeps them supported. After last winter’s extreme cold pushed benchmark price spikes past $6/mmBtu, end-users are willing to pay a premium to lock in prices, Aaron Calder, senior market analyst at energy-consulting firm […]

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Goldman Sachs Says Oil Rout Excessive as Bank Doubts Oversupply

Oil’s collapse into a bear market is excessive because there’s no oversupply to justify the sell-off, according to Goldman Sachs Group Inc. The bank is “near-term constructive about prices” after they fell too much, too soon, analysts including Jeffrey Currie , the head of commodities research in New York , wrote in a report e-mailed today. While speculation of a global oversupply drove down prompt oil, there’s no incentive to store because forward contracts are weaker, potentially creating a near-term shortage as stockpiles are depleted, according to the bank. “The ‘supply glut’ is not yet here today, it exists in expectations,” the analysts wrote. “Prices have also likely overshot to the downside particularly as the lower we go, the tighter the near-term balances become.” Oil slumped as shale boosts U.S. output to the highest level in almost 30 years amid signs of weakening global demand. The biggest producers in […]

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KRG lifts crude from Kirkuk field to Kurdistan refinery

A view of the Kalak refinery, outside of Erbil, as it undergoes an expansion on July 14, 2014. (SAFIN HAMED/AFP/Getty Images) of Iraq Oil Report Recommend 3 people recommend this. Sign Up to see what your friends recommend. The Kurdistan Regional Government (KRG) has started lifting large volumes of crude from a Kirkuk oil field, a bold step likely to exacerbate their dispute with the Kirkuk provincial administration and the government in Baghdad about who rightfully controls Iraq’s oil exports.Production stations at the Avana dome, one of three comprising the massive Kirkuk field, are “producing oil which is pumped to southern Bai Hassan station and then to Sarlo station for treatment. … Then it is pump… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

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Has Saudi Arabia lost control of the oil market?

Conspiracy theories abound around the oil price fall . A 25 per cent drop in less than three months is certainly exceptional and the assumption is that in a politically driven market a political decision by someone, somewhere must have forced prices down. The most popular conspiracy theory is that the US and the Saudis have combined to take money away from their major enemies – Russia and Iran. In both cases, [the argument goes], a shortage of revenue could help to bring President Vladimir Putin and the Supreme Leader, the ailing Ayatollah Ali Khamenei , to the negotiating table to sort out a deal on Ukraine and Iran’s nuclear ambitions. In a complicated world anything could be true. I don’t happen to believe the conspiracy theory but I accept that it is a possibility. To me the interesting thing is what happens next, and that is down to […]

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Saudi Arabia tests US ties with oil price

A worker looks at journalists during a media tour of the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008. State oil giant Saudi Aramco is adamant the biggest new field in its plan to raise oil capacity will arrive bang on schedule in June next year. REUTERS/Ali Jarekji (SAUDI ARABIA) ©Reuters By encouraging oil prices to fall , Saudi Arabia is taking a calculated gamble in its already strained relationship with the US, hoping that the potential damage to America’s shale industry will be offset by the geopolitical and economic prizes on offer to Washington. At a time when the US and Saudi Arabia are fighting a new war together in Iraq and Syria, the Saudis have taken the bold step of asserting their pivotal role in the oil market and subtly squeezing the finances of some of America’s fledgling shale companies. More On this […]

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Iraqi, Kurdish leaders discuss oil laws

Iraqi oil minister greets Kurdish leader in Baghdad office to discuss oil sector legislation. (UPI/Shutterstock/ekina) Iraqi Oil Minister Adel Abdul Mahdi hosted Iraqi Deputy Prime Minister Rowsch Nuri Shaways in his Baghdad offices to discuss bilateral ties and laws relating to the oil and natural gas sector. Shaways is a member of the leading Kurdistan Democratic Party. The oil minister’s office said both sides agreed on solving any issues related to oil sales according to the terms of the Iraqi constitution. The minister said he would increase efforts to find "positive" and "sober plans" to overcome obstacles in the national oil sector, his office said Thursday. A constitution implemented in 2006 says the federal State Oil Marketing Organization has exclusive control over petroleum exports, with the semiautonomous Kurdistan Regional Government taking 17 percent of all oil revenues. There are disagreements, however, over what level of control KRG has over […]

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Nigeria proposes $78/b oil price benchmark for 2015 budget

Home | News & Analysis | Latest News Headlines | Nigeria proposes $78/b oil price benchmark for 2015 budget Lagos (Platts)–16Oct2014/747 am EDT/1147 GMT Nigeria is proposing an oil price benchmark of $78/barrel for the purposes of revenue calculations in its 2015 budget, according to a government paper seen Thursday, amid concerns over falling oil prices in the international market. The 2015 oil price benchmark, which is slightly higher than the $77.50/b price for the current 2014 budget, was contained in the Medium Term Expenditure Framework sent by President Goodluck Jonathan to parliament. The oil production target was set at 2.278 million b/d, lower than the 2.38 million b/d of oil output assumed for 2014, as the government admitted that crude oil theft still posed a major threat to aims to increase oil production. "Our [oil price] proposal is also driven by the need to be cautious in our […]

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Venezuela blames U.S for global oil price slump

CARACAS, Oct. 16 (Xinhua) — Venezuelan President Nicolas Maduro on Thursday blamed Washington for the slump in global oil prices. Washington is "flooding" the market with cheaper shale oil to bring down prices and ultimately impact Russia and other oil-producing nations, Maduro said at a televised Cabinet meeting. "The U.S. and its allies want to affect oil prices to harm Russia, which produces around 10 million barrels per day, and that is the vital income of their economy," said Maduro. Market analysts say a 20-percent dip in oil prices since June is driven by lower economic growth and weak demand for crude in Europe, along with signs that the core Gulf members of the Organization of Petroleum Exporting Countries are in no hurry to cut production. Maduro called for an extraordinary meeting of the group to explore ways to stabilize international oil prices.

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Bakken Shale Expected to Hit 1.19-Million b/d in Nov. 2014

EIA Bakken Production Data | Click to Enlarge The Bakken Shale is expected to produce 1.193-million b/d of oil in November, up 22% from the same time last year, according to the Energy Information Administration’s  (EIA) Drilling Productivity Report. October’s total production from the play is expected to be 1.164-million b/d. Despite lower crude prices, EIA data shows gains in production across all major U.S. shale fields. According to the International Energy Agency (IEA), only 4% of U.S. shale production needs prices above $80 for drillers to break even. In April of 2014, consultancy Wood Mackenzie issued a report that estimated break-even costs in the Bakken based on sub-plays. Break-even rates in the Sanish basin, one of the better areas for development in the Bakken, are estimated to average $58/bbl, according to the Wood Mackenzie report. Break-even costs were higher in other areas of the play. Bakken operators continue the trend to be more efficient. […]

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Take a Breath

With Brent falling below $90 / barrel, panic seems to be gripping the oil community, from the majors to the frackers.  It’s time for a bit of perspective.  Start with supply.  Libya has added 550 kpbd of supply in just the last three months.  That’s a 2 mbpd / year pace, plenty to tank prices without other considerations.  That country could still boost production by a similar amount over the next year in the better case (and there are worse cases, too), but once it puts capacity back on line, Libyan production will no longer depress oil prices. On the unconventional  side, US shales and Canadian oil sands continue to power overall supply growth.  But keep in mind that the US independents were free cash flow negative at $105 WTI, and they’re going to be even more negative at $84 / barrel.  If they can’t fill the funding gap, they’re going […]

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Plunging oil prices a game-changer for major pipeline projects

A sharp correction in oil prices is putting the debate around major pipeline projects, such as Keystone XL, into a more nuanced light. Part of the impetus behind constructing new pipelines to carry bitumen from northern Alberta to the U.S. Gulf Coast, Kitimat on the Pacific, or even all the way across the country to Saint John, N.B., was to help close the substantial discount between Canadian oil and world prices. Well, crude’s recent drop into the $85-a-barrel range has basically collapsed the once wide-open spread that had existed between West Texas Intermediate and Brent crude with hardly any new lengths of pipe being laid into the ground at all. More Related to this Story Oil’s slide heightens fears of big market correction IEA cuts 2015 oil demand growth outlook, sees supply hitting prices Morning Business Briefing Oil price slump drives TSX to ‘all-out correction’ energy Video: Are low […]

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Chesapeake dumps Marcellus, Utica shale

Chesapeake unloads prime shale acreage in eastern United States for $5 billion. (File/UPI/Gary C. Caskey) OKLAHOMA CITY, Oct. 16 (UPI) — Chesapeake Energy Corp. said Thursday it was selling its Utica and Marcellus shale assets to rival Southwestern Energy Co. for more than $5 billion. Chesapeake, which has headquarters in Oklahoma, agreed to sell more than 400,000 acres in the Marcellus and Utica plays spread out over West Virginia and Pennsylvania. As of December, the company said the net proved reserves in the acreage was around 221 million barrels of oil equivalent. "Today’s announcement marks a major step in Chesapeake’s transformation and a dramatic improvement in our financial strength as we seek to maximize value for our shareholders," Chesapeake Chief Executive Officer Doug Lawler said in a statement. The Marcellus shale is the most productive basin of its kind in the United States. While production is below Marcellus, drilling […]

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Russia says it has the right to hit U.S. with sanctions

Russia says it has the right to hit back in response to U.S. sanctions targeting its energy sector. UPI/Dennis Van Tine Deputy Foreign Minister Sergei Ryabkov said the Kremlin likely won’t issue reactive sanctions against the United States, but felt the measures targeting the Russian energy sector were reflexive. "Strictly speaking, we now have every right amid this mass of anti-Russian US sanctions to impose sanctions against the United States non-stop and in all the areas," he told state news agency RIA Novosti . The Russian economy is struggling to cope with sanctions imposed on its energy sector in response the Kremlin’s posture on the conflict in Ukraine. Exports of crude oil, petroleum products and natural gas accounted for nearly 70 of all Russian export revenues in 2013 and the Russian Central Bank said it was struggling to keep Russian inflation in check because of U.S. and European sanctions. […]

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Baker Hughes’ Profit Misses on Weak Drilling Activity Outside N. America

Oct 16 (Reuters) – Baker Hughes Inc, the world’s No.3 oilfield services provider, reported a lower-than-expected profit for the first time in five quarters as political tensions in Libya and Iraq, and a sharp fall in drilling activity in the Gulf of Mexico weighed on margins. The company’s shares fell nearly 6.7 percent to $50.06 in premarket trading on Thursday. Baker Hughes said pretax profit margins in its operations in Europe, Africa and the Russia Caspian region slumped to 8 percent in the quarter ended Sept. 30 from 17 percent a year earlier. North America, which accounted for more than half of total revenue, was a brightest spot in the company’s operations. Increased demand for pressure pumping, used in hydraulic fracturing to extract oil and gas from shale rock, and a seasonal rebound in activity in Canada helped the company report a 10 percent rise in third-quarter profit. Revenue […]

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Shale Boom Helping American Consumers Like Never Before

Oil traders might see the 27 percent slide in global prices as a bear market . For U.S. consumers, it’s more like an early holiday gift. The drop in crude has pulled retail gasoline down more than 50 cents a gallon from the year’s high in April. That means annual savings of $500 for the average U.S. household, which consumes about 1,000 gallons of fuel a year, according to data from the Federal Highway Administration and Energy Information Administration. “That’s like somebody putting dollars right in your pocket,” David Hackett , the president of Stillwater Associates, an energy consultant in Irvine , California , said by phone on Oct. 14. “That sounds like Christmas presents, going out to dinner, being able to do something.” Gasoline’s slide represents the biggest benefit that U.S. consumers have seen to date from a record boom in domestic oil production, a surge that’s contributing […]

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European cities join climate initiative

EU cities get in line behind climate fight, European commissioner says. UPI/Stephen Shaver BRUSSELS, Oct. 16 (UPI) — Cities across Europe are lining up to join the regional effort to combat the threats from climate change, the European climate commissioner said Thursday. Commissioner Connie Hedegaard said 100 European cities have committed to an initiative meant to shore up the resilience to climate change. "Good preparation will be much cheaper than cleaning up afterwards — and it can save lives," she said in a statement. A mayor’s initiative was launched in March. With major population centers vulnerable to the adverse effects of climate change, the European Union says cities can lead the way in adaptation and in efforts to cut greenhouse gas emissions. The European Union aims to cut greenhouse gas emissions and increase the share of renewable energy on the grid by 20 percent of from a 1990 benchmark […]

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Daze Of Peak Oil… Or At Least Peak Oil Production

By Chris Hamilton Production of crude oil has nearly stalled despite a near quadrupling in the price since ’01 and it seems likely the world has entered the Peak Oil phase and neither the governments nor central banks (try as they may) can paper this over. Without the growing supply of adequate cheap energy, there isn’t adequate GDP growth, and without the GDP growth, there is no way to outgrow, pay off, or service the huge debts incurred but by interest rate suppression. The dual occurrence of peak oil with ZIRP (zero interest rate policy) is a truly unfortunate state of affairs. But whether or not they happened in tandem, both were inevitable. Still, governments and central banks are attempting to maintain the pre-peak oil system and avoid the pain of free market corrections to supply, production, and price. It is in this light that the centralization and "intervention" […]

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Over the Peak – Why Peak Oil Matters

4582 Votes In the last few days (written 14 October 2014) the headlines have focused on the increase in oil production from OPEC producers, now at its highest level since the summer of 2013 – In its monthly oil market report, OPEC said its oil production rose by 402,000 barrels a day in September 2014 to total 30.47 million barrels a day. Higher levels of supply from Iraq and Libya were the main drivers of the production increases. Oil production is also rising due in part to the shale oil boom in North America. Whereas demand has weakened as growth falls in the global economy, this saw a 20% fall in the spot price for Brent crude over 3½ months. From the oil industry’s point of view this all sounds very positive, growing production, a product where supply exceeds current demand. But we need to step back and look at the longer-term picture. Richard […]

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Russia takes EU to court over Ukraine sanctions

Russia state oil company Rosneft is challenging the EU sanctions in court ©Reuters Russia is taking the EU to court over sanctions imposed on some of its biggest companies. The move is a sign of the pain that the companies’ exclusion from global capital markets is inflicting on the Russian economy . Rosneft , the state oil company, and Arkady Rotenberg, a long-time friend and former judo sparring partner of President Vladimir Putin , have both launched legal challenges to the sanctions, imposed over Russia’s actions in Ukraine . The EU bans, with similar measures adopted by the US, have all but frozen Russian companies and banks out of western capital markets, at a time when they have to refinance more than $130bn of foreign debt due for redemption by the end of 2015. Rosneft filed a case against the EU’s European Council in the general court under the […]

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Oil Drops Further as Markets Struggle to Find Support

By Eric Yep Crude-oil futures continued their slide in Asian trade Thursday as the glut in global oil supply and weak demand projections weighed on both the global oil benchmarks. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $80.79 a barrel at 0501 GMT, down $0.99 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange fell $0.81 to $82.97 a barrel. Nymex WTI crude came under further pressure after the American Petroleum Institute, an industry group, said late Wednesday that its data showed a 10.2-million-barrel increase in weekly U.S. crude stockpiles. The more closely watched survey from the U.S. Energy Information Administration is due later Thursday and analysts expect an inventory buildup of 2.2 million barrels for last week. China is reportedly picking up several physical cargos for December delivery at low prices, but any gains in […]

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WTI Extends Rout From Two-Year Low on Rising Supply; Brent Falls

West Texas Intermediate extended its drop from the lowest price in more than two years amid speculation rising U.S. supplies are exacerbating a global glut that’s driven prices into a bear market. Brent fell in London. Futures slid as much as 1.8 percent in New York, declining for the seventh time in eight days. Crude inventories in the U.S., the world’s biggest oil consumer, expanded by 10.2 million barrels last week, the industry-funded American Petroleum Institute in Washington reported yesterday, according to Bain Energy. Stockpiles are projected to have gained by 2.45 million, a Bloomberg News survey shows before government data today. Oil futures have collapsed into bear markets as shale supplies boost U.S. output to the highest level in almost 30 years amid signs of weakening global demand. The largest producers in the Organization of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will […]

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Natural Gas Closes at One-Month Low on Soft Demand Outlook

By Timothy Puko NEW YORK–Natural gas closed at a one-month low as mild weather softened the outlook for demand, pushing down prices for a second straight day. The front-month November contract settled down 1.6 cents, or 0.4%, to $3.80 a million British thermal units on the New York Mercantile Exchange. It was the first day in three weeks that the intraday price dropped below $3.80/mmBtu and the lowest closing price for natural gas since Sept. 5. Prices had fallen three times as far in the morning–as low as $3.764/mmBtu–but bounced back several times, including a rally just before the trading floor closed. Traders simply don’t want to go too far down on gas with winter weather and a sharp rise in heating demand likely only a few weeks away, said John Woods, president of JJ Woods Associates and a Nymex floor trader. "You’ve got November right around the corner," […]

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End to Oil Collapse in Sight for BofA, BNP Paribas

Some of the world’s biggest banks say the collapse in oil is just about over. Bank of America Corp. and BNP Paribas SA predict prices will hold above $80 a barrel. Commerzbank AG also sees that level as a possible low for Brent crude . They’re in part counting on OPEC cutting output — some say as soon as next month — to compensate for recent declines in demand. North Sea Brent, the benchmark for more than half the world’s oil, has slid by more than $30 a barrel from its June high, closing yesterday at $83.78 a barrel, amid a supply glut and slower global growth. Ministers from the 12-member Organization of Petroleum Exporting Countries will meet in Vienna on Nov. 27 to discuss production and price levels. “We are almost at the floor,” Harry Tchilinguirian , head of commodity markets strategy at BNP Paribas in London, said […]

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Citigroup Sees $1.1 Trillion Stimulus From Oil Plunge

The lowest oil price in four years will provide stimulus of as much as $1.1 trillion to global economies by lowering the cost of fuels and other commodities, according to Citigroup Inc. Brent, the world’s most active crude contract, closed at $83.78 a barrel in London yesterday. That’s more than 20 percent below its average for the past three years, amounting to savings of about $1.8 billion a day based on current output, Citigroup estimates. Savings will climb to $1.1 trillion annually as the slide cuts costs of other commodities, leaving consumers and companies with extra cash to spend and bolstering growth, according to Ed Morse , the bank’s head of global commodities research in New York. Crude prices are plunging amid signs that OPEC, supplier of 40 percent of the world’s oil, won’t act to eliminate a surplus as global growth slows. Combined supplies from the U.S. and […]

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Falling oil prices shake up global economies

AP Photo/Julio Cortez NEW YORK (AP) — A sudden plunge in the price of oil is sending economic and political shockwaves around the world. Oil exporting countries are bracing for potentially crippling budget shortfalls and importing nations are benefiting from the lowest prices in four years. The global price of oil is $84 per barrel, down $31, or 27 percent, from its high point for the year. Oil consumption globally is 91 million barrels per day. That means the world’s oil producing countries and companies are bringing in as much as $2.8 billion less in revenue every day – and consumers, shippers and airlines are saving a comparable amount on gasoline, diesel and jet fuel. "The problem is that countries get accustomed to a certain level of income, and then spend," says Edward Chow, a senior fellow at the Center for Strategic and International Studies. "It seems like a […]

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Iran shrugs off steep dive in oil prices

Iran says oil price slump should be a temporary trend. UPI/Maryam Rahmanian TEHRAN, Oct. 15 (UPI) — The steep decline in oil prices is a momentary market phenomenon and does little to influence the economy long-term, an Iranian oil director said. Iran this week said the decline in price for its grade of crude oil wasn’t a parallel move to keep pace with Saudi Arabia’s cuts designed to maintain its footprint in the global economy. Rokneddin Javadi, managing director of the National Iranian Oil Co., said Iran wasn’t bothered by an evolving bear market for oil . "I think the oil market slump is momentary and does not affect Iran’s budget for supplies," he said. The price for the 12 crude oil blends that make up the reference basket from members of the Organization of Petroleum Exporting Countries, of which Iran is a member, was $85.14 for Wednesday, down […]

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As Oil Prices Plummet, Saudi Arabia Faces a Test of Strategy

BEIRUT, Lebanon — With global oil prices plunging at a pace not seen since the 2008 financial crisis, Saudi Arabia is emerging as a central player, accused by some of deliberately depressing the market to weaken rivals like Iran but looked to by others as the only hope of ending the rout. Still others say that the oil colossus is merely struggling to deal with its diminished position in an industry it once dominated. For their part, Saudi officials have signaled that they are prepared to endure reduced profits rather than slash production in an effort to prop up prices, as they did to their later regret in the early 1980s. Yet the Saudi acceptance of lower prices has even touched off a controversy inside the kingdom. This week, the billionaire investor Prince Alwaleed bin Talal released an open letter to the Saudi oil minister, Ali al-Naimi, criticizing him […]

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OPEC Finding U.S. Shale Harder to Crack as Rout Deepens

OPEC is resisting pressure to cut oil production while demand slumps as it tests how low prices must go to make U.S. shale oil unprofitable. As producers become more efficient, that floor is sinking. The Organization of Petroleum Exporting Countries boosted output by the most in 13 months in September, even as crude plunged into a bear market and demand growth weakens to a five-year low, according to the International Energy Agency . Saudi Arabia and Kuwait , the largest and third-largest members of OPEC, indicated the price slump doesn’t warrant immediate production cuts, the IEA said. While OPEC acted as a “swing producer” over the past decade, responding to surpluses by cutting output, it’s now letting oil slide to see if North American production can withstand lower prices, said Antoine Halff , head of the IEA’s oil industry and markets division. So far drillers are showing no signs […]

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Don’t Mess With Saudis in Oil Bear Market Global Shakeout

Print Back to story The bear market in oil is showing the world there’s still only one country in a position to choose winners and losers in the global market: Saudi Arabia . The world’s largest oil exporter is trying to protect its market share by keeping its production steady even as prices hit a four-year low. Energy producers in turmoil, such as Russia, Iran and Venezuela, stand to lose the most, U.S. shale drillers and other Saudi rivals will suffer and industrialized importing countries including Japan will get a boost from cheaper prices. “Saudi Arabia is the only one in the position of putting more oil on the market when they want to and cutting production when they want to,” said Edward Chow, a senior fellow at the Center for Strategic & International Studies in Washington. “Consumers win, producers lose.” Brent crude , the international benchmark, fell as […]

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Lukoil boss meets Iraqi oil minister

Baghdad plays host to head of Russian oil company Lukoil. UPI/Maryam Rahmanian BAGHDAD, Oct. 15 (UPI) — Conditions are right to move ahead with further development of the West Qurna oil field in Iraq, the director of Russia’s Lukoil said Wednesday from Baghdad. Iraqi Oil Minister Adil Abdul Mahdi hosted Lukoil President Vagit Alekperov at his Baghdad office to discuss commitments to raise output from the West Qurna field . First oil was produced from West Qurna, located in southern Iraq, in March. Lukoil, Russia’s largest private oil company, signed a contract revision in June to build two 75-mile pipelines and associated infrastructure. Lukoil said West Qurna is producing more than 280,000 barrels of oil per day. The Oil Ministry said production could hit the 400,000 bpd mark by the beginning of next year. Alekperov said that, so far, his company has invested $6 billion dollars on operations in […]

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DNO working on Kurdish export pipeline

Swedish energy company DNO says it plans to export more oil to Turkey from Kurdish north of Iraq. (File/UPI/Maryam Rahmanian) OSLO, Norway, Oct. 15 (UPI) — A new 24-inch oil pipeline from the Kurdish north of Iraq will facilitate exports through Turkey by the end of the year, DNO International said Wednesday. Swedish energy company DNO, one of the premier operators in the Kurdish north of Iraq, said it was exporting an average 90,000 barrels of oil per day from its Tawke field in the region to Turkey. Installation of a new 24-inch pipeline from the Tawke field is slated for completion by the end of the year. "The new pipeline will increase export capacity and provide transportation system redundancy," the company said. "Other upgrades to infrastructure and facilities to increase production and processing capacity at the Tawke field are progressing as planned." Baghdad and the semiautonomous Kurdish government […]

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At War Against ISIS, Iraqi Premier Is Facing Battles Closer to Home

BAGHDAD — As his country’s security forces struggle to push back the jihadist insurgents of the Islamic State, Prime Minister Haider al-Abadi of Iraq , only a month in office, has been battling foes even closer to home: critics within his own party and the Shiite bloc it leads. Among those nettling Mr. Abadi, several politicians said, is his predecessor, Nuri Kamal al-Maliki , who reluctantly agreed to cede the top post under pressure from the United States, Iran and the top Shiite clerics. The political feuding threatens to undermine the Iraqi government at the moment it is trying to marshal resistance against the Islamic State, not to mention deal with a long list of other domestic crises, including a moribund economy, rampant government corruption and threats of Kurdish secession, Iraqi and international officials said. “Abadi may very well be the last leader for Iraq capable of reuniting the […]

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U.S. Steps Up Strikes on Embattled Syrian Town, Aided by Data From Kurds

WASHINGTON — The United States has sharply increased the number of airstrikes against Islamic State militants in the besieged Syrian city of Kobani — aided by information provided by Kurdish fighters, American officials said Wednesday. A Pentagon spokesman said that the airstrikes had killed “several hundred” Islamic State fighters. Kurdish officials said the intensified attacks had allowed them to regain territory and push the militants back on several fronts, after fears rose last week that the city would be overrun. Yet in a sign of the perils of the intensified bombing campaign, five Kurdish fighters were killed late Tuesday — possibly because they had advanced too close to one of the airstrikes. A spokesman for the United States Central Command, Maj. Curtis J. Kellogg, said American officials had “no evidence indicating Kurdish fighters were killed in a coalition airstrike last night. Regardless, we take such reports seriously and will […]

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General Escalates Libya Attack

TOBRUK, LIBYA — A Libyan general who has led a six-month campaign to rid the country of Islamists sharply escalated his attacks on Benghazi on Wednesday, with a concerted ground assault and airstrikes — pledging to give up command if he succeeds. Gun battles raged in several parts of the city throughout the day to an extent not seen since the general, Khalifa Hifter, 71, began his campaign six months ago, before a backlash by Islamist militias — some of them hard-liners like Ansar Al Sharia — forced his soldiers and their allies to retreat to the outskirts of Benghazi. In a televised address announcing the assault, General Hifter , who calls his campaign Operation Dignity, declared that his men “are now ready to reach their most important goal for this phase, which is the liberation of the city of Benghazi.” His latest advance is part of a sharp […]

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Cheapest OPEC Crude Since ’09 Still Too Costly for India

Print Back to story OPEC must keep cutting prices to displace competing supplies from Latin America and West Africa, Indian refiners said. Saudi Arabia, Iran and Iraq , which account for about half the output from the Organization of Petroleum Exporting Countries, will sell crude to Asia next month at the biggest discounts since at least January 2009. Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. say it’s not enough to undercut the alternatives. The highest U.S. output in almost 30 years is reducing America’s demand for oil and giving consumers in Asia a greater choice of suppliers, from Venezuela to Alaska and Nigeria. The glut has driven futures into a bear market and prompted OPEC members to cut prices to defend their market share. “Obviously the Middle-East producers want to retain market leadership in Asia,” said B.K. Namdeo, refineries director at Hindustan Petroleum, India ’s third-biggest state […]

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Easiest India Subsidy Fix Tests Modi as Rajan Makes Push

Print Back to story There hasn’t been a better time for Prime Minister Narendra Modi to deregulate diesel prices. Oil prices are near a four-year low and two major state elections are out of the way. Reserve Bank of India Governor Raghuram Rajan has called on Modi to “seize this moment” while inflation is the lowest in three years and refiners are selling at a profit for the first time in recent memory. “There’s absolutely no reason for the government not to deregulate — it’s probably the easiest thing they can do, a low-hanging fruit,” Upasna Bhardwaj, an economist at ING Vysya Bank Ltd., a unit of the biggest Dutch financial-services company, said by phone from Mumbai. “The markets have been awaiting reforms, and there has been nothing big, so if they fail to do this it will be treated very negatively.” Steps to dismantle India’s subsidies would build […]

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Azeri gas line contracts signed in Turkey

Azeri company signs documents with pipe suppliers for TANAP gas line from Shah Deniz offshore field. (UPI/Shutterstock/smereka) ANKARA, Turkey, Oct. 15 (UPI) — The State Oil Co. of Azerbaijan Republic announced it signed contracts in Turkey for the construction of the Trans-Anatolian natural gas pipeline. SOCAR President Rovnag Abdullayev signed the documents in Ankara with Turkish Prime Minister Ahmet Davutoglu and Turkish Energy Minister Taner Yildiz . The contract calls for a consortium of Turkish companies, and one Chinese contractor, to provide pipes for the TANAP pipeline . "TANAP is not only an energy project, but also a huge peace project," the Turkish prime minister said in a statement Tuesday. "It builds a peace bridge between the Balkans and Caucasus." TANAP will transport natural gas from the Shah Deniz complex off the coast of Azerbaijan through Turkey to the Greek border. British energy company BP leads the group that […]

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Chevron: Oil Slide Puts Venezuela Projects Under Pressure

MARGARITA, Venezuela, Oct 15 (Reuters) – The recent slide in global oil prices puts projects under heavy pressure, executives at two major production companies told an industry conference in Venezuela on Wednesday. A four-month rout, which stemmed from signs of lower growth and oil demand in Europe coupled with expectations that OPEC’s core Gulf members are in no hurry to cut production, has left Brent crude below $85. "This scenario puts projects … in Venezuela under big pressure," Chevron Latin America Managing Director Kelly Hartshorn said at the Margarita Island gathering. U.S.-based Chevron and state oil company PDVSA operate the Petroboscan heavy crude joint venture in western Venezuela. Chevron also has a share in the Petropiar oil upgrader in the Orinoco belt. Separately, Statoil Venezuela official Luisa Cipollitti said at the conference that "mega-projects" globally were under threat from the price fall. "Prices … have fallen and we don’t […]

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Canada considers oil offshore Quebec

Canada considers management regime for oil and gas reserves off the coast of Quebec. UPI/A.J. Sisco… OTTAWA, Oct. 15 (UPI) — An agreement with Quebec outlines how best to manage offshore petroleum resources in eastern Canada, the Canadian prime minister said. Prime Minister Stephen Harper announced a decision to move forward with plans to manage reserves in the Gulf of St. Lawrence with the provincial government in Quebec. "The joint management of offshore resources will create new opportunities for economic growth in the province and make Quebec more prosperous," Harper said in a statement Tuesday. The central government estimates the Gulf of St. Lawrence may hold as much as 1.5 billion barrels of oil and 39 trillion cubic feet of natural gas. A 2011 draft agreement between the two governments envisions joint management during the pre-discovery phase in the gulf region. A discovery would trigger a new regulatory regime, […]

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Bakken, North Dakota Update, August Data

The new Bakken and North Dakota  production data is out with the August production numbers. The last data point for all charts is August 2014. Bakken Barrels Per Day Bakken oil production was up 16,864 bpd in August to  1,067,745 bpd. This is about 6,100 barrels per day less than the growth in July which was 22,965 bpd. However all North Dakota was up 17,910 bpd in August compared to 21,661 growth in July. This was a growth of 1,046 bpd for North Dakota production outside the Bakken. In July production outside the Bakken was down 1,304 bpd. Bakken Well production The big surprise this month was in wells completed and wells producing. Bakken wells producing increased by 211 and all north Dakota wells producing increased by 274. That meant wells producing outside the Bakken increased by 63. That is a real shocker since Helms says 95% of all […]

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Fracking Tied to Earthquakes in Ohio

4581 Votes Fracking Tied to Earthquakes in Ohio Another rare case of fracking-caused earthquakes has jolted Ohio. A new study connects some 400 micro-earthquakes near the town of Canton, in Harrison County, to hydraulic fracturing wells . The three wells operated from September through October 2013 in the Utica Shale. Ten of the quakes registered between magnitude 1.7 and magnitude 2.2, but the tremors were too deep to cause damage or to be easily felt by people, according to the study, published Oct. 14 in the journal Seismological Research Letters. The new study is the second report this year of fracking-linked earthquakes from drilling in the Utica Shale. The shale is a rock formation that is deeper and closer than the Marcellus Shale to the crystalline basement rocks where faults are more common. In March, scientists with Ohio’s Department of Natural Resources (ODNR) shut down drilling at seven Utica […]

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Fall in Oil Prices Poses a Problem for Russia, Iraq and Others

MOSCOW — A steep decline in oil prices is straining the budgets of major petroleum-exporting countries around the globe, raising a specter of spending cuts in Russia , where the economy is under pressure from Western sanctions, and posing a potentially grave security challenge for Iraq , which is already struggling to finance its fight against the Islamic State. From Moscow to Caracas, Riyadh to Baghdad, in Tehran, Algiers, Kuwait City and Lagos, political leaders, finance ministers and central bankers have been scrambling to confront the plunge in prices — roughly 25 percent since a peak in June — driven by increased production in the United States and by projections of sustained cuts in demand in many developed countries, as well as decelerating growth in China. The price drop is mostly welcome news in the developed world, and particularly in Washington. Countries like Russia, Iran and Venezuela that in […]

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Sanctions noose begins to tighten on sanguine Russia

Sberbank’s headquarters in Moscow…epa01749680 The headquarters of the biggest Russian bank Sberbank in Moscow, Russia, 03 June 2009. Nizhny Novgorod-based Oleg Deripaska’s GAZ Group, Sberbank and Canadian autoparts maker Magna intend to purchase controlling stake in General Motors’ Opel division, newspaper Delovoy Kvartal reports. EPA/SERGEI CHIRIKOV ©EPA For the Russian banking sector, these are the most nervous times since the global financial crisis six years ago. Half a dozen of the biggest state-connected banks – accounting for more than half of Russian banking assets – have in effect been cut off from western financing by EU and US sanctions imposed over Moscow’s aggression in Ukraine. The sliding rouble , meanwhile, creates at least the possibility that Russian consumers could start pulling their savings out of deposit accounts and swapping them into dollars. Those factors plus falling oil prices , which reduce Russia’s dollar receipts for oil exports, are creating […]

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