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Russia to increase gas supply to China

Russian President Vladimir Putin and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in Beijing ©Getty Russia and China have signed a memorandum of understanding to supply gas from western Siberia to China. It is the second big gas deal to be sealed this year as President Vladimir Putin builds investment ties with China to counter increasing isolation from the west . The framework agreement between China National Petroleum Corporation and Russian energy group Gazprom is for an additional 30bn cubic metres of gas per year. It follows a $400bn agreement in May for Russia to sell up to 38bcm of gas per year from eastern Siberia to northeastern China. The deals represent welcome diplomatic and financial support for Mr Putin, whose regime is under fire from the west over its support for Russian separatists in Ukraine . Energy exports are Russia’s primary source of hard currency […]

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China, Russia sign new 30 Bcm/year framework gas deal using western route

Home | News & Analysis | Latest News Headlines | China, Russia sign new 30 Bcm/year framework gas deal using western route Singapore (Platts)–10Nov2014/1228 am EST/528 GMT Russia and China have signed a framework agreement which envisages an additional 30 billion cubic meters of gas delivered annually to China using the western Altai route, nearly doubling current proposed shipments. The latest agreement between state-owned Gazprom and China National Petroleum Corp. was signed over the weekend following a meeting between China’s President Xi Jinping and Russia’s President Vladimir Putin on the sidelines of the Asia-Pacific Economic Cooperation Summit in Beijing. It comes just months after both companies signed a landmark deal in May for Gazprom to send up to 38 Bcm/year of gas from East Siberia to China through the future Power of Siberia pipeline, beginning as early as 2018. The 30-year supply deal is worth an estimated $400 billion. […]

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China is net exporter of oil products in October

Home | News & Analysis | Latest News Headlines | China is net exporter of oil products in October Singapore (Platts)–10Nov2014/1216 am EST/516 GMT China’s crude oil imports in October were up 18% from the same month last year to 24.09 million mt, or an average 5.7 million b/d, preliminary data from the General Administration of Customs showed Saturday, November 8. The volume, however, fell 15.4% month on month. The elevated year-on-year growth rate last month was against a low base in October 2013, when China’s crude inflows had slumped to a 14-month low of 4.83 million b/d. China did not export any crude in October. Over January to October, China’s total crude imports rose 9.2% year on year to 252.6 million mt, averaging 6.09 million b/d. This is the highest rate of year-on-year growth for the 10-month period since 2010, when expansion was 19.5%. LARGEST LEVEL OF NET […]

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China Unlikely to Become Shale Gas Superpower

4705 Votes China Unlikely to Become Shale Gas Superpower China is estimated to hold the largest technically recoverable shale gas reserves globally, yet extracting it is too complicated and costly to replicate the US shale gas revolution. China, the largest energy consumer in the world, hopes to become less dependent on energy imports. However, Beijing needs to increase its domestic volumes of energy resources in order to sustain its growing economy. Concomitantly, China has to address the environmental implications of using coal. Shale gas extraction is seen as a viable substitute to alleviate such problems as evident from the US experience. The United States, once dependent on energy imports, has been transformed into a major energy superpower following the shale gas revolution. In 2013, the US Energy Information Administration issued a report stating China has 1,115 trillion cubic feet of shale gas, twice as much as the US. It […]

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U.S. Gasoline Falls to $2.9421/Gallon in Lundberg Survey

The average price of regular gasoline at U.S. pumps dropped 13.38 cents to $2.9421 a gallon in the two weeks ended Nov. 7, falling below $3 for the first time in almost four years, Lundberg Survey Inc. said. Prices are 27.55 cents lower than a year ago, according to the survey, which is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. The average is the lowest since Dec. 3, 2010, down 78.04 cents a gallon from the May 2 peak of $3.7225, said Trilby Lundberg, the president of Lundberg Survey. She said it was the first average less than $3 a gallon since Dec. 17, 2010. “Crude oil price slippage again has pulled gasoline prices down, but we are coming to the end of this downhill ride,” Lundberg said in a telephone interview yesterday. The highest price for gasoline in the lower 48 […]

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Shale Drillers Idle Rigs From Texas to Utah Amid Oil Rout

The shale-oil drilling boom in the U.S. is showing early signs of cracking. Rigs targeting oil sank by 14 to 1,568 this week, the lowest since Aug. 22, Baker Hughes Inc. (BHI) said yesterday. The Eagle Ford shale formation in south Texas lost the most, dropping nine to 197. The nation’s oil rig count is down from a peak of 1,609 on Oct. 10. Drillers are slowing down as crude prices tumbled 24 percent in the past four months. Transocean Ltd. (RIG) said yesterday that its earnings would take a hit by a drop in fees and demand for its rigs. The slide threatens to curb a production boom in U.S. shale formations that has helped bring prices at the pump below $3 a gallon for the first time since 2010 and shrink the nation’s dependence on foreign oil imports. “We are officially seeing the slowdown in oil drilling,” […]

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Sapping the sweet spots: How long will US energy boom last?

In his 2012 State of the Union address, President Barack Obama said that the U.S. had a supply of natural gas “that can last America nearly 100 years.” But that unbridled optimism, shared by the natural gas industry as well as politicians who want to see the U.S. become more energy independent,is worrying a growing group of activists and analysts who say U.S. oil and gas production may start declining in a matter of years as drillers run out of sweet spots in U.S. shale reserves and are forced to explore less productive — and less lucrative — regions. “Most of the wells right now are going into sweet spots,” said David Hughes, who authored a report released this week on the future of oil and gas production from the Post Carbon Institute, a green energy think tank. “You’re going to have to go into other parts of the […]

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Worst east Ukraine shelling for month; ceasefire looks in doubt

DONETSK Ukraine (Reuters) – East Ukraine’s rebel stronghold Donetsk was pummeled on Sunday by the heaviest shelling in a month, and the OSCE said it spotted an armored column of troops without insignia in rebel territory that Kiev said proved Moscow had sent reinforcements. A two-month-old ceasefire to end a war that has killed 4,000 people has appeared shakier than ever in the past few days, with each side accusing the other of having violated the terms of the peace plan. Reuters journalists inside Donetsk, who have been there throughout the fighting, said the shelling sounded more intense than at any time since early October. Sunday’s strikes appeared to come from territory held by both government and rebel forces. Ukraine’s military said its standoff with the Russian-backed separatists in the east had intensified in the past week, which saw the rebels swear in new leaders after elections the government […]

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Oil Price Slide – No Good Way Out

Printer-friendly by Gail Tverberg , originally published by Our Finite World  | TODAY The world is in a dangerous place now. A large share of oil sellers need the revenue from oil sales. They have to continue producing, regardless of how low oil prices go unless they are stopped by bankruptcy, revolution, or something else that gives them a very clear signal to stop. Producers of oil from US shale are in this category, as are most oil exporters, including many of the OPEC countries and Russia. Some large oil companies, such as Shell and ExxonMobil, decided even before the recent drop in prices that they couldn’t make money by developing available producible resources at then-available prices, likely around $100 barrel. See my post, Beginning of the End? Oil Companies Cut Back on Spending . These large companies are in the process of trying to sell off acreage, if […]

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Oil Rises as U.S. Jobless Rate Declines to Six-Year Low

West Texas Intermediate and Brent oils increased after U.S. employment gains exceeded 200,000 for a ninth month and the jobless rate dropped to a six-year low, bolstering the fuel demand outlook. Crude rose 0.9 percent in New York and 0.6 percent in London . Payrolls advanced by 214,000 in October following a 256,000 gain the prior month that was more than initially estimated, Labor Department figures showed today. The unemployment rate fell to 5.8 percent. Ukraine’s military said dozens of tanks and other military vehicles crossed the border into Ukraine from Russia . “The market is concentrating on the jobs numbers,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “The unemployment rate dropped to 5.8 percent even as the labor force expanded, which implies that more people will be consuming goods and driving. This is all good for demand.” […]

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US Oil Hits Longest Weekly Losing Streak Since 1998

URL: http://www.rigzone.com/news/oil_gas/a/135814/US_Oil_Hits_Longest_Weekly_Losing_Streak_Since_1998 NEW YORK, Nov 7 (Reuters) – U.S. crude climbed less than a dollar on Friday but finished down more than 2 percent for the week, marking the first time the benchmark has fallen for six straight weeks since December 1998. The Friday rally was driven in part by geopolitical tremors in Ukraine and the dollar backing off of its four-year high. Brent crude futures settled up 53 cents at $83.39 per barrel on Friday but declined nearly 3 percent for the week, the seventh straight week down. The last time Brent fell for seven straight weeks ended in November 2002. The benchmark hit a four-year intraday low of $81.63 on Wednesday, down from a high above $115 in June. U.S. crude settled up 74 cents per barrel for the day at $78.65. The dollar helped drive both the daily gains and the weekly losses, as Friday it […]

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Natural Gas Slips as Traders Profit From Recent Rally

By Christian Berthelsen Natural gas futures eased Friday as traders booked gains from a strong market run-up in recent days with the appearance of the first winter-like weather of the season that is expected to drive gas-fired heating demand. Natural gas for December delivery was down 3.6 cents, or 0.8%, to $4.3680 a million British thermal units on the New York Mercantile Exchange. The market posted a 5% gain a day earlier in the largest jump since June 12 and has risen more than 23% over eight consecutive trading sessions. The market has been rallying with the appearance of extreme cold in the forecast over much of the middle of the country next week, with potential polar vortex conditions extending south from the northern Plains to Texas and stretching to the Midwest. Still, the market looked past bearish data in the weekly U.S. inventory report, with stockpiles rising more […]

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Four Takes on OPEC Vienna Meeting: Output Cut Talk Builds

With less than three weeks to go before OPEC meets in Vienna and the selloff in oil showing few signs of letting up, speculation is mounting the group will take action to try to stem the decline. Brent crude, the benchmark for more than half of the world’s oil, gained 53 cents to close at $83.39 today and is down 28 percent from a high of $115.06 in June on the London-based ICE Futures Europe exchange. West Texas Intermediate oil rose 74 cents to $78.65 on the New York Mercantile Exchange. It’s down 27 percent from its June peak. OPEC said yesterday the world will need less of its oil for most of the next two decades than previously estimated as U.S. shale production grows. OPEC lowered every forecast for its crude through 2035 except next year. Here’s how four analysts across Europe and the U.S. see the Nov. […]

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Kurdistan to Pay Oil Producers $75 Million for Export Sales — Update

By Sarah Kent LONDON–Oil producers operating in Iraqi Kurdistan are to receive an initial payment of $75 million this month for export sales this year, the region’s Ministry of Natural Resources said in a statement Friday. The news strongly boosted the shares of Kurdish-focused exploration and production companies such as Genel PLC (GENL.LN)and Gulf Keystone Petroleum Ltd. (GKP.LN), which have come under pressure this year as a result of the Islamic insurgency buffeting Iraq’s North and an ongoing dispute over oil sales with Baghdad. The political tensions between Iraq’s federal government and the Kurdistan Regional Government has left the KRG struggling to meet its payment obligations to companies operating there after Baghdad cut off its budget payments at the start of the year. However with the start of oil exports in January, the region is taking steps to move towards greater financial autonomy. According to the MNR, Iraqi Kurdistan […]

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Report: East Africa new energy ‘hot spot’

East Africa emerging as "hot spot" for energy activity, analysis from IHS finds. (UPI/A.J. Sisco) LAS VEGAS, Nov. 7 (UPI) — East Africa is the new "hot spot" for the energy market, with natural gas positioning the region as the new premier player, analysis from IHS finds. Analysis released from Nevada finds East Africa is expected to add another 1 million barrels per day in production by 2025, led by Mozambique and Tanzania. More recently, the region is home to more than 25 percent of the natural gas discoveries made worldwide between 2010-13. "East Africa is the new hot spot," Stanislas Drochon, director Africa oil and gas at IHS Energy, said in a Thursday statement. Drochon said the region is going through a transformative phase and could emerge as a crucial player in the global energy sector, though a lack of infrastructure and a weak regulatory framework could drag […]

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Transocean Takes $2.76 Billion Charge Amid Rig Glut

Transocean Ltd. (RIG) , owner of the biggest fleet of deep-water drilling rigs, is feeling the effect of an industrywide glut in the expensive vessels just as crude-oil prices tumble. The company will delay posting third-quarter results after saying earnings would be hit by $2.76 billion in charges from a decline in the value of its contracts-drilling business and a drop in rig-use fees. Shares in the Vernier, Switzerland-based company, which pushed back the release of its earnings report to Monday instead of today, fell 0.7 percent to $29.71 at the close in New York . Oil’s decline to a four-year low in recent months has caused companies to consider spending cuts, which would further reduce demand for rigs and the rates Transocean can charge to lease them to explorers. The drop in prices comes after rig contractors responded to rising demand during the past few years with the […]

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Shale Drillers Idle Rigs From Texas to Utah Amid Oil Rout

The shale-oil drilling boom in the U.S. is showing early signs of cracking. Rigs targeting oil sank by 14 to 1,568 this week, the lowest since Aug. 22, Baker Hughes Inc. (BHI) said yesterday. The Eagle Ford shale formation in south Texas lost the most, dropping nine to 197. The nation’s oil rig count is down from a peak of 1,609 on Oct. 10. Drillers are slowing down as crude prices tumbled 24 percent in the past four months. Transocean Ltd. (RIG) said yesterday that its earnings would take a hit by a drop in fees and demand for its rigs. The slide threatens to curb a production boom in U.S. shale formations that has helped bring prices at the pump below $3 a gallon for the first time since 2010 and shrink the nation’s dependence on foreign oil imports. “We are officially seeing the slowdown in oil drilling,” […]

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Fredriksen Said to Delay Rosneft Deal Decision on Sanctions

North Atlantic Drilling Ltd. (NADL) , the rig company controlled by billionaire John Fredriksen, will extend a deadline to complete deals with Russia’s OAO Rosneft (ROSN) that include $4.25 billion in contracts amid concern over trade sanctions, a person familiar with discussions said. The deadline for breaking the accords will be extended from Nov. 10, said the person, asking not to be named because the talks are private. North Atlantic, a unit of Seadrill Ltd. (SDRL) , is considering alternative assignments for two rigs due to start operating for Rosneft next year, the person said. North Atlantic and Rosneft rushed to sign five-year contracts for five offshore rigs at the end of July, just days before the European Union broadened sanctions against Russia to target its energy industry over the country’s role in the conflict in Ukraine. Seadrill, which owns 70 percent of Hamilton, Bermuda-based North Atlantic, said at […]

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California Oil-by-Rail Drops as Canada Faces Competition

California , the nation’s largest gasoline market, received the least amount of oil by rail in 17 months as cheaper in-state supplies and imports eliminated the need for Canadian supplies. The most populous U.S. state took 11,612 barrels a day by rail in September, a 7.5 percent drop from a month earlier and down from a peak of 38,086 barrels a day in December, California Energy Commission data show. Shipments from Canada, which made up 76 percent of California’s oil-by-rail receipts last November, tumbled to zero, the agency said on its website . The slide in Canadian shipments highlights how competition is growing to supply the western U.S. as refining markets elsewhere in the nation drive out imports by processing more domestic shale oil. Exxon Mobil Corp. (XOM) ’s Torrance refinery near Los Angeles was said to shut a crude unit in September, cutting the cost of oil from […]

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U.S. shale gas output breaking records

No signs U.S. shale natural gas boom will slow down, a division of the Platts energy services company says. UPI/Gary C. Caskey DENVER, Nov. 7 (UPI) — U.S. natural gas production has risen for the 10th consecutive month, moving steadily into "unchartered territory," analysis from Platts finds. Bentek Energy, the forecasting unit of Platts, found gas production in the Lower 48 states averaged 69.9 billion cubic feet per day in October, breaking the previous record and posting the 10th straight month of gains. Gas production in October was 7.9 percent higher year-on-year. Jack Weixel, director of analysis at Bentek, said projects slated to come online in the U.S. northeast should push the U.S. gas output above the 72 billion cubic feet per day mark by the end of the year. "The current level of production is unchartered territory for the domestic natural gas market and shows no signs of […]

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U.S. rig activity up 10 percent year-on-year

Baker Hughes finds exploration activity slowing modestly, but still up from last year’s figures. (UPI/Shutterstock/ekina) HOUSTON, Nov. 7 (UPI) — The number of rigs actively exploring for or developing oil or natural gas in the United States is up 10 percent from last year, Baker Hughes said Friday. The oil services company released its rig counts for October , reflecting the number of rigs in service in the upstream sector. For October, there were 1,925 rigs active in the United States, five less than the previous month, but 181 more than in October 2013. The U.S. government says it’s producing more oil than it imports for the first time in nearly two decades. President Barack Obama set a goal in 2012 to cut imports by half by 2020, but the White House expects to meet that goal six years ahead of schedule. Higher oil production in the United States […]

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House lays out pro-Keystone XL agenda

Expected Senate Majority Leader Mitch McConnell (R), R-Ky., and House Speaker John Boehner (L), R-Ohio, said authorizing the construction of the Keystone XL pipeline has "obvious" bipartisan support. FILE/UPI/Mike Theiler WASHINGTON, Nov. 7 (UPI) — A Republican-led House Energy Committee said that, while Keystone XL is just one piece of the energy puzzle, it’s a key component of the wider whole. The GOP has drafted its new course for the next Congress following the Republican takeover of the Senate after Tuesday’s midterm elections. Getting the Keystone XL pipeline approved is at the top of the Republican agenda. The House Energy and Commerce Committee issued an agenda statement Thursday, saying the congressional energy strategy should be broader than just one pipeline. "But Keystone XL still remains an important part of any comprehensive energy plan so we will keep fighting for its approval," the statement read. In an op-ed published by […]

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US to exchange crude with Mexico as exports climb to 1 million b/d: Citi

Home | News & Analysis | Latest News Headlines | US to exchange crude with Mexico as exports climb to 1 million b/d: Citi Washington (Platts)–7Nov2014/508 pm EST/2208 GMT The US is expected to export more than 1 million barrels a day of crude oil and condensates by early next year, including roughly 200,000 b/d in light-for-heavy crude exchanges with Mexico, analysts with Citi said in a new report. According to Citi’s estimates, US crude oil exports to Eastern Canada will grow 500,000 b/d, exports from Alaska will climb to 100,000 b/d, exports of processed condensate will hit 200,000 b/d and exports to Mexico will grow to 200,000 b/d from zero. Those Mexican exports will likely be done, at least initially, under exchanges in which the US Commerce Department allows a barrel-for-barrel trade of light crude exports for heavy crude imports, analysts said. "In the case of Mexico, there […]

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EIA: Gas storage levels now within 7% of 5-year average

HOUSTON, Nov. 7 11/07/2014 By OGJ editors Working natural gas in storage ended October at 3,571 bcf, a record increase of 2,734 bcf during the Apr. 1-Oct. 31 injection season, and within 7% of the average of the last five end-of-season storage levels, according to data from the US Energy Information Administration . “While end-October natural gas stocks are at a 5-year low, increased natural gas production, which has reached an all-time high, and new pipeline projects will help meet winter natural gas demand,” EIA said. As of August, dry gas production was 3.5 bcfd higher compared with the same month a year ago. Even if this winter were as cold as last year, EIA expects that gas storage at the end of March 2015 will be above its March 2014 level, largely because of the gains in US gas production. After a prolonged and severe winter, inventories by […]

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Baker Hughes: US Oil Drillers Cut Rigs To Lowest Since Aug.

URL: http://www.rigzone.com/news/oil_gas/a/135813/Baker_Hughes_US_Oil_Drillers_Cut_Rigs_To_Lowest_Since_Aug Nov 7 (Reuters) – Energy companies reduced the number of rigs drilling for oil in the United States to a fresh three-month low, shifting more rigs in favor of natural gas as crude prices dive and gas prices soar, data showed on Friday. The number of rigs drilling for oil fell by 14 to 1,568 in the latest week, down for five out of the past seven weeks, according to data from oil services firm Baker Hughes on Friday. A year ago, there were 1,383 rigs drilling for oil. Gas rigs meanwhile rose by 10, up for a fourth week in a row, to 356 rigs, the highest in 10 months, the Baker Hughes data show. A year ago, there were 365 rigs drilling for gas. Analysts however said a few weeks of less oil and more gas rigs does not make a pattern. "The recent rise […]

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Illinois Lawmakers Approve Fracking Rules

URL: http://www.rigzone.com/news/oil_gas/a/135811/Illinois_Lawmakers_Approve_Fracking_Rules CHICAGO (AP) — Illinois lawmakers signed off Thursday on long-awaited rules regulating high-volume oil and gas drilling, clearing the way for companies to get "fracking" permits and unleash what they hope will be an energy boom in the southern part of the state. But a number of key details were not disclosed including how the state plans to fund the hiring of new workers to oversee the practice, which uses high-pressure mixtures to crack open rocks and release trapped oil and gas. The delay in the fracking rules — which took more than a year for the state Department of Natural Resources to write and which were revised by a legislative committee — prompted complaints from industry that energy development would suffer. The final rules must be submitted to the Secretary of State to be published by Nov. 15. The secretive approval process set off alarm bells […]

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Shell Says LNG Canada Project To Cost Up To $35.3B

URL: http://www.rigzone.com/news/oil_gas/a/135812/Shell_Says_LNG_Canada_Project_To_Cost_Up_To_353B CALGARY, Alberta, Nov 7 (Reuters) – Royal Dutch Shell Plc , the lead partner in the consortium planning the LNG Canada facility on British Columbia’s remote northern coast, said on Friday the project to liquefy natural gas for export to Asia could cost as much as C$40 billion ($35.3 billion) when fully complete. Shell’s cost estimate for the LNG Canada facility near Kitimat, British Columbia, was included in the environmental assessment filed with provincial regulators on Friday. The filing begins a 180-day review of the proposal but the company cautioned it and its partners have not yet decided whether to build the plant. "While today’s announcement is an important step forward for the proposed project, LNG Canada must ensure the project is economically viable and meet several other significant milestones related to gas supply, engineering and cost estimates, supply of labor and regulatory approval prior to making […]

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Volkswagen’s Winterkorn: “great potential” in solid-state batteries, with possible 1,000 Wh/l, or 700 km range

« Availability of total electrification option for components used with Allison H 40/50 EP hybrid system | Main | Volkswagen providing e-Golf to Stanford for research » Print this post In his remarks made at Stanford University during the award of the third Science Award for Electrochemistry to Dr. Vanessa Wood ( earlier post ), Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen noted again the challenges of energy density, cost, reliability and lifespan for batteries enabling longer range electric mobility. In that context, he said that he sees “ great potential ” in solid-state batteries, which possibly could boost EV range to as much as 700 km (435 miles), representing a volumetric energy density of about 1,000 Wh/l. Current Li-ion batteries, with about 260 Wh/l are enabling a range of some 190 km (118 miles), he said. He then added that, with a higher […]

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Plunging rouble raises spectre of fresh financial crisis for Russia

Russia faces the risk of financial instability, the country’s central bank warned, after dramatic gyrations in the currency amid renewed tension in Ukraine revived fears of a currency crisis. Russia in 10 numbers 30% – The rouble’s year-to-date decline against the dollar 8% – Rouble’s drop in past week 10.3% – Yields on 10-year sovereign debt 2009 – The last time the RTS stock market index was this low 0% – 2015 GDP growth estimates from the OECD. The worst of the G20 8.4% – Inflation 9.5% – Interest rates 29% – Fall in Brent crude oil price from its June closing high to Friday’s intraday low $30bn – Russian corporate external debt due this year $68bn – The amount Russia’s central bank has spent defending the currency this year The warning came after a day of huge swings in the rouble and capped a weekwhen the currency fell […]

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New low for Russian currency

Value of Russian currency sinking to new lows under sanctions pressure. UPI/Dennis Van Tine MOSCOW, Nov. 7 (UPI) — It’s becoming more difficult to find good news for the Russian economy, an analyst said Friday after the national currency crashed to a new low. By midday in Moscow, the currency hit bottom with trade at 45.7 rubles to the U.S. dollar, besting the previous low by 8 percent. Dmitry Polevoy, a chief Russian analyst at ING, told Russian news agency ITAR-Tass there were few bright spots for the nation’s economy. "It is increasingly difficult to find augments to describe the current situation, when you look at market figures every morning," he said. The Russian economy is burdened by Western sanctions targeting Russian energy companies. With oil trading below the $100 mark, sanctions were blamed for record inflation and a struggling ruble. A report this week from the European Commission […]

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Oil Slips on OPEC’s Lower Demand Forecast, Strong Dollar

By Eric Yep Crude-oil futures slipped in Asian trade Friday on a stronger U.S. dollar and on lower oil demand forecast by the Organization of the Petroleum Exporting Countries. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $77.62 a barrel at 0449 GMT, down $0.29 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.45 to $82.41 a barrel. Oil has been under pressure from the greenback after positive economic data from the U.S. this week. Financial markets are looking to U.S. nonfarm payroll data expected later today for more cues. OPEC expects its crude production to fall by 1.8 million barrels a day by the end of 2017 to 28.2 million barrels a day, it said in its annual outlook report. "In general, it is expected that the U.S. recovery will provide a significant support […]

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Oil Falls Fifth Day in Six as OPEC Cuts Demand Outlook

West Texas Intermediate crude slid for a fifth time in six days after OPEC cut forecasts for the amount of oil it needs to supply and the dollar strengthened. OPEC lowered every published forecast for its crude demand through 2035 except next year. Oil also dropped as Libya said it will resume pumping crude “soon” at its biggest field. The euro weakened against the dollar as European Central Bank President Mario Draghi deepened his commitment to stimulus. “Demand is down and supply is up, we are in a situation where we will continue to go lower,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “The stronger dollar is weighing on the market. We are selling any rallies that we get, which has been a good trade.” WTI for December delivery slid 77 cents, or 1 percent, to close at $77.91 a barrel on the […]

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Natural Gas Prices Dip on Larger-than-Expected Surplus

By Timothy Puko Natural gas futures dipped Thursday after a weekly stockpile report showed a larger surplus than expected. Producers added 91 billion cubic feet of gas to storage for the week ended Oct. 31, the U.S. Energy Information Administration said. The addition was 5 bcf larger than the 86 bcf consensus average expectations of 16 analysts and brokers in The Wall Street Journal survey. The front-month December contract recently traded down 3.6 cents, or 0.8%, at $4.158 a million British thermal units on the New York Mercantile Exchange. Prices had dipped to as low as $4.111/mmBtu in the minute after the update, but rebounded within 10 minutes. Natural gas has been on its longest rally of the year pushed by expectations of unseasonably cold weather and sharply rising demand starting next week. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that […]

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OPEC’s Weak Links Feeling Pain That Shale Producers Seek

Here’s why the U.S. shale upstarts just might win a confrontation with Saudi Arabia as oil sinks: While the Arab nation is as flush with cash as ever, the finances of some fellow OPEC members are deteriorating quickly. Venezuela , for example, has burned through billions of dollars, leaving its foreign reserves near a decade-low, to stave off default. In Nigeria , officials are struggling to stem a selloff in the currency that has left it at a record low. Those financial strains have Venezuela calling for action to prevent further declines in oil prices while a Libyan representative said the 12-member Organization of Petroleum Exporting Countries should cut its output target. When executives at American shale companies talk about having more staying power in a price war than some of the Saudis’ partners, these countries, along with places like Ecuador and Iran, are the key weak links in […]

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IEA: Asia missing out on LNG opportunities

Asian powers need to embrace market reports to take advantage of opportunity presented by natural gas, International Energy Agency says UPI/Stephen Shaver TOKYO, Nov. 6 (UPI) — Asia needs market reforms to capitalize on the "golden opportunity" represented by liquefied natural gas, the International Energy Agency said Thursday. The IEA issued a report saying natural gas prices in Asia may be as much as four times as high as in other markets. Asian demand for gas, meanwhile, is expected to grow by as much as 8 trillion cubic feet, while 5.3 trillion cubic feet of new supplies of liquefied natural gas come on stream by 2020. "The advent of new LNG supplies represents a golden opportunity for Asia, but first the region’s governments must address the rigid and illiquid markets that undermine affordability and accessibility for consumers," IEA Executive Director Maria van der Hoeven said in a statement from […]

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OPEC Cuts Most Demand Forecasts for Its Crude on U.S. Boom

Print Back to story OPEC, supplier of 40 percent of the world’s oil, cut forecasts for the amount of crude it will need to supply for most of the next two decades as the shale-energy boom in the U.S. lessens dependency on the group. Demand for crude from the Organization of Petroleum Exporting Countries may fall to a 14-year low of 28.2 million barrels a day in 2017, according to the group’s annual World Oil Outlook. That’s 600,000 a day less than last year’s report and 800,000 below the amount required this year. OPEC lowered every forecast for its crude through 2035 except next year, which will be higher than previously predicted. Still, Secretary-General Abdalla El-Badri predicted prices will rebound next year. The group’s members face mounting competition in the U.S., where technological breakthroughs — hydraulic fracturing and horizontal drilling — have caused a surge in domestic production. Oil […]

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OPEC Head Tells Oil Market to Stop Panicking About Prices

Oil will rebound by the second half of next year as supply and demand don’t justify the recent collapse and prices are now low enough to threaten investment in production, OPEC’s Secretary-General said. While a report today from the Organization of Petroleum Exporting Countries cut forecasts for crude it will need to provide for most of the next two decades because of the shale-energy boom in the U.S., Secretary-General Abdalla El-Badri said the group isn’t “panicking” amid this year’s plunge. “We’re concerned but not panicking,” El-Badri said at a press conference in Vienna today. “The price will rebound by the second half of next year. This situation of low prices cannot continue because if it continues, most of the investments will be stopped.” Brent futures have tumbled 28 percent since mid-June, a move El-Badri said was excessive given that supply and demand levels are “reasonable.” Ali al-Naimi , oil […]

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Libya Plans for Biggest Oil Field to Resume Output Soon

Libya will resume pumping crude “soon” at Sharara, its biggest oil field, after an attack that halted output, reducing the North African nation’s production by almost a third, an official said. Sharara was shut as a precaution after gunmen stormed the on-site production compound, Mansur Abdallah, director of oil movement at the Zawiya refinery and oil port, said in a telephone interview. “The armed group left after stealing the cars, and production should resume soon,” he said. The oil field is 720 kilometers (450 miles) south of Zawiya, and the two sites are connected by a pipeline. While it has a similar capacity to the Waha field in central Libya, Sharara is the nation’s largest producer, with an output of 290,000 barrels a day before the latest shutdown, Abdallah said. Libya, which is trying to restore output after more than a year of political unrest and violence, produced 850,000 […]

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Lower Oil Prices Seen as Net Gain for U.S. Economy

ByStephen Grocer Reuters Apologies to North Dakota, but the slide in oil prices is good for the U.S. economy overall. At least that’s the conclusion Barclays draws in a note to clients Thursday (the North Dakota apology is ours). More than five years ago, such a statement wouldn’t have been necessary. Oil below $80 a barrel would be an unqualified positive for the U.S. economy. But that was before the shale-oil boom, and that has complicated the equation a bit. Lower prices mean U.S. consumers and businesses will spend less on oil. While the U.S. imports less oil than it did, it is still a net importer oil. That means a lot of the money that would have otherwise gone overseas will be spent instead on U.S.-produced goods and services. Barclays chief U.S. equity strategist Jonathan Glionna estimates that a 20% decline in gas prices results in approximately $70 […]

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Going Out On A Limb, North Dakota Oil Titan Scraps Hedges

WILLISTON, N.D., Nov 6 (Reuters) – Harold Hamm, chief executive of Continental Resources Inc, stunned a bearish crude market by scrapping all of the North Dakota energy producer’s oil hedges, betting that prices will recover soon after sinking 25 percent in recent months. With the move, Hamm, who last month called OPEC a "toothless tiger," appears to be heading into a price war with Saudi Arabia, the world’s biggest oil exporter, without any protection from a prolonged downturn that some analysts say is looming. Saudi Arabia and 14 other OPEC members have shown no sign yet of moving to cut production, a step that would lift prices. The conventional wisdom is that the country, frustrated by a global supply glut caused by soaring United States output, is prepared to let prices fall to squeeze U.S. shale oil producers out of the market. But Hamm, striking a defiant tone, told […]

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Chesapeake Subpoenaed By DOJ, States Over Royalty Payments

HOUSTON, Nov 6 (Reuters) – Chesapeake Energy Corp has received subpoenas from states and the U.S. Department of Justice seeking information on its royalty payment practices to mineral owners, according to a regulatory filing. Chesapeake, which is also being probed by the DOJ and states over possible antitrust violations related to land purchases, said it is responding to the subpoenas, according to a filing with the U.S. Securities and Exchange Commission. A spokesman for the Oklahoma City, Oklahoma company declined to comment on Thursday. Chesapeake faces a slew of lawsuits from landowners and others who allege the company has underpaid royalties for produced and sold natural gas and natural gas liquids through the use of improper deductions or below-market pricing. Chesapeake said in its quarterly SEC filing on Wednesday that it has resolved a number of those claims and has also prevailed in some lawsuits. Shares of Chesapeake fell […]

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Crude prices likely at bottom of slide: Continental CEO

Home | News & Analysis | Latest News Headlines | Crude prices likely at bottom of slide: Continental CEO Houston (Platts)–6Nov2014/341 pm EST/2041 GMT Crude oil prices are likely at the bottom of their recent slide, Continental Resources CEO Harold Hamm said Thursday on an earnings call, adding that prices will probably return to the mid-$80s to low $90s/b in the near term. While he did not specify an expected time frame for recovery, Hamm said he believes the oil price drop will be "short lived" based on global supply and demand fundamentals which "[haven’t] changed in the last three months." "What we’re dealing with is [an oil] renaissance that will be very long lasting in the US," Hamm said. Hamm also said a temporary drop in prices may cause the US "overall [to] be well served … even though we’re probably not looking at it that way." For […]

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Denton frack ban challenged in Texas court

Texas oil and gas group files suit against Denton ban on hydraulic fracturing. UPI/Kevin Dietsch AUSTIN, Texas, Nov. 6 (UPI) — The Texas Oil and Gas Association said it filed a case against the city of Denton after voters backed an initiative to ban hydraulic fracturing. Denton voters passed a special measure on the midterm ballot that prohibits hydraulic fracturing within city limits. It’s one of the first such local measures in the country to get voter approval. Denton sits on top the Barnett shale play in Texas, which at the end of 2013 was in the top tier in terms of production from shale basins in the United States. Thomas Phillips, former chief justice of the Texas Supreme Court and now a lawyer representing the Texas Oil and Gas Association, said a suit was filed in Denton County district court against the measure. "The association does not believe […]

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Shale license extended in Ukraine

Shale license for explorer JKX Oil and Gas extended in Ukraine until the end of 2019. (UPI/Gary C. Caskey) LONDON, Nov. 6 (UPI) — The Ukrainian government extended the terms for a shale exploration license by five years, JKX Oil and Gas announced Thursday. JKX, which has headquarters in London, said its exploration permit for the Zaplavskoye license was extended through December 2019. The reserve basin surrounds four other areas where the company is working to extract reserves locked in shale. Ukraine is one of the Eastern European countries rich in shale natural gas. JKX said its production in Ukraine for 2013 averaged 9,731 barrels of oil equivalent per day, an 18 percent increase from the previous year. By the government’s estimates , there may be enough natural gas in shale reserve areas to meet the country’s needs without imports. Ukraine, with the help of European negotiators, brokered an […]

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Emerald Oil May Scale Back Bakken Drilling Program in Q1 2015

Emerald Oil Bakken Acreage Map|Click to Enlarge Emerald Oil, Inc. could cut its Bakken drilling program the first quarter of next year if the price of oil continues to drop. Emerald’s CEO McAndrew Rudisill announced the company’s plans in a conference call for investors this week. With WTI now below $80, we could see the first shoes begin to drop among some Bakken producers. According to the consultancy Wood Mackenzie, breakeven oil prices range from $60 to $80 per barrel in North Dakota’s Bakken. Emerald’s current three-rig drilling program is slated to continue in the Bakken through the end of the year, but the contract for one of its rigs expires in the first quarter of next year (March 15, 2015), and the company may not renew it. According to Rudisill, the company’s decision will be determined largely by what is happening with WTI crude oil price.”We have to respond to large changes in the price of crude oil, […]

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Icahn Tank-Car Maker Joins Industry Defying Oil’s Decline

Surging railroad tank-car orders at companies owned by billionaires Warren Buffett and Carl Icahn are defying an oil price drop that threatens to slow the U.S. drilling boom. Even with crude falling to a post-2011 low, manufacturers including Buffett’s Union Tank Car and Icahn’s American Railcar Industries Inc. (ARII) can’t meet demand. The order backlog reached an all-time high last quarter after bookings for 42,900 freight and tank cars, the most in 27 years of data compiled by Bloomberg. Producers such as Greenbrier Cos. (GBX) and Trinity Industries Inc. (TRN) are expanding as buyers seek more tank cars to move surging oil shipments and get ahead of a U.S. regulatory decision that may take thousands of units already in use off the tracks. The order buildup will ensure a good 2015 no matter where oil goes, said Michael Baudendistel, a Stifel Financial Corp. analyst. “Deliveries will be sustainable for […]

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