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Some Traders Step Back From Oil Market Ahead of OPEC Meeting

By Nicole Friedman Some traders and investors are stepping back from the oil market ahead of the most widely watched OPEC meeting in years, anticipating that thin holiday trading could exacerbate big price swings. Oil experts say the Organization of the Petroleum Exporting Countries, which controls roughly a third of global crude output, needs to curb production by at least 3%, or one million barrels a day, to bring supplies closer in line with demand. Such a move could put a floor under oil prices, which have plunged about 30% since mid-June. Oil prices settled down 73 cents, or 1%, at $75.78 a barrel Monday on the New York Mercantile Exchange. OPEC is scheduled to meet on Thursday in Vienna. Many oil traders in the U.S. will be taking the day off for Thanksgiving. According to the Nymex schedule, electronic trading will run until 1 p.m. New York time […]

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Saudi Oil Minister: Oversupply Not Unusual; No Comment on Any OPEC Move

Saudi Arabian Oil Minister Ali al-Naimi is surrounded by reporters as he arrives at his… ENLARGE Saudi Arabian Oil Minister Ali al-Naimi is surrounded by reporters as he arrives at his hotel Monday for this week’s OPEC meeting. Reuters VIENNA—Saudi Arabia’s oil minister on Monday suggested current high levels of supply in global oil markets aren’t unusual, but declined to comment on the kingdom’s likely stance at this week’s crucial meeting of the Organization of the Petroleum Exporting Countries. Speaking to reporters as he arrived in Vienna ahead of Thursday’s OPEC gathering, Ali al-Naimi asked, “Is this the first time we have oversupply?” That came in response to a question about the current balance between supply and demand in oil markets. Some OPEC members, such as Venezuela, have been calling for several months for the group to cut its oil production following a 30% fall in oil prices. But […]

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Iran Nuclear Talks Extension Seen Delaying Oil-Export Boost

Iran will have to wait to boost oil exports after agreeing to an extension in talks aimed at limiting its nuclear program in return for an end to sanctions. The U.S. and five other global powers agreed today to continue negotiating with Iran after failing to reach an agreement during talks over the past year, according to two officials, who requested not to be identified because the talks are private. They spoke in Vienna where the talks were taking place. The parties will have until March 1 to agree to a political framework for a deal and July 1 to settle final details, the officials said. Iran’s Nuclear Plan International sanctions imposed over Iran’s nuclear program are curtailing crude exports, the nation’s main income source. The extension in the talks beyond today’s deadline may have little impact on crude prices because markets anticipated the decision, Commerzbank AG analyst Eugen […]

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Iran nuclear talks expected to reconvene next month

VIENNA (Reuters) – Iran and six world powers are expected to adjourn nuclear negotiations on Monday and reconvene next month after the latest round of talks failed to clinch a final deal, a source close to the talks said. Details about the adjournment and resumption of negotiations were still being worked out, though the source said on condition of anonymity that Iran could not expect any new sanctions relief for the time being. Possible venues include Vienna and Oman, the source said, though nothing had been decided. "Some progress has been made," said a diplomat involved in the talks. "But we need to discuss some issues with our capitals. We will meet again before the new year. This is an ongoing process." The talks in Vienna aim for a deal that could transform the Middle East, open the door to ending economic sanctions on Iran and start to bring […]

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Libya’s Nafoura oilfield will resume production on Monday-officials

BENGHAZI, Libya Nov 23 (Reuters) – Libya’s Nafoura oilfield will resume production on Monday after protesters demanding jobs ended a protest, officials at the Libyan state operator said on Sunday. The field in volatile eastern Libya used to produce up to 65,000 barrels a day of oil until local protesters forced a shutdown over a month ago to demand to be hired by the state oil firm AGOCO, oil officials said. "The production at Nafoura oilfield will resume tomorrow," AGOCO spokesman Omran Zawie said. Several mostly smaller fields in the east have been closed in the past three months by locals making political or financial demands, part of turmoil in Libya three years after the ouster of former strongman Muammar Gaddafi. Separately, oil officials said the southwestern El Feel field has not yet resumed production after Libya shut it down more than a week ago when clashes forced the […]

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U.S. not on oil map for Nigeria

Nigerian oil production up, with most exports headed to markets outside North America. (UPI/Shutterstock/James Jones Jr.) ABUJA, Nigeria, Nov. 24 (UPI) — The Nigerian oil export economy relies mainly on consumers outside North America, the state-controlled Nigerian National Petroleum Corp. said Monday. "Four regions, namely Europe, South America, Asia and Africa, remain the major destinations of Nigerian crude and condensate export," the company said. Nigerian crude oil exports to the United States peaked in 2007 and have since steadily decreased to zero since shale oil production increased. The state oil company said exports of 2.26 million barrels per day in August, the last full month for which data are available, were 12.4 percent higher than the previous month . Overall, oil production rose 6.8 percent in August. Nigeria is among the largest African members of the Organization of Petroleum Exporting Countries. OPEC, in its market report for November, said […]

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Bakken Shale Rig Count Decreases by Four to 188

Bakken Oil Workers | Click to Enlarge The  Bakken-Three Forks rig count  decreased by four t0 188 rigs running across our coverage area by the end of last week. The NDIC notes 192 rigs are active in North Dakota, but around 13 of those are in the process of moving in and rigging up. In recent Bakken news, North Dakota hit 1,184,635 b/d oil in September 2014, setting a new record, according to the Department of Mineral Resources’ (DMR) November  Director’s Cut . That’s 50,000 more b/d than August. During the same month, North Dakota also had record monthly gas production (1,403,448 mcf/d), and reported the highest number of producing wells to date (11,741). Read more : North Dakota Breaks Records for Oil & Gas Activity The U.S. rig count increased by one to 1,929 rigs running by the end of last week. A total of 355 rigs were targeting natural gas (five more […]

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Boston, New York City winter natural gas prices expected to remain high

Source: U.S. Energy Information Administration, based on Bloomberg Note: November through March are considered winter months. Forward prices for 2014-15 and 2015-16 are as of 10/29/2014. Despite expectations of a milder winter for 2014, marketers anticipate high prices for natural gas in Boston and New York City. Natural gas prices are expected to be lower than last winter, but higher than the average of previous winters, particularly in Boston. Boston. Average forward prices in Boston this winter are expected to be $13.70 per million British thermal unit (MMBtu), which is $2.33/MMBtu lower than the winter of 2013-14 but much higher than previous winters. Higher natural gas prices are partly because the pipeline industry has not added any new capacity to flow more Marcellus gas into Boston and because production from eastern Canada and liquefied natural gas (LNG) from the Everett (Boston) and Canaport (New Brunswick) terminals are not high […]

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Russia: Economy Set To Lose Billions

Email not displaying correctly? View it in your browser . Russia is set to lose around $40 billion because of Western-imposed sanctions and around  $90 to $100 billion could be lost because of the recent fall in oil prices, Russian Finance Minister Anton Siluanov said Nov. 24, ITAR Tass reported. The announcement comes soon after Russia’s foreign minister accused the West of trying to promote regime change in Moscow by ruining the economy. Stratfor provides global awareness and guidance to individuals, governments and businesses around the world. We use a unique, intel-based approach to analyze world affairs. Copyright © 2014 Stratfor Global Intelligence, All rights reserved. Our mailing address is: 221 West 6th Street Suite 400 – Austin, TX 78701, USA unsubscribe from this list     update subscription preferences | http://us4.forward-to-friend1.com/forward?u=74786417f9554984d314d06bd&id=dfd4fedb21&e=5dc656de01

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Russia Hasn’t Decided to Cut Oil Output in Preparation for OPEC

Russia ’s energy minister said his country hasn’t decided to cut oil production as he prepares to meet with OPEC ministers to discuss the crude market. Russia is already helping to balance the oil market by keeping output steady, Alexander Novak said today in an interview with state TV channel Rossiya 24. There’s only a small chance the Organization of Petroleum Exporting Countries will agree to reduce output at a meeting this week, he said. “We are not Saudi Arabia, which has the ability to reduce production quickly, ramp up quickly,” Novak said. It’s open question whether an agreement would affect prices, he said. His comments run counter to a report in Kommersant newspaper today that Russia may cut production by 300,000 barrels a day next year to support OPEC reductions of more than 1 million barrels. The group is considering action to boost prices after oil plunged more […]

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Some fund managers see oil falling to $60 without OPEC cut

LONDON (Reuters) – Some commodity fund managers believe oil prices could slide to $60 per barrel if OPEC does not agree a significant output cut when it meets in Vienna this week. Brent crude futures LCOc1 have fallen by a third since June, touching a four-year low of $76.76 a barrel on Nov. 14. They could tumble further if OPEC does not agree to cut at least one million barrels per day (bpd), according to some commodity fund managers’ forecasts. "The market would question the credibility of OPEC and its influence on global oil markets if there was no cut," said Daniel Bathe, of Lupus Alpha Commodity Invest Fund. That could send Brent down to around $60, Bathe said. "Herding behaviour and a shift to net negative speculative positions should accelerate the price plunge," he said. Yet fund managers and brokerage analysts are divided over whether OPEC will reach […]

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Scotland creates center for innovation in wave energy

The Scottish government aims to draw investors to fledgling wave energy industry, though one major contributor, Pelamis, doesn’t have the funds to move forward. Shutterstock/Ethan Daniels EDINBURGH, Scotland, Nov. 24 (UPI) — Scotland, a world leader in renewable energy development, still has a lot to learn in terms of wave energy programs, the energy minister said. Minister Fergus Ewing unveiled plans to develop a technology center dubbed "Wave Energy Scotland," which he said would encourage innovation and development in the offshore marine energy sector . "With the extraordinary ocean energy resources off Scotland’s coasts, our belief in the future success of wave energy is undiminished," he said in a Saturday statement. The Scottish government has put pressure on its British counterparts after a failed bid for independence, arguing for a more diluted power structure when it comes to energy sector management. The Scottish government says its power systems account […]

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London: Climate change a “great risk”

"The science is clear" about climate change, British minister says. (UPI/Shutterstock/ ChinellatoPhoto) LONDON, Nov. 24 (UPI) — The international community is at a turning point in terms of sentiments in favor of addressing climate change now, the British energy secretary said Monday. "The science is clear," Energy and Climate Change Secretary Ed Davey said in a statement. "Climate change poses great risks to health, global food security and economic development – and unchecked will change every part of our lives." This year’s report from the Intergovernmental Panel on Climate Change found emissions of carbon dioxide, a potent greenhouse gas, from the combustion of fossil fuels accounted for 78 percent of the total emissions increase from 1970 to 2010. A British government report said there was an increasing body of evidence to suggest changes in global weather patterns are "consistent with what is expected from the fundamental physics of a […]

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Sanctions cost Russia at least $40 billion

Russian economy crumbling during long presidency of Vladimir Putin. UPI/Luo Xiaoguang/Pool Oil has shed at least a quarter of its value since June because of slow economic recovery and an increase in production from North American shale. For a Russian economy dependent on oil revenue, sanctions imposed in response to the Kremlin’s policies in Ukraine have made a difficult market situation worse . "What happened for the economy? We lose at least $40 billion a year due to the political sanctions and at least $90 billion – $100 billion annually due to the oil price fall by 30 percent," Finance Minister Anton Siluanov said. An early November report from the European Commission said the Russian economy started to show signs of recovery in late 2013, though confidence in the Russian investment climate has evaporated in 2014. Separately, the World Bank said there are "substantial risks" to the Russian economy […]

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Brent Oil Trades Near Highest in 7 Days as Iran Seeks Cut

Brent crude traded near the highest closing price in seven sessions amid signs that Iran will seek an output cut at OPEC’s meeting this week. West Texas Intermediate was steady in New York . Futures climbed as much as 0.6 percent before paring gains to trade little changed in London. Iranian Oil Minister Bijan Namdar Zanganeh may propose that the Organization of Petroleum Exporting Countries trim supply by 1 million barrels a day when he meets with Saudi Arabia ’s Ali Al-Naimi before the group gathers on Nov. 27, according to Iran’s state-run Mehr News agency. There’s a 60 percent chance that the exporters’ group will cut production by 1 million to 1.5 million barrels a day, according to Societe Generale SA. Oil is trading in a bear market as the U.S. pumps at the fastest rate in more than three decades amid signs of weakening demand. Leading OPEC […]

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OPEC Division Spurs Hedge Funds to Trim Bullish Oil Bets

A driver monitors equipment while delivering 7,500 gallons of unleaded gasoline to a… Read More Hedge funds turned less bullish on crude oil as OPEC failed to signal it will act to halt the collapse that drove prices to a four-year low. Money managers reduced net-long positions in West Texas Intermediate by 4.1 percent in the week ended Nov. 18, U.S. Commodity Futures Trading Commission data show. Long positions sank to an 18-month low. Outstanding futures contracts dwindled to the lowest level in more than two years. Members of the Organization of Petroleum Exporting Countries will meet in Vienna on Nov. 27 to decide on production after oil plunged 30 percent since June. Leading producers, including Saudi Arabia , are resisting calls to reduce output while others such as Venezuela seek action to support prices. The 20 analysts surveyed last week by Bloomberg are perfectly divided, with half predicting […]

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OPEC’s Easy Days Setting Oil Production Are Over, Veteran Says; You Need Russia, Norway, Mexico

The days when OPEC members could almost guarantee consensus when deciding production levels for oil are long gone, according to a veteran of almost two decades of the group’s meetings. The global glut of crude, which has contributed to a 30 percent decline in prices since June 19, has left the organization dependent on non-members to shore up the market, said former Qatari Oil Minister Abdullah Bin Hamad Al Attiyah. The 12-member Organization of Petroleum Exporting Countries is scheduled to meet in Vienna on Nov. 27. “OPEC can’t balance the market alone,” Al Attiyah, who participated in the group’s policy meetings from 1992 to 2011, said in a Nov. 19 phone interview. “This time, Russia , Norway and Mexico must all come to the table. OPEC can make a cut, but what will happen is that non-OPEC supply will continue to grow. Then what will the market do?” Global […]

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US oil imports from Opec at 30-year low

©AFP US imports of crude oil from Opec nations are at their lowest level in almost 30 years, underlining the impact of the shale revolution on global trade flows. The lower dependence on imports from the cartel, which pumps a third of the world’s crude, comes amid advances in hydraulic fracturing that has propelled domestic US production to about 9m barrels a day – the highest level since the mid-1980s. In August, Opec’s share of US crude oil imports dropped to 40 per cent – accounting for 2.9m b/d – the lowest since May 1985, according to Financial Times analysis of US Department of Energy data. At its 1976 peak it stood at about 88 per cent. The decline in US appetite for foreign oil, alongside expanding eastern demand, has meant producers from the Middle East, west Africa and Latin America have turned towards Asia. But despite the shale […]

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Iran Nuclear Negotiators, Facing Key Differences, Weigh Extending Deadline

VIENNA — With a deadline for an agreement to curb Iran’s nuclear program just a day away, American officials finally acknowledged Sunday that the two sides would not reach a deal by Monday’s deadline but would probably extend the talks a second time to explore a series of possible solutions. It was unclear how long the talks would be prolonged or what additional sanctions relief Iran might receive as negotiators wrestled with differences such as how much nuclear fuel Iran could produce, how long the accord would last and how intrusive inspections would be, among other issues. Secretary of State John Kerry raised the idea of extending the talks in a meeting Sunday night with Mohammad Javad Zarif, Iran’s foreign minister. It was not clear whether a document detailing new points of convergence would be issued Monday in return for an extension in the talks.  “Our focus remains on taking steps forward toward an […]

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Israel reconsiders military action against Iran

4728 Votes Israeli official cites “sunset clause” in proposed comprehensive deal, which guarantees Iran a path into the nuclear club and may corner Israel into war. Israel Air Force planes fly over Tel Aviv. Photo By: IDF SPOKESPERSON’S UNIT Historic negotiations with Iran will reach an inflection point on Monday, as world powers seek to clinch a comprehensive deal that will, to their satisfaction, end concerns over the nature of its vast, decade-old nuclear program. But sharing details of the deal under discussion with The Jerusalem Post on the eve of the deadline, Israel has issued a stark, public warning to its allies with a clear argument: Current proposals guarantee the perpetuation of a crisis, backing Israel into a corner from which military force against Iran provides the only logical exit. The deal on the table World powers have presented Iran with an accord that would restrict its nuclear […]

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No Iran Nuclear Deal Seen by Monday Deadline

Russian Foreign Minister Lavrov, left, meets his German counterpart. ENLARGE Russian Foreign Minister Lavrov, left, meets his German counterpart. European Pressphoto Agency VIENNA—The U.S. and other world powers said it will be virtually impossible to reach a comprehensive deal to curb Iran’s nuclear activities by the Monday night deadline, and they would favor extending the talks. U.S. officials are arguing that preserving improved relations with Tehran is preferable to a breakdown in more than a year of direct negotiations and a potential escalation of tensions in an already-fractious Middle East. However, an extension looks headed for stiff resistance from both Democratic and Republican U.S. lawmakers, who are questioning what the White House believes it can achieve in a few additional months of talks that it couldn’t in a year. U.S. Secretary of State John Kerry backed the idea of an extension even without a core political document that would […]

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Oil-Price Slide Won’t Deter Saudi Aramco From Expansion Strategy

Saudi Arabian Oil Co. will push ahead with plans to expand and integrate its refining and chemicals businesses even amid the decline in oil prices, Chief Executive Officer Khalid Al-Falih said. The state-run oil company , known as Saudi Aramco , has a target of producing petrochemicals from 10 percent of all crude processed at its refineries, he said at an industry conference in Dubai. Oil producers in the Persian Gulf can withstand a period of low crude prices because countries in the region are fiscally strong, Al-Falih said. Brent crude , a global benchmark, has tumbled 30 percent this year. “For a refiner to be profitable, integration with petrochemicals is very essential,” he said today. Middle Eastern oil and natural gas producers are expanding petrochemical and refining operations to make fuel and other products that fetch higher prices than crude. Boosting petrochemical output is a long-term strategy for […]

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Iran May Propose Million-Barrel Daily OPEC Cut in Saudi Talks

Iran may propose that OPEC cut its output target by as much as 1 million barrels a day to halt the slide in crude prices when the country’s oil minister consults with his Saudi counterpart before the group gathers this week. Bijan Namdar Zanganeh and Saudi Arabia ’s Oil Minister Ali Al-Naimi will talk on the sidelines of the meeting in Vienna of the Organization of Petroleum Exporting Countries, seeking to define a common view among its 12 members for supporting prices, Iran’s state-run Mehr News agency reported, without saying where it got the information. An official in Iran’s oil ministry didn’t immediately comment when contacted by phone yesterday. OPEC, supplier of about 40 percent of the world’s oil, will meet Nov. 27 in the Austrian capital to assess its collective output amid a supply glut and a 27 percent drop in prices this year. Half the analysts in […]

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Iraqi troops retake 2 towns in eastern province

BAGHDAD (AP) — Iraqi troops backed by Shiite militiamen and Kurdish security forces recaptured two towns seized previously by militants in an eastern province, said Iraqi officials on Monday, a new victory for Iraqi security forces in their attempt to regain areas lost to the militants. Police officials in Diyala province said that Iraqi forces entered the towns of Saadiya and Jalula late Sunday after fierce clashes with fighters from the Islamic State group. The fighting is still continuing with some pockets of resistance outside the two towns, said the police officials. Teams defusing unexploded ordnance are working to defuse roadside bombs planted in the streets by the militants before their withdrawal. Some families that fled the area have already started to come back to their homes in the two towns. Kurdish security forces, known also as peshmerga took part in the fighting against the IS group in both […]

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Control of Syrian Oil Fuels War Between Kurds and Islamic State

A man from the Syrian village of Ali Agha near the border with Iraq digs… ENLARGE A man from the Syrian village of Ali Agha near the border with Iraq digs a hole for a new kiln to refine crude oil. Residents have pledged to support Kurdish forces in exchange for discounted crude oil that they refine into fuels sold to black-market traders. Sam Dagher/The Wall Street Journal AL-YAROUBIYAH, Syria—Plumes of black smoke billow on the horizon of this border town in northeast Syria, a thumb-shaped corner of the country that pokes into neighboring Turkey and Iraq. The smoke isn’t from war, but it rises from the deadly fight over resources between Islamic State and Kurdish fighters. Men, women and children operate thousands of primitive metal kilns to refine crude oil distributed by the warring sides to buy loyalty. Residents sell the fuel they make to black-market traders. With […]

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Nigeria: FG to Cut Petrol Subsidy By Half in 2015

The Federal Government has said it plans to cut subsidies on petroleum products by half next year after sharp falls in global crude prices, spurred a reversal of its 2015 budget downwards. President Goodluck Jonathan submitted the revised budget figures to lawmakers last week, proposing to spend 458.68 billion naira ($2.59 bln) on petrol subsidy in 2015, down from 971.14 billion naira presented for 2014. It also assumed further cuts to petrol subsidies in 2016 to 408.68 billion naira and 371.18 billion naira for 2017. The Minister of finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala has proposed lowering the assumed benchmark oil price for the 2015 budget to $73 per barrel from the $78 proposed in September, after global crude prices collapsed. Ngozi Okonjo-Iweala told Reuters last week that declines in the price of oil, which has lost almost 30 percent since July, would impact the […]

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Statoil Takes $350M Hit on Angola Exploration Halt

Norway’s Statoil is halting exploration in Angola after poor drilling results, retreating from an offshore area it had high hopes for and capping a poor year for exploration. OSLO, Nov 21 (Reuters) – Norway’s Statoil said on Friday it was halting exploration in Angola after poor drilling results, retreating from an offshore area it had high hopes for and capping a poor year for exploration. Statoil said it was cancelling a three-year contract with Stena Drilling, handing back a drilling ship two years early and taking a $350 million charge in the fourth quarter related to the contract, the drilling and the value of the Angolan blocks. Statoil had high hopes for Angola’s offshore pre-salt blocks 38 and 39 because the geology is similar to Brazil’s, where major oil discoveries have been made in similar rocks. "Statoil’s first well results from the area have been disappointing and although the […]

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Anton, Schlumberger Venture to Cut Size by Firing Workers

An oilfield service venture set up by Schlumberger Ltd. (SLB) and Anton Oilfield Services Group (3337) is considering cutting costs because of the partnership’s slow progress. Sichuan-based Tongzhou IPM Services Co., set up in September 2012, is trying to cut operating costs and could reduce the number of workers, said Wang Bo, Anton’s Hong Kong-based spokesman. The move doesn’t imply that Anton and Schlumberger, the world’s largest oilfield-services provider, plan to shut the venture. “We think the unit could still be competitive in the oilfield-services market if we improve efficiency, control cost and react more quickly to market demand,” Wang said. Schlumberger’s Houston-based spokesman Joao Felix declined to comment and referred all questions to Anton. Schlumberger’s plan to take advantage of China ’s shale gas push and establish a presence in the resource-rich Sichuan province will take a blow should Tongzhou be dismantled. It may also add to troubles […]

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China holds out hope for Iran nuclear deal

VIENNA (AP) — Talks on Iran’s nuclear program appear likely to run beyond their Monday midnight deadline, but China’s foreign minister says negotiators are still working on elements of a deal. U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif agreed Sunday to start discussion on continuing the talks past the target date But Chinese Foreign Minister Wang Yi says negotiators are still having "consultations" on a final agreement that meets both U.S. demands for strict curbs on Tehran’s nuclear program and Iran’s push for sanctions relief. Wang arrived Monday, joining the foreign ministers of the other countries negotiating with Iran – the U.S., Russia, Britain, France and Germany.

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Beijing Considers How to Harness the Wind to Blow Away Pollution

Photo Smog returned to Beijing after emergency measures to clear the air during the Asia-Pacific Economic Cooperation summit meeting were lifted. Credit Fred Dufour/Agence France-Presse — Getty Images When Beijing experiences bouts of pollution that blacken the skies and burn the lungs, residents often joke that the Chinese capital needs to build giant fans to clear out the toxic air. Mountains to the north and west help trap smog in the city, and a stiff breeze from Mongolia is the surest way to ensure somewhat cleaner air. Beijing officials are now considering ways to help that process. Though giant fans are not on the menu, at least not yet, city planners are looking at ways to create corridors that encourage wind flow through the capital. The plan is inspired by research on urban heat islands, which shows that large buildings that block the wind are one of the causes […]

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Despite Persecution, Guardian of Lake Tai Spotlights China’s Polluters

ZHOUTIE, China — By autumn, the stench of Lake Tai and the freakish green glow of its waters usually fade with the ebbing of the summer heat, but this year is different. Standing on a concrete embankment overlooking a fetid, floating array of plastic bottles, foam takeout containers, flip-flops and the occasional dead fish, Wu Lihong, the lake’s unofficial guardian, shook his head in disgust. “If you jumped into this water, you’d shed a layer of skin,” he said one recent afternoon. “The government claims they are cleaning up the lake, but as you can see, it’s just not true.” Seven years after a toxic algae bloom forced millions of people who depended on the lake to find alternative sources of drinking water, Lake Tai, which straddles two provinces in the Yangtze River delta, remains a pungent symbol of China ’s inability to tackle some of its most serious […]

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China’s October crude imports from Iran surge 36% on year to 340,027 b/d

Singapore (Platts)–24Nov2014/108 am EST/608 GMT China’s crude imports from its major suppliers, including Iran, rose significantly in October versus a year ago, save for top exporters Saudi Arabia and Angola, detailed data from the General Administration of Customs showed Saturday, November 22. Crude imports from Iran last month surged 35.5% from a year earlier to 1.44 million mt, or an average 340,027 b/d. Iran, however, remained China’s sixth-largest supplier of crude oil last month, accounting for 6% of its total imports. China imported less crude from Saudi Arabia and Angola in October despite its total crude imports rising 18% from a year earlier to 5.7 million b/d. Saudi volumes inched down 0.7% year on year to 4.56 million mt while Angolan cargoes fell 5.6% to 3.04 million mt last month. Article continues below… Platts Oil Roundtable Podcast: Higher crude prices see Saudis losing market share in China, India Yen […]

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China’s October pipeline gas imports rise 9% on year to 2.75 Bcm

Singapore (Platts)–24Nov2014/106 am EST/606 GMT China imported 2 million mt of natural gas via pipelines in October, up 8.8% from a year earlier, data released Saturday, November 22, by the country’s General Administration of Customs showed. China’s customs department reports natural gas trade data in metric tons, similar to LNG imports. The October inflow works out to about 2.75 billion cubic meters of pipeline gas, a 0.9% increase from September. Despite the overall increase, China’s gas imports from Turkmenistan in October fell 20.8% year on year and 23.7% month on month to 1.29 million mt, while imports from Uzbekistan jumped 34.9% year on year to 240,379 mt. China’s gas imports from Turkmenistan and Uzbekistan are transported through the Central Asia-China gas pipeline network that links with state-owned China National Petroleum Corp.’s Second West-East Pipeline in western Xinjiang province at the border with Kazakhstan. Chinese gas pipeline imports from Kazakhstan, […]

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Utilities Press Railroad to Speed Coal Deliveries

A BNSF train waits on the tracks near a Becker, Minn., power plant. Rail congestion… ENLARGE A BNSF train waits on the tracks near a Becker, Minn., power plant. Rail congestion has slowed deliveries. Minneapolis Star Tribune/Zuma Press Saying they are running short on coal, electric utilities from Minnesota to Texas are trying to pressure Warren Buffett ’s BNSF Railway Co. to speed up deliveries on its congested tracks before the worst of the winter weather hits. One group of utilities has petitioned federal regulators to impose a timetable on BNSF to add workers and improve tracks leading east from coal fields in Wyoming. Utilities also are negotiating directly with BNSF. In Minnesota, politicians and regulators warn that consumers could pay millions of dollars in extra charges if utilities have to buy high-cost backup power because they can’t operate their coal-fired power plants. BNSF, which is owned by Berkshire […]

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Getting in on the Water Rush

4728 Votes Getting in on the Water Rush Scramble for groundwater lures driller back into business Among critics of our society’s reliance on petrochemicals, there’s long been talk that we are nearing “peak oil” — the beginning of the end of oil reserves. Then came the fracking bonanza, and — bam! — U.S. oil supplies gained a new lease on life. The peak oil buzz died down. Maybe the critics should be talking about “peak water” in the San Joaquin Valley instead. Growers pumped out huge amounts this past summer to keep their productivity up amid drought, and they’re likely to do so again in 2015 — if they can afford it. Everybody paying attention to the situation senses that the game will be up for the Valley’s powerhouse agricultural machine if extreme drought continues, but few know it as clearly as Hanford resident Robert Carvalho. The wily 75-year-old businessman has worn a […]

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The Red Army sell signal

THREE times in the last 35 years, Russian military forces have crossed international borders – in Afghanistan in 1979, Georgia in 2008 and the Crimea earlier this year. As Simon Derrick, the currency strategist at BNY Mellon points out, each occasion coincided with a peak in the oil price. And each incursion was followed by a very sharp fall in the price of crude (see chart). Now of course, one can’t say the Russian actions caused the oil price fall. However the oil price peaks, by boosting the economy, may have bolstered the confidence of Soviet/Russian leaders and thus encouraged the military action. The subsequent declines simply show that the Russian government has very bad timing.  Indeed the weakness of oil in the 1980s (and the sapping effect of the Afghan conflict on morale) played its part in the downfall of the Soviet empire; this time round, the Russian […]

Posted On : Published By : ASPO-USA
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Where Is U.S. Energy Policy Heading Over the Next Two Years?

With the Republican Senate takeover, President Obama, here with future Senate Majority Leader Mitch McConnell… ENLARGE With the Republican Senate takeover, President Obama, here with future Senate Majority Leader Mitch McConnell and House Speaker John Boehner, will face heightened resistance to his environmental policies. Getty Images Next year’s Republican-controlled Senate is expected to come out strongly against President Barack Obama ’s most consequential policies aimed at reducing the effects of climate change. The GOP-controlled House already has spent the past few years passing legislation curtailing Environmental Protection Agency regulations. Now the Senate’s next majority leader, Mitch McConnell of Kentucky, is poised to put the upper chamber in lock step with the House on infrastructure and energy-efficiency bills as well. To get a sense of where energy and environmental policy might be headed in the next Congress, The Wall Street Journal reached out to policy advocates on opposite sides of […]

Posted On : Published By : Tom Whipple
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Where Oil and Politics Mix

Jim Wilson/The New York Times TIOGA, N.D. — In late June, as black and gold balloons bobbed above black and gold tables with oil-rig centerpieces, the theme song from “Dallas” warmed up the crowd for the “One Million Barrels, One Million Thanks” celebration. The mood was giddy. Halliburton served barbecued crawfish from Louisiana. A commemorative firearms dealer hawked a “one-million barrel” shotgun emblazoned with the slogan “Oil Can!” Mrs. North Dakota, in banner and crown, posed for pictures. The Texas Flying Legends performed an airshow backlit by a leaping flare of burning gas. And Gov. Jack Dalrymple was the featured guest. Traveling through the “economically struggling” nation, Mr. Dalrymple told the crowd, he encountered many people who asked, “Jack, what the heck are you doing out there in North Dakota?” to create the fastest-growing economy, lowest unemployment rate and (according to one survey) happiest population. Gov. Jack Dalrymple with […]

Posted On : Published By : Tom Whipple
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Bakken Sweet Spots are Petering Out

The Bakken, as well as other shale oil areas, is not one homogeneous area where equal amounts of can be found. David Hughes in DRILLING DEEPER  puts it this way, though here he is talking about gas wells, the same applies to oil wells: All shale gas plays invariably have “core” areas or “sweet spots”, where individual well production is highest and hence the economics are best. Sweet spots are targeted and drilled off early in a play’s lifecycle, leaving lesser quality rock to be drilled as the play matures (requiring higher gas prices to be economic); thus the number of wells required to offset field decline inevitably increases with time. However the Bakken, at least through the September North Dakota Industrial Commission  production report, has given no real indication that the Bakken is even close to peaking. But a closer look at the data makes me believe that is […]

Posted On : Published By : Tom Whipple
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Natural Gas Boom Is Drowning Out Coal Industry’s Battle Cries

4729 Votes Natural Gas Boom Is Drowning Out Coal Industry’s Battle Cries While a lot of the political fodder during the 2014 election season focused on the “war on coal,” a bigger and even stronger show of force is transforming the nation’s economic landscape, especially in “war torn” Appalachia: natural gas. The natural resource has emerged from the back burner of U.S. energy development and onto the hot seat. Over the last seven years, it has not only fueled new economic growth but it has also changed the way electricity is generated. Beyond the newfound abundance — a result of shale gas drilling technologies — the manufacturing sector has subsequently boomed. To be clear, dry natural gas can be used for electric generation. Wet natural gas, or natural gas liquids that include methane, ethane butane and propane, are separated from the dry gas. Those elements are then used as […]

Posted On : Published By : Tom Whipple
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Energy Minister: Russia Mulls Oil Output Cut, No Decision Yet

Russia may cut oil production to shore up flagging prices, but its ability to change output is limited and no decision has been made yet, its energy minister said, underlining Moscow’s desire for a higher oil price. MOSCOW, Nov 21 (Reuters) – Russia may cut oil production to shore up flagging prices, but its ability to change output is limited and no decision has been made yet, its energy minister said, underlining Moscow’s desire for a higher oil price. Before OPEC meets next week, Russia has already spoken to members Venezuela and Saudi Arabia about the need to support the oil market, and Moscow expects to send a high-ranking delegation to Vienna before the meeting to press the message on prices. Russia’s already weak economy has been hit by the falling price of oil, which together with natural gas generates half of state revenue. A price of at least […]

Posted On : Published By : Tom Whipple
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Why Crude Oil $80 Is the New Normal, Reasons Saudi Arabia Will Not “Swing”

4729 Votes Now the dust from the Shock & Awe of the 30% drop in oil prices has started to settle, two things are clear: (a) Saudi Arabia did not engineer anything (b) they don’t have a Machiavellian plan to stick one up the wildcatters in North Dakota, or the Russians…the Iranians…the Venezuelans, or even the genius from the Daily Telegraph who was bemoaning the fact that if oil prices go down it will be hard to import inflation into U.K. Here are five good reasons why they are going to pass on the opportunity to slash their oil production by 30% so that other OPEC members can cheat and make a windfall, like they all did in 1987/8. 1. Read My Lips Since oil prices jumped from $80 to $110 in early 2011 the Saudi’s have been saying, over, and over and over again, that oil was over-priced […]

Posted On : Published By : Tom Whipple
Category: Uncategorized

Yergin: OPEC Underestimated Resiliency of U.S. Oil Output

4728 Votes OPEC was mistaken in thinking that U.S. shale oil production would be unprofitable once crude prices slipped below $90 a barrel, according to Pulitzer Prize-winning author Daniel Yergin. The Organization of Petroleum Exporting Countries will have a tough time coming to an agreement about production when ministers gather Nov. 27 in Vienna, said the vice-chairman of IHS Inc., an Englewood, Colorado-based consultant. Oil prices plunged into a bear market last month, the result of a surge in shale drilling that lifted U.S. output to a three-decade high, as OPEC output rose and there were increasing signs of slower demand growth. “One of the big surprises for many is how resilient the shale oil sector is in the United States because of technology, efficiency,” Yergin said in an interview today after speaking at the 10th Annual Columbia University Energy Symposium in New York. “The speed with which it’s […]

Posted On : Published By : Tom Whipple
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Crude Rises as China Rate Cut Spurs Optimism About Demand

West Texas Intermediate and Brent crudes increased after China , the world’s second-largest oil-consuming country, cut interest rates to bolster its economy. WTI rose 0.9 percent and Brent 1.3 percent after the People’s Bank of China lowered lending and deposit rates for the first time since 2012. Half of the 20 analysts surveyed by Bloomberg News predict the Organization of Petroleum Exporting Countries will reduce output at a meeting next week, while the rest forecast no change. “The Chinese announcement ambushed everyone and we’re seeing all the markets react,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York , said by phone. “The interest rate cut is leading to the perception that fuel demand will gain.” WTI for January delivery advanced 66 cents to settle at $76.51 a barrel on the New York Mercantile Exchange . Prices rose 0.9 percent this week, the […]

Posted On : Published By : Tom Whipple
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Oil Prices Jump on China’s Surprise Rate Cuts

By Tim Puko And Cassie Werber NEW YORK–Oil prices jumped Friday after China surprised the market by cutting interest rates, fanning hopes of increased demand from the world’s second-largest crude consumer. The news came at a key time for oil. Prices had fallen 30% since June on worries about global production outpacing demand, and there is a growing expectation that the Organization of the Petroleum Exporting Countries will announce production cuts when the cartel meets next week. A stimulus for the Chinese economy is something that brings macroeconomic investors into all kinds of commodity markets, oil included, said Andrew Lebow, senior vice president for energy derivatives at Jefferies Bache LLC. With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said. "No question I think the market was excited today," Mr. Lebow said. "The […]

Posted On : Published By : Tom Whipple
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Crude futures settle higher on China rate cut, OPEC scrutiny

New York (Platts)–21Nov2014/405 pm EST/2105 GMT The ICE January Brent futures contract settled $1.03 higher at $80.36/b Friday after a surprise interest rate cut by the Chinese central bank lifted hopes the world’s second largest economy could grow faster. Crude benchmarks on both sides of the Atlantic closed at their highest levels since November 12. NYMEX January crude futures ended the session 66 cents higher at $76.51/b. NYMEX refined products also rallied. December ULSD futures settled 2.45 cents higher at $2.4045/gal, while front-month NYMEX RBOB futures closed 2.89 cents higher at $2.0565/gal. The People’s Bank of China unexpectedly cut benchmark interest rates for the first time since the summer of 2012 in an attempt to revive economic growth after a string of disappointing data, AFP reported. Article continues below… Listen every Monday to Capitol Crude: The Platts US Oil Policy Podcast Every Monday, Capitol Hill newshounds Herman Wang and […]

Posted On : Published By : Tom Whipple