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Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale

Oil headed for the biggest annual decline since the 2008 global financial crisis as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut. Futures slid as much as 1.8 percent in New York , bringing losses for 2014 to 46 percent. U.S. guidelines allowing overseas sales of ultralight oil without government approval may boost the country’s export capacity and “throw a monkey wrench” into Saudi Arabia ’s plan to curb American output, according to Citigroup Inc. U.S. crude inventories are forecast to rise to the highest level for this time of the year in three decades. Oil’s slump has roiled markets from the Russian ruble to the Nigerian naira and squeezed government budgets in producing nations including Venezuela and Ecuador . It’s also boosted China ’s emergency crude reserves and helped shrink fuel subsidies in India […]

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Hedge Funds Surrender to Oil Rout as Bullish Bets Drop

Hedge funds finally pulled back from bets on higher oil prices as the market faces its worst year since 2008. Speculators reduced their net-long position in West Texas Intermediate crude for the first time in four weeks, cutting their holdings by 5 percent in the week ended Dec. 23, Commodity Futures Trading Commission data showed yesterday. Long wagers dropped the most since August. Prices have tumbled to the lowest level in more than five years as U.S. output climbed and the Organization of Petroleum Exporting Countries refused to make production cuts. The International Energy Agency and U.S. Energy Information Administration cut their estimates of 2015 global fuel consumption this month amid expectations for slower economic growth outside the U.S. “The weak physical fundamentals have weighed on the market,” Tim Evans , an energy analyst at Citi Futures Perspective in New York , said by phone. “OPEC’s shift from a […]

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Oil falls below $57, heads for biggest annual drop since 2008

LONDON (Reuters) – Oil dropped below $57 a barrel on Wednesday and was heading for its biggest annual decline since 2008, pressured by weakening demand and a supply glut prompted by the U.S. shale boom and OPEC’s refusal to cut output. Global benchmark Brent crude has fallen 49 percent in 2014 as demand growth slowed, the United States expanded output and OPEC, dropping its strategy of trimming supply to keep oil around $100 a barrel, chose instead to defend market share. On Wednesday, prices came under pressure from a survey showing China’s factory sector shrank for the first time in seven months in December – a bearish indication on the strength of oil demand in the world’s second-largest consumer. "Clearly, demand concerns are one of the issues for the oil market," said Michael McCarthy, chief market strategist at CMC Markets. Brent was down $1.00 at $56.90 by 0917 GMT, […]

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Oil Drops to Lowest Since ’09 With Stockpiles at Year-End Record

Oil fell to the lowest since 2009 in New York and London amid speculation that U.S. crude inventories will stay at the highest for the time of year in at least three decades. Futures dropped as much as 1.7 percent in New York. U.S. stockpiles are projected to remain at 387.2 million barrels last week, the highest for the period in data going back to 1982, a Bloomberg News survey shows before government statistics tomorrow. U.S. oil drillers idled the most rigs since 2012, Baker Hughes Inc. said on its website yesterday. Oil has slumped 46 percent this year, set for the biggest annual decline since 2008, as the highest U.S. production in more than three decades contributed to a global surplus estimated by Qatar at 2 million barrels a day. Saudi Arabia , which is steering the Organization of Petroleum Exporting Countries to resist cutting output, has said […]

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Natural Gas Falls Ahead of Inventory Report

By Nicole Friedman NEW YORK–Natural gas prices skidded Tuesday on expectations of continuing moderate demand for the heating fuel. Natural gas for February delivery fell 10.5 cents, or 3.3%, to $3.094 a million British thermal units on the New York Mercantile Exchange. Prices had surged 6% on Monday on expectations that frigid weather would boost demand for natural gas to heat homes and offices. But updated forecasts released Tuesday pointed to slightly warmer weather in the South, West and Pacific Northwest, according to private forecaster Commodity Weather Group LLC. Traders are also looking ahead to weekly inventory data on Wednesday, which is expected to show that natural gas inventories fell by less than typical levels for this time of year. Natural gas supplies fell to 11-year lows at the end of last winter as frigid weather fueled record-high demand. However, production exceeded expectations this summer, allowing producers to refill […]

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A Binding Global Agreement on Climate Change Will Remain Elusive

Heavy smog darkens the skies over Beijing in November 2014. (Kevin Frayer/Getty Images) Summary Organizing a significant, global legal agreement at the U.N. Climate Summit in Paris in late 2015 will not be easy. Every country has its own priorities; for some, imposing constraints on economic growth by limiting greenhouse gas emissions is a political nonstarter. For others, moving toward renewable energy sources and limiting certain environmental risks — such as smog or rising sea levels  — are top priorities. The 2014 U.N. Climate Summit in Lima, Peru, has helped to maintain some momentum for a climate agreement ahead of the Paris meeting, but if any deal is reached, it will be watered down and will lack concrete enforcement measures. Analysis The countries that participated in the 2011 U.N. Climate Summit in Durban, South Africa, signed a pact to work toward a legal agreement that would be signed at […]

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OPEC Resolve on Supply Promises No Calm for Oil Markets: Energy

Oil’s biggest price swings in three years are poised to continue as OPEC cedes no ground to competing suppliers. Oil traders’ expectations for future swings, known as implied volatility, surged since Saudi Arabia and fellow members of the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep pumping crude despite a supply glut. That will mean prices fluctuating in the next several years by even more than the $58-a-barrel move in 2014, Bank of America Corp. says. “OPEC has always been there to lower volatility both on the upside and downside, but now they have less and less weight,” said Pierre Andurand , the London-based founder of Andurand Capital Management LLP, whose $350 million fund earned 18 percent in November from betting on lower Brent crude prices. “It means more volatility.” OPEC’s policy of testing rival producers’ tolerance for lower prices has sparked the search for a […]

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Basra leaders pushing for regional autonomy

Iraqi Prime Minister Haider al-Abadi (left) with Basra Gov. Majid al-Nasrawi (center) having tea on the street in Basra city on Dec. 29, 2014. Abadi is attempting to slow down the Basra campaign to create an autonomous region. (Source: Iraqi Prime Minister’s Media Office) Leaders in Basra are making a renewed push to form a region akin to the autonomous Kurdistan Regional Government (KRG) – a move that would reduce the central government’s power over the engine of Iraq’s economy.The campaign comes as Basrawis grow increasingly impatient with Baghdad, which has delayed implementing revenue sharing provisions for Basra while simultaneously making budget concessions to the KRG. Prime Minister Haider al-Abadi is taking the threat seriously enough that he met wi…

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Guard of Libyan Oil Ports Calls In Strikes on Islamist Militias

Libyan oil production has fallen below 300,000 barrels a day after Islamist militants shifted attacks to energy facilities including the country’s largest oil export terminal, said Energy Aspects Ltd. Output is the lowest since May and down at least 65 percent from a recent high of 850,000 barrels a day in October following the assault on the Es Sider terminal, according to the Energy Aspects estimate. Libya holds Africa ’s largest oil reserves. The fighting last week marked a turning point in the unrest that followed Muammar Qaddafi’s 42-year rule, according to Energy Aspects and Eurasia Group consultants. All the factions, including the Islamist militia coalition known as Libya Dawn, had committed to spare the energy industry that provides 80 percent of public spending. “The latest phase in fighting is a serious development as Libya Dawn is now trying to gain control of oil facilities, which up to now […]

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Wintershall shuts oil operations in Libya

German energy company Wintershall suspends operations in Libya amid escalation of fighting near oil export terminals. UPI/Mohamaad Hosam TRIPOLI, Libya, Dec. 30 (UPI) — With fighting ongoing in and around Libya oil export facilities, German energy company Wintershall said it had to suspend operations until further notice. "Wintershall traditionally transports oil produced in the Libyan desert to the export facilities in the coastal towns of Ras-Lanuf and Zuetina," the German company said in a Monday statement. "Wintershall does not deliver oil to Es Sider, where export facilities are on fire at this time after intense fighting." The U.N. Support Mission in Libya during the weekend called on all parties involved in the fighting to work together to end what it said was a cycle of violence spiraling quickly toward war. Oil storage depots at the Es Sider port caught fire during weekend fighting. Ahmed al-Mismari, a spokesman for the […]

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Saudi King undergoing medical tests in Riyadh hospital: state TV

DUBAI (Reuters) – Saudi Arabia’s elderly King Abdullah bin Abdulaziz was admitted to a hospital in the capital Riyadh on Wednesday for medical tests, state media reported on Wednesday, citing a royal court statement. King Abdullah was born in the court of his father, King Abdulaziz Ibn Saud, in the early 1920s. The softly-spoken monarch, who took power in 2005 after the death of King Fahd, has undergone surgery in the past few years related to a herniated disc. "The Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz, may God keep him, entered today Wednesday … the King Abdulaziz Medical City of the National Guard in Riyadh to undergo some medical tests," the statement said, according to state news agency SPA. State media last week reported that King Abdullah had left Riyadh for his desert farm at Rawdat Khuraim northeast of the capital. (Writing by Yara Bayoumy; […]

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Gazprom Neft hails oil success in Iraq

Russian oil company Gazprom Neft said third oil well now in service in Badra field in Iraq. (Photo: Gazprom Neft) Gazprom Neft said a third well now in service at the Badra oil field in Iraq ensures a production level of at least 15,000 barrels per day. The Russian company said it brought its third well into production under the terms of a contract concluded previously with its Chinese counterparts at Zhongman Petroleum and Natural Gas Group. The company, the oil arm of Russian gas company Gazprom, brought Badra online in late 2013 and testing of new pipeline infrastructure to the export terminal at Basra began in May. The Russian company said the terms of its Iraqi contract call for the eventual production of 170,000 bpd. The Russian company said investors in November reached agreements with the Iraqi government that reinforces a share of production from the Badra oil […]

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Venezuela accuses US of starting oil war to ‘destroy’ Russia and Venezuela

Venezuela relies on oil revenue for 96 percent of its hard currency reserves, so  the plunging price of oil — which has dropped by half in the past six months to $48 a barrel — threatens to destabilize its economy. President Nicolas Maduro has a theory about what’s behind the sudden drop. "Did you know there’s an oil war?” Maduro asked the leaders of Venezuela’s state-run businesses in a speech Monday in which he accused the United States of trying to flood the market with shale oil. “And the war has an objective: to destroy Russia. It’s a strategically planned war … also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse," Maduro added. The boom in U.S. shale oil production has pushed down oil prices worldwide, from $96 a barrel just six months ago, but Maduro’s comments say more about the pressure on his government […]

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Basra leaders pushing for regional autonomy

Iraqi Prime Minister Haider al-Abadi (left) with Basra Gov. Majid al-Nasrawi (center) having tea on the street in Basra city on Dec. 29, 2014. Abadi is attempting to slow down the Basra campaign to create an autonomous region. (Source: Iraqi Prime Minister’s Media Office) Leaders in Basra are making a renewed push to form a region akin to the autonomous Kurdistan Regional Government (KRG) – a move that would reduce the central government’s power over the engine of Iraq’s economy.The campaign comes as Basrawis grow increasingly impatient with Baghdad, which has delayed implementing revenue sharing provisions for Basra while simultaneously making budget concessions to the KRG. Prime Minister Haider al-Abadi is taking the threat seriously enough that he met wi…

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Shi’ite militias expand influence, redraw map in central Iraq

BAGHDAD (Reuters) – Behind black gates and high walls, Iraqi national security agents watch 200 women and children. Boys and girls play in the yard and then dart inside their trailers, located in a former U.S. military camp and onetime headquarters for Saddam Hussein’s officials in Babel province’s capital Hilla. The women and children are unwilling guests, rounded up as they fled with their male relatives in October from Jurf al-Sakhr, a bastion of Islamic State, during a Shi’ite militia and military operation to clear the farming community. Once they were arrested, security forces separated out the men, accusing them of being Islamic State fighters. They have not been heard from since. Security forces say the women and children are being investigated, but have not been brought to court. Their status shows how central Iraq’s mixed Shi’ite and Sunni regions are being altered. As Shi’ite forces push into territories […]

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Iran Seen Trying to Extend Its Sway Across Middle East in 2015

F or Iran, 2015 is shaping up to be a make-or-break year for two of Supreme Leader Ayatollah Ali Khamenei ’s biggest foreign-policy projects: achieving recognition for the country’s nuclear program and spreading his country’s sway across the Middle East. As the former goal has received most of the international attention, the latter has progressed steadily. “Iran’s biggest asset is staying power and strategic patience,” said Emile Hokayem, an analyst with the International Institute for Strategic Studies. “They’re deploying in the region the expertise and experience they’ve built up over decades.” Yet Iran’s successes have come with major costs that likely will become even more apparent in the coming year. Iranian support and guidance, as well as legions of allied Hezbollah fighters from Lebanon, have been decisive in bolstering the regime of Syrian President Bashar al-Assad. But while Tehran has been girding Mr. Assad against what once looked like […]

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Venezuela pledges to reform currency controls

Venezuelan President Nicolas Maduro speaks during a press conference at Miraflores presidential palace in Caracas on December 30, 2014. Venezuela confirmed Tuesday that it has entered recession, while annual inflation topped 63 percent, exacerbating the outlook for an economy already hit by crippling shortages and crashing oil prices. AFP PHOTO/JUAN BARRETO Nicolás Maduro, Venezuela’s socialist president, pledged to reform tight currency controls as part of a package to revive an oil-dependent economy that is officially in recession trampled by policy paralysis and falling crude prices. “We are going to perfect the currency system,” said Mr Maduro, adding that the details would be revealed in the new year, after putting the blame of the fall in global crude prices on a US-led plan to destabilise Venezuela and, its ally, Russia. Political opponents counter that the anointed successor of the late Hugo Chávez, had stalled on the reforms the Opec country […]

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Indonesia Scraps Gasoline Subsidies

ENLARGE Indonesian motorists line up to fill up their tanks after the government announced an increase in fuel prices in November. Associated Press JAKARTA, Indonesia—Indonesia will scrap gasoline price subsidies starting Thursday as part of President Joko Widodo’s push to free up more funding for infrastructure spending to help boost the economy. At the same time, the price of gasoline will be cut to 7,600 rupiah, or about 61 U.S. cents, a liter from 8,500 rupiah a liter to reflect falling global oil prices, said Energy and Mineral Resources Minister Sudirman Said on Wednesday. State-owned oil and gas company PT Pertamina is the sole seller of gasoline and diesel fuel in Indonesia and will decide on a monthly basis whether to make any changes to the fuel prices, Mr. Said added. The government will continue to subsidize diesel prices , but will fix the amount of the subsidy at […]

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China imposes record fines on corporate polluters

Environmental groups fighting pollution in China got a big boost when a court imposed the country’s biggest environmental fine from public interest litigation against a corporate polluter. On Tuesday Jiangsu provincial high court ordered six unnamed companies to pay a total of Rmb160m ($26m) for emitting waste chemicals into rivers, according to the state news agency. Xinhua reported that the Taizhou City Environmental Protection Association, a public interest group, had brought the suit against the chemical and pharmaceutical companies. The court ordered the polluters to pay the money into an environmental protection fund within 30 days. Several officials of the companies had been sentenced to prison in a criminal ruling in August. Ma Tianjie, Greenpeace East Asia’s programme director for mainland China, said: “This case sets important precedents for environmental governance in China.” “First, “polluters pay’ is no longer just a principle written on paper, and second, that NGOs […]

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US crude pipeline buildout pace to slow amid lower oil prices

New York (Platts)–30Dec2014/259 pm EST/1959 GMT It may be too soon to assess the total impact of falling global crude oil prices on the US oil patch, but the lower price will likely slow the recent fast pace of pipeline buildouts and focus attention on regions where the production plays are most economic. Many oil industry analysts expect to see a slowdown in new midstream projects as production begins to wane, which is expected by the middle of 2015 as drilling slows and many of the hedges producers put in place to manage price risk expire. "In the midstream, in general, there will be some slowdown," said John Hill, CEO of First Reserve, a global private equity investment firm exclusively focused on energy. Reductions in producer capital spending point to slowed drilling going forward, he said. But he notes there will be an "awful lot of Bakken" coming online […]

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U.S. Opening Door to More Oil Exports Seen Foiling OPEC Strategy

The Obama administration’s move to allow exports of ultralight crude without government approval may encourage shale drilling and thwart Saudi Arabia’s strategy to curb U.S. output, further weakening oil markets, according to Citigroup Inc. A type of crude known as condensate can be exported if it is run through a distillation tower, which separates the hydrocarbons that make up the oil, according to U.S. government guidelines published yesterday. That may boost supplies ready to be sold overseas to as much as 1 million barrels a day by the end of 2015, Citigroup analysts led by Ed Morse in New York said in an e-mailed report. Saudi Arabia led the Organization of Petroleum Exporting Countries to maintain its production quota at a meeting last month even as a shale boom boosted U.S. output to the highest in more than three decades. That prompted speculation OPEC was willing to let prices […]

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Alaska governor orders halt to state funds for alternate North Slope natural gas pipeline

Anchorage (Platts)–30Dec2014/302 pm EST/2002 GMT Alaska Governor Bill Walker ordered a halt to state funds being spent on a state-led North Slope natural gas pipeline as a budget contingency, a spokesman for the Alaska Gasline Development Corp said Tuesday. The order affects unencumbered state funds appropriated for a 36-inch pipeline being planned by the state gas corporation as a backup in case an industry-led 42-inch pipeline plan associated with a large LNG export project does not proceed, AGDC spokesman Miles Baker said. "The governor’s order does not affect state funds being spent in support of the larger industry-led project in which the state is a partner," Baker said. The state’s gas corporation is also the entity participating with North Slope producers BP, ConocoPhillips and ExxonMobil and pipeline company TransCanada in the larger project, he said. Walker’s action affects several other large state-funded projects and was taken in view of […]

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House vows to deliver on energy promises

Rep. Fred Upton, R-Mich, vows to advance era of energy abundance as new GOP-led Congress readies to take its seat. UPI/Yuri Gripas. WASHINGTON, Dec. 30 (UPI) — House Republicans will work to create the "architecture of abundance" needed to take advantage of North American energy leadership, a lawmaker said. The House Energy and Commerce Committee published a 105-page strategy document meant to highlight the agenda of the incoming Republican-led Congress. It says federal policies are ill-suited to develop the infrastructure needed to take advantage of the oil and gas production boost in the United States. "Creating this architecture of abundance is slowed at every step by archaic federal rules that can cause years of delays and even block some pipeline and power line projects outright," the paper reads. Rep. Fred Upton, the committee’s chairman, said the new Congress would work to advance its blueprint when it comes into power […]

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More Budget Cuts for Continental Resources

Continental Resources CEO, Harold Hamm For the second time in as many months, Continental Resources announces huge adjustments to its 2015 budget in response to plummeting oil prices. More about Bakken operators slashing budgets for 2015 In a press release before Christmas, the energy giant announced the details including plans to slash their 2015 capital expenditures to $2.7 billion. Additional cuts will come as they decrease the number of operated rigs, which they predict to drop from 50 to approximately 31 operated rigs by the end of 2015. In an interview with Forbes, CEO Harold Hamm explained that the company is taking the necessary precautions to weather this storm and protect bondholders. Seemingly unfazed in his comments, Hamm credits his confidence to his past experience with these types of scenarios. Harold Hamm tells Forbes that “It’s all part of our plan. If prices go down, we are going to cut […]

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U.S. drivers feeling oil stimulus, AAA says

Prices at the pump fall along with oil, though markets outside U.S. may start to suffer, AAA warns. (Graph: AAA Fuel Gauge report) Perceived oversupply in the oil market is bringing relief to U.S. drivers, but may have negative effects elsewhere in the global market, motor club AAA said. AAA reports a retail national average price of $2.27 for a gallon of regular unleaded gasoline. That’s down about 50 cents, or 18 percent, from one month ago and $1.04, or 31 percent, from this date in 2013. Two states, Missouri and Oklahoma, are reporting a state average price per gallon below the $2 mark. The low price at the pump is a reflection of the low price of oil , which for the global benchmark Brent is down close to 50 percent from its yearly peak in mid June. "The global oil market remains in a state of perceived […]

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Oil prices a cause for Scottish concern

Scottish Deputy First Minister John Swinney says oil prices may drag on parts of the economy. (Photo: Scottish government) EDINBURGH, Scotland, Dec. 30 (UPI) — Scotland is concerned about how low oil prices may impact North Sea operations, but is confident about future growth, the deputy first minister said Tuesday. The Scottish government said its economy is on pace to turn in its strongest performance in seven years as well as marking its second straight year of continuous growth. Deputy First Minister John Swinney said the labor market in particular was strong. "Scotland is leading the way with the highest employment and economic activity rates and lowest unemployment rate of the home nations of the United Kingdom," he said in a statement. Though fiscal year 2016, the government said it expects to see $7 billion in new infrastructure investment. Despite the mid-term growth expectations, the government said low oil […]

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Vermont Nuclear Power Plant Shut Down as Industry Evolves

ENLARGE The Vermont Yankee Nuclear Power Station in Vernon, Vt., had been generating electricity since 1972. Associated Press The Vermont Yankee nuclear plant ended more than four decades of electricity production on Monday, moving to full retirement amid growing competition from cheap natural gas from the shale boom. Environmentalists, who had waged a lengthy fight to close the General Electric Type 4 boiling-water reactor, in Vernon, Vt., applauded the news. Others lamented the loss of a source of low-cost, carbon-free electricity and jobs in the region. Owner Entergy Corp. said the Vermont Yankee Nuclear Power Station produced 171 billion kilowatt-hours of electricity since 1972—more than 70% of the electricity generated in Vermont over that period. ISO New England, the agency that oversees the area’s high-voltage electricity grid, already has determined that the region’s power system can reliably operate without Vermont Yankee given other power sources and the interconnectedness of […]

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Oil workers to pay for near 50% price fall

A BP oil and gas platform in the British North Sea Oil prices are on course for their largest annual slide since 2008, capping another dire year for commodities, as crude fell again on Tuesday to hover at close to half its level of six months ago. Brent’s 49 per cent plummet since June — alongside a near halving of iron ore prices and sharp drops in coal and copper — has also helped drag the Bloomberg Commodity index down 15.6 per cent in 2014 to a five-year low. While the international benchmark’s price plunge could prove a significant boon for the global economy, it has thrown big oil exporters such as Russia and Venezuela into disarray, and forced oil companies to re-examine their investment plans and look for ways to reduce costs. In a sign of how the oil majors are scrambling to make savings, BP , Royal […]

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Gazprom buys out South Stream partners

Russian buys out partners in South Stream project meant to splash on the European coast of the Black Sea. (Photo: Gazprom) Gazprom announced it bought out its partners at Italian energy company Eni, French major EDF and Germany’s Wintershall to take full control over the venture. None of the companies involved in the operation disclosed the financial terms of the sale, other than to say they were reimbursed fully for their cash investments . South Stream had an optimum capacity of 2.2 trillion cubic feet per year. It would’ve stretched across the Black Sea to Bulgaria and then north to European markets. Russian officials in mid-December confirmed the project was no longer viable as envisioned in 2007. Instead, Gazprom Deputy Chief Executive Officer Alexander Medvedev said a project dubbed Turkish Stream may take its place in the Black Sea. Fitch Ratings said the South Stream decision reflects low demand […]

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How Putin Forged a Pipeline Deal That Derailed

SOFIA, Bulgaria — Barely two weeks after President Vladimir V. Putin annexed Crimea on one side of the Black Sea, he won a different prize on the other side. In Bulgaria’s Parliament, lawmakers gave initial passage to a bill clearing the way for a mammoth gas pipeline from Russia . The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity. The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. It was a dream bill for […]

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Norwegians Turn Ambivalent on Statoil, Their Economic Bedrock

OSLO — This has not been a particularly good year for Statoil , the huge state-controlled oil company that has had a commanding presence in Norway ’s economy and society for more than four decades. In the spring, Statoil cut 1,000 jobs, or 4 percent of its work force. In September, it postponed a much-criticized project in the Canadian tar sands for at least three years. On Oct. 29, reflecting collapsing oil prices and a steep tumble of its stock, it reported its first quarterly loss since 2001. And in November, it announced disappointing results from the year’s program of drilling for new oil and gas in the Norwegian Arctic. But it is not just the vicissitudes of oil markets and exploratory wells that are causing difficulties for Statoil. In an era of climate change , the company — and by extension Norway’s entire oil and gas industry, which […]

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Oil Prices Continue to Slide on Oversupply Concerns

By Georgi Kantchev LONDON–Oil prices continued their relentless slide on Tuesday on concerns about a growing oversupply of the commodity. Fueled by booming U.S. shale oil production and reluctance from other major producers to cut output, the selloff shows no signs of abating despite news of disruptions in Libya and an apparent scaling back of drilling rigs in the U.S. Front month Brent crude on London’s ICE Futures exchange fell $0.50 to $57.34 a barrel, following a 2.6% drop on Monday. In electronic trading on the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $53.27 a barrel, down 0.7%. "There is a lot of negative sentiment going around despite the holidays, " said Thina M. Saltvedt, senior oil analyst at Nordea Bank in Oslo. According to her, the slide will continue into the New Year and Brent might average $55 in the first […]

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Oil Drops to Lowest Since ’09 With Stockpiles at Year-End Record

Oil fell to the lowest since 2009 in New York and London amid speculation that U.S. crude inventories will stay at the highest for the time of year in at least three decades. Futures dropped as much as 1.7 percent in New York. U.S. stockpiles are projected to remain at 387.2 million barrels last week, the highest for the period in data going back to 1982, a Bloomberg News survey shows before government statistics tomorrow. U.S. oil drillers idled the most rigs since 2012, Baker Hughes Inc. said on its website yesterday. Oil has slumped 46 percent this year, set for the biggest annual decline since 2008, as the highest U.S. production in more than three decades contributed to a global surplus estimated by Qatar at 2 million barrels a day. Saudi Arabia , which is steering the Organization of Petroleum Exporting Countries to resist cutting output, has said […]

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Oil hits five-and-a half-year low below $57 on supply glut

LONDON (Reuters) – Brent crude oil fell to a 5-1/2-year low below $57 a barrel on Tuesday as a global supply glut outweighed concerns of lost supply from Libya where battling militias have closed ports. Brent LCOc1 fell $1.14 a barrel to $56.74, its lowest since May 2009, before recovering to trade around $57.20 by 4.50 a.m.. U.S. crude CLc1 fell 60 cents to $53.01 after hitting $52.70 – also its lowest since May 2009. It fell $1.12 on Monday. Oil markets have been oversupplied this year due to increasing output of high quality, light oil from U.S. shale and lower-than-expected consumption as a result of faltering global economic growth and competition from alternative fuels. Several members of the Organization of the Petroleum Exporting Countries have suffered supply disruptions in recent months, but this has had little impact on prices. In Libya, clashes between rival factions have closed oil […]

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Energy Bargain Hunters Plow Record Amounts Into ETFs

Bargain-seeking investors have turned bullish on embattled energy stocks, plowing record amounts into the industry. More than $3.16 billion went into exchange-traded funds holding stakes in Exxon Mobil Corp. (XOM) , Schlumberger Ltd. (SLB) and other energy stocks this month, even as the price of oil fell 20 percent, according to data compiled by Bloomberg. That’s almost four times the average for the year and more than the prior record in December 2007, when oil was trading near $91 a barrel. “There definitely seems to be evidence of investors seeking to bottom-fish this market and pre-position for 2015,” David Mazza, head of ETF research at State Street Corp., said in a phone interview. “Some investors we’ve spoken with don’t believe the negative picture on energy that’s become consensus.” Investors are betting on a higher long-term price for crude oil. Brent, the global benchmark, has traded around $60 a barrel […]

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Crude futures fall to five-year lows despite Libyan oil port fire

New York (Platts)–29Dec2014/444 pm EST/2144 GMT Crude futures settled at five-year lows Monday, as the market brushed aside continued fires at Libya’s largest oil terminal, as persistent oversupply concerns led the oil complex lower. NYMEX February crude closed down $1.12 at $53.61/b. ICE February Brent settled $1.57 lower at $57.88/b. Both settlements represented lows not seen for front-month contracts since May 2009. In refined products activity, NYMEX January ULSD futures settled 5.88 cents softer at $1.8491/gal. NYMEX January RBOB ended the session 5.59 cents lower at $1.4528/gal. Article continues below… Oilgram Price Report is a daily report that covers market changes, market fundamentals and factors driving prices. Oilgram Price Report also brings a vast array of Platts international prices for crude and products, netback tables, and market critical data. Three crude storage tanks at the Es Sider terminal remained on fire Monday following attacks December 25 by Islamist militias […]

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Libyan oil output shrinks more as oil tanks blaze

* Hariga fields still producing -oil official * Fire at Es Sider oil storage site after fighting * Es Sider, Ras Lanuf ports closed * Brega port open but mostly supplying refinery (Adds comment from Conoco in paragraph 5; U.S. firm to help, in paragraph 6) By Ayman al-Warfalli BENGHAZI, Libya, Dec 29 (Reuters) – Libya’s oil output has shrunk further after blazing oil tanks at a major terminal helped push world oil prices higher and put a strain on the country’s dollar currency reserves. Libya is surviving on a mere 128,000 barrels per day from fields connected to the eastern port of Hariga, an oil official said on Monday, while fighting halted the major ports Es Sider and Ras Lanuf. Total oil output, adding offshore fields and Brega output, is about 350,000 bpd – a fraction of the 1.6 million bpd it produced before the 2011 civil war. […]

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Libya’s losses mount as oil terminal burns

Conflict in Libya, more than three years removed from civil war, leaves key oil storage depot in flames. UPITarek Alhuony. TRIPOLI, Libya, Dec. 29 (UPI) — Around $100 million worth of crude oil has gone up in flames as a result of a blaze burning at a tank storage facility in Libya, the government said. Militants with a group calling itself Libya Dawn launched attacks last week on the port of Es Sider, leaving oil storage depots in flames and at least 19 soldiers dead. The state-run National Oil Corp. confirmed as many as five of the 21 tanks storing oil at the site are in flames, which represents about $100 million worth of crude oil . The storage depot is next to the Ras Lanuf terminal, which has suffered several outages as opposing Libyan forces struggle to fill a power vacuum left over when the regime of Moammar […]

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Guard of Libyan Oil Ports Calls In Strikes on Islamist Militias

Libyan oil production has fallen below 300,000 barrels a day after Islamist militants shifted attacks to energy facilities including the country’s largest oil export terminal, said Energy Aspects Ltd. Output is the lowest since May and down at least 65 percent from a recent high of 850,000 barrels a day in October following the assault on the Es Sider terminal, according to the Energy Aspects estimate. Libya holds Africa ’s largest oil reserves. The fighting last week marked a turning point in the unrest that followed Muammar Qaddafi’s 42-year rule, according to Energy Aspects and Eurasia Group consultants. All the factions, including the Islamist militia coalition known as Libya Dawn, had committed to spare the energy industry that provides 80 percent of public spending. “The latest phase in fighting is a serious development as Libya Dawn is now trying to gain control of oil facilities, which up to now […]

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Libya Struggles to Extinguish Oil Storage Tanks After Assault

ENLARGE Libya has appealed to Italy, Germany and the United States to send firefighters. Reuters Firefighters worked Monday to extinguish a blaze at Libya’s largest oil terminal, where storage tanks have been burning for days amid fighting. The fire at As Sidra terminal in eastern Libya ignited after a rocket hit an oil storage tank. Some 800,000 barrels of crude have been destroyed. Extremist groups are making a renewed push to seize the country’s oil resources, Libyan Foreign Minister Mohamed Dayri said Sunday, according to the Associated Press. He said the assault on eastern oil terminals was carried out by militias based in the western city of Misrata, who are loyal to a rival Islamist-backed government in the capital Tripoli. The internationally recognized government is based in the eastern city of Tobruk. As Sidra is controlled by anti-Islamist militiamen allied with that government. Crude-oil futures prices closed at five-year […]

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Saudis hit ‘panic button’ at $40 oil

Saudi Arabia has insisted that OPEC will keep oil production at 30 million barrels per day no matter the cost of crude, but even the world’s biggest oil exporter has a limit, the CEO of Breitling Energy told CNBC on Friday. “I think the panic button is at $40,” Chris Faulkner said in a “Squawk Box” interview. “They can say whatever they want, but at the end of the day, they can’t just bleed out money forever.” With the Saudis’ deficit for 2015 projected to reach $50 billion—the official figure is $39 billion—the country’s leaders will face challenges in maintaining its subsidies, he said. Young people will not stand for planned wage cuts, either, he added. That said, Faulkner expects oil prices to rebound to the low $70s by the end of 2015, after initially sliding further into the low $50s and possibly recovering in the second quarter. With […]

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Shenzhen to restrict new car sales

Cars sit in traffic in the Futian district of Shenzhen, China, on Tuesday, Dec. 17, 2013. Chinese households’ concentration of wealth in real estate is magnifying the danger to the world’s second-largest economy of any property bust, as the nation grapples with the consequences of its record credit surge. Photographer: Brent Lewin/Bloomberg One of China’s richest cities has issued restrictions on new car sales, highlighting another constraint on growth for an industry already feeling the effects of the country’s slowing economy. Shenzhen, in southern Guangdong province, was the last of China’s four “tier-one” cities — large urban clusters with high per capita gross domestic product figures — to limit the issuance of new licence plates, following similar moves by Beijing, Shanghai and Guangzhou . Under the new rules, announced on Monday and effective immediately, only 100,000 new licence plates will be issued annually in Shenzhen via a combination of […]

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Foreign automakers taken to task in China over dealers’ bloated inventories

SHANGHAI (Reuters) – Foreign automakers in China may struggle to dictate sales goals in the future after dealers complained to the government that inflexible targets set during a market boom obliged them to buy too much stock and bear the brunt of a drop in demand. Automakers largely stuck to targets throughout 2014, selling cars to dealers on schedule. But dealers slashed retail prices and booked losses as sales growth in the world’s biggest auto market halved from the previous year’s 14 percent. "Carmakers have high market expectations. But the reality is: supply exceeds demand," said Luo Lei, deputy secretary general of the China Automobile Dealers Association (CADA). "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable," said Luo, whose body this month filed a report with authorities on the practice of transferring stock […]

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China’s largest inland oil field depleting

Production from one of China’s largest oil fields expected to decline in part because of the low price of crude oil. UPI/Stephen Shaver Maturation of the Daqing field, the largest inland field of its kind in China, is strained further by the low price of crude oil, off more than 40 percent from its June highs above $100 per barrel. A staff member told the official Xinhua News Agency on condition of anonymity the field’s production should be in a free fall by next year. The field has produced more than 15 billion barrels since operations began in 1960. Last year’s annual production was around 290 million barrels, though that should fall to around 234 million barrels by 2020, the employee at PetroChina said in an interview published Sunday. The field’s production rate as of this year represents about a quarter of China’s total annual oil production. The expected […]

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Oil and Gas Regulatory Push Coming from Obama Administration

ENLARGE The Interior Department, which has jurisdiction over public lands, is planning to propose a rule in April that would set a standard for how much methane can either be vented into the atmosphere or burned as part of drilling operations. Shown, natural gas is flared at a well site this month near Watford City, N.D. Associated Press The Obama administration is planning to release in the coming months a series of regulations on the oil and natural gas industry, a response to the nation’s energy boom that also is aimed at burnishing President Barack Obama ’s environmental legacy in his final two years. The coming rules—at least nine in total—would include the first-ever federal standards addressing methane emissions, stricter controls on hydraulic fracturing, drilling requirements in the Arctic, new rules governing oil shipped by trains and tougher standards on offshore drilling technology. The repercussions for the industry could […]

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Oil Firms Pull Back on Rigs as Prices Fall

ENLARGE According to data from Baker Hughes, there were 1,499 drilling rigs in the U.S., down 37 from the latest count. Analysts expect drilling capacity to continue falling, but not output. Here, an oil pump near Williston, N.D., on a recent day. Associated Press U.S. oil producers appear to be scaling back amid low crude prices, with the onshore drilling-rig count falling by 37 last week, according to oil-field services company Baker Hughes Inc. It was the third consecutive week the drilling rig count fell and one of the biggest since crude-oil prices started to tumble in June. Analysts say energy companies operating in the U.S. will need slow their oil production to help bolster international crude prices. Rigs drilling for oil in the U.S. last week dropped by 37 to 1,499, Baker Hughes said Monday. This follows a 10-rig drop the previous week and a 29-rig decline the […]

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BHI: US land drilling down 35 units in most recent rig count

HOUSTON, Dec. 29 12/29/2014 The US drilling rig count dropped 35 units to settle at 1,840 units working during the week ended Dec. 26, pushed down entirely by losses on land, Baker Hughes Inc. reported. During the week, US land rigs fell 35 units to 1,770. Offshore rigs held steady at 58 units. Rigs drilling in inland waters also held steady at 12 units last week. Oil rigs lost 37 units to 1,499. Gas rigs gained 2 units to 340. Rigs considered unclassified remained at 1 unit working. Horizontal drilling rigs declined 6 units to 1,350. Directional drilling rigs dropped 14 units to 181. Canada now has 256 rigs working, 7 fewer than this week a year ago. Of the 135 units lost this past week, 96 were oil rigs and 39 were gas rigs, which respectively total 94 and 162. Major states, basins California took a 17-rig hit […]

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For Energy Policy Makers, Tough Lessons in Downside of Cheap Gas

Federal and state governments—and formerly high gas prices—have given consumers incentive to purchase fuel-efficient cars like the Toyota Prius, shown here at a California dealership in 2010. Those dynamics have changed over the past few months as oil and gas prices have plunged. Bloomberg News The sharp drop in fuel prices is undermining government policies that bet expensive gasoline would prod Americans to find alternatives to gas-guzzling automobiles. In recent years, the federal government required passenger cars and trucks to become much more fuel-efficient, with a goal to more than double average miles per gallon by 2025. More than a dozen states ordered auto makers to boost sales of electric vehicles, helped by billions of dollars in federal spending. And President Barack Obama ’s administration increased spending on intercity passenger rail, joining states like California in planning for Asian- and European-style bullet trains. Those policies now face a big […]

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Oil Rigs in U.S. Drop by 37 to Lowest Level Since April

U.S. oil drillers, facing the lowest crude prices in five years and rising competition from suppliers abroad, idled the most rigs since 2012. Rigs targeting oil declined by 37 to 1,499 in the week ended Dec. 26, the lowest since April, Baker Hughes Inc. (BHI) said on its website today, extending the three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. The total rig count, which includes one miscellaneous rig, dropped 35 to 1,840, also an eight-month low. The number of rigs targeting U.S. oil is down from a record 1,609 following a $55-a-barrel drop in global prices since June, threatening to slow the shale-drilling boom that’s propelled domestic production to the highest in three decades. As the Organization of Petroleum Exporting Countries resists calls to cut output, U.S. producers including Continental Resources Inc. and ConocoPhillips plan to […]

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Low Oil Prices Offer Uneven Economic Effect

Energy Reliant States Will Suffer if Prices Remain Low Impact of Lower Oil Prices | click to enlarge As consumers enjoy the benefits of plunging gasoline prices this holiday season, it is still unclear how cheaper crude will impact the overall health of the U.S. economy. One Washington think tank has estimated that, though many parts of the country will experience a slight economic stimulus in 2015, the lower oil prices will bring a significant downturn in the economic health of energy dependent states. Unprecedented production in the United States shale plays have contributed to an increase in worldwide oil supplies, resulting in gasoline prices plummeting to their lowest level in almost five years. This has proven to be an economic boom of sorts to American families who are pocketing an additional $25-$75 per month . An additional perk will come as reduced fuel costs will eventually affect the […]

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