Category:

Natural Gas Selloff Halts as Traders Wait to See if Demand Rises

By Timothy Puko Natural gas closed higher for a second-straight session with traders hesitant to keep selling so close to the peak season for demand, analysts said. The front-month January contract settled up 5.4 cents, or 1.5%, at $3.706 a million British thermal units on the New York Mercantile Exchange. Prices have bounced up 3% since they closed near their low for 2014 on Monday. Record production and mild December forecasts caused a near bear market in the last three weeks as traders have expected supply to overwhelm demand for home heating. But hitting a yearly low in December is rare and prices are so low they could start to draw more buyers from the power sector, analysts and brokers said. "I think the market’s searching for a bottom," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York. Many who sold loaned contracts, betting that prices […]

Posted On : Published By : Tom Whipple
Category:

Kuwait Offers Biggest Oil Discount to Asia Since 2008

Kuwait is offering Asian buyers the largest discount for oil in six years, joining Saudi Arabia and Iraq in lowering prices. Kuwait Petroleum Corp., the state-run oil company , will sell its crude at $3.95 a barrel below the regional benchmarks next month, the company said in a faxed statement yesterday. That’s the biggest discount since December 2008, data compiled by Bloomberg show. It was $2.10 this month. Saudi Arabia, the world’s biggest oil producer, lowered its official selling prices to Asia and the U.S. on Dec. 5 after the Organization of Petroleum Exporting Countries decided last month to maintain production. Crude is trading in a bear market as the highest U.S. production in three decades exacerbates a global glut. “In this situation of oversupply in crude, everyone has to defend his market share,” Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, said by telephone yesterday. “Producers […]

Posted On : Published By : Tom Whipple
Category:

Oil price drop a conspiracy, Iran’s president says

Iranian President Hassan Rouhani sees low oil prices as a sign of a conspiracy against regional producing nations. UPI/John Angelillo "The slide in crude oil prices is not merely an economic issue, and it stems from a conspiracy and political planning by certain countries," President Hassan Rouhani said. Price variances among the 12 blends from the Organization of Petroleum Exporting Countries are seen by some as a sign of internal rivalries among producers that can withstand lower oil prices and those that can’t. Western economic sanctions on Iran’s energy sector are already impacting the health of the Iranian economy. For fiscal year 2013-14, the World Bank estimates the Iranian economy has contracted at an annual rate of 1.7 percent. The downward trend for oil prices, meanwhile, is adding to the pressure on the Iranian economy. The Iranian Heavy crude oil grade sold for more than $100 per barrel last […]

Posted On : Published By : Tom Whipple
Category:

Low gas prices will be commonplace, market analysts say

No end in sight to decline in the price at the U.S pump, market analysts say. UPI/Bill Greenblatt Motor club AAA reports a national average price for a gallon of regular unleaded gasoline Wednesday at $2.64, more than $1 off from the yearly peak in April. It was late September the last time the price at the pump increased and Michael Green, a spokesman for AAA, told UPI there’s no end in sight for the declines. "Gas prices typically reach a low this time of year, but there are no indications that prices will stop dropping anytime soon," he said. "As long as the crude oil market continues to search for a bottom, consumers will pay lower gas prices." Gasoline prices typically fall after September, when U.S. refiners switch to a winter blend that’s less expensive to manufacture. Meanwhile, oil prices, which represent about 60 percent of the price […]

Posted On : Published By : Tom Whipple
Category:

Medvedev: Russia never recovered from ’08 collapse

Russian Prime Minister Dmitry Medvedev says economy never fully recovered from global economic collapse that began in 2008. UPI/Alex Volgin "Negative trends have been adding up in our economy for the past few years," Russian Prime Minister Dmitry Medvedev told a roundtable of reporters . "In truth, we have not fully emerged from the 2008 crisis." Russia’s economy is burdened by sanctions imposed by Western powers in response to its role in Ukraine, where pro-Russian rebels are jockeying for more control in the eastern parts of the country. Low oil prices, meanwhile, are hurting a Russian economy that depends on oil and gas exports for more than half of its revenues. Oil prices have shed more than 30 percent of their value since June. The prime minister said that’s put pressure in the value of the Russian currency and expectations for gross domestic product. "When oil fell to a […]

Posted On : Published By : Tom Whipple
Category:

OPEC November Crude Production Numbers

OPEC just published its December  Monthly Oil Market Report  with their crude only production numbers for November. OPEC Change Total OPEC crude only production was down 390,000 barrels per day but that was after October production was revised up by 190,000 bpd. After revisions only Iraq and Nigeria showed any increase in November. The data for all charts below is in thousand barrels per day and is through November 2014. OPEC crude only production stands at 30,053,000 barrels per day. Algeria started a slow decline in 2011 but seems to have reached a plateau in 2013. Angola  has been on a bumpy plateau for about 4 years now. Ecuador began to increase production in 2011 and after about a 70,000 bpd increase seems to have reached a peak. Nothing very exciting is happening in Iran. Production is holding at 2,750,000 bpd and holding. Iraqi production is holding steady despite […]

Posted On : Published By : Tom Whipple
Category:

OPEC oil production: still swinging on Libya

Oil production from the Organization of the Petroleum Exporting Countries (OPEC) totaled 30.01 million barrels per day (b/d) in November, down 290,000 b/d from October, and down for a second consecutive month as Libyan production went into reverse after several months of steady gains, according to the latest Platts survey of OPEC and oil industry officials and analysts. The November level compared to October output of 30.3 million barrels per day and is within a few hundred thousand barrels of the 30-million-b/d ceiling that OPEC, at its recent end-November meeting, decided to maintain despite multiple projections that such production could create a significant supply overhang in the market. Libyan production had climbed to an average 860,000 b/d in October, almost double the July level. But a new security-related shut-in at the Sharara field in early November resulted in a month-on-month drop of 210,000 b/d. “This is the great irony […]

Posted On : Published By : Tom Whipple
Category:

Saudis won’t cut oil production unless US, Russia also cut production

Saudis won’t cut oil production unless US, Russia also cut production thumbnail Saudi Arabia’s influential royal Prince Turki al-Faisal al-Saud has said the kingdom would only consider cutting oil production if Iran, Russia and the US agreed to match those cuts because it wants to protect its market share. Speaking in London, the Prince who is a senior Saudi royal and the former head of the country’s spy agency, said that the kingdom would not repeat previous mistakes of surrendering its share of the global market for crude to its rivals. His remarks come just days after a controversial meeting of the Organisation of Petroleum Exporting Countries (Opec), when the group appeared split over a decision to keep producing at current levels. “The kingdom is not going to give up market share at this time to anybody and allow – whether it is Russia, Nigeria, or Iran or other […]

Posted On : Published By : Tom Whipple
Category:

Russia, Turkey Complete Initial Gas Pipeline Talks

By Emre Peker ISTANBUL–Turkey and Russia have held the first round of talks to build a new pipeline between the two Black Sea neighbors as Moscow seeks an alternative to the natural-gas link to the European Union it scrapped earlier this month amid political tensions over Ukraine. The negotiations started Wednesday following the memorandum Turkey signed with Russia during President Vladimir Putin’s state visit to Ankara last week, Turkish Energy Minister Taner Yildiz said on Thursday. Mr. Yildiz said final deliberations may last until 2020. It is too soon to say whether a new project will get the green light to replace the South Stream pipeline which Russia’s state-run energy firm Gazprom had undertaken to build, the minister said. The proposed new pipeline–billed "Turk Stream"–would be a major piece of energy infrastructure in its own right and help Turkey become an energy hub with a gas exporting capabilities that […]

Posted On : Published By : Tom Whipple
Category:

Modi Window to Revamp India Economy Never Wider as Oil Dips

If Prime Minister Narendra Modi is serious about overhauling India ’s economy, 2015 presents a golden opportunity. Oil prices have fallen to a five-year low, inflation is easing, the current account deficit has narrowed and investors are betting the U.S. Federal Reserve won’t raise rates until June. Only two of India’s 29 states will hold an election next year, and Modi holds a majority in the lower house for the first time in three decades after his landslide election win in May. “Very rarely do you see something like this,” Saugata Bhattacharya, a Mumbai-based economist at Axis Bank Ltd., said in an interview last week. “What more can they possibly want?” India’s growth prospects are rising as other emerging markets including China slow down, making its benchmark stock index among the best performers this year. Modi’s ability to raise living standards among India’s 1.2 billion people hinges on engineering […]

Posted On : Published By : Tom Whipple
Category:

Asia’s top 4 oil users record slowest demand growth in 6 years

Singapore (Platts)–11Dec2014/221 am EST/721 GMT Combined oil demand by Asia’s four biggest consumers — China, Japan, India and South Korea — inched up a meager 0.4% in the first 10 months of 2014, on course to register the slowest pace of full-year annual growth since 2008, according to data analyzed by Platts. Platts data shows China, Japan, India and South Korea consumed on average 18.16 million b/d of liquid fuels (excluding LPG) over January-October, a mere 80,000 b/d or 0.4% higher than the approximately 18.08 million b/d used in the corresponding period of 2013. The four countries represent about a fifth of global oil demand, estimated to come in at 92.4 million b/d for 2014 by the International Energy Agency. China and India for the past few years have been among the biggest contributors to incremental global consumption. Barring any surprises in the final two months of the year, […]

Posted On : Published By : Tom Whipple
Category:

U.S. Refineries Boost Oil Use to Record as Prices Plunge

Refiners in the U.S. used the most oil ever last week, taking advantage of crude prices tumbling to a five-year low. Plants processed 16.6 million barrels a day of crude in the week ended Dec. 5, the most in Energy Information Administration data going back to 1989. The rise occurred as futures tumbled to the lowest in more than five years after the Organization of Petroleum Exporting Countries decided Nov. 27 to maintain output levels and as U.S. production climbed to the highest level in three decades. The access to cheaper domestic crude and natural gas has enabled U.S. refiners to increase operating rates to above 95 percent for the first time since 2005, increasing gasoline supply and driving down prices at the pump to the lowest level in more than four years. Refineries have used more crude in each of the past six weeks as seasonal turnarounds wound […]

Posted On : Published By : Tom Whipple
Category:

Ecuador Plans Budget Cuts, New Debt as Oil Drop Saps Revenue

Ecuador , which relies on crude for about a third of its budget, plans to cut spending next year by as much as $1.5 billion and will seek additional financing after prices for the OPEC member’s oil fell to five-year lows. The South American nation will trim current and investment spending and use credit lines from multilateral lenders to offset lower oil prices , the Finance Ministry said yesterday in an e-mailed response to questions from Bloomberg News . Ecuador is also planning tax reforms to boost government revenue and accelerate private investment and may seek additional financing if crude doesn’t stabilize next year, the ministry said. Government bonds extended their declines today. With prices for the nation’s Oriente crude down 23 percent since congress approved President Rafael Correa ’s 2015 budget proposal on Nov. 20, the government has said it would reduce funds for new schools and police […]

Posted On : Published By : Tom Whipple
Category:

U.S. oil group applauds pro-export bill

U.S. oil production group applauds legislation aimed at easing restrictions on crude oil exports. UPI/Gary C. Caskey Rep. Joe Barton , R-Texas, introduced a bill Tuesday that would remove all restrictions on the export of crude oil from the United States. Output from U.S. shale, he said, has placed the country as the top oil producer in the world and laws governing the market don’t reflect that position. "The most recent estimates show that the U.S. has more than enough resources to meet our domestic energy needs," he said. "In order to take full advantage of this opportunity, we need to rethink outdated laws that were passed during an era of energy scarcity." The U.S. Energy Information Administration, the statistical arm of the Energy Department, estimates total U.S. oil production at around 9 million barrels per day, a 13 percent increase from last year. George Baker, executive director of […]

Posted On : Published By : Tom Whipple
Category:

US spending bill would speed up crude-by-rail rule, stem more product reserves

Washington (Platts)–10Dec2014/455 pm EST/2155 GMT The US Department of Transportation would face a January 15 deadline to issue its long-awaited crude-by-rail safety regulations, under a must-pass spending bill crafted by Republican and Democratic lawmakers from both chambers of Congress. The $1.1 trillion bill also would restrict the US Department of Energy from creating any crude product reserves without the consent of the congressional appropriations committees. In addition, it would block the US Fish and Wildlife Service from listing the greater sage grouse and three other grouse species as a threatened or endangered species for a year, opening up significant acreage in the Western US to oil and gas development. Those three measures are among several riders attached to the bill, which must pass to keep the federal government open past Thursday. The House of Representatives is scheduled to vote on the bill Thursday, while the Senate is scheduled to […]

Posted On : Published By : Tom Whipple
Category:

North Dakota producers face new vapor pressure standards

HOUSTON, Dec. 10 12/10/2014 North Dakota has approved new rail transportation safety standards for crude oil that stipulate operating standards for oil-conditioning equipment at the well to separate production fluids into gas and liquid. The North Dakota Industrial Commission (NDIC) voted unanimously Dec. 9 on standards that require producers to heat crude to at least 110° F. at a pressure of 50 psi, effective Apr. 1, 2015. The new standards, which apply to crude oil from the Bakken , Three Forks , and Sanish formations, require the removal of light hydrocarbons ensuring crude oil going to rail terminals has a rvp limit of 13.7 psi. The new standards involve lower temperatures than the NDIC initially considered and some of the operating procedures also were changed from original proposals ( OGJ Online, Nov. 14, 2014 ). “This is all designed so that everyone knows the crude oil is being treated,” […]

Posted On : Published By : Tom Whipple
Category:

U.S. Getting Rid of Oil Addiction as Price Plummets in Glut

The U.S. is producing the most oil in 31 years, economic growth is picking up and crude prices are plunging. So why is Americans’ use of petroleum waning? As the U.S. moves closer and closer to energy independence, greater fuel efficiency, changing demographics and an increase in renewables are altering the dynamic that in the past would have seen demand for gasoline climbing. Gross domestic product, the value of all goods and services produced in the U.S., grew at a 2.4 percent pace in the third quarter from the year-earlier period. Oil consumption fell 0.3 percent, government data show. “Oil demand and GDP growth used to go hand in hand,” Christopher Knittel, a professor of applied economics at Massachusetts Institute of Technology’s Sloan School of Management, said by phone from Cambridge, Massachusetts, Dec. 8. “Now, they’re in some ways almost independent of each other because of investments in fuel […]

Posted On : Published By : Tom Whipple
Category:

Truckers Vie With Shippers for $24 Billion Fuel Savings: Freight

As shippers of everything from toys to tools enjoy as much as $24 billion in savings from lower diesel surcharges next year, trucking companies see an opening to raise freight rates at a pace not seen in about a decade. The American Trucking Associations calculates that each 1-cent drop spurs industrywide annual fuel savings of $350 million. Diesel last week averaged $2.15 a gallon, down from $2.85 in the last 12 months. About 85 percent of the savings goes to shippers through lower fuel surcharges. That may soften shippers’ resistance to higher rates that trucking companies say they need to cover rising expenses for salaries, health care and new regulations that limit driving hours. Unlike previous times when fuel prices fell, stronger economic growth is increasing demand for cargo space while drivers are scarce, which spurs higher rates. “If the overall cost for the shipper, which is your rate […]

Posted On : Published By : Tom Whipple
Category:

Oil’s Fall Puts a Chill on U.S. Drilling

Oil is heading beneath $30.00 a barrel where it should have been, at the most. Corruption in and between governments has kept these prices high. The personal property rights of individual farmers in North Dakota generated this rebellon for respect of price controls in fuel oils and natural Gas, much to the dismay of this administration and corrupt factions on the right and left. The free people of the Bakken Sale have saved our Bacon and anyone who does not like or understand that is living in the wrong country. Now if capitalism would organize these Bakken finds around something like WallMart we could organize refining and piping around quickstop service centers and home deliver, reducing the price of a refined barrel of oil to beneath $15.00/barrel.

Posted On : Published By : Tom Whipple
Category:

Republicans Use Spending Bill to Pursue Environmental Goals

@Paula Dowling You Had To Be aware that the electorate voted a shellacking of the democrats and Obama specifically to obstruct and stop their policies that hurt the American worker and companies. Hopefully the republicans will shut down the Obama government  when necessary disregarding the media hype that the Republicans would be blamed. The last shutdown really hurt the republicans, they went out and beat the Obama agenda by winning the midterms making the president and democrats the embarrassing  biggest losers ever.

Posted On : Published By : Tom Whipple
Category:

BP caught between value over volume and falling crude prices

BP filling station If energy is turning into a game of shrink to survive, BP is ahead of its rivals. The tens of billions of dollars in disposals — including rigs, platforms and pipelines — that followed the disastrous Gulf of Mexico oil spill in 2010 have reshaped the oil and gas giant. Its “value over volume” mantra, pursued relentlessly by chief executive Bob Dudley, has become a byword for the majors’ efforts to curb costs, strengthen balance sheets and position themselves for a tougher, leaner world of lower oil prices . So much so, that even as the company moves to cut costs further in the face of a brutal 40 per cent slide in crude prices since June, a more profound question is being asked of BP. Sure, investors can see the benefits of capital discipline, but where are the discoveries that will power growth and keep […]

Posted On : Published By : Tom Whipple
Category:

California leads the nation in the adoption of electric vehicles

In 2013, there were about 70,000 battery electric vehicles (EVs) and 104,000 plug-in hybrid electric vehicles (PHEVs)—small numbers compared to around 226 million registered vehicles in the United States. Total U.S. sales of plug-in electric vehicles (PEVs) have increased in recent years, but still represent only about 0.7% of new vehicle sales in 2014 so far, up from 0.6% in 2013 and 0.4% in 2012. California is home to almost half of all of the nation’s PEVs, but even in California, only about 5 out of every 1,000 registered vehicles are PEVs. Several states offer tax incentives to reduce the upfront cost of PEVs to consumers. These incentives are in addition to a federal (nationwide) tax credit, which ranges from $2,500 to $7,500 depending on battery capacity and gross vehicle weight. Examples of incentives include the following: California offers rebates of up to $2,500 for EVs that run only […]

Posted On : Published By : Tom Whipple
Category:

Goodrich considers selling Eagle Ford assets

HOUSTON, Dec. 10 12/10/2014 Goodrich Petroleum Corp., Houston, is considering the sale of at least some of its shale assets in the South Texas Eagle Ford , the company said, adding that it plans to concentrate next year on the Tuscaloosa marine shale. The board authorized management to explore selling “all or a portion” of the Eagle Ford assets during the first half of 2015 to give Goodrich more flexibility to expand developments elsewhere. Goodrich said it will focus most of its spending next year on the Tuscaloosa marine shale, where executives report costs are coming down as results continue to improve. Goodrich outlined 2015 spending plans of $150-200 million compared with its 2014 budget of $325-375 million. Executives said 2014 actual spending likely will be at the lower end of that range. Related Articles 12/10/2014 Stone Energy Corp., Lafayette, La., reported that its Pribble 6HU well in Wetzel […]

Posted On : Published By : Tom Whipple
Category:

Goodrich, Oasis Petroleum Cut Spending For 2015 As Oil Slides

Dec 10 (Reuters) – Goodrich Petroleum Corp and Oasis Petroleum Inc said they expect to spend much less on exploration and production next year, joining a list of U.S. oil and gas companies cutting capital spending as oil prices plunge. Goodrich shares fell as much as 14.7 percent to $3.57 in early trading. Oasis’ shares fell as much as 13.3 percent to a record low of $11.01. Both stocks were among the top losers on the New York Stock Exchange on Wednesday. Several large oil producers, including ConocoPhillips and Apache Corp, have set lower capital spending budgets for 2015, rattled by a near 40 percent drop in global crude prices since June. Some have said they will deploy fewer drilling rigs next year. Global oil and gas exploration projects worth more than $150 billion are likely to be put on hold in 2015, according to Norwegian consultancy Rystad Energy. […]

Posted On : Published By : Tom Whipple
Category:

For Anyone That Still Believes Collapsing Oil Prices Are Good For The Economy

For Anyone That Still Believes Collapsing Oil Prices Are Good For The Economy thumbnail Are much lower oil prices good news for the U.S. economy?   Only if you like collapsing capital expenditures, rising unemployment and a potential financial implosion on Wall Street.  Yes, lower gasoline prices are good news for the middle class.  I certainly would rather pay two dollars for a gallon of gas than four dollars.  But in order to have money to fill up your vehicle you have got to have an income first.   And since the last recession, the energy sector has been the number one creator of good jobs in the U.S. economy by far.  Barack Obama loves to stand up and take credit for the fact that the employment picture in this country has been improving slightly, but without the energy industry boom, unemployment would be through the roof.  And now […]

Posted On : Published By : Tom Whipple
Category:

Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord

Brent crude slumped, trading near a five-year low as an Iranian official predicted a further decline in prices if solidarity among OPEC members falters. West Texas Intermediate also sank. Futures slid as much as 1.8 percent in London . Crude could fall to as low as $40 a barrel amid a price war or if divisions emerge in the Organization of Petroleum Exporting Countries, said an official at Iran ’s oil ministry. The U.S. Energy Information Administration reduced its price forecasts for next year while also downgrading its production outlook for a second month. U.S. output is at a three-decade high. Brent collapsed 15 percent since OPEC agreed to leave its production ceiling unchanged on Nov. 27, resisting calls from members including Venezuela to cut output to stabilize prices. Saudi Arabia and Iraq this month deepened discounts on crude exports to their customers in Asia , bolstering speculation that […]

Posted On : Published By : Tom Whipple
Category:

Oil falls below $66 on ample supply, rising stocks

LONDON (Reuters) – Brent crude oil slipped below $66 a barrel on Wednesday, just above a five-year low, on mounting signs of oversupply and lackluster demand as global economic growth falters. The price of the North Sea oil benchmark has fallen more than 40 percent since June as new supplies of high-quality crude from North America have fed a glut of fuel in many parts of the world. Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude oil inventories rose by 4.4 million barrels last week to 377.4 million barrels, compared with analysts’ expectations of a drop of 2.2 million. U.S. gasoline and distillate stocks also showed big builds, the API said. Brent futures for January LCOc1 fell to a low of $65.68 a barrel, down $1.16, before recovering slightly to trade around $65.90 by 0850 GMT (03:50 a.m. EST). The contract reached $65.29 on Tuesday, […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Futures Pull Back From Bear Territory

By Christian Berthelsen Natural gas futures rebounded Tuesday from their brush with bear territory, posting a gain as traders took profits on bets on lower prices. Natural gas for January delivery ended the day up 5.7 cents, or 1.6%, at $3.652 a million British thermal units on the New York Mercantile Exchange, partially recovering from the previous session’s losses, which helped push the contract to an intraday low that was 20% below last month’s high. Tuesday’s gain was likely the result of traders closing out bearish bets by buying futures, analysts said. The market is entering the time of year when there is usually a surge in demand for gas to heat homes, but forecasts for above-normal temperatures until Christmas across much of the U.S. is leading to expectations of weak appetite for the fuel. "There’s no change to the forecast, this is profit-taking by shorts," said Gene McGillian, […]

Posted On : Published By : Tom Whipple
Category:

Any OPEC Solidarity Break Seen by Iran Sending Oil Lower

Any break in OPEC solidarity or a price war will drive crude to below $50 or even $40 a barrel, Iran ’s oil ministry head of petroleum market analysis said. Middle East crude producers Saudi Arabia and Iraq this month increased the discounts used to set the official prices for their main crudes for buyers in Asia to the widest in more than a decade. Sellers want to defend market share as oil tumbled into a bear market amid a global glut exacerbated by the highest U.S. production in three decades. OPEC decided unanimously on Nov. 27 to maintain its output target, prompting a drop in benchmark Brent crude to less than $70 a barrel for the first time since May 2010. “Any break in OPEC solidarity or price war will lead to an enormous price dive shock” that would push oil to $40 or $50, Mohammad Sadegh Memarian […]

Posted On : Published By : Tom Whipple
Category:

Analysis: Iraq’s oil disputes remain unresolved

Iraqi Oil Minister Adil Abdulmahdi (left), KRG Prime Minister Nechirvan Barzani (center), and KRG Deputy Prime Minister Qubad Talabani (right), in Erbil on Nov. 13, reach a deal on restarting revenue sharing payments and exports. (Source: Kurdistan Regional Government) Recommend 330 people recommend this. Sign Up to see what your friends recommend. Leaders in Baghdad and Erbil are still far away from achieving a long-lasting resolution to Iraq’s oil policy disputes, even though the tides of optimism have swelled in the past few weeks.There is reason to be hopeful. In November, the autonomous Kurdistan Regional Government (KRG) began participating in federal Iraqi oil exports for the first time since 2013, and began receiving federal budget payments. On Dec. 2, the Iraqi Cabinet ratified a political agreement that could help move that …

Posted On : Published By : Tom Whipple
Category:

Shanghai stocks suffer sharpest fall in five years

An investor looks at his mobile phone in front of an electronic board showing stock information at a brokerage house in Haikou, Hainan province December 9, 2014. Shanghai shares posted their biggest one-day percentage fall in five years on Tuesday, dragged down by a sell-off in the financial and property sectors, reversing a two-week long rally. REUTERS/Stringer (CHINA – Tags: BUSINESS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA Shanghai stocks suffered their sharpest fall in five years on Tuesday after a late-in-the-day 8 per cent slide cast doubts on the sustainability of a market that had rallied by almost a quarter in less than three weeks. The benchmark Shanghai Composite broke a run of three-year highs to close 5.4 per cent lower at 2,856.27 in a move that Citigroup analysts dubbed the “Shanghai scare”, having been more than 2 per cent up in the early afternoon. The […]

Posted On : Published By : Tom Whipple
Category:

Why Texas Is Now Home to Bargain-Hunting Japan Oil Buyers

A boat passes a refinery standing along the Houston Ship Channel in Houston, Texas,… Read More As U.S. lawmakers debate whether to free up more than the tiny amount of oil output currently eligible for export, buyers from Asia are moving in. Mitsui & Co. (8031) , Japan ’s second-biggest trader, has doubled employees relocated to Houston to 50 over the past two years while Tokyo-based Cosmo Oil Co. opened an office in the oil hub in April and South Korea ’s SK Innovation Co. is bolstering its presence in the region. They are now limited to buying a product called condensate, an ultra-light oil that accounts for about 8 percent of U.S. output, but are positioning themselves to purchase more if Congress ends export restrictions. Their move into Houston illustrates the challenge for the Organization of Petroleum Exporting Countries as the highest American output in more than three […]

Posted On : Published By : Tom Whipple
Category:

Oil price plunge means survival of fittest

Crude at $70 puts at least 1.5m b/d of projects for 2016 at risk A general view shows the PetroChina’s Daqing oil field in China’s northeastern Heilongjiang province in this November 5, 2007 file photo. China’s implied oil demand rose in June 2014 to its highest level since January 2013 as crude runs hit a record high, although there were still doubts that the numbers reflected a healthy economy. China consumed roughly 10.2 million barrels per day (bpd) of oil last month, according to Reuters calculations based on preliminary government data, the highest level in 17 months and up 8.4 percent from May. Picture taken November 5, 2007. REUTERS/Stringer/Files (CHINA – Tags: ENERGY BUSINESS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA T he 40 per cent plunge in the price of oil over the past six months is testing the mettle of the world’s biggest producers, from […]

Posted On : Published By : Tom Whipple
Category:

Exxon Issues Energy Reality Check as UN Debates Emissions

The world’s largest oil company sees emissions in the developing world surging 50 percent, a forecast that suggests the diplomatic push to draft an accord to curb global warming stands to fall short. The assessment, in a report today from an Exxon Mobil Corp. (XOM) team of economists, scientists and engineers, shows how far the world is from cutting pollution blamed for climate disruption. It comes as UN Secretary-General Ban Ki-Moon warned envoys today at United Nations talks in Lima that the “window of opportunity” to slow climate change is closing. Even as the most advanced economies cut energy use by almost one tenth through 2040 and add hundreds of millions of fuel-efficient vehicles, booming growth in places like India , South Africa and Thailand will boost demand for fuels 36 percent, the Irving, Texas-based company said in its annual outlook. Emissions will surge as an expanding middle class […]

Posted On : Published By : Tom Whipple
Category:

U.S. Cuts Oil Price Forecast for 2015 to $62.75 a Barrel

— The U.S. Energy Information Administration cut its crude price forecasts by $15 a barrel after OPEC’s decision last month to maintain output as North American oil output increases. The agency reduced its 2015 U.S. oil production outlook for a second month. West Texas Intermediate will average $62.75 a barrel in 2015 versus the November projection of $77.75, the EIA said today in its monthly Short-Term Energy Outlook . The agency trimmed its Brent crude estimate for next year to $68.08 from $83.42. Prices have tumbled since the 12-nation Organization of Petroleum Exporting Countries decided Nov. 27 to maintain output levels, letting prices decrease to a level that may slow U.S. production growth. The decline in prices will start to affect U.S. production next year, EIA Administrator Adam Sieminski said in an e-mailed statement. “U.S. oil production growth is expected to slow next year in response to lower crude […]

Posted On : Published By : Tom Whipple
Category:

Fracking Discounts Seen Cutting Profits by $3 Billion

Oilfield contractors hired to drill wells and fracture rock to raise crude and natural gas to the surface will have to lower prices by as much as 20 percent to help keep their cash-strapped customers working. Ultimately, that could carve out more than $3 billion from the 2015 earnings outlined by analysts for the world’s four biggest oil-service companies — Schlumberger Ltd. (SLB) , Halliburton Co. (HAL) , Baker Hughes Inc. and Weatherford International Plc. (WFT) The potential losses loom just as the service providers were looking ahead to higher rates after a glut in pressure-pumping gear dragged prices down in past years. Now, crude oil prices that have fallen more than 40 percent since June are squeezing them once again. As they look for ways to cut costs, oil producers will be pushing for discounts wherever they can find them. “They’re already going to confront significant cash-flow pressures […]

Posted On : Published By : Tom Whipple
Category:

Canada vows to make pipelines safer

Government of Canadian Prime Minister Stephen Harper vows to make pipelines safer. UPI/Yao Dawei/Pool OTTAWA, Dec. 9 (UPI) — The Canadian government said it’s committed to a world-class regime for pipeline safety, calling for new "polluter pays" rules and other control measures. The government of Prime Minister Stephan Harper outlined amendments to pipeline safety rules , rules it says will lead to one of the safest networks of pipelines in the world. "The Harper government is committed to having a world-class safety system in place for pipelines and other energy transportation and production sectors," it said. "No development will proceed unless rigorous environmental and regulatory reviews have indicated they are safe for Canadians and the environment." Counting electricity and coal, the energy sector accounts for about 7 percent of the gross domestic product in Canada. Exploration and production alone accounts for more than $54 billion annually in capital expenses. […]

Posted On : Published By : Tom Whipple
Category:

$2.50 gas by Christmas, AAA says

National average price for a gallon of gasoline could be at or near $2.50 by Christmas, motor club AAA says. File Photo by Gary C. Caskey/UPI WASHINGTON, Dec. 9 (UPI) — The U.S. national average price for a gallon of regular unleaded gasoline could fall another 16 cents to $2.50 by Christmas, motor club AAA said. AAA reports a national average price for Tuesday at $2.66, down 10 cents from one week ago and off more than 60 cents from this date in 2013. The motor club said that, for the year, prices are off more than $1 per gallon from their April peak of $3.70 "Plentiful global crude oil supplies continue to be a primary contributing factor to falling averages nationwide," AAA said in a Monday market brief. High supplies and low demand in a weak global economy translates to lower crude oil prices, which account for about […]

Posted On : Published By : Tom Whipple
Category:

Conoco shale spending plans down for 2015

ConocoPhillips cuts capital spending plans for 2015 to reflect lower prices for crude oil. Photo by Calin Tatu/Shutterstock HOUSTON, Dec. 9 (UPI) — U.S. energy company ConocoPhillips said it was trimming its capital spending program for 2015, with funding targeting U.S. shale basins down 20 percent. "The reduction in capital relative to 2014 primarily reflects lower spending on major projects, several of which are nearing completion, as well as the deferral of spending on North American unconventional plays," the company said. Conoco said it was cutting its capital budget for 2015 to $13.5 billion, a decline of about 20 percent from the level for this year. Several so-called supermajors have trimmed their spending programs because crude oil prices have shed about 30 percent of their value since June. The price for West Texas Intermediate, the U.S. crude oil benchmark, is at a point where some drillers might not generate […]

Posted On : Published By : Tom Whipple
Category:

US shale industry faces endurance test after Opec rejects cuts

US shale oil data Darkening times for shale industry: drilling is being scaled back in the Bakken formation in North Dakota amid a falling oil price When Saudi Arabia and other Gulf countries last month rejected calls for a production cut by Opec, the oil cartel, they put the responsibility for stabilising plummeting crude prices on to the US shale industry. Suhail al-Mazroui, energy minister for the United Arab Emirates, said US shale companies and other producers who had created an oil glut should “respect the needs of the market”. Less diplomatically, Scott Sheffield, chief executive of Pioneer Natural Resources , one of the leading shale oil producers, said Opec had “declared war” on the US industry. Two weeks on from that Opec decision — and against a backdrop of a 40 per cent fall in the oil price since June — evidence of its negative impact on US […]

Posted On : Published By : Tom Whipple
Category:

Short-Term Energy Outlook

Highlights North Sea Brent crude oil spot prices fell by more than 15% in November, declining from $85/barrel (bbl) on November 3 to $72/bbl on November 28. Monthly average Brent crude oil prices have declined 29% from their 2014 high of $112/bbl in June to an average of $79/bbl in November, the lowest monthly average since September 2010. The November price decline reflects continued growth in U.S. tight oil production along with weakening outlooks for the global economy and oil demand growth. The Organization of the Petroleum Exporting Countries’ (OPEC) decision in late November to maintain its current crude oil production target, despite lower oil prices, put additional downward pressure on price expectations. The current values of futures and options contracts suggest high uncertainty in the price outlook ( Market Prices and Uncertainty Report ). WTI futures contracts for March 2015 delivery, traded during the five-day period ending December […]

Posted On : Published By : Tom Whipple
Category:

North Dakota commission approves crude conditioning order

Washington (Platts)–9Dec2014/524 pm EST/2224 GMT North Dakota’s Industrial Commission on Tuesday approved an order requiring Bakken crude oil to be conditioned before it is shipped by rail. The order, which had been delayed for a month, was approved unanimously by the commission, which includes Governor Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring. Under the order, crude oil cannot have a vapor pressure that exceeds 13.7 psi, 1 psi below the national standard of 14.7. The order, which was delayed for a month as the commission collected additional public comment and made technical corrections, faced opposition from the state’s oil and gas operators, including Hess, Marathon Oil and Continental Resources. These companies claimed the order could cost them millions of dollars, impact infrastructure projects and set up jurisdictional clashes with federal officials. Corrections to the previous order included lowering temperature requirements when companies claimed earlier temperature […]

Posted On : Published By : Tom Whipple