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US Government Cuts 2015 Domestic Oil Production Forecast

URL: http://www.rigzone.com/news/oil_gas/a/136297/US_Government_Cuts_2015_Domestic_Oil_Production_Forecast NEW YORK, Dec 9 (Reuters) – The U.S. government on Tuesday cut its forecast for domestic oil production growth in 2015 by about 100,000 barrels per day and trimmed its forecast for global oil demand growth next year by 240,000 bpd. The U.S. Energy Information Administration now expects U.S. production next year to rise by 720,000 bpd to around 9.3 million bpd, according to its monthly short-term energy outlook. A month ago, it was forecasting a 850,000-bpd rise next year. Last month, the EIA trimmed its 2015 U.S. production outlook by 100,000 bpd to an average of 9.4 million bpd. World oil demand next year is now expected to grow by 880,000 bpd, the agency said on Tuesday. It had previously forecast the year-on-year increase at 1.12 million bpd. The lower forecasts come amid a sharp slide in global oil markets, with the price of oil trading […]

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Exxon Sees Abundant Oil, Gas Far Into Future

URL: http://www.rigzone.com/news/oil_gas/a/136299/Exxon_Sees_Abundant_Oil_Gas_Far_Into_Future NEW YORK (AP) — North America, once a sponge that sucked in a significant portion of the world’s oil, will instead be supplying the world with oil and other liquid hydrocarbons by the end of this decade, according to ExxonMobil’s annual long-term energy forecast. And the "almost unspeakable" amount of natural gas found in recent years in the U.S. and elsewhere in North America will be enough to make the region one of the world’s biggest exporters of that fuel by 2025, even as domestic demand for it increases, according to Bill Colton, Exxon’s chief strategist. "The world has such an improved outlook for supplies," Colton said in an interview. "Peak oil theorists have been run out of town by American ingenuity." In a forecast that might make economists happy but environmentalists fret, Exxon’s two chief products, oil and natural gas, will be abundant and affordable enough […]

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It’s Oil, Stupid, as Russian Rates Powerless: Chart of the Day

Investors are betting that the Bank of Russia will raise interest rates tomorrow after it exhausted all other options for stabilizing the ruble. A look at the oil price suggests that too may be futile. The CHART OF THE DAY shows the ruble tracking the price of Brent crude over the past 12 months, with both falling 39 percent. The annotations show when the benchmark rate was increased with no notable response from the nation’s currency. The currency has tracked the slumping oil price even as the central bank freed itself up in November to intervene as much as it chooses and choked off access to rubles in an attempt to deter speculators. The bank has increased its main rate by 400 basis points this year and will raise it by 50 basis points to 10 percent tomorrow, according to the median estimate of 27 economists in a Bloomberg […]

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Ten Reasons Why a Severe Drop in Oil Prices is a Problem

Not long ago, I wrote Ten Reasons Why High Oil Prices are a Problem . If high oil prices can be a problem, how can low oil prices also be a problem? In particular, how can the steep drop in oil prices we have recently been experiencing also be a problem? Let me explain some of the issues: Issue 1. If the price of oil is too low, it will simply be left in the ground. The world badly needs oil for many purposes: to power its cars, to plant it fields, to operate its oil-powered irrigation pumps, and to act as a raw material for making many kinds of products, including medicines and fabrics. If the price of oil is too low, it will be left in the ground. With low oil prices, production may drop off rapidly. High price encourages more production and more substitutes; low price […]

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Crude Rebounds From Five-Year Low Amid Shale-Oil Spending Curbs

Brent and West Texas Intermediate rebounded from the lowest closing levels in more than five years amid signs that U.S. oil producers were curbing investment as price competition intensified between OPEC’s largest members. Futures rose 0.7 percent in London, reversing an earlier loss of 1.4 percent. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, reduced its Basrah Light crude price for January to the lowest in at least 11 years yesterday. ConocoPhillips cut its spending for next year by about 20 percent, deferring investment in shale plays including the Permian and Niobrara. Crude is trading in a bear market as the highest U.S. production in three decades exacerbates a global glut. Saudi Arabia, which led OPEC’s decision to maintain rather than cut output at a Nov. 27 meeting, last week offered supplies to its Asian customers at the deepest discount in at least 14 years. “U.S. […]

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Big Oil hits the brakes on shale spending

Big Oil hits the brakes on shale spending thumbnail With oil prices in free fall, the fear is that hunting for new shale in the U.S. may just not be that profitable. ConocoPhillips( COP ) became the first major U.S. oil company on Monday to reveal that it is slashing spending for 2015. There are expectations that more energy companies will follow . Oil prices have dropped 40% since June. And OPEC’s bombshell decision in November not to scale back on production has sent prices even lower. It was also widely seen as an attempt by the oil cartel to choke off the U.S. shale boom. Lower oil prices is great news for consumers globally, but it’s causing immense turmoil in the energy industry. Some countries like Iran and Venezuela as well as higher-cost producers in North America need higher prices to generate a profit. “I think you will […]

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OPEC Early Meeting Seen More Likely by Analysts on Prices

The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s oil production, is facing pressure to have an extraordinary meeting as prices keep falling, according to analysts from Energy Aspects Ltd., RBC Capital Markets and Petromatrix GmbH. OPEC will probably have the meeting in the first quarter, Amrita Sen, chief oil market analyst at London-based Energy Aspects, said at a Platts conference in Dubai today. The pressure to meet will come from financially-strapped members such as Iran, Iraq and Venezuela, she said. RBC Capital Markets and Petromatrix have also pointed to the possibility of a special meeting. OPEC’s next scheduled summit is June 5. Crude has tumbled into a bear market as the highest U.S. production in three decades exacerbates a global glut. Saudi Arabia , which led OPEC’s decision to maintain rather than cut output at a Nov. 27 meeting, last week offered supplies to […]

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Oil to Stay at About $65 for Six Months, Kuwait Petroleum Says

Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp. Oil is trading in a bear market as the U.S. pumps at the fastest rate in more than three decades and demand expands more slowly. OPEC decided on Nov. 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010. “I think oil prices will stay around the current level of $65 for six or seven months until OPEC changes its production policy, or recovery in world economic growth become more clear, or a geopolitical tension arises,” Nizar Al-Adsani, KPC’s chief executive officer, said yesterday in Kuwait City . Crude prices have declined about 40 percent from a June […]

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Oil hits five-year low, crushing risk appetite

LONDON (Reuters) – Oil prices fell to fresh five-year lows on Tuesday, prompting investors rattled by worries over global growth and renewed political uncertainty in Greece to dump shares. The government of bailed-out euro zone member Greece brought forward a presidential vote to next week in a political gamble that could trigger parliamentary polls if Prime Minister Antonis Samaras fails to have his candidate elected. Greek government bond yields GR10YT=TWEB soared. Chinese shares were standout losers, notching up their biggest daily percentage loss in more than five years and reversing a two-week rally. But the key action was in oil. Brent crude LCOc1 fell as low as $65.29 a barrel in Asian trade, its lowest since September 2009, on concern over a swelling supply glut. Brent, which has fallen some 40 percent in the last six months, was last trading at $66.29 per barrel. European shares opened lower, following […]

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Natural Gas Plunges as Low Demand Outlook Encourages Selling

By Timothy Puko NEW YORK–Natural gas had its second-biggest losing session since February as a tepid demand outlook and pessimism across the energy sector continued to rip through the market. The front-month January contract settled down 20.7 cents, or 5.4%, at $3.595 a million British thermal units on the New York Mercantile Exchange. Prices have fallen 20% from the season’s high settlement on Nov. 20 and are approaching their low closing price of 2014, $3.561/mmBtu. The front-month contract saw bigger losses in one session only once since February, but the 6.1% decline recorded Nov. 28 came over two days because the market had no settlement on Thanksgiving. Weather forecasts are encouraging traders to sell. Unseasonably warm temperatures forecast across most of the country almost until Christmas have them expecting little demand for gas heat. Half of all U.S. homes use natural gas for heating, and several analysts have said […]

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Precision Drilling Expects Lower Capital Spending in 2015

Dec 8 (Reuters) – Precision Drilling Corp said it expected 2015 capital spending to be 44 percent lower than this year’s already lowered budget as a steep fall in oil prices threaten to render exploration and development project uneconomic. Brent crude oil, which has fallen nearly 40 percent since June, fell to a new five-year low on Monday on forecasts that oversupply would keep building until next year after OPEC decided not to cut output. Precision Drilling, Canada’s largest oil and gas drilling contractor, said it expected to spend C$493 million ($430 million) next year. It also lowered its 2014 capital spending plans by C$23 million to C$885 million. The company’s capital plan includes the completion and deployment of 16 previously announced rigs. "Following the delivery of the 16 rigs, I expect our rig building activity will be idled until we see an improved commodity price environment and rising […]

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Oil Falls to New Lows

1. Part of oil price decline is caused by stronger dollar.  Major part is caused by increased supply from fracking of shale oil in N. America. 2. Stronger dollar is caused by improved American economy, compared with other developed economies, like EU and Japan. 3. Improved American economy is caused by Federal Reserve’s unconventional (expansive) monetory policy intiated by Bernanke, followed by Yellen (whose job seems to become easier than her predessor’s). 4. Obama’s contribution to this oil price decline is his support of Federal Reserve’s policy and nomination of Yellen who will continue to adjust US monetory policy according to economic development. 5. Yellen will face nomination hurdle in 2018 when her term is up.  Hope winner of 2016’s presidential election will again nominate Yellen in 2018.

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Hedge Funds Betting That OPEC-Led Oil Rout Is Near End

Hedge funds are betting that the oil-price crash is close to ending. Speculators boosted their net-long position in West Texas Intermediate crude by 14 percent in the week ended Dec. 2, the most in 20 months, U.S. Commodity Futures Trading Commission data show. Short bets contracted by 15 percent as long wagers expanded 4 percent. Oil’s collapse accelerated after the 12-nation Organization of Petroleum Exporting Countries decided Nov. 27 to maintain output levels, underscoring the price war in crude. Oil tumbled into a bear market in October and reached a five-year low last week as the U.S. shale boom added to a global glut at a time of weakening demand growth. “A lot of people are betting that the selloff is overdone,” John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund (USO) that focuses on energy, said by phone Dec. 5. “We haven’t seen […]

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Commodity Benchmarks Are Open to Manipulation, Law Firm Says

Almost two-thirds of commodity market participants say that benchmarks used to set the price of everything from crude oil to ethanol to zinc are vulnerable to manipulation, according to a new study. The report, to be published today by U.K. law firm Clyde & Co., shows that 64 percent of 170 respondents are concerned methods used by price reporting agencies to set commodity benchmarks could be manipulated. Reasons given in the survey include sample groups that are too small, a lack of independent oversight and the fact price creators are also traders who can benefit from influencing prices. “It is an issue that there is a lack of confidence,” Clare Hatcher, a consultant with Clyde & Co.’s International Trade and Commodities Group, said in a phone interview. Benchmark prices and the way they are determined have come under scrutiny after scandals in markets including foreign exchange, precious metals and […]

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Saudi King Announces Cabinet Reshuffle, Keeps Oil Minister Naimi in Place

By Summer Said Saudi Arabia’s King Abdullah on Monday announced a shake-up of the Kingdom’s government, but kept veteran oil minister Ali al-Naimi in place. Mr. al-Naimi, who has been the kingdom’s oil minister since August 1995, was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries, or OPEC, to keep its oil production target steady, a move that has since sent global oil prices into a tailspin. The king named new heads for the ministries of higher education, Islamic affairs, health, culture and information, telecommunications, transportation, agriculture and social affairs, according to a royal decree posted by the official Saudi Press Agency. Write to Summer Said at [email protected]

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Iraqi Officials Push to Take Fight to ISIS in Mosul as U.S. Urges Restraint

MANAMA, Bahrain — Allied warplanes and Iraqi ground troops are increasingly isolating Islamic State militants in the captured city of Mosul, prompting Iraqi officials to push for a winter offensive to wrest control of the area months ahead of the previous schedule — and over American warnings. The ground campaign to retake Iraq’s second-largest city from the Islamic State, also known as ISIL or ISIS , is still likely many weeks away, American officials said. Its timing will depend on the pace of training for additional Iraqi ground troops to retake the city and for a holding force afterward, as well as sorting out a brewing dispute between Baghdad and Washington over whether Iraq is ready to carry out such a complex urban battle. The United States and its coalition partners have carried more than 660 airstrikes in Iraq, making it more difficult for the Islamic State to mass […]

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Shia militias spark furor in disputed territories

Iraqi federal troops and members of their Kurdish and Shiite militia allies climb up Adhaim dam after recapturing it from Islamic State (IS) group militants in the ethnically mixed Diyala province, on Nov. 14, 2014. (YOUNIS AL-BAYATI/AFP/Getty Images) By Recommend 697 people recommend this. Sign Up to see what your friends recommend. Firing rifles into the air from more than 50 Humvees, a convoy of militiamen rolled through the main street of Kifri, 120 kilometers southeast of Kirkuk city, on Nov. 29 – arriving without warning in Kurdish-controlled Iraq.Two local Kurdish security officials and multiple eyewitnesses said that Kifri residents lined the highway, hurling abuse, rocks and water bottles at the Shia forces. Unverified videos posted to social media also captured the scene. Clashes between the local population…

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Kemp: Watching For A Drilling Slowdown In North Dakota

URL: http://www.rigzone.com/news/oil_gas/a/136273/Kemp_Watching_For_A_Drilling_Slowdown_In_North_Dakota In the next few months, everyone in the oil market will be intently watching the volume of new drilling activity in the US shale plays, says analyst John Kemp. John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Dec 8 (Reuters) – In the next few months, everyone in the oil market will be intently watching the volume of new drilling activity in the shale plays of the United States for any signs of a slowdown in response to the fall in oil prices. There are more than a dozen major shale plays in production. But just three account for almost all the rise in oil output since 2009 and nearly two thirds of all rigs in operation: the combined Bakken/Three Forks in North Dakota and the Eagle Ford and Permian in Texas. These three are the most mature plays and least […]

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Iraq Follows Saudis Discounting Oil for Asia to 11-Year Low

Iraq will sell its Basrah Light crude next month to customers in Asia at the steepest discount in at least 11 years, following Saudi Arabia’s lead as Middle Eastern producers seek to defend market share. Basrah Light, a high-sulfur oil used by refiners including China Petroleum & Chemical Corp., was set at $4 a barrel below the average of Middle East benchmark Oman and Dubai grades, according to a statement from Iraq’s Oil Marketing Co. yesterday. That’s the lowest since at least August 2003, when Bloomberg started compiling the data. The official selling price to U.S. buyers was cut by 30 cents compared with December, while shipments to Europe were marked up by 10 cents. Iraq is reducing export prices to Asia after a similar move by Saudi Arabia last week. The two nations are the biggest producers in the Organization of Petroleum Exporting Countries, which decided against cutting […]

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Crude Oil’s Fall Pressures Energy Megaprojects

If we lose jobs from the oil and gas industry we can make up for it by more hiring in the solar and wind industries.  It is BOOMING.  "Solar Energy Job Growth Outpaces Other Industries" http://www.solarnovus.com/solar-energy-job-growth-outpaces-other-industries_N8386.html "How Renewable Energy Jobs Are Changing America" http://www.fool.com/investing/general/2014/12/06/how-renewable-energy-jobs-are-changing-america.aspx Fossil fuel industries in America are going to have more competition besides just Saudi Arabia and other OPEC countries.  We still need lots of energy.  Who cares whether it comes from oil, gas, and coal or if it comes from clean energy sources like solar and wind.  Ignore what people are saying about the costs of wind and solar power.  Trust me, the "levelized costs" (LCOE) are getting VERY competitive.  The problems with intermittency are rapidly being solved with backup natural gas turbine generation, sophisticated computers linked up to weather forecasts, grid energy storage like batteries, etc.

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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 […]

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U.S. shale output still surges, to add 103,000 bpd by Jan-EIA

NEW YORK (Reuters) – Oil production from the United States’ biggest shale plays is poised to keep expanding at the same breakneck pace into early next year, according to new U.S. projections released on Monday that highlighted a slow response to tumbling prices. Oil production from the three main plays – the Bakken, Eagle Ford and Permian Basin – is set to rise by some 103,000 barrels per day (bpd) in January from December, the U.S. Energy Information Administration said. That’s just a hair below December’s 105,000 bpd rise, and a faster rate than most months this year. Well productivity continues to grow, as drillers get better at squeezing more barrels of crude out of each well – and out of each dollar. Each new Bakken well is set to produce some 550 barrels a day in January, up from under 500 bpd as recently as June, the data […]

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Drilling Productivity Report

New-well oil production per rig barrels/day New-well gas production per rig thousand cubic feet/day Region December 2014 January 2015 change December 2014 January 2015 change Bakken 543 550 7 558 567 9 Eagle Ford 550 558 8 1,444 1,454 10 Haynesville 24 24 – 5,591 5,686 95 Marcellus 33 34 1 7,962 8,002 40 Niobrara 407 415 8 1,812 1,837 25 Permian 180 185 5 380 385 5 Utica 201 209 8 4,246 4,344 98 Rig-weighted average 323 326 3 1,650 1,660 10 The Drilling Productivity Report uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil and natural gas wells to provide estimated changes in oil and natural gas production for seven key regions. EIA’s approach does not distinguish between oil-directed rigs and gas-directed rigs because once a well is completed it […]

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Almost all U.S. nuclear plants require life extension past 60 years to operate beyond 2050

Source: U.S. Energy Information Administration, based on U.S. Nuclear Regulatory Commission Note: Graph does not include planned nuclear additions but does include scheduled retirements. When nuclear power plants are built, the Nuclear Regulatory Commission (NRC) has the authority to issue initial operating licenses for a period of 40 years. Beyond that, the reactors need license renewals, and the NRC has granted 20-year license renewals to 74 of the 100 operating reactors in the United States. These reactors may now operate for a total period of 60 years. They represent a cumulative capacity of a little more than 69,000 megawatts (MW). The NRC is currently reviewing license renewal applications for an additional 17 reactors, and expects to receive seven more applications in the next few years. With the bulk of the existing nuclear fleet licensed before 1990, nearly all existing reactors will be more than 60 years old by 2050. […]

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Global Warming to Make European Heat Waves ‘Commonplace’ by 2040s, Study Finds

PARIS — In June 2003, a high-pressure weather system took hold over Western Europe and hovered there for weeks, bringing warm tropical air to the region and making that summer the hottest since at least 1540, the year King Henry VIII discarded his fourth wife, Anne of Cleves. Temperatures were about 2.3 degrees Celsius, or 4.1 degrees Fahrenheit, above average that summer, contributing to perhaps 70,000 additional deaths and hitting the elderly particularly hard. The heat was a factor in the outbreak of forest fires and in lower than usual crop yields. It caused Alpine glaciers to shrink at a rate double that seen in the previous record summer five years earlier. Now, three scientists from the Met Office, the British weather agency, have concluded that human-caused global warming is going to make European summer heat waves “commonplace” by the 2040s. Their findings, published on Monday in the online […]

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Bakken Shale Rig Count Decreases by Three to 188

Falling Oil Prices: How Low is Too Low for Bakken Producers Falling Oil Price The  Bakken-Three Forks rig count  decreased by three t0 188 rigs running across our coverage area by the end of last week. The NDIC notes 190 rigs are active in North Dakota, but around 15 of those are in the process of moving in and rigging up. In recent Bakken news, analysts and industry leaders are worried about the effects low oil prices will have on the booming shale industry, including investment and drilling interests in the Bakken play. Since extracting shale oil is currently a more expensive process than conventional production methods, Bakken producers may be more vulnerable to lower crude prices. The U.S. rig count decreased by 3 to 1,920 rigs running by the end of last week. A total of 344 rigs were targeting natural gas (flat from  the previous week) and 1,575 were targeting oil in […]

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U.S. Refining Surge Fills Tankers Taking Fuels to Latin America

The U.S. refining surge is lifting tanker rates to the highest in at least three years as demand accelerates for vessels carrying the processed fuels to buyers in Latin America and the Caribbean. Tankers shipping about 38,000 metric tons of refined fuels to Rio de Janeiro from Houston earned an average of $31,050 a day last week, according to data from Clarkson Plc. (CKN) That’s the highest since at least December 2010, when the world’s largest shipbroker began publishing the data. The surge underscores how the U.S., which bans the export of most crude, is increasingly processing its abundance of the feedstock into fuels. Record numbers of vessels were hired last week to move oil products to Latin America and the Caribbean, according to Charles R. Weber, a shipbroker in Greenwich, Connecticut . “The best option is to export,” George Los, an analyst at Weber, said by phone today. […]

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Congressman to introduce bill to lift U.S. oil export ban

WASHINGTON (Reuters) – U.S. Representative Joe Barton will introduce a bill on Tuesday to lift the 40-year ban on exports of crude oil, but the measure has almost no chance of passing due to lawmaker concerns about fuel prices and costs to refiners. Barton, a Republican from Texas, will introduce a bill to lift the export ban Congress passed in the 1970s after the Arab oil embargo led to fears of fuel shortages, an aide said. The lawmaker will introduce the measure ahead of a hearing later this week by the House of Representatives subcommittee on energy and power on whether the export restriction makes sense amid the domestic drilling boom. "The Congressman is planning to drop his bill tomorrow … and he hopes the timing will make it a centerpiece piece of conversation at Thursday’s hearing," the Barton aide said. Barton, a member of the committee, believes lifting […]

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U.S. Supreme Court rejects BP challenge to Gulf spill settlement

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday rejected BP’s challenge to its multibillion-dollar settlement agreement over the 2010 Gulf of Mexico oil spill, which the oil giant complained has allowed payouts to some businesses that are unable to trace their losses to the disaster. The court’s decision not to hear the London-based company’s appeal is the latest setback for BP, which is trying to limit payments over a disaster that killed 11 people and triggered the largest U.S. offshore oil spill. The action, disclosed in an unsigned order, means BP must make the payments as it continues to deal with the spill’s aftermath. BP signed a 2012 settlement agreement to compensate businesses claiming financial losses due to the spill. But BP has since argued the agreement has been interpreted improperly by Patrick Juneau, the settlement fund’s court-appointed administrator, forcing it to pay businesses that could not show […]

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BP Weighs Future of Aging Norway Fields as Oil Slump Forces Cuts

As oil prices keep falling, BP Plc (BP/) is among Norwegian oil producers having to take a hard look at whether to kill off aging offshore fields earlier than planned because squeezing out the last barrels might not be worth it. BP is currently deciding on plans for the five fields it operates in Norway in a study to be completed in the first half, said Jan Erik Geirmo, a Stavanger-based spokesman. “Falling oil prices, lower production and more demanding operations, in addition to significant costs for shutting down and removing old installations and platforms, are continuous challenges that may have an impact on the lifetime of some of our fields,” Geirmo said in an e-mailed reply to questions. What goes for BP also goes for an industry hit by squeezed margins even as the government demands it meet commitments to keep investing to ensure resources are exploited in […]

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Kremlin lauds ties with energy-hungry China

Russian Foreign Minister Sergei Lavrov describes ties with China as a relationship based on mutual trust and non-interference. UPI/Li Tao/Pool MOSCOW, Dec. 9 (UPI) — The growing relationship between Russia and China in the new century is supported in part on energy agreements, Russia’s foreign minister said Tuesday. "The course of Russian-Chinese relations takes into account core interests of the two nations and we have no plans to change it," Foreign Minister Sergei Lavrov said in a Tuesday interview with state-backed news agency Sputnik, formerly RIA Novosti. Lavrov last month said developing a foreign policy vision that emphasizes ties in the Asia-Pacific is a national priority for the Kremlin. A Russian economy hobbled by a reliance on Europe as a destination for oil and natural gas, whose exports account for more than half of Russian revenues, has pivoted toward energy-hungry Asia-Pacific . Western powers have sanctioned the Russian energy […]

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Ten Reasons Why a Severe Drop in Oil Prices is a Problem

Not long ago, I wrote Ten Reasons Why High Oil Prices are a Problem . If high oil prices can be a problem, how can low oil prices also be a problem? In particular, how can the steep drop in oil prices we have recently been experiencing also be a problem? Let me explain some of the issues: Issue 1. If the price of oil is too low, it will simply be left in the ground. The world badly needs oil for many purposes: to power its cars, to plant it fields, to operate its oil-powered irrigation pumps, and to act as a raw material for making many kinds of products, including medicines and fabrics. If the price of oil is too low, it will be left in the ground. With low oil prices, production may drop off rapidly. High price encourages more production and more substitutes; low price […]

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Oil Slumps to Five-Year Low as OPEC Decision Spurs Forecast Cuts

Brent crude slumped to a new five-year low as OPEC’s decision last month to maintain output at a time of oversupply prompted a growing number of banks to cut price forecasts. West Texas Intermediate also slumped. Futures dropped as much as 2.5 percent in London and 1.9 percent in New York . Morgan Stanley lowered its 2015 estimate by 29 percent in a report on Dec. 5, citing a decision by the Organization of Petroleum Exporting Countries not to lower a 30 million-barrel-a-day output target. Banks including BNP Paribas SA, Credit Suisse Group AG, UBS Group AG and Barclays Plc have also cut since the 12-nation group’s Nov. 27 meeting. “The major forecasters continue to cut price expectations, especially for the first two quarters of 2015,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail. He forecasts Brent may drop as low as $60 a […]

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Hedge Funds Betting That OPEC-Led Oil Rout Is Near End

Hedge funds are betting that the oil-price crash is close to ending. Speculators boosted their net-long position in West Texas Intermediate crude by 14 percent in the week ended Dec. 2, the most in 20 months, U.S. Commodity Futures Trading Commission data show. Short bets contracted by 15 percent as long wagers expanded 4 percent. Oil’s collapse accelerated after the 12-nation Organization of Petroleum Exporting Countries decided Nov. 27 to maintain output levels, underscoring the price war in crude. Oil tumbled into a bear market in October and reached a five-year low last week as the U.S. shale boom added to a global glut at a time of weakening demand growth. “A lot of people are betting that the selloff is overdone,” John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund (USO) that focuses on energy, said by phone Dec. 5. “We haven’t seen […]

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Oil’s Decline Is Far From Confined

So far, few outside the energy sector have been hurt by this year’s oil rout. But the ripples likely have only begun to be felt. Falling oil prices are on balance positive for energy consumers such as the U.S., and with the Dow Jones Industrial Average hitting a new record Friday, investor confidence appears intact. Yet some analysts and investors say a 39% plunge in crude futures since June could lay the groundwork for unpredictable market shifts and increasing price swings, or volatility. In a worst-case scenario, oil’s selloff could ultimately result in a shock akin to the Asian currency crisis of 1997-98. That episode—which started with a devaluation by Thailand—rattled markets and economies around the globe after many traders initially misjudged it as minor and inconsequential. Most investors expect the U.S. economy and global markets to avoid such a fate this time. But the great lesson of the […]

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The EIA’s World Oil Production Numbers

The EIA has recently published their International Energy Statistics . Their stats include all liquids such as NGLs, biofuels and even refinery process gain. But I only track actual oil. The EIA does not track “Crude Only” so we are forced to track what they do track which is Crude + Condensate . The EIA is about four months behind with their world petroleum data. All data in this report has data through August, 2014 and is in thousand barrels per day. World C+C production was down 124,000 barrels per day in August. But according to the IEA it will be up considerably more in September. Non OPEC production shot up in November, 2013 but has made no progress since. Though US production has continued to climb, declines in the rest of the world have kept it from increasing. Since that date, November 2013, US production is up 655,000 […]

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Iran Budget Faces Short-Term Oil-Price Strain, Rouhani Says

Iran expects oil prices at five-year lows will put “short-term pressure” on the government’s budget even as it strives to contain inflation, President Hassan Rouhani said. Crude prices have declined about 40 percent from a June peak amid overproduction and slower demand growth. The Organization of Petroleum Exporting Countries decided on Nov. 27 to maintain its production target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010. “The price of Brent has fallen from $110 to less than $70, a decline little before seen,” Rouhani said yesterday in a speech to the country’s parliament in Tehran, according to the semi-official Iranian Students’ News Agency . “It’s necessary for next year’s budget to be adjusted with caution.” The plunge in crude comes as international sanctions imposed on Iran over its nuclear program are already curtailing crude exports, the […]

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Syria, Iran condemn Israeli airstrikes

BEIRUT (AP) — The Syrian and Iranian foreign ministers have condemned Israeli airstrikes on two areas near Damascus, calling it an act of aggression that proves Israel was "in the same trench" with extremist groups fighting the Syrian government. Israeli warplanes bombed the two areas Sunday, striking near Damascus’ international airport as well as outside a town close to the Lebanese border. The Syrian government said the attacks caused material damage. Israel has not commented on the strikes. Syrian Foreign Minister Walid al-Moallem claimed Israel was trying to compensate for losses incurred by Islamic extremist groups in Syria at the hands of the Syrian army. He did not elaborate. He spoke Monday at a joint news conference in Tehran with his Iranian counterpart, Mohammad Javad Zarif.

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Washington Post Reporter, Detained in Iran, Is Charged

TEHRAN — A reporter for The Washington Post who has been jailed since July was finally charged by the Iranian authorities in a 10-hour court session on Saturday, his family confirmed on Sunday, but he was not told what he was being charged with. The court appearance of the reporter, Jason Rezaian, was also confirmed by his lawyer, Saleh Nikbakht, who has not been allowed to defend Mr. Rezaian. Beyond that, Mr. Nikbakht said in a phone interview, “I don’t know what happened.” People close to Mr. Rezaian, including his wife, Yeganeh Salehi, who was herself arrested and then released in October, have refused to talk to the news media. But the family of Mr. Rezaian, who holds both American and Iranian citizenship, released a statement Sunday saying that charges had been filed and asking Iran ’s supreme leader, Ayatollah Ali Khamenei, to release him. “In its ongoing disregard […]

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Israel strikes near the Syrian capital: Syrian TV

BEIRUT (Reuters) – Syrian state television said on Sunday that Israeli jets had bombed areas near Damascus international airport and in the town of Dimas, near the border with Lebanon. An Israeli army spokesman said he would not comment on the "foreign reports". Israel has struck Syria several times since the start of the three-year conflict, mostly destroying weaponry such as missiles that Israeli officials said were destined for their long-time foe Hezbollah in neighbouring Lebanon. "The Israeli enemy committed aggression against Syria by targeting two safe areas in Damascus province, in all of Dimas and near the Damascus International Airport," state television said, adding that there were no casualties. Residents in Damascus said they heard loud explosions and opposition activists posted photos online of jet streams in the evening sky and fiery explosions. Syria’s army general command said on state television that there were "material losses in some […]

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Kuwait Planning $7 Billion Heavy-Oil Project Amid Cheaper Crude

Kuwait , the third-largest producer in OPEC, plans to spend about $7 billion to develop heavy-oil fields even with crude prices near five-year lows. The first phase of the Lower Fars heavy-oil project will cost $4.2 billion, with contracts to be awarded by the end of this year, Hashem Hashem, chief executive officer of state-owned Kuwait Oil Co., said today at a conference in Kuwait City. KOC, which plans to drill 900 wells and pump 60,000 barrels a day by 2018 in the project’s first phase, targets output of 180,000 barrels a day by 2025 and 270,000 by 2030, Hashem said. Production from Lower Fars and the Ratqa field “will open the door for development of other heavy oil fields in Kuwait,” he said. Brent crude , a pricing benchmark for more than half of the world’s oil, has tumbled 41 percent from its June 19 peak this year […]

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Fossil-fuel lobbyists, bolstered by GOP wins, work to curb environmental rules

Fossil-fuel lobbyists are working to thwart the Obama administration’s environmental rules. (Shannon Stapleton/Reuters) Oil, gas and coal interests that spent millions of dollars to help elect Republicans this year are moving to take advantage of expanded GOP power in Washington and state capitals to thwart Obama administration environmental rules. Industry lobbyists made their pitch in private meetings last week with dozens of state legislators attending a meeting of the American Legislative Exchange Council (ALEC), an industry-financed conservative state policy organization. The lobbyists and legislators consideredseveral model bills to be introduced across the country next year designed to give states greater power to block or delay new Obama administration environmental standards, including new limits on power-plant emissions. The industry’s strategy is designed to combat a renewed push by President Obama to carve out climate change as a top priority for his final two years in office. The White House has […]

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U.S. gasoline prices fall to four-year low: Lundberg survey

(Reuters) – The average price of a gallon of gasoline in the United States has dropped one dollar since early May, the lowest price in more than four years, according to the Lundberg survey released Sunday. Prices for regular-grade gasoline fell to $2.72 a gallon, down 12 cents since the last survey two week ago. The recent drop has been compared by many to the extreme price plunges that took place after the 2008 recession. The decline in prices was driven by slower demand coupled with dramatic growth in oil supply production, especially in North America and Canada. The strengthening U.S. dollar also played a role. "We may see a few more pennies drop before Christmas," said the survey’s publisher, Trilby Lundberg. "All this presupposes that crude oil prices don’t bounce up significantly in the near future." The highest price within the survey area in 48 U.S. states was […]

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Low oil prices won’t slow Texas

Gas is cheap, jobs are plentiful and the economy is rolling. This is why we love the free market. In the last six months, the price of oil has fallen 36 percent, shaking producers, energy investors and some governments. Such steep drops used to be bad news, usually a signal of global recession. This time, a global glut is driving down oil prices, thanks largely to the shale boom that started in Texas. “We’ve gone from scarcity to abundance,” said Bernard Weinstein, associate director of SMU’s Maguire Energy Institute. “The price of oil today is determined in North Dakota and Texas, not Saudi Arabia.” Through September, Texas companies produced an average of 3 million barrels a day, almost three times as much as five years ago. In North Dakota, daily production topped 1 million barrels, five times the 2009 level. If oil prices keep dropping, that will eventually slow […]

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Study Finds Toxins, Cancer-Causing Air Pollution at Oil, Gas Wells

Study Finds Toxins, Cancer-Causing Air Pollution at Oil, Gas Wells thumbnail A cadre of citizens taking air samples for a scientific study has found toxic emissions from Wyoming oil and gas operations, some that are many, many of times above federal health standards. In a six-state study published in Environmental Health , authors say the Wyoming samples show high concentrations of benzene, hydrogen sulfide, formaldehyde and more. Air samples taken in 13 of 15 sites in Park and Fremont counties exceeded the standards, prompting a call to action. Deb Thomas of Clark, one of the co-authors of the study, said residents close to increasing oil and gas developments are in peril and have been abandoned by government watchdogs. She is a director of the group ShaleTest, and formerly worked with the Wyoming-based landowner advocacy group Powder River Basin Resource Council. “They’re fighting for their lives,” she said. “Fracking not […]

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Ukraine expects Russian gas supplies to resume Monday: minister

KIEV (Reuters) – Ukraine expects Russia to resume supplies of gas from Monday after Kiev transferred a pre-payment of $378 million to Gazprom, its energy minister said on Sunday. Russia cut gas deliveries to Ukraine in mid-June in a dispute over prices and debts and supplies have remained suspended while the haggling played out against a background of worsening political relations caused by the separatist war in Ukraine, which Kiev says Moscow is promoting. Cash-strapped Kiev had delayed buying new supplies for as long as possible and had been drawing on severely depleted reserves to meet consumer demand as increasingly cold weather set in. But with freezing temperatures and in line with a deal signed by Ukraine’s gas company Naftogaz and Gazprom in October, Kiev late on Friday transferred $378 million to the Russian gas giant as an upfront payment for 1 billion cubic meters of gas for December. […]

Posted On : Published By : Tom Whipple