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Iran wary of regional oil conspiracies

Iran’s parliament speaker Ali Larijani speaking with President Hassan Rouhani. Both leaders have said the recent drop in oil prices is part of a conspiracy against the Islamic republic. (Photo: Iranian government) DAMASCUS, Syria, Dec. 22 (UPI) — The Iraqi speaker of parliament said Monday from Syria his government was mindful of regional players working against Tehran in the global oil marketplace. Iran is trying to retool an economy stifled by Western economic sanctions and now the low price of oil, off about 45 percent from its June value. The price of oil Monday was around $61 per barrel. Iranian officials have said they are drafting a budget for the fiscal year that begins in March based on $70 per barrel. Speaker Ali Larijani said from the sidelines of a visit with Shiite allies in Syria the government in Tehran suspected the same countries that worked against it during […]

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Opec leader vows not to cut oil output even if price hits $20

Ali al-Naimi, Saudi oil minister Opec will not cut production even if the price of oil falls to $20 a barrel, the cartel’s de facto leader said, spelling out a dramatic policy shift that will have far-reaching implications for the global energy industry. In an unusually frank interview, Ali al-Naimi, the Saudi oil minister, tore up Opec’s traditional strategy of keeping prices high by limiting oil output and replaced it with a new policy of defending the cartel’s market share at all costs. “It is not in the interest of Opec producers to cut their production, whatever the price is,” he told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.” He said the world may never see $100 a barrel oil again. The comments, from a man who is often described as the most influential figure in the energy industry, […]

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Saudi Arabia Vows to Ride Out Oil Price Slump

ABU DHABI, United Arab Emirates — The world’s top petroleum exporter, Saudi Arabia , said on Sunday that it would not cut output to prop up oil markets even if nations outside OPEC did so, in one of the strongest signals that it planned to ride out the market’s biggest slump in years. Referring to countries that are not members of the Organization of the Petroleum Exporting Countries, Ali Al-Naimi, the oil minister of Saudi Arabia, told reporters: “If they want to cut production they are welcome. We are not going to cut, certainly Saudi Arabia is not going to cut.” He added that he was “100 percent not pleased” with prices but said they would improve, although when was unclear. He said speculators were responsible for the fall in prices to half their levels of six months ago and what he called a lack of cooperation from non- […]

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Saudi oil minister Ali al-Naimi: We’ll never cut production despite plunging prices

Saudi oil minister Ali al-Naimi: We’ll never cut production despite plunging prices thumbnail The Saudi Arabian Minister of Petroleum and Mineral ResourcesAli al-Naimi has declared that the country will “never” cut oil production despite prices hitting five and a half year lows on over-supply and weak demand. Al-Naimi added in a CNN interview that Saudi Arabia was also “not conspiring” to target US and Russian oil producers by not cutting supply and that it was too late for non-Organisation of the Petroleum Exporting Countries (Opec) members to offer any cuts. Saudi Arabia will not cut prices, neither now nor ever in the future, he said. “These rumours or whoever generated them, is completely mistaken. I was the first minister to welcome the production and addition of shale oil in 2008 and 2009, in Washington, why? Because it would give better stability and assurance to the world that peak oil, is a theory now […]

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Exclusive: Arab OPEC sources see oil back above $70 by end-2015

ABU DHABI (Reuters) – Arab OPEC producers expect global oil prices to rebound to between $70 and $80 a barrel by the end of next year as a global economic recovery revives demand, OPEC delegates said this week in the first indication of where the group expects oil markets to ‎stabilize in the medium term. The delegates, some of which are from core Gulf OPEC producing countries, said they may not see – and some may not even welcome now – a return to $100 any time soon. Once deemed a “fair” price by many major producers, $100 a barrel crude is encouraging too much new production from high cost producers outside the exporting group, some sources say. But they believe that once the breakneck growth of high cost producers such as U.S. shale patch slows and lower prices begin to stimulate demand, oil prices could begin finding a new equilibrium by the end of 2015 – even in […]

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Libya Oil Production Drops as Fighting Spreads to Port

Libya’s oil output fell below its own consumption as fighting spread to Mellitah, a region that hosts the country’s fourth largest oil port, the state petroleum company said. National Oil Corp. already this month declared force majeure at two export terminals, Es Sider and Ras Lanuf, after an attempt by Islamist militias to capture them. Force majeure is a legal status that protects a company from liability when it can’t fulfill a contract for reasons beyond its control. National Oil on Sunday reported clashes in the Mellitah area, Libya’s westernmost oil port. “There is no damage to the facilities till this hour, and the port of Mellitah is still open,” said Mohammed Elharari, the spoksman of the company, by phone in Tripoli, without giving an estimate for the nation’s current oil output. The U.S. Energy Information Administration estimates Libya’s consumption was 239,000 barrels of oil a day in 2013. […]

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Oil Price Drop, Nuclear Deal Delay Unsettle Iran’s Economy

ENLARGE TEHRAN—Plummeting oil prices and the failure so far to conclude a nuclear agreement are dealing a double blow to Iran’s economy just as it was starting to recover. Oil prices, which have fallen about 50% since June, resumed their decline on Monday after Saudi Arabia, the world’s largest crude exporter, said it may boost production despite a global glut. The slide in prices is strangling revenues in Iran, a country dependent on oil money. Compounding the problem, Iran and six world powers also missed a deadline in November to conclude a comprehensive deal on limiting Iran’s nuclear activities, something that has dimmed hopes for crippling economic sanctions to be lifted anytime soon. The renewed economic travails are eroding gains that accompanied President Hasan Rouhani ’s surprise election 18 months ago. Mr. Rouhani, whose political fortunes rest largely on an economic recovery, has been scrambling to contain the damage. […]

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Morocco natural gas reserves emerging

Sands of Morocco yielding good results for energy companies working in frontier territory. (UPI Photo/Mohammad Kheirkhah) . LONDON, Dec. 22 (UPI) — Morocco could be emerging as a major regional player in terms of potential natural gas production, companies working on fledgling campaigns there said Monday. Morocco is one of the West African countries that have drawn interest from international energy companies eager to tap into unexploited reserves. Circle Oil, a British energy company focused on Middle East and North Africa, announced what it considers to be a significant natural gas discovery in Morocco . The company said it achieved production from its Sebou permit area in the country at a sustained test rate of 8 million cubic feet per day. "We believe that this well will add significant volumes to our reserves for potential gas production and at rates not subject to oil price fluctuation," Circle Oil Chief […]

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Oil’s 50% Drop From 2014 High Stokes Faith in Rally

Outlet pipes and fuel storage tanks are seen at the Zawiya oil refinery near Tripoli,… Read More The slump in oil that drove U.S. prices down as much as 50 percent from this year’s high is spurring the most bullish bet by hedge funds in four months. Speculators expanded their net-long position in West Texas Intermediate crude by 14 percent in the week ended Dec. 16, U.S. Commodity Futures Trading Commission data show. Long wagers increased the most since February. Money managers have increased their net-long position by 34 percent in three weeks, even as prices kept tumbling as OPEC ministers reiterated pledges to keep pumping. Their bullishness is also reflected in exchange-traded funds that track oil, which attracted the most money in four years this month. “People are starting to feel that we not only hit the bottom but we are turning around,” Michael Lynch , president of […]

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South Sudan Signs Agreement With China’s CNPC to Boost Oil Production

ENLARGE Internally displaced South Sudanese receive cooking oil and food aid from the World Food Program in Bor, Jonglei state, on Dec. 10. The war-ravaged nation on Monday signed an agreement with China National Petroleum Co. in a bid to bolster oil production in the country. Reuters KAMPALA Uganda—South Sudan has signed an agreement with China National Petroleum Co., or CNPC, to boost oil production in at least three blocks, officials said Monday as the war-ravaged nation attempts to heal its battered oil industry. CNPC said in a statement that it would use heavy oil recovery technologies in ”stabilizing and increasing crude output” in the three blocks in the oil-rich but restive nation. The deal highlights how quickly China wants to restore South Sudan’s oil production which has slumped by a third since the outbreak of the conflict late last year, posing a threat to a vital source of […]

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Giant oil field in Kazakhstan moving forward

Italian energy company Eni committed to moving forward with developments at Kashagan oil field, one of the largest in the world. (Photo: North Caspian Operating Co.) ASTANA, Kazakhstan, Dec. 22 (UPI) — Italian energy company Eni said Monday it was committed to getting the Kashagan oil project in Kazakhstan, one of the world’s largest, up and running. Eni Chief Executive Officer Claudio Descalzi met in Astana with Kazakh leaders to discuss developments at the offshore Kashagan oil field . Kashagan is among the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open. Last week, members of the production consortium, which includes Eni, met with government officials and the North Caspian Operating Co. to review the project. Terms of an agreement charting […]

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Moscow confirms status of South Stream

Russian energy company Gazprom says Turkish Stream proposed as name of pipeline project proposed after larger South Stream pipeline for Europe cancelled. (UPI Photo/Sergey Starostenko) Russian President Vladimir Putin said during an early December meeting in Ankara the long-planned South Stream natural gas pipeline "will not be carried out." 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. "The South Stream pipeline will not be constructed and we will be implementing another project, which will get its name in the nearest future," Gazprom Deputy Chief Executive Officer Alexander Medvedev said. "Our partners in Turkey proposed the name of the Turkish Stream." South Stream was Gazprom’s answer to political and economic issues in Ukraine, through which Gazprom sends the bulk of its natural gas to Europe. Gazprom in 2006 and 2009 […]

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Bakken Shale Rig Count Decreases by Seven to 180

Bakken Operators Slash 2015 Budgets The  Bakken-Three Forks rig count  decreased by seven t0 180 rigs running across our coverage area by the end of last week. The NDIC notes 178 rigs are active in North Dakota, but around 13 of those are in the process of moving in and rigging up. In recent Bakken news, as the free-fall in crude prices continues, major Bakken operators are expressing their caution by slashing their budgets for 2015. Marathon Oil is the latest giant to announce that its projected budget will curb exploration spending by a whopping 20% for 2015. Though the company still forecasts spending in upwards of $4.4 billion, the decrease is another sign that the spiraling oil prices are casting a dark shadow over the incredible growth that is taking place in the shale regions. The U.S. rig count decreased by 18 to 1,875 rigs running by the end of last week. A […]

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US Shale Oil Bonanza Is Coming to End — OPEC Official

By Sarah Kent ABU DHABI–The investment bonanza in U.S. shale oil is coming to an end as a result of the steep fall in oil prices, a senior OPEC official said Monday. "Investments in the North American shale and tight oil and gas industry will come to a slow halt," the United Arab Emirates OPEC governor Ali Al Yabhouni said, while vowing that the UAE would continue to invest in its oil sector to maintain and increase its market share. The comments follow a dramatic slide of nearly 50% in oil prices this year, accelerated by the Organization of the Petroleum Exporting Countries decision last month to maintain its oil output rather than cutting it to support the market. Speaking at an energy conference in Abu Dhabi, Mr. Al Yabhouni maintained that the slide in prices would be short term and was due primarily to new supply additions. "There […]

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China’s Dark Shadow Looms Over Oil’s Future

At the heart of global oil demand in China, there remains darkness. Oil’s collapse in 2014 has been a tale of gushing supply, but it is worth remembering that investors started the year feeling jittery about slowing demand. That centered around China, the world’s largest contributor to oil demand growth in recent years. The problem for investors next year isn’t only that Chinese demand still looks slow . It is also inscrutable. Most observers can’t agree on how much oil China actually burns. A few days before 2014 ends, the International Energy Agency says China will consume 2.5% more barrels this year than in 2013. Wood Mackenzie reckons 3.4%. IHS Energy Insight thinks 2% and Barclays 1.1%. Why the differences? Analysts infer demand by combing through refinery output, trade and inventory of products such as gasoline. This being China, questions surround most data, especially inventories, with guesswork often needed. […]

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Statoil to Reduce Stake in U.S. Shale Formation, Realizes $394M

OSLO, Dec 23 (Reuters) – Norwegian energy firm Statoil has agreed to reduce its working interest in the non-operated Marcellus shale formation in the United States following a $394 million transaction with Southwestern Energy , it said on Tuesday. "The transaction reduces Statoil’s non-operated holdings at an attractive price, demonstrating the value of the Marcellus assets," head of Statoil’s U.S. onshore business, Torstein Hole, said in a statement. Statoil said it had agreed to reduce its stake in the U.S. Southern Marcellus onshore asset to 23 percent from 29. The divested share represents about 121 square km (12,100 hectares). Statoil’s third-quarter production from the Marcellus play amounted to 130,500 barrels of oil equivalent per day, of which around 4,000 barrels came from the assets included in the transaction. The transaction is expected to close in the first quarter next year, it added. (Reporting by Stine Jacobsen; Editing by Anand […]

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NY Farmers Lament Lost Opportunity for Gas Riches

ALBANY, N.Y. (AP) — While environmental groups are doing a victory dance over New York’s decision to ban fracking, farmers such as apple grower David Johnson are grieving for dashed hopes and dreams. "I’m devastated," Johnson said after Gov. Andrew Cuomo’s health and environmental commissioners announced Wednesday that they were recommending a fracking ban. "I have concerns about how to continue this farm that’s been in the family for 150 years." Energy companies denied the chance to drill in New York can simply raise their rigs in other states. That’s what they’ve done since the Marcellus Shale gas drilling boom began in 2008 and New York launched an environmental review that effectively put a moratorium in place. But landowners in the state’s Southern Tier region who had hoped to reap royalties from gas production don’t have that option. "Frankly, my heart breaks for all those families in the Southern […]

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Tesco Corp. Cuts Outlook as Falling Oil Prices Slow Drilling

Tesco Corp. slashed its outlook for its current quarter on Monday, saying the rapid decline in energy prices is hampering demand for its drilling equipment. Houston-based Tesco, which develops and commercializes drilling technology, said some of its customers have asked to defer shipments of drilling equipment until next year, while others have canceled orders altogether. The company has also seen tubular activity slow down in North America, while activity in Russia remains weak. The Russian ruble has hit record lows in recent weeks as the price of oil, a critical export, has plunged. Tesco said it now expects per-share earnings of 10 to 15 cents a share in its fourth quarter, compared with the 32 cents a share analysts polled by Thomson Reuters had been expecting. The guidance excludes eight to 10 cents a share in charges Tesco expects to book related to Russian currency devaluations and executive retirement […]

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Chesapeake Completes Asset Sale to Southwestern at Revised Price

Chesapeake Energy Corp. has completed a sale of West Virginia and Pennsylvania assets to Southwestern Energy Co. for $4.975 billion. The properties sold include about 1,500 wells overall. The companies said in October that 435 of these are in the Marcellus and Utica shale formations. The price, originally $5.375 billion, was adjusted for certain items including Southwestern’s waiver of future claims related to title defects and environmental liabilities. The sale was expected to help Chesapeake reduce a substantial amount of debt accumulated under former CEO Aubrey McClendon . Chesapeake said the transaction “solidifies our strong financial position.” The company “has a liquidity position of approximately $9 billion, putting Chesapeake in an advantageous position to enhance shareholder value in this volatile commodity price market.” Chesapeake also authorized a stock-buyback plan of up to $1 billion. Chesapeake shares, which fell more than 7% during the regular session, rose 3.15% to $19 […]

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Russia may scrap arctic oil ambitions

Russian oil company Rosneft says it may be time to reconsider its ambitions in the arctic UPI/Shutterstock/Marco Varro MOSCOW, Dec. 22 (UPI) — Russian oil company Rosneft said Monday it may have to postpone its drilling program in the arctic temporarily, but doesn’t rule out future operations. Nikolai Malyshev, Rosneft’s deputy director for operations on the Russian continental shelf, said the company was rethinking its current programs because of a lack of viable partners. "Maybe, due to the deterioration of the situation, we will somehow adjust our work schedule now," he said. "Rosneft operates and will continue its operations in the Arctic." U.S. energy company Exxon Mobil has a partnership with Russian oil company Rosneft for work in the arctic waters of Russia. With Western sanctions impeding developments, the Russian government has placed a greater emphasis on domestic exploitation of arctic reserves . Western powers have sanctioned the Russian […]

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Rosneft Feels Sanctions’ Chill in Failed Oil-Unit Deal

Morgan Stanley (MS) ’s failure to complete the sale of its oil storage, trading and transport unit shows the chilling effect U.S. sanctions are having on Russian companies including OAO Rosneft. The U.S. bank and Rosneft, the Russian state-owned oil giant, said Monday that their deal, for an undisclosed amount, had expired after the companies failed to win regulatory approval. Morgan Stanley had warned in October that the agreement might not be completed. U.S. sanctions against Rosneft explicitly prohibit selling certain oil-exploration equipment to the company or giving it long-term debt financing. The sale of Morgan Stanley’s oil-trading unit didn’t appear to trigger those prohibitions. Even so, such a sale would have undercut the broader U.S. goal of isolating the energy company. “It’s appropriate to stop deals with companies that have been targeted in one form or another,” said David Kramer, a former U.S. assistant secretary of state and […]

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Russia’s ills spread around the region

When Russia sneezes, the rest of the former Soviet Union catches a cold. Last week, as the rouble plunged as much as 36 per cent queues appeared at currency exchange points around Russia. Within days, the sense of alarm at Russia’s brewing economic crisis spread to Minsk, Bishkek and Dushanbe . More On this topic IN Europe “Such rouble weakness in Russia puts pressure on all the other currencies in the region,” says Oleg Kouzmin, economist at Renaissance Capital in Moscow. “When Russian is not doing well it’s a drag for growth in the whole region.” Agris Preimanis, chief Central Asia economist at the European Bank for Reconstruction and Development in Almaty, says concerns are running high about the rouble meltdown. “What keeps policymakers awake at night here is some of the scenarios for what might happen next in Russia,” he says, predicting that the current economic distress in […]

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Energy in 2015: Cheap oil changes everything

A year ago today, few would have predicted a collapse in oil prices would be the biggest energy story of 2014. Pinpointing next year’s equivalent is just as unlikely. Still, we can at least consider what to watch worldwide in one of the most dynamic, unpredictable, and misunderstood industries. Whatever happens in 2015, these five trends will shape the year ahead in global energy. Oil change The oil crash fallout will continue worldwide  throughout at least the first half of 2015. US shale production growth will slow, perhaps even pause. OPEC will feel mounting existential threats, and may eventually have to cut production. Strapped for cash, more vulnerable petro states like Nigeria and Venezuela will curtail inefficient, regressive fuel subsidies. The effect on price could go either way. “On one hand, it could bring down demand,” says Brenda Shaffer, a professor at Georgetown University ’s Center for Eurasian, Russian […]

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Cheap oil just keeps on coming

Cheap oil just keeps on coming thumbnail The stunning plunge in oil prices – almost 45% since June – has roiled the global oil markets; creating new winners and losers almost overnight. It has also unlocked a number of potential problems and opportunities we would be wise to consider. In our consumer-based economy, savings at the gas pump provide a direct stimulus to the economy – freeing up a reservoir of new discretionary dollars to fuel the economy. Indeed, SUV and small truck sales are skyrocketing (How soon we forget how quickly gas prices can go up) and fuel-intensive sectors – like airlines – are enjoying record profits. For others, falling oil prices are not so good. Geopolitically, it has been a disaster for oil-exporting countries; Russia, Iran, Venezuela and others are all getting clobbered. Shale oil producers – with fracking and horizontal drilling costs that far exceed OPEC’s […]

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Broken Energy Markets and the Downside of Hubbert’s Peak

A few commenters have mentioned peak oil recently. I am cautious about making forecasts and predictions and prefer instead to observe and document the data as the peak oil story unfolds. I have in fact published a couple of charts recently illustrating aspects of peak oil, one showing a possible peak in the rest of the world that excludes N America and OPEC (Figure 1). The other showing the undulating plateau in conventional crude + condensate that has persisted since 2005 (Figure 2). In my last post on oil price scenarios two of those showed global oil production capacity 1 to 2 Mbpd lower in 2016 than 2014. If that comes to fruition, will we have passed peak oil but does it matter? Figure 1  Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW […]

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Oil Prices Rebound, Sending Brent Back Above $62/Barrel

By Eric Yep Crude-oil futures rose in Asian trade Monday as the excessive drop in oil prices in recent weeks sparked some buying interest and short-covering among investors before the end of the year, traders said. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $58.09 a barrel at 0352 GMT, up $0.96 in the Globex electronic session. February Brent crude on London’s ICE Futures exchange rose $1.16 to $62.54 a barrel. The price of Nymex crude fell 2.23% last week for the fourth consecutive week. During those four weeks Nymex lost 26.13%–the largest percentage decline for that time period since the week ended Dec. 26, 2008. Brent crude fell 1.24% last week and has also dropped for the last four consecutive weeks, losing 23.62% of its value. On Sunday, Gulf oil officials defended the decision of the Organisation of the Petroleum […]

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Oil Advances as Funds Wager on Rally

Oil rose for a second day as hedge funds increased bets on rising prices to the highest in four months. Saudi Arabia said it was confident that crude will rebound as world economic growth boosts demand. West Texas Intermediate futures climbed as much as 2.5 percent in New York . Money managers expanded their net-long position in WTI by 14 percent in the week ended Dec. 16, U.S. Commodity Futures Trading Commission data show. A global glut that has driven prices lower was created by a lack of cooperation from producers outside the Organization of Petroleum Exporting Countries, according to Saudi Arabia Oil Minister Ali Al-Naimi . The market is oversupplied by 2 million barrels a day, said Mohammed Al Sada, Qatar’s energy minister. Oil has slumped about 21 percent since OPEC decided to maintain its production target at a Nov. 27 meeting even as the U.S. pumps crude […]

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OPEC Remains United on Output Decision, Says Iraqi Oil Minister

ENLARGE Iraq’s Oil Minister Adel Abdul-Mehdi speaks to journalists prior to the start of a meeting of the Organization of the Petroleum Exporting Countries at their headquarters in Vienna, Austria, on Nov. 27. Associated Press ABU DHABI—Iraq’s oil minister said Monday that the Organization of the Petroleum Exporting Countries remains united in its decision not to rein in production, but let the market decide the oil price, despite the uneven impact the stark slide in oil prices is having on the economies of member countries. “No one’s saying everything is OK,” said Oil Minister Adel Abdul-Mehdi in an interview with The Wall Street Journal on the sidelines of an energy conference in Abu Dhabi. “Up to now we didn’t see any tension. although there are different views within OPEC, but at the end OPEC is united,” he said. Since members of the Organization of the Petroleum Exporting Countries decided […]

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Gulf Oil Exporters Blame Non-OPEC Producers for Glut

ENLARGE Qatari Oil Minister Mohammed bin Saleh Al-Sada, left, Saudi Oil Minister Ali al-Naimi, center, and United Arab Emirates Energy Minister Suhail bin Mohamed al-Mazroui attend the 10th Arab Energy Conference in Abu Dhabi on Sunday. Agence France-Presse/Getty Images ABU DHABI—Gulf oil officials on Sunday defended OPEC’s decision last month to keep its production ceiling intact , blaming producers outside of the group for the glut of oil on the market that has depressed prices. Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries—along with speculators and misleading information—for the slump. On Nov. 27, OPEC said it was keeping its production ceiling unchanged, sending crude prices into a tailspin. OPEC officials since have said the move was aimed at protecting the group’s market share, saying a reduction in output to […]

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Non-Opec producers blamed for oil price slide

Saudi Oil Minister Ali al-Naimi (C) speaks with United Arab Emirates Energy Minister Suhail bin Mohamed al-Mazroui (R) during the opening session of the 10th Arab Energy Conference in Abu Dhabi, on December 21, 2014 The oil ministers of Saudi Arabia and the United Arab Emirates have blamed the rout in oil prices on producers outside Opec and reaffirmed their stance to hold output at current levels. Ali al-Naimi, Saudi Arabia’s oil minister, said a lack of co-operation from countries outside of the cartel was a key contributor to the near 50 per cent slide in crude prices since the middle of June. More On this story On this topic IN Oil & Gas “The kingdom of Saudi Arabia and other countries sought to bring back balance to the market, but the lack of co-operation from other producers outside Opec and the spread of misleading information and speculation led […]

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Age of Plenty Seen Over for Gulf Arabs as Oil Tumbles

The boom that adorned Gulf Arab monarchies with glittering towers, swelled their sovereign funds and kept unrest largely at bay may be over after oil prices dropped by almost 50 percent in the last six months. The sheikhdoms have used the oil wealth to remake their region. Landmarks include man-made islands on reclaimed land, as well as financial centers, airports and ports that turned the Arabian desert into a banking and travel hub. The money was also deployed to ward off social unrest that spread through the Middle East during the Arab Spring. “The region has had 10 years of abundance,” said Simon Williams , HSBC Holdings Plc’s chief economist for central and eastern Europe , the Middle East and North Africa. “But that decade of plenty is done. The drop in oil prices will hurt performance in the near term, even if the Gulf’s buffers are powerful enough […]

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Saudi Arabia says won’t cut oil output

ABU DHABI (Reuters) – Saudi Arabia said on Sunday it would not cut output to prop up oil markets even if non-OPEC nations did so, in one of the toughest signals yet that the world’s top petroleum exporter plans to ride out the market’s biggest slump in years. Referring to countries outside of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Oil Minister Ali al-Naimi told reporters: "If they want to cut production they are welcome: We are not going to cut, certainly Saudi Arabia is not going to cut." He added he was "100 percent not pleased" with prices but they would improve, although it was unclear when. He blamed the fall in prices to half their levels of six months ago on speculators and what he called a lack of cooperation from non-OPEC producers. His remarks at a conference in Abu Dhabi marked the second time […]

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Saudi Arabia Confident in Oil Rebounding on Global Growth

Saudi Arabia Oil Minister Ali Al-Naimi said at a conference in Abu Dhabi, prices will… Read More Saudi Arabia, the world’s largest oil exporter, is confident that crude prices will rebound with global economic growth boosting demand. Prices will recover from a slump due to a glut created by a lack of cooperation from producers outside the Organization of Petroleum Exporting Countries, Saudi Arabia Oil Minister Ali Al-Naimi said at a conference in Abu Dhabi yesterday. Al-Naimi ended his speech showing the confidence as he jumped off the stage and smiled. Brent oil tumbled into a bear market this year as the U.S. pumped the most crude in more than three decades and economic growth slowed from China to Germany . The increase in global crude demand was about 700,000 barrels a day this year, below the projected 1.2 million barrels a day, Al-Naimi said. “The oil market will […]

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Why Saudis Decided Not to Prop Up Oil

ENLARGE Saudi Oil Minister Ali al-Naimi, center, at the opening session of the 10th Arab Energy Conference in Abu Dhabi Sunday. Agence France-Presse/Getty Images In early October, Saudi Arabia’s representative to OPEC surprised attendees at a New York seminar by revealing his government was content to let global energy prices slide. Nasser al-Dossary ’s message broke from decades of Saudi orthodoxy that sought to keep prices high by limiting global oil production, said people familiar with the session. That set the stage for Saudi Arabia’s oil mandarins to send crude prices tumbling late last month after persuading other members of the Organization of the Petroleum Exporting Countries to keep production steady . Hard-hit countries like Iran, Russia and Venezuela suspected the move was a coordinated effort between the oil kingdom and its longtime ally, the U.S., to weaken their foes’ economies and geopolitical standing. But the story of Saudi […]

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Cnooc Unit Suspends Oil Production in Yemen Citing Security Threat

ENLARGE The CNOOC Ltd. logo is displayed on an employee’s uniform. The company’s Canadian unit said Sunday it has halted oil production in Yemen due to an unspecified “security threat”. Bloomberg News CALGARY—The Canadian unit of China National Offshore Oil Corp., or Cnooc, said Sunday it has halted oil production in Yemen due to an unspecified “security threat” to its personnel in the Arabian country. The shutdown affects the Yemeni assets of Cnooc’s Canadian subsidiary Nexen ULC, which operates a crude oil field and processing facility in the country. It comes after the pro-U.S. government of Yemen collapsed in September amid a civil war. “We’ve determined there is a security threat and undue risk” in Yemen, said a spokesperson for the Calgary-based Cnooc subsidiary. “The shutdown was progressed in a timely manner, production has ceased and our personnel have safely departed,” she said. The Yemeni oil ministry wasn’t immediately […]

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Oil Shakes Venezuelan Debt to Its Foundations

ENLARGE Even before oil prices dropped, Venezuela’s economy was troubled. Rigid currency controls and dollar shortages have brought the economy to a standstill. Above, an unfinished skyscraper in downtown Caracas that was abandoned in the 1990s and has been occupied for years by squatters. Anadolu Agency/Getty Images A slide in oil prices is hitting Venezuela hard, raising questions among investors about the South American country’s ability to pay its debts and heightening concerns about the health of developing economies around the world. Venezuelan debt was widely held by emerging-market investors until the summer. Many viewed the bonds as a safe bet because the country brought in ample revenue as a major oil exporter. But a nearly 50% drop in the price of crude since mid-June has left Venezuela’s finances in shambles. The price of credit-default swaps on Venezuela debt, a type of insurance, indicate a 61% chance of default […]

Posted On : Published By : Tom Whipple
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China likely to lower oil prices

BEIJING, Dec. 21 (Xinhua) — China is likely to slash gasoline and diesel prices in the coming week due to sluggish domestic demands and a continuing crude price slump in the global market. Ma Yan, analyst with crude research website Chem365.net, predicted the authorities will cut guide prices for oil products, the last price lowering in the year after the retail prices have fell by 10 consecutive weeks in a row. The prices will decline by around 440 yuan (71 U.S. dollars) per tonne, Ma said. A research note at commodity e-commerce platform 365.com made similar predictions, estimating the price drop will be around 470 to 490 yuan per tonne for both gasoline and diesel. Oil price changes are usually announced by the National Development and Reform Commission, China’s top economic regulator, and the expected drop may be unveiled on Dec. 27 according to China’s oil pricing mechanism. Analysts […]

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China Invests in Region Rich in Oil, Coal and Also Strife

Continue reading the main story Video Play Video|5:07 On the Silk Road, Oil and Tensions Flow On the Silk Road, Oil and Tensions Flow More than half a century since China started pumping oil in its arrid west, tensions continue to rise over inequality and ethnicity in Karamay, which is now one of the countries wealthiest cities. Video by Jonah M. Kessel on Publish Date December 20, 2014. Photo by Gilles Sabrie for The New York Times. KARAMAY, China — In a desolate park on the city outskirts here, oil bubbling from the ground fills small pools next to a wooden walkway. By one pool is a statue of a bearded ethnic Uighur man sitting on a donkey, playing a lute. The symbolism is telling. China is ramping up energy production here, turning the northwestern Xinjiang region into a national hub for oil , gas and coal, while the […]

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U.S. gas prices fall to lowest since May 2009: Lundberg survey

NEW YORK (Reuters) – The average price of a gallon of gasoline in the United States fell 25 cents in the past two weeks, tumbling to its lowest level in more than five-and-a-half years, according to the Lundberg survey released Sunday. Prices for regular-grade gasoline fell to $2.47 a gallon in the survey dated Dec. 19, down 25 cents since the previous survey on Dec. 5. The recent drop has taken prices down more than $1.25 a gallon since a recent peak in May of this year. "This is mostly driven by crude oil prices, and absent a sudden spike we very well may see a drop of a few pennies more," said the survey’s publisher, Trilby Lundberg. "That said, demand is up at these low prices." U.S. crude futures have been sharply weaker of late, dropping for four straight weeks, as well as in 11 of the past […]

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Bakken New Wells Producing Less Confirmed

It is has now been confirmed. The first measured 24 hour production from Bakken wells is a very good predictor of the future production of that well. And it has also been confirmed that new wells with higher well numbers are producing a lot less. In the NDIC’s Daily Activity Reports  they publish “WELLS RELEASED FROM “TIGHT HOLE” STATUS” as well as “PRODUCING WELL COMPLETED”. By searching these two lists, then eliminating the duplicates that appear on both lists, we find that perhaps 70 to 80 percent of all wells report their first 24 hours of measured production.  It is listed as “BOPD” (Barrels Oil Per Day) and “BWPD” (Barrels Water Per Day). An example below, and notice the second well listed does not give any production numbers: Producing Wells Completed The “per day” in this case is the first 24 hours of measured production and not necessarily  the first […]

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Rosneft Repays $7 Billion and Says Has No Need to Buy Dollars

OAO Rosneft (ROSN) repaid $7 billion in debt and said it is generating enough dollars to meet the obligations taken on to buy TNK-BP last year and become the world’s largest traded oil producer. The state-led company, hit by sanctions from the U.S. and EU limiting access to capital markets , said it has settled $24 billion this year in line with credit agreements. Rosneft has sufficient foreign currency to cover debt, Chief Executive Officer Igor Sechin said in a statement. “To service debt the company does not need to enter the currency market , because it generates enough foreign currency earnings,” Sechin said. The latest repayment doesn’t mean the end of financial pressure on Rosneft however. The oil producer has to grapple with the slump in oil prices, sanctions that bar it from international capital markets and a Russian economy at risk of sliding into recession. Rosneft is […]

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Rich Russians head for UK in record numbers

LONDON, ENGLAND – MAY 28: Passengers arriving at Gatwick Airport use the ‘ePassport gates’ at Passport Control on the UK Border on May 28, 2014 in London, England. Border Force is the law enforcement command within the Home Office responsible for the security of the UK border by enforcing immigration and customs controls on people and goods entering the UK. Border Force officers work at 140 sea and airports across the UK and overseas. (Photo by Oli Scarff/Getty Images) Rich Russians are gaining entry to the UK in record numbers amid a worsening economic outlook in their home country. The number of Russians who were granted investor visas this year has soared by 69 per cent, according to Home Office statistics. The visas gave foreigners from outside the EU a fast track to residence and citizenship in return for buying gilts worth £1m to £10m. In the first nine […]

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Oil rout would have wrecked an independent Scotland’s finances

Scotland, UK — Flaring a well signals huge success for Amerada Hess in this discovery well that produced at the rate of 10,000 barrels of oil per day. It was the biggest find in the Scottish sector of the North Sea in over a decade. On exploration wells there is no way to contain out-flowing gas and oil without risking an explosion, so hydrocarbons are shot out into the atmosphere and ignited. A test burn like this will last several hours to be sure the rate of flow is sustainable before a company will invest millions to lay an underwater pipeline and bring in a production platform. — Image by © George Steinmetz/Corbis ©George Steinmetz/Corbis Scotland’s North Sea revenues would have slumped to one fifth of Holyrood’s preferred forecasts in its first year of independence if Scots had voted Yes in September, according to an Office for Budget Responsibility […]

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North Sea oil industry close to collapse

North Sea oil industry close to collapse thumbnail The UK’s oil industry is in “crisis” as prices drop, a senior industry leader has told the BBC. Oil companies and service providers are cutting staff and investment to save money. Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”. Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims. ‘Everyone is retreating’ “It’s almost impossible to make money at these oil prices”, Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. “It’s a huge crisis.” “This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that’s painful for our staff, painful for companies and painful for the country. “It’s close […]

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Global Systemic Financial Crisis 2015: Geopolitics, Oil and Currency Markets

Global Systemic Financial Crisis 2015: Geopolitics, Oil and Currency Markets thumbnail For almost two years, by combining various points of view (speculative, geopolitical, technological, economic, strategic and monetary…), we have continued to anticipate a major crisis in the entire oil sector. Today, no one doubts the fact that we are actually at that point, and the GEAB must therefore anticipate the consequences of this veritable atomic bomb, which has begun to blow up all the old system’s pillars: everything which we have known, international currencies, financial markets, the US, the Western alliance, world governance, democracy, etc. Global systemic crisis: the end of the West we have known since 1945 Here, we would like to look back on a historic GEAB anticipation, that of Franck Biancheri in February 2006, which announced the beginning of the global systemic crisis under the title “the end of the West we have known since […]

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Robert Rapier: Five for Five in 2014

As the year expires and the new year arrives, there are several topics I like to cover in a series of articles. One is to review the top energy stories of the year. Another is to grade my predictions for the year. And finally, I lay out my predictions for the upcoming year. Usually I have a dilemma of whether to grade my predictions first, or to lay out the energy stories first — because I normally do both stories at the end of the year, and something could potentially happen right at the end of the year that might change the narrative. For example, I might do the top energy stories this week, but what if something monumental happens in the next two weeks? The other option is of course to wait until after the first of the year, but then that delays my predictions. This year, however, […]

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Oil Notches Biggest Gain in Two Years

ENLARGE Oil barrels at a storage depot in Jakarta. Reuters U.S. and global oil benchmarks jumped to their largest percentage gains in more than two years on Friday, as a handful of modestly bullish headlines supported the market and traders closed out bets that prices would fall. Analysts said the market seemed oversold and due to stabilize, at least for the time being, in the absence of further bearish news about growing global supplies. The front-month January contract expired with the close of trading Friday, providing the last opportunity for traders with bets against the market to close out positions. The U.S. crude contract for January rose $2.41, or 4.5%, to settle at $56.52 a barrel on the New York Mercantile Exchange. Most of the volume in the market has already moved forward into the February contract, which also rose, settling up 5.1% at $57.13 a barrel. The global […]

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Oil Surges From Five-Year Low as OPEC Comments Add Volatility

Workers connect drill bits and drill collars, used to extract natural petroleum, on… Read More Crude prices surged from the lowest closing levels since May 2009 as comments from Saudi Arabia’s oil minister yesterday added to the most volatile market in three years. West Texas Intermediate climbed 4.5 percent in New York , the biggest gain since August 2012. Both WTI and Brent rose more than 5 percent during the session. A measure of expected WTI futures movements and a gauge of options value was at the highest level since October 2011, data compiled by Bloomberg show. While Ali Al-Naimi , Saudi Arabia’s oil minister, said yesterday that a slump in prices was temporary, he also said it would be “difficult, if not impossible” for OPEC to curb its oil production amid a glut, the Saudi Press Agency reported. Prices rose immediately after his remarks, before ending the day […]

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Crude oil prices riding global stock market waves

The Chinese National Bureau of Statistics said it estimated the economy was 3.4 percent larger last year than previously estimated , adding about $9.6 trillion to the world’s second-largest economy. "The revision of 2013 GDP will affect the size of 2014 GDP, but basically will not affect GDP growth for 2014," the NBS said. The data helped lift regional stock indices, with the benchmark Shanghai Composite Index ending the day up 1.67 percent. The rally follows Thursday’s close on Wall Street, where the Dow Jones Industrial Average gained more than 400 points. Shanghai’s index alone gained 5.2 percent since Monday. The rise comes amid word that major central banks are taking action to keep economic momentum moving forward. U.S. banks scored a win Thursday when the Federal Reserve decided to let banks hold cash from private-equity and hedge-fund investments, while Russian bankers increased a key interest rate to erase […]

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Why the Oil Rout Has Spread

ENLARGE An employee walks up a flight of stairs at a MOL tank in Hungary. The decline in oil prices is having a significant impact on other markets, including bonds and foreign exchange. Reuters This month’s big fall in the price of oil should be good news for much of the world’s economy. But so far markets have been telling a different story. Oil futures were up Friday , but remain far below recent highs, with Brent crude down about 47% from its June peak of $115 a barrel. Other markets have followed suit. The MSCI Europe index has dropped 4% since early December, while the S&P 500 index remains 1% lower over the same period despite a rally Thursday after the Federal Reserve said it would be “patient” before raising interest rates next year. Emerging-market countries such as Turkey and India, which are large oil importers and so […]

Posted On : Published By : Tom Whipple