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NYMEX January closes down 17.8 cents at $3.464/MMBtu

Houston (Platts)–19Dec2014/406 pm EST/2106 GMT The NYMEX January natural gas futures contract fell 17.8 cents to settle Friday at $3.464/MMBtu on moderate weather forecasts and gas stocks that are above year-ago levels. "The natural gas market has dropped to new one-year lows in price as the temperature outlook for the week ahead turned warmer, even as some forecasts for the 11-15 day period trended colder," Citi Futures analyst Tim Evans said. "Weaker cash prices now seen as unlikely to strengthen in time for the January contract expiration December 29 [have] contributed to the break to the downside. The market seems likely to recover once the colder temperatures arrive, but it’s clear the current mild temperatures are having the greater impact on trade." The National Weather Service 8-14 day forecast calls for higher chances for below-average temperatures across most of the contiguous US north and east of a line stretching […]

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Falling Oil Prices Could Affect Supply, Pemex CEO Says

ENLARGE A worker walks down a set of stairs on the Laurus oil drilling rig operated by Pemex in Ciudad del Carmen, Mexico. TK MEXICO CITY—State oil company Petróleos Mexicanos, buffeted by the recent drop in oil prices, plans to offer international oil companies a greater share of projects in Mexico than initially envisioned and speed up joint ventures with private firms, CEO Emilio Lozoya said on Friday. “This puts pressure on us to get the joint ventures going,” Mr. Lozoya said in an interview. As oil companies around the world cut costs and investments to offset the damage from lower prices, the idea behind the acceleration of joint-ventures “is to make sure that Pemex’s capital expenditure plans for exploration and production are the least affected,” Mr. Lozoya added. Asked about international oil prices, the Pemex boss said the drop in oil prices could affect supplies as some leveraged […]

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War hurting Libyan oil, but NATO rules out intervention

Conflict in Libya endures after civil war, with oil production well below pre-conflict levels. NATO says its mindful of the situation, but rules out military action. File Photo by Tarek Alhuony/UPI BRUSSELS, Dec. 19 (UPI) — With conflict curbing Libya’s oil potential, NATO officials said they’ve reviewed the situation, but have not discussed any military role in the country. Last weekend, the oil ports of Es Sider and Ras Lanuf were shuttered because of armed clashes in the region. Combined, the two ports can handle 560,000 barrels of oil per day, about half of the country’s total export capacity. Libyan stability since the end of civil war in 2011 has faltered amid clashes between armed groups fighting for more control over the oil-rich country. Pre-conflict oil production was higher than 1 million barrels per day, though output has slumped recently to as low as 330,000 bpd because of clashes […]

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Exclusive: Iran’s support for Syria tested by oil price drop

AMMAN (Reuters) – Syrian businessmen and trade officials say they are worried the economic lifeline provided by Iran is under strain from plunging oil prices, despite public messages of support from Syria’s strongest regional ally. Syrian President Bashar al-Assad has relied on oil-producing Iran to help him fight a nearly four-year-old civil war and also prop under a currency under pressure. “If it had not been for Iranian support we could not have survived the crisis," a senior Syrian trade official said from Damascus, requesting anonymity. "It was Iranian support that has been the most important. In return, we are promising them more and more, and opening more and more doors for them to invest in Syria," he said. Oil production in Syria, which is under U.S. and European sanctions, has dropped sharply since the start of the conflict and as insurgents have taken over energy installations. In July […]

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Isis morale falls as momentum slows and casualties mount

An Isis fighter in Raqqa in the summer when the jihadis made huge territorial gains in Syria and Iraq Flagging morale, desertion and factionalism are starting to affect the Islamic State of Iraq and the Levant , known as Isis, testing the cohesion of the jihadi force as its military momentum slows. Activists and fighters in parts of eastern Syria controlled by Isis said as military progress slows and focus shifts to governing the area, frustration has grown among militants who had been seen as the most disciplined and effective fighting force in the country’s civil war. The group hurtled across western Iraq and eastern Syria over the summer in a sudden offensive that shocked the world. Isis remains a formidable force: it controls swaths of territory and continues to make progress in western Iraq. But its fighters have reached the limit of discontented Sunni Muslim areas that they […]

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Gulf braces for tough times over oil price plunge

Gulf braces for tough times over oil price plunge thumbnail Gulf countries are bracing for tough times as vital oil revenues fall and after they missed a golden opportunity to diversify their economies in a decade of unprecedented windfalls, analysts say. The six nations of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – could soon start reeling from falling oil prices, which have dropped by half from their 2014 highs to around US$60 (S$78) a barrel. Pumping about 17.5 million barrels per day, GCC countries are forecast to lose at least half their oil revenues, or around US$350 billion a year, at current price levels. Oil revenues make up around 90 per cent of income for most GCC states and with prices now below budget forecasts, their governments are looking at certain deficits next year. Spending cuts are sure to […]

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Nigeria’s Oil Workers Suspend Strike

After a protracted meeting with government officials which lasted for 13 hours, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the Nigerian Union of Petroleum and Natural Gas workers (NUPENG) suspended their nationwide strike on Friday morning. Their industrial action was in protest against several unresolved issues with the government, among which are unfair labour practices and non-passage of the Petroleum Industry Bill. The meeting by the labour leaders and the government’s delegation led by the Supervising Labour Minister, Ads by Google Copyright © 2014 This Day. All rights reserved. Distributed by AllAfrica Global Media ( allAfrica.com ). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here. AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals , representing a […]

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U.S.-Cuba Deal Shows Venezuelan Oil Giveaways Running Out

While Pope Francis is applauded for helping broker this week’s U.S.-Cuba accord, a key motive for Cuba is Venezuela’s diminishing oil gifts to its biggest ally. Venezuela sent about 100,000 barrels a day to Cuba last year in exchange for medical personnel as part of a regional subsidy program to promote the government’s socialist message. While there’s no official data for shipments to Cuba this year, anecdotal evidence suggests volumes have already slumped to about 70,000 barrels a day, Moody’s wrote Dec. 16. The regional aid is set to be scaled back further as oil’s biggest rout in a decade undermines a socialist revolution that transformed Venezuela over the past 15 years under Hugo Chavez and Nicolas Maduro , according to Eurasia Group and EnergyNomics. The commitment by Cuba and the U.S. to normalize relations opens the door for the island nation to buy more oil on the open […]

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Baker Hughes: US Oil Drillers Cut Rigs, Lowest Since May

Dec 19 (Reuters) – The number of rigs drilling for oil in the United States fell by 10 this week as low crude prices continued to threaten energy company revenues. The oil rig count dropped to 1,536 in the week to Dec. 19, the least since May, according to data from oil services firm Baker Hughes on Friday. The number of oil rigs has declined in seven of the last 10 weeks since hitting a record high of 1,609 in mid October, as a 50 percent drop in oil prices since the summer begins to take its toll on drilling projects. In the prior week ended Dec. 12, oil rigs declined by 29, the biggest weekly drop in two years. Energy traders have been watching rig data to see if the steep price drop was prompting oil drillers to cut back on the number of rigs. Some analysts however […]

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EPA Releases New Standards For Coal Ash

ENLARGE A coal ash pond at Duke Energy’s Sutton plant in Wilmington, N.C. Associated Press Electric utilities will probably have to shut down some pools containing waste ash from coal-fired power plants under new rules released by federal regulators Friday. The rules, developed by the U.S. Environmental Protection Agency, require power companies to close ponds containing ash slurry if they are structurally unsound or have contaminated groundwater and aren’t lined with materials that prevent leaks. Utilities will have to check for leaks at all ash ponds and clean them up. “This rule is a pragmatic step forward to protect public health, while providing the utility industry the time it needs to implement these new requirements,” EPA Administrator Gina McCarthy said during a conference call with reporters. The first-ever federal coal-ash standards cover about 735 ponds and 310 landfills that contain ash in more than 40 states. Companies found to […]

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Bakken Operators Slash Budgets for 2015

Bakken Operators Slash 2015 Budgets 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. “We remain confident in our investment opportunities in the three U.S. resource plays,” Marathon Oil President and Chief Executive Officer Lee Tillman said in a statement. “Our 2015 capital program is not opportunity constrained but will reflect sound discipline in managing cash flows in the current price environment.” Related: Eagle Ford and Bakken Drilling Permits Fall 30% This news comes as oil plunged Thursday […]

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Nabors Cuts Best-Paid U.S. Oil CEO’s Salary Amid Rout

Nabors Industries Ltd. (NBR) Chief Executive Officer Tony Petrello, the best-paid oil executive in the U.S., and his finance chief are getting salary cuts as the world’s biggest land-rig contractor confronts an industry downturn. Petrello’s base salary for the first half of next year will be pegged to an annual rate of $1.53 million, a 10 percent cut from the current $1.7 million. Chief Financial Officer William Restrepo is also getting a 10 percent cut in his annualized base salary, to $585,000, over the same period, the Hamilton, Bermuda-based company said today in a federal filing. “The salary reductions do not affect the calculation or payment of any ancillary benefits,” Nabors said. In 2013, Petrello’s total compensation included equity awards at $43 million when they were granted in March of last year, and he was granted $21.2 million in cash. This year, his potential total compensation reached more than […]

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Keystone XL no longer makes sense, critics argue

Memo sent to White House says Keystone XL fails a series of key tests necessary to sanction the project. UPI/Kevin Dietsch Pipeline company TransCanada submitted the application to the U.S. federal government necessary to build Keystone XL across the U.S.-Canadian border more than six years ago. The project has faced stiff opposition from climate groups worried about the effects the heavier grade of Canadian crude oil would have on the environment. A memo sent to President Barack Obama from seven environmental groups, led by the Natural Resources Defense Council and Oil Change International, argues the pipeline would add to the development of Canadian crude oil and subsequently add millions of tons of carbon pollution to the atmosphere. "Market forces and the latest climate science make it clear Keystone XL shouldn’t be approved because it would drive up carbon pollution, making climate change worse and jeopardizing our future," Anthony Swift, […]

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U.S. Oil Rigs Drop With Crude Prices, Baker Hughes Says

U.S. oil drillers pulled rigs this week as crude traded below $60 a barrel for the seventh straight day. Rigs targeting oil declined by 10 to a six-month low of 1,536, Baker Hughes Inc. (BHI) said on its website today. Those seeking out natural gas slipped by eight to 338, the Houston-based field services company’s website. The total count fell by 18 to 1,875, the lowest level since July. The number of rigs targeting U.S. oil has slid from a record 1,609 as drillers retrench in response to escalating competition from the world’s largest suppliers that’s sent international oil prices plummeting by more than $50 a barrel. Another 800 rigs are at risk of being idled should prices remain where they are, suspending an unprecedented boom in domestic production that’s brought the nation closer to energy independence than it’s been in three decades. The mindset of U.S. energy explorers […]

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Falling Oil Prices Could Rock Canada’s Politics

Canada oil map Brace for a bumpy ride, Canada and Alberta, says Stanford expert Terry Lynn Karl. Canada and global oil image via shutterstock . Reproduced on Resilience.org with permission. What do the plummeting oil prices tell us not only about our near term economic future in Canada, but the political fragility of the world’s petro states? If Canada fully joins the petro state club, as our prime minister and his party desire, is oil’s volatility just the cost of doing business, or a threat to our nation’s well-being? The ideal person to ask is Terry Lynn Karl, one of North America’s foremost experts on the politics of oil. The Tyee recently caught up with Karl, who teaches at Stanford University and lives in San Francisco. Asked in a wide ranging interview what Canadians might expect if oil prices stay low for a few years, she predicted "a rapidly […]

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Ukraine crisis: Obama orders ban on Crimea trade

A Russian Orthodox priest blesses a SU-27 SM fighter jet at Belbek military airport near Sevastopol Related Stories US President Barack Obama has ordered a ban on the export of goods, technology and services to Crimea. The executive order also imposes new sanctions on Russian and Ukrainian individuals and companies. Mr Obama said the move showed the US would never accept Russia’s annexation of Crimea in March. Similar measures agreed by the European Union earlier this week came into effect on Saturday. Canada announced its own sanction on Crimea on Friday. After the peninsula was annexed, pro-Russian separatists took control of parts of the Donetsk and Luhansk regions of eastern Ukraine in April, and later declared independence. Some 4,700 people have died and another million have been displaced by fighting in recent months. On Friday, five Ukrainian soldiers were killed in fighting – the highest death toll since the […]

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Belarus slaps 30% tax on foreign currency purchases

A woman queues at an ATM in central Minsk on Friday Belarus has imposed a 30 per cent tax on buying foreign currency and more than doubled interest rates to 50 per cent as the ripples of this week’s Russian market turmoil began to be felt in other former Soviet countries. The Belarusian central bank said the move to impose a tax on foreign currency purchases was taken “due to the increased demand for foreign currency on the domestic market”. It comes as countries around the former Soviet Union feel the fallout from the wild gyrations in the Russian rouble. In Kyrgyzstan, the central bank announced it would close down private exchange offices after a Kyrgyz som’s de facto peg to the US dollar briefly broke down on Wednesday. Armenia’s dram has fallen 17 per cent against the dollar since mid-November in a move the head of the country’s […]

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German Government Denies Pressuring BASF to Cancel Gazprom Asset Swap

FRANKFURT—German chemicals maker BASF SE’s decision to call off a long-planned asset-swap deal with Russia’s OAO Gazprom wasn’t the result of political pressure from the German government, the German Economics Ministry said Friday. BASF, the world’s largest chemical company by revenue, announced Thursday it had canceled the deal with Russian state gas group Gazprom amid mounting political tensions between Russia and the West. BASF, through its wholly-owned oil and gas unit, Wintershall AG, had planned to divest itself of its gas trading and storage operations through an asset exchange with Gazprom. The trade, announced in November 2012, would have given Wintershall access to natural-gas fields in Siberia. “This is a corporate process. From the German side, there was no political influence over the deal,” said Julia Modes, a spokesperson for the ministry. “For us, it is only important that the gas supply or the security of supply is not […]

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Statoil ready for work in vast North Sea field

Oil services company Schlumberger gets drilling contract for work in Mariner field in the North Sea from Norway’s Statoil. UPI/A.J. Sisco. STAVANGER, Norway, Dec. 19 (UPI) — Norwegian energy company Statoil said Friday it awarded a drilling contract to oil services company Schlumberger for the vast Mariner field in the North Sea. Discovered in the early 1980s, production at Mariner was delayed because of technological limitations in extracting the denser type of oil. Statoil said it was bringing its experience in Canada and elsewhere to Mariner to facilitate heavy oil development. The British government expects the field to produce around 55,000 barrels of oil per day, about 5 percent of the country’s current output. Statoil said Schlumberger, for an undisclosed sum, will conduct all of the main drilling and well services for the Mariner field. "We will work side by side to meet the challenges in the market, driving […]

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The reason oil could drop as low as $20 per barrel

An oil pump jack pumps oil in a field near Calgary How low can it go — and how long will it last? The 50 percent slump in oil prices raises both those questions and while nobody can confidently answer the first question (I will try to in a moment), the second is pretty easy. Low oil prices will last long enough for one of two events to happen. The first possibility, the one most traders and analysts seem to expect, is that Saudi Arabia will re-establish OPEC’s monopoly power once it achieves the true geopolitical or economic objectives that spurred it to trigger the slump. The second possibility, one I wrote about two weeks ago , is that the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like […]

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Oil rallies above $60, heads for fourth weekly decline on glut

LONDON (Reuters) – Brent crude oil rose above $60 a barrel on Friday, recovering from near a 5-1/2-year low as investors squared books ahead of the year-end festive break after six months of falling prices. Oil prices were on track for a fourth straight week of declines after OPEC members last month decided against cutting production despite a huge global overhang of supply. Brent and the U.S. crude oil benchmark have almost halved in value since June and many investors expect further falls unless supply tightens or demand picks up. Brent for February LCOc1 was up $1.10 a barrel at $60.37 by 4:50 a.m. ET. The contract settled down $1.91 on Thursday, after trading as high as $63.70 a barrel. U.S. crude CLc1 was up $1.20 at $55.31. Tamas Varga, oil analyst at London brokerage PVM Oil Associates, said some investors were covering short sales and preparing to enter […]

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Oil Rebounds From Five-Year Low as Saudi Comments Add Volatility

Crude prices in London and New York rebounded 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, the U.S. grade, climbed as much as 2.6 percent in New York and Brent 2.2 percent in London. 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 of oil, Saudi Press Agency reported. Prices rose immediately after his remarks, before ending the day at the lowest in five years. The nation accounted for about 13 percent of global crude output […]

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Natural Gas Prices Fall Despite Larger-than-Expected Storage Withdrawal

By Timothy Puko Natural gas futures closed lower Thursday, whipsawing from gains to losses after traders overlooked a strong storage drain to focus on the larger bearish influence of record production. The front-month January contract settled down six cents, or 1.6%, at $3.642 a million British thermal units on the New York Mercantile Exchange. It is only 2.3% above the low closing price of the year of $3.561/mmBtu, which was set Oct. 27. Storage levels shrank by 64 billion cubic feet in the week ended Dec. 12, the U.S. Energy Information Administration said. That was more than the 61 bcf drain for this week a year ago and well below the 157 bcf five-year average, likely because unseasonably warm weather led to softer demand for heating, analysts said. Prices initially incrementally added to gains on the news but flipped to losses within a half-hour of the EIA update. While […]

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Oil Investors Keep Betting Wrong on When Market Will Hit Bottom

Investors betting on a rebound in oil prices are nothing if not tenacious. They have poured the most money in more than four years into exchange-traded products that track oil as prices fell 18 percent this month. It’s the third consecutive month that the four biggest U.S. funds have received money, during which time futures have plunged 41 percent. “It’s a testament that after such a wild selloff people are more and more eager to step in and wait for this eventual rebound,” said Stoyan Bojinov, a Chicago-based analyst at ETF Database. “Oil looked cheap a month ago and it’s even cheaper today, that’s why we continue to see these inflows.” Oil prices have tumbled by half since June amid surging production and slower than expected demand growth. Output in the U.S. is the highest in three decades, and OPEC, responsible for about 40 percent of global supply, maintained […]

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Saudi Arabia Says Hard for OPEC to Give Up Oil-Market Share

Saudi Arabia and OPEC would find it “difficult, if not impossible” to give up market share by cutting crude production, the country’s oil minister said. Global oil markets are experiencing “temporary” instability caused mainly by a slowdown in the world economy, Oil Minister Ali Al-Naimi said, according to comments published today by the Saudi Press Agency. He reiterated the country’s intention to maintain output amid plunging prices. “In a situation like this, it is difficult, if not impossible, that the kingdom or OPEC would carry out any action that may result in a reduction of its share in market and an increase of others’ shares,” Naimi said, according to the state-run news agency. Saudi Arabia, the largest producer in OPEC, will stick to its oil policies, he said. The Organization of Petroleum Exporting Countries decided Nov. 27 to keep its production target unchanged at 30 million barrels a day, […]

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Saudi Arabia’s Oil Exports Drop Was Sign of Weaker Demand

Saudi Arabia shipped 10 percent less oil overseas in October than it did a year earlier, signaling demand was falling even before OPEC decided a month later to hold production unchanged with prices plunging. Oil exports fell to 6.9 million barrels a day in October from 7.7 million barrels a day a year earlier, according to data from the Joint Organisations Data Initiative yesterday. It was the sixth month in a row that Saudi Arabia exported less than 7 million barrels a day, the level it needs to balance its budget. Crude slumped 44 percent this year as the Organization of Petroleum Exporting Countries sought to defend market share amid a U.S. shale boom that’s exacerbating a global glut. Saudi Arabia will stick to its policy to maintain output, the country’s oil minister Ali Al-Naimi said, according to state-run Saudi Press Agency. Saudi Arabia and OPEC can’t lose its […]

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KAR Group confirms Ninewa oil contract

Workers clean a cooling system at the Kalak refinery, which is operated by the KAR Group. KAR is building the Hamdaniya refinery as part of its Production Sharing Contract with Ninewa province. (SEBASTIAN MEYER/Iraq Oil Report/Metrography) Kurdish oil company KAR Group has confirmed it signed a production sharing contract directly with the Ninewa provincial council in 2014, the latest provincial oil contract in Iraq and one that illustrates the deepening economic ties between the Kurdistan Regional Government (KRG) and the embattled province.“In early 2014 we signed a production sharing agreement with the government of Ninewa for the Makhmour block,” Baz Karim, President of Kar Group, said in a presentation at the CWC Kur…

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Backed by U.S. Airstrikes, Kurds Reverse an ISIS Gain

BAGHDAD — Kurdish forces, backed by a surge of American airstrikes in recent days, recaptured a large swath of territory from Islamic State militants on Thursday, opening a path from the autonomous Kurdish region to Mount Sinjar in the west, near the Syrian border. The two-day offensive, which involved 8,000 fighters, known as pesh merga, was the largest one to date in the war against the Islamic State, also known as ISIS and ISIL, according to Kurdish officials. It was also a successful demonstration of President Obama’s strategy for battling the extremist group: American air power combined with local forces doing the fighting on the ground. A statement released Thursday night by the office of Masrour Barzani, the head of the Kurdistan Regional Security Council, called the operation “the single biggest military offensive against ISIS , and the most successful.” In August, a siege of Mount Sinjar, where thousands […]

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Cheap Oil Jamming Rails Means Higher U.S. Power Bills

U.S. electricity costs are poised to reach the highest level since 1999 because railroads are too clogged to deliver enough coal to power plants. While the U.S. has the world’s biggest coal reserves, utilities are forecast by the government to end the year with the lowest stockpiles since 2005. With carriers including BNSF Railway jammed with record shipments of oil and grains, Xcel Energy Inc. (XEL) and other power producers say they can’t get the coal they need. The rail delays mean utilities haven’t rebuilt inventories that fell to a seven-year low last winter. Power producers filed 10 notices this year warning regulators that stocks were low enough to threaten generation, compared with two filings in 2013. Utilities have been obliged to rely more on natural gas, increasing costs for consumers. “There’s plenty of coal,”Jim Thompson, a director of coal for IHS, an Englewood, Colorado-based energy and industrial analytics […]

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In China’s Housing Market, Pressure to Sell, Hesitation to Buy

HONG KONG — In Dongguan, a sprawling factory city in southern China, one real estate developer has cut prices by 15 percent, offered $1,600 worth of free appliances and even brought in a circus and a traveling zoo to move apartments. In Hangzhou, the affluent hometown of the online retailer Alibaba in eastern China, families who paid in advance for new apartments have occupied a stalled, half-finished complex. And in Changsha, a bustling river town in central China where developers built a forest of fancy towers, a third of the modern office space is empty and families are mulling whether to buy in a housing market where prices have fallen 7.4 percent since April or wait for further drops. Every urban real estate market is different in mainland China, driven by myriad municipal and provincial regulations and the varying strength of local economies. But the outcome is the same: […]

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China data revision lifts GDP by $308bn

Chinese tourists stand along the promenade on the Bund overlooking the Huangpu River against the skyline of the Pudong district in Shanghai on December 10, 2014 China’s economy was 3.4 per cent bigger last year than previously reported, government statisticians said on Friday, pushing the world’s largest economy even further ahead of the US on officially recognised figures. The revision adds Rmb1.92tn ($308bn) to China ’s gross domestic product in 2013, an amount greater than Singapore’s entire economic output. But the results of the country’s third economic census may do little to allay longstanding scepticism about China’s official data, as the statistics bureau chose not to apply the System of National Accounts, an international framework for compiling economic data. The SNA , endorsed by the UN in 2008 and since adopted by the US, the EU and South Korea, would probably have led to a larger upward revision by […]

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Gasoline Under $2.50 in U.S. for First Time Since 2009

U.S. drivers are paying less than $2.50 a gallon at the pump for the first time in more than five years. Retail gasoline averaged $2.477 a gallon yesterday, data from the Heathrow, Florida-based motoring group AAA showed. That’s down from this year’s peak of $3.696 in April and the first time it has dipped below $2.50 since October 2009. By New Year’s Day, the fuel may be selling for $2.25 to $2.40, the lowest seasonally since 2008, AAA said by e-mail. Tumbling crude prices and rising fuel output have sent gasoline lower, leaving more money in the pockets of consumers. The Organization of Petroleum Exporting Countries declined to reduce its output target at a meeting last month, letting prices drop to a level that may slow U.S. output that’s surged to the most in more than three decades. U.S. refineries operated at the highest level in more than nine […]

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Nature fires back at EIA shale gas critique

Scientific community debating studies examining the longevity of the U.S. shale natural gas boom. Photo by Steve Oehlenschlager/Shutterstock The U.S. Energy Information Administration took issue this week with an article published by Nature, in which Texas researchers said a detailed analysis of U.S. shale plays may be "bad news" for forecasters. Policymakers on Capitol Hill have said the glut of natural gas means the United States should transform itself as a major exporter of liquefied natural gas , arguing such deliveries may contribute to the rise of the country as an "energy superpower." Tad Patzek, director of petroleum engineering at the University of Texas at Austin, said in the Nature report EIA assessments of shale were setting U.S. policymakers up "for a major fiasco." In a Dec. 15 retort, EIA countered the Nature article was filled with "inaccurate and distorting reporting." It further questioned Patzek’s role in the research […]

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Falling Oil Prices Don’t Give Clean-Energy Stocks the All-Clear

ENLARGE A solar facility in the California desert. The outlook for alternative energy isn’t necessarily better because of falling oil prices, analysts say. PR Newswire/Associated Press These are dark days for investors in Big Oil. That doesn’t mean clear skies for investors in clean energy. The sharp plunge in oil prices has dragged down the share prices of many global energy giants. But a number of companies that provide alternatives to fossil fuel have taken a similar hit. U.S. oil prices have fallen 15% this month through Wednesday, and the $10.6 billion Vanguard Energy Fund , a mutual fund that holds shares in large oil and gas producers, has fallen 4.9%. In the same period, the New Alternatives Fund, one of the largest mutual funds focused on alternative energy, is down 6.2%. Government policies and social acceptance may support the investment argument for more environmentally friendly energy sources. But […]

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BASF, Gazprom Call Off Asset Swap Amid Political Tensions

FRANKFURT—Germany’s BASF SE , the world’s largest chemical company by revenue, and Russia’s OAO Gazprom have called off an asset-swap deal amid mounting political tensions between Russia and the West, BASF said Thursday. The collapse of the deal means BASF now expects an only “slightly higher” increase in earnings before interest and taxes for 2014, rather than the “considerable rise” the company previously forecast, as it won’t collect expected income from the transaction. BASF had planned to divest itself of the gas trading and storage business of its wholly owned oil and gas subsidiary Wintershall AG as part of an asset exchange with Russian state gas group Gazprom that was scheduled to be completed by the end of this year. The trade, announced in November 2012, would have given Wintershall access to natural-gas fields in Siberia. “Due to the current difficult political environment, BASF and Gazprom have decided not […]

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Plunge in Oil Prices Brings Jitters to Texas City

ENLARGE Tankers load oil at a Port Corpus Christi dock. Corpus Christi and the surrounding areas have prospered from the oil boom in the nearby Eagle Ford Shale. Eddie Seal for The Wall Street Journal CORPUS CHRISTI, Texas—This Gulf Coast city has ridden a rocket of a rebirth in recent years, propelled by a more than 30-fold increase in oil production at the nearby Eagle Ford Shale since the beginning of 2010. Corpus Christi’s economy went from stagnant to zooming, growing by 8% in 2012 and 6% in 2013. Workers flush with cash have helped drive average home prices to nearly $200,000 from $150,000 four years earlier. The formerly sleepy port is bustling with crude shipments destined chiefly for refineries elsewhere in the U.S. and Canada. An old grain elevator now unloads the sand used to crack shale formations through fracking and release oil and gas. Officials are building […]

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Defiant Vladimir Putin blames west for Russia’s economic woes

Russian President Putin attends his annual end-of-year news conference in Moscow…Russian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow, December 18, 2014. Putin said on Thursday the central bank and government were taking adequate measures to support the rouble and that Russia’s current economic situation was casued by external factors. REUTERS/Maxim Zmeyev (RUSSIA – Tags: POLITICS BUSINESS) A defiant Vladimir Putin said Russia should brace itself for two years of recession, as he blamed economic woes on a western plot to defang the Russian bear. The president was speaking at a three-hour press conference during which he addressed this week’s market turmoil in public for the first time. More On this story On this topic IN Europe He claimed that a period of economic hardship was the price Russia would have to pay to maintain its independence in the face of western aggression, repeatedly blaming […]

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Moody’s: Mid-term elections dim federal fracing regulation prospects

Results of 2014’s congressional elections have reduced the prospect of the federal government enacting its own hydraulic fracturing regulations, Moody’s said in a Dec. 17 report. It noted that Republicans, who generally have taken the position that state regulations are sufficient, will assume control of the US Senate in addition to the House in January. This change in Washington’s political climate means oil and gas producers can avoid the consequences of higher costs from federal regulation, the New York credit rating service said. It cited an Independent Petroleum Association of America estimate that one proposal could raise costs per well by up to $100,000. “However, the biggest benefit of not having federal regulation is the time to receive permits, which likely would have slowed,” the report added. Operators face growing regulations of their exploration and development of unconventional resources on state and local levels, it continued. Courts in Pennsylvania […]

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EIA, Analyst: US Crude Production Strong, Despite Rig Count Decline

Rig counts have trended lower in recent weeks, and the drop is right on schedule, according to online economic blog Zero Hedge. There is a lag time of about four to six months before initial declines in crude oil prices lead to a reduction in rig counts, and it’s been about that long since crude oil prices began sliding last summer. But while analysts acknowledge the reduction in rigs, they say production levels will continue to grow, though not as quickly. There can be a reduction of as much as 10 to 25 percent in the number of wells without making a large difference in production, Berkeley Research Group Managing Director Rick Chamberlin told Rigzone. “Production will continue to grow, but it just won’t grow at the same rate,” Chamberlain said, adding that until the Organization of the Petroleum Exporting Countries (OPEC)  agrees to lower production values, U.S. crude […]

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Most North America Shale Plays Still Profitable at $65/Barrel

Most North America shale plays should remain profitable at $65/barrel, an industry expert tells Rigzone. At $65/barrel, most North America shale plays are still profitable with the current rig and well economics on an individual or series basis, according to an industry expert with A.T. Kearney. The firm doesn’t see any major pullback in activity at this price level, except for companies with stronger balance sheets possibly deferring or slowing programs to take advantage of consolidation opportunities with other players that may have higher debt levels and are looking for merger activity, said Vance Scott, partner and leader of the Americas energy practice at global management and strategy consulting firm A.T. Kearney. Deeper, more expensive shale plays that have more exotic completion requirements are always going to be more sensitive to commodity pricing, said Scott. Bakken wells tend to be deeper than wells in the Eagle Ford in South […]

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Oil Crash Exposes New Risks for U.S. Shale Drillers

Tumbling oil prices have exposed a weakness in the insurance that some U.S. shale drillers bought to protect themselves against a crash. At least six companies, including Pioneer Natural Resources Co. (PXD) and Noble Energy Inc. (NBL) , used a strategy known as a three-way collar that doesn’t guarantee a minimum price if crude falls below a certain level, according to company filings. While three-ways can be cheaper than other hedges, they can leave drillers exposed to steep declines. “Producers are inherently bullish,” said Mike Corley, the founder of Mercatus Energy Advisors, a Houston-based firm that advises companies on hedging strategies. “It’s just the nature of the business. You’re not going to go drill holes in the ground if you think prices are going down.” The three-way hedges risk exacerbating a cash squeeze for companies trying to cope with the biggest plunge in oil prices this decade. West Texas […]

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Texas RRC October Oil & Gas Report

The Texas Railroad Comission has updated their Oil & Gas Production Data Query  to include the production numbers for October. The Texas data is always incomplete so the charts all look like there is a big decline in the last few months. This is not the case, the charts only reflect the data that has been received and the production numbers will look a lot more positive after several months. That being said there is something that can be gleaned from these numbers. Even though the data is incomplete, if production is increasing then last months incomplete numbers should be higher than this months incomplete numbers. Using that logic, there seems to have been a strong slowdown in Texas oil and gas production. All the last data points are October and is in barrels per day. Texas Crude Only In June and July there was a strong increase in […]

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Oil markets spark fear in North Sea waters

North Sea producers starting to feel the squeeze of low oil prices, industry leaders say. UP/ICasey J. Ranel/USCG Oil prices for the week are recovering from historic lows, though Brent, a crude index based on North Sea oils, at one point fell below the $60 mark for the first time in more than five years. Robin Allen, chairman of the independent British exploration association Brindex, told the BBC the regional industry was in a state of contraction . "It’s close to collapse. In terms of new investments – there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks," he said. "Budgets for 2015 are being cut by everyone." Major international oil companies, from Marathon in the United States to British energy major BP, have trimmed their investment forecasts with oil trading in a bear market. BP in […]

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Russian President Vladimir Putin Strikes Harsh Tone on With West

ENLARGE Russian President Vladimir Putin during his news conference in Moscow. Associated Press MOSCOW—President Vladimir Putin accused the West of trying to subdue and disarm Russia at a defiant annual news conference Thursday, and blamed “external factors”—chiefly the drop in oil prices—for the collapse of Russia’s currency and stock market. He acknowledged that Western sanctions over the country’s annexation of Crimea and role in Ukraine were biting, but said the economic troubles “are payment for our independence, our sovereignty.” He reassured Russians that they would last no more than two years, as Russia retools its economy away from oil, upon which it had become overly dependent. Mr. Putin ’s comments, the first since the ruble plunged earlier this week, signal he may hunker down for a long chill in relations with the West, although he appeared to be softening his stance in Ukraine. He appeared to rebuff the pro-Russian […]

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Shell sheds some Norwegian operations

Shell sheds some of its assets in Norway in cost-saving measure. UPI/Mohammad Kheirkhah Finnish fuels company ST1 acquires parts of the Norwegian downstream operations from Shell for an undisclosed sum. The company also takes a joint interest in Shell’s aviation business in Norway. Shell said the measure includes a special retail license agreement to ensure the brand remains "highly visible" in the Norwegian market. "The deal will have no impact on Shell’s other businesses in Norway," the Dutch company said in a statement. The decline in crude oil prices, nearly half of their June value, has forced some energy companies to streamline their portfolios to cope with the market stress. In October, Shell Chief Executive Officer Ben van Beurden said "the volatility in our industry" underlined the importance of keeping a tight hold on costs and spending . The Finnish company operates Shell’s retail fuel stations in Finland and […]

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Putin Says Russian Economy Must Brace for $40-a-Barrel Oil

The Russian economy must adapt to the reality of oil prices that could fall as low as $40 a barrel, President Vladimir Putin said as he faces the worst financial crisis since coming to power in 2000. “I don’t know how quickly it will happen if prices stay at today’s level, or if they will drop lower than $60, $40,” Putin said today at his annual press conference in Moscow. “The economy will structure itself accordingly, however much is necessary.” The U.S. and Saudi Arabia , which with Russia are the world’s three biggest crude producers, may be colluding to push down the price of oil, Putin said. The collapse of prices, which are down more than 40 percent this year, may also be due to a battle for market share between traditional producers and shale-oil companies, he said. Oil is heading for its biggest annual loss since the […]

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Ukraine, Russia: EU Bans Investment In Crimea

The European Union banned investment in the disputed territory of  Crimea on Dec. 18, outlawing investment in Russian oil and gas exploration in the Black Sea and prohibiting European cruise ships to dock at Crimean ports, Reuters reported. The new measures, which come into effect Dec. 20, are meant to pressure Russia following its annexation of the area. Meanwhile, EU leaders will meet Dec. 18 to discuss measures against Russia. They are expected to maintain pressure on the country over its involvement in Ukraine, despite the recent fall in the ruble.

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