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Saudis hit ‘panic button’ at $40 oil

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

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Shenzhen to restrict new car sales

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

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

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

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China’s largest inland oil field depleting

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

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Oil and Gas Regulatory Push Coming from Obama Administration

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

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Oil Firms Pull Back on Rigs as Prices Fall

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

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

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

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

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

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

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

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Low Oil Prices Offer Uneven Economic Effect

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

Posted On : Published By : Tom Whipple