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British energy players facing tight purse strings

Oil companies working in the British seas may face tight purse strings in current bear market for crude oil, analysis finds. (Photo: BP p.l.c.) Brent, the global price benchmark based on oil blends taken from the North Sea, is trading near the $60 per barrel mark, far below the price for the June contract. Ewan Mitch, lead analyst at British firm Company Watch, said the bear market is putting a strain on the pocketbooks of many regional companies. "The recent large falls in the price of oil and gas could leave the weaker companies in difficulties, especially the ones that need to raise funds to keep exploring," he said in the report. The price for Brent is approaching the point at which companies might not be able to generate a profit. British energy company BP said it could cope with an oil price as low as $60 per barrel, […]

Posted On : Published By : Tom Whipple
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Russia expects major losses from S&P action

Russian development minister backs President Vladimir Putin’s assessment the government has the mettle to arrest economic decline. File Photo by Monika Graff/UPI MOSCOW, Dec. 29 (UPI) — Russia may lose as much as $30 billion as a result of a downgrade by Standard & Poor’s of its credit rating, Russia’s development minister said Monday. S&P last week put Russia on notice because of a weakened economy and negative review of monetary flexibility. Russian Minister of Economic Development Alexei Ulyukayev said in an interview with Russia’s Business FM radio station that the consequences of a credit downgrade may be severe. "We can’t specify this sum right now but intuitively this is about $20 billion – $30 billion," he said. "However, this amount still needs to be specified and requires additional work. This is a new risk." Western sanctions imposed in response to the Kremlin’s policies on Ukraine, coupled with a […]

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As oil falls, Russia choked by military, social spending

MOSCOW (Reuters) – Russian authorities are facing some unpalatable options as they try to keep the economy afloat – unless they can persuade President Vladimir Putin to curb massive military spending. Officials fear that without limiting the defense budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control. Despite a crisis brought on by diving oil markets and Western sanctions, they believe Russia can muddle through next year provided the price of crude, its dominant export earner, holds near current levels. But even at $60 per barrel, the present oil price is little more than half what the Kremlin needs to balance the budget, and it is quickly running out of money. Without radical action, the officials are much less confident about 2016-17 – and even sooner, should global oil prices continue their slide […]

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Russian ADRs Drop on First GDP Contraction Since 2009

Russian stocks traded in New York fell to the lowest level in a week as the economy shrank for the first time in five years and a court hastened the scheduled reading of a verdict in the case against opposition leader Alexey Navalny. The Bloomberg Russia-US Equity Index dropped 4.5 percent to 50.41 in New York. The Market Vectors Russia ETF, the biggest exchange-traded fund tracking the country’s stocks, sank percent 8.7 percent to $14.61. The ruble tumbled 7.4 percent against the dollar. Stocks slid and the ruble weakened after the government said gross domestic product shrank 0.5 percent in November. The economy is contracting as oil, the country’s top export, is trading at the lowest level in five years and sanctions linked to the Ukraine conflict stoke the country’s worst currency crisis in 16 years. A Moscow district court said it will hand down a verdict in Navalny’s […]

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Russia to add wheat exports duty to other curbs from February

MOSCOW (Reuters) – Russia will introduce a duty on wheat exports from Feb. 1, the government said, adding to other restrictions with which it is battling a rise in domestic grain prices. Russia, expected to be the world’s fourth-largest wheat exporter this year, has been exporting record volumes from a large grain crop of 105 million tonnes as the ruble’s plunging value has spurred a dash for foreign currencies. But last week, Moscow imposed informal export controls, including tougher quality monitoring and slashed railway loading programs, in a bid to cool domestic prices while also unveiling plans to impose a duty on exports. The government said late on Thursday the duty on wheat exports would amount to 15 percent of the customs price plus 7.5 euros and would be no less than 35 euros ($43) per tonne from Feb. 1 until June 30, 2015. Trade sources expect business to […]

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David Hughes Weighs In on The Fracking Fallacy Debate

In the current debate about the  Nature  article  "The Fracking Fallacy,"  the discussion has focused on estimates of cumulative production of shale gas plays by the Energy Information Administration (EIA) and The Bureau of Economic Geology at the University of Texas (UT/BEG).  David Hughes  provides another estimate in his recent post  "Fracking Fracas: The Trouble with Optimistic Shale Gas Projections by the U.S. Department of Energy ," a summary of his comprehensive study of all U.S. shale plays  Drilling Down  published by The Post Carbon Institute. The Fracking Fallacy debate is important because it casts doubt on the reliability of government estimates of our natural gas supply.  If U.S. gas production is in decline by the early 2020s as described in the  Nature  article, or sooner as I suspect, then important policy decisions about the export of natural gas and the retirement of coal-fired electric power plants have been […]

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Why Low Oil Prices Are Not Sustainable

Summary There have not been any considerable fundamental changes in the oil market from June to December that justify the big drop in oil prices. OPEC surplus of crude oil production capacity has changed very little between June and December. Now is an excellent opportunity to make a long-term investment in good energy stocks at a relatively cheap price. Oil prices have fallen sharply during the last six months. WTI crude oil’s last price of $54.73 per barrel is a 45.9% drop from its peak of $101.18 on June 25, while Brent crude oil has declined 46.6% from its peak price of $112.12 per barrel. WTI crude oil February 2015 leading contract Chart: TradeStation Group, Inc. According to the U.S. Department of Energy’s recent analysis release on December 18, the principal reasons for the sharp fall in crude oil prices are as follows: lowered expectations for global economic growth, […]

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10 Huge Countries Without Their Own Oil

The world’s 1.635 trillion barrels of proved oil reserves are not evenly distributed among the globe’s 216 nations. Just three — Saudi Arabia, Venezuela and Canada — account for nearly a third of the total.There are far more countries with no or very little oil than those countries with deposits that can be developed and used internally or exported. According to the U.S. Energy Information Administration (EIA), of the world’s 216 nations only 99 have any oil reserves at all. And only about 40 nations have proved reserves totaling more than a tiny 1 billion barrels.Global consumption of crude oil grew from around 83.2 million barrels a day to 90.4 million in the 10-years from 2004 to 2013, according to the EIA. With the exceptions of 2008 and 2009, when the global financial crisis stifled economic growth in much of the world, oil consumption has been rising, but about […]

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Oil Futures Edge Upward on Libya Fire

By Eric Yep Crude-oil futures edged higher in Asian trade Monday on reports of a fire at oil storage terminals at a Libyan oil terminal. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $55.37 a barrel at 0537 GMT, up $0.64 in the Globex electronic session. February Brent crude on London’s ICE Futures exchange rose $0.47 to $59.92 a barrel. Nymex crude lost 4.20% last week and Brent crude was down by 3.14% last week. Both the oil benchmarks have fallen for five consecutive weeks. "With persisting conflicts in Libya, crude export and production continue to be unstable. Current estimates of crude output in Libya stands at 352,000 barrels a day," analyst Daniel Ang at Singapore’s Phillip Futures said. He said for the past week both Nymex WTI and Brent crude were supported by short covering, but with 2015 just around […]

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Libya conflict helps oil move higher

Escalating violence in Libya helped oil prices advance towards $60 a barrel on Monday. The expanding seven-month civil conflict in Libya, an Opec member, has caused traders to refocus attention on the geopolitical risks and potential impact on supplies and exports. More On this topic IN Commodities Libya, which holds Africa’s largest oil reserves, has seen production drop from as high as 900,000 barrels a day in October to around less 400,000 b/d because of the most recent fighting. “A new wave of unrest in Libya resulted in crude oil production falling to some 350,000 b/d according to official statements,” said analysts at JBC Energy, a consultancy. “This is some 300,000 b/d less compared to our . . . estimates for average crude output in November.” ICE February Brent, the international oil marker, rose 59 cents to $59.90 a barrel, while Nymex February West Texas Intermediate, the US benchmark, added 59 cents to […]

Posted On : Published By : Tom Whipple