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U.S. Talking Oil Exports Just When World Needs It Least

The U.S. Congress is talking about allowing unfettered oil exports for the first time in almost four decades. Its timing couldn’t be worse. There’s space in the global market for 1 million to 1.5 million barrels a day of U.S. crude if the ban vanishes, Energy Information Administration chief Adam Sieminski told a congressional subcommittee at a Dec. 11 hearing. That would be less than 2 percent of worldwide demand . With prices sliding amid a glut, the figure is bound to be even smaller, according to consultants including Wood Mackenzie Ltd. As members of Congress promise more hearings on repealing the restrictions on oil exports, the world is awash in the stuff. Global prices have fallen by almost half since June to the lowest in five years amid slower demand growth and rising supply. What’s more, the kind of crude flowing in record volumes from U.S. shale plays […]

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Canada’s U.S. Oil Imports Dwarfs Saudis’ Share: Chart of the Day

Canada ’s share of U.S. oil imports is dwarfing Mexico and Saudi Arabia , as the country is faced with few outlets for its growing oil sands production. The CHART OF THE DAY tracks the proportion of U.S. crude oil imports supplied by Canada, Saudi Arabia and Mexico since November 2004, when each provided a bit more than 15 percent of demand. Canada’s dominance started in 2006, when output from Alberta ’s oil sands formations boosted the country’s production to a then-record 3.29 million barrels a day. Its share has climbed to about 42 percent while the others combine for 24 percent, according to data compiled by Bloomberg. Canadian production rose 5.6 percent to a record last year and is projected by the U.S Energy Information Administration to reach 4.47 million barrels a day in 2015. The country’s refineries can process 2.12 million barrels a day, according to the […]

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U.S. household gasoline expenditures in 2015 on track to be the lowest in 11 years

Source: U.S. Energy Information Administration, Short-Term Energy Outlook The average U.S. household is expected to spend about $550 less on gasoline in 2015 compared with 2014, as annual motor fuel expenditures are on track to fall to their lowest level in 11 years. Lower fuel expenditures are attributable to a combination of falling retail gasoline prices and more fuel-efficient cars and trucks that reduce the number of gallons used to travel a given distance. Household gasoline costs are forecast to average $1,962 next year, assuming that EIA’s price forecast, which is highly uncertain, is realized. Should the forecast be realized, motor fuel expenditures (gasoline and motor oil) in 2015 would be below $2,000 for the first time since 2009, according to EIA’s December 2014 Short-Term Energy Outlook (STEO). The price for U.S. regular gasoline has fallen 11 weeks in a row to $2.55 per gallon as of December 15, […]

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You May Spend Less on Gas Next Year Than You Have Any Year This Decade

ByAmy Harder Gas prices: U.S. households are on track to spend the least amount of money on gasoline in 11 years. Getty Images With global oil prices in a freefall, Americans are reaping economic benefits not seen in more than a decade. U.S. households are on track to spend the least amount of money on gasoline in 11 years, the U.S. Energy Information Administration reported Tuesday . The average household is expected to spend about $1,962 on gasoline in 2015, $550 less than it did in 2014. The price for regular gasoline in the U.S. has fallen 11 weeks in a row to $2.55 per gallon as of Dec. 15, down more than a dollar since its peak this year in April, according to EIA. The federal statistical agency also predicts that U.S. gasoline prices are going to remain low next year, averaging $2.60. The drop in gasoline prices […]

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New Regulations for Oil Transportation in the Bakken

Will tougher regulations for oil transport create a safer environment? Commission Adds New Restrictions for Oil Transports In an effort to improve the safety of crude production in the Bakken region, the North Dakota Industrial Commission issued an order on December 9th that will impose new regulations on oil producers. The order (no. 25417) is the result of an investigation that began at an emotionally charged hearing in September. Over the past two months, commission members Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring considered oral and written comments from technical witnesses, manufacturers, land/royalty owners and the general public. The new regulations will go into effect on April 1, 2015 and require that all new wells in the Bakken Petroleum System utilize equipment that controls vapor pressure in order to lessen the likelihood of explosions during transportation. This order comes as a series of troublesome […]

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U.S. drivers saving millions of dollars on gas

Consumers saving about $400 million per day at the pump when weighed against last year’s prices, motor club AAA says. hxdbzxy/Shutterstock Consumer benefits of low oil prices are "abundantly clear" as U.S. drivers are saving more than $400 million per day on gasoline, motor club AAA said. AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.53 for Tuesday, about a penny less than Monday and 70 cents less than this date in 2013. "Holiday cheer has come early for the motoring public, with the average for retail gasoline at its lowest level in more than five years," the motor club said in a Monday price briefing. Low oil prices are driving down the price at the pump, falling for 82 consecutive days and down $1.16 from the peak price reached April 8. AAA estimates U.S. commuters are saving more than $400 million […]

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North Dakota funds economic diversity effort

Federal grants support economic diversification strategies in oil-rich North Dakota. Photo by Calin Tatu/Shutterstock BISMARCK, N.D., Dec. 16 (UPI) — Grants totaling more than a quarter of a million dollars will help communities across North Dakota diversify their economy, U.S. Sen. John Hoeven , R-N.D., said. Hoeven said the U.S. Economic Development Administration funneled grants totaling $310,000 to the state for economic diversification assistance . "These grants will help to develop and diversify the economies of communities across North Dakota," said Hoeven. "This builds on our work to create good jobs for our people and ensure our state’s economy is healthy and strong now and into the future." North Dakota’s economy grew last year faster than any other U.S. state in terms of real growth in gross domestic product. The U.S. Commerce Department said in a state-by-state review North Dakota can credit the extractive industries for a sizable portion […]

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Encana: U.S. shale tops agenda despite low oil prices

Canadian energy company Encana builds bear market for crude oil into its U.S. shale strategies for 2015. UPI/Gary C. Caskey CALGARY, Alberta, Dec. 16 (UPI) — Capital efforts in U.S. shale basins for 2015 are tailored to account for a "volatile price environment," Canadian energy company Encana said Tuesday. Encana said it was directing about 80 percent of its capital expenses, or around $2.2 billion, toward the Montney, Duveray, Eagle Ford and Permian shale reserve areas in the United States. Dough Suttles, the company’s president and chief executive officer, said Encana was moving forward with a new aggressive strategy in mind. "Built into our 2015 plan is the flexibility to respond to the challenges and act on potential opportunities presented in this volatile price environment," he said. West Texas Intermediate, the U.S. oil price index, has shed close to half of its value since June. Prices are at the […]

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Keystone pipeline to top Senate agenda next year

AP Photo/J. Scott Applewhite WASHINGTON (AP) — Senate Republican Leader Mitch McConnell declared Tuesday that approving the Keystone XL pipeline will top the Senate agenda in January, potentially setting up an early veto confrontation with President Barack Obama. Congressional Republicans have been pushing for approval of the pipeline for years. Obama has resisted because of environmental concerns. "People want jobs and this project will create well-paying high-wage jobs for our people," McConnell told reporters. "We’re optimistic we can pass it and put it on the president’s desk." The $8 billion pipeline would carry oil from Canada into the United States and eventually to the Texas Gulf Coast. It has become a symbol for divisions over the country’s energy and environmental policy. Environmentalists say the issue is a significant test of Obama’s commitment to address climate change. Republicans and other supporters say the project would create jobs and promote energy […]

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Russian rouble suffers steepest drop in 16 years

MOSCOW (Reuters) – The rouble plunged more than 11 percent against the dollar on Tuesday in its steepest intraday fall since the Russian financial crisis in 1998 as confidence in the central bank evaporated after an ineffectual rate hike. The rouble opened around 10 percent stronger against the dollar after the central bank unexpectedly raised its benchmark interest rate by a hefty 650 basis points to try and halt the currency’s slide, but it reversed gains in volatile trade and repeatedly set new record lows. It has now fallen close to 20 percent this week, taking its losses this year against the dollar to more than 50 percent and stirring memories of the 1998 crisis when the currency collapsed within a matter of days, forcing Russia to default on its debt. Although Russia’s public finances and reserves are much healthier than in 1998, analysts say the country is on […]

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Russia Sees No Need to Cut Oil Supply With Prices to Stabilize

Russia will keep its crude oil output steady next year and plunging prices will stabilize, Energy Minister Alexander Novak said, reiterating comments made almost three weeks ago that nation won’t alter supplies to halt the rout. The world’s largest crude producer’s output will be similar to this year’s 10.6 million barrels a day, Novak said at a conference today in Doha, the Qatari capital. Brent, the international benchmark grade, has fallen 47 percent since the end of 2013, contributing to a currency crisis in Russia, which relies on energy for half its budget. By keeping oil output unchanged, Russia is mirroring a strategy by OPEC, which said Nov. 27 it won’t curb production to tackle a global surplus. The government plans to hold a meeting today to discuss its deteriorating financial situation. Sanctions imposed by the U.S. and European Union over the conflict in Ukraine stoked the worst capital […]

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Ruble Freefall Helps to Shield Russia’s Most Important Industry

The freefall ruble that symbolizes Russia ’s economic crisis is also shielding its most important industry. Russian oil and gas companies are benefiting from earning dollars from sales of their products, while paying for expenses in rubles that have lost about half their value against the U.S. currency in the past five months. Still, the energy companies whose revenues brought power and status on the world’s stage to President Vladimir Putin are battling collapsing crude prices, hurdles to borrowing and sanctions imposed by the U.S. and Europe over the Ukraine conflict. Set against the short-term gains from the ruble’s slide is a recessionary backdrop that’s driving down stocks of all Russian commodity businesses, and raising concerns that oilfield exploration and development will be hindered. “The devaluation of the ruble under the same oil price is actually positive for all exporters, including oil companies ,” said Alexey Bulgakov, a Sberbank […]

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Chevron suspends Ukrainian shale efforts

Chevron puts brakes on gas exploration efforts in Ukraine, but says it’s keeping its options open. UPI/Shutterstock/Calin Tatu KIEV, Ukraine, Dec. 16 (UPI) — U.S. energy company Chevron said it was still looking for opportunities in Ukraine, but opted to shelve a contract to tap the country’s shale gas potential. In October, members of a regional council in Ukraine approved a draft production agreement for shale natural gas with Chevron. The deal was formalized in November. Ukraine is one of the Eastern European countries thought to be rich in shale natural gas and the government estimates there may be enough natural gas in shale plays to meet the country’s needs without imports. Peter Clark, country manager for Chevron, told the Kiev Post the company terminated the production agreement because of legislative hurdles in Ukraine. "We have just terminated that PSA (product sharing agreement)," Clark said in comments published Monday. […]

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New Russia Sanctions Bill Will Be Signed by Obama, White House Says

WASHINGTON — President Obama has decided to sign legislation imposing further sanctions on Russia and authorizing additional aid to Ukraine , despite concerns that it will complicate his efforts to maintain a unified front with European allies, the White House said on Tuesday. The legislation calls for a raft of new measures penalizing Russia’s military and energy sectors and authorizes $350 million in military assistance to Ukraine, including antitank weapons, tactical surveillance drones and counter-artillery radar. The bill was approved unanimously by Congress, but Mr. Obama hedged for days on whether he would sign it. Josh Earnest, the White House press secretary, announced the decision to approve the bill even as he described the president’s qualms over it. Mr. Earnest said it sent a “confusing message” internationally, including language “that does not reflect the consultations” with European powers. But in the end, he added, the president opted to allow […]

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Vladimir Putin vs. the Currency Markets: What to Know About the Ruble’s Collapse

Vladimir Putin ’s biggest enemy right now may well be the currency markets. Even as it spars with Ukraine, Russia’s government is in the midst of a full-scale war to preserve the value of the ruble as a plummeting oil price has led to billions flooding away from the country. The ruble fell 11 percent against the dollar on Monday alone. To try to stanch the bleeding, on Monday evening (the middle of the night Moscow time), the Central Bank of Russia announced a stunning interest rate increase. Its main deposit rate is now 17 percent, up from 10.5 percent when Russian banks closed for business Monday. It may go without saying, but an emergency interest rate increase of 6.5 percentage points announced in the middle of the night is not a sign of strength. Rather, it is the kind of thing you see only in an old-school emerging […]

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The rouble crisis reveals Putin’s strategic failure

Russia’s President Vladimir Putin is seated for the "welcome country" ceremony for the G20 Summit at the Brisbane Convention and Exhibition Center in Brisbane on November 15, 2014. Australia is hosting the leaders of the world’s 20 biggest economies for the G20 Summit in Brisbane on November 15 and 16. AFP PHOTO / Mandel NGAN R ussia is in the throes of a full-blown currency crisis, with profound implications for its economy, its political system and its relations with the outside world. Even by the standards of emerging market currency meltdowns, the rouble’s gyrations this week have been extreme, plumbing record lows that days — even hours — earlier would have seemed unthinkable. The rout is caused by the plunge in the price of oil, Russia’s major export, and exacerbated by western sanctions imposed in response to Vladimir Putin’s military intervention in Ukraine . But the depth of the […]

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Evaluating Fifteen Years of IEA Energy Forecasts

Highlights This article analyses historical IEA forecasts of global energy consumption. Three major forecasting challenges are observed and briefly analysed: Overprediction of oil consumption Underprediction of coal consumption Underprediction of other renewables Introduction The International Energy Agency tackles a monumental task every year when compiling its World Energy Outlook report: forecasting global energy consumption over the next 2-3 decades. Over the years, the IEA has taken quite a lot of flak from critics with 20/20 hindsight about fairly large deviations between forecasted and actual numbers. For example, the IEA failed to forecast the plateau in conventional oil production which started about one decade ago and generally underpredicted the expansion rate of modern renewables. But just how large are these deviations? This article will take a quantitative look at 15 years of IEA World Energy Outlooks (available  here ) and compare the forecasts to actual data from the BP Statistical Review to get […]

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Front-month ICE Brent crude falls below $60/b on weak Chinese data

Singapore (Platts)–16Dec2014/332 am EST/832 GMT Front-month January ICE Brent crude futures fell below the $60/barrel mark for the first time in five-and-a-half years to $59.93/b at 3:42 pm in Singapore (0742 GMT) Tuesday, December 16, as investors continued to engage in sell-offs after data revealed a contraction in China’s manufacturing sector. At $59.93/b, the price represents a $1.13/b (1.85%) day-on-day fall from Monday’s settlement of $61.06/b. The January ICE Brent contract will expire later in the day. The last time front-month ICE Brent crude was any lower was on July 13, 2009, when the contract traded at an intra-day low of $59.49/b. Article continues below… Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude and products and more than 200 end-of-day assessments. Analysts said the declines were a response to HSBC announcing that its […]

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Oil Stays in Negative Territory After China PMI Slips

Crude-oil futures continued to slide in Asian morning trade Tuesday, after overnight losses that pushed oil prices to their lowest in more than five years. Data showing a further slowdown in China’s manufacturing sector didn’t help market sentiment. HSBC’s China flash manufacturing purchasing managers’ index for December slid to a seven-month low of 49.5 compared with 50.0 in November. In the last three months alone, Brent crude has tumbled 40%, a level of adjustment that has only happened three times in the last 24 years, according to Morgan Stanley. Oil prices have now fallen around 47%-48% since their peak in June this year, their largest drop since the 2008-2009 financial crisis. The slump in oil prices is having a ripple effect across financial markets and economies but market participants are still unsure of where prices will bottom. "As the industry takes the ‘fat’ out of the system that was […]

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Oil Keeps Dropping, China Manufacturing Data Weighs

By Eric Yep Crude-oil futures continued to drop in Asian trade Tuesday as market sentiment remained bearish, with more data showing a further slowdown in China’s manufacturing sector. Oil prices have now fallen around 47%-48% since their peak in June this year, their largest drop since the 2008-2009 financial crisis. The slump in oil prices is having a ripple effect across financial markets and economies, and market participants are still unsure of where prices will bottom. China’s manufacturing sector showed a decline as HSBC’s China flash manufacturing purchasing managers’ index for December slid to a seven-month low of 49.5 compared with 50.0 in November. "With China PMI lower than expected, we would need U.S. and E.U. manufacturing PMI to perform exceptionally well, or else [oil] prices would likely continue on its descent," analyst Daniel Ang at Phillip Futures said. He said weak manufacturing data from other regions could cause […]

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Oil Slides Below $55 as U.S. Output Seen Steady Amid OPEC Fight

Oil in New York fell below $55 a barrel for the first time in more than five years amid speculation that U.S. producers may further increase output as they battle OPEC for market share. Crude in London traded below $60. West Texas Intermediate futures dropped as much as 2.1 percent, after closing yesterday at the lowest level since May 2009. U.S. crude drillers are benefiting as costs fall almost as quickly as prices, according to Goldman Sachs Group Inc. Brent, the benchmark for more than half the world’s oil, may decline to $50 a barrel in 2015, a Bloomberg survey of analysts showed. Oil has slumped about 45 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. The group, responsible for 40 percent of the world’s supply, will refrain from curbing output even […]

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Natural Gas Drops on Short-Term Weather Forecast

By Timothy Puko Natural-gas prices ended lower after a strong start Monday, with analysts saying near-term weather forecasts are still too warm to overcome record supply. The front-month January contract settled down 7.6 cents, or 2%, at $3.719 a million British thermal units on the New York Mercantile Exchange. Prices started the session immediately higher, opening at $3.843/mmBtu, and then steadily retreated, losing 3.2% between the open Sunday evening and the close Monday afternoon. The U.S. oil and gas boom has led to record supply outpacing growth in demand. Demand is largely dependent on home heating, and weather forecasters are still expecting above-normal temperatures through Christmas. That has traders expecting supply to keep outpacing demand, driving prices down, analysts said. –Write to Timothy Puko at [email protected]

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Oil Prices Need More Than a Crisis

ENLARGE A wrecked building in Libya. News that renewed clashes in Libya could disrupt the country’s oil exports caused oil prices to briefly rally Monday morning. Reuters Can Libya save Russia? With the ruble sliding another 11% against the dollar on Monday, Russia could use a rally in oil prices. As rising supply and weaker demand have pushed Brent crude toward $60 a barrel, the market has focused on how quickly U.S. producers will pull back. That is likely to be a slow and uncertain process, though, so it may take something else to rebalance oil in 2015: political crises. The market got a taste of this with news that renewed clashes in Libya could disrupt the country’s oil exports, causing crude prices to rally briefly Monday morning. The increase in Libyan production to almost 900,000 barrels a day in October from roughly 250,000 in June helped spark the […]

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Chart of the Day: History Says Oil May Finally Be Nearing Its Floor

ByKevin Kingsbury Oil has been on a near-straight-shot lower since the summer, when prices stood at $105. If the charts are to be relied upon, the slump could be ready to end–at least for the time being. For those into technical trading, there’s a line which nicely connects 1998′s lows for Nymex oil at around $11/barrel with the post-9/11 bottom near $18 and the $33.85 nadir seen in early 2009. That line extends to the $53-54 area today, meaning very long-term support could soon be at hand with January futures falling below $56 on Monday to reach depths not seen since 2009. In both of last decade’s bottoms, shares initially bounced higher after hitting the support line but returned to it within a couple months. Only then did sustained rallies begin. Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use […]

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Crude Seen Falling to $50 in 2015 as OPEC Fails to Stem Glut

Crude oil prices are poised to fall below half where they were six months ago, before producers begin dealing with a global glut. Brent, the global benchmark, will slide to as low as $50 a barrel in 2015, according to the median in a Bloomberg survey today of 17 analysts, down from the $115.71 a barrel high for the year on June 19. The grade has already collapsed 47 percent since then and needs to fall further before producers clear the current glut, said five out of six respondents who gave a reason. Brent futures sank to a five-year low today, two weeks after the Organization of Petroleum Exporting Countries decided to maintain output even as the highest U.S. production in three decades swells a global surplus. The organization will stand by its decision even if prices fall to $40, United Arab Emirates Energy Minister Suhail Al-Mazrouei said yesterday. […]

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Oil price fall threatens $1tn of projects

New frontiers: Pemex workers drill at the La Muralla IV deep sea crude oil platform off Veracruz Almost $1tn of spending on future oil projects is at risk after a brutal plunge in crude prices to nearly $60 a barrel, Goldman Sachs has warned. Any cancellation of these developments would deprive the world of 7.5m barrels a day of new output over the coming decade — or 8 per cent of current global oil demand. The findings suggest the supply glut that has sent prices tumbling could soon vanish as the oil majors delay big-ticket production projects — the lifeblood of future petrol supplies, heating fuels and chemicals. Brent, the international benchmark, has fallen more than 45 per cent since mid-June amid surging US shale production, strong supply from the Opec cartel and weak oil demand in Europe and Asia. The price plunge has shaken the energy industry, throwing […]

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Saudi Arabia is playing chicken with its oil

Saudi King Abdullah sits before a meeting with U.S. Secretary of State Kerry at the Royal Palace in Jeddah In August 1973, Egyptian President Anwar Sadat paid a secret visit to the Saudi capital, Riyadh, to meet with King Faisal. Sadat was preparing for war with Israel, and he needed Saudi Arabia to use its most powerful weapon: oil. Until then, King Faisal had been reluctant for the Arab members of OPEC to use the “oil weapon.” But as the October 1973 Arab-Israeli war unfolded, the Arab oil producers raised prices, cut production and imposed an embargo on oil exports to punish the United States for its support of Israel. Without Saudi Arabia, the oil embargo would not have gotten very far. Today, Saudi Arabia is once again using its “oil weapon,” but instead of driving up prices and cutting supply, it’s doing the reverse. In the face of […]

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Iran to seek end to ‘cruel’ sanctions on energy

Iranian President Hassan Rouhani confident sanctions pressure will ease. UPI /Monika Graff Iranian President Hassan Rouhani spoke Monday before the Central Bank of Iran, saying he was confident international sanctions will come to an end . Western powers "have no other choice" but to work to find an agreeable solution to the nuclear impasse, he said. High-level talks are scheduled this week in Geneva, less than a month after multilateral negotiations in Vienna failed to bear fruit. Iran secured modest relief from sanctions one year ago during multilateral talks. Under the terms of an agreement, Iran can export about 1 million barrels of oil per day if it maintains its commitment to curb nuclear activity. Rouhani characterized existing sanctions as "cruel," but added the Iranian economy was coping with pressure on its energy sector. Inflation was down, he said, and Iranian officials were busy working to draft a budget […]

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New major gas find offshore Israel

Israeli energy company finds what may be third largest regional natural gas basin. (UPI/Shutterstock/James Jones Jr.) TEL AVIV, Israel, Dec. 15 (UPI) — An Israeli energy company said it’s discovered what may be the third largest natural gas basin in the country in the eastern Mediterranean Sea. Minority partner Israel Opportunity said the so-called Royee field may hold around 3.2 trillion cubic feet of natural gas. Located in the eastern Mediterranean, it would be the third largest in the region after the Leviathan and Tamar fields if reserve estimates are correct. The partners developing the giant Leviathan offshore gas field said an audit by Dutch consulting company Sewell and Associates put the reserve estimate at 21.9 trillion cubic feet, up from the previous estimate of around 18.9 trillion cubic feet. Tamar, with an estimated 8.5 trillion cubic feet of gas reserves, entered into production in March 2013. Amit Lang, […]

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Offshore Congo exceeds Eni’s expectations

Production test from site off the coast of Congo exceeds expectations for Italian energy company Eni. (UPI/Shutterstock/James Jones Jr.) Eni said it completed a production test in the Minsala Marine 1 NFW well off the Congolese coast, yielding more than 5,000 barrels of oil and 14 million cubic feet of natural gas per day in natural flow. "The production test results has exceeded expectations and enables us to plan a fast commercial development of the important Minsala Marine find," Eni Chief Executive Officer Claudio Descalzi said in a statement. The company said it estimates the discovery holds about 1 billion barrels of oil equivalent in place, of which 80 percent is oil. Reserves off the West African coast are similar to those in Brazil in that they’re located beneath a thick layer of submarine salt. Eni said it’s already discovered about 4 billion barrels of oil in basins off […]

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ISIS’s Oil Revenue Is Falling, Administration Says

ByJay Solomon A Kurdish Peshmerga Nov. 8 during fighting against Islamic State in the Syrian besieged border town of Ain al-Arab. Agence France-Presse/Getty Images The Obama administration believes it has sharply cut back the oil revenues that have made the Islamic State the best funded terrorist organization in history, according to senior U.S. officials. The U.S. has been combining military strikes that target energy infrastructure controlled by Islamic State in Iraq and Syria with heightened tracking of smuggling routes used to move oil through Turkey and Kurdistan, according to these officials. In October, the U.S. Treasury Department estimated that Islamic State, also known as ISIS or ISIL, was earning between $1 million and $2 million a day from oil sales. Administration officials, without citing specific figures, say they believe they have already scaled back this revenue stream sharply. “We know this has come down significantly,” said Amos Hochstein , the State […]

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Gulf Keystone on Track to Up Shaikan Daily Output in Kurdistan by More Than 60%

By Alex MacDonald LONDON–U.K.-listed oil firm Gulf Keystone Petroleum Ltd. (GFKSY) said Tuesday that it is on track to boost daily oil output from the Shaikan field in Kurdistan by more than 60% through three additional oil wells. The company has installed flowlines to connect three new wells–Shaikan 7, 8, and 10–to existing production facilities. It expects to start pumping oil through the flowlines this month, the company said. This will increase the field’s total output to a near-term target of 40,000 gross barrels of oil per day from 23,000 to 25,000 barrels a day currently, it added. "Despite numerous challenges earlier this year, Gulf Keystone has completed the work on the three additional producers on time," said John Gerstenlauer, Gulf Keystone’s chief executive officer. "We are now testing the flowline connections, including an 11 km link between Shaikan-10 and PF-2, and look forward to boosting Shaikan production to […]

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Nigeria’s Oil Unions Continue Strike That May Reduce Exports

Nigeria ’s two oil unions entered the second day of an indefinite strike that they say will curb exports from the West African nation responsible for pumping more than a quarter of the continent’s crude. “You will soon begin to see shutdowns of our oil flow,” Emmanuel Ojugbana, a spokesman for the Petroleum and Natural Gas Senior Staff Association of Nigeria, said by phone. Ohi Alegbe, an Abuja-based spokesman for the Nigerian National Petroleum Corp. and the Oil Ministry, declined to comment on exports. While talks between union leaders and authorities have been agreed, “the time and date is not yet fixed,” the union official said. “As soon as we confirm the time for talks, we will engage them. But as I speak the strike is continuing.” Any reduction in pumping would coincide with a collapse in the price of Nigeria’s biggest source of revenue. Brent crude oil plunged […]

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Nigeria’s Oil Unions Start Strike They Say Will Curb Exports

Nigeria’s two oil unions began an indefinite strike that they say will curb exports from the West African nation responsible for pumping more than a quarter of the continent’s crude. “You will soon begin to see shutdowns of our oil flow,” Emmanuel Ojugbana, a spokesman of the Petroleum and Natural Gas Senior Staff Association of Nigeria, said by phone. Ohi Alegbe, an Abuja-based spokesman for the Nigerian National Petroleum Corp. and the Oil Ministry, declined to comment on exports. Any reduction in pumping would coincide with a collapse in the price of Nigeria’s biggest source of revenue. Brent crude oil plunged 44 percent this year. It rose as much as 2.3 percent to $63.25 a barrel in London today. Nigeria needs about twice that to balance its budget, according to estimates in October from Deutsche Bank AG. “We do not expect the strike to have a material impact on […]

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After Lima, Peru criticized for oil policies

U.N. frustrated with Peruvian decision to sanction oil operations in remove Loreto area. (UPI/Shutterstock/sittitap) LIMA, Dec. 15 (UPI) — The United Nations said Monday it was concerned by a Peruvian proposal to sanction oil operations despite a legacy of heavy pollution and rights abuses. Human rights experts working for the United Nations said there were frustrated with a Peruvian government decision to start operations in the northern Loreto region in one of the more desolate parts of the Amazon Rainforest. The operation comes despite an agreement between aboriginal groups and the state-owned Petroperu to clean areas contaminated by more than 40 years of oil spills. "Companies extracting oil in this region have left behind a toxic mess with disregard for the rights of affected communities and laws of Peru," U.N. special envoy for human rights and hazardous substances Baskut Tuncak said in a statement. The Peruvian government in recent […]

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Woodside to Pay $2.75 Billion for Apache Project Stakes

Australia’s Woodside Petroleum Ltd. (WPL) agreed to pay Apache Corp. (APA) $2.75 billion for stakes in two liquefied natural gas projects, while delaying approval for its own $35 billion-development off the nation’s northwest coast. The Apache transaction will give Woodside interests in the Wheatstone LNG and Balnaves oil projects in Australia as well as Canada ’s Kitimat LNG development. The projects are among dozens under construction or consideration worldwide as companies seek to feed Asian markets hungry for gas. Woodside has been seeking acquisitions after its $2.7 billion plan to buy back shares from Royal Dutch Shell Plc was blocked by investors. Apache, facing pressure from activist hedge fund Jana Partners LLC to cut spending and focus on the U.S., said in July it was seeking to exit the proposed Canadian project and the facility under construction in Australia. The Apache deal “adds production growth in a period when […]

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Apache dumps Australian, Canadian LNG assets

U.S. energy company sells stakes in two LNG projects to Australian energy company Woodside Petroleum for more than $2 billion. UPI/Stephen Shaver "I am proud of Apache’s legacy in advancing the Wheatstone and Kitimat liquefied natural gas projects, and I am confident that Woodside’s participation will have a positive impact in seeing these world-class LNG facilities through to first production," G. Steven Farris, the top executive at Apache, said in a statement. Apache sold its interests, which include oil and natural gas reserves, to Australian energy company Woodside Petroleum. Apache under the terms of the deal is also reimbursed around $1 billion for net expenses on the two LNG projects. The first phase of the Wheatstone project envisions deliveries of up to 8.9 million tons of LNG per year from third-party gas projects in Australia. The proposed Kitimat project in British Columbia has a planned capacity of 5 million […]

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Kemp: Past Oil Price Slumps Show US Drillers’ Inertia

The most important characteristic of the US oil industry is inertia – or to put it another way, drilling and production respond sluggishly even to a large change in prices, John Kemp says. John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Dec 15 (Reuters) – The most important characteristic of the U.S. oil industry is inertia – or to put it another way, drilling and production respond sluggishly even to a large change in prices. Since 1974, there have been four episodes in which oil prices declined sharply over a relatively short time (ignoring the brief price spike and equally rapid reversal in 1990 associated with preparations for the first war between the United States and Iraq). These price slumps occurred between (1) December 1985 and July 1986; (2) January 1997 and December 1998; (3) November 2000 and December 2001; and (4) July […]

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China industrial activity shrinks in November, calls grow for more stimulus

BEIJING (Reuters) – Activity in China’s factory sector contracted in December for the first time in seven months, the latest in a string of weak economic indicators that will intensify calls for more stimulus measures to head off a hard landing. The flash HSBC/Markit manufacturing purchasing managers’ index(PMI) fell to 49.5 in December from November’s final reading of 50.0 and below the 50.0 forecast by analysts. The new orders sub-index fell to 49.6, the first contraction since April. A reading below 50 indicates contraction, while one above 50 points to expansion on a monthly basis. "The manufacturing slowdown continues in December and points to a weak ending for 2014," Hongbin Qu, chief economist for China at HSBC, said after the survey was released on Tuesday. "The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months." However, while economists have continued to call […]

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Repsol Agrees to Buy Canada’s Talisman for $8.3 Billion

Repsol SA (REP) , Spain ’s largest energy company, agreed to buy Talisman Energy Inc. (TLM) for $8.3 billion, ending a months-long search for acquisitions to help boost crude reserves and production. Under the terms of the all-cash offer, Talisman shareholders will receive $8, or C$9.33, for each share they own, according to statements from both companies. That’s a 60 premium to Talisman’s 30-day weighted average price, the Canadian company said. Repsol has been seeking to spend about $10 billion on takeovers since it received compensation in May from Argentina for the 2012 nationalization of YPF SA . In losing the Argentine producer, Repsol gave up almost half of its oil and gas reserves and has been looking for ways to replace them. “The transaction with Talisman is the result of an thorough analysis of more than 100 companies and assets around the world,” Repsol Chief Executive Officer Josu […]

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Strategic Oil Hoarding Seen Driving China Demand in Next 2 Years

Strategic stockpiling will drive China ’s crude demand as the world’s second-largest oil consumer takes advantage of the lowest prices in more than five years, according to Macquarie Group Ltd. More than half of the country’s incremental oil demand over the next two years will be related to building emergency reserves, Macquarie said in a report distributed today. The government is filling stockpiles at three new sites with a combined capacity of about 60 million barrels and will probably commission another 100 million barrels of storage space at four locations, the bank estimated. Oil has slumped about 45 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 supply glut. OPEC decided at a Nov. 27 meeting in Vienna to keep its output unchanged, while U.S. production has risen to 9.12 million barrels a day, […]

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China Wants ‘Made in China’ Nuclear Reactors

ENLARGE Out of 71 nuclear reactors being built globally, China is constructing 26. The Hongyanhe power station was one of the first to come online in China after the Fukushima disaster. Zuma Press BEIJING—When a unit of North Carolina’s Curtiss-Wright Corp. won a roughly $300 million deal in 2007 to supply components for new reactors in China, industry officials trumpeted China’s nuclear boom as good for U.S. business. Today, Chinese companies are competing for that business—and foreign companies risk getting left out. Meanwhile, Curtiss-Wright’s contract is caught up in a legal dispute, while Chinese authorities blame the company in part for the delay of a landmark nuclear project. U.S. and other foreign companies are now struggling to keep their hold in China, the industry’s biggest growth market and a rare bright spot more than three years after the Fukushima disaster in Japan put many of the world’s nuclear projects […]

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China to revise 2013 GDP by about 3 pct

BEIJING, Dec. 16 (Xinhua) — China’s statistics authority will revise its gross domestic product (GDP) figure for 2013 by about 3 percent after a latest national economic census. Ma Jiantang, chief of the National Bureau of Statistics (NBS), told a press conference Tuesday that the revision is made as more detailed data became available after the third economic census conducted this year. The adjustment will be around 3 percent, lower than that for the previous two censuses, Ma said, adding that the revised figures will be released on Friday. After the second census in 2009, the NBS revised up the 2008 GDP figure by 4.5 percent. Preliminary data showed that China’s GDP stood at 56.88 trillion yuan (9.3 trillion U.S. dollars) in 2013, up 7.7 percent year on year.

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Will the Bakken Red Queen Outrun the Growth in Water Cut?

This is a guest post by Rune Likvern  Who’s Website is: Fractional Flowa This post presents a closer examination of actual data on Light Tight Oil (LTO) extraction, developments in water cut and Gas Oil Ratio (GOR) for some pools and individual wells in the Middle Bakken and Three Forks formations in North Dakota. LTO extraction’s primary drive mechanism is (differential) pressure and there are some noticeable trends for LTO extraction from Bakken: LTO productivity (measured as average totals by vintage) in 2014 have increased, most notably from the Middle Bakken formation which has better well productivity than Three Forks. There are differences to LTO productivity developments amongst the pools. Water cut; generally increases as the wells ages. An indicator for depletion. Water cut; generally increases for newer wells. This suggests that the areas with the highest oil saturation has been developed. Gas Oil Ratio (GOR, produced and expressed […]

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Cheap Oil Crashes Energy’s Debt Party

Oil and gas companies in the Americas have been feasting at the debt markets trough this year. But falling prices have put them on a diet. As of Dec. 12, borrowings by oil and gas companies from North, Central and South America—including the U.S., Canada, Brazil and Mexico—accounted for 60% of all money raised from debt issued by energy companies globally in 2014. The $145.9 billion in bonds issued by companies from the Americas hit a year-to-date record, even as global borrowing for the industry fell to its lowest level since 2011, according to Dealogic. Brazilian oil company Petróleo Brasileiro SA’s $8.5 billion bond, issued in March, was the year’s largest. Oil prices have plunged in recent weeks amid growing supply and falling demand. Last week, the benchmark U.S. oil price fell below $60 a barrel for the first time in five years, which has put pressure on the […]

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Report: Shale Vulnerable to Short-Term Investment Cuts Versus Deepwater

Companies with flexible financing may choose US deepwater project investment opportunities over US shale in the near-term, according to a recent report. U.S. shale projects may be vulnerable to short-term investment cuts in relation to deepwater projects, according to a Dec. 9 report by petroleum investment advisor Gaffney, Cline & Associates (GCA). Oil and gas companies are facing reduced cash flow in 2015 due to the recent decline in oil prices to a five-year low. That dip has been blamed on reduced demand and global oversupply, with much of the oil production oversupply coming from U.S. unconventional production. As a result, companies will be scaling back or reprioritizing their spending. However, recent analysis by GCA indicates shale activity will most likely suffer investment cuts first due to low oil prices, leaving the deepwater Gulf of Mexico and other deepwater plays relatively more protected. Strong offshore Gulf of Mexico projects […]

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Canada Finance Minister Confident in Economy Amid Oil Decline — 2nd Update

By Paul Vieira OTTAWA–The Canadian economy is in solid shape and the government remains on track to record a budget surplus next year amid the steep decline in oil prices, Finance Minister Joe Oliver said Monday. Mr. Oliver’s comments, at a meeting here with provincial finance ministers, came as signs emerge that the energy swoon is starting to weigh on real-estate markets in resource-rich regions of the country. The sharp fall in crude-oil prices has become a source of consternation in regions of Canada that rely on commodities to drive income growth. Crude oil, which fell below the $57 a barrel mark Monday, is Canada’s top export, and the 40%-plus price fall from its recent peak has prompted economists to cut their growth and inflation forecasts. Mr. Oliver, though, remained bullish on the Canadian outlook. "We are confident we will achieve a budget balance next year," he said, adding […]

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Bakken Shale Rig Count Decreases by One to 187

Univ. of Texas Releases Study Focusing on Correlation Between Well Technology and Methane Emissions During Natural Gas Production Oil torch against the cloudy sky The  Bakken-Three Forks rig count  decreased by one t0 187 rigs running across our coverage area by the end of last week. The NDIC notes 181 rigs are active in North Dakota, but around 12 of those are in the process of moving in and rigging up. In recent Bakken news, a new study led by researchers from The University of Texas hopes to provide clues to better understand the correlation between well technology and methane emissions during the natural gas production process. The findings, published December 9th in  Environmental Science & Technology , indicate that the overwhelming majority of methane emissions are from two types of wells; those that use pneumatic devices and those that use liquid unloading. Read more : Methane Emission From Two Main […]

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Oil Storm Has Texas Wildcat Veterans Warning Bakken Rookies to Take Cover

Autry Stephens knows the look and feel of an oil boom going bust, and he’s starting to get ready. The West Texas wildcatter, 76, has weathered four such cycles in his 52 years draining crude from the Permian basin, still the most prolific U.S. oilfield. Though the collapse in prices since June doesn’t yet have him in a panic, Stephens recognizes the signs of another downturn on the horizon. And like many bust-hardened veterans in this region — which has made and broken the fortunes of thousands — he’s talking about it like a gathering storm. The ups and downs of oil are a way of life in Midland and Odessa, Texas, dating all the way back to the Great Depression. It’s as much a part of the culture as Gulf Coast hurricanes, and residents often prepare accordingly. Related: “We’re going to hunker down and go into survival mode,” […]

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Oil Sands Output Rises as Canadian Crude Falls Below $40

Canadian heavy crude traded below $40 a barrel for the first time in five years just as surge of new projects are scheduled to start operation. A total of 14 new oil sands projects are scheduled to start next year with a combined capacity of 266,240 barrels a day, according to data published by Oilsands Review. That’s 36 percent more than was started in 2014. Oil futures have dropped more than 40 percent since June as production surged in the U.S. and Canada , adding to OPEC output that exceeded the group’s target for six consecutive months. OPEC decided to maintain its production level at a Nov. 27 meeting, resisting calls from members including Venezuela to reduce supply. “There is a lot of crude coming on next year,” Juan Osuna, IHS Energy Inc.’s senior director for North American oil said in a phone interview Dec. 12. Producers “aren’t going […]

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