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Oil Strengthens as Libya Conflict Offers Relief From Glut

Oil advanced for the first time in three days amid speculation that an escalating conflict in Libya may pare a global surplus that’s driven crude into a bear market . Brent futures rose 0.2 percent in London. Fires have been extinguished at three of five tanks at Es Sider, Libya’s largest oil port, which were set ablaze after an attack by militants, said Ali al-Hasy, a spokesman for the Petroleum Facilities Guard. Algerian Energy Minister Youcef Yousfi called on the Organization of Petroleum Exporting Countries to cut output to boost prices, the Associated Press reported. Oil plunged 46 percent this year, set for the biggest annual drop since 2008, as OPEC resisted supply cuts to defend market share in response to the highest U.S. production in three decades . Libya pumped 580,000 barrels a day in November, down from about 1.59 million at the end of 2010, according to […]

Posted On : Published By : Tom Whipple
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Tanker market benefits from oil rout

Oil tanker The daily earnings of supertankers on the benchmark Middle East to Japan route hit a six-year high in mid-December, in part due to China building up its strategic reserves on the back of low oil prices. According to aggregated data from the Baltic Exchange, daily earnings reached $97,489 on the Middle East to Japan route, the highest levels since 2008. Only six months ago, tanker rates were so low ship owners could not cover their daily operating expenses of up to $20,000. “Somebody call the bucket brigade, because the tanker market is officially on fire,” said Noah Parquette, an analyst at Canaccord Genuity, the brokerage company. The rally in tanker rates is a welcome boost for an industry that has been ravaged in recent years. With oil prices dropping to below $60 a barrel for the first time since May 2009 — down almost 50 per cent […]

Posted On : Published By : Tom Whipple
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Fires Put Out at Three Oil Tanks at Libya’s Es Sider Port

Fires were extinguished at three of five Libyan oil tanks that were set ablaze last week after an attack by militants, curbing the threat of 6 million barrels of crude spilling into the Mediterrean Sea. Libyan firefighters extinguished the fires at three tanks at the Es Sider port, Ali al-Hasy, a spokesman for the Petroleum Facilities Guard, said by phone. International assistance is being sought because the fires may lead to environmental damages in the Mediterranean Sea , al-Hasy said. Libya, holder of Africa ’s largest crude reserves, has been in a civil war since 2011 when dictator Muammar Qaddafi was killed after a 42-year rule. The fires at Es Sider started on Dec. 25 after Libya’s oil guard gave Islmatist militias an ultimatum before air strikes and the Islamists fought back with rockets. Brent oil rose 0.6 percent today to $59.82 a barrel amid speculation that the conflict […]

Posted On : Published By : Tom Whipple
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Suicide bombers attack Syria gas facilities

DAMASCUS, Syria (AP) — A Syrian official says two suicide attackers have targeted separate natural gas facilities in the central province of Homs, killing eight people. The state news agency SANA also reported the attacks, saying guards opened fire at the attackers as they drove toward the plants, forcing them to detonate their payloads before reaching their targets. It said the facilities are operating as usual. The local official in Homs told The Associated Press that the attacks killed eight people and wounded 12. He spoke on condition of anonymity in line with regulations. There was no claim of responsibility, but opposition fighters and jihadis have frequently targeted the country’s oil and gas infrastructure during the nearly four-year conflict.

Posted On : Published By : Tom Whipple
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Saudi 2015 budget based on oil price around $60

* Government doesn’t publish oil price assumption in budget * But finance minister indicates it’s close to current levels * Budget cuts oil price assumption for first time since 2009 * Disagreement over when oil will rebound – minister Saudi Arabia’s 2015 state budget assumes an oil price close to current levels of around $60 a barrel for Brent crude, a shift from past budgets which were based on prices well below market levels, analysts say. The kingdom doesn’t reveal the oil prices which it uses to calculate its annual budgets. So analysts estimate them, making assumptions about several other variables such as planned oil exports and production for the following year. For the 2015 budget, announced on Thursday, four analysts’ oil price estimates are in a range of $55 to $63. That does not mean Saudi Arabia necessarily expects such prices next year — Finance Minister Ibrahim Alassaf […]

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Canadian Oil Surge to U.S. Gulf Puts Mexico on Defensive

A price war is brewing between Canada and Latin America over who will satisfy U.S. Gulf Coast refiners’ hunger for heavy oil. The new Seaway Twin pipeline will almost double the amount of heavy Canadian crude coming to Gulf terminals and plants to about 400,000 barrels a day starting in January, according to Calgary-based based ARC Financial Corp. The shipments are growing even without the Keystone XL pipeline, which has been delayed for six years because of environmental opposition. The Canadian supply will square off against crudes from Mexico and Venezuela that have traditionally fed refineries along the Texas and Louisiana coasts. State-owned Petroleos Mexicanos widened its discount for U.S. buyers in December by the most since August 2013. Valero Energy Corp. and Marathon Petroleum Corp., which invested in special equipment to refine heavy crude, stand to gain the most from the Canadian supply. “Something’s going to have to […]

Posted On : Published By : Tom Whipple
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Texans Discover Oil Grows on Olive Trees as Crude Drops

As crude prices tumble, landowners across Texas are accelerating production of a different kind of oil — olive oil. “I love the trees, and I love watching them grow,” Steve Coffman Jr. said of his 40 acres (16 hectares) of budding olive trees, which he planted two years ago on his red dirt ranch just outside Cotulla, Texas, the epicenter of the state’s Eagle Ford shale-oil boom. Nowadays he doesn’t have the same affection for his oil wells , which sit just down the road from his olive trees. “I can’t look, it’s depressing,” Coffman said as he pulled out his smartphone to check the latest energy prices. He shook his head. West Texas Intermediate crude had fallen again. Five years after one of the biggest oil booms in decades boosted royalty checks, a steep decline in oil prices has Texans seeking new ways to stay ahead. About 70 […]

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Russian Ruble Drops 7 Percent as Economy Shrinks

The Russian currency extended its losses on Monday after a report showed the economy has started shrinking in annual terms for the first time since 2009 as the country is buffeted by falling oil prices and Western sanctions. Meanwhile, the government, which has been scrambling to support the ruble and the economy, announced fresh steps to keep the banks afloat. The ruble has been one of the world’s worst performing currencies this year and was down another 5 percent on Monday, trading at 56 rubles per dollar in early afternoon in Moscow, wiping off some of the gains it made last week. The fall came as the Economic Development Ministry issued a report showing the economy shrank by 0.5 percent in November compared with a year earlier. The ministry attributed the year-on-year decline in the economy, Russia’s first in five years, to a sharp drop in manufacturing and investment. […]

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In Reversal, Germany Cools to Russian Investment

FRANKFURT — Few countries have invested more heavily in Russia than Germany has, rushing in to exploit new trade opportunities that opened up after the Cold War ended. More than 6,000 German companies set up operations there, and Russia became a major customer for German cars, pharmaceuticals and machinery. But now the rush is going in reverse. The announcement last week by the German chemical giant BASF that it had canceled a planned deal with Gazprom , the Russian energy giant, involving natural gas extraction and distribution, was the latest example of how German companies are delaying projects and investment. Opel, the car-making unit of G.M. based in Germany, has laid off workers at its plant in St. Petersburg; Volkswagen shut down an auto plant in Kaluga intermittently because of poor demand; and Fresenius, a health care company, canceled a joint venture with Russian partners. More than a third […]

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Oil Plunge Pushes Russia ADRs to Worst Year Since 2008

Russian stocks traded abroad are headed for the biggest annual drop in six years as companies from Yandex NV to OAO Megafon tumble amid a plunge in oil prices that is further slowing an economy already beset by sanctions. The Bloomberg Russia-US Equity Index fell 48 percent this year through Dec. 26. The gauge of the country’s most actively-traded stocks traded outside the country is on pace for the worst performance since a 70 percent rout during the global financial crisis in 2008. Oil, Russia ’s main export, sank into a bear market in October, accelerating the ruble’s 39 percent drop in 2014 and pushing inflation to the fastest in three years. While equities had traded below 2013 levels all year as international sanctions linked to the Ukraine crisis throttled gross domestic product growth, they accelerated losses in late November in tandem with plunging oil prices amid a global […]

Posted On : Published By : Tom Whipple