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Energy Crunch: Oil Slide

Red oil barrels image via ezioman/flickr. Creative Commons 2.0 license. Three things you shouldn’t miss this week Chart:  Oil production break even prices: Article:   Oil price plunge means survival of fittest  – Crude at $70 puts at least 1.5m b/d of projects for 2016 at risk Article:   Fracking could carry unforeseen risks as thalidomide and asbestos did, says report produced by Government Chief Scientist  – Historic innovations that have been adopted too hastily with grave unforeseen impacts provide cautionary examples for potential side effects of fracking. The price of oil crashed below $65/barrel this week, its lowest level since 2009. The speed of the fall, from $100/barrel as recently as September, has caused mayhem in the financial markets. The price drop may be seen by some as a Christmas present for motorists, but for oil companies already struggling with spiralling costs, and oil producing nations trying to balance state budgets, this […]

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U.S. Oil Rigs Drop Most in Two Years, Baker Hughes Says

U.S. oil drillers, facing prices that have fallen below $60 a barrel and escalating competition from suppliers abroad, idled the most rigs in almost two years. Rigs targeting oil dropped by 29 this week to 1,546, the lowest level since June and the biggest decline since December 2012, Houston-based field services company Baker Hughes Inc. (BHI) said on its website today. As OPEC resists calls to cut output, U.S. producers including ConocoPhillips and Oasis Petroleum Inc. (OAS) have curbed spending. Chevron Corp. (CVX) put its annual capital spending plan on hold until next year. The number of rigs targeting U.S. oil is sliding from a record 1,609 following a $50-a-barrel drop in global prices, threatening to slow the shale-drilling boom that has propelled domestic production to the highest level in three decades. “It’s starting,” Robert Mackenzie, oil-field services analyst at Iberia Capital Partners LLC, said by telephone from New […]

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Cheap Natural Gas Lures Private Equity to Power Industry

The companies most bullish on U.S. power aren’t from the energy industry . They are private equity firms, and here’s why: natural gas. Firms from Panda Power Funds to Energy Investors Funds are financing about 10 gigawatts of new gas-fired plants over the next five years in the 13-state mid-Atlantic grid. That’s enough power to run New York City on all but the hottest summer days. Traditional power companies are building less than 4 gigawatts. Part of the electric grid sits atop the Marcellus shale formation in Pennsylvania , which supplies 18 percent of U.S. gas production, up from 1.8 percent in 2007. Gas from the Marcellus shale deposit is helping boost U.S. production to a record for a fourth year. Growing supplies have cut gas prices in half over the past six years, double the drop in power, leaving investors with a healthy profit margin. Gas plants will […]

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Too soon to lift oil export ban, Congress hears

Rep. Ed Whitfield, R-Ky., chairman of a House energy commerce subcommittee, says during debate on export policies shale yielding an oil domestic refineries don’t want. (UPI Photo/Roger L. Wollenberg) The House Energy and Commerce Committee heard testimony Thursday on the validity of restrictions on U.S. crude oil exports at a time when production, largely from shale, is at 40-year highs. With U.S. oil production eclipsing 9 million barrels per day, those in the exploration and production sector say the time is ripe to consider repealing a 1970s-era ban on crude oil exports. Studies conducted by the Brookings Institution , IHS Energy, the Dallas Federal Reserve Bank, and the U.S. Government Accountability Office found there would be consumer benefits , like low gasoline prices, from easing the restrictions, though each found lifting the ban did little to eliminate foreign dependency. Deborah Gordon, director of energy programs at the Carnegie Endowment […]

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Rail shipments of oil here to stay, IHS finds

IHS Energy finds rail an "enabler" of growth in North American crude oil production.. (Photo: Daniel J. Graeber) More than 10 percent of the oil transported in North American will be carried on the region’s rail system at its peak, analysis from IHS Energy finds. The Organization of Petroleum Exporting Countries finds the world needing less of its crude oil in part because of the glut in the North American market brought on by shale. The United States alone is producing around 9 million barrels of oil per day and, with the existing pipeline network lacking the capacity to handle the load, those in the industry are turning to rail as an alternate transit method. "Rail transport of crude oil has become an enabler of growth in North America, playing a crucial role as pipeline capacity has struggled to keep pace with the rapid rise of North American oil […]

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North Dakota monthly crude production falls for first time since Nov 2013

Houston (Platts)–12Dec2014/414 pm EST/2114 GMT Low oil prices and regulations for flaring and oil conditioning helped suppress North Dakota’s crude oil production in October, the first time the monthly total has fallen since November 2013, data released Friday by the state’s Department of Mineral Resources showed. Crude output in October was 1.182 million b/d, a 4,054 b/d decline from September, the agency said. "We’ve really got three majors forces at play here and all of them are working to restrict production … or hold it flat," said Lynn Helms, director of North Dakota’s Department of Mineral Resources. Helms said this marked the first time in eight months the state did not set a production record and said it was "very unusual" to not see an increase in production from September to October. Helms pointed to flaring reductions, conditioning and falling oil prices as the likely explanation. On Tuesday, the […]

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Bakken and North Dakota Production Report

The North Dakota Industrial Commission just published their Bakken Monthly Oil Production Statistics and also their ND Monthly Oil Production Statistics . Bakken Barrels Per Day 2 Bakken production was down 1,598 barrels per day to 1,118,010 bpd. All North Dakota production was down 4,054 bpd to 1,182,174 bpd. From the Director’s Cut , bold mine: The drilling rig count dropped 2 from September to October, an additional 3 from October to November, and has since fallen 5 more from November to today. The number of well completions decreased from 193(final) in September to 134(preliminary) in October. Three significant forces are driving the slow-down: oil price, flaring reduction, and oil conditioning. Several operators have reported postponing completion work to achieve the NDIC gas capture goals. There were no major precipitation events, but there were 9 days with wind speeds in excess of 35 mph (too high for completion work). The […]

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The Relentless Production of Shale Oil Is Breaking OPEC’s Neck

The world’s biggest oil companies faced ruin in the summer of 1931. Crude prices had plummeted. Wildcatters were selling oil from the bonanza East Texas field for a nickel a barrel, cheaper than a bowl of chili. On Aug. 17, Governor Ross Sterling declared a state of insurrection in four counties and sent 1,100 National Guard troops to shut down the fields and bring order to the market. A month later the Railroad Commission of Texas handed out strict production quotas. That heavy-handed intervention in the free market was remarkable enough. Even more remarkable was who pulled it off. The person in charge of shutting down the wildcatters, National Guard Brigadier General Jacob Wolters, was the general counsel of Texas Co., an ancestor of Chevron ( CVX ). And the Texas governor who ordered Wolters in was a past president of Humble Oil and Refining, a forerunner of ExxonMobil […]

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EU: Gas security still hinges on Ukraine

Ukraine still plays a key role in European energy strategies, European official tells Russian state media. UPI/Ivan Vakolenko Europe gets about a quarter of its natural gas supplies from Russia, though most of that runs through the Soviet-era pipeline network in Ukraine. Contractual disputes in 2006 and 2009 between Kiev and gas supplier Gazprom left downstream consumers in Europe in the cold for weeks and recent turmoil in Ukraine has only exacerbated the problem. Beate Raabe, a natural gas director for the European Union, said Ukraine is still a vital part of the energy security chain. "It is important that the businesses continue to cooperate, we cannot change the political climate, as much as we hope the political parties will do their utmost to end the armed conflict in Ukraine and to find a lasting solution to the problem, because that will also help the energy market," she told […]

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Russia says will react if U.S. imposes new sanctions

MOSCOW (Reuters) – Russia will take counter measures if Washington imposes new sanctions on Moscow over the Ukraine crisis, Russia’s Deputy Foreign Minister Sergei Ryabkov said on Saturday. The U.S. Congress has readied new sanctions on Russian weapons companies and investors in the country’s high-tech oil projects, but U.S. President Barack Obama has yet to sign a corresponding bill into law. "We will not be able to leave that without an answer," Russia’s Interfax news agency quoted Ryabkov as saying. He did not say what form of counter-measure Moscow might take. Relations between Russia and the United States are at their lowest since the Cold War because of Russia’s annexation of Crimea from Ukraine in March and its support for pro-Russian rebels in eastern Ukraine. The West says it has firm evidence that Russia has armed the rebels – an accusation that Moscow rejects – and has, together with […]

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Oil Extends Drop Below $60 as Producers Tussle for Market Share

Oil extended losses below $60 a barrel amid speculation that OPEC’s biggest members will defend market share against U.S. shale producers. Brent also slid after closing at the lowest price since July 2009. West Texas Intermediate futures fell as much as 1.9 percent in New York and are down almost 10 percent this week. Iraq , the second-largest producer in the Organization of Petroleum Exporting Countries, said its decision to widen a discount for January sales to Asia isn’t proof of a price war. Crude will decline further next week, according to a Bloomberg News survey of analysts and traders. Oil is headed for the 10th weekly drop since October after OPEC decided against reducing its output, even as the highest U.S. production in more than three decades exacerbates a global glut. Saudi Arabia , Iraq and Kuwait, the group’s three biggest members, this month widened discounts on shipments […]

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Oil falls further as IEA cuts 2015 forecast

WILLISTON, ND – JULY 28: Scott Berreth, a derrick hand for Raven Drilling, works on an oil rig drilling into the Bakken shale formation on July 28, 2013 outside Watford City, North Dakota. North Dakota has been experiencing an oil boom in recent years, due in part to new drilling techniques including hydraulic fracturing and horizontal drilling. In April 2013, The United States Geological Survey released a new study estimating the Bakken formation and surrounding oil fields could yield up to 7.4 billion barrels of oil, doubling their estimate of 2008, which was stated at 3.65 billion barrels of oil. Workers for Raven Drilling work twelve hour days fourteen days straight, staying at a camp nearby, followed by fourteen days. (Photo by Andrew Burton/Getty Images) The International Energy Agency cut its demand growth forecasts for next year saying that the rout in oil prices has so far failed to […]

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Markets Continue to Slide on Oil Shock — Update

By Josie Cox Oil’s persistent slide continued to drive global financial markets Friday, sending currencies in Russia and Norway to fresh multiyear lows, and stocks in energy companies tumbling. In early trade, the ruble surpassed 57 against the U.S. dollar for the first time. Norway’s krone hit a new five-year low against the euro and an 11-year low against the dollar as Brent crude slumped to $63 a barrel and West Texas Intermediate settled below $60–both five-year lows. Russia’s central bank on Thursday raised its key interest rate to 10.5% from 9.5%, and its deposit rate to 9.5% from 8.5%, in an attempt to halt the ruble’s slide, but economists broadly agreed that wasn’t enough. "In my view the risk of a full-scale currency crisis is still high and the Bank of Russia may have to use all tools at its disposal to stem ruble rout," said Piotr Matys, […]

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Weak China data, oil slide send world stocks lower

SEOUL, South Korea (AP) — Renewed signs of weakness in China’s economy and the slide in oil prices sent world stock markets lower Friday despite robust U.S. retail sales. KEEPING SCORE: Britain’s FTSE 100 sank 1.4 percent to 6,371.06. Germany’s DAX fell 1.6 percent to 9,710.73 and France’s CAC 40 declined 1.6 percent to 4,160.27. U.S. futures showed Wall Street was headed for a sell-off. S&P 500 futures fell 0.7 percent to 2,010.40. Dow futures dropped 0.7 percent to 17,382. CHINA DATA: A source of caution for investors on Friday was data from China. China’s factory output growth declined to 7.2 percent in November from 7.7 percent growth in October and 8 percent in September. Growth in investment in factories and other fixed assets slowed slightly to 15.8 percent for the first 11 months of the year from 15.9 percent in the first 10 months. The data came after […]

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

By Timothy Puko Natural-gas futures slipped Thursday after news that stockpiles fell last week by nearly 30% less than they usually do at this time of year. The front-month January contract settled down 7.2 cents, or 1.9%, at $3.634 a million British thermal units on the New York Mercantile Exchange. It is only 2% above the low closing price of the year set Oct. 27, $3.561/mmBtu. Storage levels shrank by 51 billion cubic feet in the week ended Dec. 5, the U.S. Energy Information Administration said. That was less than the 72 bcf drain for this week a year ago and below the 92-bcf five-year average, likely because unseasonably warm weather led to softer demand for heating, analysts said. Prices initially went up on the news because the drain was larger than the 6 bcf expected by analysts and brokers surveyed by The Wall Street Journal. But they flipped […]

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Oil Slide Drives Central Banks to Action

Dear John Glowka: You are wrong. The dangerous cycle you speak of is total BS. There is no "deflation death spiral."  It is a bogeyman created by the Federal Reserve and other moneyed interests to scare the American people, so that they can continue to line their own pockets.  Have a critical mind and think.  Stop towing the Federal-Reserve-Fear-Monger-Line.  It is total BS. The price on anything, including TV’s and oil, goes down until it reaches its natural market price, and when it does, people buy.  People buy when the price is right and they believe they are getting a bargain.  The price will only fall to that point.  DEFLATION is GOOD for clearing the market of inefficient and bloated players.  DEFLATION is GOOD for people who need more buying power, like the middle and lower class do right now.  DEFLATION is GOOD for those who have saved, despite the Federal […]

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IEA Cuts Global Oil Demand Forecast for 4th Time in Five Months

Global oil demand next year will be weaker than previously estimated and supply from non-OPEC producers will be bigger, the International Energy Agency said. Consumption will expand by 230,000 barrels a day less than estimated in November, the Paris-based adviser to 29 nations said in a report today. Output from nations outside of the Organization of Petroleum Exporting Countries will grow at a faster pace than the agency predicted last month. Production rising faster than demand could strain some nations’ ability to store by the middle of next year, it predicted. The agency cut projections because the economies of producer nations are being hurt by tumbling prices, the IEA said. Most of the reduction in next year’s estimate is attributable to Russia , where sanctions are hobbling growth, it said. Brent crude costs that collapsed 43 percent this year are too low for 10 of OPEC’s 12 members to […]

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Iran: No oil swap deal in place with Russia

Iranian Oil Minister Bijan Zanganeh says there is no oil-for-goods deal in place with the Russian government. UPI/Maryam Rahmanian "The barter of Iran’s oil against Russian commodities is not true and no such an agreement has ever been signed," the minister said. Zanganeh has hinted that the Iranian government endorsed such a deal, but nothing was formalized . Both sides already cooperate in a variety of fields, with Russia supplying fuel for Iran’s nuclear reactor at Bushehr. "The two countries only cooperate with each other in the oil and gas sectors," he said. "Iran will benefit from the technical and operational capabilities of Russian companies in the oil and gas industries." His comments follow a November declaration from the Kremlin that it plans to sign contracts to deliver grain and possibly industrial products to the Iranians in exchange for oil. Iran has long been searching for a way around […]

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China offers to help Iraq defeat Sunni extremists

Ibrahim Jafari China has offered to help Iraq defeat Sunni extremists with support for air strikes, according to Ibrahim Jafari, Iraq’s foreign minister. Wang Yi, Mr Jafari’s Chinese counterpart, made the offer to help defeat the Islamic State of Iraq and the Levant, known as Isis , when the two men met in New York at September’s UN antiterrorism meeting, Mr Jafari said. More On this topic IN Iraq Any Chinese assistance would be outside the US-led coalition. “[Mr Wang] said, our policy does not allow us to get involved in the international coalition,” Mr Jafari told the Financial Times in Tehran, where he was attending an anti-extremism conference earlier this week. “I welcomed this initiative. I told him . . . we are ready to deal with the coalition and also co-operate with countries outside this coalition.” Isis has taken swaths of Iraqi territory since June. The US has led the air […]

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Nigeria: Piracy in Nigeria – Just Getting Going?

analysis Nigerian piracy is unique for several reasons. It accounts for 71% percent of all incidents in West Africa, and the methods used by Nigerian pirates are highly profitable. The International Maritime Bureau (IMB), which monitors sea crime, reported eight piracy incidents off Somalia during the first half of 2013. 31 piracy incidents were recorded off the West African coast during the same period, 9 off the coast of Nigeria and 22 outside of Nigeria’s territorial waters. With fewer attacks off Somalia, attention has moved to the Gulf of Guinea, a hot spot for violent piracy and ship hijacking for many years. The region recorded more than 40 piracy attacks in the first three quarters of 2013, with 132 crew taken hostage and seven vessels hijacked – six tankers and an offshore supply vessel. Nigeria, the main source of piracy in the region, accounted for 29 piracy incidents, including […]

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Nigeria: Before the oil runs dry

Following the steady decline in oil prices, we deem it fit to revise this report as the arguments herein still remain germane to the need for Nigeria to urgently address its dependence on oil revenues. This report was originally released in December 2010, following the approval for an increase in Nigeria’s minimum wage and its consequences on public sector finances, especially for the federating states. While the arguments for and against Nigeria’s debt profile continue, we believe the assessment, viability and sustainability of the current model of funding Nigeria’s federating states remains largely ignored. In our opinion, this is fundamental to Nigeria’s ability to achieve and sustain economic growth and development in the long run. At present, states receive a substantial portion of their income – average of c. N3.8 billion as of June 2014 – from the Federation Account Allocation Committee (FAAC), which is the body responsible for […]

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US to impose sanctions on Venezuela officials

Venezuelan President Nicolas Maduro raises his fist as he arrives to a rally congregating thousands of representatives of regional social movements in Santa Cruz, Bolivia on June 14, 2014, where the G77+China Summit will take place. Leaders of developing nations plus China meet here Saturday to draft a global anti-poverty agenda at a summit that also showcases Latin America’s burgeoning relationship with the Asian giant. AFP PHOTO/CRIS BOURONCLE (Photo credit should read CRIS BOURONCLE/AFP/Getty Images) The US Congress on Wednesday voted to restrict travel and freeze assets on some Venezuelan government officials it accuses of human rights abuses during a crackdown on protests against socialist President Nicolás Maduro earlier this year. More than 40 people have died during a wave of protests by students and members of the Venezuelan opposition against curbs on democratic liberties, rampant crime and a deteriorating economy in the embattled Caribbean nation . More On […]

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Mexico Output-Sharing Contracts Set for 25 Years in Oil Opening

Production-sharing contracts for shallow-water exploratory blocks in Mexico will be granted for 25 years, Deputy Energy Minister Lourdes Melgar said. The 14 contracts will each have two renewal options of five years, Melgar said today in Mexico City. Terms for other development blocks will be announced in January, she said. The terms come a day after Mexico authorized bidding guidelines for new offshore blocks as the country prepares for investment in its newly opened energy industry. Before crude slumped below $60 a barrel for the first time in five years, Mexico had forecast private investment would bring in more than $50 billion by 2018. Mexico’s oil monopoly, held by state-owned Petroleos Mexicanos since 1938, ended last year after President Enrique Pena Nieto approved a bill to allow foreign producers to drill. Companies will pay 30 percent income tax on the shallow water blocks, Deputy Finance Minister Miguel Messmacher said […]

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Chinese Refiners Pump Out Fuel Near Record Pace Amid Oil Slump

Refiners in China , the world’s second-biggest oil consumer, processed near-record volumes of crude last month as global prices slumped to the lowest level in five years amid a glut. Refiners increased crude processing by 5.5 percent from a year earlier to 42.25 million metric tons, or 10.32 million barrels a day, data from the National Bureau of Statistics in Beijing show today. That’s the second-highest volume this year and 2.9 percent less than last month’s record 43.51 million. “Oil processing is staying at a high level,” Amy Sun, an analyst at ICIS-C1 Energy, a Shanghai-based consultant, said by phone from Guangzhou today. “Refineries are running at high rates in the fourth quarter because of less maintenance amid stockpiling for winter.” China is benefiting as the Organization of Petroleum Exporting Countries maintains its output quotas even as benchmark prices fell 40 percent this year. Saudi Arabia , Iraq and […]

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China’s factory output growth declines

BEIJING (AP) — Growth in China’s factory output declined further in November in a new sign of weakness in the world’s second-largest economy. Industrial production rose by 7.2 percent over a year earlier, government data showed Friday. That was down from October’s 7.7 percent growth and September’s 8 percent rate. The report came after Chinese leaders at an annual planning meeting affirmed their commitment to the "new normal" of slower growth as they try to steer China toward a more sustainable expansion based on domestic consumption. Economic growth fell last quarter to a five-year low of 7.3 percent, below the official full-year target of 7.5 percent. Imports contracted unexpectedly in November in a sign of anemic domestic demand. Communist leaders have expressed confidence they can manage the slowdown. But they cut interest rates unexpectedly Nov. 22 in a sign they worried growth was falling too sharply. Analysts say the […]

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Plunging Oil Prices Won’t Dent Supply in Short Term — IEA

By Sarah Kent LONDON–The current rout in oil prices won’t dent global supply or hit demand, at least in the short term, the International Energy Agency said Friday, suggesting there will be little relief for oil market bulls in the coming months. Despite a slide of more than 40% in oil prices since June, the Paris-based energy watchdog has lowered its expectations for oil demand growth next year and continues to see a robust increase in production from nations outside the Organization of the Petroleum Exporting Countries. "Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout," the IEA said in its closely watched monthly report on the oil market. Ordinarily, lower prices should encourage greater consumption, but sluggish global economic growth and the negative impact a weak market is having on oil-exporting economies is expected to dent […]

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Has US oil production peaked? An EIA report argues both sides

Want to dazzle party guests this holiday season with a data-backed argument that the US oil boom may have peaked? Well, the US Energy Information Administration has a report you should probably read. Want to shut up that obnoxious blowhard who keeps using EIA data to support his argument that the glory days of US oil may have gone by? Want some government data of your own to defend your claim that we have yet to see the peak of US oil production? I have good news: You can use the same report . Last week, the EIA released its annual estimate of recoverable US crude oil and lease condensate in the US, which is based on engineering and geologic data and factors current economic and operating conditions heavily into its assessments. In short: if potential oil plays make no economic sense for an operator, they are not seen by […]

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Strange Climate Event: Warmth Toward U.S.

LIMA, Peru — When it comes to global warming , the United States has long been viewed as one of the world’s worst actors. American officials have been booed and hissed during international climate talks, bestowed with mock “ Fossil of the Day ” awards for resisting treaties, and widely condemned for demanding that other nations cut their fossil fuel emissions while refusing, year after year, to take action at home. Suddenly, all that has changed. At the global climate change negotiations now wrapping up in Peru, American negotiators are being met with something wildly unfamiliar: cheers, applause, thanks and praise. It is an incongruous moment, arriving at a time when so many aspects of American foreign policy are under fire. But the enthusiastic reception on climate issues comes a month after a historic announcement by the United States and China, the world’s two largest polluters, that they would […]

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Canada Heavy Oil Nearing $40 Threatens Oil Sands Projects

Canadian heavy crude fell to near $40 a barrel, threatening projects under construction as producers boosted output and space on a pipeline was rationed. Imperial Oil Ltd. (IMO) is increasing output at its Kearl oil sands project to 110,000 barrels a day after a shutdown last month, Pius Rolheiser, a Calgary-based spokesman, said by phone yesterday. Enbridge Inc. apportioned space on the Spearhead pipeline, which carries Canadian crude south to Cushing, Oklahoma , after demand to ship on the line exceeded capacity, according to a company statement. Heavy West Canadian Select rose 82 cents to $43.01 a barrel after falling to $42.19 a barrel yesterday, the lowest since April 2009, data compiled by Bloomberg showed. Crude has fallen into a bear market as U.S. output surges to the highest in more than three decades. Calgary-based Cenovus Energy Inc. (CVE) said today it “substantially” slowed development plans at the Narrows […]

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Falling Oil Prices Raise New Concerns For States

Plummeting oil prices may add a little jingle in the pockets of holiday shoppers and travelers but are raising financial worries in some states that had been tapping into surging oil tax revenues to pay for roads and other government services. With oil prices now around a five-year low, budget officials in about a half-dozen states already have begun paring back projections for a continued gusher of revenues. Spending cuts have started in some places, and more could be necessary if oil prices stay at lower levels. How well the oil-rich states survive the downturn may hinge on how much they saved during the good times, and how much they depend on oil revenues. Some states, such as Texas, have diversified their economies since oil prices crashed in the mid-1980s. Others, such as Alaska, remain heavily dependent on oil and will have to tap into sizeable savings to get […]

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Halliburton to Lay Off 1,000 Eastern Hemisphere Employees

A Halliburton spokesperson confirmed to Rigzone that it will lay off approximately 1,000 employees from its Eastern Hemisphere operations, effective immediately. No layoffs have occurred or are currently planned as a result of Halliburton’s pending acquisition of Baker Hughes , Emily Mir, director of public relations at Halliburton, told Rigzone. “The decision to eliminate jobs is never easy,” said Mir in the email. “Our talented workforce is the foundation of everything that we accomplish, and we place the highest value on the commitment and hard work that our employees dedicate to building our company. “Yet, we believe these job eliminations are necessary in order to work through this market environment.” Due to low prices, drilling equipment manufacturers are expected to take a hit as oil and gas companies seek to pump more oil while spending less on equipment and materials, according to the Nov. 26 edition of The Kiplinger […]

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Several states are adding or increasing incentives for electric vehicle charging stations

Source: U.S. Energy Information Administration, based on Alternative Fuels Data Center During the past few years, several models of plug-in electric vehicles (PEVs), including battery electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs), have been introduced in the light-duty vehicle market. PEVs are limited by driving range , which is related to battery capacity, and can usually travel between 60 and 200 miles before recharging. Therefore, charging infrastructure is crucial to the success of these kinds of vehicles. To address this issue, states have established plans to promote the development of infrastructure through financial incentives for the building of new public and private recharging facilities. In 2008, Washington and Oregon established plans to facilitate PEV travel by installing recharging stations at convenient intervals on major travel corridors, including along Interstate 5 (I-5), the main north-south highway that runs from Canada to Mexico. Each station contains one 480-volt direct […]

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Where U.S. Factories Have the Most to Gain From Cheap Oil

ByTimothy Aeppel Steel plants use lots of petroleum-derived raw materials and are already counting big savings from this year’s rapid fall in oil prices. Getty Images Anyone who drives a car or truck that isn’t a plug-in electric benefits from cheaper oil every time they pull up to the gas pump. But for manufacturers, the benefits are far more unevenly distributed. Consider tiremakers and steel plants . Both use lots of petroleum-derived raw materials and are already counting big savings from this year’s rapid fall in oil prices. U.S. oil prices continued to swoon on Thursday, nearing $60 a barrel for the first time in five years. The slide is driven by a glut of supply that’s expected to endure well into next year. Cheaper oil is usually good for the economy —and for domestic manufacturers. But not everyone gets the same boost and some are outright burned when […]

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Methane Emissions from Two Main Sources says UT Study

Study points to the greatest threat from methane emissions Natural Gas Emissions 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. According to the study, 19% of Pneumatic Devices were responsible for 95% of methane emissions and were highest in the Gulf Coast Region, which was a similar result to the first part of the study conducted in 2013 . As for Liquid Unloading, 20% of these devices account for 65-85% emissions. Conversely, this finding showed emissions were highest (~50%) in the Rocky Mountain Region due to the higher number […]

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U.S. importing more Venezuelan oil

U.S. oil imports from Nicolas Maduro’s Venezuela up the same week the U.S. Senate passes legislation sanctioning officials in Caracas for human rights abuses. UPI Photo/Mohammad Kheirkhah The U.S. Energy Information Administration said in a status report the United States imported 896,000 barrels of Venezuelan crude oil per day for the week ending Dec. 5, up 66 percent from last week and 14.4 percent year-on-year. The increase in oil imports comes more than two months after the Venezuelan government shelved plans to sell Citgo , the U.S. subsidiary of state oil company Petroleos de Venezuela . A decline in global oil prices is hurting economies like Venezuela’s that rely heavily on oil exports for revenue. High inflation in the country is eroding consumer purchasing power by as much as 12 percent. In July, the government in Caracas said it could free up export volumes and to start directing oil […]

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U.S. House weighs oil export ban

House committee chaired by Rep. Fred Upton hears testimony on effectiveness of 1970s era policies restricting crude oil exports. (UPI Photo/Kevin Dietsch) House leaders hear testimony Thursday on policies restricting crude oil exports, arguing America’s updated energy outlook mean it’s time to redraft the rules. Advances in hydraulic fracturing and horizontal drilling, techniques usually described under the banner of fracking, have resulted in exponential increases in U.S. oil production. The U.S. Energy Information Administration estimates total U.S. crude oil production will increase next year by 10 percent to average 9.42 million barrels per day, a level not seen since the 1970s. "America’s updated energy outlook necessitates the re-examination of laws conceived in an era of energy scarcity," a memo from the House Energy and Commerce reads. Arab members of the Organization of Petroleum Exporting Countries stopped exporting oil to the United States in response to U.S. support for Israel […]

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Faith in oil prices faltering

Crude oil prices now off 40 percent of their June values in a sign faith in the market is collapsing. (UPI Photo/Monika Graff) West Texas Intermediate, the U.S. oil benchmark, lost about 50 cents early Thursday to trade at $60.40 per barrel for the January contract. The slump follows trading Wednesday that saw oil prices shed more than a dollar after the Organization of Petroleum Exporting Countries trimmed its forecast for global oil demand. Global crude oil prices have now lost more than 40 percent of their June value and analysts are wondering where the bottom is in the current market. WTI prices are at a point where oil companies working in U.S. shale deposits are struggling to make a profit. Adam Sieminski , director of the U.S. Energy Information Administration, said Tuesday drillers may be struggling already, though 2015 production should still be at its highest level in […]

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Lew Cheers Plummeting Oil Prices as ’Tax Cut’ for U.S. Economy

U.S. Treasury Secretary Jacob J. Lew said plunging oil prices are like a beneficial tax cut for the nation’s consumers while having negative consequences for Russia, where energy is a vital source of revenue. “It is a great success story that we are now producing oil in the quantity that we are,” Lew said today in an interview in New York broadcast by CNBC. “The independence that we’ve developed in the energy sector, it is a clear positive if you look at the impact on our economy.” Lew’s comments came after Brent crude fell below $65 yesterday for the first time in five years. The shale boom has driven U.S. output to the highest on a weekly basis since 1983, with oil production up 65 percent in just five years and the country supplying 89 percent of its own energy in 2014. While Lew said the U.S. needs to […]

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Diesel Surges in New York as Stockpiles Shrink Amid Cold Weather

A shortage of diesel supply around New York Harbor and speculation that colder weather will boost demand for heating oil is pushing up prices for futures contracts and physical deliveries. Ultra-low-sulfur diesel stockpiles in the U.S. Central Atlantic region that includes New York dropped for the fifth straight week, reaching a six-month low despite gains in production and imports on the East Coast, Energy Information Administration data show. ULSD futures gained as much as 2.4 percent today on the New York Mercantile Exchange, and the premium over futures for prompt supply widened to the biggest in almost a month. Supplies are shrinking as temperatures are forecast to drop to as low as 32 degrees Fahrenheit over the weekend and the East Coast’s biggest refinery was said to have reduced production because of a boiler upset. “It certainly could get ugly again if we don’t significantly build the inventories needed […]

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Truckers Vie With Shippers for $24 Billion Fuel Savings: Freight

As shippers of everything from toys to tools enjoy as much as $24 billion in savings from lower diesel surcharges next year, trucking companies see an opening to raise freight rates at a pace not seen in about a decade. The American Trucking Associations calculates that each 1-cent drop spurs industrywide annual fuel savings of $350 million. Diesel last week averaged $2.15 a gallon, down from $2.85 in the last 12 months. About 85 percent of the savings goes to shippers through lower fuel surcharges. That may soften shippers’ resistance to higher rates that trucking companies say they need to cover rising expenses for salaries, health care and new regulations that limit driving hours. Unlike previous times when fuel prices fell, stronger economic growth is increasing demand for cargo space while drivers are scarce, which spurs higher rates. “If the overall cost for the shipper, which is your rate […]

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Bakken CEO talks low crude price environment

An active Oasis Petroleum well site in the summer. PHOTO: OVERLAND AERIAL PHOTOGRAPHY An active Oasis Petroleum well site in the summer. PHOTO: OVERLAND AERIAL PHOTOGRAPHY Oasis Petroleum Chairman and CEO Thomas Nusz addressed a group of investors today, providing poignant information and insight on the exploration and production firm’s 2015 plans and adopted strategies for a low crude price environment. The Williston Basin pure play operator will focus on its held acreage in areas with the highest estimated ultimate recovery (EUR) totals. The EUR areas are also a 2015 focus due to the present and scalable infrastructure in the acreage, the ability by Oasis to perform high intensity completions and the option to optimize full field development strategies. The company’s focus and strategies are being guided by oil prices trading in the $60 per barrel range, Nusz explained. “We are in a new environment today in comparison to […]

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What’s it take to slow the U.S. oil boom?

With the on-going drop in oil prices —down from around $100 a barrel this summer, to below $70 at this writing—I’ve been closely following various assessments of what this means. How long will prices remain low? What impact will this have on the United States’ oil boom?  I’ve been curious to see how the U.S. Energy Information Administration (EIA)—the data-collection and forecasting arm of the Department of Energy—might adjust its forecasts in response to the oil price drop. Yesterday EIA issued its latest Short-Term Energy Outlook (STEO), a monthly report that gives forecasts for the following year or two. The verdict is: Nothing will change. As The Hill put it: “ Low oil prices won’t hurt US drilling, feds say .” Sort of. Below is the price drop so far, and EIA’s expectation that it will persist at least through the end of 2015. Figure 1 Figure 1 This […]

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Oil slide hits European stocks, safe-haven assets sought

LONDON (Reuters) – A relentless slide in crude prices put energy stocks and currencies exposed to oil exports under pressure on Friday, dampening appetite for riskier assets and underpinning flows into the safety of core government bonds. Brent crude dropped to a 5-1/2-year low of $63 a barrel and was set for a weekly loss of more than 8 percent. Falling oil prices have sparked weakness in U.S. high yield markets and pushed up volatility across asset classes. The STOXX Europe 600 Oil & Gas Index fell nearly 1 percent in early trade, dragging down the pan-European FTSEurofirst 300 index to 1,347.45 points. The euro zone’s blue-chip Euro STOXX 50 index declined by 0.8 percent to 3,133.36 points with political concerns over Greece also hurting European stocks. Currencies strongly linked to oil export revenues like the Canadian dollar slumped to a 5-1/2 year trough against the dollar, while the […]

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Russia sees promise in energy ties with India

Russian President Vladimir Putin sees promise in expanding energy ties with the expanding Indian economy. (UPI Photo/Anatoli Zhdanov) Bilateral efforts to expand cooperation in the oil and gas sector between Russia and India hold "great promise," the Kremlin said Thursday. "We are paving the way for long-term, true and mutually beneficial cooperation," Russian President Vladimir Putin said during a state visit to New Delhi. Russia is examining its energy options as Western sanctions take their toll on its economy. In July, Russian Ambassador to India Alexander Kadakin told Indian business newspaper The Hindu the Kremlin was interested in spending as much as $40 billion to build a natural gas pipeline for India. The pipeline would run along the southern border of Russian to India through the Himalayan region or mirror the route of the planned pipeline from Turkmenistan. India’s economy is expected to expand by 5.8 percent next year, […]

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Guest post: in the oil market, you can’t have it both ways

The media is replete with stories of low oil prices killing the shale revolution.  This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth. We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d  per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015. Now, where would supply growth come from to meet that demand? It could come from Brazil and Iraq for starters.  Brazil’s offshore program is finally finding its legs, and production has been increasing at a pace of perhaps 200,000 b/d per year. Iraq, assuming it does not implode into civil war, could provide as much with some luck.  And perhaps another 200,000 b/d could come from various other sources, for example, from the US Gulf of Mexico in 2015.  And that’s […]

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Oil Trades Near 5-Year Low as Saudis Question Need to Cut Output

Brent and West Texas Intermediate traded near the lowest price since July 2009 as Saudi Arabia questioned the need to cut output, bolstering speculation that OPEC’s biggest producer will defend market share. Brent futures were little changed in London after falling 3.9 percent yesterday. The market will correct itself, according to Saudi Arabian Oil Minister Ali Al-Naimi . Global demand for crude from the Organization of Petroleum Exporting Countries will drop next year by about 300,000 barrels a day to 28.9 million, the least since 2003, the group predicted yesterday. Oil’s collapse into a bear market has been exacerbated as OPEC’s three largest members offered discounts on exports to Asia. The cartel, which supplies about 40 percent of the world’s crude, decided against reducing its output quota at a meeting last month even as the U.S. pumps at the fastest pace in more than three decades. “Crude prices will […]

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Oil price falls below $65 for first time in 5 years

The price of internationally traded oil fell below $65 for the first time in more than five years on Wednesday after Opec lowered forecasts of demand for its crude to their lowest level in a decade. The report by Opec, the producers’ cartel, underlined the looming supply glut facing oil markets amid surging US shale output and weakening global demand, raising hopes of a boost for consumers but piling further pressure on to oil companies. It worsened the already bearish outlook for oil, which has fallen 43 per cent since mid-June. Brent, the international benchmark, fell as much as 4.9 per cent to $63.56, the lowest level since July 2009. West Texas Intermediate, the US benchmark, also fell after US crude stocks unexpectedly rose. “For prices, the path of least resistance is down,” said Michael Wittner, analyst at Société Générale The price slide battered energy stocks, with shares in […]

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