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U.S. Oil Jumps as Number of Drilling Rigs Drops

ENLARGE U.S. oil futures rose 8.3%, their largest one-day percentage gain since June 2012. Above, equipment operated by Russian oil company Ritek. Photo: TASS/Zuma Press U.S. oil prices surged 8.3% as traders jettisoned bearish bets against the market after data showed a steep drop in the number of rigs drilling for oil in the country—a sign that crude production may be starting to ebb. The news of falling domestic production facilities came against a backdrop of otherwise bearish supply-and-demand fundamentals and macroeconomic indicators on Friday, including a continued widening gap between production and consumption for oil from the Organization of the Petroleum Exporting Countries and a weaker-than-expected reading on fourth-quarter U.S. economic growth. Indeed, many analysts believe oil prices have further to fall as global production continues to outpace demand through the first half of this year. Still, for one day the bullish production news drove traders to quickly […]

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Oil jumps on drop in U.S. rig count; dollar up 5 percent for month

NEW YORK (Reuters) – Oil prices surged on Friday following the sharpest weekly drop in U.S. oil rig count in nearly 30 years, while the dollar index was on track to end January with gains of about 5 percent. U.S. stocks cut losses as energy shares followed oil prices higher. U.S. crude CLc1 rose 8.3 percent to settle at $48.24 a barrel, while Brent crude LCc1 jumped 7.9 percent to settle at $52.99. The S&P 500 energy .SPNY was up 0.8 percent. [ID:nL1N0V9266] European stocks ended lower, but registered their biggest monthly gain in three years, while major U.S. stock indexes were on track for a second straight monthly decline. The dollar index .DXY, bolstered by expectations the U.S. Federal Reserve will be the first major central bank to raise interest rates, also was poised to end January with its longest run of gains since the greenback was floated […]

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Natural Gas Tests New Lows on Strong Supply, Warming Weather

Natural gas touched its lowest point since August 2012 Friday morning and is still trading lower on strong supply and signs of softer heating demand in the weeks to come. Natural gas for March delivery is down 4.2 cents, or 1.5%, at $2.677 a million British thermal units on the New York Mercantile Exchange. Prices fell as low as $2.637/mmBtu in early morning trading and have been paring losses since the floor opened. Prices are coming down because of strong stockpiles for a second straight session, analysts said. Storage levels shrank by 94 billion cubic feet, the EIA reported Wednesday. That was 17 bcf lower than expectations and was just the fourth time in 20 years that the stockpile drain for this week of January wasn’t at least 100 bcf, according to Simmons & Co. International. "Demand has simply not been strong enough this winter to have a significant […]

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Petrostates have a cheap oil malady

While consumers in the United States and Europe are cheering low prices at the pump, a variety of states that depend on oil revenue are expecting a period of uncertain income and budget shortfalls. Unfortunately, rather than encourage reform in these typically corrupt and authoritarian countries, the pressure of low oil prices is likely to result in increased instability. Oil has halved in price in the last six months, dropping to just under $50 per barrel. This plunge is driven by contracting global demand as well as efforts by Saudi Arabia to curtail growing oil production by the United States, Russia and other nonmembers of OPEC. The death of Saudi Arabia’s King Abdullah is unlikely to alter this situation, as newly crowned King Salman has been careful to emphasize continuity with his predecessor’s policies. As a result, oil prices should remain low for a while. Though oil was less […]

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OPEC January Crude Output Rises as Iraq Pumps at Record Pace

(Bloomberg) — OPEC oil production rose in in January as record Iraqi output helped drive prices near six-year lows. Production by the Organization of Petroleum Exporting Countries climbed 483,000 barrels a day to 30.905 million a day this month, led by gains in Iraq, Saudi Arabia, and Angola, according to a Bloomberg survey of oil companies, producers and analysts. Output rose even as oil futures dropped to the lowest level since 2009. OPEC left its production quotas unchanged at a November meeting, prompting speculation that the group will let prices slide low enough to slow U.S. output that’s climbed to the highest in three decades. “There’s clearly a battle for market share among the members of the group,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone on Friday. “The Iraqis feel entitled to a greater share of […]

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Islamic State Militants Launch Offensive Outside Kurdish-Controlled Kirkuk

A senior Kurdish military commander and eight Kurdish fighters have been killed in clashes with Islamic State militants in a battle outside the city of Kirkuk, the Associated Press said. Photo: Getty. Islamic State militants launched their biggest offensive yet outside Kurdish-controlled Kirkuk and tried to penetrate the city itself, part of a spate of brazen attacks by the extremist group against Kurdish forces across Iraq on Friday. A senior Kurdish commander, Brig. Gen. Sherko Fatih, was among at least six Kurdish forces killed in the surprise attack just after midnight outside the northern Iraqi city, officials said. As fighting raged outside the city, fighters from Islamic State, also known as ISIS, tried to break into the Kirkuk Palace Hotel after detonating a car bomb in front of the hotel, a rare incursion into the city center, officials said. Kirkuk Gov. Najmaldin Karim said Kurdish forces and local police […]

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Overview Iraq

Iraq has the fifth largest proved crude oil reserves in the world, and it is the second-largest crude oil producer in OPEC. Iraq was the second-largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC) in 2014, and it holds the world’s fifth largest proved crude oil reserves after Venezuela , Saudi Arabia , Canada , and Iran . Most of Iraq’s major known fields are producing or in development, though much of its known hydrocarbon resources have not been fully exploited. All of Iraq’s known oil fields are onshore and the largest fields in the south have relatively low extraction costs owing to uncomplicated geology, multiple supergiant fields, fields that are typically located in relatively unpopulated areas with flat terrain, and the close proximity to coastal ports. 1 Iraq is re-developing its oil and natural gas reserves after years of sanctions and wars. Iraq’s crude […]

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Islamic State seizes oil facility in north Iraq, 15 workers missing

KIRKUK, Iraq (Reuters) – Islamic State insurgents seized a small crude oil station near the northern Iraqi city Kirkuk where 15 employees were working, security and oil officials said on Saturday. Two officials from the state-run North Oil Co confirmed the militants seized a crude oil separation unit in Khabbaz and said 15 oil workers were missing after the company lost contact with them. "We received a call from one of the workers saying dozens of Daesh fighters were surrounding the facility and asking workers to leave the premises. We lost contact and now the workers might be taken hostage," an engineer from the North Oil Co told Reuters, using a derogatory acronym for Islamic State. The radical jihadist movement seized at least four small oilfields when it overran large areas of northern Iraq last summer, and began selling crude oil and gasoline to finance their operations. Islamic State […]

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Chevron to Abandon Shale Natural Gas Venture in Poland

LONDON — Chevron said on Friday that it would abandon efforts to find and produce natural gas from shale rock in Poland, in perhaps the biggest setback yet to fledgling efforts to start a European shale oil and gas industry that might help replace the region’s dwindling fuel resources. Shale development in the United States has been one of the reasons the American energy industry has experienced a renaissance in recent years — so much so that it has contributed to the global glut now depressing oil prices. But Europe, heavily reliant on imported fuel, has had trouble getting started with shale, for geological, environmental and political reasons. Chevron announced it was abandoning the Poland project the same day the company reported that its earnings for the fourth quarter of 2014 fell nearly 30 percent compared with a year earlier, to $3.5 billion. The company blamed lower oil prices […]

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Lessons from a California Drought

California drought Rain finally arrived in California this past December with a series of storms dumping deluges across the state. So much rain fell that localised flooding and landslides were a concern. Whether this means that the three-year drought, which stands to be the driest “ in over a millennium ” is breaking, however, is far from certain. The drought has devastated California’s agriculture and driven LA residents to rip out their lush green lawns . There has been something apocalyptic in the air as farmers drained the state’s aquifers last year, and vast reservoirs were sucked dry, sparking water wars . As 2015 begins, 99% of the state is rated ‘ abnormally dry ’. It has been much debated whether climate change has been at work across California – and the western United States more generally. At a global level, 2014 is now confirmed as the warmest year […]

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Mexico Cuts Spending Saying Oil Price May Stay Low for Years

(Bloomberg) — The Mexican government will cut 2015 spending by 0.7 percent of gross domestic product on the expectation that oil prices may remain low for years, Finance Minister Luis Videgaray said. Stocks extended declines. President Enrique Pena Nieto’s administration will reduce spending by 124.3 billion pesos ($8.3 billion) this year from the level approved by lawmakers in November, Videgaray said at news conference in Mexico City. The government is canceling plans for a passenger train in the Yucatan peninsula and suspending a high-speed rail project meant to connect Mexico City and Queretaro, Videgaray said. The reductions will allow Mexico to avoid raising additional debt or increasing taxes, Videgaray said. Mexico’s state-owned oil and electricity companies will cut their own outlays, and all the reductions will have a marginal effect on 2015 growth, Videgaray said. “We will take measures not only addressing the current situation, but rather we’ll take […]

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97% of fracking now operating at a loss at current oil prices

 If the Saudis wanted to crush America’s shale oil industry they are certainly doing a good job of it.  West Texas Intermediate reached a 2014 peak of $107.73 in June before dropping as low as $49.77 today on the New York Mercantile Exchange. The grade settled at $50.04 a barrel. That’s below the break-even price for 37 of 38 U.S. shale oilfields , according to Bloomberg New Energy Finance. Shale oil fracking and Canadian tar sand is some of the most expensive (and dirty) oil production on the planet, while conventional Persian Gulf oil is the cheapest to produce. Warren Henry, the spokesman for Continental, one of the frackers who have been spending money faster than they can make it, says that current oil prices are “not a sustainable long-term trend.” However, Bob Tippee, Editor of Oil & Gas Journal, has a different take .  “The Saudis have no […]

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Millions Of Gallons Of Oil Settled At The Bottom Of The Gulf After BP Oil Spill

Millions Of Gallons Of Oil Settled At The Bottom Of The Gulf After BP Oil Spill thumbnail Millions of gallons of oil from the Deepwater Horizon oil spill didn’t get cleaned up, and instead settled in the sediment of the Gulf of Mexico’s floor, a new study has found. The study , published in the journal Environmental Science and Technology, found that 6 to 10 million gallons of oil from the spill are buried in the seafloor. The researchers measured the amount of carbon 14 — a radioactive carbon isotope that’s found in organic material but not found in oil — in an approximately 24,000 km² area of sediment near the spill site, a process which allowed them to see what parts of the sediment were low in carbon 14 and thus contained oil. The study sought to determine two things: whether oil had, in fact, settled on the […]

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Most Republicans Say They Back Climate Action, Poll Finds

WASHINGTON — An overwhelming majority of the American public, including half of Republicans, support government action to curb global warming , according to a poll conducted by The New York Times, Stanford University and the nonpartisan environmental research group Resources for the Future. In a finding that could have implications for the 2016 presidential campaign, the poll also found that two-thirds of Americans said they were more likely to vote for political candidates who campaign on fighting climate change . They were less likely to vote for candidates who questioned or denied the science that determined that humans caused global warming. Among Republicans, 48 percent say they are more likely to vote for a candidate who supports fighting climate change, a result that Jon A. Krosnick, a professor of political science at Stanford University and an author of the survey, called “the most powerful finding” in the poll. Many […]

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American CEOs Most Bearish on Earnings Since 2008 Crisis

Drilling for oil in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota. (Bloomberg) — U.S. chief executive officers are more pessimistic about corporate earnings than any time since the financial crisis, according to research from Bespoke Investment Group LLC. The percentage of companies cutting profit forecasts during this earnings season has outpaced those with upward revisions by 8.6 percentage points, the widest margin in six years, according to data compiled by Bespoke. Consumer companies and drugmakers are the most bearish among 10 major industries, with at least 18 percent of each group providing lower guidance, the data show. Plunging oil and a strengthening dollar are wreaking havoc on earnings this month as Procter & Gamble Co. to Caterpillar Inc. and Pfizer Inc. joined an increased number for companies to announce disappointing forecasts. While the reduction in projections sets a lower bar for companies to […]

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Savings at the Pump Are Staying in Wallets

ENLARGE Americans are keeping, not spending, much of the cash saved as gas prices fall. Above, shoppers in Texas. Photo: The Odessa American/Associated Press Americans are taking the money they are saving at the gas pump and socking it away, a sign of consumers’ persistent caution even when presented with an unexpected windfall. This newfound commitment to frugality was illustrated this past week when the nation’s biggest payment-card companies said they aren’t seeing evidence consumers are putting their gasoline savings toward discretionary items like travel, home renovations and electronics. Instead, people are more often putting the money aside for a rainy day or using it to pay down debt. That more Americans are saving their bounty at the pump comes as a surprise, because the personal savings rate, after rising during and after the recession, has declined steadily over the past two years. “We haven’t seen the extra savings […]

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Congress Gets Busy On Oil, Gas Issues

Republicans are wasting no time in taking on some of the energy issues that have been waiting in Congress for years, Alex Mills says. This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. For the first time since Barack Obama became President, Republicans took control of the U.S. House and Senate, and they wasted no time in taking on some of the energy issues that have been languishing in the Congress for years. Senate Republicans made good on a pledge to pass the long-pending Keystone XL oil pipeline on Jan. 29. Senators voted 62-36 on the bill to bypass the Obama administration’s delaying tactics on the Keystone XL, only 5 short of the number needed to override a presidential veto, which is expected. All Republicans present voted for the bill, as did nine Democrats. Approving the Keystone XL has been […]

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China’s Louisiana Purchase: New Orleans’ own Battle of Algiers

This article is the final installment of a three-part series on China’s role in redeveloping southern Louisiana called China’s Louisiana Purchase. The  first part  investigated links between Chinese government officials, Chinese gas giant Shandong Yuhuang and Gov. Bobby Jindal. The second part explored allegations of environmental racism from the predominantly black community where the plant will be built.  ALGIERS, New Orleans — A New Orleans government–contracted company stands accused of stealing millions of dollars from foreigners who sought citizenship through the U.S. investor immigrant — or EB-5 — system by investing in a cluster of would-be businesses in an underserved black community devastated by Hurricane Katrina. But even with litigation pending in that case, municipal authorities are continuing to seek EB-5 investments. Under  the EB-5 system , individuals from overseas — a vast majority of applicants hail from China — have a shot at a green card if they […]

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US growth slows to 2.6% in fourth quarter

Personal spending rose to the highest level since 2006 in the first quarter America’s growth lost momentum at the end of 2014 as weak exports highlighted the risks the US recovery faces from sagging overseas demand. Gross domestic product rose by an annualised 2.6 per cent in the fourth quarter — sharply below Wall Street expectations for an increase of at least 3 per cent and a marked slowdown from the 5 per cent pace set in the third quarter. More On this story On this topic IN US Economy While consumer spending — the main driver of America’s economy — surged at its fastest pace since 2006, overall growth was dragged down by poor trade numbers and falling government spending. Stocks slipped on Wall Street in response and bond traders pushed back expectations of interest-rate increases by the Federal Reserve’s Federal Open Market Committee. Separate data showed US […]

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The Car of the Future May Run on Gas

ENLARGE Thomas Wallner, a mechanical engineer with the Department of Energy’s Argonne National Laboratory near Chicago, adjusts Argonne’s "omnivorous engine," an automobile engine that Wallner and his colleagues have tailored to efficiently run on blends of gasoline, ethanol and butanol. Photo: Argonne National Laboratory When most of us picture the high-tech personal mobility of the future, we tend to imagine a sleek, dead-quiet electric car, packed with voice- or motion-directed gizmos and self-driving features. We see ourselves gliding around almost effortlessly, free to talk, work or text as we see fit. What few of us conjure up is having this sort of experience in a gasoline-fueled car. But that may be changing in the face of recent design advances. The internal combustion engine—the workhorse of the industrial age—is proving to be much more than a stubborn technological incumbent. More than a century after becoming the dominant way that people […]

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Pennsylvania reinstates drilling moratorium

Pennsylvania Gov. Tom Wolf reinstates moratorium on oil and gas leases in state land. (Photo: Commonwealth of Pennsylvania) Louis D’Amico, president and executive director of the Pennsylvania Independent Oil & Gas Association, said the moratorium struck a blow against an industry that’s already returned more than $700 million in revenue to the state in the last seven years. "This is a lose-lose for Pennsylvania’s taxpayers and energy consumers," he said in a statement Thursday. His comments follow a decision from state Gov. Tom Wolf to reinstate a moratorium on oil and gas leases in state parks and forests. A ban was enacted in 2010 by Gov. Ed Rendell , but modified last year by Gov. Tom Corbett to allow drillers to explore for oil or gas so long as it didn’t interfere with land integrity. Wolf said the decision was about striking a balance to economic vitality and preservation. […]

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Massachusetts set for offshore wind energy

U.S. Interior Department holds auction for wind energy development off the coast of Massachusetts. Photo by Teun van den Dries/Shutterstock WASHINGTON, Jan. 30 (UPI) — Wind energy potential in the Atlantic holds promise as a new source of renewable energy and economic stimulus, the U.S. Interior Department secretary said. With high bids totaling $448,000, the Interior Department said it doubled the total acreage available for wind energy development off the coast of Massachusetts in the fourth-ever auction of its kind. "Offshore wind along the Atlantic holds great potential to help power our nation with renewable energy while adding jobs to the economy," Interior Secretary Sally Jewell said in a Thursday statement. The U.S. government estimates the leased area, a combined 354,409 acres, could support around 2 gigawatts of commercial wind energy, enough to meet the annual electricity needs of 700,000 homes if fully developed. Wind energy development up and […]

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Chevron latest low oil price casualty

Chevron fourth quarter profits down in weak oil price market, but net oil production unchanged. UPI/A.J. Sisco SAN RAMON, Calif., Jan. 30 (UPI) — Chevron Corp. said Friday it became the latest casualty of a weak oil market, announcing fourth quarter profits were down 30 percent year-on-year. "Our 2014 earnings were down from the previous year, largely due to the sharp decline in crude oil prices," Chairman and Chief Executive Officer John Watson said in an announcement of fourth quarter earnings. Fourth quarter earnings of $3.5 billion represented a 30 percent decline year-on-year. Full year 2014 earnings were $19.2 billion, compared with $21.4 billion the previous year. Oil prices are off more than 15 percent since the start of the year and down more than half from June 2014 peaks. The price slump has forced many international energy companies, and those in secondary industries like steel, to cut their […]

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Putin Fingerprints Seen All Over Surprise Interest-Rate Reversal

(Bloomberg) — The message some Russia watchers are getting from Friday’s surprise interest-rate cut is this: Start listening more to what President Vladimir Putin’s aides say about monetary policy and less to central bankers. Here’s the key evidence. In comments made just nine days ago, the country’s central bank chief indicated she saw no chance of a rate cut any time soon after inflation soared to a five-year high. A week earlier, though, one of Putin’s most vocal economic aides urged the exact opposite, saying a reduction was needed to bolster the ailing economy. So when the Bank of Russia shocked traders and analysts alike by announcing it was lowering the benchmark rate from an 11-year high, the words spoken by that aide, Andrey Belousov, left many to speculate that the Kremlin is exerting more pressure on central bank policy makers. The rate cut — to 15 percent from […]

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12 Killed In Ukraine As Peace Talks Awaited

People take cover from shelling in a residential area in Donetsk’s Kyibishevsky district on Friday…. ENLARGE Photo: Agence France-Presse/Getty Images KIEV, Ukraine—At least 12 people were killed in fighting in eastern Ukraine as the Ukrainian government and rebels squabble over who should be allowed to attend internationally-mediated talks if they are restarted in Belarus. In the last 24 hours, five members of the Ukrainian military were killed, a spokesman said, and the city council of rebel-held Donetsk reported seven civilian deaths. Dozens were wounded on both sides. The death toll has risen sharply this month, as government forces and pro-Russian rebels resumed full-scale fighting . After the collapse of a tentative truce agreed last month, both sides accused each other of violating a broader peace agreement reached in Minsk in September, and rebels announced an offensive to retake territory lost to the government last year. Russia and the West […]

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Crude-Oil Futures Volatile

An oil refinery in Singapore on Jan. 13. ENLARGE Photo: Agence France-Presse/Getty Images LONDON—Oil futures were volatile on Thursday with U.S. oil prices hovering near six-year lows as the global oil glut that has pummeled prices since midsummer showed no signs of abating. The U.S. reported record high oil supplies and the dollar continued to strengthen after the Federal Reserve’s meeting on Wednesday, further weighing on dollar-denominated commodities such as oil. On the New York Mercantile Exchange, March-dated WTI, the U.S. price benchmark, traded down 0.1% at $44.40 a barrel after settling at its lowest level since March 2009 on Wednesday. On London’s ICE Futures Exchange, Brent, the global marker, rose 0.3% to $48.65 a barrel Data from the U.S. Energy Department showed the country’s oil stockpiles rose by a more-than-expected 8.9 million barrels in the week ended Jan. 23. The stockpiles are now near 407 million barrels, an […]

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Natural Gas Prices Sink on Smaller-Than-Expected Stockpile Drain

By Timothy Puko Natural gas prices dropped to a new two-year low on Thursday after federal data showed U.S. storage levels fell less than expected last week. Storage levels shrank by 94 billion cubic feet in the week ended Jan. 23, the U.S. Energy Information Administration said. The drain was 17 bcf less than the 111-bcf average of 20 forecasters surveyed by The Wall Street Journal. The smaller-than-expected drain caused prices to drop sharply. The front-month March contract recently traded down 14.7 cents, or 5.2%, at $2.695 a million British thermal units on the New York Mercantile Exchange. The contract had been trading around unchanged before the data. This is the lowest front-month price since Sept. 10, 2012, when gas fell to $2.682/mmBtu. The drain was 44% lower than the five-year average for that week of that year. That is another reminder of how severely oversupplied the market is, […]

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Falling oil prices prompt central bankers to reconsider

World Bank expects global inflation to fall 0.4-0.9 percentage points this year The Federal Reserve O nly a few months ago, the 2015 outlook for monetary policy could be summarised in two words: “great divergence”. This was the year in which the US Federal Reserve and the Bank of England would finally raise rates after years of ultra-low borrowing costs, while the Bank of Japan and the European Central Bank would continue to loosen monetary policy. More On this topic Global Insight Fast forward to the start of this year and the picture is completely different: from India and Turkey to Canada , monetary policy makers are all busy slashing borrowing costs. Brazil, where the central bank raised rates last week, is the one big exception to the rule. But its move pales against the ECB’s decision last Thursday to launch a massive €1.1tn programme of quantitative easing. And […]

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Oil’s Next Casualty: Government Budgets

The 56 percent drop in oil prices in the last six months is fueling more than just jet engines and road trips. It’s also burning through the cushy budget surpluses enjoyed by some of the world’s biggest oil-producing nations.  Saudi Arabia, the world’s top producer of crude, will see the budget surplus it has enjoyed in the past turn into a deficit of 4.7 percent of gross domestic product this year, according to the median estimate of eight economists surveyed by Bloomberg. That would be the first shortfall since 2009, according to  International Monetary Fund  data. The Middle Eastern nation, which derives about 90 percent of its budget revenue from oil, recorded a surplus of 8.7 percent of GDP in 2013. (Data for 2014 surpluses or deficits aren’t yet available in many countries, so we’re using 2013 for comparisons.) Oil exporters Kuwait, Qatar and the United Arab Emirates will also see their surpluses […]

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Fossil Fuel Subsidies Fall in Gain for Renewables

(Bloomberg) — Countries from Mexico to Germany and Malaysia are increasingly taking advantage of cheap oil by trimming fossil-fuel subsidies, easing the way for renewable power that can help the environment, according to the chief economist of the International Energy Agency. With the global cost of crude cut by more than half, Fatih Birol said the IEA has scrapped a forecast that had subsidies reaching $660 billion by 2020. In the group’s latest report, fossil fuel producers were paid $548 billion in 2013, a $26.5 billion decline that was the first drop in four years. At least 27 nations are decreasing or ending the subsidies that hold down costs for fuels used to generate electricity, including coal and natural gas, the IEA reported in November. That’s adding momentum to global efforts to limit greenhouse gases by increasing the use of clean energy. “In the absence of subsidies, all of […]

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Senate Committee Passes New Iran Sanctions Legislation

WASHINGTON—The Senate Banking Committee easily approved a new bipartisan sanctions bill Thursday on Iran, raising the likelihood that new financial penalties on Iran will be passed into law before a final June diplomatic deadline for an agreement on Tehran’s nuclear program. But politics will be a big factor in the fate of the legislation. Majority Leader Mitch McConnell (R., Ky.) could send the bill to the floor at any time now that it has passed out of committee. Earlier this week, Democratic lawmakers including the bill’s co-author, Sen. Robert Menendez (D., N.J), pledged not to support a vote on the bill until after a March deadline set by negotiators to reach a political framework. A final agreement is due by the end of June. As a result of that Democratic pledge, Mr. McConnell is considered by many to be unlikely to call up the bill for a floor vote […]

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Libyan crude oil came to USGC in November, first time since mid-2013: EIA

Houston (Platts)–30Jan2015/520 am EST/1020 GMT Crude oil from Libya was imported to refiners in the US Gulf Coast in November for the first time since August 2013, according to data released Wednesday by the US Energy Information Administration. In November, two Aframaxes arrived in the Gulf Coast from Libya, chartered by BP and Citgo, carrying 32.5 and 36.6 API crude, respectively, and both with a sulfur content of 0.14%, the EIA data showed. The BP-chartered cargo delivered to Oil Tanking PL in Houston carrying 449,000 barrels, while the cargo chartered by Citgo headed to Lake Charles, Louisiana, where Citgo owns a 425,000 b/d refinery, contained 552,000 barrels. Platts cFlow ship-tracking software shows the EuroChampion 2004 deported from Ras Lanuf on October 18, and arrived at Offshore Galveston Lighterage on November 5. The Nissos Delos left the port of Marsa el Hariga on October 27, and arrived the Port of […]

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With compromise budget, Iraq buys some time

Members of Parliament gather to vote on Iraq’s new government in Baghdad on Sept. 8, 2014. (THAIER AL-SUDANI/Reuters) Iraq’s Parliament passed the 2015 budget Thursday, including spending reductions and provisions governing the relationship between Baghdad and the autonomous Kurdistan region. The new budget also leaves key questions unanswered. For example, it is not clear how Iraq will find additional financing if the price of oil remains so low; how leaders in Baghdad and Erbil will reconcile competing interpretations of their past and future obligations; or how southern provinces will respond to the disap…

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Government Allies Are Said to Have Slaughtered Dozens of Sunnis in Iraq

BAGHDAD — Some of the men were shot on their doorsteps, their bodies left crumpled in the streets. Others were lined up, led to a field and killed there. Their relatives, ordered to stay in their homes, heard the gunfire. At least 72 people from a majority Sunni village in eastern Iraq were methodically singled out for slaughter this week, according to witnesses and local Sunni leaders, who said the victims were killed by Shiite militiamen who were supporting Iraqi security forces. A spokesman for Iraq ’s prime minister said Thursday that the government was investigating the claims. Some local security officials in Diyala Province have asserted the victims were militants killed in battle by the security forces, denying that sectarian executions had occurred. But witness accounts suggest that is what happened in the village of Barwanah starting on Monday. Several survivors described seeing a column of troops drive […]

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Baghdad-Erbil cooperation fraying

Iraqi Oil Minister Adil Abd al-Mahdi (L) meets with Kurdistan Prime Minister Nechirvan Barzani in Erbil on Nov. 13, 2014. (STRINGER/Reuters) Recommend 898 people recommend this. Sign Up to see what your friends recommend. A cooperative oil export and revenue sharing agreement reached by Iraq’s federal government and Kurdistan region is in danger, with the two sides failing to meet each other’s expectations. The dispute over oil exports nearly derailed the passage of the 2015 budget, which was approved by Parliament on Thursday, as MPs demanded language be amended to explicitly forbid the KRG from exporting oil independently of the federal government. Much remains to be reconciled, however, as the disappoin…

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Bombs in central Baghdad kill 12: security sources

BAGHDAD (Reuters) – At least 12 civilians were killed on Friday morning when two bombs exploded in central Baghdad, security sources said. An initial blast in the Bab al-Sharqi district was followed by a car bomb, the sources said. At least 30 people were also wounded in the attack. The area is home to a large market and lies across the Tigris river from the Green Zone, which houses most government buildings. Bombings are frequent in Baghdad, where Sunni insurgents from Islamic State, which controls large swathes of territory in Iraq’s north and west, regularly target Shi’ite neighborhoods with car bombs. At least 21 people were killed on Thursday in bombings at five separate locations and a shooting on the outskirts of Baghdad. (Reporting By Stephen Kalin; Editing by Crispian Balmer )

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Explorers Curb 2016 Drilling Plans in Namibia on Oil-Price Drop

(Bloomberg) — The plunge in crude prices to below $50 a barrel has curbed oil and gas explorers’ plans for drilling in Namibia next year, the country’s petroleum commissioner said. “We have at least three majors which have indicated to us that they will be drilling in 2016, Immanuel Mulunga said by phone on Thursday from the capital, Windhoek. ‘‘I am more confident of three instead of five or six’’ announced last year, he said. While Namibia was interesting to explorers ‘‘way before’’ oil rose to $100 a barrel, ‘‘the current trend is worrying,’’ Mulunga said. Explorers are cutting back or delaying projects and drilling plans after crude plunged more than 50 percent since June. Basins off Namibia have attracted attention from the world’s biggest oil explorers on a bet that the southwest African nation’s coastal shelf may mirror that of Brazil across the Atlantic and neighboring Angola, the […]

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Saudi King Reshuffles Cabinet, Keeps Oil Minister in Place

ENLARGE Saudi Arabian Oil Minister Ali Al-Naimi retained his post in a government shake-up Thursday, but King Salman canceled the kingdom’s top oil decision-making council. Photo: European Pressphoto Agency Saudi Arabia’s new king announced Thursday a shake-up of the kingdom’s government, but kept veteran Oil Minister Ali al-Naimi in place. Mr. al-Naimi, who has been the kingdom’s oil minister since August 1995, was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries, or OPEC, to keep its oil production target steady , a move that has since sent global oil prices into a tailspin. But King Salman canceled the Supreme Council for Petroleum and Minerals, which has been traditionally kingdom’s top decision-making body on oil, according to royal decrees announced on the state-owned television. The council was led by the king and includes senior royal family members, ministers including Mr. al-Naimi and top industry executives. […]

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Twenty-six killed in attacks in Egypt’s North Sinai

CAIRO (Reuters) – Twenty-five people were killed in a bomb attack on military buildings in the capital of Egypt’s restive North Sinai province on Thursday, while an army major was shot dead at a checkpoint in Rafah near the Gaza Strip, medical and security sources said. The flagship government newspaper, al-Ahram, said its office in the town of Al-Arish, which is situated opposite a military hotel and base that security sources said were the intended targets of the bombing, had been "completely destroyed". Later, suspected militants killed an army major and wounded six others at an army checkpoint in Rafah, security sources said. An Islamist insurgency based in Sinai has killed hundreds of security officers since president Mohamed Mursi of the Muslim Brotherhood was removed from power following mass protests against his rule. Tensions have also been raised across Egypt this week by protests, some of them violent, marking […]

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Nigeria’s Growth Set to Slow to 5.5% as Oil Plunges, Agency Says

(Bloomberg) — Economic growth in Nigeria, Africa’s biggest crude producer, is projected to slow to 5.5 percent this year after oil prices plunged, the statistics office said. Gross domestic product growth is set to decelerate from an estimated 6.2 percent last year, the National Bureau of Statistics said in a report on its website. The economy is forecast to expand 5.8 percent in 2016 and 5.8 percent in 2017. “The decline in crude oil prices is a downside to the economy in both the short and medium term,” the agency said. “The crude oil price shocks, the resulting declining government expenditure and its multiplier effects are likely to impact businesses.” Oil prices have plunged more than 50 percent since June, curbing export revenue in Africa’s biggest economy, forcing the government to cut back on spending and prompting the central bank to devalue the naira as foreign-currency reserves slumped. The […]

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Dominican Republic Taps $1.9 Billion to Pay Venezuelan Oil Debt

(Bloomberg) — The Dominican Republic paid off almost all of a $4.1 billion debt owed to Venezuela for years of oil shipments after raising funds through a bond sale last week, Finance Minister Simon Lizardo said. With a discount of more than 50 percent, the government used $1.93 billion to pay off 98 percent of its debt to Venezuela, Lizardo told reporters Thursday in Santo Domingo. The deal will immediately reduce its public debt by about 3.3 percent of gross domestic product, Lizardo said, according to the government’s information service. “In very rare occasions can a country make a transaction of this magnitude,” he said. The agreement was concluded on Jan. 27, according to the Finance Ministry. The Dominican government had accumulated the debt under preferential financing terms afforded to it as a member of Venezuela’s Petrocaribe energy program. Since Petrocaribe was conceived in 2005 by former President Hugo […]

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Oil Cash Waning, Venezuelan Shelves Lie Bare

CARACAS, Venezuela — Mary Noriega heard there would be chicken. She hated being herded “like cattle,” she said, standing for hours in a line of more than 1,500 people hoping to buy food, as soldiers with side arms checked identification cards to make sure no one tried to buy basic items more than once or twice a week. But Ms. Noriega, a laboratory assistant with three children, said she had no choice, ticking off the inventory in her depleted refrigerator: coffee and corn flour. Things had gotten so bad, she said, that she had begun bartering with neighbors to put food on the table. “We always knew that this year would start badly, but I think this is super bad,” Ms. Noriega said. Venezuelans have put up with shortages and long lines for years. But as the price of oil, the country’s main export, has plunged, the situation has […]

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Companies, Rulers Caught in Wide Ripples From the Drop of Oil

Airlines love plummeting oil prices, right? Not always. The fall in the price of the black stuff may mean cheaper fuel in the long run, but it’s also resulted in a headache for Portuguese carrier TAP SGPS SA. TAP flies frequently in Angola, but the Angolan kwanza has slumped along with oil prices. So TAP doesn’t want to be stranded with a load of kwanzas. So this week it announced on its website that fliers temporarily won’t be able to buy tickets in Angola—unless the trip starts there. One dollar now buys almost 105 kwanzas, an increase of more than 7% over the last six months, brought on by a nearly 55% fall in the price of both Brent crude and WTI light sweet crude over the same period. Earlier this week, the Angolan cabinet presented a revised 2015 budget to Parliament in which it trimmed its assumed oil […]

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Asian Drivers Lose to Americans as Oil Slides: Chart of the Day

(Bloomberg) — Car drivers from Beijing to Mumbai aren’t getting the same benefit from oil’s plunge as peers in Phoenix or Boston. Meanwhile, Asian governments are getting more bang for their buck. The CHART OF THE DAY compares the price decline of Brent crude with retail gasoline costs in the U.S. and much of Asia. Oil’s slide of about 55 percent since the start of June is most closely followed by the 44 percent drop at American gas stations. Pump prices in Taiwan and Thailand fell the most in Asia, more than 30 percent, with India and Japan seeing about half those declines, data compiled by Bloomberg show. Consumers in some Asian nations that subsidize fuel costs are missing out on the full benefit of crude’s slump enjoyed at pumps in the U.S., as governments use cheaper purchases as a chance to cut subsidies and bolster state budgets. The […]

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Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist , explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price. This is because the conventional oil industry […]

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Falling Prices Spread Pain Far Across The Oil Patch

The cratering in global oil prices is hitting small-time U.S. producers as they struggle to keep their operations afloat. Dan Molinski reports. DALLAS—Rumor became reality here last week when dozens of workers lost their jobs at Laredo Petroleum Inc. The Oklahoma-based energy outfit said it closed its regional office to cope with plunging oil prices. The layoffs were “kind of like a death in the family,” says Robert Silver, age 62, a geophysicist who had helped Laredo decide where to drill in the Permian Basin in West Texas. Trouble has been looming over the oil patch since crude prices began falling last summer, from over $100 a barrel to under $50 today. But only now are the long-feared effects of a bust starting to ripple through the complex energy ecosystem, affecting Houston executives, California landowners and oil old-timers in Oklahoma. Many big energy companies have said they plan to […]

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‘Bomb Train’ Terminal Lawsuits Sidetrack Crude-Oil Rail Plans

(Bloomberg) — Rail yard projects vital to the flow of crude from the shale oil boom are being waylaid in court by legal challenges that may slow the march to U.S. energy independence. Crude-oil handling facilities along rail lines in cities from Albany, New York, to Richmond, California, are mired in lawsuits by community and environmental groups claiming they were kept in the dark about the projects. They accuse local regulators of giving cursory review and rubber-stamping operating permits for proposals that pose threats to their safety and the environment. In Albany, pollution regulators who examine such projects for dirty-air potential are grappling with 19,000 comments from residents more worried about exploding trains. Citizen complaints about the move to rail as a new means of transporting oil initially focused on safety conditions of tanker cars en route from shipping point to destination as pipeline capacity failed to keep pace […]

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Kemp: US Crude Oil Stocks Return To 1930s Crisis Levels

John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Jan 29 (Reuters) – U.S. commercial crude oil stocks last week hit their highest level since 1931 – when the opening of giant oil fields in the United States coincided with the Great Depression to create an enormous glut and sent prices tumbling to just 13 cents per barrel. Commercial crude stocks at refineries and tank farms across the country rose to almost 407 million barrels on Jan 23, up from 398 million the week before, according to the U.S. Energy Information Administration (EIA) ( http://link.reuters.com/jax83w ). Commercial stocks were the highest since the agency started collecting weekly data in 1982. The parallels are not exact because production and consumption are so much higher now than in the 1930s. In 1931, stocks of 407 million barrels were equivalent to 160 days of nationwide production, while […]

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