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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 […]

Posted On : Published By : Tom Whipple