Category:

Commodity Traders Exploit Crude Crash to Make Oil Storage King

The key to surviving and thriving amid the carnage in global oil markets is having a place to store the stuff. Oil prices have dropped 60 percent since June as the U.S. pumped more shale crude and OPEC resisted calls to cut production, stoking a global supply glut. While the 28-company STOXX 600 Oil & Gas Index has fallen 4.9 percent this month, shares of Rotterdam-based Royal Vopak NV (VPK) , the world’s largest independent storage tank operator, have surged 15 percent. “We don’t know specifically about occupancy rates but we hear from companies that inquiries for tank storage are growing,” Ronald Backers, adviser for business intelligence at the Port of Rotterdam, said by phone Jan. 12. Europe ’s largest port has crude oil tank storage of 85.6 million barrels. Refiners, tankage firms and traders that invested in oil storage capacity are benefiting as the slump in crude to […]

Posted On : Published By : Tom Whipple
Category:

Traders take supertankers for likely crude storage of up to 45 mil barrels

Singapore (Platts)–14Jan2015/433 am EST/933 GMT Trading companies have taken at least 22 supertankers on time charter this month with an option to store crude as the contango in futures prices is expected to sustain in the medium term, market participants said Wednesday, January 14. This will translate into floating storage of almost 45 million barrels of crude. Crude oil prices have been sinking for six straight weeks, and traders want to store the commodity for the time being, hoping to sell it later at higher prices. Around eight more ships were taken on time charter in the last two-three days, according to interviews with brokers, owners and charterers tracking the developments. Article continues below… Real-time news service tailored for ship owners, tanker charterers, brokers and traders plus the only independent source of daily clean and dirty tanker rate assessments daily. "Many owners are still working [on giving out their […]

Posted On : Published By : Tom Whipple
Category:

Iran President Says Oil-Price Drop to Hurt Saudi Arabia, Kuwait

Oil’s price slump may hurt Saudi Arabia and Kuwait more than Iran, which depends less on crude exports than the other two nations, Iranian President Hassan Rouhani said. Countries responsible for the drop in oil prices will “regret it,” Rouhani said in an address in Bushehr province, without identifying them. “If Iran suffers from declining oil prices, know that other oil-producing countries such as Kuwait and Saudi Arabia will suffer more than Iran,” Rouhani said. Saudi Arabia, the world’s largest crude exporter, and neighboring Kuwait opposed Iran’s unsuccessful effort to persuade the Organization of Petroleum Exporting Countries to cut output at their Nov. 27 meeting. Iran ’s crude exports have been curbed by international sanctions imposed because of the country’s nuclear program. It produced 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, according to data compiled by Bloomberg. Oil […]

Posted On : Published By : Tom Whipple
Category:

Iran Unlikely to Knuckle Under on Nukes Due to Oil’s Fall

Iranian President Hassan Rouhani, elected on a pledge of prosperity and ending the country’s global isolation, is facing the largest fall in oil prices since the aftermath of the 2008 financial crisis. Officials are warning of further spending and investment cuts to next year’s budget, which Rouhani unveiled on Dec. 7 and is based on $72-a-barrel crude instead of the current year’s $100. Even that new, lower forecast is proving to be unrealistic, with Brent crude , the world benchmark, trading for less than $46 on Tuesday. The Islamic Republic’s leaders will prefer to absorb the blow in the form of reduced prosperity rather than let it affect nuclear policies, said Djavad Salehi-Isfahani, an economics professor at Virginia Tech in Blacksburg, Virginia , who specializes in Iranian affairs. “Iran will stumble along with less growth and development,” Salehi-Isfahani said. “The oil-price fall is not reason enough for Iran to […]

Posted On : Published By : Tom Whipple
Category:

Oil Recovery Seen by Kuwait to U.A.E. After Lower Prices

Oil oversupply that sent prices to a five-year low probably will persist until at least the second half when demand is set to recover, according to Kuwait ’s oil minister and the OPEC governor of the United Arab Emirates . Faster global economic growth will be needed to help absorb the oil surplus estimated at 1.8 million barrels a day, Kuwait Oil Minister Ali Al-Omair told reporters in parliament yesterday. A demand-led recovery is seen in the second half, the U.A.E.’s Governor to OPEC Ali Al Yabhouni told reporters in Abu Dhabi. Oil fell about 40 percent since the Organization of Petroleum Exporting Countries chose to maintain its production target at a Nov. 27 meeting, seeking to defend market share rather than prices. The U.A.E. and Kuwait are OPEC members. Slowing economic growth has contributed to the drop in prices, Al-Omair said. “We are expecting that this situation will […]

Posted On : Published By : Tom Whipple
Category:

Venezuelan shortages, long lines spark violence, arrests

Print | Single Page [ – ] Text [ + ] (Adds comments from National Assembly leader, access limits.) By Alexandra Ulmer and Javier Farias CARACAS/ SAN CRISTOBAL Jan 12 (Reuters) – At least a dozen protesters arrested in Venezuela remained in jail on Monday and masked assailants burned a bus amid scattered unrest over swelling lines for basic goods, activists said. Police rounded up 16 people for protesting outside stores over the weekend, according to the opposition MUD coalition, which said four of them were released shortly after. Rights group Penal Forum said 18 protesters were still behind bars on Monday. The government did not confirm that. Venezuela is suffering from chronic shortages of goods ranging from diapers to flour that have worsened since an ebb in deliveries over Christmas. The scarcity has forced shoppers across Venezuela to line up in front of stores before dawn. The MUD […]

Posted On : Published By : Tom Whipple
Category:

China’s oil production increases

China says oil and natural gas production on a steady rise. (UPI/Shutterstock/project1photography) BEIJING, Jan. 13 (UPI) — Chinese data from Tuesday show crude oil production in 2014 increased nearly a full percentage point, staying above a threshold rate for five straight years. The Ministry of Land Resources reported total crude oil output increased 0.7 percent from 2013 to 1.53 billion barrels for full-year 2014. Data show it’s the fifth-straight year full-year output has stayed above the 1.5 billion barrel mark. Seven major oil fields contributed to the increase last year, with new facilities adding 73 million barrels for the full year. Natural gas production, meanwhile, increased 10.7 percent to 4.6 trillion cubic feet, with about 10 percent of that coming from shale reserves. China has the most technically recoverable shale natural gas reserves and the third highest shale oil reserves in the world, though complex geology makes it difficult […]

Posted On : Published By : Tom Whipple
Category:

‘Violent’ Piracy Seen in Southeast Asia as Global Attacks Slide

Pirates hijacked more oil tankers in Southeast Asia in 2014 even as attacks at sea declined globally to the lowest level in eight years, according to the International Maritime Bureau . Fifteen ships carrying mainly marine-fuel cargoes were attacked in Malaysia , Indonesia , Thailand and the Malacca Strait, the IMB said in its annual piracy report today. While that contributed to the global increase to 21 vessels from 12, the total number of “incidents” reported worldwide fell to 245, it said. That’s a 44 percent drop from when piracy in Somali waters peaked in 2011. “The global increase in hijackings is due to a rise in attacks against coastal tankers in Southeast Asia,” said Pottengal Mukundan, the director of the IMB. “Gangs of armed thieves have attacked small tankers in the region for their cargoes, many looking specifically for marine diesel and gasoil to steal and then sell.” […]

Posted On : Published By : Tom Whipple
Category:

China’s 2014 unconventional gas output soars 42% on year to 4.9 Bcm

Singapore (Platts)–14Jan2015/110 am EST/610 GMT China’s production of unconventional gas in 2014 totaled 4.9 Bcm, soaring 42% year on year, although this pace of increase will still fall short of official targets for 2015, data from the country’s Ministry of Land and Resources showed Monday. Coalbed methane output rose 23.3% year on year in 2014 to 3.6 Bcm while shale gas production was 1.3 Bcm, expanding by over five times from 2013, the ministry said. The shale gas output is just under the 1.5 Bcm that the ministry expected in September would be reached in 2014. China has targeted shale gas output to hit 6.5 Bcm/year by this year, the end of the current five-year economic plan. Article continues below… Platts Natural Gas Alert provides global coverage of the major natural gas and LNG markets, including real-time spot market transactions reported as deals are done and key end-of-day crude […]

Posted On : Published By : Tom Whipple
Category:

British economic slowdown dings oil prices

Low prices of oil starting to reflect trends in the global economy. (UPI/Shutterstock/Lilac Mountain) The price for Brent, the crude oil benchmark based on North Sea blends, was off close to 3 percent from the previous session to trade near the $46 per barrel mark, the second consecutive day below $50 per barrel and a 5 1/2-year low. Oil prices are off more than half their June value, falling as markets swing to the supply side in a weakened global economy. The British economy became the latest to show signs of a slowdown. The Office for National Statistics said Tuesday consumer price inflation in December was down 0.5 percent and 1 percent for November, some of the lowest rates on record . British economic data mirrors developments emerging elsewhere in the region. Inflation in an already struggling eurozone turned negative in December, driven in large part by falling energy […]

Posted On : Published By : Tom Whipple
Category:

Clash Looms Over Fuel Economy Standard

National Highway Safety Transportation Administration chief Mark Rosekind said the nation’s fuel efficiency mandate isn’t going to be sacrificed because gasoline has fallen to a six-year low in the U.S. Reuters Auto makers are on a collision course with U.S. regulators over the timetable to achieve stringent fuel-economy standards as cheap gasoline sends consumers flocking to less-efficient pickup trucks and sport-utility vehicles. Car companies are laying the groundwork to seek some relief when the targets come up for review by regulators in 2017, executives said at the North American International Auto Show in Detroit. They are in some cases already canvassing the White House, Capitol Hill and regulatory agencies to start lobbying for possible changes to fuel economy standards that take effect in 2022. The mileage targets, known as corporate average fuel economy, or CAFE, call for auto makers to sell a portfolio of light-duty cars and trucks averaging […]

Posted On : Published By : Tom Whipple
Category:

Obama Administration to Unveil Plans to Cut Methane Emissions

WASHINGTON — In President Obama ’s latest move using executive authority to tackle climate change , administration officials are announcing plans this week to impose new regulations on the oil and gas industry’s emissions of methane, a powerful greenhouse gas. The administration’s goal is to cut methane emissions from oil and gas production by up to 45 percent by 2025 from the levels recorded in 2012, according to a person familiar with Mr. Obama’s plans. The Environmental Protection Agency will issue the proposed regulations this summer, and final regulations by 2016, according to the person, whom the administration asked not to speak about the plan. The White House declined to comment on the effort. The new rules are part of Mr. Obama’s push for regulations designed to cut emissions of planet-warming greenhouse gases from different sectors of the economy. The White House says it can make the moves under […]

Posted On : Published By : Tom Whipple
Category:

US EIA sets 2016 natural gas price forecast at $3.86/MMBtu

Washington (Platts)–13Jan2015/428 pm EST/2128 GMT Spot natural gas prices at the benchmark Henry Hub in Louisiana are expected to average $3.86/MMBtu in 2016, the US Energy Information Administration said Tuesday in its first forecast for that time frame. The January Short-Term Energy Outlook also cut the agency’s 2015 natural gas price call to $3.44/MMBtu, which is 39 cents below last month’s forecast. In comparison, Henry Hub spot prices averaged $4.39/MMBtu in 2014, the agency said. In its outlook, EIA cut the price estimate for first-quarter of 2015 by 72 cents to $3.23/MMBtu, and it reduced its Q2 outlook by 33 cents to $3.30/MMBtu. The drop in near-term prices comes from a warm December, EIA Deputy Administrator Howard Gruenspecht said Tuesday on a conference call. Production also is playing a role, according to the outlook. "EIA expects the Henry Hub natural gas spot price to average $3.52/MMBtu this winter compared […]

Posted On : Published By : Tom Whipple
Category:

Short-Term Energy Outlook 2015 and 2016

The EIA has just released their Short-Term Energy Outlook  for January. They have now included their predictions for 2016. Here is what they expect for US C+C. I have made the first projected production for December 2014 though the EIA says they have production data for December. All date is in million barrels per day through December 2016. STEO Total US C+C The EIA is saying that US C+C will peak at 9.47 mb/d in May 2015, drop 330,000 barrels per day by September 2015 then recovers, apparently because the price of oil goes back. Or perhaps they have another reason. They do not have US production surpassing May 2015 until July of 2016. The EIA only gives C+C outlook numbers for domestic production. However they do project total liquids for all Non-OPEC nations. But first here is what they are predicting for US total liquids: STEO US Total […]

Posted On : Published By : Tom Whipple
Category:

EIA: US 2016 Oil Output Growth Seen Slowest In 5 Years

URL: http://www.rigzone.com/news/oil_gas/a/136735/EIA_US_2016_Oil_Output_Growth_Seen_Slowest_In_5_Years NEW YORK, Jan 13 (Reuters) – The U.S. government said on Tuesday it expects domestic oil output in 2016 to grow only 2.2 percent, the slowest pace in years, as the relentless rout in prices puts the brakes on the country’s five-year shale boom. In its first forecast for next year, the U.S. Energy Information Administration said domestic oil production will rise about 200,000 barrels a day to 9.5 million bpd in 2016. That amount in barrels is the smallest increase since 2011. While this would be the second-highest annual average level of production in U.S. history, the slowdown in growth reflects the long-term impact of plunging prices on output as drillers curb higher-cost capacity in some shale formations. "Many oil companies have cut back on their exploration drilling in response to falling crude prices and will concentrate their drilling activities in established areas that already have […]

Posted On : Published By : Tom Whipple
Category:

As Oil Plummets, How Much Pain Still Looms For US Energy Firms?

URL: http://www.rigzone.com/news/oil_gas/a/136705/As_Oil_Plummets_How_Much_Pain_Still_Looms_For_US_Energy_Firms With nearly a quarter of US energy shares’ value wiped out by oil’s 6-month slide, investors are wondering if the sector has taken enough punishment. NEW YORK, Jan 12 (Reuters) – With nearly a quarter of U.S. energy shares’ value wiped out by oil’s six-month slide, investors are wondering if the sector has taken enough punishment and whether it is time to pile back in ahead of earnings reports later this month. The broad energy S&P 1500 index gained more than 4 percent over the past month, suggesting many believe markets have already factored in the pain caused by oil prices tumbling by more than half since June below $50 a barrel. Yet since the start of this year, most energy stocks have given up some of those gains, revealing anxiety that some nasty surprises might still be lurking somewhere and that last month’s bounce may not […]

Posted On : Published By : Tom Whipple
Category:

Halliburton Cuts Jobs in Houston Amid Slumping Crude Oil

URL: http://www.rigzone.com/news/oil_gas/a/136736/Halliburton_Cuts_Jobs_in_Houston_Amid_Slumping_Crude_Oil Houston-based oilfield service major Halliburton is cutting jobs in Houston in response to the drop in crude oil prices, the company told Rigzone in an email release. The company did not say how many jobs it was cutting in Houston. “Halliburton continues to make adjustments to its workforce based on current business conditions. The company has made some workforce reductions in Houston,” Halliburton Public Relations spokesperson Chevalier Mayes said in the email release. “While these reductions are difficult, we believe they are necessary to work through this challenging market. We will continue to monitor the business environment closely and will make adjustments to the cost structure of our business as needed.” In December, Halliburton, which employees 80,000 workers in 80 countries, cut 1,000 workers in Europe, Asia, Africa, the Middle East and Australia due to falling oil prices. The company said then that the cuts were due […]

Posted On : Published By : Tom Whipple
Category:

Suncor Cuts Jobs, Spending as Oil Rout Rattles Canada

Suncor Energy Inc. (SU) , Canada ’s largest oil company, said it will cut 1,000 jobs, lower its 2015 capital budget by about 13 percent and delay projects to weather collapsing prices. The company will spend C$1 billion ($836 million) less this year than originally forecast in November, following Canadian Natural Resources Ltd. (CNQ) in revising its budget lower this week. Suncor also plans to reduce operating expenses by C$600 million to C$800 million in two years, according to a company statement today. “Cost management has been an ongoing focus, with successful efforts to reduce both capital and operating costs well underway before the decline in oil prices ,” Steve Williams , Suncor’s chief executive officer, said in the statement. “In today’s low crude price environment, it’s essential we accelerate this work.” The cuts are the latest blow to Canada’s energy industry and economy as plummeting prices reverberate in […]

Posted On : Published By : Tom Whipple
Category:

Arctic Explorers Retreat From Hostile Waters With Oil Prices Low

When Statoil ASA (STL) acquired the last of three licenses off Greenland ’s west coast in January 2012, oil at more than $110 a barrel made exploring the iceberg-ridden waters an attractive proposition. Less than two years later, the price of oil had been cut by almost half and Norway’s Statoil, the world’s most active offshore Arctic explorer in 2014, relinquished its interest in all three licenses in December without drilling a single well, Knut Rostad, a spokesman for the state-controlled company, said by e-mail. Statoil’s decision shows how the plunge in oil, with Brent crude trading at about $45 a barrel, has dealt another blow to companies and governments hoping to tap the largely unexplored Arctic. That threatens to demote the importance of a region already challenged by high costs, environmental concerns, technological obstacles and, in the case of Russia , international sanctions. “At $50, it just doesn’t […]

Posted On : Published By : Tom Whipple
Category:

Russia Facing Budget Cuts on Oil Price, Western Sanctions

By Andrey Ostroukh MOSCOW–Russia will have to cut budget spending this year as revenue declines due to Western sanctions and a fall in the price of oil, the country’s finance minister said Wednesday. Speaking at an annual economic conference, Anton Siluanov said that his ministry plans to cut budget costs by 10% across all sectors except for military spending. Russia is widely expected to slide into recession this year, while also suffering from double-digit inflation. The economic turbulence is the result of a rapid depreciation in the ruble, steered by sliding oil prices, massive capital flight and a geopolitical standoff with the West. Mr. Siluanov said that Russia has a $180 billion shortfall in revenues due to the drop in oil prices. A shortfall in revenues created by Western sanctions is expected to be between $40 billion and $60 billion, Mr. Siluanov added. The finance ministry will tap the […]

Posted On : Published By : Tom Whipple
Category:

EU Explores Russia Sanctions Options, Better Ties

ENLARGE German Chancellor Angela Merkel, bottom left, Russia’s President Vladimir, Putin, left, French President François Hollande, third right, and Ukraine’s President Petro Poroshenko, right, during the 10th Asia-Europe Meeting in Milan last year. The European Union discussion paper suggests the EU consider gradually start normalizing many aspects of its ties with Moscow. Agence France-Presse/Getty Images BRUSSELS—The European Union could significantly scale back sanctions and resume discussions with Russia on issues ranging from visa-free travel; cooperation with the Moscow-led Eurasian Economic Union; and the crisis in Libya, Syria and Iraq; if Russian President Vladimir Putin moves to end the crisis in eastern Ukraine, according to an EU discussion paper. While insisting the EU can’t return to “business as usual” with Moscow, the paper suggests the EU consider gradually normalizing many aspects of its ties with Russia in what would be a significant shift in relations. It says the change would […]

Posted On : Published By : Tom Whipple
Category:

Russian minister promises to limit government spending

MOSCOW (AP) — Russia’s finance minister has promised to maintain a tight lid on spending as the country faces its worst economic downturn in 15 years. Anton Siluanov said an earlier plan to boost government spending by nearly 12 percent this year is unrealistic, and some of the planned expenditures should be cut. He told an economic forum Wednesday that if oil prices average at $50 a barrel this year, government revenues will drop by around $45 billion compared to an earlier plan. The Russian ruble lost about half of its value last year under the combined blow of slumping global prices for oil and Western sanctions over Ukraine. The currency dropped about 1 percent in morning trading in Moscow, nearing 66 rubles per dollar. With oil trading at almost a six-year low, the World Bank on Wednesday sharply revised its predictions for Russia’s economy, foreseeing a 2.9 percent […]

Posted On : Published By : Tom Whipple
Category:

Lack of aid deepens suffering in conflict-hit east Ukraine

AP Photo/Mstyslav Chernov World Video Buy AP Photo Reprints Latest News DONETSK, Ukraine (AP) — Valentina Dudareva’s voice cracks with despair as she stands in the snow, surveying the bombed-out windows of her apartment block in Donetsk, the separatist capital in eastern Ukraine. Cold, poor and hungry, Dudareva is among the masses of people trapped by fighting between the government and Russian-backed militias, reliant on outside help that often fails to arrive. More than six months have passed since Dudareva last received her pension – and the Russian food aid packages so trumpeted by rebel authorities are nowhere to be seen. Anger she once reserved for the Ukrainian armed forces shelling the city is now directed at the separatist government. "They tell us: `Go to the theater. There are tickets for sale!’" Dudareva said, dabbing a handkerchief to her cheek. "But I want to eat. I want my pension." […]

Posted On : Published By : Tom Whipple
Category:

Hungarian Imports of Russian Diesel Fuel Via Ukraine Disrupted

BUDAPEST—Hungarian oil and gas company MOL Nyrt said on Tuesday that it has experienced disruptions in the supply of diesel fuel flowing through a pipeline from Russia via Ukraine. The company, which replied by email to questions posed by The Wall Street Journal, didn’t disclose the nature of the disruption. MOL said only that its “Russian partner fulfills its long-term contractual obligations.” Ownership of the diesel pipeline, however, has been in dispute between Ukraine and Moscow, as Kiev considers the Russian pipeline as Ukrainian property, a source close to the matter outside MOL said. MOL also imports crude oil from Russia via Ukraine, but the company said it hasn’t suffered disruptions so far and “hoped there won’t be any in the future.” MOL also said its refineries could be supplied with crude oil via an Adriatic pipeline, if necessary. Energy issues have been in the forefront in the bitter […]

Posted On : Published By : Tom Whipple
Category:

Why Is There So Little Action on Climate Change?

According to the World Bank , human-induced or “ anthropogenic ” climate change may raise the earth’s temperature by two degrees in the next 20 or 30 years. Once four degrees is reached—which may arrive by the end of this century—the polar ice will be gone, sea levels will have risen dramatically and extreme climate disruption will be a fact. But climate scientists aren’t sure what will happen in the gap between these two scenarios. No-one knows where the point of no return is located, nor what the consequences will be of current climate changes for the human species and the planet. In effect, humanity is playing a game of Russian roulette. So what’s getting in the way of taking the necessary action? To find out some answers to this question, I hosted a discussion in November of 2014 between George Marshall , the co-founder of the Climate Outreach […]

Posted On : Published By : ASPO-USA
Category:

Back to the Future? Oil Replays 1980s Bust

ENLARGE The discovery of oil from shale rocks means that U.S. output is faster paced. Drilling and hydraulically fracturing a well takes weeks, not years. Minneapolis Star Tribune/Zuma Press A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn’t keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Welcome to the world of oil in 2015—a repeat in surprising ways of the story 30 years ago. Between November 1985 and March 1986, the price of crude plunged by 67%. Between June 2014 and today, crude prices have fallen by 57% and could well head lower. After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there. Energy executives are now haunted by the question: Will it take as […]

Posted On : Published By : Tom Whipple
Category:

Could Global Tide Be Starting To Turn Against Fossil Fuels?

Turning tide image via shutterstock. Reproduced at Resilience.org with permission. From an oil chill in the financial world to the recent U.S.-China agreement on climate change, recent developments are raising a question that might once have been considered unthinkable: Could this be the beginning of a long, steady decline for the oil and coal industries? Boom may be turning to bust for fossil fuels. Market forces are combining with the prospect of new limits on carbon emissions from major economies such as China and the United States to prick the carbon bubble. Many analysts are now suggesting that — with prices falling and production costs rising — the coming year could be the moment when investors realize the game is up for the coal and oil industries. Nations found it hard to make progress at UN climate negotiations in Lima last year, making many observers skeptical of the prospects […]

Posted On : Published By : Tom Whipple
Category:

The central contradiction in the modern outlook: ‘Planet of the Apes’ vs ‘2001: A Space Odyssey’

 When talking about the perils of climate change or resource depletion, soil degradation or fisheries collapse, water pollution or nuclear waste–how annoying it is to have one listener respond dismissively, "They’ll figure something out. They always have." It’s a nonsense rejoinder and yet, it often gains the assent of many–as if this assertion were a self-evident truth that only an enemy of progress would question. And, that’s where we’ll start examining the central contradiction in the modern outlook–with a statement that is offered as if it were a scientific fact, when, in truth, it is nothing more than a piece of dogma enunciated by the religion we call modernism. At first glance, the statement seems backward-looking because it asserts that we humans have always averted catastrophe through our ingenuity. But, of course, this is complete hogwash. History is replete with civilizations that have risen and then fallen, crumbling for […]

Posted On : Published By : Tom Whipple
Category:

Brent Crude Falls Below $50 On Nagging Oversupply Fears

ENLARGE A petro-chemicals factory in Kawasaki, Japan, photographed last month. Oil prices fell lower in Europe Monday after tumbling below $50 a barrel in Asian trading. Reuters LONDON—Oil prices started the week deep in the red, falling to fresh 5½ year lows as analysts took an even more bearish outlook on crude. Over the weekend, Goldman Sachs and Société Générale joined the list of analysts who have slashed their oil-price forecasts projecting that crude’s dramatic slide since last summer could continue well into 2015. Crude futures have fallen more than 50% since a peak in June on the back of strong global supply and lackluster demand. Brent crude for February delivery on London’s ICE Futures exchange fell 2.5% to $48.86 a barrel, trading near its lowest levels since April 2009. On the New York Mercantile Exchange, front-month WTI futures shed 2.3% to trade at $47.25, after losing 8.2% last […]

Posted On : Published By : Tom Whipple
Category:

Oil rout takes Brent to near six-year low

Crude oil approached six-year lows on Tuesday after a leading Opec producer said the cartel would not change its strategy to hold production at current levels, adding that a rebound in prices was unlikely. Brent crude, the international benchmark, and West Texas Intermediate have fallen almost 60 per cent since the middle of June to levels last seen in early 2009. ICE February Brent fell as far as $45.23 a barrel before recovering to $45.39 a barrel, down $2.04 in early trading. Nymex February West Texas Intermediate declined $1.57 to $44.50. More On this topic IN Commodities Speaking at an energy conference in Abu Dhabi, Suhail bin Mohammed al-Mazroui, the oil minister for the United Arab Emirates, said that he was confident that Opec’s November decision made in Vienna was the right one “The strategy will not change . . .” he said of the move to keep output at its existing […]

Posted On : Published By : Tom Whipple
Category:

Oil Spread Shows Saudi Shale Strategy Working

International crude oil prices are close to undercutting the main U.S. grade for the first time in 18 months, a signal to Societe Generale SA that Saudi Arabia’s strategy of curbing growth in shale production is working. The CHART OF THE DAY shows how West Texas Intermediate, the U.S. oil grade traded in New York, cost $1.28 a barrel less than Brent, the international benchmark, at 9:30 a.m. in London today. A year ago, the American price was $15.49 lower, fortifying the nation’s refineries with cheaper feedstocks and hastening a slump for European processors. The gap is narrowing in part because Saudi Arabia is leading the Organization of Petroleum Exporting Countries in maintaining crude production amid a global surplus. The strategy is to curb output growth from shale formations and higher cost producers. A narrower gap helps make international crudes more attractive to U.S. refiners while a wider one […]

Posted On : Published By : Tom Whipple
Category:

U.A.E. Sticks With Oil Output Boost Even as Prices Drop

The United Arab Emirates will stick with a plan to increase oil-production capacity to 3.5 million barrels a day in 2017 even as an oversupply pushed prices to the lowest in more than five years. “In this time of unstable oil prices, we are showing in Abu Dhabi and across the country that we remain dedicated to reach our long-term production goals,” Energy Minister Suhail Al Mazrouei said in a presentation in Abu Dhabi yesterday. “Our investments remain there.” Oil fell to the lowest level since March 2009 yesterday after Goldman Sachs Group Inc. (GS) and Societe Generale SA (GLE) cut their price forecasts. Venezuela called on producers in the Organization of Petroleum Exporting Countries to work together to lift prices back toward $100 a barrel. The U.A.E., the fifth-largest OPEC member, produced 2.7 million barrels a day last month and has a current capacity of 3 million barrels […]

Posted On : Published By : Tom Whipple
Category:

Oil Drops Below $45; U.S. Stockpiles May Speed Collapse

Oil extended losses to trade below $45 a barrel amid speculation that U.S. crude stockpiles will increase, exacerbating a global supply glut that’s driven prices to the lowest in more than 5 1/2 years. Futures fell as much as 4 percent in New York , declining for a third day. Crude inventories probably gained by 1.75 million barrels last week, a Bloomberg News survey showed before government data tomorrow. The United Arab Emirates , a member of the Organization of Petroleum Exporting Countries, will continue to expand output capacity, while shale drillers will probably be the first to curb production as prices fall, according to Energy Minister Suhail Al Mazrouei. Oil slumped almost 50 percent last year, the most since the 2008 financial crisis, as the U.S. pumped at the fastest rate in more than three decades and OPEC resisted calls to cut production. Goldman Sachs Group Inc. said […]

Posted On : Published By : Tom Whipple
Category:

Nearly 2% Of Global Crude Could Be Cash Negative at $40 Brent

URL: http://www.rigzone.com/news/oil_gas/a/136693/Nearly_2_Of_Global_Crude_Could_Be_Cash_Negative_at_40_Brent Wood Mackenzie concludes that producers could start shutting in production at $40/bbl Brent crude or lower, causing a significant reduction in global supply. A recent analysis by Wood Mackenzie found that 1.6 percent, or 1.5 million barrels of oil per day (MMbopd), of global oil supply could be cash negative on an operating basis if Brent crude falls to $40/barrel. Wood Mackenzie’s analysis of 2,222 producing oil fields, which account for 75 million barrels per day of total liquids production, determined at three price points the impact on oil production and percentage of global supply which will turn cash negative. The firm concluded that producers would begin shutting in production at $40/bbl Brent crude or lower, to a point where a significant reduction in global supply would result. “The cash operating cost for oil fields becomes very important as prices producers can achieve for the oil they […]

Posted On : Published By : Tom Whipple
Category:

Iran out billions of dollars in oil revenue

Iran says oil losses are heavy in part because of Western sanctions curbing exports. (UPI/Shutterstock/sakhorn) TEHRAN, Jan. 12 (UPI) — A decline in oil exports, largely because of Western economic sanctions, has cost the Iranian economy more than $100 billion, a senior official said. Iran under the terms of a November 2013 agreement is allowed some oil exports in exchange for commitments to curb some of its nuclear research activity. Mohsen Rezaei , secretary of the influential Expediency Council, said exports since have dropped by 1.5 million barrels per day and inflicted more than $100 billion in revenue losses . Iranian officials have said the government is working to decrease the share of oil revenues in the budget. The government in early January said non-oil exports from the beginning of the Iranian year, which starts in March, increased to $35 billion, or about 20 percent year-on-year. Iran emerged from […]

Posted On : Published By : Tom Whipple
Category:

Goldman Sees Need for $40 Oil as OPEC Cut Forecast Abandoned

Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market. The bank reduced its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year, according to an e-mailed report. Excess storage and tanker capacity suggests the market can run a surplus far longer than it has in the past, said Goldman analysts including Jeffrey Currie in New York . The U.S. is pumping oil at the fastest pace in more than three decades, helped by a shale boom that’s unlocked supplies from formations including the Eagle Ford in Texas and the Bakken in North Dakota. Prices slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted output cuts even amid a global […]

Posted On : Published By : Tom Whipple
Category:

Oil dives anew, falling 5 percent on Goldman downgrade, outages

NEW YORK (Reuters) – Oil fell 5 percent to its lowest in nearly six years on Monday, extending the second-deepest rout on record, after Goldman Sachs warned that prices would fall further and Gulf oil producers showed no sign of cutting output. An unusual spate of major refinery glitches across the U.S. East and Midwest added to the concerns, threatening to accelerate a buildup of surplus crude. Brent LCOc1 fell $2.68, or more than 5 percent, to settle at $47.43 a barrel, its third-largest one-day decline since 2011 and its lowest close since March 2009. The decline was the 10th in the past 12 sessions. U.S. crude CLc1 settled down $2.29 at $46.07, leading losses across the complex. Gasoline RBc1 and ultra-low sulphur diesel (ULSD) HOc1 futures fell by around 3 percent as refinery outages spurred some prompt buying. "I figured we’d see $40 in the near term, but […]

Posted On : Published By : Tom Whipple
Category:

Rig maker Lamprell expects tough year

Rig company Lamprell says low oil prices may mean fewer customers in 2015. (UPI/Shutterstock/James Jones Jr.) SHARJAH, United Arab Emirates, Jan. 12 (UPI) — Emirati rig builder Lamprell said Monday it expects the weak market for crude oil will impact its ability to land new contracts in 2015. The oil services company said it had a strong year in 2014, but didn’t anticipate a replication of that success . "With the recent slump in the oil price, winning work in 2015 is going to be a challenge as the industry adjusts to the new realities," Chief Executive Officer Jim Moffat said in a statement. Oil prices have lost roughly half of their value since June as markets tilt toward the supply side in a weakened global economy. The price is forcing some industry leaders to cut back on capital spending plans for 2015, which is spilling over into secondary […]

Posted On : Published By : Tom Whipple
Category:

Iraqi forces repel IS attacks on key locations

A soldier stands guard over the Baiji refinery. (AYMAN OGHANNA/Iraq Oil Report) Militants from the so-called Islamic State (IS) group attempted surprise offensives on key, hard-won locations in northern Iraq, to no avail.Federal government forces repelled attacks on the Baiji refinery and the Samarra dam, while Kurdish forces weathered offensives targeting Kirkuk and the city of Gwer, near Erbil.The Baiji attack began on Sunday morning, when IS militants sent a car laden with explosives to the outer ring of security at the Baiji refinery, according to a senior offi…

Posted On : Published By : Tom Whipple
Category:

Winston Churchill’s map of Iraq ready to unravel over oil

Winston Churchill, at the time Britain’s colonial secretary, is front and centre at the 1921 Cairo conference that set Iraq’s borders. Also in the picture are the Arabist Gertrude Bell (second from left, second row) and Lawrence of Arabia (fourth from right, second row). Getty Images Related Topics: Oil Winston Churchill understood the significance of the black stuff seeping to the surface in the Kurdish plains of Mesopotamia when he included the region within Iraq as the British forged the country in the 1920s. In doing so, Churchill, the colonial secretary at the time, set in train almost a century of bickering between the Iraqi government and its Kurdish enclave over the area’s estimated 45 billion barrels of crude. While their latest dispute was temporarily resolved last month to help finance the struggle against ISIL, the accord has not addressed differences between administrations in Baghdad and Erbil that include […]

Posted On : Published By : Tom Whipple
Category:

Venezuela Woos Qatar as Oil Rout Exacerbates Cash Crunch

Venezuelan President Nicolas Maduro is seeking several billion dollars from Qatari lenders to help plug a budget gap after oil lost more than half its value. “We’re finalizing a financial alliance with important banks from Qatar that will give us sufficient oxygen to help cover the fall in oil prices and give us the resources we need for the national foreign currency budget,” he said on state television. Maduro, Hugo Chavez ’s hand-picked successor, is turning to Asia and the Middle East for relief as crude’s nosedive of more than 50 percent erodes international reserves and funding options. Boasting the world’s biggest oil reserves, the Latin American nation has seen its crude output slump since 2008 and imports of refined products surge as state-owned Petroleos de Venezuela SA revenue is diverted to social programs and fuel subsidies. The financing would be for “various” billions of dollars for 2015 and […]

Posted On : Published By : Tom Whipple
Category:

India gets $4 billion solar energy promise

India gets $4 billion solar energy pledge on sidelines of major investment conference. UPI/Stephen Shaver AHMEDABAD, India, Jan. 12 (UPI) — With New Delhi praised for its renewable energy role, Indian conglomerate Adani Enterprises said it signed a $4 billion solar agreement with a U.S. company. Adani signed a memorandum of understanding with solar energy services company SunEdison to produce enough solar panels to develop a sustainable green power sector in India. "India has embarked on an ambitious program to become a world leader in power generation from renewable technologies, and sees solar as a key part in realizing that goal," Vneet S Jaain, chief executive officer of subsidiary Adani Power Ltd., said in a statement Saturday. The agreement was signed on the sidelines of an Indian investment conference, attended by U.S. Secretary of State John Kerry . From auto giant Ford Motor Co., to companies like SunEdison, the […]

Posted On : Published By : Tom Whipple
Category:

China December trade more robust than expected, but concerns linger

BEIJING/SHANGHAI (Reuters) – China’s December trade data beat expectations, as demand from a stronger U.S. economy helped offset weakness in Europe and Japan while Chinese bargain-shopping in commodities markets put a floor under sliding imports. But while exports grew faster and imports shrank less than forecast, trade officials warned of more headwinds to come in the first quarter. Policymakers are trying to steer the world’s second-largest economy through a soft patch as it confronts weak demand and a slowdown in its property market. Exports in December rose 9.7 percent from a year earlier in dollar-denominated terms, data from the General Administration of Customs showed on Tuesday, handily beating a Reuters poll by nearly three full percentage points. Imports dropped by only 2.4 percent, where analysts’ consensus was for a far steeper decline of 7.4 percent. Officials were cautious when discussing how much positive momentum trade will deliver. "We think […]

Posted On : Published By : Tom Whipple
Category:

China Wins From Commodity Slump as Collapse Spurs Imports

China is emerging a winner from the collapse in commodities prices to the lowest in 12 years as the world’s second-largest economy buys a record amount of raw materials. Imports of crude, copper, iron ore and soybeans climbed to records in 2014 as prices tumbled, customs data showed today. The Bloomberg Commodity Index of 22 energy, agriculture and metal products slid to the lowest level since November 2002 yesterday after dropping 17 percent last year. A rout in energy prices is leading commodities lower amid speculation supplies of raw materials from crude to copper are outpacing demand and as a stronger dollar diminishes their allure. China’s seeking to benefit by boosting purchases and filling its stockpiles even as economic growth slows. “China is taking advantage of an extensive slump in raw material prices to purchase from overseas, which is especially reflected in oil and iron ore,” Guo Chaohui, a […]

Posted On : Published By : Tom Whipple
Category:

Canadian Natural Slashes Spending, Production Targets

CALGARY— Canadian Natural Resources Ltd. , one of Canada’s largest oil and gas producers, cut its full-year capital spending plans and production forecast on Monday, citing the rapid drop in crude oil prices since setting its initial 2015 budget in early November. The Calgary-based company said it would spend 6.2 billion Canadian dollars ($5.25 billion) on growth projects, down from an earlier target of C$8.6 billion, and increase production of crude oil and natural gas liquids about 7% over 2014 levels, down from an earlier projection of around 11% growth. The moves come after the Canadian unit of Royal Dutch Shell PLC on Friday said it would cut up to 10% of its oil sands mining workforce due to lower crude prices. The slump in global oil prices is expected to trim profit and slow growth at many energy producers, especially those with higher cost operations. Canadian Natural said […]

Posted On : Published By : Tom Whipple
Category:

Halcón Resources Reduces 2015 Budget

Halcón Operations in Bakken In a press release on January 8th, Halcón Resources executives announced that they will slash their drilling and production budget almost in half for 2015. The Houston-based company affirmed it will reduc eoperations in the Bakken to two rigs in the Fort Berthold area of North Dakota. Read here for more about Halcón in the Bakken This is the second round of cuts for the Bakken producer in less than two months due to the continued decline in oil prices. Projected spending for the company is set at between $375 – 425 million, which represent a steep decline from 2014 numbers of $950 million. Even with decreased spending for 2015, production is expected to increase to an average 40,000-45,000 barrels per day this year, compared to 43,554 b/d in the third quarter of 2014. Halcon CEO Floyd Wilson says that, “Our plan is to deploy capital to […]

Posted On : Published By : Tom Whipple
Category:

North Dakota Rig Count Drops Sharply As Oil Price Tumbles

URL: http://www.rigzone.com/news/oil_gas/a/136715/North_Dakota_Rig_Count_Drops_Sharply_As_Oil_Price_Tumbles WILLISTON, N.D., Jan 12 (Reuters) – The number of drilling rigs operating in North Dakota’s oil fields fell to 159 on Monday, the lowest level since November 2010 and the latest reaction to falling crude oil prices, according to state data. Overnight the state lost eight rigs, a steep one-day drop not seen for years in the No. 2 U.S. oil producer. Rigs are typically contracted by oil producers to bore through the earth and create horizontal wells. The rigs then move on, and the wells are hydraulically fractured, or "fracked." The number, which is tracked closely throughout North Dakota, comes after Continental Resources Inc, Oasis Petroleum Inc and other companies slashed planned spending for 2015, openly admitting they planned to use few rigs this year. The rig count is widely seen as a key barometer of an oil field’s health and longevity. More rigs means more […]

Posted On : Published By : Tom Whipple