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The Oil Plunge: The Facts & Why We Should Care

According to The Wall Street Journal four of the five worst stocks in 2014 were oil/energy related and the fifth was Avon .  Gas prices were cheaper and women were opting for more expensive cosmetics? I’m guessing that’s probably not the case. TRANSOCEAN LTD. – DOWN 62% DENBURY RESOURCES INC. – DOWN 50% NOBLE CORP. – DOWN 47% ENSCO PLC – DOWN 46% AVON PRODUCTS INC. – DOWN 44% Prices at the Pump Gas prices at the pumps hit a four year all time low , which is great for us; but, does this savings come at too high of an eventual cost or are we just really looking for problems where there aren’t any?  There is no simple answer if there is one at all.  Economists, environmentalists, scientists and politicians all have theories (often conflicting) but do have one slick concept in common- peak oil. Peak Oil The […]

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Brent turns lower, heads towards $57 as supply glut fears prevail

LONDON (Reuters) – Brent crude LCOc1 slipped towards $57 after an early rise above $58 on Friday, as the glut of oil that has halved prices since June overshadowed investors repositioning at the start of the year for an eventual recovery. Brent has fallen to its lowest since 2009 as top exporter Saudi Arabia has declined to cut production in the face of fast-growing U.S. shale oil output, despite pleas from other members in the Organization of the Petroleum Exporting Countries (OPEC). "Nothing has changed on the supply side. Unless there are some supply cuts, oil markets can’t be strong at the moment," said Ken Hasegawa, commodity sales manager at Tokyo’s Newedge Japan. Brent crude LCOc1 for February delivery was down 24 cents at $57.09 at 0843 GMT (0343 ET), almost $1.50 below the day’s high at $58.54, which was hit within 30 minutes of the open of trading. […]

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Oil Prices Start Year on Volatile Note

ENLARGE A gas price of $1.94 a gallon for regular gas is shown at a gas station in Cleveland on Wednesday. The average cost of gas in Ohio has dipped below $2 a gallon for the first time in more than five years. Associated Press LONDON—Oil prices began the New Year on a volatile note on Friday as Brent whipsawed between gains and losses after closing 2014 at more-than five-year lows. The price of Brent, the global benchmark, nearly halved in 2014, the steepest fall since the recession of 2008, as fears of global oversupply coupled with lackluster demand engulfed the market. In thin holiday trade on Friday, front-month Brent futures were up 0.5% at $57.63 a barrel on London’s ICE exchange, after dropping to an intraday low of $57. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $53.65 a barrel, […]

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Crude Oil Trades Near 5 1/2-Year Low Amid Manufacturing Weakness

Oil traded near its lowest closing price since mid-2009 amid signs of manufacturing weakness in Europe and China . Futures headed for a sixth weekly loss in New York and London. Euro-area manufacturing expanded less than initially estimated in December as growth rates for output, new orders and employment remained near stagnation. The bloc’s currency weakened to a 4 1/2-year low against the dollar. A manufacturing gauge in China, the world’s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday. “China PMI was more of the same while we are seeing weaker than expected PMI in Europe,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “This adds to the support for the dollar. So we are kicking off 2015 with a strong dollar and weak oil theme.” Oil slumped 46 percent in New York in 2014, the […]

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Saudi Arabia’s Half-Off Sale On Crude Oil

Saudi Arabia’s Half-Off Sale on Crude Oil. Global Demand Strong Despite Weakness in OECD. Supply Issues Remain in the Hands of Saudi Aramco. Why would anyone sell seven widgets for $50 a widget (total revenue: $350) when they could sell six of the widgets for $100 per widget (total revenue: $600) and just keep the seventh widget in a garage to sell later? No rational person would do this, unless there were other considerations at work. Yet this is precisely the current situation with Saudi oil exports. Few people doubt that Saudi Arabia could have held oil prices in the $100 per barrel range by cutting exports to six million barrels per day (bpd) as it did previously on several occasions over the past three years. Instead, Saudi oil exports have remained in the seven million bpd range. This together with weak demand in Europe and Japan (two of […]

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Gunmen kill 3 Sunni clerics in Iraqi city of Basra

BAGHDAD (AP) — Gunmen killed three Sunni clerics near the mostly Shiite city of Basra in southern Iraq, a government spokesman said Friday, an apparent sectarian attack that drew immediate calls for calm. Interior Ministry spokesman Saad Maan told The Associated Press that the assailants ambushed a car Thursday night carrying the clerics in the mostly Sunni district of Bab al-Zubeir near Basra, shooting dead the three and seriously wounding two other clerics traveling with them. The ministry, he said, was investigating the killings. He gave no other details. There was no claim of responsibility for the ambush and no reports of retaliatory attacks by Sunnis. Iraq’s sectarian violence peaked in 2006-07, when thousands of Shiites and Sunnis perished in attacks. The violence later eased but has partially resumed after Sunni militants of the Islamic State group swept across much of northern and western Iraq last year. Shiites make […]

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Iran says Saudi Arabia should move to curb oil price fall

DUBAI (Reuters) – Falling world oil prices will hurt countries across the Middle East unless Saudi Arabia, the world’s biggest crude exporter, takes action to reverse the slump, Iran’s deputy foreign minister told Reuters. Hossein Amir Abdollahian described Saudi Arabia’s inaction in the face of a six-month slide in oil prices as a strategic mistake and said he still hoped the kingdom, Tehran’s main rival in the Gulf, would respond. Oil prices closed on Wednesday at a 5-1/2 year low, registering their second-biggest ever annual decline after OPEC oil exporters, led by Saudi Arabia, chose to maintain oil output despite a global glut and calls from some of the cartel’s members – including Iran and Venezuela – to cut production. "There are several reasons for the drop of the price of oil but Saudi Arabia can take a step to have a productive role in this situation," Abdollahian said. […]

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Falling Oil Price Poses Tough Challenge for West African Rulers

ENLARGE Cameroon’s President Paul Biya and his wife, Chantal Biya, arrive for a White House dinner in August. Reuters Some of Africa’s most entrenched leaders are facing an unprecedented challenge from an unexpected foe: falling oil prices. Rulers of a cluster of nations along Africa’s oil-rich Atlantic coast have long used crude revenue to consolidate their power, reward political allies and subsidize basic goods and services. As oil prices decline, that formula for maintaining power looks increasingly inadequate for rulers such as Angola’s José Eduardo dos Santos. “If the drop in prices continues, he will be in free fall,” said Ricardo Soares de Oliveira, a political scientist at the University of Oxford. For more than 30 years in office, Mr. dos Santos has relied on the proceeds from oil sales. If that revenue continues to shrink, “the very assumption that this regime is able to weather all sorts of […]

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Three Gorges breaks world record for hydropower generation

YICHANG, Jan. 1 (Xinhua) — China’s Three Gorges Power Plant generated 98.8 billion kilowatt-hours (kwh) of electricity in 2014, beating the world record for hydropower generation set by Brazil’s Itaipu hydroelectric plant, according to the China Three Gorges Corporation on Thursday. Though with a much smaller installed capacity, Brazil’s Itaipu hydroelectric plant has long been the champion of world hydropower generation. It generated 98.6 billion kwh of electricity in 2013. The China Three Gorges Corporation said 98.8 billion kwh is the equivalent of saving 49 million tonnes of coal consumption and preventing the emissions of carbon dioxide by 100 million tonnes. The Three Gorges Power Plant, the world’s largest hydropower station, has an installed capacity of 22.5 million kw. The Itaipu hydroelectric plant has an installed capacity of 14 million kw.

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Trucks Triumph in 2014 as Cheap Fuel Frees U.S. Consumers

Fresh from a fifth year of growth in the U.S., carmakers are rolling into the new year with yet another sign of good fortune: Cheap fuel is gassing up truck sales. Consumers bought more pickups, minivans and sport utility vehicles than cars in every month of 2014. That’s something Detroit ’s carmakers and their rivals haven’t enjoyed since 2004 when a barrel of oil sold for less than $40. And the industry’s bonanza in the world’s most valuable market should continue. Hot-selling pickups like the Ram 1500 and luxury SUVs such as the Cadillac Escalade command higher prices and fatter profits than most passenger cars. Available credit, cheap gas, and good lease deals have given consumers the confidence to buy more of both. All automakers are projected to report on Monday that sales rose in December. Last month’s annualized sales pace, adjusted for seasonal trends, may have been 16.9 […]

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AAA Sees U.S. Drivers Saving $75 Billion on Gasoline

The rout in crude oil prices may mean as much as $75 billion in gasoline savings for U.S. drivers in 2015, according to AAA. Americans saved $14 billion on the motor fuel last year compared with 2013, Heathrow, Florida-based AAA, the country’s largest motoring group, said by e-mail. Pump prices dropped a record 97 consecutive days to a national average of $2.26 a gallon yesterday, the lowest since May 12, 2009. A global glut of crude oil and a standoff between U.S. producers and the Organization of Petroleum Exporting Countries over market share has been a boon for consumers. U.S. production climbed in 2014 to the highest in three decades amid a surge in output from shale deposits. Oil capped its biggest annual decline since the 2008 financial crisis. “Next year promises to provide much bigger savings to consumers as long as crude oil remains relatively cheap,” Avery Ash, […]

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Get Used to Cheap Oil

ENLARGE Drilling for oil in North Dakota. U.S. production has soared to its highest level since 1986 due to new technologies enabling producers to access oil trapped in shale-rock formations. Minneapolis Star Tribune/Zuma Press Plunging oil prices in the second half of 2014 upended global economic forecasts, boosted consumer spending and roiled markets from Moscow to Midland, Texas. Now, analysts and investors—most of whom were caught off-guard when U.S. prices dropped from $107.26 a barrel in June to $53.27 a barrel Wednesday—are calling low prices the new normal. Investors and traders say a price recovery likely won’t come until the second half of 2015, as U.S. oil output keeps rising and subdued global growth weighs on demand. It will take months for the global glut of oil to shrink, market participants say. Producers will be slow to cut back on drilling, and consumers won’t change their buying habits right […]

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Good Times Run Out for Sand Producers

ENLARGE Freshly washed sand is sifted into piles, waiting to be dried, stored and shipped at Fairmount Santrol’s Wisconsin Industrial Sand Co. in Menomonie, Wis. Stephen Maturen for The Wall Street Journal “This isn’t our first rodeo” has become a catchphrase among oil-industry executives who are laying off workers and dialing back spending in the wake of tumbling crude-oil prices. But for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business—and not all of them are ready for the wild ride, industry analysts say. Sand is an important ingredient in hydraulic fracturing, or fracking, which has pushed American oil output above 9 million barrels a day, rivaling the production of Saudi Arabia or Russia. Sand companies’ biggest customers used to be golf courses and glass manufacturers, but the oil boom brought energy clients to their door and now roughly 60% […]

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Energy Partnerships Lose Allure as Oil Prices Fall

ENLARGE One of the hottest trends in the energy industry in recent years, oil-and-gas drilling partnerships, is looking increasingly iffy in the face of falling crude oil prices. By organizing themselves as partnerships, energy producers can avoid corporate taxes and offer hefty dividend-like payments that are popular with investors. Executives of the new firms have raised money easily. The partnerships helped bankroll the U.S. shale boom, spending billions to buy known oilfields from cash-hungry drillers that, in turn, wildcatted for new prospects. But the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. Many are saddled with heavy debt loads. Some, with less cash to pay out to investors, are now weighing whether to cut their payouts, executives say. Fearing such a move, investors have sent […]

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US shale boom is same as dotcom bubble, says Russian oil executive

A chapopero, literally the tar man, shows his oil-covered hands after cleaning a waist-deep pond of spilled crude oil in La Venta, Mexico Photo: AP He said the current oil market was similar to the rise of the technology sector more than a decade ago that saw companies’ stock prices surge before collapsing several years later. “The shale boom is on a par with the dotcom boom. The strong players will remain, the weak ones will vanish,” added Mr Fedun, who is worth around $4bn. Lukoil did not return calls from The Telegraph for further comment. The price of a barrel of Brent crude oil dropped 6.7pc to $72.58 on Thursday, while WTI fell 6.3pc to $69.05. The sharp falls came after Opec’s members agreed to keep oil production levels at 30m barrels per day (bpd), following three days of talks in Vienna. The meeting ended in anger, with […]

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Hundreds with oil company get layoff notices

The price of oil continues to drop, and that now means mass layoffs for oil workers in Bakersfield. The Employment Development Department showed 700 people to be laid off by Ensign Energy Services, but that bad news came very suddenly for families, even with the threat of low oil prices looming overhead for months. “I’ve got six kids,” said Edgar Salazar, choking back tears. “It’s stressful on a man. I have to support my family some way or another.” Salazar was laid off just before Christmas. He’s a 14-year veteran of the oil industry and has never been unemployed. Now, he’s a casualty of those drastic declines in oil prices. “I’ve never seen it this bad,” he said. On Jan. 1, 2014, the price of oil per barrel was $99. Now, it has dropped to $48. “It basically impacts your life,” said Salazar. “I’d rather pay $4.80 a gallon […]

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Russia oil output hits post-Soviet high, small firms help

MOSCOW (Reuters) – Russia’s 2014 oil output hit a post-Soviet record high average of 10.58 million barrels per day (bpd), rising by 0.7 percent helped by small non-state producers, Energy Ministry data showed on Friday. Oil and gas condensate production in December hit 10.67 million bpd, also a record high since the collapse of the Soviet Union. The data showed Russia’s so-called small producers, mostly privately held, increased their output by 11 percent to just over 1 million barrels per day. Crude oil exports via state monopoly Transneft fell 5 percent to 195.5 million tonnes due to rising domestic demand and refinery runs. Exports to China reached a new high of 22.6 million tonnes (452,000 bpd), up 43 percent on the year as Russia seeks to diversify its energy customers. Russian producers capitalized on rising oil prices in the first half of 2014, when they reached over $113 per […]

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Russia Pumps Most Oil Since Soviet Era With Sanctions Yet

Russian oil production rose to a post-Soviet record last month, showing how pumping of the nation’s biggest source of revenue has so far been unaffected by U.S. and European sanctions or a price collapse for the commodity. The nation increased output 0.3 percent to 10.667 million barrels a day, according to preliminary data today e-mailed today by CDU-TEK, part of the Energy Ministry. The figure is for crude and condensates, an ultralight oil that yields a greater proportion of high-value fuels. Production averaged 10.58 million barrels a day for 2014, also a post-Soviet record. The U.S. and the European Union imposed sanctions against Russia last year in response to the country’s annexation of Crimea and what they say was support for separatists in eastern Ukraine. Measures included targeting the country’s energy sector by banning exports of some equipment and technology. Russia gets about half of its revenue from oil […]

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Peak Oil from the Demand Side: A Prophetic New Model

Peak Oil from the Demand Side: A Prophetic New Model This is a Guest post by Avery Morrow Avery Morrow’s Internet Fancy The most attention-grabbing attempts to predict oil futures have come from geologists and environmental activists, who tend to look solely at production. An overlooked doctoral thesis by Christophe McGlade, Uncertainties in the outlook for oil and gas , in contrast, focuses on how both supply and demand might be constrained in the coming decades. Peak oil researchers should take note of McGlade’s thesis because he predicted, in November 2013, that oil prices would sink, and that they will stay low throughout the second half of this decade. I found this paper on Google Scholar and have no connection with the author, but I appreciate his careful consideration of peak oil arguments, and his ability to distance himself from the more narrow-minded aspects of both economic and geological thinking. […]

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Low Oil Prices in the New Year Are Screwing Petrostates

Low Oil Prices in the New Year Are Screwing Petrostates thumbnail Low oil prices in 2015 could spark an economic revival in the United States while impoverishing Russians, Venezuelans, and other petrostate citizens. The New Year starts with oil prices at their lowest since 2009. This week they dropped around $1, to $53.11 for West Texas crude and $56.75 for Brent traded in London. Oil prices have plunged partly because of the shale boom in the United States, the biggest oil importer in the world. Fracking has opened massive new supplies of oil in places like North Dakota, where drillers can’t find enough roughnecks to hire. Diminished demand from Europe and China, where economic growth has slowed, is also helping to suppress prices. Saudi Arabia, the world’s biggest oil exporter, has meanwhile maintained a steady flow of oil, even as the price has fallen by around 50 percent since […]

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Crude oil prices slide on last day of 2014

Crude oil prices moving toward historic lows as traders inch closer to ringing in 2015 UPI/John Angelillo NEW YORK, Dec. 31 (UPI) — Crude oil prices were pummeled in the early Wednesday session on dueling reports showing growing evolution in the U.S. oil market. West Texas Intermediate, the U.S. price index, fell nearly 2.8 percent below the close from the previous session to trade at $52.61 per barrel for the February contract. Brent, the global benchmark, was off nearly 3 percent from the previous day to trade at $57.90 per barrel. Crude oil prices this week saw a brief rally early Monday on word oil storage tanks in Libya were burning out of control following rebel action. Once a major market swinger, the glut of oil from the United States may be driving market mechanisms more than Libyan shortages. The American Petroleum Institute this week said total U.S. oil […]

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Hedge Funds Surrender to Oil Rout as Bullish Bets Drop

Workers connect drill bits and drill collars, used to extract natural petroleum, on… Read More Hedge funds finally pulled back from bets on higher oil prices as the market faced its worst year since 2008. Speculators reduced their net-long position in West Texas Intermediate crude for the first time in four weeks, cutting their holdings by 5 percent in the week ended Dec. 23, Commodity Futures Trading Commission data showed yesterday. Long wagers dropped the most since August. Prices tumbled today to the lowest level in more than five years as U.S. output climbed and the Organization of Petroleum Exporting Countries refused to make production cuts. The International Energy Agency and U.S. Energy Information Administration cut their estimates of 2015 global fuel consumption this month amid expectations for slower economic growth outside the U.S. “The weak physical fundamentals have weighed on the market,” Tim Evans , an energy analyst […]

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U.S. Oil Prices Fall 46% This Year, Steepest Loss Since 2008

ENLARGE NEW YORK—Oil futures closed the year at more-than five-year lows, as plentiful supplies and tepid demand continued to send prices plunging. Brent crude oil and gasoline futures both posted 48% losses in 2014, making them the worst performers among the 22 commodity markets tracked by the Bloomberg Commodity Index. U.S. oil futures dropped 46% in the year. Oil, gasoline and diesel markets all posted their largest annual losses since the global recession in 2008. Wednesday’s price drop marked a “poetic end to…what ended up being a difficult year for the oil and gas industry,” said Adam Wise, managing director at John Hancock Financial Services, who helps oversee about $7 billion in energy-related investments. Weak Chinese economic data weighed on the market Wednesday, along with U.S. inventory data showing that supplies in a key storage hub rose last week. Brent crude futures settled down 57 cents, or 1%, at […]

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NYMEX prompt-month gas closes below $3/MMBtu

Houston (Platts)–31Dec2014/455 pm EST/2155 GMT The NYMEX February natural gas futures contract tumbled 20.5 cents to a $2.889/MMBtu settlement as the market reacted to a smaller-than-expected gas storage withdrawal report and continued mild winter weather. Wednesday’s settlement price was the first time a front-month package closed below $3/MMBtu since September 25, 2012, and Wednesday’s settle was the lowest since September 24, 2012, when the prompt-month package settled at $2.837/MMBtu. Wednesday’s settlement price represents a slide of $1.60, or about 36%, since a recent prompt-month peak of $4.489/MMBtu on November 20. Phil Flynn, Price Futures Group senior market analyst, said a number of factors contribute to the natural gas’ stumble on Wednesday. "Obviously, the inventory report was very bearish, and the weather up until now has been warmer than normal, but in a larger sense, what is happening in oil prices is trickling down to natural gas," Flynn said. "There’s […]

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Decline In Oil Price Tops Industry News In 2014

URL: http://www.rigzone.com/news/oil_gas/a/136576/Decline_In_Oil_Price_Tops_Industry_News_In_2014 This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. As 2014 comes to a close, the oil and gas industry in Texas faces many challenges but none bigger than the decline in the price of crude oil and the failure of natural gas prices to rebound. The Texas Petro Index increased month after month in 2014, setting a new record each month until November when the slide in oil prices began. The TPI expanded for 58 consecutive months reaching a high of 312.9 in October. “The decline of the TPI from October to November likely marks the high point of the expansion of the upstream oil and gas economy that began in December 2009 and signals the onset of a significant cyclical contraction,” said Karr Ingham, the economist who created the TPI and updates it monthly. “If October […]

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OPEC December Crude Output Slips as Global Prices Tumble

OPEC oil output dropped less than 1 percent in December, the first month after the group refused to cut production in response to a rout in oil prices, a Bloomberg survey showed. Output by the 12-member Organization of Petroleum Exporting Countries slipped 122,000 barrels a day, or 0.4 percent, to 30.239 million, led by declines in Saudi Arabia, Libya and the United Arab Emirates, according to the survey of oil companies, producers and analysts. Brent and West Texas Intermediate futures dropped to the lowest levels since May 2009 today, capping the worst year since 2008. OPEC left its production quotas unchanged at a Nov. 27 meeting in Vienna, prompting speculation that the group will let crude slide low enough to slow U.S. production that’s climbed to the highest level in three decades . “Ultimately the big producers will make significant cuts to support prices,” Dan Heckman, Kansas City, Missouri-based […]

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OPEC Resolve on Supply Promises No Calm for Oil Markets: Energy

Oil’s biggest price swings in three years are poised to continue as OPEC cedes no ground to competing suppliers. Oil traders’ expectations for future swings, known as implied volatility, surged since Saudi Arabia and fellow members of the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep pumping crude despite a supply glut. That will mean prices fluctuating in the next several years by even more than the $58-a-barrel move in 2014, Bank of America Corp. says. “OPEC has always been there to lower volatility both on the upside and downside, but now they have less and less weight,” said Pierre Andurand , the London-based founder of Andurand Capital Management LLP, whose $350 million fund earned 18 percent in November from betting on lower Brent crude prices. “It means more volatility.” OPEC’s policy of testing rival producers’ tolerance for lower prices has sparked the search for a […]

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Analysis: 5 key takeaways from Iraq’s 2015 draft budget

Iraqi PM Haider al-Abadi (center) leads the Dec. 16, 2014, Iraqi Council of Ministers meeting. (Source: Iraqi Cabinet media office) Iraq Oil Report Recommend 5 people recommend this. Sign Up to see what your friends recommend. Prime Minister Haider al-Abadi’s Cabinet is trying to pull off a difficult balancing act – attempting to fund a war, reconstruct a country, and corral a fractured body politic, despite a devastating collapse in oil revenues.The 2015 budget bill is now with Parliament, which gave it a first reading on Dec. 25 and will hold a session on it next week, though a final vote is unlikely until later in January.The draft, obtained by Iraq Oil Report, makes several attempts to remedy past budg…

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Delek: Credit OK despite Israeli cartel claims

Credit rating stable despite evolving antitrust issues in Israeli offshore gas fields, Delek Group says. Photo by James Jones Jr./UPI TEL AVIV, Israel, Dec. 31 (UPI) — The ruling from the Israeli Antitrust Authority on regional natural gas monopolies had no impact on credit ratings, energy company Delek Group disclosed. A note from Midroog, a subsidiary of Moody’s rating agency, reviewed Delek in the wake of the ruling that a monopoly exists over Israeli natural gas reserves. Delek supplied the findings in a Tuesday release, saying the financial assessment of the company remained stable. Midroog in its report rated Delek Group at A1, or a low credit risk, and stable. "At this preliminary stage, we are continuing to monitor the developments and their possible implications on the debt rating in the short term and medium term, with emphasis on the company’s financial flexibility, operating strategy and structure of its […]

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Venezuelan economy slips into recession

Venezuelan President Nicolas Maduro says he’ll outline steps to fix the nation’s economy, as low oil prices push it into recession. File photo UPI CARACAS, Venezuela, Dec. 31 (UPI) — Venezuelan President Nicolas Maduro said he’d unveil economic reform efforts next year as an economy linked strongly to oil prices slips into recession. The Central Bank of Venezuela said the collapse in oil prices was in part to blame for a 2.3 percent drop in third quarter gross domestic product. That marks three straight quarters of decline for the member of the Organization of Petroleum Exporting Countries. With a reform agenda in mind, Maduro said that, with Venezuelan oil valued at around $46 per barrel, it was time to usher in an economic overhaul and a time for opportunity. "Awareness and national unity are required," he said. "Widespread debate and national commitment are needed." As part of the agenda, […]

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Oil Price Crash Claims First US LNG Project Casualty

URL: http://www.rigzone.com/news/oil_gas/a/136558/Exclusive_Oil_Price_Crash_Claims_First_US_LNG_Project_Casualty MILAN, Dec 30 (Reuters) – Excelerate Energy’s Texan liquefied natural gas terminal plan has become the first victim of an oil price slump threatening the economics of U.S. LNG export projects. A halving in the oil price since June has upended assumptions by developers that cheap U.S. LNG would muscle into high-value Asian energy markets, which relied on oil prices staying high to make the U.S. supply affordable. The floating 8 million tonne per annum (mtpa) export plant moored at Lavaca Bay, Texas advanced by Houston-based Excelerate has been put on hold, according to regulatory filings obtained by Reuters. The project was initially due to begin exports in 2018. Excelerate’s move bodes ill for thirteen other U.S. LNG projects, which have also not signed up enough international buyers, to reach a final investment decision (FID). Only Cheniere’s Sabine Pass and Sempra’s Cameron LNG projects have hit that […]

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China December factory PMIs suggest economy cooling further, more stimulus expected

BEIJING (Reuters) – China’s factory activity sputtered in December, underlining the challenges facing the country’s manufacturers as they fight rising costs and softening demand in a cooling economy. After a rough 2014, the world’s second-largest economy looks set to start the new year on a weak note, reinforcing expectations that Beijing will roll out more stimulus to avert a sharper slowdown which could trigger job losses and debt defaults. A property slump is expected to last well into 2015, companies will continue to struggle to pay off debt and export demand may remain erratic, leaving only the services sector as the lone bright spot in the economy. China’s official Purchasing Managers’ Index (PMI) slipped to 50.1 in December from November’s 50.3, a government study showed on Thursday, its lowest level of the year and clinging just above the 50-point level that separates growth from contraction on a monthly basis. […]

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China’s December manufacturing PMI retreats

BEIJING, Jan. 1 (Xinhua) — Chinese manufacturing activity waned slightly in December but is still expanding, official data showed on Thursday. The manufacturing purchasing manager’s index (PMI), a key measure of factory activity in China, posted 50.1 in December, down from 50.3 in November, according to data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP). A reading above 50 indicates expansion, while a reading below 50 represents contraction. The PMI of large manufacturers posted 51.4, down from 51.6 in November. That of medium enterprises stood at 48.7, up from 48.4 in November, but still contracting. The PMI of small manufacturers slumped to 45.5, down from 47.6 in November, and remained in the contraction territory, the NBS said. The production sub-index posted at 52.2 percent, down from 52.5 in November. The sub-index for new orders slipped to 50.4, down from 50.9 […]

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Some advice to those developing the Marcellus, from somebody who knows

Rodney White is wrapping up a lengthy career with Platts today, and he has watched up close the battles over developing the Marcellus and Utica shales, among other areas. Not only that, he lives in West Virginia, home to part of the Marcellus. Here are some of his departing thoughts for The Barrel. ——————— Most of the people, if not all, the people in the oil and gas industry I have worked with, have been professional and spoken truthfully about the issues that mean so much to folks who live in and around the Appalachian oil and gas fields. Some companies have gone the extra mile to make things right when things go wrong. They fix roads, clean up streams and try to be good neighbors. It isn’t easy for anyone. The Appalachian terrain is not easy to work in. The terrain is steep and narrow, hence the reason we have rock […]

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Oilfield Housing Firm’s Stumble May Herald More Oil Industry Pain

URL: http://www.rigzone.com/news/oil_gas/a/136573/Oilfield_Housing_Firms_Stumble_May_Herald_More_Oil_Industry_Pain WILLISTON, N.D., Dec 31 (Reuters) – A nasty profit warning and deep job cuts. A gutted capital budget, a suspended dividend and shares tumbling by more than half on a single day. The retrenchment at Civeo Corp, which provides temporary housing for oilfield workers and miners, is the most-severe symptom of pain inflicted on the oil service industry by the slide in crude prices, and may presage similar steps by peers. It also exposes the transient nature of the "man camp" business of dormitory-style temporary housing the company helped pioneer. Drilling, a barometer of oilfield activity, has been slowing for weeks as producers slashed spending plans by 20 to 40 percent. Baker Hughes reported last week the U.S. land rig count fell by 35 to 1,770 and hundreds more rigs will be idled, hitting scores of services companies from ones renting trailers to those repairing pumps. The […]

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Cheniere’s Corpus Christi LNG export project gains US FERC approval

Washington (Platts)–31Dec2014/453 pm EST/2153 GMT Federal regulators have approved Cheniere’s plan to export liquefied natural gas from Corpus Christi, Texas, following recommendations that the export facility and related infrastructure would result in minimal environmental impact if certain conditions are met. "We conclude that, with the conditions required herein, Corpus Christi Liquefaction’s project results in minimal environmental impacts and can be constructed and operated safely. Accordingly, we find that, subject to the conditions imposed in this order, Corpus Christi Liquefaction’s proposal is not inconsistent with the public interest," the Federal Energy Regulatory Commission said in an order Tuesday. Cheniere now awaits approval from the Department of Energy to export LNG from the project to countries that do not have free trade agreements with the US. DOE makes public interest determinations for energy export projects, while FERC is responsible for the export facility design, engineering and environmental footprint — a far […]

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Do Natural-Gas MLPs Face More Downside Ahead?

Sliding oil prices have been hurting natural gas. Will the ongoing oil-price rout cause further damage to master-limited partnerships that focus on natural gas? MLPs have already gotten clobbered in recent months as the price of oil has plunged, but analysts have been quick to note that MLP performance isn’t necessarily directly correlated with oil-price trends, and that many MLPs should hold up pretty well , particularly if they’re focused on non-oil energy sources like liquefied natural gas. But Reuters reports today that the oil-price drop has claimed its first LNG-project casualty, saying Excelerate Energy’s plan for an offshore Texas liquefied natural gas terminal has been put on hold. Oleg Vukmanovic reports for Reuters: A halving in the oil price since June has upended assumptions by developers that cheap U.S. LNG would muscle into high-value Asian energy markets, which relied on oil prices staying high to make the U.S. supply […]

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American Eagle Energy Halts Drilling Plans

American Eagle Energy Corp. said Wednesday that it has suspended its drilling operations and likely won’t resume until oil prices improve, the latest sign that a glut in crude oil is stifling exploration and production across the industry. Shares dropped 9.1% to 60 cents in light premarket trading. The stock is one of the hardest hit in the energy sector this year and approached $12 a share in November 2013. Oil prices have plummeted in the second half of 2014 as a flood of crude from U.S. shale disrupted the global oil market, leading a host of energy companies to cut drilling, lay off workers and slash spending. Earlier this month, Chevron Corp. told Canadian regulators that it had “indefinitely” suspended plans to drill for oil in Arctic waters. Energy giants ConocoPhillips and BP PLC, along with a number of smaller companies like Husky Energy Inc. and Penn West […]

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U.S. oil export policies increasingly fluid

Commerce Department showing some flexibility in what’s permissible for oil exports under existing legislation. UPI/Shutterstock/tcly WASHINGTON, Dec. 31 (UPI) — A company planning exports of so-called condensate from the United States said it’s operating according to precedent, though laws may be on the cusp of change. Data from the American Petroleum Institute show U.S. oil production is around 9.1 million barrels per day, the highest rate in roughly 40 years and an increase of more than 14 percent from last year. The increase in oil production is a direct result of activities in shale basins, notably the Eagle Ford and Bakken reserve areas in Texas and North Dakota, respectively. Conservative lawmakers have said the increase in a production means it’s time to relax laws that restrict crude oil exports. Arab members of the Organization of Petroleum Exporting Countries in the early 1970s placed an embargo on oil exports in […]

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Continental’s 2015 Bakken plans: $1.5 billion

Continental Resources production by geography for Q3 2014. IMAGE: CONTINENTAL RESOURCES Although Continental Resources, one of the Bakken’s most prolific producers, has reduced its 2015 operating and budgeting plans for all of its U.S.-based plays, the Oklahoma-based exploration and production firm still intends to spend roughly $1.5 billion in its Williston Basin operations. Continental had previously announced it’d be operating 19 rigs and investing $2.6 billion in western North Dakota, but, due to lower than expected crude oil prices, the firm now intends to run 11 rigs in the Bakken. The company plans to decrease its total operated rig count from roughly 50 to approximately 31 by the end of the first quarter 2015 and has decreased its previous estimated budget of $4.6 billion to $2.7 billion. “This revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015. This budget also […]

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ND population reaches all-time high

Ron Ness, president of the North Dakota Petroleum Council addresses a large crowd during a 1 million barrel celebration held in mid-2014. The celebration was highly attended by long-time and new residents of the Tioga and surrounding area communities North Dakota’s population has reached an all-time high of 739,482 residents, an increase of roughly 15,600 from last year’s count, largely due to the increased activity in western North Dakota, according to the U.S. Census Bureau. “Our economic growth over the last decade continues to keep North Dakotans home, and we are attracting new residents who come for good jobs, a stable community and a quality of life that is second to none,” said North Dakota Governor Jack Dalrymple. According to the U.S. Census Bureau, the state’s population has increased 2.2 percent since last year, the largest percent increase in the nation. North Dakota is also in the midst of […]

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Until oil prices recover, American Eagle suspends 2015 plans

Two American Eagle Energy wells shown producing in Divide County, North Dakota. PHOTO: AMERICAN EAGLE ENERGY American Eagle Energy may be situated in a Divide County, North Dakota, sweetspot, but the Denver-based exploration and production company has chosen to suspend its 2015 drilling schedule due to low crude prices. The company recently released its operations and guidance update, explaining that after drilling a well in November, the company has released the drilling rig and will complete two unstimulated wells before it halts drilling and completion activity for 2015 until oil prices recover. During the fourth quarter of 2014, American Eagle added three gross new operated wells and two gross operated wells that were recompleted to production. The Rick 13-31 well was stimulated earlier in mid-October and began producing oil in late October. During the first 30 days of production, the Rick well produced an average of approximately 267 barrels […]

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U.S. agency gives quiet nod to light oil exports

Full Article WASHINGTON (Reuters) – The main U.S. export authority is telling some oil companies that they should consider exporting a lightly processed form of crude oil called condensate without formal permission, according to people familiar with the discussions. In conversations that may help clear the way for more overseas sales of U.S. shale oil, the Commerce Department’s Bureau of Industry and Security (BIS) has told companies seeking clarification on the legal status of so-called "processed condensate" that self-classification – whereby companies export their product without any formal authorization – could be a way forward, the people told Reuters. An official familiar with the law said the agency’s discussions did not represent a change in policy since self-classification is allowed under U.S. export controls and is a routine, common practice for the majority of exports. Yet the message, though carefully couched as an informal suggestion, marks the first sign […]

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Polish shale still on international radar

BNK Petroleum, based in California, said it was looking for partners to help exploit potential shale natural gas reserves in Poland. (UPI Photo/Heinz Ruckemann) CAMARILLO, Calif., Dec. 31 (UPI) — Reservoir analysis of a natural gas well in Poland was encouraging enough to start looking for potential work partners, shale player BNK Petroleum said. BNK Petroleum, which has headquarters in California, said Wednesday it was reviewing data from a reservoir model analysis for a Polish shale natural gas well dubbed Gapowo B-1H. "The company believes that the encouraging modeling results, strong natural gas prices in Europe, and the company’s large Polish acreage position will be attractive to joint venture partners with the capacity to advance this project," it said in a statement. New drilling technologies like horizontal drilling and hydraulic fracturing, dubbed fracking, are used in shale deposits to access oil and gas reserves previously out of reach. Those […]

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Russia takes more action to prop up ruble

With Russian President Vladimir Putin blaming external factors for economic woes, Central Bank reveals efforts to prop up nation’s currency. File photo by Yuri Gripas/UPI MOSCOW, Dec. 31 (UPI) — With low oil prices and Western sanctions taking their toll, the Central Bank of Russia said it was forced to take action to keep the national currency stable. The Russian currency is recovering somewhat, valued at about 56.45 to the U.S. dollar, up from recent lows of around 65 rubles to the U.S. dollar. In mid-December, the Russian Central Bank raised its key interest rate by 6.5 percent to 17 percent in an effort to arrest the decline of the nation’s currency. In a Wednesday statement, the bank said it sold more than $80 million on the national currency market this week in an effort to keep the ruble stable . With the value slipping from 33 rubles to […]

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Russia takes steps to prop up struggling companies

An OAO Gazprombank logo, right, sits illuminated outside a bank branch against a backdrop of St Basil’s Cathedral near Red Square in Moscow, Russia, on Thursday, July 17, 2014. OAO Rosneft, Russia’s biggest oil company, natural gas producer OAO Novatek and OAO Gazprombank, the third-largest lender, are among those hit by the penalties, the U.S. Treasury Department said. Photographer: Andrey Rudakov/Bloomberg Russia has moved to support a number of large companies and banks as it tries to prop up a struggling economy and a banking sector battered by the rouble’s jitters. On Wednesday, the government said it would support Yamal LNG, the Arctic gas project of Novatek, with Rbs150bn. Separately Gazprombank, the country’s third-largest lender, said the government had bought Rbs39.95bn in preferred shares, using money from a subordinated deposit the bank had returned to the National Wealth Fund. “The conversion allows the bank to strengthen its capital structure […]

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Falling Oil, Commodities Prices Raise Headaches for Developing Nations

ENLARGE An aerial view of Petrobras’ Abreu e Lima oil refinery in Recife, Pernambuco state, Brazil. Agence France-Presse/Getty Images The drops last year in the prices of oil and other commodities are threatening to stunt growth in poor African and Latin American nations that sought to use vast natural-resource wealth to climb the development ladder. During a decadelong boom, governments on those continents vowed to use a windfall from surging raw-material prices to lift the vast underclass. Governments that sought big development leaps by funding social-welfare programs and ambitious infrastructure initiatives, such as building roads, ports and power plants, may now have less money to do so. “The good-governance records in many [Latin American] countries were linked to commodity prices, and this will be tested by the end of the commodity boom,” said Jorge Castaneda, Mexico’s former foreign minister. The commodity-rich nations of Africa and Latin America are also […]

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Are low oil prices here to stay?

What in the world? Pieces of global opinion A review of the best commentary on and around the world… Related Stories Today’s must-read Americans have become used to the bouncing cost of oil over recent years. Prices have spiked, causing angst and political posturing ("Drill, baby, drill" and all), and they’ve tanked following the economic upheaval of the Great Recession and the 9/11 attacks. The bottom has again dropped out of the oil market, as the cost per barrel has declined more than 40% since June. The change has been a welcome relief for consumers and energy-intensive industries, for which the change is an unexpected financial windfall. While most have a nagging suspicion that the drop is only temporary and prices will, at some point soon, begin an upward climb, Bloomberg View’s Mohamed A El-Erian isn’t so sure . What the world is currently experiencing is a "fundamental shift" […]

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Oil at $14 a barrel? Here’s how it could happen

No one really saw 2014’s dramatic plunge in oil price coming, so it’s probably fair to say that any predictions about where it’s going from here fall somewhere between educated guesses and picking a number out of a hat. In that light, it’s less than shocking to see one analyst making a case—albeit in a pure outlier sense—for a drop all the way below $14 a barrel. Abigail Doolittle , who does business under the name Peak Theories Research, posits that current chart trends point to the possibility that crude has three downside target areas where it could find support—$44, $35 and the nightmare scenario of, yes, $13.65. Make no mistake, she thinks that’s an extreme case. Her target for the more likely move is the $35 range, which in itself is quite a call considering light crude had been just above $100 a barrel this summer and the […]

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