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Natural-Gas Futures Prices Fall as Cold Forecasts Moderate

By Christian Berthelsen Natural-gas prices fell on Friday, extending a second day of losses, as uneven weather forecasts raised doubts about a predicted burst of below-normal temperatures in the U.S. that was expected to drive demand for gas-fired heating. The front-month February contract for natural gas settled down 3.1 cents, or 1%, at $3.1270 a million British thermal units on the New York Mercantile Exchange. The decline came after forecasters began to alter prior outlooks for the extreme cold, with a previously expected swell of much-below-normal temperatures over most of the U.S. beginning to recede. Still, futures posted a gain for the week, snapping a seven-week losing streak. Despite the advent of the peak winter-heating demand season and a larger-than-expected draw on supplies in data reported this week, natural-gas futures have struggled, as robust production from U.S. shale fields has ensured steady supplies. In weekly U.S. government inventory data […]

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US, Iranian opponents could blow up nuclear negotiations

Before meeting this week in Geneva with Secretary of State John Kerry, Iranian Foreign Minister Javad Zarif said he hoped to accelerate the drawn-out negotiations over a comprehensive nuclear deal. While Zarif did not specify the reason for expediting talks, pressures have been mounting in both countries from skeptics and outright opponents of an agreement. If the spoilers succeed in preventing a deal, the result could be an escalatory spiral of retaliatory measures. In the U.S. Congress, sponsors are lining up behind legislation limiting the foreign policy prerogatives of the executive branch. One bill, a revised version of legislation introduced in the last Congress by Sens. Mark Kirk, R-Ill., and Robert Menendez, D-N.J., but never voted on, threatens to restore restrictions on Iran’s battered energy sector if no comprehensive agreement is reached by July 6. According to a summary of the bill, the Nuclear Weapon Free Iran Act of […]

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Obama comes out swinging against new Iran sanctions

AP Photo/Evan Vucci Politics Video Buy AP Photo Reprints Latest News WASHINGTON (AP) — President Barack Obama came out swinging Friday against congressional attempts to slap fresh sanctions on Iran, warning such a move would likely destroy nuclear talks and increase prospects for a military showdown. Vowing to veto any sanctions that reach his desk, Obama pleaded, "Just hold your fire." In an unusual move by a foreign leader, British Prime Minister David Cameron said he was personally calling U.S. senators to say that new sanctions would drive a wedge through international unity. Standing side by side with Cameron at the White House, Obama said world powers would be sympathetic to Iran and would blame the U.S. if Congress moved ahead with more sanctions while fragile negotiations are under way. At that point, Obama argued, the world would lose its best chance to prevent Iran from obtaining a nuclear […]

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Crude Fall Prompts Proposals to Shield Colombian Drillers

Colombia is preparing measures to help oil producers including Ecopetrol SA and Pacific Rubiales Energy Corp. (PRE) cope with the crash in global prices as the Andean nation looks to protect its biggest source of revenue. Options include easing investment costs and reducing the amount of oil that goes to the government as a royalty, said Nicolas Mejia, vice president for promotion at Colombia’s hydrocarbons agency. Proposals put forward by several consultancies will be discussed at a Jan. 27 meeting with government ministers. West Texas Intermediate, a U.S. benchmark oil price, fell 46 percent last year. Oil accounts for about half of Colombia’s exports and is a key revenue generator for the government. The nation’s oil production averaged 988,100 barrels a day in 2014, the first drop in output since 2005 amid community protests and pipeline attacks. “Companies are calling for more favorable terms,” Mejia said in an interview […]

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Harvest seeks arbitration against Venezuela

Harvest Natural Resources Inc. , Houston, is seeking international arbitration against Venezuela, alleging the country’s government has thwarted efforts to sell its interest there. Through subsidiaries, Harvest owns 32% of Petrodelta SA, which produces oil in eastern Venezuela. The US company tried to sell the interest to state-owned PT Pertamina (Persero) of Indonesia and later to Pluspetrol Venezuela SA ( OGJ Online, Nov. 20, 2013 ). Harvest Pres. and Chief Executive Officer James A. Edmiston blamed the government for failure of those efforts. “Over the past decade, the Venezuelan government has violated Harvest’s rights as an investor by systematically thwarting the development of Harvest’s investment in Venezuela as well as the company’s ability to sell its interest there,” he said in a statement. Harvest has had interests in the Latin American country for 22 years. Affiliates HNR Finance BV and Harvest Vinccler SCA submitted a request for arbitration before […]

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Regional differences in China’s vehicle adoption reflect differences in income

Source: U.S. Energy Information Administration, based on the 2013 China Statistical Yearbook Note: Vehicle density covers private vehicles, including passenger vehicles, trucks, and other. Oil demand and imports in China have increased significantly as private passenger vehicle sales and use have increased. Sales of private passenger vehicles have grown by 29% annually over the past 13 years, which has increased gasoline consumption in China. China is currently the world’s second-largest oil consumer, behind the United States. Increased sales have mainly been focused in China’s wealthier, eastern provinces, where some provinces have now instituted policies to limit vehicle ownership. In other parts of the nation, the central government has encouraged policies to increase incomes, which will likely lead to increased vehicle use and energy consumption. The distribution of China’s current vehicle market generally reflects the regional differences in household and disposable incomes across the country. As of 2012, per capita […]

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Oil Companies Pump More U.S. Crude, Drill Fewer Wells

ByJeffrey Sparshott Oil and gas extraction surged in December from a month earlier, but the companies moving more crude out of the ground are drilling fewer wells. Getty Images The oil industry is at a crossroads. Figures in the Federal Reserve’s December industrial production report show oil and gas extraction surged last month, rising 2.8% from November. But the same companies that are pumping more crude out of the ground are drilling fewer wells. Drilling activity sank 1.9%, the third consecutive monthly drop. The mismatch in activity follows a crash in oil prices. Crude has lost more than half of its value since the summer amid booming U.S. production and weak global demand. Global Brent crude contracts traded below $50 a barrel on Friday . “The continued rise in oil output suggests the marginal cost of production is below $50, so if OPEC wants to hurt U.S. shale  output […]

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BHI: US rig count plunges 74 units, hits lowest total since October 2010

HOUSTON, Jan. 16 01/16/2015 The US drilling rig count plunged 74 units—all on land—to settle at 1,676 rigs working during the week ended Jan. 16, Baker Hughes Inc. reported. That’s the lowest total since the Oct. 29, 2010, rig count, which totaled 1,672. The count has now fallen in 7 consecutive weeks, during which time it has lost 244 units ( OGJ Online, Dec. 5, 2014 ). The US has 101 fewer rigs compared with this week a year ago. Land rigs have plummeted 134 units in the last 2 weeks to settle at a total of 1,610. Unchanged from a week ago were offshore rigs at 54 and rigs drilling in inland waters at 12. Oils rigs this week dropped 55 units to 1,366. Gas rigs dropped 19 units to 310. Horizontal drilling rigs plunged 48 units to 1,253. Directional drilling rigs dropped 8 units to 153. Canada […]

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Sharp drop in US rigs drilling for oil

A worker waits to connect a drill bit on Endeavor Energy Resources LP’s Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas The number of rigs drilling for oil in the US dropped sharply this week as plunging crude prices hit development of shale reserves, the most-watched survey of industry activity has shown. There were 1,366 rigs drilling wells primarily for oil in the US, the lowest number since October 2013, according to Baker Hughes , the oilfield services company that compiles a weekly count. The number of oil-directed rigs has now fallen 15 per cent from its recent peak of 1,609 in October last year. The figures show a broad-based decline in activity in all the areas that have led the US shale oil boom, reinforcing expectations that US crude production growth will slow sharply this year, or even go into reverse. Standard & […]

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Steepest Drop in U.S. Oil Rigs Shows OPEC Prevailing

U.S. drillers have taken a record number of oil rigs out of service in the past six weeks as OPEC’s sustained production sent prices below $50 a barrel. The oil rig count has fallen by 209 since Dec. 5, the steepest six-week decline since Baker Hughes Inc. (BHI) began tracking the data in July 1987. The count fell by 55 this week to 1,366. Horizontal rigs used in U.S. shale formations that account for virtually all of the nation’s oil production growth fell by 48, the biggest single-week decline. Analysts including HSBC Holdings Plc say the decline shows that the Organization of Petroleum Exporting Countries is winning its fight for market share and slowing the growth that’s propelled U.S. production to the highest in at least three decades. OPEC’s decision not to curb its output amid increasing supplies from the U.S. and other countries has driven global oil prices […]

Posted On : Published By : Tom Whipple