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

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

Posted On : Published By : Tom Whipple
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Nigeria’s Growth Set to Slow to 5.5% as Oil Plunges, Agency Says

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

Posted On : Published By : Tom Whipple
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Dominican Republic Taps $1.9 Billion to Pay Venezuelan Oil Debt

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

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Oil Cash Waning, Venezuelan Shelves Lie Bare

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

Posted On : Published By : Tom Whipple
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Companies, Rulers Caught in Wide Ripples From the Drop of Oil

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

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

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

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

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

Posted On : Published By : ASPO-USA
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Falling Prices Spread Pain Far Across The Oil Patch

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

Posted On : Published By : Tom Whipple
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‘Bomb Train’ Terminal Lawsuits Sidetrack Crude-Oil Rail Plans

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

Posted On : Published By : Tom Whipple
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Kemp: US Crude Oil Stocks Return To 1930s Crisis Levels

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

Posted On : Published By : Tom Whipple