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North Sea oil and gas up against wall

Low oil prices means the future of North Sea oil and gas is uncertain, Wood Mackenzie finds. File Photo by Casey J. Ranel/UPI LONDON, Jan. 12 (UPI) — Low oil prices are a growing cause for concern in the exploration and production sector of the North Sea, analysis published Monday by Wood Mackenzie finds. The analytical group said the region brought in $19 billion in capital spending last year, making the British North Sea sector one of the top 10 for upstream spending. With oil prices falling more than 50 percent since June, data show exploration and production activity was slowing down . Erin Moffat, a senior research analyst at Wood Mackenzie, said exploration activity in 2014 was off 18 percent from the previous year. Only four fields were brought online. "The current oil price means 2015 will unsurprisingly bring further budget cuts, with exploration spending at the top […]

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Russian economy in crisis mode

Russian Prime Minister Dmitry Medvedev signals economy is on the verge of a major crisis. File Photo by Anatoli Zhdanov/UPI MOSCOW, Jan. 12 (UPI) — Russian Prime Minister Dmitry Medvedev said Monday all government hands were called upon to help an economy damaged by low oil prices and sanctions. The Russian currency, the ruble, was trading near historic lows Monday at 61 per U.S. dollar. Dual strains from Western sanctions imposed in response to the Kremlin’s policies in Ukraine and the low price of oil is pushing the Russian economy toward recession. Medvedev told his deputies there should be regular meetings to discuss the looming economic crisis . "The economic situation is quite problematic to say the least," he said. "Therefore, all of the members of the government must hold key meetings in the areas that they coordinate, as we have already agreed," Medvedev said. Analysis from the World […]

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Hopes for Ukraine Peace Talks Fade After Summit

ENLARGE German Foreign Minister Frank-Walter Steinmeier, second left, welcomes his counterparts from France, Laurent Fabius, right, Russia, Sergey Lavrov, left, and Ukraine, Pavlo Klimkin, second right, for a meeting in Berlin Monday on the Ukraine situation. Michael Sohn/Press Pool BERLIN—Hopes for a Ukraine peace summit this week faded after top diplomats from France, Germany, Russia and Ukraine late Monday failed to reach agreement on how to resolve the conflict amid heightened fighting there. German Foreign Minister Frank-Walter Steinmeier met with Laurent Fabius, Pavlo Klimkin and Sergei Lavrov —the foreign ministers of France, Ukraine and Russia, respectively—in the latest effort to resolve the Ukraine conflict, which began almost a year ago and set off the worst diplomatic crisis between Russia and the West since the fall of the Iron Curtain. The ministers couldn’t find sufficient common ground for holding a peace summit, which Ukraine had hoped would take place in […]

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Hungary Restarts Natural Gas Transport to Ukraine via Pipeline

BUDAPEST—After a three-month break while it filled up its own reserves, Hungary restarted natural gas transport to Ukraine on Saturday via a pipeline connecting the neighboring countries, the foreign affairs and trade ministry told The Wall Street Journal. Ukraine is highly dependent on gas imports, especially amid ongoing conflicts with Russia. Hungary transported 2.6 million cubic meters of gas so far to Ukraine, and will continue to sell about 2.5 million cubic meters a day in the coming days. In comparison, Ukraine received around 3.5 million a day cubic meters of gas from Hungary in September before Hungary ceased shipping to its eastern neighbor. Ukraine continues to receive gas from Slovakia, but not from Poland, the ministry added. Write to Veronika Gulyas at [email protected]

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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 […]

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Surplus fears send oil further below $50

Oil prices slid further below the $50 a barrel mark on Monday to a near six-year low amid growing concerns of an oil surplus in the coming months. Ice February Brent, the international oil marker, dropped $1.43 to $48.68 a barrel in morning trading, while Nymex February West Texas Intermediate, the US benchmark, fell $1.22 to $47.14 a barrel. Both hovered at levels last seen in April 2009. Opec’s November decision to maintain output at 30m barrels a day, rather than cut production to shore up prices, has lubricated a plunge that started in June. Relentless production from the US and output from countries such as Libya and Iraq that surpassed estimates coincided with a demand slowdown in Europe and Asia amid economic weakness, all putting pressure on prices. More On this topic IN Commodities David Hufton, chief executive at London-based broker PVM, said there seemed to be “no […]

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Venezuela’s Maduro seeks support from Saudi Arabia on oil prices

(Adds Venezuela government comments) RIYADH Jan 11 (Reuters) – Venezuelan President Nicolas Maduro met Saudi Arabia’s Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour of OPEC members to discuss falling oil prices, which have hit its economy hard. The Saudi side in the meeting included Oil Minister Ali al-Naimi and several princes including Deputy Crown Prince Muqrin, intelligence chief Prince Khaled bin Bandar and three sons of King Abdullah, who is in hospital, state media reported. No details of the meeting were given by the official Saudi Press Agency and there was no indication that the world’s biggest oil exporter was any closer to taking action to stem the over 50 percent rout in oil prices. The Venezuelan government said in a statement that "we agreed to work to recover the market and oil prices with state policies between the two energy powerhouses." It […]

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Goldman Sachs slashes oil price forecasts

LONDON (Reuters) – U.S. bank Goldman Sachs slashed it oil forecasts on Monday, saying fuel prices needed to stay low for much longer in order to curb production and end a global supply glut. Goldman Sachs oil analysts led by Jeffrey Currie said the collapse in oil prices over the last six months, which has brought North Sea Brent crude down almost 60 percent to below $50 a barrel, would eventually balance the market. But they said crude oil prices could come down much further in the short term, possibly into the high $30s a barrel before the market saw a rebound. Goldman Sachs is one of the most influential U.S. banks in commodities markets. In 2008, when oil prices were racing up toward their all-time high at almost $150 a barrel, the bank forecast crude could hit $200. The bank said on Monday it had cut its 2015 […]

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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 […]

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Oil Falls as Goldman Cuts Outlook While Venezuela Seeks Recovery

Oil extended losses from the lowest level in more than 5 1/2 years as Goldman Sachs Group Inc. reduced its price forecasts and Venezuela called on OPEC producers to work together to spur a recovery. Futures slid as much as 3.1 percent in London after a seventh weekly drop. Crude has to “stay lower for longer” if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts. Prices need to return to $100 a barrel for economic equilibrium, Venezuelan President Nicolas Maduro said in Iran during a tour of Middle Eastern members of the Organization of Petroleum Exporting Countries. Oil slumped almost 50 percent last year, the most since the 2008 financial crisis, amid a supply glut estimated by Qatar at 2 million barrels a day. OPEC is battling a U.S. shale boom by resisting production cuts, signaling it’s prepared to let prices […]

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