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Gail Tverberg: This Is The Beginning Of The End For Oil Production

With the recent collapse in the price of oil, Gail Tverberg, returns to discuss the likely impact on the US shale oil industry, as well as the global market for oil. Gail is a professional actuary who applies classic risk assessment procedures to global resources: studying issues such as oil & natural gas depletion, water shortages, climate change, etc. These days, she writes at her website OurFiniteWorld.com . While as an actuary, Gail is one to avoid hyperbole and the let the numbers speak, her analysis of the outlook for future oil production is nothing short of dire: What we need is cheap energy. We need cheap, liquid oil. When it’s high-priced it really messes up the economy. We need oil to run our cars and to operate our trucks and such things, but it needs to be cheap. And it suddenly is today. But, you have to be able […]

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BP PLC, Shell PLC And Petrofac PLC: Why Peak Oil Theory Was Wrong

Photo: Berardo62. Cropped. Licence: https://creativecommons.org/licenses/by-sa/2.0/ During the 1990s, the oil price was around $10-20 a barrel. Petrol was cheap and SUVs and gas guzzlers were selling in record numbers. Oil company share prices were low and there was next to no oil exploration. Yet wells from the North Sea to Saudi Arabia were still producing oil — after all, once an oil well has been drilled, the costs of actually pumping out hydrocarbons are marginal. A perfect theory? But since there were few discoveries of oil, and as current reserves dried up, production inevitably fell. Round about the turn of the century, inventories started to slide and oil prices began to rise. These rises gathered momentum and soon the oil price was reaching all-time highs, peaking at $147 a barrel. The effects of these high commodity prices rippled around the world. The shares of companies like BP (LSE: BP.), Shell (LSE: RDSB) and Petrofac (LSE: PFC) soared. Lord Browne, at that […]

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U.S. Department of Energy: Our forecasts aren’t really forecasts (or are they?)

Put this in the category of things that can’t be true, but that are nevertheless affirmed with a straight face: The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, does not issue forecasts, at least not long run forecasts. So says Howard Gruenspecht, deputy administrator of the EIA,  in a letter  to  Nature , the respected science journal. Gruenspecht was responding to  recent coverage  of an alleged EIA forecast which paints a rosy picture of U.S. domestic oil and natural gas production through 2040, a view challenged by the article in question. Here is the bureaucratese from the letter: "Contrary to the presentation in the  Nature article, EIA does not characterize any of its long run projection scenarios as a forecast." Long run projection scenarios….huh. What could those actually be if not forecasts? And, why is the deputy administrator making such a big […]

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Dumb and Dumber: U.S. Crude Oil Export

Exporting crude oil and natural gas from the United States are among the dumbest energy ideas of all time.   Exporting gas is dumb.   Exporting oil is dumber. The U.S. imports almost half of the crude oil that we use. We import 7.5 million barrels per day.  The chart below shows the EIA prediction that production will slowly fall and imports will rise ( AEO 2014 ) after 2016.  (click image to enlarge) This means that the U.S. will never be self-sufficient in oil. Not even close. What about the tight oil that is produced from shale?  That’s included in the chart and is the whole reason that U.S. production has been growing.  But there’s not enough of it to keep production growing for long.   Here is a chart showing the proven  tight oil reserves  just published last month by the EIA. (click image to enlarge) Total tight oil […]

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Get Ready For Life Without Oil

Photographer: Chris Ratcliffe/Bloomberg Saudi Arabia isn’t the nicest ally to have. The desert kingdom just handed out   a sentence of  1,000 lashes to a blogger for running a website devoted to freedom of speech. Not exactly the kind of regime we want to have in our circle of friends, especially once you figure in their financial support for Islamic State and other radical Islamist groups. But you go to war with the allies you have, not the allies you wish you had. And in the global oil price war against Russia and Iran, Saudi Arabia is the U.S.’s indispensable ally. By continuing to pump the black stuff at an undiminished rate, the Saudis are repeating the trick they pulled in the mid-’80s, allowing oil prices to plunge in response to Western supply increases, thus depriving their rival (Iran) and ours (Russia) of revenue — and, in the process, […]

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What’s So Bad About Cheap Oil?

The sharp drop in oil prices will benefit American consumers, many of the nation’s businesses and the economy as a whole. So why are stock market investors behaving as though oil under $50 a barrel and gasoline prices hovering around $2 a gallon are bad news? The overall market’s recent decline reflects more than just the free fall in oil prices. Overseas economies are struggling; last week, the World Bank cut its forecast for global growth to 3 percent from 3.4 percent. But fears about losses emanating from a devastated oil patch have weighed heavily on broad stock indexes, investment strategists say. This response appears to be a case of investors seizing on the industry’s highly visible losers while ignoring the far larger number of winners. “The stock market has reacted negatively, and some of that comes down to the fact that you can see what the impact is […]

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Oil Prices Rally on IEA Comments

Oil prices rallied Friday in a rare respite from their six-month collapse after international energy monitors lowered their forecast for supply increases this year, potentially alleviating the growing glut of crude sloshing around the globe. Still, analysts said the new outlook was only modestly bullish and attributed the day’s gains to traders buying futures to close bearish bets against the market ahead of a long U.S. holiday weekend. The U.S. benchmark contract ended the day up $2.44, or 5.3%, at $48.69 a barrel. The gains helped U.S. oil futures rise 0.7% for the week, ending seven consecutive weeks of losses, the longest such streak for since 1986. The global Brent contract rose $1.90, or 3.9%, to $50.17 a barrel on the ICE Futures Europe exchange. Crude has lost more than half of its value since last summer as a combination of ample supply and lackluster demand spooked the markets. […]

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IEA Slashes 2015 Forecast Increase in Non-OPEC Oil Supply

ENLARGE OPEC’s decision in November to abandon its traditional role of stabilizing the market and maintain its output in the face of falling prices has proved divisive even within the group. Associated Press LONDON—The collapse in oil prices is expected to slash growth in non-OPEC oil production this year, bolstering demand for the producer group’s own output, the International Energy Agency said Friday, indicating the Organization of the Petroleum Exporting Countries’ strategy to defend its market share may be working. The decision taken by the oil cartel in November to abandon its traditional role of stabilizing the market and maintain its output in the face of falling prices has proved divisive even within the group. Oil prices, already under pressure from surging U.S. production and sluggish demand, tanked following the group’s decision and are now down more than 50% since June. Oil prices ticked higher Friday , following steep […]

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Oil Heads for Longest Weekly Losing Streak Since 1986

Oil advanced in New York , paring an eighth weekly decline, as the International Energy Agency lowered forecasts for supplies from outside OPEC and said prices could recover. West Texas Intermediate futures climbed as much as 3.6 percent. The grade’s loss of 1.3 percent this week caps the longest run of weekly declines since March 1986. Non-OPEC oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the IEA said in its monthly market report. “The market is very over-sold and has been looking for signs for a pick-up,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., said by phone from London. “The IEA has very clearly come out and said there will be an impact from price. They’ve lowered Canada , Colombia production-wise, they’ve talked about shale as well.” West Texas Intermediate for February delivery climbed […]

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The Cruel Oil-Market Math Conspiring Against ETF Bulls

The $2.3 billion that has poured into funds that track oil since December would seem like a logical enough investment. After crude dropped more than 50 percent to a five-year low, the thinking goes, prices are due for a rebound. There’s just one problem. And it’s a big problem. The market is stuck in something called contango, an exotic term that really just means that prices on crude contracts to be delivered in coming weeks are lower than those on contracts due later. Exchange-traded fund (USO) managers, as a result, are left to sell the cheaper expiring oil contracts and re-invest the proceeds in the more expensive ones due the following month, creating a vicious cycle that erodes returns. Consider these numbers. From 2009 to 2012, crude prices soared twofold, yet, because contango conditions existed then too, the biggest U.S. oil fund gained less than 1 percent over that […]

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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 […]

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Truckers Gain From Diesel’s Drop After Gasoline Plunge: Freight

Chris Bortz has seen the cost of gasoline for his car drop by almost half since June. The price of diesel used by his construction business has lagged behind. That’s about to change as sliding farm demand after the U.S. harvest and milder weather brings diesel, nearly identical to heating oil, more in line with gasoline. Government forecasts show the fuel dropping to $2.73 a gallon by June. The average retail price slipped below $3 this week for the first time in four years. Diesel’s drop will aid everyone from truckers to industrial users such as Bortz, chief executive officer of Towne Construction Services in Batavia, Ohio , which uses 300,000 gallons of diesel a year. Haulers have cut fuel surcharges to shippers, lowering the cost of delivering two-thirds of retail goods in the U.S. “Truckers are going to love this,” Phil Flynn, senior market analyst at Price Futures […]

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Clean Power to Shrug Off Oil Slump, Goldman, Deutsche Bank Say

Spending on renewable energy, which surged 16 percent in 2014, will remain strong this year, largely unaffected by the slumping oil prices that have artificially depressed their shares. That’s the message from Stuart Bernstein, Goldman Sachs Group Inc.’s global head of clean technology and renewables, and Vishal Shah, Deutsche Bank AG’s renewable-energy analyst. Because oil produces only 1 percent of U.S. electricity, the crude plunge that’s roiling markets should have only a “modest” effect on clean-energy developers or the companies that equip them, Bernstein said in a telephone interview. “I don’t want to be dismissive of the impact of declining oil and gas commodity prices on renewable energy,” Bernstein said. “But they will have a very small impact on the long-term cost of electricity.” Clean energy attracted a total of $310 billion in investment last year, up from $268 billion in 2013 and the first increase in three years, […]

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Schlumberger latest casualty of oil price decline

Oil services company Schlumberger forced to revise its plans moving forward in low oil price environment. (UPI/Shutterstock/Lilac Mountain) "In this uncertain environment, we continue to focus on what we can control," Chief Executive Paal Kibsgaard said in a statement. "We have already taken a number of actions to restructure and resize our organization that has led us to record a number of charges in the fourth quarter." Low oil prices are forcing international energy companies to trim their spending plans for 2015. The pull back is spilling over to secondary sectors, with U.S. Steel, which makes pipe for the energy industry, and oil services company Halliburton already announcing layoffs . Kibsgaard said full-year revenue of $48.6 billion was a 7 percent increase from 2013 and marked the fifth straight year of growth. Performance was driven in large part by operations in North America, and marginally by work in the […]

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Gas exports down for Canada

Canadian energy sector getting pinched by low commodity prices and the U.S. shale boom. Photo by Kodda/Shutterstock The Canadian government said exports of natural gas to the United States were 5 percent lower year-on-year thanks in part to the U.S. shale boom. Pipeline exports to the United States averaged 7.3 billion cubic feet per day during the first 10 months of last year, a 5 percent decline from the same period in 2013. "Exports have declined steadily since 2008," the National Energy Board said in a Thursday release. "A combination of factors contributed to this, the largest being the emergence of highly productive shale gas plays in the U.S. located close to markets traditionally served in part by Canadian exports." Canadian leaders have said that, with the United States relying more and more on its own energy reserves, it’s time to start courting potential Asian consumers. Analysis published last […]

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Range Resources makes most of low price climate

Shale company Range Resources trims budget, but maintains optimism on success in Marcellus shale. Photo by photostock77/Shutterstock U.S. shale leader Range Resources said it trimmed 2015 spending plans by more than 30 percent, but was betting on Marcellus shale for continued success. Low commodity prices are forcing major energy companies to revisit their spending plans for 2015. Range, which has headquarters in Texas, said it was trimming its capital budget from $1.3 billion to $870 million in response to "the continuing erosion in commodity prices." Last year, the company said it added nearly 2.4 trillion cubic feet of gas reserves , driven largely by developments in the Marcellus shale play near Pennsylvania. "Concentration of its operations in the Marcellus, coupled with continuing operating efficiencies and now anticipated cost reductions, allows Range to target 20 percent production growth for 2015 with this revised capital budget," the company said. Energy consultant […]

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Cheaper Heating Oil Fuels Billions in Savings in Northeast

ENLARGE A sharp drop in the price of crude oil has also brought down heating oil costs, potentially saving billions of dollars this winter for the estimated 6.2 million homes that use the fuel for warmth. Here, a heating-oil delivery to a home in Westwood, Mass., this past week. Gretchen Ertl for The Wall Street Journal On top of the broad savings Americans are reaping from cheaper gasoline, plummeting oil prices stand to bring residents in the Northeast billions more in savings this winter when they fill up their home heating-oil tanks. An estimated 6.2 million U.S. homes rely on heating oil for seasonal warmth, the vast majority in the Northeast. The region—stretching from Maryland to Maine—accounts for about 87% of the heating fuel’s use, according to federal data. The fuel is delivered by truck and pumped into storage tanks, which are often in the basement. Heating a house […]

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U.S. Lobbyists Turning Down Heat on Oil Exports

ENLARGE U.S. Sen. Ted Cruz (R., Texas) addresses the second annual Conservative Policy Summit at the Heritage Foundation Jan. 12 in Washington, DC. Getty Images For months, the nation’s oil and natural-gas industry has been urging Congress and the Obama administration to lift the decades-old ban on oil exports, arguing that doing so would bring jobs and geopolitical leverage to the U.S. Now, however, with an energy bill being debated in Congress for the first time in years, industry officials are urging lawmakers to wait, saying they want more time to lobby before senators cast votes. The issue is arising now because the Senate is debating the Keystone XL pipeline under a process in which senators are being allowed to offer a wide range of amendments on various energy issues. Sen. Ted Cruz (R., Texas), whose home state produces nearly 40% of all U.S. oil, is sponsoring an amendment […]

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Low crude prices could tamp down Seaway pipeline shipments: Enterprise exec

Freeport, Texas (Platts)–16Jan2015/446 pm EST/2146 GMT Current low crude oil prices could tamp down shipments on the new 450,000 b/d Seaway "twin" pipeline to the US Gulf Coast, which came online in December and is now running at about half that capacity, Jim Teague, chief operating officer for Seaway operator Enterprise Products Partners, said Friday. The "twin" pipeline parallels and augments the original 400,000 b/d Seaway pipeline, which was reversed and put into service in 2012, connecting the oil storage hub at Cushing, Oklahoma, with US Gulf Coast refining markets. "I wouldn’t be surprised to see [Seaway] run at current capacity" because of lower prices, Teague told reporters during a commemorative event at the Jones Creek terminal near Freeport, Texas. Even though oil prices have dropped 50% from the mid-2014 recent peak of $107/barrel in the US, "I think [shippers] want" pipe capacity, for the options it provides to […]

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Amid US Oil Price Crash, Cost Cutting Ripples Through Industry

URL: http://www.rigzone.com/news/oil_gas/a/136796/Amid_US_Oil_Price_Crash_Cost_Cutting_Ripples_Through_Industry NEW YORK, Jan 16 (Reuters) – Any lingering doubt about the depth of the crisis facing the U.S. energy industry is quickly evaporating as even the biggest firms slash spending amid the steepest oil price crash since the recession, sending ripples across the vast sector. In a stark sign of how a sudden, 60 percent drop in oil prices is biting, oil services giant Schlumberger Ltd on Thursday said it will reduce spending this year by 25 percent and fire 9,000 workers worldwide, surprising investors with the size of the cuts. As activity slows and drillers idle rigs at the fastest pace in more than 20 years, the magnitude and speed of the changes are surprising firms that provide some of the raw materials and equipment essential to drilling that even two months ago hoped to dodge the ill effects of the slowdown. "There is total chaos […]

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Bulgaria: We’re here to serve EU energy

With Russia’s role in the European energy community questioned, Bulgaria presents itself as an important energy security cog. (UPI/Shutterstock/Igor Golovniov) Bulgaria can serve as an important energy bridge for members of the European Union, Bulgarian Foreign Minister Daniel Mitov said. Bulgaria’s decision in August to back away from the South Stream natural gas pipeline, envisioned by Russian energy company Gazprom, led in part to a derailment of the project. This week, the country’s prime minister told European leaders Bulgaria could become a common gas distribution center for EU member states in the region. Meeting in Washington, the Bulgarian foreign minister told U.S. Secretary of State John Kerry energy security for Europe was a top concern for the government in Sofia. "Our common goal is to attract investments to guarantee supply and distribution, as well as to build interconnectivity with neighboring countries," he said Thursday. South Stream was meant to […]

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British fracking takes early steps

British shale pioneer Cuadrilla Resources gets environmental permits needed for early gas work. Photo by Steve Oehlenschlager/Shutterstock PRESTON, England, Jan. 16 (UPI) — British shale pioneer Cuadrilla Resources was granted the environmental permits necessary to carry out at shale work in Lancashire, the government said Friday. "After completing a rigorous assessment of Cuadrilla’s application and the public consultation responses, we are confident the permits issued will ensure people and the environment are protected," Steve Molyneux, environment manager for Lancashire, said in a statement. "The right controls are in place to manage waste and the flaring of gas safely, and protect local water resources." Cuadrilla in June deposited 21 chapters of environmental studies with the Lancashire County Council associated with plans for up to four shale gas exploration wells. The council said initially it would make a determination by early November, but said more time was needed to study the […]

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2014 was Earth’s warmest year on record

The graph depicts global surface temperature through 2014, with the 10 warmest years highlighted in dark red. (Climate.gov) Earth’s average surface temperature was the warmest since record-keeping began in 1880, according to NASA and the National Oceanic and Atmospheric Administration. December also was the warmest month ever recorded, and was among five months that set records, the agencies reported Friday. The combined land and ocean surface temperature was 1.24 degrees above the 20th century average of 57 degrees, according to NOAA. December’s average global temperature was 1.39 degrees above that 20th century average. The four other months that set records were May, June, August and September, NOAA said. October tied for warmest, according to the agency’s report. The data add to a two-decade string of record warmth planetwide. Except for 1998, the 10 warmest years on record have occurred since 2002, according to NOAA. The increase in global average […]

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U.S. scientists call 2014 Earth’s hottest year on record

CAPE CANAVERAL, Fla. (Reuters) – Last year was Earth’s warmest on record, bolstering the argument that people are altering the planet’s climate by relentlessly burning fuels that belch greenhouse gases into the air, two major U.S. government agencies said on Friday. Separate studies by the U.S. space agency NASA and the National Oceanic and Atmospheric Administration showed that the 10 warmest years on record have taken place since 1997. The scientists said the record temperatures were spread around the globe, including most of Europe stretching into northern Africa, the western United States, far eastern Russia into western Alaska, parts of interior South America, parts of eastern and western coastal Australia and elsewhere. "While the ranking of individual years can be affected by chaotic weather patterns, the long-term trends are attributable to drivers of climate change that right now are dominated by human emissions of greenhouse gases," said Gavin Schmidt, […]

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Renewable Resources Reach Their Limits

Renewable Resources Reach Their Limits thumbnail Can the world continue expanding its use of renewable resources at an increasing rate? Most likely not. Using a data set of over 25 resources researchers at the Helmholtz Centre for Environmental Research (UFZ), Yale University and Michigan State University demonstrate that several key resources have recently passed, at around the same time, their “peak-rate year” — the maximum increase year. A potential implication is that as substitution becomes arduous, global society’s expanding needs will be harder to fill. They explain this in an article published in the latest issue of the international journal Ecology and Society, and featured in the journal Nature’s Research Highlights this week. Landscape ecologists Prof. Dr. Ralf Seppelt, Dr. Ameur M. Manceur and plant ecologist Dr. Stefan Klotz from the UFZ analyzed the production and extraction rates of 27 global renewable and non-renewable resources together with economist Dr. […]

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Population: Not Leveling Off

Population: Not Leveling Off thumbnail When it comes to the party that is planet Earth, we might need to plan for a few extra guests, according to scientists. A new statistical projection concludes that the world population is unlikely to level off during the 21st century, leaving the planet to deal with as many as 13 billion human inhabitants—4 billion of those in Africa—by 2100. The analysis, formulated by U.N. and University of Washington (UW), Seattle, researchers, is the first of its kind to use modern statistical methods rather than expert opinions to estimate future birth rates, one of the determining factors in population forecasts. “The U.N. in the past has been criticized for not doing complete statistics on their data and now they’ve done it exactly right,” says demography researcher John Bongaarts, vice president of the Population Council in New York City, who was not involved in the […]

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Oil Stable in Asian Trade but Speedy Rebound Unlikely

By Eric Yep Oil futures took a breather from a selloff in Asian trade Friday as investors sought for signs of tighter supply that could stem further declines in oil prices. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $46.56 a barrel at 0419 GMT, up $0.31 in the Globex electronic session. March Brent crude on London’s ICE Futures exchange rose $0.25 to $48.52 a barrel. Oil prices had fallen again in the last trading session, with Nymex WTI crude now down by around 13% year-to-date and Brent crude down by around 17%. James Hubbard, head of Asian oil and gas research at Macquarie Group, said that prices below $40 a barrel would make it difficult for producers to break even, prompting them to begin limiting production. "Once WTI goes below $40 a barrel and thereabouts you’ll start to see headlines […]

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Oil Heads for Longest Weekly Losing Streak Since 1986

Oil advanced in New York , paring an eighth weekly decline, as the International Energy Agency lowered forecasts for supplies from outside OPEC and said prices could recover. West Texas Intermediate futures climbed as much as 3.6 percent. The grade’s loss of 1.3 percent this week caps the longest run of weekly declines since March 1986. Non-OPEC oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the IEA said in its monthly market report. “The market is very over-sold and has been looking for signs for a pick-up,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., said by phone from London. “The IEA has very clearly come out and said there will be an impact from price. They’ve lowered Canada , Colombia production-wise, they’ve talked about shale as well.” West Texas Intermediate for February delivery climbed […]

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Crude Oil Erases Advance on OPEC’s Reduced Demand Forecast

West Texas Intermediate oil fell for the fourth time in five days as OPEC said it expects weaker demand for its crude and U.S. output climbed to the highest in records dating to January 1983. Demand for oil from the Organization of Petroleum Exporting Countries will average 28.8 million barrels a day this year, about 100,000 barrels less than forecast last month, the Vienna-based organization said in a monthly report. U.S. output surged to 9.19 million barrels a day last week, the Energy Information Administration reported yesterday. Crude slid almost 50 percent last year, the most since the 2008 financial crisis, as OPEC resisted calls to cut its output ceiling amid the U.S. shale boom, exacerbating a global surplus. WTI crude will decline to $32 by the end of this quarter, Bank of America said. “Nothing fundamental has changed,” said Tariq Zahir, a New York-based commodity fund manager at […]

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Natural Gas Prices Slide Lower Despite Larger-Than-Expected Stockpile Drain

By Timothy Puko Natural gas futures slid Thursday as traders took profits, despite federal data showing gas stockpiles dropped more than expected last week. Storage levels shrank by 236 billion cubic feet in the week ended Jan. 9, the U.S. Energy Information Administration said. It was the 15th largest storage draw in EIA records dating through 1994, indicating especially strong demand. It was five bcf greater than the 231-bcf consensus average of 18 forecasters surveyed by The Wall Street Journal. But most of the buying probably happened Wednesday, when gas gained nearly 10% in advance of the report. By anticipating the move, many were able to sell and lock in their gains on Thursday after prices touched a nearly four-week high for intraday trading. "It ran too far too fast," said Scott Gettleman, an independent trader in New York. Natural gas for February delivery settled down 7.5 cents, or […]

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Welcome to ‘Normal’ Crude Oil Price, Trading at 100-Year Average

The theory goes that commodity prices move in “supercycles” or bursts of phenomenal surges, followed by longer, less-exciting periods. As such, a barrel of oil at $50 is, well, normal. Many people think the oil price has crashed, but it has just gone back to its long-term historical trend, according to Ruchir Sharma at Morgan Stanley Investment Management Inc. That makes a barrel of oil at around $50 just about right based on a 100-year inflation-adjusted average, said Sharma, who manages $25 billion as head of emerging markets . “The price of oil is returning to normal in its long-term 100-year history,” Sharma said in an interview from New York . “We tend to have a short memory and we tend to forget that the price of oil breached the $50 a barrel level only a decade ago.” Brent crude oil futures, which trade in London and are used […]

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Banks mixed on impact of low crude oil prices

After Halliburton announces a pull back, several banks offer a mixed report on the impact low oil prices have on the economy. File photo by Aaron M. Sprecher/UPI DALLAS, Jan. 15 (UPI) — The Federal Reserve Bank of Dallas said in its latest forecast it was less optimistic about its outlook for the year because of the low price of oil. The bank said early this week it expected job growth would be modest and drilling and extraction in the state, the nation’s top oil producer, should fall "sharply" if oil prices stay below the $50 per barrel mark. In its so-called Beige Book, the bank said Wednesday demand for oil services in the Permian and Eagle Ford shale basins declined. "Outlooks for the first half of 2015 are very uncertain and significantly weaker than in the prior reporting period, with firms expecting anywhere from a 15 to 40 […]

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No oil price recovery yet despite U.S. shale slowdown: IEA

LONDON (Reuters) – Oil prices may have further to fall and a rebound could take some time, despite increasing signs that the downtrend will end, possibly in the second half of this year as North American supply growth slows, the West’s energy watchdog said on Friday. Crude oil prices have fallen almost 60 percent over the last six months with both of the world’s crude oil benchmarks now trading below $50 a barrel as supplies of high quality, light oil from the United States and Canada have overwhelmed demand at a time of lacklustre global economic growth. The Organization of the Petroleum Exporting Countries has not cut production despite the collapse in prices. "How low the market’s floor will be is anybody’s guess. But the sell-off is having an impact. A price recovery – barring any major disruption – may not be imminent, but signs are mounting that the […]

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Oil Market Report

mb/dWorld Oil Demand1Q20122Q20123Q20124Q20121Q20132Q20133Q20134Q20131Q20142Q20143Q20144Q20141Q20152Q20153Q20154Q2015868890929496© OECD/IEA 2014 World Oil Demand *Please note that these Highlights are from the latest Oil Market Report, which is released in full to subscribers only – according to this schedule each month . Non subscribers get free access to the latest Highlights on this schedule, however the full Oil Market Report is released to the public two weeks after the report is released to subscribers. If you would like to receive the full report with accompanying charts and graphs on the day of publication please subscribe or contact the subscription manager . The price of oil continued to collapse into January as rising supplies collided with weak demand growth and OPEC maintained its commitment to not cut production. Brent crude futures last traded at $48.40/bbl, near a six-year low. NYMEX WTI was at $47.75/bbl. Macroeconomic weakness continues to restrain global oil demand growth, with 4Q14 deliveries estimated […]

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IEA Sees Oil-Price Recovery; Cuts 2015 Non-OPEC Output Estimate

Non-OPEC oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the International Energy Agency said. The adviser lowered its non-OPEC supply growth estimate by 350,000 barrels a day, the first cut since the 2015 forecast was introduced in July. Half the cut is from Colombian output while effects on U.S. production are so far “marginal,” it said. The slow-down in non-OPEC output will lead to a “rebalancing” of currently over-supplied global markets in the second half, reviving prices, the agency said. “Companies have been taking an axe to their budgets, postponing or cancelling new projects,” the Paris-based IEA, which advises 29 nations on energy policy , said in its monthly market report. “A price recovery, barring any major disruption, may not be imminent, but signs are mounting that the tide will turn.” Oil prices have collapsed almost 60 […]

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Iraq to Double Exports of Kirkuk Crude Amid Oil Surplus

Iraq will double exports within weeks from its northern Kirkuk oil fields and continue boosting output further south amid a global market glut that’s pushed prices to their lowest level in more than five and a half years. Crude shipments will rise to 300,000 barrels a day from the Kirkuk oil hub, where authorities are also upgrading pipelines between fields, Fouad Hussein, a member of the Kirkuk provincial council’s oil and gas committee, said yesterday in a phone interview. “There is a need to install a new pipeline network” to increase exports from the area, Hussein said. Kirkuk, which currently exports about 150,000 barrels a day, will boost shipments to 250,000 barrels a day and then to 300,000 “in the coming few weeks,” he said. Iraq, holder of the world’s fifth-largest crude reserves, is rebuilding its energy industry after decades of wars and economic sanctions. The country exported 2.94 […]

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Iran’s Budget Assumes $40 Oil After Prices Decline 33%

Iran , its oil exports curbed by sanctions, is lowering the crude price for this year’s budget to $40 a barrel as the energy slump affects governments and industry. The government is revising its draft budget to assume a base price of $40, from $72, the state-run Fars News Agency reported Finance and Economy Minister Ali Tayebnia as saying today. The minister said some projects will have to be halted, according to Fars. The Iranian calendar year begins March 21. Brent, a pricing benchmark for more than half the world’s oil, fell 18 percent this year after tumbling 48 percent last year. Qatar Petroleum and Royal Dutch Shell Plc yesterday called off plans to build a $6.5 billion petrochemical plant in the emirate in response to lower oil prices. Brent crude futures fell 2.9 percent to $47.28 a barrel at 2:27 p.m. in Dubai. Iran, OPEC’s fourth-largest producer, budgeted […]

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Eni acquires deepwater blocks offshore Egypt

01/15/2015 Eni SPA will resume exploration offshore Egypt under concession agreements based on production sharing it has signed covering two deepwater blocks offered in Egyptian Natural Gas Holding Co.’s 2013 bid round ( OGJ Online, Sept. 25, 2014 ). Eni subsidiary IEOC is operator. The company holds 100% of the North Leil block, covering 5,105 sq km in 2,050-3,000 m of water about 170 km offshore. It holds 50% of the Karawan block, which covers 4,565 sq km in 1,200-2,200 km of water about 107 km offshore. BP PLC holds the remaining interest. The Karawan block is adjacent to the west of the North Leil block and adjacent to the east of the Shorouk block, which Eni acquired last year. Royal Dutch Shell PLC drilled a dry hole on the Karawan block in 2001 and a dry hole on the North Leil block in 2007. Eni has worked in […]

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Venezuela’s Maduro Pledges OPEC Coordination for Prices

Venezuelan President Nicolas Maduro said his government plans to coordinate with OPEC and non-OPEC producers to create a “formula that impacts the oil market and restores the normalization of prices” in the next few weeks. Maduro spoke on Venezuela state television after meeting with his Russian counterpart Vladimir Putin as falling oil prices threaten the economies of both nations. The two leaders met today in Moscow to discuss global oil markets and the “stability of natural resources,” Maduro said. “Venezuela is not just a friend but also a close partner, one of Russia ’s most important partners,” Putin said in a statement posted online by Venezuela’s Information Ministry. Venezuela, which holds the world’s largest crude reserves, relies on oil exports for almost 95 percent of foreign currency earnings. The price of the country’s crude fell to $42.44 a barrel last week from a peak of $100.64 on June 27. […]

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Night lines banned at shops in some Venezuela states; scarcity persists

People line up outside a supermarket to buy toilet paper in Caracas January 12, 2015. REUTERS/Jorge … CARACAS (Reuters) – Governors in three Venezuelan states have banned overnight queuing amid huge and sometimes rowdy lines around shops across the scarcity-plagued country. Shortages of basic consumer products from milk to toilet paper have worsened since a lull in distribution over the Christmas and New Year holidays, prompting many to wait from the early hours on foot – or in hammocks – before shops open. The ubiquitous lines and frequent jostling for places when shop doors finally open are an embarrassment and irritation to Venezuelans across the political spectrum. There have also been scattered protests and arrests. "We are going to prohibit lines outside commercial establishments," Falcon state governor Stella Lugo said late on Tuesday. "Security forces have been instructed." She joined two other governors, in the states of Bolivar and […]

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Cheaper oil tames U.S. producer inflation; jobless claims up

WASHINGTON (Reuters) – U.S. producer prices in December recorded their biggest fall in more than three years on tumbling energy costs while underlying inflation pressures were tame, a cautionary note for the Federal Reserve as it ponders its next step on monetary policy. The Labor Department said on Thursday its producer price index for final demand declined 0.3 percent, the biggest drop since October 2011, after falling 0.2 percent in November. "That makes the Fed’s job more difficult," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. "We expect inflation to slow … the Fed needs to be more cautious about raising interest rates." In the 12 months through December, prices at the factory gate increased 1.1 percent, the smallest gain since November 2013, after rising 1.4 percent in November. A broader measure of underlying producer inflation pressures that excludes food, energy and trade services edged […]

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