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As Oil Prices Climb, Some Harbor Doubts

A pump jack near Denver. Oil prices jumped 7% on Tuesday. ENLARGE Photo: Reuters Crude prices rose to the highest level this year amid signs a global supply glut could ease, but some investors and analysts said the worst of the oil rout may not be over. The benchmark U.S. oil price has surged 19% since Wednesday, the largest four-day percentage gain since January 2009. The jump follows a selloff that saw oil tumble from more than $107 to less than $45 a barrel in seven months. Oil settled Tuesday at $53.05 a barrel, its highest level since Dec. 31, up $3.48, or 7%, on the New York Mercantile Exchange. Brent crude, the global benchmark, rose $3.16, or 5.8%, to $57.91. The rise in crude-oil prices spurred a rally in energy stocks, which helped lift the Dow Jones Industrial Average 305.36 points. Crude gains in recent days have been […]

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Dollar steadies after slide, oil retreats

LONDON (Reuters) – The U.S. dollar steadied on Wednesday after its worst day in more than a year, and a retreat in oil prices after four days of gains halted a rally in European stock markets. Globally, investors’ appetite for risk appears much stronger than it was a week ago. Oil has bounced almost 20 percent in value inside a week, stock markets are back on the rise and the euro is up almost 4 cents from low against the dollar. But for the dollar that may simply add up to a clearing of the decks before another push higher, while a heady brew of concerns over politics, growth and monetary policy has left stocks struggling for clear direction. In Europe much attention is focussed on Greece, where shares fell 1 percent in early deals and government bond yields rose on a report that the European Central Bank is […]

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Oil jumps as dollar dives, crude up 19 percent in four days

NEW YORK (Reuters) – Oil prices jumped again on Tuesday as a tumbling dollar sent most commodities rallying, bringing crude’s four-day rise to about 19 percent, its biggest such advance since January 2009. Despite signs that U.S. crude supplies had registered another heavy build last week, investors were more confident that oil prices have hit a bottom after a seven-month rout. Traders said oil bulls were encouraged by BP’s plan to cut capital expenditures 13 percent in 2015, which came after reductions announced by other major energy companies. Benchmark Brent crude oil LCOc1 settled up $3.16, or nearly 6 percent, at $57.91 a barrel. It rallied as high as $59 for the first time since end of December. U.S. crude CLc1, or WTI, finished up $3.48, or 7 percent, at $53.05, after a session high at $54.24. A global glut of crude had prompted a sell-off that brought oil […]

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Oil Prices Surge 7% to One-Month High

Oil prices soared to a one-month high on Tuesday, providing investors some respite from a prolonged selloff that rattled financial markets, the energy sector and oil-dependent economies. U.S. oil futures notched a fourth consecutive gain, their longest winning streak since August. Prices have risen 19% in that time. The benchmark crude-oil contract on the New York Mercantile Exchange settled up $3.48, or 7%, at $53.05 a barrel, the highest settlement price since Dec. 31, 2014. Despite the jump in oil prices, few investors and analysts are willing to call a bottom to a downdraft that began in July, the magnitude of which caught many market experts by surprise . Plunging oil prices, driven by a global glut of crude oil, pummeled shares of oil companies and the currencies of oil-producing nations. The decline also prompted cutbacks to energy spending and investment, potentially sowing the seeds for a sustained recovery […]

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Natural Gas Prices Continue Slump

By Nicole Friedman NEW YORK–Natural-gas prices fell for a fifth-straight day Tuesday on expectations that mild temperatures would continue to limit demand for the heating fuel. Futures for March delivery recently fell 2.3 cents, or 0.9%, to $2.657 a million British thermal units, on track to settle at a fresh more-than-two-year low. Prices have slid in recent weeks as robust supply growth has outweighed tepid demand. Natural-gas consumption is usually strongest in the winter, because half of U.S. households use natural gas as their primary heating fuel, but this winter’s temperatures have kept demand subdued. While forecasts are calling for colder-than-average weather in the eastern U.S. this week, temperatures are expected to moderate in the next 11 to 15 days. "Everywhere except the Northeast is to see normal to below-normal heating demand this week, while absolute temperatures begin to clamber higher as we move away from the peak of […]

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Low Energy Prices Offer Opening for Subsidy Cuts

In Saudi Arabia, drivers pay roughly 45 cents a gallon to fill up their cars, and in Venezuela even less. Energy is so inexpensive in Kuwait and Qatar that residents chill their enormous swimming pools in the summer and typically leave their air-conditioners on at full blast while they are away on vacation. Across the Middle East and much of the developing world, government subsidies make energy cheap and encourage consumption. But governments around the world are beginning to take advantage of plummeting oil and natural gas prices by slashing the subsidies. The cuts are just a small fraction of the global total of annual subsidies, but energy experts say they are beginning to add up. Even with oil rebounding in recent days — including a 6 percent rise on Tuesday for the global Brent crude benchmark — the price is down nearly 50 percent from its peak last year of just […]

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Subsidies may curb Islamic State oil financing

Liz Rosenburg, director of the energy and security program at the Center for a New American Security, says providing cheap oil products to regional allies could cut revenue stream for the Islamic State. File photo by Kevin Dietsch/UPI WASHINGTON, Feb. 3 (UPI) — Western supporters fighting the group calling itself the Islamic State should consider subsidizing regional fuels to curb terror financing, a U.S. scholar said. The Islamic State is said to generate anywhere between several hundred thousand dollars to as much as $2 billion in illicit oil trade. Liz Rosenburg, director of the energy and security program at the Center for a New American Security, told delegates at the Washington Institute of Near East Policy that, while it was difficult to pinpoint exact financing, the group’s ability to generate funding through oil is diminished. "It is unlikely to be anywhere near the top of that spectrum now, given […]

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Saudi Oil Seen as Lever to Pry Russia Away From Syria’s Assad

WASHINGTON — Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria , using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices. Saudi Arabia and Russia have had numerous discussions over the past several months that have yet to produce a significant breakthrough, according to American and Saudi officials. It is unclear how explicitly Saudi officials have linked oil to the issue of Syria during the talks, but Saudi officials say — and they have told the United States — that they think they have some leverage over Mr. Putin because of their ability to reduce the supply of oil and possibly drive up prices. “If oil can serve to bring peace in Syria, I don’t see how Saudi Arabia would […]

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Oil exports fall in January

Tugboats position an SPM pump in the Basra Gulf in January 2012 as Iraq expands its export capacity. (ALI ABU IRAQ/Iraq Oil Report) Iraq’s oil exports fell by nearly 14 percent in January, after a record-setting December, due to rough weather and technical problems in Basra and strained relations between the Baghdad government and the autonomous Kurdistan region. The federal State Oil Marketing Organization (SOMO) sold just 2.535 million barrels per day (bpd) in January, compared to 2.94 million bpd in December, according to an official with access to SOMO data. The disappointing rate of export further compounds Iraq…

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Workers, oil field survive IS assault

Kurdish Peshmerga soldiers at the Khabbaz oil field after regaining control after an assault by militants from the so-called Islamic State group. (KAMARAN AL-NAJAR/Iraq Oil Report/Metrography) Recommend 3,412 people recommend this. Sign Up to see what your friends recommend. The 22 workers at the Khabbaz oil field faced two options: feign allegiance to the so-called Islamic State (IS) militant group, or die.At dawn on Friday, IS militants had raided the field as part of a seemingly coordinated, multi-pronged offensive that lasted until Sunday, leaving scores dead and taking the 20,000 bpd field offline. In addition to Khabbaz, located east of the Bai Hassan oil field in Kirkuk’s Daquq district, IS fighters attacked – and were ultimately defeated – in Kirkuk …

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New fighting for Libyan oil ports as UN tries to revive talks

New fighting for Libyan oil ports as UN tries to revive talks thumbnail New clashes erupted on Tuesday between rival factions fighting for control of Libya’s biggest oil ports Es Sider and Ras Lanuf, killing at least 10 people, the two sides said. The fighting came a day after the United Nations said it was seeking a ceasefire to pave the way for a new round of peace talks between factions operating two opposing governments, nearly four years after Muammar Gaddafi’s overthrow. Libya’s internationally-recognised government under Prime Minister Abdullah al-Thinni and the elected House of Representatives have been based in the east since a group called Libya Dawn seized Tripoli last summer, set up its own administration and reinstated the old parliament. Troops loyal to the Tripoli government launched an offensive in December to try to take the eastern Es Sider and Ras Lanuf oil ports, which have had […]

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Fighting Resumes Near Libya’s Largest Oil Port

Fighting between rival militias resumed close to Libya’s largest oil port on Tuesday, while Islamic State claimed another attack in Tripoli, as the country further descends into lawlessness. Islamic State’s Tripoli faction had already said it was behind an attack on the upmarket Corinthia hotel in the capital last week that killed nine people, including an American. Clashes erupted at the Sidra oil terminal between Dawn, an Islamist militia that controls the capital Tripoli, and forces loyal to the internationally recognized government based in the east of the country, according to the Facebook pages of both factions and Libyan oil officials. Dawn said it was making military progress and inflicted heavy casualties on the troops of Gen. Khalifa Hifter, who supports the legitimate government. It also said one of its fighters had died and nine had been wounded. The First Brigade of the Libyan National Armyled by Gen. Hifteronly […]

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Gunmen Storm Libyan Oil Field, Says Oil Company Officials

ENLARGE Black smoke billows from a fire at an oil depot struck in crossfire between militias battling in Tripoli, Libya, last July. Fighting for control of the country’s oil facilities continues, with gunmen storming an oil field in central Libya on Wednesday, according to oil officials. Photo: Associated Press Gunmen have stormed an oil field in central Libya, oil officials said on Wednesday, just one day after fighting resumed near the country’s largest oil port. The attack underscores the chaos that is gripping Libya as rival factions vie for the control of its vital oil industry . A spokesman for state oil company National Oil Co. said unknown gunmen had entered the Mabruk oil field, which is operated by its joint-venture with France’s Total SA . Staff were able to leave the premises and are now safe, he said, but the status of the facility isn’t known. A manager […]

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Petrobras chief executive set to step down

Maria das Graças Foster Maria das Graças Foster , the embattled head of Petrobras , is set to step down to help resolve a crippling corruption scandal at the Brazilian state-owned oil company, sources at the presidential palace in Brasília said.  The sources said they were unable to provide an exact timetable for her departure but indicated it could be as early as the end of this month. President Dilma Rousseff was reported to have met Ms Graças Foster on Tuesday.  A person familiar with the matter said Ms Graças Foster’s position had become “untenable” at Petrobras, which is at the centre of allegations that executives collaborated with politicians, contractors and black market money dealers to cream billions of dollars from the company’s projects in bribes and kickbacks.  A spokesperson for the presidential palace refused to comment on Tuesday.   A close friend of Ms Rousseff, Ms Graças Foster […]

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Venezuela Goes After Private Companies as Shortages Mount

(Bloomberg) — Venezuelan officials arrested a second retail executive in two days, accusing their companies of hoarding goods and fixing prices, as President Nicolas Maduro responds to mounting shortages and the lowest support in two decades. Officials detained the owner of Dia a Dia supermarket chain and took over the company’s stores, National Assembly President Diosdado Cabello told state television last night from one of the 35 occupied shops. On Feb. 1, police detained the chief executive officer of Farmatodo C.A., which runs almost 200 drug stores across Venezuela and Colombia. The collapse of oil revenue has deepened shortages of everything from diapers to sugar in the country that imports almost everything it consumes. Rather than relaxing price controls to boost supply, Maduro has blamed private industry for “waging economic war” against his government. His approval rating fell to 22 percent in December, according to the latest poll made […]

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Shell to dismantle Brent platform

Shell recommends decommissioning of oil rig, not pictured, in the North Sea. Photo by James Jones Jr./Shutterstock THE HAGUE, Netherlands, Feb. 3 (UPI) — Taking down a legacy platform in the North Sea is part of the natural stage of maturation in the Brent oil and gas field, Royal Dutch Shell said Tuesday. Shell said the process for decommissioning the Delta platform — one of four installations at the field — begins with a 30-day public consultation period beginning Feb. 16. The Brent basin in the North Sea is one of the most mature in the world and its crude oil blends make up the global benchmark price for oil. The Dutch oil major said the Brent field accounted for about 10 percent of the oil and gas produced in the British waters of the North Sea since operations began in 1976. Alistair Hope, decommissioning director for Shell, said […]

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China’s Energy Companies Tighten Their Belts as Oil Prices Plunge

ENLARGE China’s energy companies are cutting back on spending as oil prices plunge. Shown, workers lay cables on a new oil rig under construction for Cnooc Ltd. in Qingdao, eastern China in September 2014. Photo: Associated Press BEIJING—When oil prices surged near record highs in recent years, China’s state-owned energy companies bet prices could climb even higher, paying top dollar for assets around the world and pushing aggressively to develop new resources at home. Now, as oil prices have lost around half their value in less than a year, China’s biggest energy companies are in the midst of a rare pull back. Cnooc Ltd. —the listed arm of China’s main state-owned offshore oil-and-gas producer—said Tuesday it planned to cut capital spending by 26% to 35% in 2015 compared with a year earlier, its first such drop since 2010. The company could be facing write-downs of more than $5 billion […]

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U.S. factory orders fall sharply, order books shrinking

WASHINGTON (Reuters) – New orders for U.S. factory goods fell for a fifth straight month in December, but a smaller-than-previously reported drop in business spending plans supported views of a rebound in the months ahead. Other data on Tuesday showing fairly brisk sales in January by the country’s leading automobile manufactures also offered a silver lining for a sector that has taken a hit from weak global demand and falling crude oil prices. "It suggests that activity will pick up in coming months," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. The Commerce Department said new orders for manufactured goods declined 3.4 percent as demand fell across a broad sector of industries. That followed a 1.7 percent decrease in November and exceeded economists expectations for a 2.2 percent drop. The department also said orders for non-defense capital goods excluding aircraft – seen as a measure […]

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EPA Keystone Review Links Oil Sands to Carbon Emission Jump

Oil sands mining operation near Fort McMurray, Alberta, Canada. (Bloomberg) — The U.S. Environmental Protection Agency said developing Canadian oil sands would significantly increase greenhouse gases, a conclusion environmental groups said gives President Barack Obama reason to reject the proposed Keystone XL pipeline. “Until ongoing efforts to reduce greenhouse gas emissions associated with the production of oil sands are more successful and widespread,” developing the crude “represents a significant increase in greenhouse gas emissions,” the EPA said Tuesday in a letter to the State Department, which is reviewing the project. The proposed pipeline has pitted Obama’s allies in the environmental movement against the U.S. energy industry. Obama has said he’ll reject TransCanada Corp.’s Keystone if it would lead to a significant increase in carbon pollution. Proposed in 2008, Keystone would deliver Alberta oil sands to U.S. Gulf Coast refineries. The Republican-led House next week probably will pass a Senate […]

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Tesoro’s California Dominance Targeted in Union Strikes

(Bloomberg) — In the biggest strike at U.S. oil refineries in 35 years, Tesoro Corp. has been hit the hardest, with workers walking out of three of its plants across the western U.S. That’s not just bad luck. Tesoro, the biggest refiner in the western U.S. by capacity, won a reputation in the last round of negotiations three years ago for being an especially hard bargainer with local United Steelworkers members. That’s put a bullseye on the company during the current negotiations. Changes pushed by the company in 2012 to cut profit-sharing and pension benefits “severely impacted the employees,” said Dave Campbell, secretary-treasurer of the USW local that represents Tesoro’s Carson and Wilmington refineries in Southern California. “Everyone was very, very angry.” The United Steelworkers, a union representing employees at more than 200 U.S. refineries, terminals, pipelines and chemical plants, stopped work at nine sites Feb. 1. after negotiations […]

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AAA: Gas prices rising, but pain less severe

U.S. gasoline prices are on the rise, but still low compared with last year, AAA says. Photo by John Angelillo/UPI WASHINGTON, Feb. 3 (UPI) — While it’s not uncommon for retail gasoline prices in the United States to spike 30 cents in February, motor club AAA said prices will remain at historic lows. AAA reports a national average price for a gallon of regular unleaded gasoline for Tuesday at $2.07, about 4 cents higher than last week. The price of gasoline has increased for eight consecutive days, but follows a steady decline that began at the end of September. The low price of oil, about 50 percent below June levels, is reflected at the gas pump and roughly half of all retail filling centers in the country are selling gas below the $2 mark. With refineries undergoing seasonal maintenance as they prepare to make a summer blend of gasoline […]

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New dawn for U.S. solar power capacity

Analysis from Wood Mackenzie finds parallels between emerging solar power and the U.S. shale boom. UPI/Stephen Shaver HOUSTON, Feb. 3 (UPI) — Solar power progress in the United States is expected to advance to record levels as prices decline and technology improves, Wood Mackenzie finds. Energy consultant group Wood Mackenzie finds it’s getting cheaper to install solar power components. With this, new solar capacity has evolved from a niche renewable sector to something that’s pressuring conventional business models in the utility industry. "Just as shale extraction technologies reconfigured oil and gas markets, no other technology is closer to transforming power markets in a similar fashion than distributed and utility-scale solar," Prajit Ghosh, research director for American renewables research, said. The U.S. government is supporting solar development through its SunShot initiative, which aims to make the renewable technology competitive. The program aims to move solar power capacity from less than […]

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EPA Says Low Oil Prices Should Be Weighed in Keystone Decision

WASHINGTON—The Environmental Protection Agency said the government should factor in the recent trend of lower oil prices as part of its decision on whether to approve the Keystone XL pipeline. The EPA, in a letter sent Monday to the State Department, said the monthslong drop in oil prices should compel the department to “revisit” conclusions about U.S. oil consumption and greenhouse gas emissions it made in an environmental assessment published in January 2014, which found the pipeline wouldn’t significantly add greenhouse gas emissions to the atmosphere. The State Department oversees cross-border pipelines and is in the process of deciding whether the Keystone project should receive a permit. The letter by Cynthia Giles, EPA’s assistant administrator for enforcement and compliance assurance, said building the pipeline at a time of lower oil prices could prompt production of more oil from Canada’s oil sands deposits. The letter said the 2014 environmental assessment […]

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Cheap fuel drives US car sales to near record levels

DAGENHAM, ENGLAND – JANUARY 13: Cars are prepared for distribution at a Ford factory on January 13, 2015 in Dagenham, England. Originally opened in 1931, the Ford factory has unveiled a state of the art GBP475 million production line that will start manufacturing the new low-emission, Ford diesel engines from this November this will generate more than 300 new jobs, Ford currently employs around 3000 at the plant in Dagenham. (Photo by Carl Court/Getty Images) Falling fuel prices and a strong US economy pushed domestic new car sales back to near-record levels, as the latest figures for January surged past already optimistic expectations for most manufacturers. Two of the market’s most conspicuously fuel-hungry vehicles — General Motors’ vast Cadillac Escalade sports utility vehicles and Ford’s Mustang performance car — recorded sales more than double those for last January. Sales for Fiat Chrysler’s Jeep SUV brand were up 23 per […]

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US DOT missed self-imposed deadline to submit crude-by-rail regs for review

Washington (Platts)–3Feb2015/352 pm EST/2052 GMT Representatives of the rail industry Tuesday complained to the US Congress about the Obama administration’s slow pace in issuing its comprehensive crude-by-rail safety rule, as the Department of Transportation missed a self-imposed January 30 target to submit the regulation to the White House for final review. Joe Delcambre, a spokesman with DOT’s Pipelines and Hazardous Materials Safety Administration, told Platts the agency hopes to send the rule, including an overhaul of tank car safety standards, "very soon" to the White House Office of Management and Budget, which vets all regulations before they go into effect. The DOT in January had said in a rulemaking schedule update that it planned to submit the rule to OMB by January 30, and for the rule to be finalized by May 12. "The rulemaking is very comprehensive and involves interrelated issues that must be carefully assessed to ensure […]

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IHS sees second-half end of US output surge

HOUSTON, Feb. 3 02/03/2015 Expectations are moderating about growth of oil production in the US this year. A report by IHS says the US production surge may end by midyear as low oil prices crimp output from tight formations. “Growth is still expected in the early months of 2015, but that momentum will level off in the latter half of the year amidst prices at lows not seen since the 2008-09 Great Recession,” IHS said in a press statement. A study of 39,000 wells indicated month-to-month growth will cease in the latter half of 2015 if the price of West Texas Intermediate crude remains below $60/bbl. About one fourth of new wells in 2014 had break-even WTI prices below $40/bbl, according to the study. Slightly less than half the new wells had break-even prices below $60/bbl. Nearly 30% of new wells had break-even prices above $81/bbl. The study defined […]

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Anadarko CEO Sees Significant Cuts In Capex In 2015

URL: http://www.rigzone.com/news/oil_gas/a/137055/Anadarko_CEO_Sees_Significant_Cuts_In_Capex_In_2015 Anadarko’s capex in 2015 will be significantly lower than last year because of the recent collapse in crude oil prices, Chief Executive Al Walker says. HOUSTON, Feb 3 (Reuters) – Anadarko Petroleum Corp’s capital expenditures in 2015 will be significantly lower than last year because of the recent collapse in crude oil prices, the exploration and production company’s CEO told investors on a conference call on Tuesday. "We see ourselves in a period here of trying to build value, maintain flexibility and not grow in a low commodity price environment that we see as less than attractive," Chief Executive Al Walker said. Anadarko will release its capital plan and outlook on March 3. In 2014, Anadarko spent about $9.3 billion, according to its fourth-quarter earnings report. Last month oil prices tumbled to the lowest level in six years, hit by a world supply glut and weak demand. […]

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Bakken Boom Slows on Crude Pride Slump

Drilling activity in the Bakken is feeling the effects of a bearish crude oil market. The drop in crude oil prices in recent months has likely gone uncelebrated in the North Dakota town of Williston, or in the state as a whole, as exploration and production companies reduce or halt their drilling activity in the Bakken, that vast shale formation underlying North Dakota and neighboring Montana. But how much has the state’s drilling activity been affected, and how long is the slowdown likely to last? The abrupt arrival of sub-$50 oil prices has been a shock to the oil industry, and the subsequent decline in drilling activity in the Bakken could, if continued, prove painful for a state that had until recently been riding high as an oil producing state and an economic powerhouse. Between 2006 and 2013, North Dakota went from being the ninth-largest oil producing state to […]

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Russian Hard-Line Stance on Ukraine Prompts U.S. to Reconsider Policy

Pro-Russian rebels drive a mobile anti-aircraft system Strela-10 in Donetsk on Tuesday. ENLARGE Photo: maxim shemetov/Reuters WASHINGTON—Nearly a year after Russia began its military campaign in Ukraine, the U.S. and its European allies find themselves in a familiar predicament: struggling to devise a strategy to get Moscow to back off. While Western economic sanctions, combined with a steep drop in the price of oil, have inflicted heavy damage on the Russian economy, they’ve done nothing to temper the Kremlin’s support for eastern Ukraine’s separatist insurgency, U.S. officials acknowledge. “It’s fair to say that costs haven’t risen high enough for the Russian leadership to rethink their course of action,” a senior Obama administration official said. As Secretary of State John Kerry travels to Ukraine to meet with President Petro Poroshenko and other Ukrainian leaders this week, policy makers in Washington are re-examining their decision not to supply weapons to Ukraine […]

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Russia Sees Marginal Increase in Oil Output in 2015

Russia envisages a marginal increase in oil production in 2015 despite the global slump in prices, according to the Ministry of Energy’s latest projections. The oil price rout has battered Russia, one of the world’s biggest oil producers along with Saudi Arabia and the U.S., at a time when its economy was already suffering from sanctions imposed by the West over the conflict in Ukraine, as well as the depreciation of the ruble. Russia produced an average of 10.58 million barrels of crude a day in 2014, a level of output not seen since the end of the Soviet Union. The Ministry of Energy expects average daily output in 2015 to reach 10.6 million to 10.7 million barrels a day, “approximately at the same level” as last year, a ministry spokeswoman said. The spokeswoman said the government’s forecasts will be updated next week. Oil output in January reached 10.66 […]

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Low oil prices threaten EU border economies

Economists at the International Monetary Fund find low oil prices threatening economies just outside the eurozone. (UPI/Shutterstock/canadastock) WASHINGTON, Feb. 3 (UPI) — The fall in oil prices may help short-term, but deflationary pressures are expected to spill out of the borders of countries in the eurozone, the IMF said. Beginning in March, the European Central Bank said it would purchase bonds valued at more than $65 billion per month through September 2016 as part of a so-called quantitative easing program meant to stimulate the struggling European economy. Eurostat, the statistics office for the European Union, reported inflation for January was at minus 0.6 percent, a further contraction from the minus 0.2 percent reported in December. Deflation is driven in large part by the slump in oil prices, off about half of their June value. A blog by economists at the International Monetary Fund found low oil prices will boost […]

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BP works on strategic reset

BP Chief Executive Bob Dudley says company looking to hit the reset button in low oil price era. File photo by Roger L. Wollenberg/UPI LONDON, Feb. 3 (UPI) — British energy company BP is entering a reset phase focused on streamlined spending in the low oil price climate, Chief Executive Bob Dudley said Tuesday. "Our focus must now be on resetting BP: managing and rebalancing our capital program and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations," Dudley said in a statement announcing fourth quarter results. The oil major reported a replacement cost loss during the fourth quarter of $968 million, compared with a profit of $1.5 billion during the same period last year. Replacement cost is similar to net income reported by the British company’s U.S. counterparts. BP began streamlining operations late last year. The company last year said […]

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United Kingdom: Falklands Drilling Program Confirmed

Falkland Oil and Gas Ltd. has mobilized a rig from West Africa to the Falkland Islands for the 2015 drilling program, Merco Press reported Feb. 3, citing company CEO Tim Bushell. The drilling will begin March and will be operated by Premier Oil and Noble Energy. Significant oil and natural gas reserves have been discovered near the Falklands , aggravating disputes over its ownership.  

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Here’s One Theory for Why Oil Is Going Nuts

Brent oil surged to $58 a barrel on Tuesday. It is now 24 percent higher than it was just a few weeks ago, meeting the technical definition of a bull market. (Some perspective: Prices are still down 50 percent since June.)  One possible reason for the recent surge: an industry in despair. U.S. drillers idled 94 rigs  last week, the most in data going back to 1987, according to Baker Hughes. In the past eight weeks, 352 rigs were idled. BP on Tuesday said it will reduce spending to $20 billion this year, compared with previous guidance of as much as $26 billion. The cuts bring renewed focus to rig counts and raise questions about how low prices can go and still sustain the U.S. oil boom.  U.S. Rigs Fall to a Three-Year Low Source: Bloomberg The history of oil prices follows a golden rule: What goes down must come up. Goldman Sachs in December […]

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Peak oil, peak food, peak everything

It all started with peak oil, the point when the maximum rate of extraction is reached, after which production begins to decline By Gwynne Dyer PEAK OIL is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertiliser, even peak bees. Let’s start small. We depend on bees to pollinate plants that account for about one-third of the world’s food supply, but since 2006 bee colonies in the United States have been dying off at an unprecedented rate. More recently the same “colony collapse disorder” has appeared in China, Egypt and Japan. Many suspect that the main cause is a widely used type of pesticides called neonicotinoids, but the evidence is not yet conclusive. The fact remains that one-third of the American bee population has disappeared in the past decade. If the losses spread and deepen, we may face serious food shortages. Then […]

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OPEC leader: Oil could shoot back to $200

Right now the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC’s Secretary-General Abdulla al-Badri we’ve already hit bottom. Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He’s far from the only one that sees a return of triple-digit oil prices . Finding a bottom: According to recent comments by the Secretary-General when he was in London, the oil market doesn’t need to look for oil prices to bottom as the market has already bottomed. Instead, he offered quite bullish comments by saying, “Now the prices are around $45-$55 , and I think maybe they [have] reached the bottom and we [will] see some rebound very soon.” Normally that type of remark would be just another layer of noise, but this is coming from OPEC’s Secretary-General […]

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The Entire Oil Collapse Is All About Crushing Russian Control Over Syria

While the markets are still debating whether the price of oil is more impacted by the excess pumping of crude here, or the lack of demand there, or if it is all just a mechanical squeeze by momentum-chasing HFT algos who also know to buy in the milliseconds before 2:30pm, we bring readers’ attention back to what several months ago was debunked as a deep conspiracy theory. Back then we wrote about a certain visit by John Kerry to Saudi Arabia, on September 11 of all days, to negotiate a secret deal with the now late King Abdullah so as to get a “green light” in order “to launch its airstrikes against ISIS, or rather, parts of Iraq and Syria. And, not surprising, it is once again Assad whose fate was the bargaining chip to get the Saudis on the US’ side, because in order to launch the incursion […]

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Oil Prices Continue Their Rally

A flame shoots out of a chimney at a petroindustrial factory in Kawasaki, Japan. ENLARGE Photo: Reuters LONDON—Oil prices continued their rally on Tuesday as investors continued to bet that a sharp decline in U.S. drilling activity will balance the oversupplied global market even as analysts cautioned that the rebound may not prove sustainable. Front-month Brent crude, the global oil benchmark, rose 2.3% flirting with $56 a barrel on London’s ICE futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March recently traded at $50.65 a barrel, up more than 2% from Monday’s settlement. Both the global oil benchmarks have gained more than 11% over the last three sessions after data last week showed the number of oil-drilling rigs in the U.S. fell to their lowest in three years. Gareth Lewis-Davies, analyst at BNP Paribas , said that investors are encouraged by the […]

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Natural Gas Hits Four-Session Losing Streak on Tame Weather Forecasts

Natural-gas prices closed at fresh two-year lows Monday as tame weather forecasts keep traders believing that supply is strong enough to overwhelm demand for the heating fuel. The front-month March contract settled down 1.1 cents, or 0.4%, at $2.68 a million British thermal units on the New York Mercantile Exchange. Gas is on a four-session losing streak, its longest in two months, and at its lowest settlement since Aug. 29, 2012. Weather updates from the weekend are showing limited cold for the next two weeks. Below-normal temperatures are limited to the Northeast while far above-normal temperatures are covering the entire western half of the country, spreading as far east as St. Louis. Without any sign of an extreme Arctic cold front coming for most of February, there is little hope for gas bulls, analysts said. Half of all U.S. homes use natural gas for heat, and that usually drives […]

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How Floating Armories Help Guard Cargo Ships From Pirates on High Seas

The MNG Resolution, a floating arsenal in the Gulf of Oman, shuttles guards and weapons for private maritime security companies that protect ships in one of the most dangerous shipping routes in the world. Photo: Niki Blasina/The Wall Street Journal ON THE GULF OF OMAN—Before dawn one morning in November, four men on the deck of the MNG Resolution lifted cases of guns and body armor out of shipping containers and heaved them into a waiting speedboat. The team zipped across the water to a tanker, where the crew pulled aside razor wire and hoisted the weapons aboard. The four men clambered up a rope ladder, and the speedboat raced back. The 141-foot Resolution, built 30 years ago to service offshore oil platforms, has a new job: She is a floating armory and bunkhouse for contract security forces. At least a half dozen such boats ply the Gulf of […]

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Iraq’s war within a war

Diyala stands as a microcosm of Iraq with a mixed population of Sunnis, Shias, Kurds and Turkmen [Reuters] When one of Iraq’s Shia militia commanders this week declared the province of Diyala "liberated", few people familiar with the province believed it would be a lasting victory. In a country with a largely Shia south, Kurdish north and Sunni west, Diyala stands as a microcosm of Iraq – a mixed population of Sunnis, Shias, Kurds and Turkmen. The apparent massacre of dozens of unarmed villagers by Shia militias is a reminder of the war within a war potentially more dangerous to Iraq than the fight against ISIL. The accounts from survivors of the massacre in Barwana are horrifying. But particularly chilling was an account from one of the survivors, a university student, that the gunmen knew their victims. "I realised there are two types of militias," he said. Shia militia […]

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Exclusive: Iran sweetens oil contracts to counter sanctions and price plunge

ANKARA/LONDON (Reuters) – Iran is sweetening the terms it offers on oil development contracts to draw the interest of foreign investors deterred by sanctions and low crude prices, as its pragmatic president seeks to deliver on his promise of economic recovery. Tehran is engaged in talks with world powers about its disputed nuclear program as it tries to strike a final deal to lift the sanctions that have halved its oil exports to just over 1 million barrels per day since 2012 and hammered its economy. To prepare for any agreement, it has already circulated new draft oil contracts to foreign firms to attract business once the restrictions end, Iranian oil officials and Western diplomatic sources said. Such deals would involve helping Iran revive aging fields and develop new ones, they added. But there is no certainty about the outcome of the nuclear negotiations. The contracts offer far more […]

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Libyan oil official released; kidnappers still unidentified

Libyan oil official freed, though no word on responsible party. File Photo by Tariq AL-hun/UPI TRIPOLI, Libya, Feb. 2 (UPI) — Though he’s been released, it’s unclear which group was behind the kidnapping of a member of the Libyan National Oil Co., his family said. Samir Kamal, a member of the NOC’s planning committee, disappeared Jan. 15 while leaving his office in Tripoli. He was released Sunday , though no group has yet to claim responsibility for his kidnapping. "He is well, but of course shaken up," a family member told the Libya Herald. "The reasons for his kidnapping are unclear, and the people responsible are still unknown." Kamal has represented Libya’s interests at the Organization of Petroleum Exporting Countries as the country struggles to resume its North American dominance in the 12-member group. OPEC in its January market report said continued unrest in Libya led to "significant disruption" […]

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Dana Gas building momentum in Egypt

Emirati energy company Dana Gas sees strong foundation for growth in Egypt. Photo: Dana Gas. SHARJAH, United Arab Emirates, Feb. 2 (UPI) — Emirati energy company Dana Gas said there was positive momentum building behind its exploration and production operations in Egypt. Dana said two concession agreements signed for operations in the Nile Delta provides the company, the sixth largest gas producer in Egypt, a strong foundation for growth . "We see this positive momentum continuing and are excited about our exploration and development plans in Egypt," Chief Executive Officer Patrick Allman-Ward said in a Sunday statement. Dana in early January said it received $60 million from the Egyptian government, which represents about a quarter of its outstanding debt . Political and economic instability in Egypt has left the government in debt to energy companies eager to tap the country’s natural gas potential. The government recently agreed to cover […]

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Asia’s Oil Giants Rethink Spending Plans

Malaysia’s Petronas has warned of double-digit percentage cuts in capital spending this year. ENLARGE Photo: Bloomberg News SINGAPORE—Asia’s largest oil companies are set to join their global peers in slashing investment plans for 2015 in response to the slump in oil prices, putting production growth in jeopardy in the energy-hungry region. Malaysia’s Petroliam Nasional Bhd., known as Petronas, has warned of double-digit percentage cuts in capital spending this year, while China’s Cnooc Ltd. and PetroChina Ltd. could reduce spending by a similar amount, people briefed by the companies said. Indonesia’s Pertamina said last week it could cut its investment by up to 50% this year. In all, Asian state-run oil-and-gas companies—which in the recent past have spent around $120 billion a year, accounting for nearly one-fifth of annual sector investment world-wide—could cut capital spending by between 15% and 30% in 2015, according to several experts. Meanwhile, major developments planned […]

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DW: Oil Price Downturn Impacts North American Land Rig Market More

UK’s Douglas-Westwood, an energy business strategy, research and commercial due-diligence services provider, discusses "Oil Price Downturn to have Significant Impact on North American Land Rig Market in 2015 with International Market More Resilient" in its latest edition of DW Monday. The recent oil price downturn is expected to have a significant impact on the global land rig market in 2015, as operators announce planned cuts to expenditure. Following a 24 percent rise over the 2010-2014 period, the number of active drilling rigs is expected to fall 12 percent in 2015.  The North American market, which is particularly susceptible to fluctuations in commodity prices, is expected to see the largest impact, with the active drilling rig fleet forecast to decline by 29 percent. Notably, Apache Corporation has announced plans to cut spending on its North American assets by 26 percent in 2015.  In comparison, the impact of the oil price […]

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Arctic Oil On Life Support

Oil companies have eyed the Arctic for years. With an estimated 90 billion barrels of oil lying north of the Arctic Circle, the circumpolar north is arguably the last corner of the globe that is still almost entirely unexplored. As drilling technology advances, conventional oil reserves become harder to find, and climate change contributes to melting sea ice, the Arctic has moved up on the list of priorities in oil company board rooms. That had companies moving north – Royal Dutch Shell off the coast of Alaska, Statoil in the Norwegian Arctic, and ExxonMobil in conjunction with Russia’s Rosneft in the Russian far north. But achieving the goals of tapping the extensive oil reserves in the Arctic has been much harder than previously thought. Shell’s mishaps have been well-documented. The Anglo-Dutch company failed to achieve permits on time, had its drill ships run aground , and saw its oil […]

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U.S. consumer spending in December weakest since 2009

WASHINGTON (Reuters) – U.S. consumer spending recorded its biggest decline since late 2009 in December with households saving the extra cash from cheaper gasoline. Other data on Monday showed factory activity cooled in January, suggesting the economy may have entered the new year on a slightly softer footing than had been expected. Nevertheless, upbeat and cash-flush consumers are expected to step-up spending and buoy the economy this year. "The consumer is poised to do well in early 2015. Lower gasoline prices are going to provide a big lift to consumption," said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell 0.3 percent after gaining 0.5 percent in November and 0.3 percent in October. The drop, the largest since September 2009, reflected a decline in spending at service stations as […]

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U.S. workers strike for second day at nine refineries; one to shut

HOUSTON (Reuters) – Union workers were on strike for a second day on Monday at nine U.S. refineries and chemical plants as they sought a new national contract with oil companies covering laborers at 63 plants. The walkouts were the first in support of a nationwide pact since 1980 and targeted plants with a combined 10 percent of U.S. refining capacity. One of the plants, Tesoro Corp’s ( TSO.N ) 166,000-barrel-per-day Martinez, California, refinery, was being shut because it was in the midst of planned maintenance work. The other refineries appeared set to continue running normally as operators initiated contingency plans, calling on trained managers as replacement workers. U.S. gasoline and diesel fuel prices rose on Monday on concerns over supply, as well as a bounce in crude. Talks broke down against a backdrop of plunging crude prices, down nearly 60 percent since June, prompting oil companies to cut […]

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Refineries to Rely on Automation Amid Strike

Oil Workers Strike (Bloomberg) — The heart and soul of a modern refinery isn’t the welders and pipefitters with grease on their hands, it’s the white-collar technicians seated at computers in a control room, overseeing the flow and temperature of every tank and valve. That’s why a strike that began in nine of the nation’s refineries yesterday isn’t likely to have much effect on fuel production at the plants. It will probably hurt refiners even less than the last strike 35 years ago, which also had a negligible impact on operations, according to industry analysts and consultants. “Refineries are highly automated operations that should be able to run with minimal disruption in the initial days and weeks,” Roger Read, an analyst for Wells Fargo Securities, said today in a note to investors. “Strikes are not new to the industry and a combination of non-union management and contract workers will […]

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