Category:

Venezuela Still Seen Defaulting to Deutsche Bank: Andes Credit

(Bloomberg) — With oil prices ticking up and new financing commitments, cash-strapped Venezuela is persuading traders and analysts alike to back away from calls the country will default this year. But not everyone is buying it. Deutsche Bank AG and Jefferies LLC still see Venezuela running out of money to pay debt in 2015. They’re the only ones out of 10 firms surveyed by Bloomberg, which included Goldman Sachs Group Inc. and Credit Suisse Group AG. While the country has raised almost $5 billion in the past month and oil has jumped 21 percent from an almost six-year low, Deutsche Bank’s Armando Armenta says that’s still not enough. Venezuela needs $32 billion to finance itself this year, according to his estimates. “The financing gap that they are facing for this year with current oil prices is just too large,” Armenta, the bank’s New York-based economist, said by telephone. “I […]

Posted On : Published By : Tom Whipple
Category:

Commodities explained: China’s new normal

Home working: China has shifted the emphasis to a model based on domestic demand As the Chinese return from their New Year celebrations, commodities traders and industry executives will be wondering what the year of the sheep holds for the sector. Why is Chinese growth on the minds of commodities traders? China has been the most important factor in commodities demand in the past decade. More On this topic IN Commodities explained The commodities “supercycle” that started in the early 2000s was largely driven by the country as investment in infrastructure, property, and factories producing exports for the globe required increasing imports of raw materials. Beijing’s 2009 stimulus further prolonged the demand, with loose credit encouraging the use of metal as collateral for loans. China grew from consuming about 12 per cent of the world’s metals in 2000 to near 50 per cent today. In commodities like iron ore, […]

Posted On : Published By : Tom Whipple
Category:

Exxon Mobil Adds More To Reserves In 2014

Exxon Mobil Corp. added more oil and gas to its reserves than it produced in 2014, with most of the new reserves coming from Canada. The world’s biggest oil company said it added proven reserves totaling 1.5 billion oil-equivalent barrels, of which 1.2 billion barrels consisted of petroleum and other liquids and 300 million barrels of natural gas. In the U.S., Exxon said it added more than 580 million oil-equivalent barrels from oil-rich shales including the Woodford, Permian, and Bakken, which have been the fastest-growing oil fields in the world. About 700 million barrels of oil equivalent came from Canada. At the end of last year, Exxon’s proved reserves were made up of 54% liquids, up one percentage point from a year earlier, and 46% natural gas. Exxon added back as new reserves about 104% of the oil and gas it produced. Excluding the impact of asset sales, reserve […]

Posted On : Published By : Tom Whipple
Category:

Battered by freeze, U.S. refineries try to rebound before next chill

NEW YORK (Reuters) – Major U.S. East Coast refineries were still working to restore operations on Monday, several days after severe cold weather triggered unit outages and drove up home heating oil futures on fears of tight supplies. The refineries, which account for more than two-thirds of production in the region, got a brief reprieve from the burst of cold weather on Sunday, but another front with sub-zero temperatures is expected to sweep through late on Monday. New York futures for ultra-low sulfur diesel (ULSD) – used for heating in much of the Northeast – extended Friday’s sharp gains in early trading, rising by another 4 percent on expectations of increased demand and supply worries. Monroe Energy, a subsidiary of Delta Airlines Inc, restarted the fluid catalytic catcracker at its 185,000-barrel-per-day refinery in Trainer, Pennsylvania, on Sunday, a spokesman said. But a source said on Monday that the main […]

Posted On : Published By : Tom Whipple
Category:

Oil-by-rail shipments are playing Russian roulette

LONDON (Reuters) – Train derailments involving crude oil and ethanol in the United States will cost more than $18 billion over the next 20 years, according to an assessment by the U.S. Department of Transportation. USDOT forecasts there will be just over 200 derailments involving trains carrying 20 or more tank cars of crude or ethanol between 2015 and 2034, an average of more than 10 per year, based on analysis of previous accidents and predicted growth in traffic volumes. Most will be "lower-consequence events" involving limited damage to property, environmental clean-up and only a few injuries or fatalities, with the bill totaling less than $5 billion. But up to 10 could have more serious consequences because they occur in more densely populated areas, with an estimated cost of $1.2 billion per incident. USDOT also considered a tail-risk event occurring in a densely populated urban center such as Chicago […]

Posted On : Published By : Tom Whipple
Category:

Frozen U.S. East Coast Makes Diesel Trade From Europe Profitable

(Bloomberg) — Freezing temperatures in North America have made it profitable to ship diesel and heating oil from Europe to the U.S. East Coast, according to Energy Aspects Ltd., KBC Energy Economics and FGE. This window of opportunity, also known as arbitrage, will last until the cold weather subsides, analysts from the three consultants said Monday. Temperatures will probably remain below normal levels in the U.S. and Canada for the next two weeks, BNP Paribas SA said in a report. “The whole thing will be short lived,” Ehsan Ul-Haq, senior analyst at KBC, said by phone from Walton-on-Thames, England. “Whenever temperatures start rising, we will see less and less demand,” for European fuels. Northwest Europe currently has a surplus of diesel and heating oil, with independently held stocks of the fuel at the highest in at least seven years, according to researcher PJK International BV. Cold weather has hindered […]

Posted On : Published By : Tom Whipple
Category:

Alberta Becomes Canada’s Most Pessimistic Region, Poll Data Show

(Bloomberg) — In a reversal of fortune, consumers in Canada’s prairie provinces Alberta, Saskatchewan and Manitoba have become the country’s most pessimistic. An index of consumer confidence calculated by Nanos Research for the prairies fell to 49.2 last week, putting it behind every other region for the first time since the series began in 2008. The decline has coincided with an oil price shock that has reduced prices for crude by more than half since June and triggered a housing market correction in cities such as Calgary and Regina. Ontario consumers have replaced those on the prairies as Canada’s most optimistic, according to the indexes. Every week, Nanos Research asks Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed. This is what the survey data, which is compiled for Bloomberg News, captured for the week through Feb. […]

Posted On : Published By : Tom Whipple
Category:

Arctic oil can wait, advocacy group says

Proposals for safe energy work in arctic U.S. waters stirs debate from environmental and industry circles. Photo by longtaildog/Shutterstock The Interior Department last week unveiled seven proposals meant to enhance regulations governing oil and gas operations on the arctic shelf of the United States. The new rules would require companies to adopt oil spill response plans suitable for the arctic environment and have the ability to drill a relief well in the event of a catastrophe like the BP oil spill in the Gulf of Mexico, among others. The government said the proposals follow an examination of arctic operations carried out by Dutch energy company Shell off the coast of Alaska in 2012. Michael LeVine, a senior counsel for advocacy group Oceana, said in response to email questions the federal government should start over with arctic energy regulations. "Good choices about whether to allow these activities and, if so, […]

Posted On : Published By : Tom Whipple
Category:

Canada expects dip in crude oil production

Oil sands development in northern Alberta, Canada. Photo by chris kolaczan/Shutterstock WASHINGTON, Feb. 23 (UPI) — Growth in Canadian crude oil production is expected to slow by about 3 percent as oil prices weigh on future developments, industry leaders said. The National Energy Board in Canada said total crude oil production should average 3.8 million barrels per day in 2015. That’s about 3.5 percent less than last year and, with oil prices expected to stay well below the $100 per barrel mark for the foreseeable future, drilling activity in Canadian basins should experience a 40 percent decline year-on-year. Bill Wall, a technical specialist at the NEB, told UPI there should be a slowdown in future production, though existing products should be sustained despite the low price for oil. "Oil sands production is expected to grow, as several projects will be ramping up or coming on stream in 2015," he […]

Posted On : Published By : Tom Whipple
Category:

Shell Withdraws Application for New Canadian Oil Sands Mine

CALGARY, Alberta— Royal Dutch Shell PLC said Monday that it was indefinitely postponing plans to develop a proposed oil-sands surface mine in Western Canada, the energy company’s latest sign of retrenchment amid a drop in crude oil prices to six-year lows. The company said it would withdraw its regulatory application to the Canadian Environmental Assessment Agency for a 200,000-barrel-a-day oil project known as the Pierre River North surface mine in northern Alberta. That move followed Shell’s decision last month to cut up to 10% of its 3,000 oil-sands-related jobs. Shell was the first major energy company to shed workers in Canada’s oil patch in response to the recent swoon in global crude oil prices to half their levels in mid-2014. Since then, other large Canadian oil-sands producers have also slashed jobs. Like Shell, some have deferred longer-term projects, but most plan to finish construction of oil-sands projects already under […]

Posted On : Published By : Tom Whipple