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Oil’s Volatility Reflects Debate: Is Worst Over Yet?

New evidence of surging U.S. oil supplies sent prices on a roller-coaster ride Thursday, reflecting the growing divide among traders over whether an eight-month rout is over. The U.S. Energy Information Administration said oil inventories grew by 7.7 million barrels in the week ended Feb. 13. Analysts said swelling stockpiles are a sign that producers aren’t cutting back on output despite a more than 50% collapse in prices since last summer. In its report, the EIA said U.S. oil production was on track to reach a 42-year high this month. But traders in the futures market had been bracing for much worse, and many took the data as a cue to buy. On Wednesday, an industry group had estimated a jump of 14.3 million barrels for last week, which would have been a record had it been borne out in the government data. Although both reports depend on surveys […]

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Natural Gas Prices Make Limited Gains on Larger-than-Expected Stockpile Drain

By Timothy Puko Natural gas futures made small gains Thursday after data showing a larger-than-expected draw from stockpiles. The U.S. Energy Information Administration said storage levels fell by 111 billion cubic feet in the week ended Feb. 13. That is 3 bcf more than the 108-bcf consensus average of 17 forecasters surveyed by The Wall Street Journal. The EIA update is widely considered one of the best measures of supply and demand, and this draw would indicate lower supply or larger demand than expected. In the minute after the data, prices rose 0.9% to $2.856 a million British thermal units on the New York Mercantile Exchange. They briefly fell reverted to losses before flipping again. The front-month March contract recently traded up 1.4 cents, or 0.5%, at $2.845/mmBtu. Cold winter weather, like that chilling the eastern half of the country right now, usually drives demand and raises prices. But […]

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Inspectors Say Iran Is Evading Questions as Nuclear Talks Enter a Crucial Stage

WASHINGTON — With only five weeks remaining for a basic agreement to be reached with Iran on the fate of its nuclear program , the world’s nuclear inspectors reported on Thursday that Iran was still refusing to answer their longstanding questions about suspected work on nuclear weapons and designs. The report, by the International Atomic Energy Agency , was issued just as an American negotiating team heads to Geneva for four days of talks that will, by Sunday, include Secretary of State John Kerry and his Iranian counterpart, Mohammad Javad Zarif. Most of those negotiations focus on the future, particularly on the question of how much nuclear fuel Iran would be permitted to produce and stockpile. But a lurking issue has been whether, as part of any final accord, Iran will be compelled to answer all questions that the I.A.E.A. has put to it about evidence of past work […]

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Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth

ENLARGE ‘Like everyone else, we’re using the downturn as an opportunity to sharpen our fiscal discipline,’ Aramco CEO Khalid Al Falih said during the World Economic Forum in Davos in January. Photo: Bloomberg News Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain. As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter. The company—the world’s largest oil producer—is also considering slashing its future spending on production and exploration by as much as 25%, much like private oil companies, industry sources said. “Like everyone else, we’re using the downturn as […]

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Pentagon reveals plans to retake Mosul from Isis

Iraqi policemen raise their weapons during a training session at a camp in the Bardarash district in January The Pentagon took the unusual step on Thursday of disclosing plans for an Iraqi-led attempt to retake Mosul, Iraq’s second-largest city, from Islamist militants with a ground offensive this spring. A senior US official said that a force of 20,000 Iraqi and Kurdish soldiers was being prepared to conduct the battle against Islamic State in Iraq and the Levant , known as Isis, which took control of the northern Iraqi city last year. The US has been publicly signalling an impending assault to retake Mosul for months, in part as an attempt to frighten Isis fighters or convince non-Isis insurgent groups that have worked with it to drift away While the broad objective of launching a ground campaign to retake Mosul in the late spring or early summer has been widely […]

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Saudi King Unleashes a Torrent of Money as Bonuses Flow to the Masses

RIYADH, Saudi Arabia — European leaders are still battling over austerity. The United States Congress is gearing up for another fight over the budget. But in Saudi Arabia , there are no such troubles when you are king — and you just dole out billions and billions of dollars to ordinary Saudis by royal decree. Not surprisingly, Saudis are very happy with their new monarch, King Salman. “It is party time for Saudi Arabia right now,” said John Sfakianakis, the Riyadh-based Middle East director of the Ashmore Group , an investment company, who estimates that the king’s post-coronation giveaway will ultimately cost more than $32 billion. That is a lot of cash, more, for example, than the entire annual budget for Nigeria, which has Africa’s largest economy. Since King Salman ascended the throne of this wealthy Arab kingdom last month, he has swiftly taken charge, abolishing government bodies and […]

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Pro-Islamic State militants seize Libyan university: residents

CAIRO (Reuters) – Militants claiming loyalty to Islamic State have seized the university in the central Libyan city of Sirte, residents said on Thursday, days after a video showed them staging a convoy parade. Islamist militants have made inroads into parts of the North African oil-producing country, exploiting a power vacuum created by a violent struggle for control between two competing governments. On Monday Egyptian planes struck suspected Islamic State targets in eastern Libya, after the group released a video showing the execution of 21 Egyptian Christians kidnapped in Sirte. On Wednesday Egypt and the official Libyan government asked the United Nations Security Council to lift an arms embargo and help build up the army to tackle the jihadists. "The group took control of the university yesterday," a Sirte resident said, asking not to be named. A picture posted on social media showed an Islamic State flag at the […]

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Big Investors Exit Petrobras as Corruption Scandal Drags On

SÃO PAULO—Some big international investors have been selling shares in Brazil’s state-run oil company Petróleo Brasileiro SA, or Petrobras, as the company faces the biggest crisis of its history amid corruption allegations. Investors including Soros Fund Management LLC, which invests for billionaire investor George Soros and his family; BlackRock Fund Advisors; and Fidelity Management Research Co., cut their stakes in the Brazilian company in the fourth quarter, when the corruption scandal gained force. “Big international investors prefer to stay away from Petrobras because the uncertainty surrounding the company is huge. So they’ve opted to take a conservative path until they see a clearer scenario for the company,” said João Pedro Brugger, a portfolio manager at Leme Investimentos, based in Florianopolis. Mr. Brugger said his company owns shares in Petrobras as part of a portfolio matching Brazil’s Ibovespa stocks index. Soros slashed its stake in Petrobras by 60% to 2 […]

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Union rejects contract offer from oil cos in U.S. refinery strike

HOUSTON (Reuters) – Union negotiators on Thursday rejected the latest contract offer from oil companies and said the largest U.S. refinery strike since 1980 may spread to more plants beyond the 11 where walkouts are underway. The United Steelworkers union (USW) said in a message to members and news media including Reuters that the latest proposal from lead oil company negotiator Royal Dutch Shell Plc failed to improve safety at refineries and chemical plants in an "enforceable way." The union also told workers not on strike to be prepared to walk out in the coming days. "New offer fails to improve safety in enforceable way," the USW said in the text message. "All units instructed to reject and prepare to join (unfair labor practices) strike if called upon. Union at table ready to bargain." A USW spokeswoman confirmed the message, but said the union would have no further comment. […]

Posted On : Published By : Tom Whipple