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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 […]

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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, […]

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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 […]

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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 […]

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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 […]

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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 […]

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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. […]

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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, […]

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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 […]

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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 […]

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Derailed Oil Train in Ontario Was Within Speed Limit

A train that derailed in northern Ontario just over a week ago—igniting and spilling more than 6,000 barrels of oil—was traveling at a restricted speed and carrying oil in structurally enhanced tank cars, Canadian investigators said Monday. Initial findings on the accident from the Transportation Safety Board of Canada suggest it bore stark similarities to a fiery derailment that occurred days later in West Virginia . The findings are likely to add to concerns that recent regulatory steps to make the transport of oil by rail don’t go far enough. In the Ontario accident , 29 railcars derailed, with 21 sustaining fire damage, the TSB said. The train, operated by Canadian National Railway Co. , was traveling at 38 miles an hour at the time of the derailment, under a 40-mile-per-hour speed restriction, the agency said. The train was made up of tank cars built to the new CPC-1232 […]

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Areva Warns of $5.6 Billion Loss

ENLARGE Delays on the Olkiluoto-3 nuclear power plant in Finland have contributed to Areva’s losses. The power plant was scheduled to come online in 2013. Photo: Associated Press PARIS—Engineering firm Areva SA said it expects its 2014 net loss to widen to about €4.9 billion, or $5.6 billion, from a year earlier, as delays to a reactor project in Finland and low demand for nuclear projects continue to hammer the company. The French firm’s latest profit warning follows three successive years of reported losses stemming from delays to a nuclear reactor project in Finland and a big write-off after a mine acquisition went sour. The company was also hampered by the aftermath of the 2011 Fukushima disaster in Japan, when many utilities shelved or delayed plans for nuclear power plant construction. Areva, which is 85%-owned by the French state, on Monday said preliminary financial information shows a full-year net […]

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Kremlin questions Moody’s rating downgrade

Ukrainian conflict, low oil prices, putting pressure on Russian economy, though Kremlin defends policies amid Moody’s credit downgrade. UPI/Ivan Vakolenko Finance Ministry criticized a credit downgrade from ratings agency Moody’s as pessimistic and out of step with developments in the oil-laden economy. "I suspect that in making this decision to lower the rating the agency was guided by political factors above all," Finance Minister Anton Siluanov said Saturday. "I believe that Moody’s rating is not just overly negative, but also based on an extremely pessimistic forecast, unparalleled these days." Moody’s said the security situation in Ukraine and the weak market for crude oil was diminishing Russia’s economic strength. The rating’s agency last week said the outlook for Russia was negative, leading to a downgrade in the government bond rating. "The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a […]

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Ukraine military says cannot withdraw heavy weapons as attacks persist

KIEV (Reuters) – Ukraine’s military said on Monday it could not start withdrawing heavy weapons from the frontline in the east as pro-Russian separatists had not stopped attacking government positions despite a ceasefire deal. Over the weekend, rebels and the Ukrainian military said they had reached an agreement to begin the process of withdrawing weapons, as required by the ceasefire deal that came into effect on Feb. 15. Violence has lessened significantly in recent days, but rebels twice shelled government troops overnight, spokesman Anatoly Stelmakh said. "Given that the positions of Ukrainian servicemen continue to be shelled, there can not yet be any talk of pulling back weapons," spokesman Vladislav Seleznyov said in a televised briefing. (Reporting by Pavel Polityuk; Writing by Alessandra Prentice)

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Norway faces up to prospect of North Sea slowdown

Norway’s economic model has long been much-admired. The Scandinavian country is one of the wealthiest nations in the world, thanks to 40 years of North Sea oil production. The global financial crisis barely registered amid decades of almost nonstop growth. More On this topic IN Europe But after a plunge in oil prices, policy makers and analysts in Oslo are now cautioning that this gilded era is coming to an end . “We cannot expect to grow continuously as we have over the past 10-15 years,” Øystein Olsen, Norway’s central bank governor, told the Financial Times. “We are going to be more in the same boat as our neighbouring countries.” Siv Jensen, Norwegian finance minister, added: “The past couple of decades are not to be continued.” Western Europe’s biggest oil producer is still a long way from crisis, the same policy makers note. The economy grew 3 per cent […]

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Archer Hit By US Shale Rig Squeeze, Targets At Least 10% Cost Cuts

OSLO, Feb 23 (Reuters) – Oil services firm Archer expects to cut its costs by at least 10 percent through an 11 percent headcount reduction, as it adapts to a weaker market in the North Sea and the U.S., the firm said on Monday. Archer, which offers drilling and well intervention services, is especially hit by the downturn in the U.S. onshore market where the shale rig count has fallen by more than 500, or 30 percent, since the end of November. Archer expects this decline to continue through the first quarter and into the second quarter, it said on a conference call with investors. When asked if the firm’s North American revenues would drop at the same pace as the rig count, Chief Executive David King said that was a fair prediction, which would be "not far off". The onshore shale rig count dropped dramatically after OPEC kept […]

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North Sea Oil Production Continues to Slide

ENLARGE British North Sea oil production fell 1.1% in 2014 compared with the previous year, an industry report said Tuesday. That is down around 70% since the North Sea’s peak in 1999. Photo: Agence France-Presse/Getty Images LONDON—Oil production in the British section of the North Sea declined in 2014 amid rising costs, high taxes and low oil prices , underscoring the need for more investment and exploration there, an industry association said Tuesday. The report by Oil & Gas U.K., a lobbying group, comes as the oil industry has stepped up pressure on the U.K. government to cut taxes and streamline the complex regime for the oil and gas sector in its March budget amid the North Sea’s decline. British North Sea production fell by 1.1% in 2014 compared with the previous year to 1.42 million barrels of oil equivalent a day, the report said. That is down around […]

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North Sea oil and gas drains cash at fastest rate since 1970s

Oil rig Spending on new North Sea oil and gas projects is to plunge by a third this year, industry operators warned on Tuesday, with the basin draining cash at its fastest rate since the 1970s. In a bleak assessment of Britain’s future as an energy producer, Oil & Gas UK, which represents the offshore industry, says that rising costs, heavy taxes and a near-50 per cent slide in crude prices could lead to accelerated decommissioning of older fields. More On this topic IN Oil & Gas “Without sustained investment in new and existing fields, critical infrastructure will disappear, taking with it important North Sea hubs, effectively sterilising areas of the basin and leaving oil and gas in the ground,” said Malcolm Webb, chief executive of the group. Another couple of years of low prices “could take a terrible toll on the North Sea”. Its annual survey of operators, […]

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Is Oil Returning To $100 Or Dropping To $10?

If you have been following the price of oil over the last few months, the chances are you’re a little confused. On the one hand you have the likes of A. Gary Shilling who, in this Bloomberg article , loudly trumpets the prospect of oil at $10/Barrel, and on the other there is T. Boone Pickens, who, at the end of last year was predicting a return to $100 within 12-18 months. Pickens prediction has moderated somewhat as WTI and Brent crude have continued to fall, but in January he was still saying that oil would return to $70 or $80/barrel in the near future. So, who is correct The answer is neither one. As with most things in life it is unlikely that the truth lies at either extreme. Pickens, and Shilling and other commentators suggesting that oil will fall to levels not seen since 1998, purport to […]

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Oil prices dip as worries over U.S. oversupply drag

SINGAPORE (Reuters) – Oil prices dipped on Monday on worries about oversupply in North America, with Brent futures testing support around $60 a barrel and U.S. contracts hovering around $50.70. After an initial rise on Monday along with global markets on optimism that another euro zone crisis over Greek debt had been averted for now, prices began dipping as analysts said crude markets remained oversupplied, especially in the United States, where inventories are at record highs. Benchmark U.S. WTI crude futures were trading down 9 cents at $50.72 a barrel by 0745 GMT. Brent crude was trading 5 cents lower at $60.17. Several banks on Monday said they expected prices to keep falling. "We expect prices to head back below $50/bbl in the coming weeks, with a target of $43/bbl over the next 2-3 months," ANZ said. Barclays also said the market would weaken again in the near future. […]

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Oil Extends Weekly Loss as Libya Opens Pipeline

Four pumpjacks are silhouetted as they operate at the site of an oil well outside Williston, North Dakota, U.S. Photographer: Daniel Acker/Bloomberg (Bloomberg) — Oil extended a weekly decline as Libya restarted a crude pipeline halted by a fire and the U.S. idled fewer drilling rigs than in previous weeks. West Texas Intermediate lost as much as 1.4 percent after falling 4.6 percent last week. Oil fields in eastern Libya resumed pumping to the port of Hariga after a pipeline was repaired, according to state-run National Oil Corp. The number of rigs targeting oil in the U.S. shrank by 37 to 1,019 last week, the fewest in service since July 2011, data from Baker Hughes Inc. showed on Friday. It was the smallest cut in seven weeks. “There is still an imbalance between supply and demand,” Jean Medecin a London-based member of the investment committee at Carmignac Gestion SA, […]

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Oil’s Plunge Could Help Send Its Price Back Up

If something is cheaper, people will likely buy more of it. That core principle of economics is proving to be especially true with oil after its recent plunge. Over the past six months, 53% of vehicle purchases in the U.S. were light trucks or sport-utility vehicles, which tend to consume more gas than cars, according to Commerce Department data. That was the highest share in a decade and up from 51% last June, when oil prices peaked for the year. The Transportation Department estimates Americans drove more than three trillion miles in the 12 months through November, the most since mid-2008 and the biggest annual increase—38 billion miles—in a decade. Falling oil prices aren’t only a sign of too much supply and not enough demand. The more prices fall, the more people can afford oil, an effect that can goose demand and ultimately help push prices back up. This […]

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Oil Rises Marginally, Gains Capped by High U.S. Supplies

By Eric Yep Crude-oil futures rose marginally in Asian trade Monday, with investor concerns about excess crude in U.S. markets limiting gains. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $50.90 a barrel at 0409 GMT, up $0.09 in the Globex electronic session. Brent crude for April delivery rose $0.19 to $60.41 a barrel on London’s ICE Futures exchange. Nymex West Texas Intermediate crude declined 4.6% last week, dropping more than Brent crude, which fell 2.1%. Both benchmarks snapped a three-week winning streak. "U.S. crude stocks are elevated and set to build through May as challenges continue to mount," Morgan Stanley’s head of energy research Adam Longson said in a weekly report. The U.S. crude market faces challenges including growing oil production in North America, refinery maintenance and a marginal decline in oil imports. Although Brent crude prices are holding up […]

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Hedge Funds Raise Bullish Oil Bets as Drillers Idle Rigs: Energy

The silhouette of pumpjacks is seen on the site of an oil well outside Williston, North Dakota, U.S. Oil explorers idled rigs for the 11th straight week, reducing them by 37 to 1,019, Baker Hughes said Feb. 20. Photographer: Daniel Acker/Bloomberg (Bloomberg) — Speculators raised bullish oil bets for the first time in five weeks as producers curbed new drilling. Hedge funds and other money managers increased net-long positions in West Texas Intermediate crude by 2.7 percent in the week ended Feb. 17, U.S. Commodity Futures Trading Commission data show. Futures rose 7 percent in the report week as companies including Total SA and Apache Corp. said they would cut spending and drill less. The number of oil rigs in the U.S. tumbled 35 percent since Dec. 5 to the fewest since 2011, according to Baker Hughes Inc. Outlays for exploration and production will drop by more than $116 […]

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The oil price: The Saudi project, part two

Stage one of Saudi Arabia’s plan — or perhaps hope — to restructure the oil market is taking longer than expected. By refusing to rein in production while prices fell, the Saudis permitted a big surplus to grow and served notice on higher-cost rivals (Russia, Venezuela, American shale-oil producers) that they would not prop up other people’s profit margins at the expense of their own market share. That signal has been weakened by the growing amount of oil in storage, which is absorbing most of the glut. World oil stocks rose by about 265 million barrels last year and Société Générale, a French bank, reckons they will increase by a further 1.6 million – 1.8 million barrels a day (b/d) in the first six months of this year, adding roughly 300 million barrels to the total. Oil is being stored in the hope that demand and prices will pick up later. Such […]

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What is Saudi Arabia not telling us about its oil future?

It is popular these days to speculate about why Saudi Arabia cajoled its OPEC allies into maintaining oil production in the face of flagging world demand. As the price the world pays for oil and oil products has plummeted, the price OPEC members are paying in terms of lower revenues is high, even unbearable for those who didn’t save up for just such a rainy day. Was the real reason for the decision to maintain production the desire to undermine rising U.S. tight oil production–which has now proven embarrassingly vulnerable to low prices after years of triumphalist talk from the industry about America’s "energy renaissance"? Were the Saudis also thinking of crippling Canada’s high-cost tar sands production? Was it Sunni Saudi Arabia’s wish to undermine its chief adversary in the region, Shiite Iran? Was the Saudi kingdom doing Washington’s bidding by weakening Russia, a country that relies so heavily […]

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U.S., Iran Hold Nuclear Talks in Geneva

ENLARGE U.S. Secretary of State John Kerry, right, speaks with Iranian Foreign Minister Javad Zarif in Geneva on Jan. 14. Photo: Associated Press GENEVA—As U.S. Secretary of State John Kerry met with Iran’s foreign minister for fresh nuclear talks, Israel’s leader stepped up criticism of the diplomacy, saying it was “astonishing” that negotiations were continuing over what he warned would be a dangerous deal. Israeli Prime Minister Benjamin Netanyahu ’s comments are the latest salvo in growing tensions between his government and the Obama administration over the Iranian nuclear talks. They come ahead of Israeli elections next month and the prime minister’s visit to Washington to address Congress at the request of Republican leaders. U.S. and Iranian officials have been meeting in this lakeside Swiss city since Friday as they try to agree at least on the outline of a final nuclear agreement by late March. Mr. Kerry and […]

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Oil Flows Resume at Libya’s Largest Field

Libya’s largest oil field and a key oil port were brought back online Sunday, though attacks by Islamic extremists have continued elsewhere in the war-torn nation. The resumption of oil flows from the Sarir oil field, which pumps about two-thirds of the country’s remaining output, was a rare piece of good news following renewed fighting in Libya’s civil war and a string of attacks by Islamic State militants. A pipeline carrying 185,000 barrels a day from Sarir to the Hariga terminal in eastern Libya was blown up about a week ago by unknown militants. “The pipeline was repaired. Production restarted today” at 9 a.m. Libyan time, a spokesman for the state-owned National Oil Co. told The Wall Street Journal. No group has claimed responsibility for the sabotage but Libyan oil officials have blamed Islamic State, which has made headway in the North African country after capturing swaths of Iraq […]

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French aircraft carrier deploys against IS fighters in Iraq

PARIS (AP) — France has deployed an aircraft carrier in the Persian Gulf to strengthen its military operation against Islamic State extremists in Iraq. President Francois Hollande announced days after deadly attacks by Islamic radicals in Paris last month that France would dispatch the Charles de Gaulle carrier to the Middle East, to work more closely with the U.S.-led coalition. A French military official said warplanes are starting operations from the Charles de Gaulle on Monday, and French Defense Minister Jean-Yves Le Drian was visiting the carrier. France has been among the most active participants in the coalition, carrying out regular airstrikes in Iraq. French media reported that some 2,000 military personnel are aboard the carrier, accompanied by a submarine, an air defense frigate and a British anti-submarine frigate.

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Amid a Slump, a Crackdown for Venezuela

CARACAS, Venezuela — For a glimpse into Venezuela ’s economic disarray, slip into a travel agency here and book a round-trip flight to Maracaibo, on the other side of the country, for just $16. Need a book to read on the plane? For those with hard currency, a new copy of “50 Shades of Grey” goes for $2.50. Forget your toothpaste? A tube of Colgate costs 7 cents. Quite the bargain, right? But for the majority of Venezuelans who lack easy access to dollars, such surreal prices reflect a tremendous currency devaluation and a crumbling economy expected to contract 7 percent this year as oil income plunges and price controls produce acute shortages of items including milk, detergent and condoms . “I’ve seen people die on the operating table because we didn’t have the basic tools for surgeries,” said Valentina Herrera, 35, a pediatrician at a public hospital in […]

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New Fukushima Leak Sees 70x Increase In Radiation

It has been a disturbing week for Japan, not due to any recent economic calamity resulting from Abenomics, but because for the first time since the catastrophic 2011 earthquake, the nation has been rocked with a series of ever stronger tremors, with two 6.0+ stronger quakes recorded in just the past 2 days: The quakes come at an awkward time, just a few short months before Japan’s government aims to restart its first nuclear reactor by around June, following the Fukushima devastation. While it is unclear if it is directly related to the recent surge in tectonic activity, overnight another radioactive water leak in the sea was detected at the crippled Fukushima nuclear plant, the facility’s operator TEPCO announced. Contamination levels in the gutter reportedly spiked up 70 times over regular readings. The levels of contamination were between 50 and 70 times higher than Fukushima’s already elevated radioactive status, […]

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U.S. refinery strike affects one-fifth of national capacity

HOUSTON (Reuters) – The largest U.S. refinery strike in 35 years entered its fourth week on Sunday as workers at 12 refineries accounting for one-fifth of national production capacity were walking picket lines. Sources familiar with the negotiations said talks may resume by mid-week to end the walkout by 6,550 members of the United Steelworkers union (USW) at 15 plants, including the 12 refineries. Representatives of both sides said no date has been set to restart negotiations, however. The strike comes as U.S. workers seek more pay in a strengthening economy. Wal-Mart Stores Inc has said its U.S. workers will get a raise to at least $9 an hour, while West Coast port workers have reached a tentative deal for a new contract after a months-long dispute. The refinery work stoppage began on Feb. 1 when talks for a new three-year contract between the USW and lead oil company […]

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U.S. shale oil’s crash diet likely to bring forward output dip

HOUSTON (Reuters) – Shale oil producers are throttling back so quickly on drilling that U.S. crude output could fall sooner than expected, within months, executives say as they slash costs to cope with tumbling crude prices and compete with Persian Gulf rivals. About a dozen chief executives who talked to Reuters or who spoke publicly, acknowledged they were taken aback by the scale and speed of the cutbacks, noting how this oil price downturn was different from several previous episodes in their careers. For one, companies are cutting costs deeper and faster than before as Wall Street investors increasingly place a premium on capital discipline rather than just production growth. Some also say the nature of shale makes it easier for companies to defer work and wait for prices to recover. The wells that drove the U.S. energy boom of the last decade rapidly deplete, so overall output will […]

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Texas RRC Oil & Gas Production Report

Texas has released Oil & Gas Production Data Query  with its (incomplete) production numbers for December 2014. The numbers were quite surprising. The last data for all Texas data is December 2014 . The EIA data is through November. The Oil data is in barrels per day. Texas C+C Though the data is incomplete, we can still get some idea what oil production was in Texas in December. Total, C+C incomplete, production numbers for December was up over 133,000 barrels per day over the November incomplete data. Of course this number will change but it is very significant. Why would Texas production numbers jump to over 2.5 times their usual number in December? Texas Crude Only Texas crude only was up 109.4 thousand barrels per day according to the Texas RRC. Texas Condensate And the rest of the C+C increase came from condensate, up 23.9 thousand barrels per day. […]

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Prominent climate change denier funded by Koch brothers, energy companies: reports

Harvard-Smithsonian researcher Willie Soon, who has denied that climate change is caused by human activity, took more than $1 million in funding from the energy industry, newly released documents show. (Screenshot) A prominent climate change denier and researcher quietly took more than $1.2 million in payouts from the energy industry, including the Koch brothers and other oil lobbyists, for the past 14 years, newly released documents have  shown . Wei-Hock "Willie" Soon, a researcher at the Harvard-Smithsonian Center for Astrophysics, accumulated a total of $1.25 million from Exxon Mobile, the American Petroleum Institute, Southern Company, and a Koch brothers foundation, according to documents obtained by Greenpeace through Freedom of Information Act (FOIA) filings. For years, Soon’s work has been a go-to source for politicians angling to block climate change legislation, such as Sen. James Inhofe (R-OK), who has called climate change a hoax. Soon has also testified before the […]

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Canada’s Oilsands Face ‘Death Spiral’ If They Don’t Cut Costs

As the world’s oil glut continues to build, wiping out hopes of a price recovery, the head of one of Canada’s largest oilsands operators is warning the industry faces a “death spiral” if it doesn’t figure out how to cut costs. Speaking before the Chamber of Commerce in Fort McMurray, Steve Laut, president of Canadian Natural Resources Ltd. (CNRL), said oilsands companies can still return to health, but only if they aggressively begin to cut costs. Costs have risen so far, so fast that oil producers were making three times as much profit in 2004, when oil was at $40 a barrel, than they were a few years ago when oil was at $100 a barrel, Laut said, as quoted at the Globe and Mail . Laut’s call for cost cutting may be seen by some as a prelude to layoffs and project cancellations, but so far North America’s […]

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Don’t abandon the North Sea

The next few months will be a critical period in the history of the North Sea. After 50 years which have seen 42 billion barrels of oil and gas produced, the province could now see a significant proportion of activity brought to a premature end. Fields which are uneconomic at current prices could be closed down and then decommissioned. Much of of the oil and gas which remains ( between 12 and 24 bn barrels ) could be left behind, undeveloped and valueless. For some fields, such as Brent, the exhaustion of reserves makes decommissioning inevitable. For others, however, we should be finding a way to maintain operations and to ensure that the resources in place can be developed when prices rise again. A 50 per cent fall in prices would be a nasty shock for any business anywhere in the world but the fall in oil prices is […]

Posted On : Published By : Tom Whipple
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Ukraine military says cannot withdraw heavy weapons as attacks persist

KIEV (Reuters) – Ukraine’s military said on Monday it could not start withdrawing heavy weapons from the frontline in the east as pro-Russian separatists had not stopped attacking government positions despite a ceasefire deal. Over the weekend, rebels and the Ukrainian military said they had reached an agreement to begin the process of withdrawing weapons, as required by the ceasefire deal that came into effect on Feb. 15. Violence has lessened significantly in recent days, but rebels twice shelled government troops overnight, spokesman Anatoly Stelmakh said. "Given that the positions of Ukrainian servicemen continue to be shelled, there can not yet be any talk of pulling back weapons," spokesman Vladislav Seleznyov said in a televised briefing. (Reporting by Pavel Polityuk; Writing by Alessandra Prentice)

Posted On : Published By : Tom Whipple
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Ireland’s energy crisis

Ireland’s energy crisis thumbnail Energy is not one of Ireland’s strengths: we import almost 90 per cent of our power, we’ve made little progress in renewables, and we’re at the mercy of an unstable global market. Where will Ireland get its energy in years to come? Besides worries about climate change and security of supply, Ireland faces a capacity issue. A nuclear reactor is unlikely ever to dominate the landscape of Carnsore, Co Wexford. In Co Leitrim not a single rock has been fracked – and none might ever be. Yet nuclear power and hydraulic fracturing are already in Ireland. And although a large part of the population doesn’t want these two controversial power sources anywhere on the island, our purchase of their product is why energy is cheaper now than it has been for almost a decade. Ireland imports electricity derived from nuclear power from the UK through […]

Posted On : Published By : ASPO-USA
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Conservation of Living Resources in a Post-Peak Oil World

Summary: In a world overrun with humans, what fate awaits wildlife, fisheries, and forests when the fuels run short? Several years ago I was working as a biological consultant to the U.S. Fish and Wildlife Service, helping this federal agency prepare a long-term management plan for Innoko National Wildlife Refuge (NWR) in Alaska. This Comprehensive Conservation Plan (CCP) would provide overall management guidance for the refuge’s wildlife, habitat, and public use. The huge, sprawling 3.8-million acre (5,940-square mile) Innoko NWR is one of the remotest national wildlife refuges in the United States. It is so wild that it contains not a single human inhabitant in all that vastness; its headquarters are located in the village of McGrath, on the Kuskokwim River, some 50 miles as the raven flies from the refuge itself. In 1980, the U.S. Congress officially designated 1,240,000 acres of Innoko NWR (1/3 of it) as part […]

Posted On : Published By : ASPO-USA
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Oil Retreats on U.S. Supply Highs

ENLARGE The U.S. oil-rig count fell to 1019, the lowest in years, according to data reported Friday. Photo: Associated Press Oil prices fell for a third-straight session as slowing rig count cuts added to losses that had been mounting because of historically high U.S. supplies. The U.S. Energy Information Administration reported on Thursday that U.S. crude inventories reached another record last week, a sign that cheap prices haven’t begun to affect production yet. The rising supplies led to the oil market’s first weekly loss in nearly a month. Rig counts kept falling in new data released Friday, but the 37-rig decline was less than half of that registered a week ago. That could be a bearish sign that production won’t fall to balance the market as quickly as some had hoped. The day’s losses mounted on the news. Light, sweet crude for March delivery, the U.S. benchmark, settled down […]

Posted On : Published By : Tom Whipple
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Oil falls below $60 as oversupply weighs

LONDON (Reuters) – Brent crude oil fell below $60 a barrel on Friday as oversupply, supported by record-high U.S. crude stocks, weighed on the market. U.S. crude inventories rose 7.7 million barrels to 425.6 million last week, rising for a sixth straight week to record highs, data from the Energy Information Administration (EIA) showed on Thursday. Stockpiles of West Texas Intermediate (WTI) U.S. crude at the Cushing oil hub in Oklahoma rose the most in six years, the EIA said. "With total crude stocks now about 425 million barrels and Cushing north of 46 million barrels, WTI is looking increasingly mispriced high above $52 per the April contract," said Jeffries Futures analysts in a note to traders. Brent crude futures for April were down 27 cents at $59.94 by 0915 GMT, having hit an intraweek low of $57.80 in the previous session. U.S. crude for March delivery CLc1 was […]

Posted On : Published By : Tom Whipple
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Energy Market Volatility Reaching New Heights

Greetings from London. Urgent Note . We urge you to take a look at this week’s Inside Investor, in which Dan Dicker analyzes one of the very few shale companies that could weather the downturn. While every industry player is hoping its rivals cut back on production, there is no sign of that happening just yet. That could lead to a lot more pain in the sector as a whole in the months ahead. But there is one company that can withstand the slump and is taking a more prudent approach, which should allow it to emerge stronger than all of its peers. Find out which company that is: Click here to read the report for free . Oil prices fluctuated up and down over the course of this week, with a wider gulf opening up between WTI and Brent crude. The U.S. Energy Information Administration reported higher than […]

Posted On : Published By : Tom Whipple
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Natural Gas Surges on Rising Demand

By Timothy Puko Natural gas prices surged to their highest closing price in nearly a month as severely cold weather boosts demand. The front-month March contract settled up 11.7 cents, or 4.1%, at $2.951 a million British thermal units on the New York Mercantile Exchange. It was the seventh gain in nine sessions and the highest closing price since Jan. 23. Half of U.S. homes use natural gas for heating fuel and severe cold could be about to drive up their demand for weeks. The U.S. government weather model shifted, creating more agreement between computer weather models about the chance for extended, widespread cold, wrote Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, in a note. "The morning forecasts effectively erased the argument for a March warm-up and forced bearish traders to price in the potential for a long-term cold snap," Mr. Calder said. […]

Posted On : Published By : Tom Whipple
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NYMEX March gas futures settle at $2.951/MMBtu, up 11.7 cents

Houston (Platts)–20Feb2015/351 pm EST/2051 GMT NYMEX March natural gas futures settled at $2.951/MMBtu Friday, up 11.7 cents, on updated weather forecasts calling for a higher probability of below-normal temperatures across a much greater portion of the US. Friday’s rally is "supported by both current intense cold and updated forecasts indicating that cooler-than-normal readings may persist into the first week of March," said Tim Evans, energy futures specialist with Citi Futures Perspective. Aaron Calder, senior market analyst at Gelber & Associates, agreed. "Front-month prices have surged higher today in response to a substantial shift in domestic weather modeling," Calder said. Updated weather forecasts calling for below-normal temperatures across key demand regions in the US "erased the argument for a March warm-up and forced bearish traders to price in the potential for a long-term cold snap," Calder added. Calder believes that, despite robust gas production growth and supply levels, the potential […]

Posted On : Published By : Tom Whipple
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Natural gas inventory exceeds five-year average for first time since November 2013

Working natural gas in storage has surpassed five-year average levels for the first time in more than a year. At 2,157 billion cubic feet (Bcf) as of February 13, stocks are 58 Bcf greater than the five-year average. Recent extremely cold weather may result in high stock withdrawals for the week ending February 20, which could again push stocks below their five-year average. However, natural gas production in February and March that is forecast to average 5 Bcf/day above the year-ago level is likely to contribute to healthy inventories and moderate prices as the nation moves from winter into spring. At no point during 2014 did inventories surpass their five-year average; the most recent excess was on November 22, 2013. Inventories ended the 2013-14 winter withdrawal season last March at a 10-year record low of 837 Bcf . After a record injection season in 2014 (April-October), weekly working gas […]

Posted On : Published By : Tom Whipple
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U.S., Iran resume bilateral nuke talks

GENEVA, Feb. 20 (Xinhua) — Delegations from the United States and Iran started on Friday another round of bilateral talks over Tehran’s long-disputed nuclear program. A diplomatic official with the U.S. Mission in Geneva told Xinhua that the talks began this morning. The source said that issues regarding the Iranian nuclear program including centrifuges and sanctions would be on the table during these closed-door meetings. The bilateral talks were at the moment led by Iranian Deputy Foreign Minister Abbas Araqchi and U.S. Under Secretary of State Wendy Sherman, according to Iran’s official news agency IRNA. Iranian Foreign Minister Mohammad-javad Zarif and U.S. Secretary of State John Kerry will join the talks on Sunday and Monday, Araqchi said earlier. Kerry’s trip was confirmed by the U.S. Department of State in a statement, which noted that the top U.S. diplomat will travel on Feb. 22 to Geneva to meet with his […]

Posted On : Published By : Tom Whipple
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World major countries to hold nuclear talks with Iran

GENEVA, Feb. 20 (Xinhua) — Representatives from world major countries and Iran will hold talks here on Sunday seeking for an agreement over Tehran’s disputed nuclear program, said the mediator European Union (EU) on Friday. In a statement received by Xinhua Friday afternoon, the EU said that the political directors from the P5+1 group, namely the United States , Britain, France , Russia , China, and Germany , and Iran will meet in this Swiss city on Feb. 22 "to continue their diplomatic efforts towards reaching a long-term, comprehensive solution to the Iranian nuclear issue". Sunday’s meeting is preceded by the bilateral engagements between the United States and Iran that started Friday morning. The bilateral talks were at the moment led by Iranian Deputy Foreign Minister Abbas Araqchi and U.S. Under Secretary of State Wendy Sherman, according to Iran’s official news agency IRNA. It was announced that Iranian Foreign […]

Posted On : Published By : Tom Whipple