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Mysterious Gas Shortages in Central China Draw Official Scrutiny

10:00 am HKT AFP/Getty China’s inflation has dropped to a five-year low, spurring lots of calls from economists for stimulus measures to prop up the Chinese economy. But in the central Chinese city of Zhengzhou, the rising price of gasoline—and mysterious fuel shortages that hit the city in recent days—have dominated local attention and drawn authorities’ ire. Where did the gasoline go? It starts with pricing. Advertisement On Monday, China’s top economic planning body, the National Development and Reform Commission, announced it was raising retail prices of gasoline by 280 yuan per ton, the equivalent of about 0.21 yuan per liter. The price increase was the first time China’s government had raised fuel prices since July. Until this week, prices had been cut 13 consecutive times, reflecting the sharp fall in international oil prices. To anyone who follows oil in China, the NDRC’s decision to raise prices was no […]

Posted On : Published By : Tom Whipple
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Occidental Petroleum Reduced 2015 Capex by 33%

Occidental Bakken Acreage|Click to Enlarge Occidental Petroleum Corporation reported during its earnings call in late January that the company sustained a fourth quarter loss of $3.4 billion. In response to low oil prices, Occidental announced it will scale back its 2015 capital spending by 33 percent to $5.8 billion from $8.7 billion spent in 2014. In addition to the cuts, the company will also be reducing its activity in the Bakken. This confirms the news we reported in October that the company was in the process of restructuring, and looking to sell off its Williston Basin assets. Read more here . Stephen Chazen, President and Chief Executive Officer confirmed that the company “minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project, as these have subpar returns in this current product price environment. These efforts should result in a reduction in the cost of […]

Posted On : Published By : Tom Whipple
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U.S. Gulf Coast oil imports down

Oil imports into southern U.S. region down from historic highs, federal data show. Photo by Artens/Shutterstock Crude oil imports into the southern United States have gone from around 1.3 million barrels per day to a trickle, U.S. government data show Tuesday. A crude oil import tracking tool produced by the Energy Information Administration show a steady decrease in crude oil imports to the southern U.S. coast. "Historically, Gulf Coast refineries have imported as much as 1.3 million barrels per day of light-sweet crude oil, more than any other region of the country," EIA said in a Tuesday brief. "Beginning in 2010, improvements to the crude distribution system and sustained increases in production in the region have significantly reduced light crude imports." Gulf Coast imports come from Latin American and Canadian producers, as well as Saudi Arabia, Kuwait and Iraq. EIA data from last week show commercial crude oil stocks […]

Posted On : Published By : Tom Whipple
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Gas prices rise for 15th straight day

Gasoline prices rise in the United States, but pace of increase is muted. Photo by John Angelillo/UPI Oil prices in the United States were in a free fall last year and in early 2015, with the national average price flirting with the $2 per gallon mark. A national average price for Tuesday of $2.18 per gallon is about a penny more than Monday and 12 cents more than one week ago. AAA notes gasoline prices usually turn the corner at the beginning of February as refineries enter a period of seasonal maintenance. "Refineries usually schedule maintenance during the first several months of the year when demand is relatively low, which can lead to decreased production and supplies," the motor club explained in a Monday report. Refineries are also preparing to make a summer blend of gasoline, which requires additional preparations to prevent vaporization during warmer months. That gasoline is […]

Posted On : Published By : Tom Whipple
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Halliburton to Cut 8% of Workforce

ENLARGE A Halliburton Co. worker walks through an Anadarko Petroleum Corp. hydraulic fracturing site north of Dacono, Colo. Photo: Bloomberg News Halliburton Co. , the world’s second-largest oil-field services company, said Tuesday it plans to shed up to 8% of its global workforce as low oil prices force energy companies to rein in spending . The job cuts could amount to 6,400 layoffs; the company says it has more than 80,000 employees around the world. “We are faced with the difficult reality that reductions are necessary to work through this challenging market environment,” the company said in an emailed statement. Halliburton said the job cuts aren’t related to its pending acquisition of oil field rival Baker Hughes Inc., which was announced late last year. In its statement Tuesday, the company didn’t specify where in the world the layoffs would take place but said they would affect its entire line […]

Posted On : Published By : Tom Whipple
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Falling Oil Prices Threaten Houston Building Boom

ENLARGE Construction giant Skanska AB is developing two office buildings in Houston’s “Energy Corridor.” The one that is nearly complete is mostly leased; the other building doesn’t yet have any tenants. Photo: Michael Stravato for Wall Street Journal HOUSTON—The jagged skyline of this oil-rich city is poised to be the latest victim of falling crude prices. As the energy sector boomed in recent years, developers flocked to Houston, so much so that one-sixth of all the office space under construction in the entire U.S. is in the metropolitan area of the Texas city. But now, the need for more offices is drying up, thanks to a drop in oil prices that has spun energy companies from an outlook of optimism and growth to anxiety and cutbacks. Oil prices have fallen by more than 50% since June. Demand for office space is “going to basically stop,” said Walter Page, director […]

Posted On : Published By : Tom Whipple
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What the massive snowfall in Boston tells us about global warming

The snowfall in Boston lately is simply insane. The local bureau of the National Weather Service has tallied up the data and here’s how it looks — with all time records for snow within a 14-, 20-, and 30-day period: [Winter Climatology] Boston & Worcester breaking snowfall records, inching up to the snowiest winter ever pic.twitter.com/PGy87imCyo — NWS Boston (@NWSBoston) February 10, 2015 You could treat this as ordinary weather, or, you could think about it in a climate context. Counter-intuitive though it may sound, the fact remains that — as I have noted previously — some kinds of winter precipitation could indeed be more intense because we’re in a warming world. Consider, for instance, that sea surface temperatures off the coast of New England are flashing red , showing an extreme warm anomaly. That’s highly relevant — because warmer oceans have atmospheric consequences.  “Sea surface temperatures off the […]

Posted On : Published By : Tom Whipple
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US EIA sharply cuts natural gas price targets for Q1, full year 2015

Washington (Platts)–10Feb2015/441 pm EST/2141 GMT Pointing to continuing downward pressure on US natural gas prices, the Energy Information Administration on Tuesday reduced its Henry Hub spot price estimate for the first quarter of 2015 by 34 cents to $2.89/MMBtu. In its latest monthly Short-Term Energy Outlook, the agency made similar adjustments to its January estimates for the spot price in 2015, cutting its forecast 39 cents to $3.05/MMBtu, and in 2016, also down 39 cents to $3.47/MMBtu. EIA noted that the Henry Hub spot price for January averaged just $2.99/MMBtu, a decline of 49 cents from December "and the first monthly average price under $3/MMBtu since September 2012." The agency now expects monthly average spot prices to remain south of $3/MMBtu through the winter and below $4/MMBtu until the fourth quarter of 2016. For this winter heating season, EIA sees the Henry Hub spot price averaging $3.34/MMBtu, well below […]

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EIA: US gasoline prices to average $1/gal less in 2015 vs. 2014

HOUSTON, Feb. 10 02/10/2015 US regular gasoline retail prices are expected to average $2.33/gal in 2015, down from $3.36/gal in 2014, according to the Energy Information Administration’s (EIA) latest Short Term Energy Outlook (STEO). As a result, the average household is now expected to spend about $750 less for gasoline in 2015 compared with last year, EIA says. The projected regular gasoline retail price increases to an average of $2.73/gal in 2016. Driven largely by falling crude oil prices , US weekly regular gasoline retail prices averaged $2.04/gal on Jan. 26, the lowest since Apr. 6, 2009, before increasing to $2.19/gal on Feb. 9. Brent, WTI prices unchanged EIA’s price outlook is unchanged from last month’s forecast ( OGJ Online, Jan. 13, 2015 ). The administration expects Brent crude prices will average $58/bbl in 2015 and $75/bbl in 2016, with 2015 and 2016 annual average West Texas Intermediate prices […]

Posted On : Published By : Tom Whipple
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Halliburton to Cut Thousands of Jobs as Oil Slumps

NEW YORK, Feb 10 (Reuters) – U.S. oil services company Halliburton said on Tuesday it expects to cut potentially more than 6,000 jobs across the globe because of a "challenging market environment" resulting from low oil prices. Halliburton, the latest in a growing list of major oil industry companies laying off workers because of a worldwide glut of crude, said it expects to let go 6.5 percent to 8 percent of its 80,000-strong workforce, amounting to between 5,200 and 6,400 jobs. The number includes the 1,000 jobs that had been cut in the eastern hemisphere in the fourth quarter of 2014, a company spokeswoman said. Halliburton said the impact of the layoffs would be across all company operations, but it did not offer specifics. Oil prices have dropped about half to $50 a barrel since June because of the global glut of oil, forcing many companies to reduce spending. […]

Posted On : Published By : Tom Whipple