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Kemp: US Businesses Brace For Oil Investment Downturn

John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Feb 10 (Reuters) – Oil and gas production is fundamental to the U.S. economy. The sharp downturn in prices will have a negative impact on business investment in the short term before the positive impact on consumer spending takes over further down the line. Oil and gas producers accounted for almost $1 in every $8 of new business investment in the U.S. economy in 2013, according to new data published by the Census Bureau. Businesses engaged in oil and gas extraction invested $159 billion in wells, structures and equipment in 2013, according to the Annual Capital Expenditures Survey, the latest edition of which was published on Feb. 5 ( http://link.reuters.com/dur93w ). Companies engaged in oil and gas production support activities invested a further $20 billion, taking the oil and gas sector’s share of economy-wide new […]

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Oil Drilling Slows as Crude Price Drops

The International Energy Agency describes a lasting bounce in oil prices as “inevitable.” But lower Chinese oil imports, persistent oversupply and Saudi laissez-faire may endanger the recovery. Photo: AP The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday. Companies drilled 28% fewer oil wells in January across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University’s Baker Institute for Public Policy. But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm. Energy mavens around the world are […]

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Voices in Arlington, Texas Unify to Protect Environment and Community From Fracking

Liveable Arlington, a new Texas grassroots environmental group, joins the growing number of anti-fracking groups forming around the world. The group was established at the end of January, as the battle to impose stricter ozone standards intensifies and the call for fracking bans and tighter ordinances on industry increase nationwide. Arlington, Texas, a Dallas suburb, sits atop the natural gas rich Barnett Shale. ”Once Arlington was known as a bedroom community. Now we are in the forefront of a potentially dangerous industrial experiment,” Ranjana Bhandari, one of the co-founders of Liveable Arlington, told DeSmogBlog. “We have lived with fracking all around us for many years now and have experienced its negative effects on air quality, public health, and now the earthquakes,” she says. Ranjana Bhandari, co-founder of Livable Arlington, in her backyard. ©2013 Julie Dermansky Bhandari and her family are among the few residents who turned down Chesapeake Energy […]

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Why rig cuts won’t save oil

The sharp drop in U.S. oil rig counts has helped lift crude prices off their lows, but it won’t slow production or alleviate oversupply, Goldman Sachs said. “The decline in the U.S. rig count likely remains well short of the level required to slow U.S. shale oil production to levels consistent with a balanced global market,” Goldman said in a note Tuesday. “Lower oil prices will be required over the coming quarters to see the U.S. production growth slowdown materialize.” It estimates the current rig count will bring production growth from the Big-three shale basins — Permian, Eagle Ford and Bakken — to 615,000 barrels a day in the fourth quarter of this year, while continued productivity growth may push that as high as 690,000 barrels a day. Which, not how many It’s about which rigs are getting cut. U.S. crude production was estimated at around 8.6 million barrels […]

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U.S. oil output ‘party’ to last to 2020: IEA

LONDON (Reuters) – The United States will remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth. The agency also said in its Medium Term Oil Market report that oil prices LCOc1, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years. Oil prices deepened their decline after the Organization of the Petroleum Exporting Countries in November shifted strategy and declined to cut its own output, choosing to retain market share that has been eroded by rival supply sources such as U.S. shale oil. But IEA Executive Director Maria van der Hoeven, launching the report in London, said while OPEC may win back […]

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Ukraine Fighting Continues Ahead of Key Meeting

ENLARGE A bus station hit during shelling between Russian-backed separatists and the Ukrainian government forces in Donetsk on Wednesday. Photo: Associated Press Heavy fighting continued in eastern Ukraine on Wednesday, just hours before leaders were expected to gather for a high-stakes summit to negotiate a cease-fire in the 10-month conflict between pro-Russia separatists and Kiev. Lower-level talks were scheduled to resume early Wednesday in the Belarusian capital of Minsk, the foreign ministry said, in an effort to hammer out the basics of a deal that could be finalized later in the day by the leaders of Russia, Ukraine, Germany and France if an agreement appeared close. “There are a number of problems which remain to be resolved…but it is very likely to go ahead,” French Foreign Minister Laurent Fabius told France Inter radio early Wednesday, according to news agency reports, referring to the leaders’ summit. “It is really a […]

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Gazprom Has Financial Clout to Survive Russian Crisis, CFO Says

(Bloomberg) — OAO Gazprom, Russia’s largest company, has the strength to weather the country’s economic crisis, according to its chief financial officer. The state-run gas exporter cut its debt by 10 percent last year, has a cash pile of about $20 billion and is benefiting from the ruble’s declines, Gazprom’s Andrey Kruglov said. The company’s board will review its 840 billion ruble ($13 billion) budget for this year later this month and Gazprom plans “additional stress tests” using oil at $40 and $50 a barrel, Kruglov said in an e-mailed response to questions. The company sees no need to ask for state aid, he said. Russia economy has been whacked by the collapse in oil and the plunge in the ruble, yet export-focused companies like Gazprom are seeing profits supported because they earn revenue in dollars while paying most costs in local currency. That’s helping to offset oil’s drop, […]

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Low oil price global economic threat, Russia says

Russia’s finance minister expects low oil prices to have widespread economic impacts. (UPI/Shutterstock/ekina) Low oil prices may have an aggregate negative impact on the health of the global economy, Russian Finance Minister Anton Siluanov said Tuesday. Siluanov told reporters from the sidelines of the summit for the Group of 20 major economies in Istanbul the impact of low oil prices, for importers and exporters alike, would be negative . "The cumulative effect from the current steep fall of prices for resources may enfeeble the aggregate demand in world economy and this in turn will slow down its growth rates," he said. A blog posted last week by economists at the International Monetary Fund found low oil prices will boost economic growth short-term, as consumers save on energy costs, but mid-term risks are present in terms of national monetary policy planning. Exporters will lose and importers will win in the […]

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As Extreme Weather Increases, A Push for Advanced Forecasts

With a warmer atmosphere expected to spur an increase in major storms, floods, and other wild weather events, scientists and meteorologists worldwide are harnessing advanced computing power to devise more accurate, medium-range forecasts that could save lives and property. Like a pipeline in the sky, the plume of sodden tropical air advanced mile-high above the Pacific Ocean, heading toward the California coast. This “atmospheric river” — a long, narrow band of concentrated water vapor — carried the moisture equivalent of about 15 Mississippi Rivers. When it made landfall, it dumped a massive amount of rain on the densely populated stretch of California from San Francisco to Los Angeles, unleashing floodwaters, causing landslides, and cutting off power to hundreds of thousands of homes and businesses. Atmospheric rivers fuel some of western North America’s most intense and destructive winter storms, and this one, slamming California last December, was a big one. […]

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How Russia Plans To Retaliate For The Saudi-Driven Collapse In Oil`

A week ago we explained that yet another conspiracy theory, one involving virtually every geopolitical hotzone, from Saudi Arabia, to Russia, the United States, Qatar, Syria, ISIS, and Ukraine, has become fact when our speculation from last September , namely that the plunge in oil was an choreographed move between the US and the Saudis (even if Kerry realized – we hope – that it meant a recession for the US energy producing states and a collapse in the only vibrant US industry of the past decade: shale), one seeking to dislodge Russian control over the Syrian government and to facilitate the passage of a Qatar pipeline under Syrian territory. This is what the NYT said: “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 […]

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