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Yellen Says Oil Price Means Inflation Will Fall Before It Rises

(Bloomberg) — Federal Reserve Chair Janet Yellen told lawmakers the impact of lower oil prices means the U.S. inflation rate will decline before it eventually rises toward the central bank’s 2 percent target. “We think inflation is going to move lower before it moves higher,” she said in testimony today before the House Financial Services Committee. “Declining oil prices have had a very major influence.” The Fed chair reiterated that she expects the drag on inflation “will be transitory.” “Especially with an improving labor market we expect inflation in the medium term to move to our 2 percent target,” she said. Yellen said in December she and colleagues will want to be “reasonably confident” that inflation will move back to their target as they begin raising interest rates. The Fed’s preferred gauge of inflation, based on personal consumption expenditures, hasn’t touched 2 percent since April 2012, and rose just […]

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U.S. Oil Inventories Surge for Seventh Week

Photographer: Carlos Javier Sanchez/ Bloomberg Crude oil in storage in the U.S. jumped 2 percent, to 434 million barrels, according to EIA weekly data released today, Feb. 25. The increase of 8.43 million barrels was more than double the median estimate in a Bloomberg survey of analysts and was the biggest increase in a month. U.S. oil storage is bursting at the seams amid a global glut of supply that has driven prices down by half since last summer. U.S. inventories remain at their highest levels in at least 80 years, according to an analysis by Bloomberg Intelligence.  U.S. Oil Inventories Reach 80-Year High Oil prices fluctuated as the inventory news was tempered by slowing growth in production last week, rising a fraction of a percent to 9.29 million barrels a day, the EIA reported today. Production continues at the highest rate since 1972.  Winter weather and refinery outages have contributed to […]

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Bakken oil drillers retreat to the core

LONDON (Reuters) – North Dakota’s oil producers have pulled back to the core areas of the Bakken formation to cut costs and maximize output amid the slump in prices. The number of active rigs in the state has fallen to just 121, from 190 a year ago, according to an active rig list published by the state’s Department of Mineral Resources (DMR) on Wednesday. The rig count is now below the threshold of “at least 130” DMR Director Lynn Helms identified last month as needed to sustain output at the current level of just over 1.2 million barrels per day. But more important than the raw number is their distribution across the state, with drilling now increasingly concentrated in only the most promising areas. Of the 121 rigs active on Wednesday, 115 are drilling in just four counties at the heart of the Bakken – Dunn, McKenzie, Mountrail and […]

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Keystone shows environmental review process is broken

LONDON (Reuters) – "Because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest – including our security, safety and environment – it has earned my veto." With those words, the president returned the Keystone pipeline authorization act (S.1) to the Senate unsigned, and challenged lawmakers to find the two-thirds majorities in both houses needed to enact the law without his approval, something that remains unlikely. But by citing established procedures and the need not to short cut a thorough examination of the issues, after more than six years of environmental reviews, the president’s staff demonstrated they have absolutely no sense of irony and a deeply cynical approach to governing. The president’s advisers insist the administration has not yet taken a decision on the merits of the pipeline and is still waiting for the State […]

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U.S. crude stocks rise, distillates draw down to record low: EIA

NEW YORK (Reuters) – U.S. crude stocks rose last week to a seasonal record high for the seventh straight week as refineries cut output, while refined product inventories fell with distillates at seasonal record low levels, data from the Energy Information Administration showed on Wednesday. Crude inventories rose 8.4 million barrels in the week to Feb. 20, double analysts’ expectations for a 4 million-barrel rise, to 434.1 million barrels, their highest for the time of year since records began 80 years ago, the EIA said. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 2.4 million barrels, EIA said. U.S. crude futures extended losses after the data but by 11:27 a.m., were up about 1 percent at $49.75 a barrel. "The report is relatively bullish, despite the large crude oil inventory build," said John Kilduff, partner at Again Capital LLC in New York. "The drawdowns […]

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CGG to Cut About 400 Jobs After Reporting $1.2 Billion Net Loss

(Bloomberg) — CGG SA, the oil field seismic surveyor that rejected a takeover approach last year by Technip SA, reported a net loss of $1.2 billion in 2014 after a writedown for restructuring costs and an impairment on marine assets. “We have faced a difficult environment last year which deteriorated brutally with the drop of oil prices in the last quarter,” Chief Executive Officer Jean-Georges Malcor said on a conference call Thursday. “Our focus is to generate cash this year through lower capital expenditure and restructuring.” Europe’s second-biggest oil-services provider Technip last year approached CGG about an offer that would have seen the combination of two French companies specialized in providing equipment and studies for energy companies. The surveyor, which has cut jobs and reduced its fleet, rejected the bid and said it was confident it could remain an independent company. Malcor said CGG will cut about 400 jobs […]

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How ‘Orphan’ Wells Leave States Holding the Cleanup Bag

ENLARGE Ed Presley stands by an idle well in Wyoming’s Powder River Basin, one of thousands that state regulators seized from his company, High Plains Gas, to ensure they didn’t pollute groundwater or soil. Photo: Ryan Dorgan for The Wall Street Journal GILLETTE, Wyo.—After a natural-gas boom in the Powder River Basin here petered out several years ago, few energy companies were interested in the leftover wells pockmarking the prairie. Then Ed Presley came along. The burly, bearded speculator acquired roughly 3,000 idle wells, many for a few dollars. With a salesman’s charm, he vowed to revive the wells with a contraption called the Gazmo. But Mr. Presley’s plan never produced any gas. He says he couldn’t raise enough money for his company, High Plains Gas Inc., to follow through. Last year, Wyoming seized most of his wells to ensure they didn’t pollute groundwater or soil, declaring them abandoned. […]

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Food Waste Is Becoming Serious Economic and Environmental Issue, Report Says

WASHINGTON — With millions of households across the country struggling to have enough to eat, and millions of tons of food being tossed in the garbage, food waste is increasingly being seen as a serious environmental and economic issue. A report released Wednesday shows that about 60 million metric tons of food is wasted a year in the United States, with an estimated value of $162 billion. About 32 million metric tons of it end up in municipal landfills, at a cost of about $1.5 billion a year to local governments. The problem is not limited to the United States. The report estimates that a third of all the food produced in the world is never consumed, and the total cost of that food waste could be as high as $400 billion a year. Reducing food waste from 20 to 50 percent globally could save $120 billion to $300 […]

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Chesapeake’s $4-4.5 billion capex down 37% vs. last year

HOUSTON, Feb. 25 02/25/2015 Chesapeake Energy Corp. , Oklahoma City, is budgeting total capital expenditures, including capitalized interest, of $4-4.5 billion for 2015. Using the midpoint of the range, it represents a 26% reduction compared with the company’s 2014 capital expenditures before acquisitions of $5.8 billion, and a 37% reduction from the company’s 2014 total capital expenditures of $6.7 billion. Chesapeake for 2014 reported net income available to common stockholders of $1.273 billion. The primary component of this increase was unrealized gains on the company’s oil and natural gas commodity derivatives, partially offset by the redemption of all the outstanding preferred shares of a subsidiary. Adjusting for these items, full-year adjusted net income available to common stockholders was $957 million, compared with adjusted net income available to common stockholders of $965 million in 2013. Notably during the fourth quarter, the company received $5.1 billion of net proceeds from asset […]

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Encana Cuts 2015 Budget After 85% Fall In Operating Profit

URL: http://www.rigzone.com/news/oil_gas/a/137400/Encana_Cuts_2015_Budget_After_85_Fall_In_Operating_Profit CALGARY, Alberta, Feb 25 (Reuters) – Encana Corp, Canada’s largest natural gas producer, slashed its 2015 capital budget by a quarter on Wednesday in response to a slump in global crude oil prices. The company joins a slew of other Canadian oil and gas producers, including Suncor Energy and Cenovus Energy , that have cut back spending as benchmark crude prices more than halved since June. Encana said it will spend between $2 billion and $2.2 billion in 2015, down from the original budget of $2.8 billion announced in December. Chief Executive Officer Doug Suttles also said Encana, which since 2013 has been selling off natural gas assets to concentrate spending on regions rich in high-value gas liquids and oil, will look to see if there are further opportunities to trim its portfolio. "We are well prepared to act … The lower points in the commodity cycles […]

Posted On : Published By : Tom Whipple