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U.S. Shale Oil Growth Slows as Price Crash Idles Drill Rigs

Analysts are watching the rig count to help forecast U.S. production. Photographer: Brittany Sowacke/Bloomberg The EIA’s oil-production estimates are based on the number of drilling rigs in different plays and calculations of how productive each piece of equipment is. The number of rigs drilling for oil fell to 922 on Friday, according to oilfield service company Baker Hughes Inc. Oil rigs in the U.S. peaked in October at 1,609. To contact the reporter on this story: Dan Murtaugh in Houston at [email protected] To contact the editors responsible for this story: David Marino at [email protected] Richard Stubbe

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Russia’s Well for Corporate Bailouts Appears to Be Running Dry

MOSCOW — Facing Western sanctions and low oil prices, Russian companies are lining up for subsidies from the government. But the demand for bailouts is quickly outstripping the supply of money, raising the prospect of an economic crisis here if the funds run out. With the economy flailing, the Russian government set up a corporate bailout program last year, tapping one of the country’s sovereign wealth funds . Almost immediately, companies started applying. The state-owned oil giant Rosneft has requested $21.3 billion. Gazprom, the dominant natural gas player, has asked for $3.2 billion for a subsidiary. The list goes on: Russia ’s railroad monopoly, which is also the largest employer in the country; an owner of Moscow’s airports; a venture capital firm investing in nanotechnology; and a company exporting Russian nuclear power plants. So far, companies have requested at least $37 billion, a figure that is likely to rise […]

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Oil drops toward $59 on dollar, stock builds

LONDON (Reuters) – Brent crude oil fell toward $59 a barrel on Monday as the dollar strengthened and a supply glut pushed global oil inventories to record highs. The dollar hit a more than 11-year high against a basket of currencies after data showed the U.S. unemployment rate in February fell to its lowest level since May 2008, making commodities priced in the greenback more expensive for holders of other currencies. Oil inventories are rising across the world as production outstrips demand, offsetting geopolitical tensions in the Middle East and the risk of output cuts in Libya and Iraq. Brent LCOc1 was down 30 cents at $59.43 a barrel by 4 a.m. ET. The North Sea crude oil futures contract fell 4.6 percent last week in its biggest decline since the week ended Jan. 9. U.S. crude CLc1 was up 15 cents a barrel at $49.76. It closed down […]

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Oil Extends Losses Pushing Brent Below $60 a Barrel

By Eric Yep Crude-oil futures extended losses in Asian trade Monday after ending on a weaker note last week due to a stronger dollar and rising U.S. oil supplies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $49.34 a barrel at 0418 GMT, down $0.27 in the Globex electronic session. Brent crude for April delivery on London’s ICE Futures exchange fell $0.42 to $59.31 a barrel. Nymex West Texas Intermediate crude lost 0.30% last week and has been down for three consecutive weeks, Brent crude lost 4.55% last week and has fallen for two of the past three weeks. Over the weekend, China released trade data for February, which showed that the country’s crude-oil imports during the month rose 11% on year to 25.55 million tons. "The stabilisation of Brent oil prices in January at prices around $50 a barrel appears […]

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U.S. crude prices to drop to $40 a barrel as inventories rise: Goldman

SINGAPORE (Reuters) – Oil prices will reverse their recent gains as global crude inventories begin to increase again, with U.S. crude likely to drop as far as $40 a barrel in the near-term, Goldman Sachs said. Oil prices rose by almost a third between January and February on the back of Middle East supply disruptions, strong winter demand and high refinery margins. That followed a rout that had seen price falls of around 60 percent between June 2014 and January this year. But Goldman said that "the activity pull is sequentially weakening" and that global crude inventories would therefore rise, pushing West Texas Intermediate (WTI) crude to $40 a barrel, levels last seen at the peak of the global financial crisis in late 2008, early 2009. It stood at around $49.40 on Monday. "While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker […]

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Goldman Says $40 Oil Call May Be Too Low as Demand Surprises

The silhouettes of pumpjacks are seen on the site of an oil well outside Williston, North Dakota. Crude has lost half its value since June as U.S. producers pumped oil at the fastest pace since 1983. Photographer: Daniel Acker/Bloomberg (Bloomberg) — Goldman Sachs Group Inc. said it didn’t expect oil demand to recover so quickly and its forecast for crude at $40 a barrel may be too low. While the bank projects that crude will reverse its recent advance, the failure of global inventories to increase amid weather-related disruptions and stronger-than-expected demand means there’s a risk prices will miss its target for the next two quarters, according to a report dated March 8. Morgan Stanley also said the strength of the global physical market was a surprise. Global benchmark crude prices rose in February for the first time in eight months after losing almost half their value in 2014 […]

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OPEC Chief Says Cartel Is Hurting U.S. Shale Producers

ENLARGE A worker caries oil well piping in Sweetwater, Texas, at the Cline shale formation. The U.S. shale-oil industry has been badly hurt by the plunge in crude oil prices. Photo: Associated Press OPEC’s top official said Sunday that the cartel’s decision to continue pumping crude in the face of collapsing prices is hurting the U.S. shale-oil industry and that a global pullback on investment could lead to a shortage that will push the market upward again. “Projects are being canceled. Investments are being revised. Costs are being squeezed,” said Abdalla Salem el-Badri, the secretary general of the Organization of Petroleum Exporting Countries, at the Middle East Oil and Gas conference, which was held in Bahrain. “If we don’t have more supply, there will be a shortage and the price will rise again,” he said. Other top officials at the conference said they would maintain their response of continuing […]

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Traders cash out on tanker-stored oil as prices rise

SINGAPORE (Reuters) – Traders who have been storing oil since the start of the year are selling some supplies back into the market, completing a trade-play that made oil storage profitable, and re-injecting fuel into an already oversupplied market. The selling signals a winding down of a strategy that has seen at least 50 million barrels of oil stored in tankers, equivalent to about one month’s consumption in Britain, although traders said it was not clear how much oil has been sold. A steep fall in the price of crude from last June to January enabled traders to potentially make money by storing oil for delivery at a later date, as the market moved into an unusually large contango, with prices in future months well above the spot price. Traders such as Trafigura [TRAFGF.UL], Vitol [VITOLV.UL] and Gunvor [GGL.UL], as well as energy majors like BP and Shell stored […]

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OPEC Sec-Gen says oil market should return to balance in H2 2015

MANAMA (Reuters) – The Organisation of the Petroleum Exporting Countries (OPEC) Secretary-General said on Sunday OPEC and non-OPEC producers should work together to stabilize oil markets, suggesting oversupply could amount to two million barrels per day (bpd). But Abdullah al-Badri added in remarks to a conference in Bahrain he had no doubt markets would return to balance in the second half of 2015, explaining that he did not believe fundamentals warranted a price drop of the extent markets had seen. "Tremendous opportunity" in oil remained, despite recent market volatility and uncertainties, he said, adding that the industry’s ‎long term outlook remained healthy. Oil prices have slid sharply in recent months as a result of a large supply glut, due mostly to a sharp rise in U.S. shale production as well as weaker global demand. The rapid decline has left several smaller oil producing countries reeling and has forced oil […]

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Barack Obama, Benjamin Netanyahu Clash on Possible Iran Nuclear Deal

President Barack Obama said the U.S. and other world powers have offered Tehran “an extraordinarily reasonable” nuclear deal after efforts during the past week to move the negotiations forward and shore up support among Arab and European allies. But Israeli Prime Minister Benjamin Netanyahu said an agreement would allow Iran to soon have “many, many nuclear bombs.” Mr. Obama said in a televised interview that there is an “urgency” to reaching a framework agreement this month, after nearly two years of negotiations where the deadline has been extended twice. The talks have faced a torrent of criticism from Mr. Netanyahu as well as Republicans in Congress who, joined by some Democrats, want a say in approving the deal and fear it will not go far enough to curtail Iran’s ability to seek a nuclear weapon. “We have made progress in narrowing the gaps, but those gaps still exist” with […]

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New Attacks on Libya’s Oil Assets Shake Nation’s Stability, Energy Markets

Fighters from Libya Dawn take a position outside Tripoli on Thursday. ENLARGE Photo: mahmud turkia/Agence France-Presse/Getty Images Deadly attacks on Libyan oil installations in recent days have resulted in what could be long-lasting damage to the industry that affects oil markets and alters the battle for dominance in the country. Western and Libyan officials said they suspected the Libyan affiliate of Islamic State, the radical group that has taken over parts of Iraq and Syria, was responsible for assaults on Friday that left at least eight people dead and seven foreign workers missing. The attacks targeting oil fields and their employees point to a new pattern in Libya’s violence: Lacking the strength and expertise to capture and use oil installations, militant groups are destroying them to prevent rivals from profiting from the oil. Islamic State’s “engagement with Libya’s hydrocarbons sector is not about capturing fields,” said Geoff Porter, an […]

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Iraq Narrows Oil Discount to Asia by Most in 3 Years on Demand

(Bloomberg) — Iraq narrowed the discount for April crude deliveries to Asian buyers by the most since November 2011, joining other Middle East producers in raising official selling prices amid signs demand is improving. Iraq, OPEC’s second-biggest producer, will sell its Basrah Light crude at $2.80 a barrel below Middle East benchmark Oman and Dubai grades in April, the state-run Oil Marketing Co., known as SOMO, said Monday. That’s $1.30 less than the discount for March. Saudi Arabia last week increased the pricing terms for Arab Light sold to Asia, while Abu Dhabi and Qatar raised export prices. Saudi Arabia led a November decision by the Organization of Petroleum Exporting Countries to maintain output and defend market share against rising U.S. output that sent crude prices almost 50 percent lower in 2014. The imbalance in the global crude market will even out in the second half of this year, […]

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Barclays’ Mahesh Sees Elections as ‘Huge Risk’ for Nigeria Oil

(Bloomberg) — Barclays Plc energy analyst Miswin Mahesh sees a “huge risk” of oil production in Nigeria being disrupted by political instability arising from elections scheduled for March 28. The vote is set to be the most closely contested since the end of military rule in 1999. President Goodluck Jonathan’s People’s Democratic Party and former military ruler Muhammadu Buhari’s All Progressives Congress are the leading contenders — each won 42 percent support in a survey of 2,400 adults polled by Afrobarometer in December in 33 of the nation’s 36 states and the federal capital territory. “We are not sure how it will play out on the political front,” Mahesh, based in London, said in a March 6 interview in Cape Town. “Nigeria will do whatever it takes to maintain its production. The risks are still there. There is a genuine risk that we might see some disruptions.” Nigeria’s daily […]

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Activists say airstrike hits Islamic State-held oil refinery

BEIRUT (AP) — Airstrikes by the U.S.-led coalition have hit a Syrian oil refinery held by the Islamic State group, activists said Monday. The strikes targeted a refinery near the Turkish-Syrian border outside the town of Tel Abyad. Video from the Turkish Dogan News Agency showed the strikes Sunday night, which saw an enormous fireball engulf the refinery. The Britain-based Syrian Observatory for Human Rights estimated the strikes killed about 30 people, including Islamic State militants and refinery workers. The Syrian activist group Raqqa is Being Slaughtered Silently also reported the strikes, but offered no casualty figure. The Islamic State group, which controls a self-declared caliphate on captured territory covering about a third of Syria and Iraq, partially funds its conquests through the sale of black market oil. The U.S.-led coalition did not immediately acknowledge launching the strike.

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Iraqi Leader Sounds Call for More Help, Including From Iran

WASHINGTON—Iraq Prime Minister Haider al-Abadi Sunday appeared to signal that his country needs more U.S. help in its war against the Islamic State extremist group, warning regional forces might not be able to withstand the offensive. “If they are not stopped on time, I can assure you no army in the region can stand in their…way,” Mr. al-Abadi said in an interview on ABC News “This Week.” “We have to stop them for our own sake, and I think the world has to stop them for their own sake,” he said. Mr. Abadi is scheduled to meet this week with the U.S.’s top military officer, Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. The prime minister highlighted the growing role of longtime U.S. adversary Iran in Iraq’s efforts to retake the strategic city of Tikrit and other areas that have been captured by Islamic State. “They’re helping […]

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The Islamic State appears to fray from within

this undated file image posted on June 30, 2014, by the Raqqa Media Center of the Islamic State group, a Syrian opposition group, fighters from the Islamic State group parade in Raqqa. (Uncredited/AP) BEIRUT — The Islamic State ­appears to be starting to fray from within, as dissent, defections and setbacks on the battlefield sap the group’s strength and erode its aura of invincibility among those living under its despotic rule. Reports of rising tensions between foreign and local fighters, aggressive and increasingly unsuccessful attempts to recruit local citizens for the front lines, and a growing incidence of guerrilla attacks against Islamic State targets suggest the militants are struggling to sustain their carefully cultivated image as a fearsome fighting force drawing Muslims together under the umbrella of a utopian Islamic state. The anecdotal reports, drawn from activists and residents of areas under Islamic State control, don’t offer any indication […]

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Outcry and fears grow as Pakistan builds new nuclear reactors

Outcry and fears grow as Pakistan builds new nuclear reactors thumbnail The Karachi Nuclear PowerComplex is on an earthquake-prone seafront less than 20 miles from downtown Karachi. (Max Becherer/Polaris Images for The Washington Post) KARACHI, Pakistan — World leaders have fretted for years that terrorists may try to steal one of Pakistan’s nuclear bombs and detonate it in a foreign country. But some Karachi residents say the real nuclear nightmare is unfolding here in Pakistan’s largest and most volatile city. On the edge of Karachi, on an earthquake-prone seafront vulnerable to tsunamis and not far from where al-Qaeda militants nearly hijacked a Pakistan navy vessel last fall, China is constructing two large nuclear reactors for energy-starved Pakistan. The new reactors, utilizing a cutting-edge design not yet in use anywhere in the world, will each provide 1,100 megawatts to Pakistan’s national energy grid. They are being built next to a much […]

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Nigerian economy affects due to fuel shortages

LONDON: Nigeria is suffering from a gasoline shortage as falling oil prices have affected the country’s ability to import and distribute refined fuels. Coming just weeks before elections scheduled for March 28, the shortage could have a big impact on the campaign trail. In Abuja, the lines of cars waiting for gas are growing longer. Acute fuel shortages are gripping towns and cities across the country. Workers reliant on their cars are losing money fast – like taxi driver Bartholomew Ode Akpa. “I work at the airport as a car hire and now I’m supposed to be at the airport and there is no fuel for me to go and look for something to do,” he said. Nigeria is one of the world’s top producers of crude oil, and exports around 2 million barrels per day. But it doesn’t have the refinery capacity to meet fuel demand, so it […]

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South America’s UNASUR pledges to help Venezuela address shortages in basic foods, other goods

CARACAS, Venezuela — An association of South American countries on Friday urged the region to help Venezuela keep basic goods on the shelves. The 12-nation UNASUR group called on every country in Latin America to do what they can to ensure Venezuelans have access to staples after a delegation met with President Nicolas Maduro. Secretary General Ernesto Samper said UNASUR would create a special commission to strengthen distribution chains. Pantry and cleaning basics like dish soap, detergent, milk and cooking oil, chronically in short supply in recent years, have become been even harder to find in the socialist-governed country since the year started. The meeting between South American foreign ministers and Venezuelan officials in Caracas had been expected to address the more abstract problems of rising tension between the administration and the opposition. Maduro recently accused opposition leaders of conspiring with the U.S. to bomb the presidential palace, while […]

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China’s new oil import policy positive for quality, prices: governor

BEIJING (Reuters) – China’s decision to allow more independent oil refiners to import crude oil will help to improve fuel quality and lower domestic fuel prices, the governor of Shandong province, the country’s hub of small refineries, said. China, the world’s second biggest crude importer after the United States, has had strict controls on oil imports to ensure stable domestic supplies. State-controlled companies Sinopec and PetroChina account for nearly 90 percent of the country’s inbound crude shipments. But last month, Beijing took advantage of a global oil price collapse to loosen the tightly state-control sector, which will allow smaller refiners to apply for crude oil import quotas. "This new policy breaks the previous situation that only three to four big companies are allowed to import crude oil," Guo Shuqing, governor of the eastern province told reporters on Saturday during an annual parliament meeting. Shandong is home to most of […]

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China Commodities Imports Slow as Lunar New Year Cools Trade

(Bloomberg) — China’s commodity trade slowed in February as the Lunar New Year holiday crimped imports of oil, iron ore, copper and soybeans while exports of aluminum and steel fell. Inbound shipments of copper tumbled by the most in four years, soybeans to the least since October, while oil and iron ore imports slowed to the weakest in three months, according to customs data released Sunday in Beijing. Steel exports fell for the first time since August and the country shipped the smallest amount of aluminum products in four months. The slowdown in raw materials trade reflects the impact of the country’s most-important festival, when factories and output slow before and during the weeklong holiday. Total exports gained more than 48 percent from a year earlier in February, driven by a recovery in the U.S. economy. Imports slid 20.5 percent, leaving a record trade surplus of $60.6 billion. “The […]

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More California Oil Industry Wastewater Injection Wells Shut Down Over Fears Of Groundwater Contamination

The latest in the ongoing investigation into California regulators’ failure to protect residents from toxic oil industry waste streams has led to the closure of 12 more underground injection wells. The 12 wells that were shut down this week are all in the Central Valley region, ground zero for oil production in the state. California has roughly 50,000 underground injection wells. State officials are investigating just over 2,500 of them to determine whether or not they are injecting toxic chemical-laden oil industry wastewater into aquifers containing usable water (or at least potentially usable water) that should have been protected under the Safe Drinking Water Act. A coalition of environmental, health and public advocacy groups filed a legal petition with Governor Jerry Brown last week in an attempt to force an emergency moratorium on fracking after it was discovered that flowback, a fluid that rises to the top of a […]

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Has California’s Fracking Boom Already Gone Bust?

A hazy view of an oil field in Taft, California. (Credit: Faces of Fracking/Sarah Craig) We accelerate down the runway — a tiny asphalt strip next to Taft Skydiving. Our little Piper Cherokee lifts off and as we ascend, I peer out the window. Below us is California’s Kern County and more than a century of oil exploration — from the gushers of the 1800s to today’s less robust reality. It’s a spider web of dirt roads, drilling rigs, pump jacks, pipes and boilers. At least I’m pretty sure that’s what’s below us. The air quality is so bad that the San Joaquin Valley we’re flying over looks like the blurred work of an impressionist painter. Our view is smudged by stubborn smog that’s refused to budge for days. It’s a perfect metaphor for trying to understand the future of oil and gas production in California, which is why […]

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Wrecks Hit Tougher Oil Railcars

ENLARGE Fire continued Friday after a train carrying 103 railcars loaded with crude oil from North Dakota’s Bakken Shale derailed south of Galena, Ill. Photo: Associated Press In a string of recent oil train derailments in the U.S. and Canada, new and sturdier railroad tanker cars being built to carry a rising tide of crude oil across the continent have failed to prevent ruptures. These tank cars, called CPC-1232s, are the new workhorses of the soaring crude-by-rail industry, carrying hundreds of thousands of barrels a day across the two countries. But the four recent accidents are a sign that the new tanker cars are still prone to rupture in a derailment. The ruptures could increase momentum for rules aimed at further reducing the risk of shipping crude by rail. In the last month, there have been significant derailments of crude-carrying trains in West Virginia and Illinois, plus two in […]

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CN Rail, BNSF Tackle Accidents as Group Seeks Ban on Oil Trains

Smoke and flames erupt from the scene of a train derailment near Galena, Illinois, on March 5, 2015. Photographer: Mike Burley/Telegraph Herald via AP Photo (Bloomberg) — Canadian National Railway Co. is building a 1,500-foot (457 meter) long track to bypass a burning train that derailed Saturday in northern Ontario, while BNSF Railway Co. crews are working to reopen track in rural Illinois after a train carrying oil derailed three days ago. CN crews teamed with outside specialists are fighting the blaze after an eastbound train carrying crude oil derailed and caught fire around 2:45 a.m. near Gogama, about 600 kilometers north of Toronto, cutting off rail traffic between Toronto and Winnipeg, Manitoba. The BNSF train jumped the tracks Thursday afternoon near Galena, Illinois, about 160 miles west of Chicago, according to the railroad, a unit of Warren Buffett’s Berkshire Hathaway Inc. The accidents bring to four the number […]

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Whiting reported to be seeking buyer, but source says not aware

WILLISTON, N.D. (Reuters) – Whiting Petroleum Corp ( WLL.N ), North Dakota’s largest oil producer, is seeking a possible buyer, according to the Wall Street Journal, but a person familiar with the board’s thinking told Reuters he was not aware of any such plan. The Denver-based company began seeking a buyer after tumbling crude oil prices CLc1 eroded its market value, the Journal reported earlier on Friday, citing people familiar with the matter. Three months ago, Whiting closed on its $1.55 billion buyout of Kodiak Oil & Gas to become the largest oil company in North Dakota, home to the Bakken shale formation, one of the world’s largest crude reserves. Clinching Kodiak helped Whiting eclipse rival Continental Resources Inc ( CLR.N ), guaranteeing years of growth potential and access to even more lucrative acreage across North Dakota, the No. 2 U.S. oil producing state. Although the deal increased the […]

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U.S. gas prices climb in past two weeks: survey

(Reuters) – The average price of regular grade gasoline rose 21 cents in the past two weeks, bringing it to $2.54 per gallon, according to the Lundberg survey released on Sunday. Prices bottomed out on Jan. 23. However, the price for gasoline is still lower by 97 cents than it was a year ago, when the average was about $3.51 per gallon. Trilby Lundberg, publisher of the survey, noted that the cost for crude oil is mostly unchanged. She cited other factors that are accountable for the climb at the pump: Refiners and retailers are making more money on gasoline and deadlines for regulations affecting the summer blend are starting to come in. The lowest-price gasoline in the survey area of the 48 contiguous U.S. states was in Baton Rouge, Louisiana, at $2.16 per gallon. The highest price was in Los Angeles, at $3.48 per gallon. Prices are highest […]

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« Whiting Fall Reveals Weakness of Tight Oil Plays

Posted in The Petroleum Truth Report Whiting Petroleum is the latest victim of the flawed U.S. shale play business model. Whiting’s demise shows that location isn’t everything. The company is looking for a buyer despite having a premium position in the Bakken Shale play in North Dakota.   Whiting discovered the Sanish Field in 2006 that began the Bakken-Three Forks play and that has been the centerpiece of activity for the past several years.  The map below shows Bakken commercial areas at $45 WTI oil price based on an average well EUR (estimated ultimate recovery) of 650,000 barrels of oil equivalent. Bakken Shale map showing commercial area (in green) at $45 WTI oil price. Whiting wells are shown in red and Kodiak wells in yellow. Data from DrillingInfo, mapping by Labyrinth Consulting Services, Inc. (click image to enlarge) The table below summarizes Whiting’s financial performance.  The company ended 2014 with […]

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Exxon Suit Highlights Energy Cost Fears

ENLARGE The Arkutun-Dagi oil field lies beneath ice-choked waters 15 miles from Sakhalin Island in Russia’s Far East. Photo: ExxonMobil When Exxon Mobil Corp. in January started pulling oil from beneath the icebound waters off Russia’s eastern coast, the project was over budget and a year behind schedule. The troubles likely would have remained out of public view had Exxon not sued contractor WorleyParsons Ltd. The spat offers a rare glimpse of the challenges and sniping behind one of the world’s most complicated oil developments as soaring costs and falling crude prices have bedeviled the energy industry. The project, known as Arkutun-Dagi, called for building one of the largest offshore drilling platforms in the world, designed to withstand extreme winds, waves and earthquakes that shake the seabed beneath the icy Sea of Okhotsk. Oil began flowing in January, and is expected to reach up to 90,000 barrels a day. […]

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European Official Not Ready to Stiffen Russia Sanctions

BRUSSELS — Rattled by a newly aggressive Russia but still loath to confront the reality of violent conflict, Europe needs to draw clear lessons from the war in Ukraine in order to respond to a new and dangerous era, according to Donald Tusk, the former prime minister of Poland who took over recently as representative of the European Union ’s 28 leaders. Mr. Tusk, who will meet President Obama in Washington on Monday in his role as president of the European Council, said in an interview that Europe was not yet ready to further tighten sanctions against Russia despite continuing provocations by President Vladimir V. Putin. But he said he was eager for Europe to take a more robust stance alongside the United States in countering Russian efforts to redraw the borders of Ukraine, in dealing with chaos in countries like Libya, and in confronting the threat of jihadist […]

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Industry response to peak oil not enough long term

President and Vice President, Illinois Renewable Energy Association We were asked recently if peak oil remains an issue. Just as cold weather stimulates doubt regarding climate change the current low price of oil stimulates doubt about peak conventional oil. Such short-term anomalies confuse the public and bring out a new round of denials regarding the existence of these long-term trends. Researchers documenting peak conventional oil provide data indicating it occurred around 2005. Since then the production of conventional oil has been virtually flat. The dramatic increase in the production of oil shale in the United States obscured recognition of the long term implications of the drop in conventional oil supplies. As major independent oil companies such as Exxon Mobil and Shell spent more money on developing new sources of oil the actual amount of oil secured per capital expenditure declined. In response, oil companies cut back on expenditures and […]

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Oil Falls as Dollar Weighs, Drilling Report Disappoints

Oil prices fell sharply Friday as the dollar climbed in reaction to strong U.S. jobs data and a report on domestic drilling activity disappointed the market. Light, sweet crude traded on the New York Mercantile Exchange, the U.S. benchmark, turned negative early in the session as the dollar climbed, followed later by global Brent futures. The drop accelerated after a weekly report on U.S. drilling activity was released but regained some ground into the close. Though the oil market has stabilized after a steep selloff between June and January, analysts say fundamentals remain weak with continued supply growth and slower-than-expected demand. The international market has rebounded more strongly than the domestic one as supply interruptions in Libya and Iraq have brought a measure of balance back into the global market; still, both leading contracts lost ground for the week, with the U.S. benchmark declining for the third week in […]

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Natural Gas Slips as Winter Nears an End

By Timothy Puko Natural-gas prices halted a brief rally, slipping as traders prepare for the end of winter. The front-month April contract settled down 0.2 cents, or 0.1%, at $2.839 a million British thermal units on the New York Mercantile Exchange. It ended a three-session rally even though prices briefly surged to their highest intraday point in a week. Private and government meteorologists are showing normal and above-normal temperatures for at least half the country by mid-March. It would be the end of an arctic chill across the eastern half of the country that led to the coldest February in about 30 years. It would also appear to be the end of the season’s spike in heating demand, analysts said. "It seems the fears of winter are evaporating," said Gene McGillian, an analyst at Tradition Energy. Half of U.S. homes use natural gas for heating fuel, so single-digit temperatures […]

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World Rig Counts Declining

The weekly  Baker Hughes Rig Count  for North America and the International monthly rig count is out. In the charts below the monthly data is through February 2015 and the weekly data is as of March 6th. World Rig Count World Rig Count, counting oil, gas and miscellaneous rigs are down 684 rigs over the last three months. The annual spikes you here are caused by Canada. World Rig Count Less Canada Removing the seasonal Canadian spikes gives you a better picture of what is happening to the world rig count. Canada Rig Count This is the first time since before 2000 when the Canadian rig count did not peak in February. International Rig Count The International Oil Rig Count is down only 67 in the last three months but was unchanged from last month. It now stands at 982. *The US, Canada or FSU countries are not included […]

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Iraqi Forces Said to Near ISIS-Held Tikrit

BAGHDAD — Iraq ’s largest offensive against Islamic State militants came a step closer to the city of Tikrit on Friday, with Shiite militiamen and Iraqi troops advancing into the town of Dour, according to Iraqi state television. Dour, just south of Tikrit, is home to Izzat Ibrahim al-Douri, the highest-ranking member of Saddam Hussein’s government who was never captured after the 2003 American-led invasion. A prominent figure in the ruling Baath Party, he went on to make common cause with Islamist insurgents against American occupying troops and is now believed to be an ally of the Islamic State. Despite setbacks in some villages over the past four days, the Islamic State fighters have managed to hold on to Tikrit, using suicide attacks and roadside bombs to augment their defense against a pro-government force of at least 30,000, most of them from Iranian-backed Shiite militias. The militias have played […]

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IOCs asked to suggest contract changes

Rick Vierbuchen (R), then president of ExxonMobil Upstream Ventures, shakes hands with Abdul Mahdy al-Ameedi, the director general of the Oil Ministry’s Petroleum Contracts and Licensing Directorate (PCLD), after signing an initial deal for the West Qurna 1 field on Nov. 5, 2009. (MOHAMMED AMEEN/Reuters) Iraq is asking international oil companies (IOCs) to propose amendments to their multi-billion dollar oil field contracts, in addition to cutting costs and slowing down projects this year, as Iraq’s financial crisis squeezes available funding. In a Feb. 9 letter to IOCs obtained by Iraq Oil Report, the Iraqi Oil Ministry said that the contracts and development activity should be changed in light of the recent crash in oil prices. "The consequence of the oil price fall is not just on the …

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Ecuador’s Oil Export Revenue Falls 44% in January

QUITO—Ecuador’s crude oil export revenue totaled $598 million in January, down about 44% from a year earlier, due to lower oil prices, the central bank said on Friday. Lower oil prices are expected to drag down economic growth, in a country whose oil sector generates about one-quarter of total government revenue and about a half of exports. Economists say Ecuador’s economy will likely grow between 1% and 2% this year. The average price of crude oil in January decreased 55% to $41.40 a barrel from the previous year. In terms of volume, Ecuador exported 11.57 million barrels of crude oil in January, a 25% increase from a year earlier and an increase of about 8% from December. All of the oil was exported by Ecuador’s state-owned companies. Crude oil is Ecuador’s main export, which the Andean country sends primarily to Asia, the U.S. and the Caribbean. The central bank […]

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China Blocks Web Access to ‘Under the Dome’ Documentary on Pollution

BEIJING — “Under the Dome,” a searing documentary about China ’s catastrophic air pollution, had hundreds of millions of views on Chinese websites within days of its release one week ago. The country’s new environment minister compared it to “Silent Spring,” the landmark 1962 book that energized the environmental movement in the United States. Domestic and foreign journalists clamored to interview the filmmaker, a famous former television reporter, though she remained silent. Then on Friday afternoon, the momentum over the video came to an abrupt halt, as major Chinese video websites deleted it under orders from the Communist Party’s central propaganda department. The startling phenomenon of the video, the national debate it set off and the official attempts to quash it reflect the deep political sensitivities in the struggle within the Chinese bureaucracy to reverse China’s environmental degradation , among the worst in the world. The drama over the […]

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China faces unprecedented environment, development conflict: minister

China’s Minister of Environmental Protection Chen Jining gives a press conference for the third session of the 12th National People’s Congress ( NPC ), on environmental protection in Beijing, capital of China, March 7, 2015. (Xinhua/Li Ran) BEIJING, March 7 (Xinhua) — China’s newly appointed environment chief said Saturday that the world’s second largest economy is faced with the unprecedented conflict between environmental protection and development in human history. Environmental Protection Minister Chen Jining made the remarks at a press conference on the sidelines of the ongoing annual session of the National People’s Congress, China’s top legislature. "China’s environmental problem is still severe," he said, citing woes in poor environmental quality, grave ecological damage and high environmental risks that come with unreasonable industrial layout. The minister said that China needs to do more to cut pollution but also stressed that environment protection is a common issue that every other […]

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Interview: Chinese automaker BYD to sell electric cars in S. Korea in 2 years

JEJU, South Korea , March 7 (Xinhua) — Chinese new energy vehicle maker BYD is planning to sell its electric vehicles to the South Korea market before the end of 2015, according to a senior company executive. BYD, a rising Chinese electric vehicle manufacturer, has brought its popular BYD e6 electric taxi and SUV to an international electric vehicle (EV) expo which opened here Friday in the renowned South Korean tourist attraction. Liu Xueliang, BYD’s general manager of the Asia-Pacific Region who leads the company’s team at the show, believes that South Korea is an ideal country for developing EVs due to its favorable policies and strong public environmental awareness, as well as their understanding of the automotive industry. BYD is the only Chinese EV producer at the expo, which also attracts world big name automakers including BMW and General Motors. Liu told Xinhua they paid great attention to […]

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Oil Production in Federal Gulf of Mexico Expected to Continue Increasing

Source: U.S. Energy Information Administration. Note: Production data have not yet been reported for four of the eight fields (Cardamom Deep, Jack, St. Malo, and Tubular Bells). Because of the long timelines associated with Gulf of Mexico (GOM) projects, the recent downturn in oil prices is expected to have minimal direct impact on GOM crude oil production through 2016. EIA projects GOM production to reach 1.52 million barrels per day (bbl/d) in 2015 and 1.61 million bbl/d in 2016, or about 16% and 17% of total U.S. crude oil production in those two years, respectively. The forecasted production growth is driven both by new projects and the redevelopment and expansion of older producing fields. Five deepwater projects began in the last three months of 2014: Stone Energy-operated Cardamom Deep and Cardona projects, Chevron-operated Jack/St. Malo fields, Murphy Oil-operated Dalmatian, and Hess-operated Tubular Bells. Also occurring at the end of […]

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Sluggish Productivity Hampers Wage Gains

A Ford Truck assembly line in Dearborn, Mich., in November. ENLARGE Photo: Getty Images Based on the jobs data alone , the American economy is doing fabulously. Monthly payroll growth this year, averaging 267,000, already is ahead of last year’s impressive tally, which in turn handily beat the prior year. The unemployment rate, at 5.5%, is now in the range some economists consider “full employment.” But overall economic growth has been less impressive. That’s because productivity—the amount of goods and services each worker produces—is growing at a tepid rate. Since the economic expansion began in 2009, annual productivity growth has averaged just 1.3%, if the farm and government sectors are excluded. That is the weakest growth of any expansion since the 1970s. On Thursday, the day before the encouraging February jobs data were released, the Labor Department reported that productivity in last year’s fourth quarter didn’t grow at all […]

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US jobs surge sends dollar soaring

The Marriner S. Eccles Federal Reserve building stands at sunrise in Washington, D.C., U.S., on Tuesday, Oct. 28, 2014. The Federal Open Market Committee meets today and tomorrow after six weeks of volatility in global financial markets. Since the FOMC met in mid-September, oil prices have tumbled 14 percent, and the Standard & Poor’s 500 Index of stocks dropped as much as 7.4 percent from a record close. Photographer: Andrew Harrer/Bloomberg The dollar soared and bond yields spiked as hiring by US employers smashed Wall Street expectations and sparked heightened speculation that the Federal Reserve is nearing its first interest-rate rise in nearly a decade. Employers added 295,000 jobs in February in defiance of bad weather and the unemployment rate fell to 5.5 per cent, the lowest level since 2008. The US has now seen its longest streak of monthly jobs gains above the 200,000 mark in 20 years. […]

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Oil Rigs Get Slammed for the 13th Week

The number of U.S. oil rigs out drilling new wells fell for the 13th straight week as the U.S. sinks deeper in a glut of excess oil. Drillers idled 64 oil rigs (excluding gas rigs), dropping the number to 922, Baker Hughes reported on Friday. The rig count is down 43 percent since October, an unprecedented retreat. The median forecast from a Bloomberg survey of 20 #RigCountGuesses on Twitter was for a decline of 20 rigs. Every week since 1944, oilfield-services company Baker Hughes has released a survey of rigs out drilling for oil. But it wasn’t until oil prices dropped by more than half that "rig counts" became a popular metric for oil watchers. Rigs are used to explore for new deposits and to drill new wells, but fewer rigs don’t always mean less production. The U.S. is currently pumping oil faster than at any time since 1972. Bloomberg recently […]

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Baker Hughes: Monthly U.S. rig count drops 20 percent

U.S. rig count falling amid high inventories, low price environment. Photo by David Gaylor/Shutterstock Sign up for our daily Energy Newsletter WASHINGTON, March 6 (UPI) — The number of U.S. rigs actively exploring for or producing oil or gas was down 20 percent from January. Oil services company Baker Hughes published its monthly rig count report for February, and the average U.S. rig count for February was 1,348, down 335 from January and down 421 year-on-year. The average Canadian rig count was 363, down 5 from January and down 263 year-on-year. Oil prices are off about half their June value, as U.S. inventories accumulate, which has led to planned spending cuts in exploration and production. The U.S. Energy Information Administration in its petroleum status report for the week ending Feb. 20, the most recent data available, said U.S. crude oil inventories increased by 8.4 million barrels from the previous […]

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Bakken Rigs Decrease to 106

Whiting Petroleum to Cut Rigs in 2015 Whiting Bakken Acreage Map | Click to Enlarge The Bakken-Three Forks rig count decreased by three t0 106 rigs running across our coverage area by the end of last week. In recent Bakken news, Whiting Petroleum announced a record 2014 and revealed a 2015 spending plan that includes reducing Bakken rig count. Read more: Whiting to Reduce Bakken Rig Count The U.S. rig count fell another 72 to 1192 rigs running as of today. A total of 268 rigs were targeting natural gas (down 12 from the previous week) and 922 were targeting oil in the U.S. (64 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 108 rigs are running in the Williston Basin across MT, ND, and SD. 105 are in ND alone. Bakken Oil & Gas Rigs The number of oil […]

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Gas Pump Prices Rising Five Times Faster Than Crude Oil in U.S.

The highest price for gasoline in the lower 48 states among the markets surveyed was in Los Angeles, at $2.91 a gallon, Lundberg Survey Inc. said. Photographer: Luke Sharrett/Bloomberg (Bloomberg) — Gasoline is rising five times faster than crude oil as refinery shutdowns limit supplies. Retail gasoline increased 0.3 cent to $2.458 a gallon Thursday, the highest level since Dec. 17, according to Heathrow, Florida-based AAA. After climbing 20 percent since Jan. 31, prices will rise by another 20 cents this month because of refinery maintenance and unexpected outages, the nation’s largest motoring group estimates. Refineries are operating at the lowest rate in six weeks, government data show. Fuel production may slow further as more plants shut for seasonal maintenance. Gasoline is also climbing as the panic in oil markets subsides, with volatility the lowest in three months. The gain threatens to reduce the windfall to U.S. drivers from […]

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Derailed Oil Train From Bakken Region Burns Day After Accident

(Bloomberg) — A BNSF Railway Co. train that carried 103 cars of crude oil from North Dakota’s Bakken region continued to burn a day after derailing just outside a rural Illinois town. Five of the cars caught fire and were still burning, BNSF said Friday in a statement. Fires and explosions related to Bakken crude spurred North Dakota regulators to require all operators to condition the crude to lower the vapor pressure beginning in April. “An initial pool fire occurred that we believe impacted five rail cars and that fire continues to burn,” BNSF, a unit of Warren Buffett’s Berkshire Hathaway Inc. said in the statement. “Local, state and BNSF Railway emergency personnel are on the scene working to contain the incident.” Of the 105-car train, including two sand cars as buffers, 21 jumped the tracks Thursday afternoon near Galena, Illinois, about 160 miles (260 kilometers) west of Chicago. […]

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