Category:

Ill. oil-train derailment involved cars safer than federal standard

Derailed train continues to burn in Illinois GALENA , Ill., March 6 (UPI) — Two cars of an oil train carrying Bakken crude from North Dakota caught fire after a derailment in near Galena, Ill., Thursday, with an evacuation of homes within a one-mile radius. The train derailed near the confluence of the Galena and Mississippi Rivers, near Illinois’ border with Wisconsin and Iowa. There were no reported injuries. BNSF Railway in a statement said the tank cars involved were the "CPC-1232 model that were unjacketed with half-height head shields." The newer 1232 model was designed four years ago as part of voluntary safety upgrades adopted by the industry. Sixteen of the 105 cars of the train, all but two carrying crude oil, left the tracks, and two ignited, Galena City Administrator Mark Moran said. The derailment is the third in three weeks. In February, trains carrying crude oil […]

Posted On : Published By : Tom Whipple
Category:

Oil on Train in Illinois Derailment Shipped by Mercuria Energy

ENLARGE Railcars continued to burn at the scene of a freight train derailment south of Galena, Ill., on Friday. Photo: Associated Press The crude oil aboard the train involved in a fiery derailment Thursday in Illinois was shipped by a big energy-trading company based in Switzerland. The firm, Mercuria Energy Trading Inc., bought the oil in North Dakota and was delivering it to refineries in Philadelphia, according to people familiar with the matter. The train, operated by BNSF Railway Co., held about 70,000 barrels of oil from the Bakken Shale in 103 tanker cars. Federal officials said 21 of the cars derailed near Galena, Ill., about 160 miles west of Chicago. Seven of them were punctured or had holes in their steel skins. About 35 crude trains traveled through the area every week, according to state data. The oil caught fire, sending a thick plume of black smoke and […]

Posted On : Published By : Tom Whipple
Category:

To Drill or Not to Drill: That is the Question

Here’s a Jeopardy!- style question for you: “Eight different species of whales can be seen in these two American seas.” Unless you’re an Iñupiaq, a marine biologist, or an Arctic enthusiast like me, it’s a pretty good guess that you can’t tell me what those seas are or what those whales are either. The answer: the Chukchi Sea and the adjacent Beaufort Sea, off Arctic Alaska, and you can commonly spot bowhead, beluga, and grey whales there, while fin whales, minkes, humpbacks, killer whales, and narwhals are all venturing into these seas ever more often as the Arctic and its waters continue to warm rapidly. The problem, however, is that the major oil company Royal Dutch Shell wants to drill in the Chukchi Sea this summer and that could, in the long term, spell doom for one of the last great, relatively untouched oceanic environments on the planet. Let […]

Posted On : Published By : Tom Whipple
Category:

Iraq, Libya nudge Brent crude prices up

Sign up for our daily Energy Newsletter Crude oil prices mixed Thursday. Photo by sakhorn/Shutterstock WASHINGTON, March 5 (UPI) — Brent crude oil prices moved higher early Thursday as deteriorating security situations in Iraq and Libya countered increasing U.S. inventories. The global benchmark briefly topped $61 per barrel for the April contract before moving to $60.87, 32 cents above closing price Wednesday. Libya’s state-owned National Oil Corp. declared force majeure on 11 oilfields Wednesday, releasing it from production commitments due to the recent spate of attacks from militant groups including the Islamic State. This after a recent rise in production due to restarting operations at the Sarir field. Iraqi forces have been engaged this week in an offensive to retake Tikrit and its nearby oilfields from Islamic State forces. Saudi Arabia on Tuesday raised the price of its oil for delivery to the United States and Asia, and the […]

Posted On : Published By : Tom Whipple
Category:

Volatility draws billions into oil funds

LONDON/NEW YORK (Reuters) – Billions of dollars are pouring into oil exchange-traded funds as investors, many of them small savers more familiar with stocks than commodities, risk big losses and focus on the chance of huge rewards. Five of the biggest oil ETFs have seen their assets more than quadruple since July to $5.4 billion as the oil market has had a roller-coaster ride, collapsing by 60 percent then rallying by almost a third. ETFs, designed for investors who cannot or will not buy and sell oil directly themselves, offer easy access and exposure to oil volatility because they are based on traded futures markets. Many small investors such as pensioners, hobby traders, and savers on fixed incomes are attracted to oil ETFs, which can be designed to take advantage of price rises or falls. But the volatility and structure of the underlying markets also make such investments dangerous […]

Posted On : Published By : Tom Whipple
Category:

Oil falls in volatile trade on supply worries, dollar and Iran

NEW YORK (Reuters) – Oil closed lower on Thursday in volatile trade, as a soaring dollar and the U.S. pursuit of an Iranian nuclear deal offset earlier gains from supply concerns in Libya and Iraq. Libya’s declaration of force majeure on nearly a dozen of its oilfields due to security concerns and arson attacks by Islamic State militants on Iraqi oil wells helped prices climb during the European session. In New York trade, the market came off its highs after the dollar hit 11-1/2 year highs against the euro, weighing on oil prices denominated in the greenback. Washington’s pursuit of a nuclear agreement with Tehran, which could end sanctions against Iran and bring more oil from the OPEC member into an already flooded market further dragged on prices. Even so, market bulls convinced oil had hit a bottom after the June-January selloff that had knocked 60 percent off prices […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Hits One-Week High on Strong Winter Demand

By Timothy Puko Natural-gas futures surged to their highest point in a week on unexpectedly strong winter demand. The front-month April contract settled up 7.2 cents, or 2.6%, at $2.841 a million British thermal units on the New York Mercantile Exchange. It was the third-straight session of gains and the highest closing price since Feb. 25. The lingering arctic chill led to the largest ever draw from stockpiles for the second half of February, the U.S. Energy Information Administration said. Storage levels fell by 228 billion cubic feet in the week ended Feb. 27. That is 3 bcf more than the 225-bcf consensus average of 15 forecasters surveyed by The Wall Street Journal. Half of U.S. homes use natural gas for heating fuel, so single-digit temperatures like those lingering this week are big drivers for demand. February was the coldest in 30 years, according to Commodity Weather Group LLC. […]

Posted On : Published By : Tom Whipple
Category:

Libya declares force majeure on 11 central oilfields

The El Sharara oil field in Libya resumed operation in December after being shut down by militants in November. Photo by Javier Blas/CC WASHINGTON, March 5 (UPI) — Libya declared force majeure on 11 oilfields after a series of Islamic State attacks on facilities in the country’s central region. The state-owned National Oil Corp. posted a statement on its website declaring force majeure, saying it could no longer ensure production at the facilities due to the deteriorating security situation. The move frees the company of liability. Two fields, Bahi and Mabruk, had been attacked last month and were seized again Monday and Tuesday by unknown militants. Gunmen at Mabruk claimed to represent the Islamic State militant group. A third field, Dahra, was attacked late Tuesday. Col. Hakim Maazab, who commands oil guards in the region, said Wednesday the militants had withdrawn from Mabruk , after destroying oil tanks and […]

Posted On : Published By : Tom Whipple
Category:

Islamic State crisis: Thousands flee Iraqi advance on Tikrit

Iraqi government forces have been slowed by roadside bombs and booby traps A military operation to retake the Iraqi city of Tikrit from Islamic State (IS) has caused about 28,000 people to flee their homes, the UN says. Those displaced are headed towards the city of Samarra, the UN said, but many families are stranded at checkpoints. Aid convoys carrying relief supplies are being sent to the area by UN agencies to help those affected. The operation to retake Tikrit, involving some 30,000 soldiers and Shia militiamen, is now in its fourth day. They are trying to encircle the IS fighters, but their advance has been slow due to the roadside bombs and booby traps planted since the city was overrun last June, says the BBC’s Jim Muir in Beirut. Iraqi jets and helicopters are supporting the ground troops but US-led coalition aircraft are not involved. Militants also set […]

Posted On : Published By : Tom Whipple
Category:

Islamic State torches oil field near Tikrit as militia advance

BAGHDAD (Reuters) – Islamic State militants have set fire to oil wells northeast of the city of Tikrit to obstruct an assault by Shi’ite militiamen and Iraqi soldiers trying to drive them from the Sunni Muslim city and surrounding towns, a witness said. The witness and a military source said Islamic State fighters ignited the fire at the Ajil oil field to shield themselves from attack by Iraqi military helicopters. The offensive is the biggest Iraqi forces have yet mounted against IS, which has declared an Islamic caliphate on captured territory in Iraq and Syria and spread fear across the region by slaughtering Arab and Western hostages and killing or kidnapping members of religious minorities like Yazidis and Christians. Black smoke could be seen rising from the oil field since Wednesday afternoon, said the witness, who accompanied Iraqi militia and soldiers as they advanced on Tikrit from the east. […]

Posted On : Published By : Tom Whipple
Category:

Senate majority leader decides not to fast-track Iran bill

AP Photo/J. Scott Applewhite Politics Video Buy AP Photo Reprints Latest News WASHINGTON (AP) — Senate Majority Leader Mitch McConnell on Thursday decided to postpone action on a bill giving Congress a chance to review and vote on any deal the U.S. signs with Iran over its nuclear program. The move comes at a time delicate negotiations are at a critical juncture between the U.S. and its partners and Tehran. Democrats, many of whom backed the legislation, had loudly criticized McConnell for scheduling a Tuesday test vote on the bill. They accused him of playing politics in bypassing the Senate Foreign Relations Committee process and said it was better to move slowly to ensure bipartisan support for the measure. Sen. Bob Menendez, D-N.J., a co-sponsor of the bill, announced that he was so outraged at McConnell’s decision to fast-track the bill that he would vote against moving ahead on […]

Posted On : Published By : Tom Whipple
Category:

John Kerry Seeks to Calm Arab States Unsettled by Iran Talks

ENLARGE U.S. Secretary of State John Kerry, left, meets with Saudi King Salman bin Abdulaziz al-Saud at Diriya Farm, on March 5 in Diriya, Saudi Arabia. Photo: Getty Images RIYADH, Saudi Arabia—Saudi Arabia’s foreign minister said after meetings with Secretary of State John Kerry on Thursday that Gulf Arab countries support international talks over Iran’s nuclear program, but remain concerned about Tehran’s regional influence. Mr. Kerry met in Saudi Arabia with top officials of six Arab nations, addressing concerns about the effect of the nuclear talks on the balance of power in the region. Prince Saud al-Faisal, the Saudi foreign minister, said at a news conference with Mr. Kerry afterward that the U.S. had provided assurances that it would continue to focus on Iran’s destabilizing activities in the region. “He has been very clear in the assurances he gave,” Prince Saud said. He added that Iran’s influence in the […]

Posted On : Published By : Tom Whipple
Category:

Iran would sell more oil if Western sanctions lifted: Mehr agency

ANKARA (Reuters) – Iran said oil prices would not rise above $60 a barrel until 2016 and that it would increase crude exports if Western sanctions over its nuclear program were lifted, the semi-official Mehr news agency reported on Friday. "We’re not expecting oil prices to go over $60 until 2016. What will happen after that is not clear," Mehr quoted National Iranian Oil Co’s head of international affairs, Mohsen Ghamsari, as saying. "When sanctions are lifted, it is our natural and legal right to increase our oil sales in an effort to raise market share." U.S. and EU sanctions that came into force in 2012 prohibit the import, purchase and transport of Iranian petroleum products. World powers are in talks with Iran to try to persuade Tehran to curb its nuclear program in exchange for relief from the sanctions that have crippled the major oil exporter’s economy. "Sanctions […]

Posted On : Published By : Tom Whipple
Category:

As World’s Hottest Economy Unravels, Nigerians Feel the Squeeze

Zoology student Samuel Pelumi works on his laptop outside his home alongside the Lagos Lagoon. In a four-day sweep through Nigeria early last year, Aberdeen Asset Management’s Kevin Daly detected trouble. Yes, the country was a rising African power and yes, it had become the world’s fastest-growing major economy, but things weren’t quite right. An Islamic insurgency was heating up in the north and there were early signs that a nasty presidential campaign was brewing. Then financial disaster struck. Oil, the lifeblood of the country, collapsed in a breath-taking free fall. Daly had seen enough. By November, he had sold all of his Nigerian government bonds. Back in Lagos again last month for a fresh look, Daly found a country ravaged by crisis from all sides: the bloody clashes with Boko Haram insurgents had intensified; the violence had spurred authorities to postpone elections the president was in danger of […]

Posted On : Published By : Tom Whipple
Category:

Falkland Oil and Gas Says Drilling Has Begun on Zebedee Well

By Alex MacDonald LONDON–U.K.-listed Falkland Oil and Gas Limited (FOGL.LN) said Friday that Premier Oil, the operator of the Zebedee prospect in the Falklands islands, had begun drilling the first exploration well of the current drilling campaign at the prospect. The well is located on license PL004b, in which Falkland oil and gas has a 40% working interest. Falkland Oil and Gas said there is a 10% to 50% chance that the well will be successful. The well is targeting estimated gross resources of 281 million barrels of oil equivalent, of which 112 million barrels of oil equivalent would be net to Falkland. "The Zebedee prospect, if successful, will significantly increase the hydrocarbon resources of the Sea Lion field complex within our license area," said Falkland CEO Tim Bushell. Falkland has a market capitalization of GBP169 million or $258 million. Write to Alex MacDonald at [email protected]

Posted On : Published By : Tom Whipple
Category:

BNSF Train Carrying Crude Oil Derails in Illinois

ENLARGE Flames and smoke can be seen at the site of an oil train’s derailment near Galena, Ill., on Thursday. Photo: Mike Burley/TH Media A BNSF Railway Co. train carrying crude oil derailed and began to burn Thursday afternoon near Galena, Ill., just over the state line from Wisconsin and 160 miles west of Chicago. The company said the train consisted of 103 modern railcars loaded with oil from North Dakota’s Bakken Shale, along with two cars carrying sand. Several cars derailed and two of the cars were on fire Thursday night, local officials said. The derailment took place in a rural area and there were no injuries reported, according to BNSF. The cause of the derailment wasn’t immediately known, and federal investigators were heading to the scene. Local officials called for a one-mile voluntary evacuation around the derailment. This is the third derailment of a train carrying crude […]

Posted On : Published By : Tom Whipple
Category:

Canadian Crude Exports by Rail Drop in Latest Quarter

CALGARY—Canada’s national energy regulator said Thursday exports of crude oil by rail dropped in the latest quarter, a sign that lower oil prices have made shipments by rail less attractive to some Canadian crude producers. Crude-by-rail exports declined 5% to 173,342 barrels a day in the fourth quarter, down from 182,396 barrels a day in the previous three month period but still above the 148,929 barrels a day exported in the last quarter of 2013, according to National Energy Board data. A slide in oil prices to six-year lows has crimped oil producers’ profit margins and made it uneconomical for some to ship by rail. Last month, Suncor Energy Inc. and Cenovus Energy Inc., two of Canada’s largest oil sands producers, both said they have stopped shipments of crude-by-rail to the U.S. Gulf Coast. The U.S. imports more oil from Canada than from any other country. Despite an overall […]

Posted On : Published By : Tom Whipple
Category:

EIA: US petroleum product exports rise for 13th consecutive year

HOUSTON, Mar. 5 03/05/2015 US exports of petroleum products averaged a record 3.8 million b/d in 2014—an increase of 347,000 b/d from 2013—based on data from the US Energy Information Administration’s Petroleum Supply Monthly . In particular, exports of motor gasoline, propane, and butane increased, offsetting a decrease in exports of distillate , EIA said. EIA noted that the combination of record-high US refinery runs, which averaged 16.1 million b/d in 2014, and increased global product demand allowed US product exports to rise for the 13th consecutive year. Most of these exports were sent to Central and South America, followed by exports to Canada and Mexico. In fact, product exports from the US increased in every region except the Middle East, which declined to 47,000 b/d in 2014 from 55,000 b/d in 2013, EIA said. Exports of motor gasoline (including finished gasoline and blending components) in December 2014 set […]

Posted On : Published By : Tom Whipple
Category:

Oil climbs to $61 on Mideast supply concerns

LONDON (Reuters) – Brent crude oil rose to around $61 a barrel on Friday as fighting in Libya and Iraq stoked output worries, while traders kept a close eye on Iran nuclear talks that could eventually bring more supply to world markets. Fighting has escalated in northeast Iraq where Islamic State militants have set fire to oilfields to deter Shi’ite militiamen and Iraqi soldiers from advancing. In Libya, worsening security conditions have led to the closure of 11 oilfields. Brent LCOc1 was up 50 cents a barrel at $60.98 by 0910 GMT (4:10 a.m. EST). U.S. light crude CLc1 was up 30 cents at $51.06 a barrel. Worries about oil supplies from the Middle East helped widen the premium for Brent over U.S. crude CL-LCO1=R by nearly $1 to around $10 on Thursday. "The Libyan and Iraqi oilfield skirmishes are worrying," said Tamas Varga, oil analyst at London brokerage […]

Posted On : Published By : Tom Whipple
Category:

USW, Shell to resume talks amid ongoing labor strike at US refineries

The United Steelworkers union (USW) and Royal Dutch Shell PLC , which serves as lead company for National Oil Bargaining negotiations, have agreed to return to the bargaining table in an attempt to resolve USW’s more than 5-week-long unfair labor practice strike in effect at US refineries and associated installations ( OGJ Online, Feb. 2, 2015 ). After an extended period of halted discussions between the parties, Shell and USW decided at a Mar. 4 meeting to resume the negotiation process during the week beginning Mar. 9, Shell said. The announcement comes just days after Shell revealed its plan to return the company’s strike-impacted sites to normal, full-rotation operations with the use of Shell-trained employees and without the use of union workers ( OGJ Online, Mar. 3, 2015 ). While Shell expressed hopes of reaching a mutually satisfactory agreement with USW upon renewed negotiations, the company also said it […]

Posted On : Published By : Tom Whipple
Category:

GOP Presidential Hopefuls Risk Iowans’ Ire on Ethanol

ENLARGE Corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa, earlier this year. Despite lower crude prices, ethanol plants across the nation continue to operate at a brisk pace. Photo: Associated Press For decades, presidential candidates have bowed to Iowa’s corn-based ethanol industry while campaigning in a state where corn is king. But several of the likely Republican candidates slated to address the state’s agricultural industry on Saturday backed the sunset of ethanol subsidies in 2011, and many oppose the industry’s new sacred cow: the renewable-fuel standard, which requires blending ethanol and other biofuels into the gasoline supply. How the likely White House contenders navigate the issue will signal how much Republican politics are now driven by the party’s conservative base, which balks at government interference in the marketplace. Two GOP contenders who want to phase out the renewable-fuel standard, Florida Sen. Marco Rubio and Louisiana […]

Posted On : Published By : Tom Whipple
Category:

Oil Glut Sparks Latest Dilemma: Where to Put It All

ENLARGE Newly constructed oil-storage tanks in Cushing, Okla. in 2012. Despite a boom in tank construction since 2009, U.S. facilities are running out of room for more crude. Photo: Associated Press In a world awash in crude, oil producers and traders are facing a billion-barrel conundrum: where to put it all. U.S. crude-oil supplies are at their highest level in more 80 years, according to data from the Energy Information Administration, equal to nearly 70% of the nation’s storage capacity. A key U.S. storage hub in Cushing, Okla., is expected to hit maximum capacity this spring. While estimates are rough, Citigroup Inc. believes European commercial crude storage could be more than 90% full, and inventories in South Korea, South Africa and Japan could be at more than 80% of capacity. The danger of running out of places to stash crude: Some analysts predict prices, already down 50% since June, […]

Posted On : Published By : Tom Whipple
Category:

U.S. factory orders fall for sixth straight month

WASHINGTON (Reuters) – New orders for U.S. factory goods unexpectedly fell in January, posting their sixth straight monthly decline, a sign of weakness in the manufacturing sector. The Commerce Department said on Thursday new orders for manufactured goods slipped 0.2 percent after a revised 3.5 percent decline in December. Economists polled by Reuters had expected factory orders to gain 0.2 percent in January after a previously reported 3.4 percent tumble in December. The department also said orders for non-defense capital goods excluding aircraft – seen as a measure of business confidence and spending plans – rose 0.5 percent instead of the 0.6 percent advance reported last month. Manufacturing has been hurt by softening demand in Europe and Asia as well as a strong dollar and lower crude oil prices, which have caused some energy companies to either delay or cut back on capital expenditure projects. A labor dispute at […]

Posted On : Published By : Tom Whipple
Category:

Ukraine Says EU Should Help Pay to Store Gas if It Wants to Prepare for Worst Cases

Ukrainian Energy Minister Volodymyr Demchyshyn BRUSSELS—The European Union should share the cost of filling Ukraine’s natural-gas storage if it wants to prepare for worst-case scenarios next winter, the country’s energy minister said in an interview, highlighting a potential clash in coming negotiations between the EU, Kiev and Moscow. An EU-mediated deal that helped maintain gas supplies to Ukraine and the rest of Europe during the winter expires at the end of March. The comments by Volodymyr Demchyshyn, a former investment banker who took office in December, underline how difficult it will be to reach a follow-up agreement that ensures deliveries over the summer and beyond. About half of the EU’s gas imports from Russia pass through Ukraine. Mr. Demchyshyn also warned that the government in Kiev might decide to cut off shipments to regions controlled by pro-Russian separatists because of a failure by local energy distributors to pay for […]

Posted On : Published By : Tom Whipple
Category:

The Price of Oil Is Down, So Why Is Production Still Going Up?

Too much oil, too fast. That turns out to be the downside of the U.S. oil boom—at least if you’re an investor. Prices crashed, and America is pumping so much crude its running out of places to store it. One promising sign you may have heard about: The plunge in U.S. oil 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 part of everyday business vocabulary. Oil watchers are desperate for any sign of an end to the glut. Drillers have been shutting down rigs at a record pace. But oil production isn’t slowing yet. In fact, the U.S. is pumping more crude now than at any time in 40 years. Why? We explore the conundrum in our animated explainer: Why Cheap Oil Doesn’t Stop the Drilling . Declining Rigs Versus […]

Posted On : Published By : Tom Whipple
Category:

Oil Fluctuates on China’s Lower Growth Target, Libyan Supply Issues

By Eric Yep Crude-oil futures swung between gains and losses in Asian trade Thursday as investors assessed a lower growth target from China, a slower increase in U.S. oil stockpiles and ongoing production issues in Libya. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $51.82 a barrel at 0419 GMT, up $0.29 in the Globex electronic session. Brent crude for April delivery on London’s ICE Futures exchange rose $0.14 to $60.69 a barrel. China on Thursday projected economic growth of about 7% for 2015, lower than the 7.4% it achieved in 2014. Beijing also announced several energy-related goals, including reducing energy intensity–the amount of energy needed to increase gross domestic product–by more than 3.1% for 2015, strictly controlling energy use and boosting clean-energy sources like hydropower. A softer Chinese economy has been mostly priced in by the market considering that crude […]

Posted On : Published By : Tom Whipple
Category:

U.S. Oil Prices Rise After Supply Data

Oil pump jacks next to a strawberry field in Oxnard, Calif. ENLARGE Photo: Reuters U.S. oil prices rose on Wednesday after weekly data showed that inventories at a key storage hub increased less than expected. Light, sweet oil for April delivery settled up $1.01, or 2%, at $51.53 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, settled lower as concerns ebbed that violence in Libya would immediately halt production. Front-month futures fell 47 cents, or 0.8%, to $60.55 a barrel on ICE Futures Europe. U.S. crude stockpiles rose by 10.3 million barrels to 444.4 million barrels in the week ended Feb. 27, the Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had predicted a 4.6 million-barrel increase. The gain was the biggest for a single week since March 2001. However, supplies in Cushing, Okla., the delivery point for the Nymex contract, […]

Posted On : Published By : Tom Whipple
Category:

U.S. oil stockpiles rise twice as much as expected in week: EIA

NEW YORK (Reuters) – U.S. crude stocks rose more than twice as much as expected last week, while gasoline stocks increased and distillate inventories fell, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories rose by 10.3 million barrels in the last week to 444.37 million, compared with analysts’ expectations for an increase of 4.2 million barrels. "Overall, it’s another bearish data point in an already bearish fundamental environment," said Dominick Chirichella, senior partner, Energy Management Institute, New York. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 536,000 barrels, EIA said. U.S. Gulf Coast crude oil stockpiles last week reached their highest level since the EIA began keeping records in 1990, up 5.4 million barrels to 219.9 million barrels in the region with the majority of the nation’s refining capacity. "It shows that all the cuts in capex spending and rig counts have not […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Prices Mark Biggest Gains in Nearly Two Weeks

By Timothy Puko Natural gas prices made their biggest gains in nearly two weeks, as strong winter demand and dwindling stockpiles boosted prices. Natural gas for April delivery settled up 5.7 cents, or 2.1%, at $2.769 a million British thermal units on the New York Mercantile Exchange. It’s the largest percentage gain and first back-to-back winning sessions since Feb. 20. Cold has been so severe that a rush of late-season heating demand likely drained 225 billion cubic feet out of storage last week, according to The Wall Street Journal survey of 15 analysts. That would be double the average drain for that week of the year, according to data from the U.S. Energy Information Administration. The agency plans to release its official data on storage levels on Thursday at 10:30 a.m. Last week’s 219-bcf drain set a new high for a week in the second half of February. "This […]

Posted On : Published By : Tom Whipple
Category:

Shell’s Ollila Says Society Must Find ‘Middle Way’ on Climate Change

LONDON— Royal Dutch Shell PLC Chairman Jorma Ollila is joining Chief Executive Ben van Beurden in backing efforts to limit carbon emissions ahead of international climate talks in Paris later this year. Mr. Ollila was set to tell employees Wednesday that society must find a “middle way” that “doesn’t threaten economic growth,” according to a transcript of a speech the company disseminated. “Shell has been open and firm in its advocacy of cleaner-burning natural gas, carbon capture and storage,” which takes carbon from combustion and stores it in places like underground reservoirs “and carbon pricing. And we’re hopeful that policy makers will recognize the value of all three at the gathering in Paris later this year,” the transcript says. Shell, which is heavily invested in big, long-lived natural gas projects, has been increasingly vocal in calling for energy companies to participate with policy makers in addressing climate change. Mr. […]

Posted On : Published By : Tom Whipple
Category:

Exxon CEO says oil prices will stay low

The world should “settle in” for a period of relatively weak oil prices, the chief executive of ExxonMobil has said, with US shale production more resilient than many people had expected. More On this topic IN Oil & Gas Rex Tillerson’s comments came as the world’s largest listed energy company said it would cut capital spending by 12 per cent this year even while increasing its oil production by 7 per cent, in a sign of how the industry is pushing to cut costs in response to the plunge in crude prices. Mr Tillerson told an annual meeting for analysts in New York that oil prices had crashed because demand growth in China and elsewhere had slowed, while US supplies were “coming like a freight train”. Those conditions could persist, he suggested. “My view is people need to kind of settle in for a while,” he said: “There’s a […]

Posted On : Published By : Tom Whipple
Category:

John Kerry Flies to Saudi Arabia to Discuss Iran Nuclear Talks

MONTREUX, Switzlerland — Secretary of State John Kerry flew to Saudi Arabia on Wednesday to take on the challenge of explaining a potential deal over Iran ’s nuclear program to the American-allied conservative monarchies of the gulf. In the Saudi capital, Riyadh, Mr. Kerry plans to meet with King Salman and to consult with foreign ministers from Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates, who are also flying there. Like Israel, which opposes the potential deal, Saudi Arabia and other Arab nations in the region see Iran as an opponent. They are concerned about the terms of the deal, which would be limited in duration and would allow Iran to retain some of its nuclear infrastructure. Mr. Kerry met here in Switzerland for three days of talks that also included the United States energy secretary, Ernest J. Moniz, and Ali Akbar Salehi, the director of Iran’s Atomic […]

Posted On : Published By : Tom Whipple
Category:

U.S. Strategy in Iraq Increasingly Relies on Iran

WASHINGTON — At a time when President Obama is under political pressure from congressional Republicans over negotiations to rein in Tehran’s nuclear ambitions, a startling paradox has emerged: Mr. Obama is becoming increasingly dependent on Iranian fighters as he tries to contain the Islamic State militant group in Iraq and Syria without committing American ground troops. In the four days since Iranian troops joined 30,000 Iraqi forces to try to wrest Saddam Hussein’s hometown of Tikrit back from Islamic State control, American officials have said the United States is not coordinating with Iran, one of its fiercest global foes, in the fight against a common enemy. That may be technically true. But American war planners have been closely monitoring Iran’s parallel war against the Islamic State, also known as ISIS or ISIL, through a range of channels, including conversations on radio frequencies that each side knows the other is […]

Posted On : Published By : Tom Whipple
Category:

Iran Flexes New Clout Beyond Its Borders

As head of Iran’s elite Quds Force, Qasem Soleimani used to dwell in the shadows. But now his face is all over social media as Iran works to expand its influence in the Mideast. Photo: ISNA/Associated Press BAGHDAD—Not long ago, Qasem Soleimani, head of Iran’s elite troops known as the Quds Force, was one of the spy world’s most covert operators. Now, his smiling face is everywhere: arm-in-arm with Iraqi officials on TV, rubbing shoulders with the militiamen fighting Islamic State across social media, and in public meetings with Iraqi families liberated by Iran’s allies. Mr. Soleimani surfaced this week in Samarra, Iraq, to bolster the morale of Iraqi troops and militiamen embarking on a fight to free the nearby city of Tikrit, now controlled by Islamic State, also known as ISIS or ISIL. Mr. Soleimani’s high profile underscores Iran’s transformation in the way it does business in the […]

Posted On : Published By : Tom Whipple
Category:

Iran Talks Closer on One-Year Nuclear ‘Breakout’ Demand

ENLARGE U.S. Secretary of State John Kerry takes a break from a bilateral meeting with Iran’s Foreign Minister Mohammad Javad Zarif in Montreux, Switzerland, on Wednesday. Photo: Associated Press MONTREUX, Switzerland—An understanding is emerging between Iran and six major powers that a final nuclear deal between the two sides must be structured around a key demand of the U.S. and its European partners: that Tehran stay at least a year away from amassing enough fuel for a nuclear weapon, according to people familiar with the negotiations. The understanding about Iran’s so-called breakout time, if it can be nailed down as part of a broader package, could open the way to a final nuclear agreement in coming weeks, although diplomats warned again on Wednesday that difficult obstacles remained in the way of a deal. The breakout period has been one of the critical questions in the talks. Last year, negotiations […]

Posted On : Published By : Tom Whipple
Category:

Libya Declares Force Majeure Over Oil Fields in Central Region

Libya on Wednesday declared a force majeure related to 11 oil fields in the center of country, after a string of attacks against the facilities by the radical group calling itself Islamic State. In a statement posted on its website, state-owned National Oil Co. said it was no longer able to ensure security in the 11 fields and declared force majeure on them, a move guaranteeing legal protections from claims against any future disruptions. In recent weeks, the North African country’s oil industry—once the lifeblood of its economy—has been in the cross hairs of an armed conflict. The country is pumping about 500,000 barrels of crude oil a day, three times less than its peak output. The Dahra oil field, about 500 kilometers (310 miles) southeast of Tripoli, was attacked late on Tuesday, hours after two other oil facilities were targeted by the militants. Col. Hakim Maazab, a commander […]

Posted On : Published By : Tom Whipple
Category:

Libyan Oil Guards Prepare to Take on Islamic State

By Benoît Faucon Oil guards in Libya are getting ready to take on suspected Islamic State militants, their commander said Wednesday, following a third attack on oil fields overnight. In recent weeks, the North African country’s oil industry–once the lifeblood of its economy–has been in the cross hairs of an armed conflict. Colonel Hakim Maazab, who heads the brigade that is in charge of guarding oil fields in central Libya, told The Wall Street Journal that the Dahra oil field, about 500 kilometers southeast of Tripoli, was attacked Tuesday night by suspected Islamic State militants, hours after two other oil facilities were targeted by the same group. Col. Maazab said his brigade had sent reinforcements to the nearby Zella airport and a military aircraft had arrived to assist them. "We will go to Dahra today," he said. A Libyan oil official familiar with the situation in the fields said […]

Posted On : Published By : Tom Whipple
Category:

Oil Companies Begin to Give Up on Yemen

A Houthi fighter in front of the U.S. Embassy in San’a, Yemen’s capital. ENLARGE Photo: Associated Press The political upheaval in Yemen has dealt a powerful blow to the country’s oil industry, forcing companies to abandon productive oil patches and evacuate staff as a rebel group consolidates power. Houston-based Occidental Petroleum Corp. , which has been operating in Yemen for nearly three decades, flew its staff out of the country in January, executives and local officials said, after gunmen stormed its compound in the capital, San’a, where Houthi militants have tightened their grip on power. Since then, executives and local officials said, Norway’s DNO AS A, Dove Energy Group of Dubai and Nexen Inc., which is owned by China’s Cnooc Ltd. , are all moving to relinquish their rights to blocks that produce thousands of barrels of crude a day. Meanwhile, Austrian energy company OMV AG , which produces […]

Posted On : Published By : Tom Whipple
Category:

Nigeria: Fuel Scarcity – Nigerian Govt to Pay U.S.$30 Billion Exchange Rate Differentials to Marketers

A man fills in a car at a fuel station (file photo). Photo: Shell The Minister of Finance, Ngozi Okonjo-Iweala, said on Wednesday that the Federal Government had agreed to pay 30 billion dollars foreign exchange differentials owed to oil marketers. Ms. Okonjo-Iweala made this known on Wednesday in Abuja while briefing journalists after a meeting with the Central Bank, Petroleum Products Pricing Regulatory Agency, major oil markers and depot owners. "The Federal Government has addressed all contentious issues with the marketers, such as the issue of the foreign exchange rate differentials. "The Federal Government has agreed to pay the 30 billion dollars exchange rate differentials owed the marketers over the last couple of months. "It is already in the process of offsetting the N185 billion debts owed the marketers with the issuance of the Sovereign Debt Note (SDN)," she said. Ms. Okonjo-Iweala added that the Federal Government had […]

Posted On : Published By : Tom Whipple
Category:

China lowers GDP growth target to ‘around 7%’

Chinese President Xi Jinping (L) and Premier Li Keqiang stand during opening of the annual full session of the National People’s Congress, the country’s parliament, at the Great Hall of the People, in Beijing March 5, 2015. REUTERS/Jason Lee (CHINA – Tags: POLITICS) China will target economic growth of “around 7 per cent” this year, Premier Li Keqiang told parliament on Thursday, signalling that the leadership expects the country’s economy to slow further following the slowest expansion for 24 years in 2014. The country, which has enjoyed some of the fastest growth rates in the world in the past two decades or so, is now slowing as it approaches middle-income levels. Mr Li reiterated Beijing’s refrain that economic development has entered “a new normal”. Illustrating the breadth of issues Beijing is grappling with, Mr Li’s 3 per cent target for consumer price inflation is a far cry from January’s […]

Posted On : Published By : Tom Whipple
Category:

5 Takeaways From China’s State-of-the-Nation Speech

Agence France-Presse/Getty Images Share With a state-of-the-nation speech, Chinese Premier Li Keqiang announced an era of slower growth , saying “China’s economic development has entered a new normal.” The nearly 100-minute speech inside Beijing’s Great Hall of the People on Thursday outlined the Chinese government priorities for the coming year. The overriding imperative: generating enough growth to keep people happy while the government guides a transition away from smokestack industries to services.    1 China’s ‘new normal’ is slower, but not slow. The lowered growth target of about 7% is the lowest in over a decade, but still — Chinese state media reminded — fast for a major economy. A willingness to see an economic free-fall after years of heady growth it isn’t. Mr. Li several times cited the need to keep the economy humming along. He said maintaining “medium-high-level growth” is crucial to boosting living standards, creating jobs […]

Posted On : Published By : Tom Whipple
Category:

China Lowers Growth Target to About 7%

Chinese Premier Li Keqiang spoke at the opening of the National People’s Congress on Thursday…. ENLARGE Photo: Zuma Press BEIJING—China lowered its economic growth forecast to about 7% for 2015 at the opening of the country’s biggest political event of the year, ushering in what leaders have dubbed a “new normal” of slower growth in the world’s second-largest economy. The move signaled Beijing won’t take dramatic action to raise the growth rate above last year’s level, which at 7.4% was its lowest level in nearly a quarter-century. At the same time, its leaders signaled concerns that an even sharper drop in growth risks higher unemployment and social unrest. In remarks before the country’s lawmakers on Thursday, Premier Li Keqiang listed the challenges to the Chinese economy, including sluggish investment growth, overcapacity, deflationary pressure and increasing public demand for better social services. The new target “takes into consideration what is […]

Posted On : Published By : Tom Whipple
Category:

Union says it will resume talks Monday with U.S. refining companies

HOUSTON (Reuters) – Labor leaders and oil company representatives will resume face-to-face talks on Monday in Houston in a bid to agree on a new contract that would end the biggest U.S. refinery strike in 35 years, the United Steelworkers union said on Wednesday. The strike, now in its second month after starting Feb. 1, has dragged on as both sides fail to reach agreements over wage increases and how to curb worker fatigue, which is tied to accidents. The protracted strike has prompted at least some workers in Texas to return to their jobs. Companies have told laborers they will not receive bonuses unless they show up for work. The USW said it held a conference call on Wednesday with officials from Royal Dutch Shell as it presses for higher wages and what it calls tighter safety practices. Shell’s U.S. unit, which is leading the talks for oil […]

Posted On : Published By : Tom Whipple
Category:

Pain at the pump to continue, AAA says

Sign up for our daily Energy Newsletter Gas prices have increased for more than a month for one of the longest streaks in years. UPI/Bill Greenblatt WASHINGTON, March 3 (UPI) — While U.S. gasoline prices remain relatively low, the recent trend in increases is the longest in more than two years, motor club AAA reports. The national average retail price for a gallon of regular unleaded for Tuesday is $2.44, up two cents from the previous day. Prices have increased for 36 straight days, the longest streak since February 2013. AAA spokesman Avery Ash said gasoline prices are still historically low , but the price trend is a growing source of frustration for motorists. Prices are up because of refinery issues and AAA expects increases to continue. "Gas prices likely will rise higher in March as refineries conduct seasonal maintenance," he said in a Monday briefing. "The good news […]

Posted On : Published By : Tom Whipple
Category:

Override of Obama’s Keystone Veto Fails in Senate

ENLARGE Senate Majority Leader Mitch McConnell (R., Ky.) said construction of the Keystone pipeline would pump billions into the U.S. economy. Photo: Andrew Harrer/Bloomberg News WASHINGTON—The Senate Wednesday defeated a Republican-led effort to override President Barack Obama’s veto of legislation approving the Keystone XL pipeline , the latest twist in a yearslong saga over the contentious project. In a 62-37 vote, the Senate didn’t get the required 67 yes votes necessary to override Mr. Obama’s veto of the bill, which would have authorized a Canadian company to construct the 1,179-mile pipeline. The project has been under review by the Obama administration for more than six years. Mr. Obama vetoed the legislation, not the pipeline itself. The administration retains the ultimate decision. The pipeline, which would carry up to 830,000 barrels of oil a day mostly from Canada’s oil sands to existing pipelines in Steele City, Neb., crosses an international […]

Posted On : Published By : Tom Whipple
Category:

U.S. Refiners, Striking Workers Digging In for Protracted Battle

U.S. refiners and striking union workers are digging in for a protracted battle that could last through the spring. Even as the two sides returned to the bargaining table Wednesday for a new round of talks on salaries and safety, some refinery operators say they are training replacement employees to take over for union workers at their plants. A spokeswoman for Shell said discussions ended Wednesday with an agreement to resume talks next week. In a letter addressed to employees Tuesday, LyondellBasell Industries said it had filed a complaint with the National Labor Relations Board alleging the United Steelworkers has threatened and harassed people trying to cross picket lines. “We have been told of threats against returning employees, abusive language being used in texts and social media, and we have witnessed threatening behavior at the gates to the Houston Refinery as employees arrive for work,” the company said in […]

Posted On : Published By : Tom Whipple