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Oil Futures Give up Gains as Oversupply Fears Resurface

Dow Jones Newswires By Eric Yep Crude-oil futures dropped in Asian trade Thursday, reversing the previous day’s gains, as oil markets went back to fretting over rising U.S. supplies that hit new records. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $43.89 a barrel at 0347 GMT, down $0.77 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange fell $0.37 to $55.54 a barrel. Oil prices had risen in the last trading session, with Nymex West Texas Intermediate crude snapping a six-session losing streak after the U.S. Federal Reserve said it was in no hurry to raise interest rates. But the oil glut in the U.S. is weighing on prices again. Overall U.S. oil stockpiles rose more than expected, by 9.6 million barrels to 458.5 million barrels last week, the U.S. Energy Information Administration said. At the […]

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U.S. shares, oil jump after Fed statement

NEW YORK (Reuters) – Stocks on Wall Street surged and oil prices jumped as much as 5 percent on Wednesday after the Federal Reserve indicated it preferred a more gradual path to normalizing U.S. interest rates even as it moved toward its first rate hike in almost a decade. The dollar tumbled against other major currencies and the U.S. 10-year Treasury yield dipped below 2 percent for the first time since March 2 after the Fed appeared to argue against a June rate hike as many in the market had expected. The Fed in its statement following a two-day meeting of policy-makers slashed interest rate projections over the next few years and downgraded its outlook on the U.S. economy. "What’s really significant is that they downgraded their assessment of the economy, and that means rates will stay lower for longer. And when they do start to rise, they will […]

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Natural Gas Prices Rally on Colder Forecasts, Strong Demand

By Timothy Puko Natural gas sprung to its highest point in nearly a month as traders grew more confident in forecasts showing abnormally cool weather. Natural gas for April delivery settled up 6.5 cents, or 2.3%, at $2.92 a million British thermal units on the New York Mercantile Exchange. The market had dipped as low as $2.775/mmBtu before turning positive late this morning. It is the highest settlement since Feb. 20. Weather forecasts are divided about how strong a shot of unseasonably cool weather will be in the coming weeks. The market initially traded lower on some signs that the cold wouldn’t be so bad, reducing demand for natural gas heating fuel. But some traders put more weight on the forecasts that show even cooler temperatures than expected, said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston. Midday updates from weather models did show […]

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Non-U.S. Shales Prove Difficult to Crack

After spending more than five years and billions of dollars trying to re-create the U.S. shale boom overseas, some of the world’s biggest oil companies are starting to give up amid a world-wide collapse in crude prices. Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC have packed up nearly all of their hydraulic fracturing wildcatting in Europe, Russia and China. The reasons vary from sanctions in Russia, a ban in France, a moratorium in Germany and poor results in Poland to crude prices below what it can cost to produce a barrel of shale oil. Chevron halted its last European fracking operations in February when it pulled out of Romania. Shell said it is cutting world-wide shale spending by 30% in places including Turkey, Ukraine and Argentina. Exxon has pulled out of Poland and Hungary, and its German fracking operations are on hold. The result: Outside the […]

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In a World Awash With Crude Oil, Storage Companies Are Kings

Chart: Oil Storage Companies (Bloomberg) — In a world awash with cheap oil and plunging profits, one obscure corner of the energy business is shining brightly: the owners of storage tanks. While not nearly as famous as giant oil producers like Exxon Mobil Corp. and Royal Dutch Shell Plc, storage companies including Vopak NV, Kinder Morgan Inc., Oiltanking GmbH and Magellan Midstream Partners LP are among those benefiting from rising demand for onshore tanks — and higher prices to rent limited space. “Storage is king,” said Jean Francois Lambert, global head of commodity finance at HSBC Holdings Ltd. in London. “Good tanking at the right location could make money.” Driven by record production from shale fields, the oil glut is bigger in the U.S. than any other region, and particularly large around the hub of Cushing, the Oklahoma town that calls itself the “pipeline crossroad of the world.” The […]

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OPEC, non-OPEC oil talks on ice, Iran return unlikely to change that

LONDON (Reuters) – OPEC efforts to bring non-member countries such as Russia on aboard in cutting output have made little progress, officials say, and even the chance of more Iranian exports hitting prices if sanctions end is unlikely to boost cooperation. Since the oil price collapse, top OPEC exporter Saudi Arabia has said it wanted non-OPEC producers to cooperate with the group. But a plan for a meeting between the two sides this month appears to have been shelved. "At first we have been planning to meet in March, but so far no-one has come forward with such an initiative. The situation has calmed down a bit," Russian Energy Minister Alexander Novak told Reuters. Novak was part of a Russian delegation that held talks with OPEC ministers before OPEC’s November meeting. But no supply cut deal was reached then, OPEC refused to act alone and Brent crude prices fell, […]

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Iran Could Add Million More Barrels a Day to the Oil Glut

Iran’s oil industry installations are seen in Mahshahr, Khuzestan province, southern Iran. The country produced 2.8 million barrels of oil a day last month, compared with 3.6 million at the end of 2011, according to data compiled by Bloomberg. Photographer: Kaveh Kazemi/Getty Images (Bloomberg) — Iran says it could add a million barrels to daily oil production shortly after a deal to lift sanctions is reached, reclaiming the position of OPEC’s second-largest supplier. While the timing of such a move would be at least months away because the sanctions would be rolled back slowly, industry observers largely agree that the capacity is there. Yet going further than that and adding a second million barrels — as the government has said it plans to do — will prove a much bigger challenge. It would take some five years and tens of billions of dollars of investment, according to two former […]

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A Nuclear Deal With Iran Could Increase Global Oil Glut

It’s not just Benjamin Netanyahu and other world leaders who are scrutinizing the Iran negotiations. Oil traders are, too. That’s because there’s already an oil glut, and an Iran deal could lift sanctions and mean even more oil. “Even the thought that Iranian oil could be unleashed on the global market is, you know, getting people to sell first and ask questions later,” says Phil Flynn, a senior market analyst and oil trader at The Price Group in Chicago. He says in the last couple of days traders are trying to read the geo-political tea-leaves, and some think they see a deal coming with Iran. “Especially when you have Secretary of State John Kerry standing next to the energy secretary of the United States in on the talks,” he says. “Why would you have the energy secretary in on the talks if you weren’t really getting prepared for more […]

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Kurdish oil production to increase

Gulf Keystone Petroleum expects production to ramp up in Kurdish north of Iraq. Photo courtesy Gulf Keystone Petroleum Production from oil operations in Kurdish Iraq is expected to increase following a payment from the regional government, Gulf Keystone Petroleum said. The company said Wednesday it resumed production from the Shaikan reserve area in the Kurdish north of Iraq after receiving payments for future crude oil sales. Production is now expected to increase to levels consistent with the installed capacity of 40,000 barrels of oil per day. Gulf Keystone was upbeat when, in December, the Kurdish and Iraqi central governments brokered a deal ending a simmering impasse over who controls what parts of the oil sector in the country. Operations were suspended in February amid a payment row with the semiautonomous Kurdistan Regional Government. "Over recent weeks we have maintained a flexible and prudent approach, ensuring that we can maximize […]

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Shell, Eni Making No Progress on Nigeria Oil Spills: Amnesty

A man tries to separate crude oil from water in a boat at the Bodo waterways polluted by oil spills attributed to a Royal Dutch Shell Plc equipment failure, August 11, 2011. Photographer: Pius Utomi Ekpei/AFP via Getty Images (Bloomberg) — Royal Dutch Shell Plc is making no progress curbing oil spills in Nigeria and Eni SpA’s operations in the West African country are out of control, according to Amnesty International. The two companies reported more than 550 spills in the southern oil-rich Niger River delta last year, compared with an average of 10 spills a year in Europe between 1971 and 2011, said Amnesty. “These figures are seriously alarming,” Audrey Gaughran, Amnesty’s global issues director, said in a statement on Thursday. “In any other country, this would be a national emergency. In Nigeria it appears to be standard operating procedure for the oil industry.” Nigeria produces about 2 […]

Posted On : Published By : Tom Whipple