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Deep Concerns as Climate Impacts on Gulf Stream Flow

Meltwater on the Greenland ice sheet could affect currents as it enters the sea. Image: James Balog/Aurora Photos via Flickr Ocean scientists find evidence of an increasing slowdown in the Atlantic’s “invisible river” that could seriously affect weather and sea levels in the US and Europe. LONDON, 25 March, 2015 − Climate scientists have once again confirmed an alarming slowdown in the circulation of the Atlantic Ocean − the process that drives the current that warms Europe, and powers the planetary climate. And this time, they are prepared to say that the changes are recent − and may be linked to global warming. The Atlantic Conveyor is a great invisible river that flows in two directions at the same time. The equatorial surface waters − warm, and therefore less dense − flow towards the north in the form of the Gulf Stream. Around Greenland, the denser and colder Arctic […]

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Heinberg: AFTERBURN Society Beyond Fossil Fuels

Heinberg: AFTERBURN Society Beyond Fossil Fuels thumbnail The advent of fossil fuels changed the world profoundly (giving us everything from plastics and automobiles to global warming); the inevitable and rapidly approaching end of the oil-coal-and-gas era will likewise bring overwhelming transformation in its wake. My new book Afterburn explores that transformation—its opportunities and challenges—in sixteen essays that address subjects as varied as energy politics, consumerism, localism, the importance of libraries, and oil price volatility. Afterburn is a book of “greatest hits”—that is, popular essays that have been previously published—similar in that respect to an earlier book of mine, Peak Everything (2007). Like that previous collection, this one has been carefully selected and arranged, and features an all-new Introduction. Here are just a few of the highlights: “Ten Years After” reviews the debate about “peak oil” from the perspective of over a decade’s work in tracking petroleum forecasts, prices, and […]

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Oil Rallies, Gulf Stocks Fall as Yemen Crisis Escalates

ENLARGE A fisherman travels on a boat in front of a bulk carrier ship and a tanker in the Suez Canal on May 1, 2014. Oil tankers that transit the Suez Canal also need to pass through Bab el-Mandeb Strait. Photo: Reuters LONDON—Oil prices surged on Thursday, while stocks fell sharply, as Saudi Arabia and its allies in the Middle East launched airstrikes against Houthi rebel forces in Yemen. The abrupt intensification of the crisis surprised markets. Oil prices rose more than 5% in early European morning trade, before slipping back slightly, while stocks in Europe more broadly, and the Gulf states more specifically, were lower. The escalation of the conflict came hours after Yemen’s President Abed Rabbo Mansour Hadi fled the country as the Iranian-supported militants advanced on the southern port city. The fresh developments threaten to make Yemen the focal point of the clash between Iran and […]

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Oil surges on Yemen air strikes, global stocks tumble

LONDON (Reuters) – Crude prices rose as much as 6 percent on Thursday after Saudi Arabia and its allies launched air strikes on Yemen, pushing shares lower in Europe, the Middle East and Asia and lifting oil producers’ currencies. The military operations, including air strikes, targeted Iran-backed Houthi rebels besieging the southern Yemen city of Aden. Arab producers ship oil via the Gulf of Aden and Suez Canal to Europe. The escalating tensions in the Middle East pushed the price of Brent crude up more than $3 a barrel to close to $60, a 2 1/2-week high. It last traded at $59.17, up 4.7 percent LCOc1. "Oil is having a nice move after more geopolitical tensions in the Middle East over Yemen. Saudi has intervened via a military operation but, to be clear, (it) has at the moment led to no disruptions in oil supply," said Atif Latif, director […]

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Lower spending may be pushing oil higher

EIA expects lag time in decreased spending and oil production levels from the United States. Photo by David Gaylor/Shutterstock Crude oil prices gained traction in Wednesday trading as U.S. federal data show spending on exploration and production was down by double digits. Global oil prices are about half of what they were in June 2014, dropping more than once this year below the $50 per barrel mark. The steady drop in crude oil prices has forced energy companies to cut back on staff and reduce the amount of capital set aside in their 2015 budgets for exploration and production, known as the upstream side of the sector. A daily brief from the U.S. Energy Information Administration finds spending on exploration and production during the fourth quarter of 2014 was down 12 percent year-on-year. EIA said the impact of the spending cuts might not be felt for a long time. […]

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Biggest Polluters to Miss Climate Deadline

Haze surrounds the International Commerce Centre (ICC), center, as a cruise ship sails past in Hong Kong,. (Bloomberg) — Less than a week before the United Nations deadline for countries to file greenhouse-gas pledges necessary to keep a global climate change deal on track, it looks like most of the world is missing in action. Ahead of the March 31 target, only the European Union and Switzerland have unveiled plans, representing about 10 percent of global emissions. The U.S. has promised to hit the deadline. The rest of the world’s major economies, including China, India, Australia and Japan, are unlikely to complete submissions in time, according to environmental groups tracking UN climate talks. More than 190 nations are scheduled to meet in Paris in December to craft an international deal aimed at slowing global warming. Countries may be holding off on individual plans as long as possible to see […]

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Saudi Arabia Leads Air Assault in Yemen

WASHINGTON — Saudi Arabia announced on Wednesday night that it had begun military operations in Yemen , launching airstrikes in coordination with a coalition of 10 nations. The strikes came as Yemen was hurtling closer to civil war after months of turmoil, as fighters and army units allied with the Houthi movement threatened to overrun the southern port of Aden where the besieged president, Abdu Rabbu Mansour Hadi, has gone into hiding. The rapid advances by the president’s opponents included the seizure of a military air base and an aerial assault on his home. There were unconfirmed reports that the president had fled the country by boat for Djibouti, the tiny Horn of Africa nation across the Gulf of Aden. The region’s most impoverished country, Yemen has been a central theater of the American fight against Al Qaeda , and its possible collapse presents complex challenges to the Obama […]

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Yemen Houthis respond to Sana’a air raids with rocket attacks

People search for survivors on Thursday after an air strike near Sana’a airport Houthi rebels say they have responded to Saudi Arabia-led air strikes on Sana’a, the Yemen capital, by launching rockets across the northern border into the oil-rich kingdom, as civil conflict threatens to escalate into a regional war. Saudi Arabia, backed by a 10-country Muslim coalition, launched the air strikes early on Thursday against targets in Houthi-controlled Sana’a, including the airport and a military air base. News of the strikes and retaliation triggered a surge in the price of crude oil . Brent crude, the international benchmark, rose $2.89, or 5.1 per cent, to $59.37 while West Texas Intermediate, the US benchmark, also rose, up $3.01 to $52.22 a barrel. It had reached $52.48 a barrel in earlier trading. Although the attack is not expected to cause any major disruption, the narrow waters between Yemen and Djibouti […]

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Saudi Arabia invites Iraq’s Abadi to visit in big sign of thaw

BAGHDAD/RIYADH (Reuters) – Saudi Arabia’s King Salman has invited Iraqi Prime Minister Haidar al-Abadi to visit the kingdom, Abadi’s office said on Monday, in the biggest sign yet of improving ties between the countries after decades of tension. Abadi’s office gave no details about the invitation or possible visit, which would be his first as prime minister, including when it might take place. But the invitation caps months of better cooperation between Riyadh and Baghdad since the prime minister replaced Nouri al-Maliki last summer. Iraq and Saudi Arabia have found new room to cooperate with each other in the fight against the Islamic State group, which both see as a threat, but long-held suspicions persist. Saudi Arabia hopes Abadi will do more to include Iraqi Sunnis in the government than Maliki did, and will prove more able to distance himself from Iran, Baghdad’s main ally and Riyadh’s biggest regional […]

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Why Bombing This Tiny Oil Producer Is Roiling the Energy Market

(Bloomberg) — While Yemen contributes less than 0.2 percent of global oil output, its location puts it near the center of world energy trade. The nation shares a border with Saudi Arabia, the world’s biggest crude exporter, and sits on one side of a shipping chokepoint used by crude tankers heading West from the Persian Gulf. Global oil prices jumped more than 5 percent on Thursday after regional powers began bombing rebel targets in the country that produced less than Denmark in 2013. Yemen’s government collapsed in the face of an offensive by rebels known as Houthis, prompting airstrikes led by Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries. The Gulf’s main Sunni Muslim power says the Houthis are tools of its Shiite rival Iran, another OPEC member, and has vowed to do what’s necessary to halt their advance. “While thousands of barrels of oil […]

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U.S.-led coalition, Iraqis pound Islamic State in Tikrit

BAGHDAD/WASHINGTON (Reuters) – U.S.-led coalition warplanes launched their first airstrikes against Islamic State targets in Tikrit on Wednesday, officials said, coming off the sidelines to aid Iraqi forces fighting alongside Iran-backed Shi’ite militia on the ground. The decision to give air support to the Tikrit campaign pulls the United States into a messy battle that puts the U.S.-led coalition, however reluctantly, on the same side of a fight as Iranian-backed militia in a bid to support Iraqi forces and opens a new chapter in the war. It also appeared to represent at least a tacit acknowledgement by Baghdad that such airpower was necessary to wrest control of the hometown of former Iraqi dictator Saddam Hussein from Islamic State fighters, after its attempts to go it alone stalled. Iraqi Prime Minister Haider al-Abadi said Iraqi forces would prevail with the support of "friendly" countries and the international coalition, including arms, […]

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Iran storing 30 million barrels of oil at sea

LONDON/SINGAPORE (Reuters) – Iran is storing at least 30 million barrels of oil on its fleet of supertankers as Western sanctions continue to keep a lid on sales, tanker market sources say. World powers are trying to reach a framework deal with Tehran by the end of the month that would restrict the most sensitive aspects of Iran’s disputed atomic program in return for an easing of international sanctions. Sanctions have halved Iran’s oil exports to just over 1 million barrels per day since 2012 and hammered its economy. Higher Iranian oil exports are likely to put more pressure on weak global oil prices. Iran has parked unsold crude oil stocks off its coast, mainly onboard tankers belonging to its national carrier NITC. One shipping industry source said 15 of NITC’s Very Large Crude Carriers (VLCC), each capable of carrying 2 million barrels of oil, were deployed for floating […]

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US, Iran nuke talks enter critical round ahead of deadline

AP Photo/Brendan Smialowski Buy AP Photo Reprints Interactives Latest News LAUSANNE, Switzerland (AP) — Nuclear negotiations between the United States and Iran entered a critical phase on Thursday with U.S. Secretary of State John Kerry meeting his Iranian counterpart less than a week away from an end-of-month deadline to secure the outline of a deal. With the clock ticking, Kerry and Iranian Foreign Minister Mohammad Javad Zarif and their teams huddled Thursday in the Swiss resort town of Lausanne on Lake Geneva trying to overcome still significant gaps after nearly two years of negotiations between Iran and the five permanent members of the U.N. Security Council and Germany. The top diplomats from Britain, China, France, Germany and Russia are expected to join the talks if the U.S. and Iran are close to an agreement. U.S. officials say the March 31 deadline is achievable but remains uncertain. En route to […]

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Iran Stalls U.N. Probe Into Its Atomic Past

Iranian supreme leader Ayatollah Ali Khamenei waves to the crowed in Mashhad, eastern Iran, Saturday. ENLARGE Photo: European Pressphoto Agency LAUSANNE, Switzerland—Talks over Iran’s nuclear program have hit a stumbling block a week before a key deadline because Tehran has failed to cooperate with a United Nations probe into whether it tried to build atomic weapons in the past, say people close to the negotiations. In response, these people say, the U.S. and its diplomatic partners are revising their demands on Iran to address these concerns before they agree to finalize a nuclear deal, which would repeal U.N. sanctions against the country. “Progress has been very limited,” Yukiya Amano, who heads the U.N.’s International Atomic Energy Agency, told The Wall Street Journal this week. “No more new issues” have been addressed. Secretary of State John Kerry is resuming talks on Thursday in Lausanne with his Iranian counterpart, Javad Zarif, […]

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Kuwait Seen Missing 2020 Oil-Production Target

Stymied by political opposition to foreign oil companies, Kuwait oil officials have privately acknowledged the country won’t meet a goal of boosting oil-production capacity 25% by 2020, people familiar with the matter said. The delay throws a spotlight on the fractious politics of a rare Middle Eastern country where an elected parliament holds real power, and the constitution bans foreign ownership of natural resources. It also could affect Kuwait’s effort to expand into Asian markets during the current period of relatively low oil prices—as well as its ability to profit should the price of crude rise again. Oil exports from aging fields make up 60% of the country’s gross domestic product. Kuwait has made it a national priority to ramp up production capacity to 4 million barrels a day—from the current 3.2 million—to help it reach new markets. That would bring it on par with regional rivals like Iran, […]

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Budget payment buoys Baghdad-KRG oil deal

Iraqi Oil Minister Adil Abd al-Mahdi (L) meets with Kurdistan Prime Minister Nechirvan Barzani in Erbil on Nov. 13, 2014. (STRINGER/Reuters) Recommend 462 people recommend this. Sign Up to see what your friends recommend. The Kurdistan Regional Government (KRG) has received its second federal budget payment for 2015, keeping a fragile oil export and revenue sharing deal on track for now.The region received the 490 billion Iraqi dinar ($408.3 million) payment on Monday, according to the spokesman of the KRG Ministry of Finance, Ahmed Abdulrahman. He said the money would be used to pay overdue salaries of government employees.The payment follows the first transfer made on Feb. 26 of $208.3 million. Both a…

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Shell takes further steps away from Nigeria

Royal Dutch Shell unloads more assets in the Niger Delta region to national energy companies in Nigeria. File Photo UPI/Maryam Rahmanian. The Nigerian subsidiary of Royal Dutch Shell said it made further progress in its divestment strategy by selling Niger Delta assets from $1.7 billion. Shell Petroleum Development Co. of Nigeria said it completed the sale of oil mining lease 29 and the 62-mile long Nembe Creek pipeline to Aiteo Eastern E&P Co., a Nigerian company. "This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the federal government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business," the Dutch supermajor said in a Wednesday statement. Shell last week sold its stake in oil mining lease 30 to a separate rival for $737 million. Divested fields produced around 43,000 barrels of oil per day for Shell […]

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Shell completes $1.7 billion lease, trunk line sale in Nigeria

Shell Petroleum Development Co. of Nigeria Ltd. (SPDC) has completed its assignment of interest in oil mining lease 29 (OML 29) and the Nembe Creek trunk line (NCTL) and related facilities in the Eastern Niger Delta to Aiteo Eastern E&P Co. Ltd. for $1.7 billion. OML 29 covers 983 sq km and includes Nembe, Santa Barbara, and Okoroba fields and related facilities. NCTL, which was commissioned in 2010, is a 100-km, 600,000-b/d system that transports oil to the Bonny crude oil terminal (BCOT). BCOT is not part of the transaction and will remain owned and operated by the SPDC joint venture. Among the divested assets are flow stations, associated gas systems, and oil and gas pipelines within the OML. The divested fields produced 43,000 boe/d during 2014. Total E&P Nigeria Ltd. and Nigerian Agip Oil Co. Ltd. also have assigned their respective 10% and 5% interests in the lease, […]

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New Zealand breaks renewable energy record

New Zealand says it’s on pace to use renewable resources for nearly all of its electricity. File Photo by UPI/Stephen Shaver. The share of renewable energy on the grid in New Zealand is the highest it’s been in close to 20 years, the country’s energy minister said Thursday. The share of electricity generated from renewable resources last year was 79.9 percent, a 5 percent increase from the previous year. "New Zealand’s share of renewable electricity generation is the fourth largest in the world," Energy and Resources Minister Simon Bridges said in a statement. The government attributed the rise to the growth in geothermal generation, which more than doubled in the last decade. New Zealand last held an auction for oil and gas exploration in December, which Bridges said was the most successful to date . Around 149 million barrels of oil reserves remain in fields already in production and […]

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As Oil Prices Slide, North Dakota Sees Manufacturing In Its Future

WILLISTON, N.D., March 23 (Reuters) – Business and community leaders in North Dakota’s western oil patch have launched an aggressive campaign to convince more manufacturers to set up shop locally, part of a push to expand the area’s economy beyond crude production and slash costs. The effort, which was launched on Wednesday at a conference in Williston, capital of the state’s oil industry, comes as crude prices have plunged more than 60 percent since last summer, threatening the economy of a region overly reliant on one industry – pumping of oil out the ground. Industry and community leaders say diversification is crucial for not only the state’s economy, but also for oil producers who have long complained of excessive costs for pump repairs, valve parts and myriad other components and services. "We’re just asking for a quality product at a reasonable price," Dave Ruffie, a production foreman with Continental […]

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US Senate Democrats Push White House On Oil Train Safety

WASHINGTON, March 25 (Reuters) – U.S. Senate Democrats on Wednesday urged the White House to implement national oil train safety standards and to do more to control the volatility of crude moving in those shipments. The Obama administration is expected to demand that future oil train tankers are toughened with added steel and have advanced braking systems to prevent derailments from becoming a disaster like the 2013 Lac-Megantic tragedy, when a runaway oil train killed 47 people in the Canadian town. But the proposal is expected to do nothing to control the dangers of that cargo even though federal officials have warned that crude oil from North Dakota’s Bakken energy patch could be unduly volatile and explosion-prone. Senator Maria Cantwell introduced legislation that would force regulators to control oil train volatility. "This bill is showing our impatience with the fact that (the White House plan) doesn’t include volatility and […]

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Ending crude exports ban would help US security, Rice study finds

WASHINGTON, DC, Mar. 25 Lifting the 40-year-old US crude oil export ban would benefit pricing, energy security, and petroleum investment, according to a new study issued by the Center for Energy Studies at Rice University’s Baker Institute for Public Policy in Houston. Ending the ban would level the playing field for US producers who face deep discounts for light crude relative to globally traded grades, said Kenneth B. Medlock, the CES’s senior director who wrote the study. Most US light, tight crude is of higher quality than both West Texas Intermediate, the US benchmark, and Brent, the current global light crude reference, he told reporters during a Washington briefing where the study was released. If it was exported, it would fetch higher prices globally than either WTI or Brent, Medlock said. “Providing more global trading opportunities increases fungibility and enhances energy security,” he said. Global demand growth in the […]

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Supreme Court Appears Divided on EPA Rules to Limit Mercury Emissions

ENLARGE Justices are considering whether the EPA should first have weighed costs to generators of emission cuts. Photo: Bloomberg News WASHINGTON—The Supreme Court appeared split on Wednesday over whether the Environmental Protection Agency erred when it adopted first-ever regulations requiring power plants to cut emissions of mercury and other toxic air pollutants. The regulations would cost $9.6 billion in annual costs, according to EPA estimates. But the agency said it was appropriate to consider only public health risks—not industry costs—when it decided to regulate coal- and oil-fired generation plants. That decision was the crux of 90 minutes of oral argument. The court was considering a section of the Clean Air Act that said the EPA “shall” regulate utilities’ emissions of the hazardous air pollutants if it found that such regulation “is appropriate and necessary.” The agency said it took costs into account later when it determined exactly how to […]

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Schlumberger Unit to Plead Guilty to Violating Iran, Sudan Sanctions

ENLARGE Oil is pumped from a well near Tioga, N.D. Oil-services firm Schlumberger Ltd. on Wednesday has agreed to pay $232.7 million for violating U.S. sanctions. Photo: karen bleier/Agence France-Presse/Getty Images Schlumberger Ltd., the world’s largest oil-field services company, has agreed to pay $232.7 million for violating U.S. sanctions in Iran and Sudan, part of the government’s extended crackdown on companies doing business with countries the U.S. has declared off limits. As part of a plea agreement with the Justice Department, Schlumberger will pay a $155.1 million criminal fine—the biggest criminal fine ever imposed for a U.S. sanctions violation—and forfeit $77.6 million in illegally obtained profits. Schlumberger Oilfield Holdings Ltd., a subsidiary, will also plead guilty to conspiring to violate the International Emergency Economic Powers Act, or IEEPA, which enables the government to block transactions involving countries under sanctions. The agreement, which still needs court approval, caps a six-year […]

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Harold Hamm Gains More Bakken Acreage

Harold Hamm of Continental Resources Continental Resources strengthened its position in North Dakota by winning the right to drill on an additional 160 acres located near the Fort Berthold Indian Reservation. Continental’s Harold Hamm spent  2.3 million for the privilege at a state land auction last Friday, beating out the competition in the last 30 seconds of bidding. The funds from this sale are earmarked for educational uses around the state. Low oil prices have caused companies to reduce spending for 2015 and order to wait out the pricing situation including  EOG ,  Occidental Petroleum  and  ConocoPhillips . Even as Continental announced it would  slash its budget by 48% , CEO Harold Hamm remained publicly optimistic about his company’s ability to navigate the rough waters. Hamm commented that “We concluded 2014 with a strong fourth quarter performance, capping off another year of exceptional production and proved reserves growth (…) We believe that our […]

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Oil in Storage Rises More Than Expected Again

America’s oil in storage just hit another record after rising for the 11th consecutive week.  Stockpiles rose 8.2 million barrels, or 1.8 percent, to 466.7 million barrels last week, the EIA reported today. Analysts had expected an increase of 4.75 million barrels. The amount of oil the U.S. is cranking out also edged up slightly, for the seventh consecutive week, to a rate of 9.42 million barrels a day. Investors have been closely watching the oil gather in storage tanks, which has been rising steadily since the oil-price crash started last year. Stockpiles are more than 25 percent above their five-year average. Inventories aren’t likely to max out, but even the possibility of coming close is adding pressure to an oversupplied oil market.   The oil storage in tank farms may rise to about 73 percent, leaving plenty of excess room, according to an analysis distributed today by Morgan Stanley. The buildup of […]

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U.S. crude stocks rise as Cushing storage maintains record

NEW YORK (Reuters) – U.S. crude inventories soared last week to extend their record build into the eleventh consecutive week as stocks at the Cushing, Oklahoma, delivery hub also hit another peak, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories rose 8.2 million barrels to 466.7 million last week, another 80-year high record, compared with analysts’ expectations for an increase of 5.1 million barrels. [EIA/S] Crude stocks at Cushing rose 1.9 million barrels to 56.3 million barrels, the EIA said, a 16th straight build adding on last week’s record high level of storage. But the EIA noted in a report released earlier this week that capacity additions at Cushing meant that while the amount of crude was at a record high, it was still only at 77 percent of capacity at the end of the previous reporting period on March 13. U.S. May crude briefly […]

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Record traffic is boosting U.S. fuel demand: Kemp

LONDON (Reuters) – Traffic on U.S. highways has hit a new record as the economy recovers and the lower cost of gasoline and diesel encourages more travel. Cars and trucks drove a record 3.050 trillion miles on U.S. highways in the 12 months ending in January, passing the previous peak of 3.039 trillion set in the 12 months to November 2007, according to the Federal Highway Administration ( link.reuters.com/vyj44w ). In January, traffic was 4.9 percent higher than in the corresponding month in 2014, the agency said on Tuesday. Information on traffic volumes is collected from 4,000 roadside monitoring stations across the country and published with a two-month delay. Traffic fell more than 3 percent between November 2007 and November 2011, as the increased cost of fuel coupled with the recession and increased unemployment to produce the most sustained drop in motoring since World War Two. Traffic volumes have […]

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British oil and gas production declines

British government data show oil and gas production in slow decline, though growth in renewable energy is setting records. File Photo by UPI/A.J. Sisco. Preliminary data from the British Department of Energy and Climate Change show total domestic production of oil in the three months ending in January dropped off 3.6 percent while gas production declined by 1.1 percent compared with the same period last year. Total 2014 production of petroleum was down 2.3 percent "as a result of long-term decline and maintenance activity," though natural gas production was up slightly by 0.3 percent "The overall rate of decline in 2014 was the lowest for 12 years at 1.5 percent compared with the average decline of 7.9 per cent over the previous 10 years," the department said. A February report from industry body Oil & Gas U.K. found a bright spot in an otherwise "bleak" year for North Sea […]

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Pickens: Oil Could Hit $100 A Barrel

Pickens: Oil Could Hit $100 A Barrel thumbnail Amid falling oil prices mostly due to fears of oversupply and a surging U.S. dollar, American business magnate and financier T. Boone Pickens said Tuesday that oil prices could reach $100 a barrel by the end of next year. The 86-year-old billionaire, who chairs the hedge fund BP Capital Management, also revised his previous forecast in which he said that the prices would hit the $100 mark as early as this year. According to Pickens, the idea of “peak oil” — when oil production goes into an irreversible decline — should not be ignored as regions other than the U.S. are experiencing decline in their oil output, Reuters reported. “I think you could very well be at $100 a barrel by the end of 2016,” Pickens said at the Commonwealth Club of California in San Francisco. Although oil prices briefly recovered […]

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Oil Markets Volatile As Dollar Falls And Supplies Seen Rising

ENLARGE Oil storage in tanks on the edge of town in Cushing, Okla. “U.S. crude stocks will build through May, but there is plenty of storage,” said Morgan Stanley. Photo: Associated Press LONDON—Oil markets were volatile on Wednesday with major price benchmarks diverging as investors weighed a weaker dollar against expectations that U.S. oil supplies will hit a fresh record. Brent crude for delivery in May rose 0.6% to $55.42 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures traded at $47.43 a barrel, down 0.2% from Tuesday’s settlement. Investors were awaiting the latest data from the U.S. Energy Information Administration that is expected to show another large build in oil inventories last week. Inventories in the U.S. are already running at an 80-year high and analysts polled by The Wall Street Journal forecast another gain of 5.6 million barrels. Late […]

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Oil rebounds towards $57 as weaker dollar overshadows China slowdown

LONDON (Reuters) – Brent crude reversed early losses to trade back towards $57 a barrel on Tuesday, as a weaker dollar overshadowed signs of slowing growth in China and Saudi Arabian oil production close to an all-time high. The dollar slipped 0.25 percent against the euro, extending losses from the previous session and providing a boost to dollar-priced commodities, which tend to move inversely to the U.S. currency. Brent futures LCOc1 for May delivery were trading up 64 cents at $56.56 by 0620 EDT, while U.S. crude CLc1 rose 60 cents to $48.05 a barrel. Its discount to Brent CL-LCO1=R widened to $8.51 a barrel. Gains were capped by data showing factory activity in China, the world’s second-largest economy and top oil importer, slipped in March. The flash HSBC/Markit Purchasing Managers’ Index came in at 49.2, below the 50-point level that separates growth from contraction. Economists polled by Reuters […]

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Oil Prices Retreat as Dollar Gets Boost

An oil rig in the North Sea. ENLARGE Photo: Zuma Press U.S. oil prices barely held to small gains and global prices fell Tuesday as a revived dollar, a growing glut and pessimistic signs for demand all weighed on the market. Light, sweet crude for May delivery settled up six cents, or 0.1%, to $47.51 a barrel on the New York Mercantile Exchange. It had been as up as much as $1.11 to $48.56 a barrel Tuesday morning. Brent, the global benchmark, lost 81 cents, or 1.5%, to $55.11 a barrel on ICE Futures Europe. It had been up as much as much as 87 cents to $56.79 a barrel Tuesday morning. Oil prices moved in tandem with the dollar, a common phenomenon, especially in the past four months, analysts said. Dollar-priced commodities like oil become more expensive for holders of other currencies as the dollar appreciates. And a […]

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Natural Gas Rebounds on Cold Start to Spring

By Timothy Puko Natural-gas prices inched up Tuesday after forecasts showed a colder-than-expected start for spring and suggested a lingering demand for gas heat. Natural gas for April delivery settled up 5.3 cents, or 1.9%, at $2.786 a million British thermal units on the New York Mercantile Exchange. The gains snapped a three-session losing streak and reversed losses from Monday’s session. Snow and cold have traders thinking about lingering heating demand, brokers and analysts said. About half of all U.S. homes use natural gas for heating fuel, making winter weather one of the biggest drivers of demand. "It’s probably just enough to keep this market from really tanking again," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York. "We’re at a really good price level, maybe right where we should be." After a steep fall for the better part of seven months, natural-gas prices have stabilized. […]

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Global demand to help oil prices despite U.S. glut-senior Gulf OPEC delegate

RIYADH (Reuters) – Stronger-than-expected global oil demand should help support crude prices at around $55-$60 a barrel in the next two months despite some signs of a growing glut in the United States,‎ a senior Gulf OPEC delegate told Reuters on Tuesday. The comments appear to counter some market forecasts that the U.S. oil glut may push prices to as low as $20-$30 and are a sign that the core Gulf OPEC members remain confident about their strategy of defending market share. "Global demand is definitely growing much stronger than expected. In December, January, and especially February ‎it was beyond what forecasts anticipated," the delegate said. Low oil prices may have encouraged demand to pick up particularly in the United States but also in Asia, the Gulf delegate, who declined to be identified, added. Oil prices are expected to fluctuate around $55-$60 a barrel through April, when they may […]

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Progress in Iran talks puts oil traders on edge

Talk of progress in the nuclear negotiations between Iran and the world powers has had oil traders on edge. With large amounts of Iranian oil already in storage , an injection of hundreds of thousands of barrels a day into the oil market already struggling with a crude overhang could depress prices further. The prospect of a wave of Iranian crude exports has already hit internationally traded Brent: after rebounding to $60 a barrel last month, it now hovers around $55 a barrel amid expectations of a deal by March 31. “There is nothing that cannot be resolved,” Hassan Rouhani, Iran’s president, said on Saturday, according to the Iranian state news agency. But as negotiators from Iran and the US, UK, France, Russia, China and Germany, the so-called P5+1 group, reconvene this week, questions remain around what any deal, full or partial, could mean for the oil market. Sanctions […]

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In Nuclear Talks, U.S. Wants Clear Deal, While Iran Favors General One

Photo Secretary of State John Kerry, center, in Lausanne, Switzerland, last week. He returns for more talks on Wednesday. Credit Brian Snyder/Agence France-Presse — Getty Images PARIS — If an agreement to limit Iran ’s nuclear capability is reached by deadline in the next seven days, one thing may be missing: an actual written accord, signed by the Iranians. Over the past few weeks, Iran has increasingly resisted any kind of formal “framework” agreement at this stage in the negotiations, preferring a more general statement of “understanding” followed by a final accord in June, according to Western diplomats involved in the talks. Should that position hold — one of the many unknowns of the coming days — the United States and its five negotiating partners may find themselves in the uncomfortable position of describing the accord as they understand it while the Iranians go home to offer their own […]

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Iraqi Forces Map Plan Against ISIS, With Strategic Use of Militias

Photo Shiite and Sunni fighters joined Iraqi forces against ISIS outside former President Saddam Hussein’s palace near Tikrit. Credit Thaier Al-Sudani/Reuters BAGHDAD — As a small force of Islamic State militants holds out in parts of Tikrit for a fourth week, Iraqi forces have been compelled to shift tactics, officials say: Rather than storming in to clear the city at any cost, the security forces are trying to seal off the area and begin preparing for even more challenging battles to the west and north. The Iraqi forces’ progress has put them closer to the doorstep of Nineveh Province, where the city of Mosul looms as the most important battle against the Islamic State. But the hard lessons of the Tikrit offensive, with a heavy cost in casualties for the Shiite militiamen and soldiers involved, have Iraqi officials thinking more cautiously about their next steps. To that end, officials […]

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Iran Has a Little Surprise for Oil Market

Technicians stand at an oil and methanol installation on Kharg Island in the Persian Gulf off the coast of Iran. The country exports about 1 million to 1.1 million barrels of crude per day, down from 2.5 million before the U.S. and European Union added oil sanctions in mid-2012, IEA data show. Photographer: Kaveh Kazemi/Getty images (Bloomberg) — Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude. That’s because the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled by Bloomberg. While estimates of the hoard by shipbrokers and government officials vary from as little as 7 million barrels to as much as 35 million, Barclays Plc and Societe Generale SA predict this crude would be first to be sold abroad if there’s an agreement on Iran’s nuclear program. The U.S. and […]

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Gazprom Neft surveying Kurdish oil potential

Russian oil company Gazprom Neft ready for surveys in Kurdish north of Iraq. UPI/Maryam Rahmanian Gazprom Neft said it was surveying the reserve potential in the Kurdish north of Iraq. The Middle East subsidiary of Gazprom Neft said it was ready to survey the reserve potential in the Halabja block of the Kurdish north of Iraq. "The Halabja block has until now undergone very little geological study," Chief Executive Officer Mikhail Kholodov said in a statement. "Conducting seismological surveys is the first step towards identifying the optimal location for an exploration well and these provide a significant amount of new information on the structure of the block." Lukoil, Russia’s largest private oil company, signed a contract revision last year to build two 75-mile long pipelines and associated infrastructure for the West Qurna oil field in southern Iraq. The company this week said it was committed to Iraqi oil developments […]

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Exclusive: Saudi Arabia building up military near Yemen border – U.S. officials

WASHINGTON (Reuters) – Saudi Arabia is moving heavy military equipment including artillery to areas near its border with Yemen, U.S. officials said on Tuesday, raising the risk that the Middle East’s top oil power will be drawn into the worsening Yemeni conflict. The buildup follows a southward advance by Iranian-backed Houthi Shi’ite militants who took control of the capital Sanaa in September and seized the central city of Taiz at the weekend as they move closer to the new southern base of U.S.-supported President Abd-Rabbu Mansour Hadi. The slide toward war in Yemen has made the country a crucial front in Saudi Arabia’s region-wide rivalry with Iran, which Riyadh accuses of sowing sectarian strife through its support for the Houthis. The conflict risks spiraling into a proxy war with Shi’ite Iran backing the Houthis, whose leaders adhere to the Zaydi sect of Shi’ite Islam, and Saudi Arabia and the […]

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Nigeria’s Daily Oil Exports Hit 2.05 Million Barrels in 2014

Despite United States’ refusal to import crude oil from Nigeria due to its shale boom, the country exported 2.05 million bpd of crude oil and condensate to Europe and India in 2014. The United States traditionally had been the largest importer of Nigerian oil until the last few years. It changed from being the largest importer of Nigerian oil in 2012 to the 10th largest in 2014. India is now the largest importer of Nigeria’s oil, purchasing about 370,000 bpd or 18 per cent of Nigeria’s total crude exports in 2014. The International Energy Information Administration (IEA), in its 2015 report on Nigeria oil and gas sector, stated that Europe continued to be the largest-regional importer of Nigerian oil, importing slightly more than 900,000 bblpd or 45 per cent of the exports in 2014. According to the report, the United States typically imported between nine per cent and 11 […]

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In Nigeria, Oil Price’s Slide Deters Theft

ENLARGE Fuel drums in Lagos, Nigeria, in an area where illegally refined oil is traded, seen in a 2013 photo. Photo: Benoit Faucon/The Wall Street Journal THE NIGER DELTA, Nigeria—Oil is so cheap these days that for people around here, it isn’t even worth stealing anymore. Just months ago, villagers regularly took hacksaws to pipelines, transforming their homeland of rivulets winding through bayou forests into a calamity for global oil giants and environmentalists. Hundreds of thousands of barrels of crude spurted daily into buckets, jerrycans and drums that were loaded into canoes. Some got cooked in makeshift refineries fashioned from metal cylinders built along riverbanks. But now, with prices low, the risk of getting busted by Nigeria’s navy now outweighs the get-rich rewards of sabotaging pipelines, stealing oil and smuggling vast quantities of it onto international markets. Indeed, some of these thieves have reverted to plunking fish traps in […]

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Upstream capital expenditure declined 12% year-over-year in fourth-quarter 2014

Source: U.S. Energy Information Administration, based on Thomson Reuters and Evaluate Energy Note: Q1 2015 prices are through March 16. Based on financial statements from selected international oil and natural gas companies, spending on upstream investments was 12% lower in fourth-quarter 2014 compared to the same period in 2013. Upstream spending on exploration and development typically accounts for the bulk of these companies’ investment expenditures. Aggregating the reports of 23 global oil- and natural gas-producing companies, upstream capital expenditure totaled $77 billion in the fourth quarter of 2014, which was $10 billion, or 12%, less than in fourth-quarter 2013. Three of the four quarters in 2014 had year-over-year declines in spending, bringing full-year 2014 upstream capital expenditure to $297 billion, 6% less than full-year 2013 spending for these companies. Much more so than midstream and downstream investments dealing with the refining, distribution, and sale of oil and natural gas, […]

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US enters undulating crude oil production plateau in 2015

This is a post on the EIA Short Term Energy Outlook March 2015 (STEO). The following graph shows total US crude production according to EIA statistics until Feb 2015 and then a forecast until Dec 2016. A clear kink in the production curve can be seen in the 2 nd  quarter of 2015. An increase of production is only expected by the end of 2016 following a recovery of oil prices to a $70 range. Fig 1 US crude oil production by area Jan 2011 – Feb 2015 and forecast to Dec 2016 All data from here: http://www.eia.gov/forecasts/steo/outlook.cfm We see a 10 month time delay between the sharp drop in oil prices and the peaking of US crude oil production expected by EIA in May 2015. The main battle is fought in the tight oil fields of the lower 48 States (brown line) because Alaska (dark blue) and the […]

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Chinese demand for Russian oil holds steady

"New normal" for Chinese economy not expected to lead to less demand for Russian oil, Chinese trader said from Beijing. File Photo by Stephen Shaver/UPI. Chinese officials are describing a "new normal" in an economy slowing from a long period of double-digit growth. For Russia, sanctions pressure in response to crises in Ukraine and the decline in crude oil prices is pushing the country toward recession. Chen Bo, head of the oil trading subsidiary of China Petroleum & Chemical Corp., said from a bilateral energy forum in Beijing both countries would remain strong energy partners . "Compared with 2014, Russian oil exports to China will be approximately the same in 2015 or slightly higher," he said. Russian President Vladimir Putin described the 2010 launch of the East Siberia-Pacific Ocean oil pipeline as a strategic victory for a Russian energy sector looking to capitalize on Asian economy success. The Chinese […]

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China’s crude storage nearly full, says Sinopec exec

BEIJING (Reuters) – China’s commercial and strategic oil storage is almost full, a Sinopec trading executive said on Wednesday, leaving little room for Asia’s top oil consumer to keep up its soaring import growth and adding downward pressure to an already oversupplied market. China’s purchases to fill its strategic petroleum reserves (SPR) was one of the main drivers of Asian demand since August of last year, with the nation’s importers buying cheap crude to fill oil tanks despite slowing economic growth. But with storage capacities approaching their limits, China’s crude imports will likely stay flat or rise only slightly this year, said the executive, who requested not to be named despite speaking to reporters at an industry event. China’s crude oil imports grew 4.5 percent in the first two months of the year compared to the same period a year ago, according to official customs data. [O/CNTRADE] But daily […]

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Durable Goods Orders in U.S. Unexpectedly Fell in February

A factory worker fills out paperwork amongst a stack of assembled aluminum ladders at a factory in Louisville, Kentucky, on March 17, 2015. (Bloomberg) — Orders for durable goods unexpectedly dropped in February, a sign the slowdown in global growth may be weighing on American manufacturers. Bookings for goods meant to last at least three years declined 1.4 percent after a 2 percent gain in January that was smaller than previously estimated, data from the Commerce Department showed Wednesday in Washington. The median forecast of 81 economists surveyed by Bloomberg estimated durable goods orders would rise 0.2 percent. Demand for American-made products may be softening as economies abroad struggle to accelerate and a stronger dollar makes it more attractive for foreign customers to buy from elsewhere. Increased business spending will be needed to provide a boost to the economy following what some economists are projecting as lackluster growth in […]

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Feds irked by industry stance on oil-train safety

American Petroleum Institute calls for a holistic approach to address the safe transport of crude oil by rail. Photo by Steven Frame/Shutterstock Suzanne Emmerling, a spokesperson for the department, said in a statement the administration was frustrated with statements made by the American Petroleum Institute on efforts to improve rail safety . "It’s disappointing that API continues to look for reasons not to engage in improving safety," she said in a statement Tuesday. "While the rail industry has taken many steps to improve safety, we will always demand more and expect more from them. We continue to hope the energy industry will join in those efforts." API, which represents the business interests of the oil and gas sector, said its review of a federal report on rail found kinetic energy built up during a derailment may play a greater role than cargo in any detonations. "The Department of Energy […]

Posted On : Published By : Tom Whipple