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California first state to generate more than 5% of electricity from utility-scale solar

Source: U.S. Energy Information Administration, Electric Power Monthly Note: Data include generation from plants greater than 1 megawatt. California has become the first state with more than 5% of its annual utility-scale electricity generation from utility-scale solar power, according to EIA’s Electric Power Monthly . California’s utility-scale (1 megawatt (MW) or larger) solar plants generated a record 9.9 million megawatthours (MWh) of electricity in 2014, an increase of 6.1 million MWh from 2013. California’s utility-scale solar production in 2014 was more than three times the output of the next-highest state, Arizona, and more than all other states combined. Several large plants were phased into operation in California during 2014, including two 550 MW solar photovoltaic plants, Topaz and Desert Sunlight (Phases 1 and 2 ), as well as the 377 MW Ivanpah (Phases 1 , 2 , and 3 ) and the 250 MW Genesis solar thermal plants. In […]

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Chesapeake Energy Cuts Capital Budget, Production Outlook

Chesapeake Energy Corp. on Monday slashed its 2015 capital budget by more than 10% and sharply lowered its production outlook, becoming the latest energy company to do so in response to lower oil prices. Separately, billionaire investor Carl Icahn said he has boosted his stake in Chesapeake Energy to nearly 11% from nearly 10%. Mr. Icahn now owns 73.1 million Chesapeake shares, financial filings show, but he isn’t the company’s largest investor. The No. 1 spot still belongs to Southeastern Asset Management Inc., which has 76 million share, or an 11.4% stake. Oil producers have announced plans to curb billions of dollars in capital spending this year, aimed in part at stabilizing the recent declines in energy prices. The Oklahoma City-based oil and natural gas driller reduced its spending plans to between $3.5 billion and $4 billion, down from a previous range of $4 billion to $4.5 billion. The […]

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Whiting Petroleum Silences Takeover Talk

ENLARGE A Whiting Petroleum pump jack near Bainville, Mont. Whiting on Tuesday priced an offering of 35 million shares at $30 a piece. Photo: Associated Press The most anticipated energy deal of the year is off the table. Eyes have been on Whiting Petroleum Corp., the biggest crude producer in North Dakota, for the past month as the debt-laden company reportedly explored refuge from plunging oil prices in the arms of a buyer . But Instead, Whiting said Tuesday that it would issue more equity, diluting shareholders’ stock, and take on more debt. “We are currently exploring asset sales of noncore properties. We are not, however, pursuing any significant strategic transaction at this time,” the company said in a filing to the Securities and Exchange Commission. A takeover of Whiting would have set a benchmark value for U.S. oil producers as crude continues to trade roughly 50% lower than […]

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AAA: U.S. gas prices drifting lower nationally

Regional refinery issues creating pain at the pump for some markets, though AAA says national average price for gasoline is trending lower. Photo by Oskari Porkka/Shutterstock Though an end to winter and Great Lakes refinery issues mean pain at the pump for some, low crude oil prices are a governor on gas prices, AAA said. Motor club AAA reports a national average price for a gallon of regular unleaded gasoline for Tuesday at $2.42, relatively unchanged in recent days. For the West Coast, California had the highest state average at $3.26, about 27 cents above the price one month ago. Illinois had the highest price for the Great Lakes region with a state average of $2.64, more than 25 cents above the average price last month. AAA said in a weekly gasoline report regional refinery issues were largely behind the increase in gasoline prices in some markets. Warmer temperatures […]

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U.S. shale oil output to flatten, then dip in second quarter – PIRA

LONDON (Reuters) – U.S shale oil production will flatten and slightly decline in the second quarter of 2015 as companies cut their capital spending to cope with lower oil prices, energy consultancy PIRA said on Tuesday. Crude oil prices have roughly halved since June last year due to a supply glut and weak demand. There has been a drop off in the number of drilling rigs in the U.S. in recent weeks but stocks have continued to rise to record levels. [EIA/S] "The effect of falling prices rippled throughout the production chain, both on an operational and a financial level," PIRA said in a note. "For the companies covered, capex guidance for 2015 was 35 percent lower than 2014 capex on average." Last week, a monthly report from the Organization of the Petroleum Exporting Countries (OPEC) said that U.S. oil output would decline in late 2015. U.S. oil companies […]

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Tank tops? Cushing isn’t the whole oil market: Kemp

LONDON (Reuters) – Traders do not appear worried that rising oil stocks in the United States will cause storage space to run out in the next few months, despite the rapid accumulation of inventories at Cushing in Oklahoma. The term structure of futures contracts has remained broadly stable since the end of January ( link.reuters.com/xyg44w ). Stocks "may soon test storage capacity limits", the International Energy Agency worried in its latest monthly Oil Market Report. "That would inevitably lead to renewed price weakness," it added. The view is shared by many bearish hedge fund managers and oil analysts, who have watched the steady climb in U.S. oil inventories for 15 consecutive weeks. Crude stockpiles at the Cushing storage hub hit a record 54 million barrels on March 13, according to the latest Weekly Petroleum Status Report from the U.S. Energy Information Administration (EIA). Tank farms at Cushing are now […]

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Gas key to EU ties with Azerbaijan

Natural gas developments key part of bilateral ties with Azerbaijan, country report from the European Union said. (UPI/Shutterstock/James Jones Jr.) Development of a natural gas pipeline network from Azerbaijan is one of the most important aspects of bilateral ties, a European Union report said Wednesday. The European Union published a series of reports Wednesday on the neighborhood policy for Eastern European and Central Asian countries, some of which are former Soviet republics. The report for Azerbaijan said the country’s economy was stable and diverse in part because of growth outside of the energy sector, which nevertheless underpinned bilateral ties . Azerbaijan is rich in natural gas reserves, which the EU sees as a source of diversification for an energy sector dominated in large part by Russia. "The commitment for the implementation of the Southern Gas Corridor continued to be of utmost importance for the EU-Azerbaijan dialogue," the country report […]

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Total moves ahead with North Sea development

Total cleared for development of two reserve fields west of the Shetland islands. Image courtesy: Total French energy company Total said Wednesday its plans for North Sea oil and gas development were backed by a British government expecting sector revitalization. The company said it could confirm the British Department of Energy and Climate Change approved field development plans for the Edradour oil and Glenlivet gas projects west of the Shetland Islands. "The approval of the field development plans by the U.K. government allows Total and its partner DONG [Denmark’s largest energy company] to continue to develop the project according to the concepts outlined in 2014," Total said in a statement. "The project is expected to add reserves of more than 65 million barrels of oil equivalent." A budget plan outlined last week in London is aimed at boosting exploration for new oil and gas reserves in British territorial waters. […]

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Category: Uncategorized

European gas demand fell 11% on year in 2014 to 409 Bcm: Eurogas

European gas demand fell 11.2% on the year in 2014 to 409 Bcm, or 4,418 TWh, because of "exceptionally warm" weather, industry association Eurogas said Wednesday. The weather was the warmest in Dutch and German recorded history, and the warmest in 50 years for the Czech Republic, the organization said. This reduced the need for heating. The size of the year-on-year change was further boosted by the fact that 2013’s winter had been colder than average. Eurogas said that "notably low coal prices" and "low carbon dioxide prices" had also reduced gas consumption in the power generation sector, combined with competition from increased renewable energy sources. Article continues below… It also pointed to "a sluggish economic situation," although in some countries, such as Germany and Ireland, industrial demand for gas increased. In the Eurogas figures, covering the EU 28 countries, the biggest single consumer was Germany with 2014 demand […]

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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 ETF investors, not just OPEC, hold sway over crude market

NEW YORK (Reuters) – Tumult in Libya, U.S. rig counts, production plans of the oil exporting cartel and a pact on nuclear relations with Iran can all affect crude supply and demand, but oil traders have kept an equally close watch on retail investors in recent weeks. Those investors and hedge funds, betting on a reversal of oil’s long rout, poured billions of dollars into exchange traded products at the tail end of the slide last year, providing unexpected support that helped prices stabilize. Even as concerns about U.S. storage capacity triggered renewed slide over the past week investors have stuck with the view that a bottom might be in sight, pouring more money into financial products backed by oil futures. There is a risk, however, that their bets could unravel and send oil prices tumbling again because of a market constellation where spot prices may head lower, but […]

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Natural Gas Futures Sell Off as Spring Appears on Horizon

Dow Jones Newswires By Christian Berthelsen and Tim Puko Natural gas futures slipped Monday as forecasts for warmer temperatures were expected to arrive over most of the U.S. in the coming weeks, dimming expectations for late-season heating demand as winter fades. The front-month April natural gas contract lost 5.3 cents, or 1.9%, to settle at $2.733 a million British thermal units, its third straight losing session. Though the market has recovered off recent lows set last month, analysts and traders say it remains mired in booming supply growth and sluggish demand with the approach of warm weather months and will likely be stuck in low gear for months to come. "Natural gas prices will likely remain discounted for much of the year," BNP Paribas said in a note. Though robust production from domestic shale formations has led to rising supplies, seasonally warmer weather over much of the U.S. has […]

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Oil prices falter as OPEC stands firm

U.S. crude oil prices still near 2015 floor as markets continue to favor the supply side. Photo by John Angelillo/UPI The price for Brent crude oil, the global benchmark, was volatile early in the Monday trading day, dropping off about a half a percent before the opening bell on Wall Street, but posting small gains at the start of the trading day in the United States. Brent was trading at about $55 per barrel for the May contract. Prices recovered from near the $45 per barrel mark mid-January to above $60 per barrel, but have since pulled back to the mid-$50s for much of the month. Mohammend al-Madi, the OPEC governor for Saudi Arabia, said during an energy conference in Riyadh it would be "difficult" for current markets to return to a scenario where oil priced about $100 per barrel was normal. Prices were hammered last week after the […]

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Eight killed in air strike as Libya government aims to recapture capital

TRIPOLI/BENGHAZI (Reuters) – Eight civilians were killed in an air strike near Tripoli on Monday, the U.S. ambassador said, as Libya’s internationally recognized government pressed on with an assault to recapture the capital it abandoned to a rival faction last year. Four years after NATO warplanes helped dislodge dictator Muammar Gaddafi, Libya has descended into chaos, with two rival governments fighting for control, both fielding armies of former rebel fighters and air forces that bomb rival territory. The internationally recognized government has been based in the country’s east since being driven out of the capital last August by an alliance of armed groups called Libya’s Dawn, which has set up its own rival government and parliament. On Friday, the eastern-based government announced an assault to recapture Tripoli, even as the sides are both attending U.N.-hosted peace talks in Morocco. Western countries fear a total collapse of central authority in […]

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Israeli Officials Talk With French to Try to Influence Iran Nuclear Deal

PARIS — Fearing that the Obama administration may not take what they consider to be a tough enough stand in the next round of negotiations on a nuclear deal with Iran , senior Israeli officials held talks in Paris on Monday with senior members of the French government and will go to London on Tuesday in an attempt to influence the final terms of any agreement. France and Britain are among the six world powers — along with the United States, Russia, China and Germany — that are negotiating with Iran on an accord that would require Tehran to submit to verifiable limitations on its nuclear program in exchange for the lifting of United Nations sanctions, as well as separate sets of sanctions imposed by the United States and the European Union. Negotiations are scheduled to resume later this week in Lausanne, Switzerland, with negotiators working against a self-imposed […]

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JODI, Iraqi Reserves and Ghawar

The JODI  data just came in with production numbers for January 2015. I really don’t like JODI all that much but they are about two and one half months ahead of the EIA with their world data. And their data is incomplete so I have to substitute the EIA data for the countries that do not report to JODI. So the data I use is about 95% JODI and about 5% EIA. The last data point is January 2015 and is in thousand barrels per day. JODI World We peaked in December at 75,342,000 bpd but dropped 356,000 bpd in January to 74,986 bpd. JODI has the US at 9,226,000 in December but dropping 34,000 bpd in January to 9,192,000 bpd. The US did not start its grand ascent until the summer of  2011 when the shale oil boom exploded. JODI Less USA Without that shale surge in the […]

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Saudis claw back global market share with oil output push

LONDON (Reuters) – When Saudi Arabia’s oil minister Ali al-Naimi says he does not want the kingdom to lose market share anymore, he really means it. Iraq, Venezuela, Russia and Kazakhstan all saw their oil partially replaced by Saudi crude in Asia, the United States and even Europe, with its lackluster demand, as traders said the kingdom offered customers more oil, and more cheaply. Supplies from OPEC’s leading producer are notoriously difficult to track as they reach customers under confidential direct deals rather than via the spot market. But an indirect confirmation of rising deliveries came on Sunday from Naimi himself. The veteran minister, who carefully chooses his words and figures in his speeches, said the kingdom was now pumping around 10 million barrels per day – near an all-time high and some 350,000 bpd above the figure Saudi Arabia gave to OPEC for its February output. And to […]

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East’s bid to control Libya oil wealth likely to fail

CAIRO (Reuters) – Libya’s official government, operating out of hotels in the east after being driven from the capital, is unlikely to succeed in plans announced last week to divert the country’s oil export income away from Tripoli. Control over oil is at the heart of a struggle between two rival governments who are fighting for territory in the North African OPEC state four years after the ousting of Muammar Gaddafi. Both sides field armies of fighters whose salaries are paid with export revenues collected by the National Oil Company (NOC), which continues to operate out of Tripoli and sell oil abroad even though the capital is in the hands of a faction whose legitimacy is not recognized by the international buyers. Last week, the internationally recognized government, which runs an eastern rump state since fleeing the capital last year, said it wanted all oil exports to be paid […]

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Iran’s Hard-Liners Show Restraint on Nuclear Talks With U.S.

Photo Ayatollah Ali Khamenei, in a speech Saturday, said Iran’s establishment favored negotiations over the country’s nuclear program. Credit Office of the Supreme Leader, via European Pressphoto Agency TEHRAN — A coterie of Iran ’s hard-line Shiite Muslim clerics and Revolutionary Guards commanders is usually vocal on the subject of the Iranian nuclear program , loudly proclaiming the country’s right to pursue its interests and angrily denouncing the United States. But as the United States and Iran prepare to restart nuclear talks this week, the hard-liners have been keeping a low profile. “They have been remarkably quiet,” said Nader Karimi Joni, a former member of the Revolutionary Guards and the Basij, a volunteer paramilitary group. Their silence is a result of state policies intended by Iran’s supreme leader, Ayatollah Ali Khamenei , to seriously try to find a solution through negotiations. Ayatollah Khamenei has largely supported the nuclear talks […]

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Iran expecting economic growth

Iranian budget planners place less emphasis on oil for new year that began March 21. File Photo by Maryam Rahmanian/UPI Iran’s economy emerged from recession in December, and Finance Minister Ali Tayebnia said the momentum should continue into the new year, which for Iran began Saturday. "We predict a better situation in economy for the upcoming year," he said. Sanctions imposed on Iran’s energy sector curb the country’s ability to generate revenue from oil and gas sales. The Central Bank of Iran, however, said a nine-month growth rate of 3.6 percent represents an increase of $54 billion for the nation’s economy. When he wrapped up his mission to Iran last month, Martin Cerisola, assistant regional director for the International Monetary Fund, warned "the sharp drop in global oil prices and an uncertain external environment" presents significant challenges to Iran’s economic future. Iranian President Hassan Rouhani said during weekend celebrations […]

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Egypt, Ethiopia and Sudan Sign Nile Dam Declaration

ENLARGE Egyptian President Abdel Fattah Al Sisi, right, next to his Sudanese counterpart Omar Bashir during a welcoming ceremony in the Sudanese capital Khartoum on Monday. Photo: Agence France-Presse/Getty Images Egypt, Sudan and Ethiopia took a step Monday to defuse tensions around Ethiopia’s construction of a massive dam on the Blue Nile, which has threatened to upset the geopolitical balance in the region over how to share water from the River Nile. Egyptian President Abdel Fattah Al Sisi, Sudanese President Omar al-Bashir and Ethiopian Prime Minister Halemariam Desalegn signed a declaration in Sudan’s capital Khartoum, pledging to better share the Nile’s waters, an Egyptian presidency official familiar with the matter said. Ethiopia has said the project is necessary to produce much-needed electricity, but the building of the dam has been controversial, with some scientists predicting it could disrupt the flow of the river into Egypt, where it provides much […]

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Chinese Economy Dangles on a Cliff

Chinese Economy Dangles on a Cliff thumbnail China’s money supply had a net increase of 11 percent from 2013 to 2014, an increase that is significantly higher than the country’s economic growth. In 2014 it reached 122.84 trillion yuan (US$18.05 trillion), compared with 110.7 trillion (US$17.71 trillion) by the end of 2013. Of China’s 12.14 trillion added currency (US$1.94 trillion) in 2014, 9.78 trillion yuan (US$1.56 trillion), over 80 percent, was used for creating new loans. Not only was it 890 billion (US$142 billion) higher than that in 2013, but also broke the 2009 record of 9.59 trillion (US$1.53 trillion) by 190 billion (US$30 billion) more. So much new money was printed. Where did it all go? The majority of the loans did not flow into the economy, but went into non-production areas, namely the financial market. Massive Money Printing The Research Center for China Market Value Management Ltd. […]

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Sinopec facing era of slower growth

China Petroleum & Chemical Corp. said it expects low price of crude oil to become commonplace. File Photo by UPI/Shutterstock/ekina. Fu Chengyu , chairman of the company known also as Sinpece, said his company last year was focused on quality growth , adjusting each segment of its business accordingly. "In 2015, China will enter a new normal phase of slower growth while international crude oil prices are likely to stay low," he said in a statement Sunday. "The company still faces a challenging operating environment. Sinopec will seize the opportunities and tackle the challenges." The phrase "new normal" was coined last year by Chinese President Xi Jinping , who said qualitative growth was favored over quantitative growth. China, in the 35-year period ending in 2013, posted double-digit growth. It has slowed down to around 7.5 percent in recent years. For Sinopec, last year’s capital spending was down 4.2 percent. […]

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Report says China manufacturing at lowest in nearly a year

HONG KONG (AP) — A report says that China’s manufacturing activity has fallen to the lowest level in nearly a year as new orders shrank. The preliminary HSBC purchasing managers’ index released Tuesday dropped to 49.2 in March. That’s down from February’s 50.7. The readings are based on a 100-point scale on which numbers above 50 indicate expansion. The report said a "renewed fall in total new business contributed to weaker expansion of output" while companies trimmed staff. The weakness in China’s massive manufacturing sector adds to official worries about the country’s deepening economic slowdown. China’s economy expanded 7.4 percent last year, its slowest pace in nearly a quarter century, and economists predict growth will slow further in the next two years.

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Whiting Petroleum Gives Signal Deal May Not Be Imminent

Whiting Petroleum Corp. announced plans Monday to offer 35 million shares as well as $1.75 billion of convertible senior notes, raising concerns about the oil-and-gas producer’s ability to find a buyer for the whole company. Earlier this month, The Wall Street Journal had reported that Whiting was looking to sell itself amid plummeting crude prices. However, the stock sale announced Monday signaled any larger takeover was unlikely soon, an analyst said. “I think it pretty much puts that idea to bed,” said Jason Wangler, an analyst at Wunderlich Securities Inc. “It doesn’t mean there wasn’t interest, but it obviously means they didn’t get the price they wanted.” Shares of Whiting fell 12% to $33.75 in after-hours trading following news of the offerings. The stock—beaten down in late 2014 amid the drop in oil prices—had risen 47% through the close Monday from its low in December. Denver-based Whiting began suffering […]

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Hedge funds get short of U.S. oil as storage fills: Kemp

LONDON (Reuters) – Hedge funds have turned super-bearish about U.S. oil prices as concerns about running out of storage trump the drop in the number of rigs drilling new wells. Money managers had amassed a record number of short positions in futures and options contracts linked to WTI (West Texas Intermediate) by the end of March 17, equivalent to 209 million barrels of oil, according to the U.S. Commodity Futures Trading Commission’s (CFTC) latest commitments of traders report published on Friday. Money managers still have long positions equivalent to 381 million barrels, so overall the sector is still running a net long position. Hedge fund managers have a natural bullish bias. Not once have hedge funds as a whole been net short of WTI futures and options in the last nine years ( link.reuters.com/daf44w ). But the ratio of long to short positions last week, at 1.8:1, was the […]

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U.S. refiners turn to tanker trucks to avoid ‘dumbbell’ crudes

HOUSTON (Reuters) – In a pressing quest to secure the best possible crude, U.S. refiners are increasingly going straight to the source.     Firms such as Marathon Petroleum Corp and Delek U.S. Holdings are buying up tanker trucks and extending local pipeline networks in order to get more oil directly from the wellhead, seeking to cut back on blended crude cocktails they say can leave a foul aftertaste. While the business of hauling crude from individual oil wells to bulk storage depots or pipeline hubs has become a lucrative niche in recent years thanks to the shale oil revolution, refiners are getting into the "first mile" game for a different reason: taking control of their supply chains to secure a more predictable, consistent stream of crude.     Phillips 66, the nation’s fourth-largest refiner, has added trucks and offloading equipment at several of its refineries to help reduce its reliance […]

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Here’s How $20 Oil Could Become a Reality If Storage Runs Out

There’s the makings of a crisis swirling in America’s oil-storage tanks, and the next few months will determine whether it’s a minor annoyance, or a major blow, to U.S. oil.  The basic problem is that too much oil is being pumped, and not enough is being used up. America is running out of places to store all of the excess crude. That’s a problem, and it could send prices plummeting — some say to  $20 a barrel  or even lower . (For context: Last summer it was more than $100, and today it’s less than $50.) That’s probably not going to happen, but it’s not as crazy as it might first sound. Stockpiles are at record-high volumes after 10 straight weeks of increases. The U.S. is currently accumulating an extra one to two million barrels a day more than its using. The oil imbalance is bad, and it’s still getting worse. If oil inventories begin to top […]

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Barclays: New fracturing regs will have limited effect on US oil, gas output

HOUSTON, Mar. 23 A recent US rule about hydraulic fracturing on federal and tribal lands will have limited effect on existing US oil and natural gas production, said a Barclays Research analyst in New York. The US Department of the Interior issued a long-anticipated final rule to govern fracturing of onshore oil and gas wells ( OGJ Online, Mar. 20, 2015 ). Officials with the US Bureau of Land Management said the regulations, effective in 90 days, will improve safety and help protect groundwater by updating requirements for wellbore integrity, wastewater disposal, and public disclosure of chemicals. Onshore oil production from federal and tribal lands accounted for less than 10% of US oil production according to statistics from 2013, the latest available data, said Michael Cohen, Barclay’s research analyst. Most oil and gas production from federal jurisdiction involves the offshore Gulf of Mexico, he said. “The rulemaking is significant […]

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Schlumberger Sees Prudence As New Normal For US Shale Oil

Schlumberger says it expects the oil and gas industry’s spending internationally on exploration and production to drop by 10-15% in 2015. March 23 (Reuters) – Prudence will be the new normal for the U.S. shale oil industry, which has quickly abandoned its heavy-spending ways in the face of sliding crude prices, Schlumberger Ltd, the world’s No.1 oilfield services provider, said on Monday. Spending cuts already announced by producers – to the tune of 25 to 60 percent – have dropped the rig count by 45 percent since late 2014, and output will soon decline or flatten out so prices can recover, Schlumberger’s Chief Executive Paal Kibsgaard said. U.S. oil prices have fallen by 50 percent since June to around $46 per barrel as Saudi Arabia and OPEC try to push higher cost producers out of the market. At the time of $100 oil, some U.S. highly-leveraged U.S. players were […]

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Russian currency stabilizing despite oil’s fade

Russian currency holding steady despite fade in early 2015 rally in crude oil prices. File Photo by UPI/Alex Volgin. The ruble traded Monday at around 59.27 to the U.S. dollar, recovering from the historic low-water mark of around 62 reached in late 2014. Russian Finance Minister Anton Siluanov said on the "Vesti on Saturday" television program the nation’s currency has stabilized . "Even if oil prices deviate to a certain extent from the current figures, the ruble will not react much," he said. Brent crude oil prices dipped below $50 per barrel in January, but gained more than 35 percent by early March. The price since the beginning of the month is down nearly 12 percent. A forecast for 2015 from the Russian Economy Ministry said export revenues would decline as Russian energy products wane from the world market, but Siluanov said last week it was unclear how long […]

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Ukraine to Temporarily Stop Buying Natural Gas From Russia

ENLARGE A natural gas line runs through the countryside near Donetsk, Ukraine. Kiev started to diversify away from its eastern neighbor as tensions between the countries escalated last spring. Photo: Agence France-Presse/Getty Images KIEV, Ukraine—Ukraine will temporarily stop buying natural gas from Russia on April 1 as the current interim deal expires , the country’s energy minister said on Monday, citing high prices. Kiev, which is heavily reliant on Russian gas, started to diversify away from its eastern neighbor as tensions between the countries escalated last spring, seeking independence from Russian gas shipments in three to four years. Currently “there’s no reason to buy [Russian gas] at a higher price than we can buy from Europe, so I think we’ll just stop buying it,” Ukraine’s Energy Minister Volodymyr Demchyshyn told a briefing in Kiev. In October, Ukraine and Russia struck a temporary deal to ensure uninterrupted transit of Russian […]

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Eurozone recovery signs grow stronger

More signs have emerged that the eurozone’s recovery is strengthening, with a closely-watched poll of purchasing managers indicating activity is now rising at its fastest pace in almost four years. The flash purchasing managers’ index for the eurozone, compiled by data firm Markit, registered 54.1 this month, up from 53.3 in February. The figure is the highest since the spring of 2011 and is well above the crucial 50 level that marks an expansion in activity. There were indications that activity would remain strong in the months ahead, with a separate reading for new orders also hitting its highest level since May 2011. The single currency’s decline against the dollar helped ease deflationary pressures, with the cost of input prices rising at the fastest pace for more than a year. While firms continued to slash prices in the face of weak demand, some managed to pass on the higher […]

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US Drillers Scrambling To Thwart OPEC Threat

Companies are leaning on new techniques and technology to get more oil out of every well they drill, and furiously cutting costs in an effort to keep US oil competitive with much lower-costing oil. NEW YORK (AP) — OPEC and lower global oil prices delivered a one-two punch to the drillers in North Dakota and Texas who brought the U.S. one of the biggest booms in the history of the global oil industry. Now they are fighting back. Companies are leaning on new techniques and technology to get more oil out of every well they drill, and furiously cutting costs in an effort to keep U.S. oil competitive with much lower-cost oil flowing out of the Middle East, Russia and elsewhere. "Everybody gets a little more imaginative, because they need to," says Hans-Christian Freitag, vice president of technology for the drilling services company Baker Hughes. Spurred by rising global […]

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First Oil, Now Shale Gas Set To Crash Amid “Orgy Of Over-Production”

Spending cuts for oil-directed drilling have dominated first quarter 2015 energy news but rig counts for shale gas drilling are too high . Investors should pay attention to this growing problem. Bank of America fears sub-$2 gas prices now that winter heating worries are over. Low natural gas prices affect the economics for gas-rich oil production in the Eagle Ford Shale and Permian basin plays as well as for the shale gas plays. Meanwhile, an orgy of over-production is taking place in the Marcellus Shale. Well head prices are now below $1.50 per thousand cubic feet of gas because of limited take-away capacity and near-saturation of regional demand. Even companies in the Wyoming, Susquehanna, Allegheny and Washington County core areas of the Marcellus play are losing money at these prices. The rig count for shale gas plays has decreased by only half as much as for the tight oil […]

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Oil slips close to $55 as Saudi output rises to near record

LONDON (Reuters) – Oil prices declined on Monday, holding near $55 a barrel after Saudi Arabia indicated it was now pumping near a record high of 10 million barrels per day, adding to concerns of global oversupply. Saudi Arabia has stood firm on output, saying it would only consider cutting it if other producers outside OPEC also joined. Brent crude oil futures were trading down 21 cents at $55.11 a barrel at 1217 GMT, after hitting a low of $54.12. U.S. WTI crude was down 55 cents at $46.02. Saudi oil minister Ali al Naimi also said the kingdom was now pumping around 10 million barrels per day (bpd), which could indicate an increase of 350,000 bpd over its February production. Analysts at Barclays forecast on Monday that if OPEC production held near current levels of near 30 million bpd, the market surplus would expand from 900,000 bpd to […]

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Iran’s Coming Leadership Crisis

ENLARGE Following surgery in Tehran, Ayatollah Ali Khamenei is visited by President Hasan Rouhani, Sept. 8, 2014. Photo: Getty Images Negotiators from Iran and the P5+1 powers led by the U.S. are racing against a March 31 deadline to conclude a nuclear deal in Lausanne, Switzerland. Secretary of State John Kerry told reporters on Saturday that negotiators had made “genuine progress” but that “important gaps remain.” Yet what happens if the Iranian leadership that the U.S. and others are dealing with now is not in place to implement any agreement? Two recent developments suggest that the Islamic Republic may be heading toward one of its cyclical spasms of intense factional competition. The outcome could derail any deal, or leave the West committed to an agreement that is even less verifiable or useful than it might be today. There is scant evidence that the Obama administration is taking this into […]

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Using Iraq and Libya as a Lens

WASHINGTON — Every presidential candidate should face pressure to answer, explicitly, these two questions: Given what we now know, was it right or wrong to invade Iraq in 2003 to oust Saddam Hussein and, eight years later, to help topple the regime of Muammar el-Qaddafi in Libya? Force the contenders to skip the partisan talking points and make them provide an inkling of a would-be president’s instincts about military interventions. The Iraq invasion was undertaken by the brother of the leading 2016 Republican candidate. The Libya operations were advanced by the Democratic front-runner. Today, both Iraq and Libya are dangerously dysfunctional countries where terrorism is pervasive. At the same time, the threat of the Islamic State has made war-weary Americans, at least temporarily, more receptive to American involvement. Some prospective candidates have no trouble with these questions. Senator Lindsey Graham, a South Carolina Republican who is a hard-liner on […]

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OPEC won’t bear burden of propping up oil price: Saudi minister

RIYADH (Reuters) – OPEC will not take sole responsibility for propping up the oil price, Saudi Arabia’s oil minister said on Sunday, signaling the world’s top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June. Last November, Organization of the Petroleum Exporting Countries kingpin Saudi Arabia persuaded members to keep production unchanged to defend market share. The move accelerated an already sharp oil price drop from peaks last year of more than $100 per barrel that was precipitated by an oversupply of crude and weakening demand. Since the oil price collapse, top OPEC exporter Saudi Arabia has said it wants non-OPEC producers to cooperate with the group. But Saudi oil minister Ali al-Naimi said on Sunday that plan had so far not worked. "Today the situation is hard. We tried, we held meetings and we did not succeed because countries […]

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Germany’s Nuclear Costs Trigger Fears

Germany is trying to find a site suitable to store radioactive waste. ENLARGE Photo: Bloomberg News FRANKFURT—A new German government report is stoking fears that the country’s energy companies can’t shoulder the cost of a government plan to close the country’s nuclear-power plants. Germany aims to phase out its nine remaining reactors by 2022, faster than almost any country. But nobody knows exactly how much it costs to shut and clean up atomic-power plants and all the facilities used over decades to store radioactive waste. Building a depository for the waste deep underground and delivering the waste add additional unknown costs. Berlin promises utilities will foot the bill, but the new report, released Friday, raises the prospect of German taxpayers ending up on the hook. The issue is particularly acute because German power companies are already struggling financially. Chancellor Angela Merkel ’s campaign to wean Germany off nuclear and […]

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Pentagon Cuts Military Fuel Price by 12%

ENLARGE The Pentagon, in a rare midyear change following falling oil prices, cut the price it charges military branches for refined fuel. Photo: Agence France-Presse/Getty Images The Pentagon has cut the price it charges the U.S. Air Force and other military branches for refined fuel by 12% in a rare midyear change following the swoon in global oil prices. The Pentagon’s Defense Logistics Agency typically buys fuel at prevailing market prices throughout the year from vendors including BP PLC, Royal Dutch Shell PLC and Valero Energy Corp. and then resells it at a fixed price to its various services. The Pentagon reduced the standard sales price of refined fuel to its services to $136.92 a barrel from $155.40 at Feb. 1, the department said in response to a request from The Wall Street Journal. It’s rare for the Pentagon to change the preset price midyear, according to defense experts. […]

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Paris imposes car restrictions to fight pollution

On Wednesday last week Paris was covered in a thick haze obscuring the Eiffel Tower The French authorities have introduced measures to combat a sharp increase in pollution affecting Paris and other cities in northern France. On Monday the number of cars on the road in Paris will be cut in half – only motorists with odd-numbered plates will be allowed to drive. Public transportation will be free as well car-sharing and bike-sharing programmes. Similar measures were put in place last year when pollution soared in Paris. The city saw a severe spike in smog on Wednesday last week and briefly had the world’s dirtiest air, AP news agency reported quoting Plume Labs, a monitoring company. The mayor’s office announced at the weekend that alternating number plate measures would be implemented on Monday, with exceptions for electric or hybrid vehicles as well as emergency vehicles. About 750 police officers […]

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Russia threatens to aim nuclear missiles at Denmark ships if it joins NATO shield

COPENHAGEN (Reuters) – Russia threatened to aim nuclear missiles at Danish warships if Denmark joins NATO’s missile defense system, in comments Copenhagen called unacceptable and NATO said would not contribute to peace. Denmark said in August it would contribute radar capacity on some of its warships to the missile shield, which the Western alliance says is designed to protect members from missile launches from countries like Iran. Moscow opposes the system, arguing that it could reduce the effectiveness of its own nuclear arsenal, leading to a new Cold War-style arms race. In an interview in the newspaper Jyllands-Posten, the Russian ambassador to Denmark, Mikhail Vanin, said he did not think Danes fully understood the consequences of joining the program. "If that happens, Danish warships will be targets for Russian nuclear missiles," Vanin told the newspaper. Asked to respond, NATO spokeswoman Oana Lungescu said Denmark was a staunch member of […]

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Smuggled Libya Gas Fuels Conflict

ENLARGE Fighters from Libya Dawn, an alliance of Islamist-backed militias, take cover during clashes last week with an opposing militia in Bir al-Ghanam, around 30 miles from the capital of Tripoli. Photo: Agence France-Presse/Getty Images Smugglers selling Libya’s heavily subsidized gasoline and diesel abroad at jacked-up prices are likely using at least some of the profit to finance fighting between the country’s rival governments, according to a U.N. report. With recurring violence hampering attempts to resolve Libya’s division, U.N. officials now are considering action that could target at least some of the illegal trade. The sales add up: About $12 million of petroleum products are being smuggled out of the country each month on average, a Libyan oil official said. ENLARGE Officials at Libya’s National Oil Co. say smugglers are diverting some of the fuel to Mediterranean countries such as Tunisia and Malta, where a gallon of diesel costs […]

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Exclusive: CN Rail derailment numbers soared before recent crashes

TORONTO (Reuters) – Canadian National Railway’s safety record deteriorated sharply in 2014, reversing years of improvements, as accidents in Canada blamed on poor track conditions hit their highest level in more than five years, a Reuters analysis has found. Canada’s Transportation Safety Board (TSB) said on Tuesday that track failure may have played a role in CN’s three recent Ontario accidents, which have fueled calls for tougher regulation. The agency said oil unit trains, made up entirely of tank cars, could make tracks more susceptible to failure. Data obtained under access to information laws and analyzed by Reuters shows a broader trend, which has not been previously reported, and could pile more pressure on CN Rail to slow down trains or reduce their length. A crackdown on oil trains could raise the cost of shipping Canadian crude by rail. Trains operated by CN in Canada derailed along main lines […]

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ChemChina to Buy Controlling Stake in Pirelli

ENLARGE Pirelli tyres ahead of the Italian F1 Grand Prix in Monza in September 2014. China National Chemical Corp. and other investors are making a bid for Pirelli. Photo: Reuters MILAN—China National Chemical Corp. and other investors are making a bid for Pirelli & C. SpA that could value the Italian tire manufacturer at around $7.7 billion—one of the largest overseas acquisitions by a Chinese state firm in recent years. The deal will give China, the largest auto market in the world, control of one of the world’s top tire brands and if the tender is completed, the largest acquisition by a Chinese state firm since oil giant Cnooc Ltd.’s $15 billion acquisition of Nexen Inc. in 2012, according to Dealogic data. A unit of China National Chemical, known as ChemChina, will initially pay about €1.8 billion ($1.9 billion) to buy a 26% stake in Pirelli owned by Camfin, […]

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U.S. dollar, Iran talks sway oil markets

Iranian Foreign Minister Mohamad Javad Zarif upbeat as multilateral nuclear negotiations spawn talk of a "new day." UPI/Maryam Rahmanian Iranian Foreign Minister Mohammad Javad Zarif continued talks Friday in Lausanne, Switzerland, with his U.S. counterpart, John Kerry . Talks coincide with Nowruz, the start of the Iranian calendar year. "I hope this new day will be a new day for the entire world — a new era of greater understanding and peace," Zarif said. Iranian oil production is limited under the terms of a multilateral agreement reached in November 2013 that allows the Islamic republic some leeway in terms of oil exports in exchange for concessions on nuclear research activity. Sanctions against Iran may be revised if there’s a breakthrough during the current round of talks. Iranian negotiator Ali Akbar Salehi said Monday he was "very optimistic" about the progress so far. Though obstacles remain in terms of sanctions, […]

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Iran Nuclear Talks Go Down to the Wire

ENLARGE U.S. Secretary of State John Kerry, left, before a negotiation session with Iran’s Foreign Minister Javad Zarif, right, over Iran’s nuclear program in Lausanne, Switzerland on Friday. Photo: Agence France-Presse/Getty Images LAUSANNE, Switzerland—Nuclear talks between Iran and six powers are set to go down to the wire, with negotiations breaking up on Friday and expected to resume again just days before the March 31 deadline for a political deal. A spokeswoman for U.S. Secretary of State John Kerry said that he will meet somewhere in Europe on Saturday with the British, French and German foreign ministers and then return to Washington. “We’ve had a series of intensive discussions with Iran this week, and given where we are in the negotiations, it’s an important time for high-level consultations with our partners in these talks,” Marie Harf said. Two diplomats at the talks said that the likely day for negotiations […]

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Deadlocked Iran nuclear talks set to break off, resume next week

LAUSANNE, Switzerland (Reuters) – Iran and six world powers were set to suspend negotiations on a historic nuclear deal and reconvene later next week to break a deadlock over sensitive atomic research and lifting of sanctions, Western officials said on Friday. While the negotiations have made progress over the past year and both sides appear determined to push for a deal, differences on major sticking points are still wide enough to potentially prevent an agreement in the end. On the sixth day of talks at a 19th century hotel in the Swiss city of Lausanne, plans for the delegations changed repeatedly over the course of several hours. At one point, the foreign ministers of France, Britain and Germany were expected to join the talks on Saturday. Less than an hour later those plans were called into question after the Iranian delegation informed their U.S., British, French, Germany, Russian and […]

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Oil Surges on Weaker Dollar, Drilling Data

ENLARGE A car travels past rigs on Highway 80, west of Farm-To-Market Road 1788, in Midland, Texas last month. The number of rigs in the U.S. has fallen by more than 40% since October. Photo: Associated Press NEW YORK—Oil prices surged Friday as the dollar weakened and the number of rigs drilling for oil in the U.S. fell for a 15th straight week . The expiration of the front-month U.S. oil-futures contract extended the move, analysts said, as traders closed out positions. Light, sweet crude for April delivery rose $1.76, or 4%, to $45.72 a barrel on the New York Mercantile Exchange, posting the largest one-day move since Feb. 12. Prices gained 2% on the week, snapping a four-week losing streak. The April contract expired at settlement Friday. The more-actively traded May contract settled up $1.04, or 2.3%, at $46.57 a barrel. Brent, the global benchmark, rose 89 cents, […]

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