Category:

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

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

Oil drops toward $59 on dollar, stock builds

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

Posted On : Published By : Tom Whipple
Category:

Oil Extends Losses Pushing Brent Below $60 a Barrel

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

Traders cash out on tanker-stored oil as prices rise

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple