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China’s new oil import policy positive for quality, prices: governor

BEIJING (Reuters) – China’s decision to allow more independent oil refiners to import crude oil will help to improve fuel quality and lower domestic fuel prices, the governor of Shandong province, the country’s hub of small refineries, said. China, the world’s second biggest crude importer after the United States, has had strict controls on oil imports to ensure stable domestic supplies. State-controlled companies Sinopec and PetroChina account for nearly 90 percent of the country’s inbound crude shipments. But last month, Beijing took advantage of a global oil price collapse to loosen the tightly state-control sector, which will allow smaller refiners to apply for crude oil import quotas. "This new policy breaks the previous situation that only three to four big companies are allowed to import crude oil," Guo Shuqing, governor of the eastern province told reporters on Saturday during an annual parliament meeting. Shandong is home to most of […]

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China Commodities Imports Slow as Lunar New Year Cools Trade

(Bloomberg) — China’s commodity trade slowed in February as the Lunar New Year holiday crimped imports of oil, iron ore, copper and soybeans while exports of aluminum and steel fell. Inbound shipments of copper tumbled by the most in four years, soybeans to the least since October, while oil and iron ore imports slowed to the weakest in three months, according to customs data released Sunday in Beijing. Steel exports fell for the first time since August and the country shipped the smallest amount of aluminum products in four months. The slowdown in raw materials trade reflects the impact of the country’s most-important festival, when factories and output slow before and during the weeklong holiday. Total exports gained more than 48 percent from a year earlier in February, driven by a recovery in the U.S. economy. Imports slid 20.5 percent, leaving a record trade surplus of $60.6 billion. “The […]

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More California Oil Industry Wastewater Injection Wells Shut Down Over Fears Of Groundwater Contamination

The latest in the ongoing investigation into California regulators’ failure to protect residents from toxic oil industry waste streams has led to the closure of 12 more underground injection wells. The 12 wells that were shut down this week are all in the Central Valley region, ground zero for oil production in the state. California has roughly 50,000 underground injection wells. State officials are investigating just over 2,500 of them to determine whether or not they are injecting toxic chemical-laden oil industry wastewater into aquifers containing usable water (or at least potentially usable water) that should have been protected under the Safe Drinking Water Act. A coalition of environmental, health and public advocacy groups filed a legal petition with Governor Jerry Brown last week in an attempt to force an emergency moratorium on fracking after it was discovered that flowback, a fluid that rises to the top of a […]

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Has California’s Fracking Boom Already Gone Bust?

A hazy view of an oil field in Taft, California. (Credit: Faces of Fracking/Sarah Craig) We accelerate down the runway — a tiny asphalt strip next to Taft Skydiving. Our little Piper Cherokee lifts off and as we ascend, I peer out the window. Below us is California’s Kern County and more than a century of oil exploration — from the gushers of the 1800s to today’s less robust reality. It’s a spider web of dirt roads, drilling rigs, pump jacks, pipes and boilers. At least I’m pretty sure that’s what’s below us. The air quality is so bad that the San Joaquin Valley we’re flying over looks like the blurred work of an impressionist painter. Our view is smudged by stubborn smog that’s refused to budge for days. It’s a perfect metaphor for trying to understand the future of oil and gas production in California, which is why […]

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Wrecks Hit Tougher Oil Railcars

ENLARGE Fire continued Friday after a train carrying 103 railcars loaded with crude oil from North Dakota’s Bakken Shale derailed south of Galena, Ill. Photo: Associated Press In a string of recent oil train derailments in the U.S. and Canada, new and sturdier railroad tanker cars being built to carry a rising tide of crude oil across the continent have failed to prevent ruptures. These tank cars, called CPC-1232s, are the new workhorses of the soaring crude-by-rail industry, carrying hundreds of thousands of barrels a day across the two countries. But the four recent accidents are a sign that the new tanker cars are still prone to rupture in a derailment. The ruptures could increase momentum for rules aimed at further reducing the risk of shipping crude by rail. In the last month, there have been significant derailments of crude-carrying trains in West Virginia and Illinois, plus two in […]

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CN Rail, BNSF Tackle Accidents as Group Seeks Ban on Oil Trains

Smoke and flames erupt from the scene of a train derailment near Galena, Illinois, on March 5, 2015. Photographer: Mike Burley/Telegraph Herald via AP Photo (Bloomberg) — Canadian National Railway Co. is building a 1,500-foot (457 meter) long track to bypass a burning train that derailed Saturday in northern Ontario, while BNSF Railway Co. crews are working to reopen track in rural Illinois after a train carrying oil derailed three days ago. CN crews teamed with outside specialists are fighting the blaze after an eastbound train carrying crude oil derailed and caught fire around 2:45 a.m. near Gogama, about 600 kilometers north of Toronto, cutting off rail traffic between Toronto and Winnipeg, Manitoba. The BNSF train jumped the tracks Thursday afternoon near Galena, Illinois, about 160 miles west of Chicago, according to the railroad, a unit of Warren Buffett’s Berkshire Hathaway Inc. The accidents bring to four the number […]

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Whiting reported to be seeking buyer, but source says not aware

WILLISTON, N.D. (Reuters) – Whiting Petroleum Corp ( WLL.N ), North Dakota’s largest oil producer, is seeking a possible buyer, according to the Wall Street Journal, but a person familiar with the board’s thinking told Reuters he was not aware of any such plan. The Denver-based company began seeking a buyer after tumbling crude oil prices CLc1 eroded its market value, the Journal reported earlier on Friday, citing people familiar with the matter. Three months ago, Whiting closed on its $1.55 billion buyout of Kodiak Oil & Gas to become the largest oil company in North Dakota, home to the Bakken shale formation, one of the world’s largest crude reserves. Clinching Kodiak helped Whiting eclipse rival Continental Resources Inc ( CLR.N ), guaranteeing years of growth potential and access to even more lucrative acreage across North Dakota, the No. 2 U.S. oil producing state. Although the deal increased the […]

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U.S. gas prices climb in past two weeks: survey

(Reuters) – The average price of regular grade gasoline rose 21 cents in the past two weeks, bringing it to $2.54 per gallon, according to the Lundberg survey released on Sunday. Prices bottomed out on Jan. 23. However, the price for gasoline is still lower by 97 cents than it was a year ago, when the average was about $3.51 per gallon. Trilby Lundberg, publisher of the survey, noted that the cost for crude oil is mostly unchanged. She cited other factors that are accountable for the climb at the pump: Refiners and retailers are making more money on gasoline and deadlines for regulations affecting the summer blend are starting to come in. The lowest-price gasoline in the survey area of the 48 contiguous U.S. states was in Baton Rouge, Louisiana, at $2.16 per gallon. The highest price was in Los Angeles, at $3.48 per gallon. Prices are highest […]

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« Whiting Fall Reveals Weakness of Tight Oil Plays

Posted in The Petroleum Truth Report Whiting Petroleum is the latest victim of the flawed U.S. shale play business model. Whiting’s demise shows that location isn’t everything. The company is looking for a buyer despite having a premium position in the Bakken Shale play in North Dakota.   Whiting discovered the Sanish Field in 2006 that began the Bakken-Three Forks play and that has been the centerpiece of activity for the past several years.  The map below shows Bakken commercial areas at $45 WTI oil price based on an average well EUR (estimated ultimate recovery) of 650,000 barrels of oil equivalent. Bakken Shale map showing commercial area (in green) at $45 WTI oil price. Whiting wells are shown in red and Kodiak wells in yellow. Data from DrillingInfo, mapping by Labyrinth Consulting Services, Inc. (click image to enlarge) The table below summarizes Whiting’s financial performance.  The company ended 2014 with […]

Posted On : Published By : Tom Whipple
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Exxon Suit Highlights Energy Cost Fears

ENLARGE The Arkutun-Dagi oil field lies beneath ice-choked waters 15 miles from Sakhalin Island in Russia’s Far East. Photo: ExxonMobil When Exxon Mobil Corp. in January started pulling oil from beneath the icebound waters off Russia’s eastern coast, the project was over budget and a year behind schedule. The troubles likely would have remained out of public view had Exxon not sued contractor WorleyParsons Ltd. The spat offers a rare glimpse of the challenges and sniping behind one of the world’s most complicated oil developments as soaring costs and falling crude prices have bedeviled the energy industry. The project, known as Arkutun-Dagi, called for building one of the largest offshore drilling platforms in the world, designed to withstand extreme winds, waves and earthquakes that shake the seabed beneath the icy Sea of Okhotsk. Oil began flowing in January, and is expected to reach up to 90,000 barrels a day. […]

Posted On : Published By : Tom Whipple