Category:

Obama orders GHG cuts for Federal Agencies; 50% of all new agency vehicles to be ZEV or PHEV by 2025

President Obama today signed a wide-ranging executive order mandating cuts in greenhouse gas emissions for Federal agencies. Through more efficient Federal operations, agency direct greenhouse gas emissions can be cut by at least 40% over the next decade, the order suggests. The order has operational directives for building and fleet management, electricity generation, water use, waste management and purchasing. As an initial outcome, within 90 days the head of each agency sis to propose to the Chair of the Council on Environmental Quality (CEQ) and the Director of the Office of Management and Budget (OMB) percentage reduction targets for agency-wide reductions of scope 1 and 2 and scope 3 greenhouse gas emissions in absolute terms by the end of fiscal year 2025 relative to a fiscal year 2008 baseline. On the transportation side, if the agency operates a fleet of at least 20 motor vehicles, the directive is to […]

Posted On : Published By : Tom Whipple
Category:

Russian Inflation hits 17 per cent

Russian Inflation hits 17 per cent thumbnail Inflation in Russia has hit a zenith of around 17 per cent, the economy minister said Thursday, as the economic crisis roiling the country takes its toll.”The peak in inflation has not passed but we have reached the highest point and will probably stay at this level for some time,” minister Alexei Ulyukayev was reported as saying by Russian news agencies. “I think that for quite a long time, a month and a half or two months it will be at around 17 per cent,” he said. Inflation has shot up in Russia as the ruble national currency plummeted in value on the back of Western sanctions over Moscow’s role in the Ukraine crisis and falling international oil prices. The steep rise in prices has slashed spending power of households across the nation and Russia is expected to plunge into recession this […]

Posted On : Published By : Tom Whipple
Category:

EU moves towards extending Russia sanctions

Polish prime minister Donald Tusk EU leaders took the first step towards extending their sweeping economic sanctions against Russia on Thursday night, agreeing that the measures would be maintained unless last month’s ceasefire agreement reached in Minsk was implemented in full by Moscow. The communiqué, agreed on the first day of a two-day summit in Brussels, fell short of hopes from some hardline countries — and the summit’s host, European Council president Donald Tusk — for an immediate renewal of the sanctions, which are due to expire in July. But by tying the measures to the Minsk agreement, which among other things requires Russia to secure its border with Ukraine and hand over its control to Ukrainian authorities, officials believe extension is now assured since the Kremlin is not expected to live up to the agreement’s terms. “Our common intention is also very, very clear,” said Mr Tusk at […]

Posted On : Published By : Tom Whipple
Category:

Eclipse Tests European Power Grid Flooded by Solar Farms

Eclipse watching tourists ride dog sleds outside of Longyearbyen, Svalbard, an archipeligo administered by Norway on March 19, 2015 ahead of the March 20 solar eclipse. Photographer: Stan Honda/AFP/Getty Images (Bloomberg) — The first major eclipse of the solar age is placing unprecedented strain on Europe’s electricity grids this morning as power panels switch off and then on again. The moon will block about 80 percent of the sun’s light across Europe from about 8 a.m. to 11 a.m. London time. In Germany, the eclipse will briefly halt output from thousands of panels, which provide about 40 percent of the nation’s power on the most sunny days. Grid operators are working to switch to usually idle natural gas and coal plants to make up for the lost solar power. Success will inform nations from the U.S. to China about how to integrate the variable supplies from renewables generators into […]

Posted On : Published By : Tom Whipple
Category:

Here’s the Next Biggest Threat to Global Crude Oil Prices

A gas flare burns at the central processing plant for oil and gas in the Salym oilfields near Surgut, Russia. Russian crude exports averaged 4.84 million barrels a day last year, a 6.1 percent decrease compared with 2013. Photographer: Alexander Zemlianichenko Jr./Bloomberg (Bloomberg) — The next big threat to oil prices isn’t from OPEC or Bakken shale. It’s Russian samovars, or teapots. Simple refineries that process crude into fuel oil are scaling back, because when oil prices slump, the government reduces the discount that these refiners — known as teapots to those in the industry — get for exporting fuel. They use less crude, freeing it up for sale abroad, which in turn adds to the global glut. Russia may increase oil exports by as much as 250,000 barrels a day this year, according to James Henderson, a senior research fellow at the Oxford Institute for Energy Studies who’s […]

Posted On : Published By : Tom Whipple
Category:

G.M. Exiting Russia, for the Most Part

MOSCOW — General Motors on Wednesday announced plans to largely withdraw from the Russian market by the end of the year, becoming the most prominent company to date to express a lack of confidence in the deeply troubled economy. The move reverses years of G.M. investments in Russia , where car sales had boomed. Now, however, the country is struggling with low oil prices and sanctions on its banks, and its economy is expected to contract 4 percent this year. “This decision avoids significant investment into a market that has very challenging long-term prospects,” G.M.’s president, Daniel Ammann, said in a statement. Since Russia annexed Crimea last year and its economy has faltered, other multinational companies have left. G.M. said it would shutter its main factory in the country and wind down sales of Opel brand cars. The decision, the company said, will cost $600 million this year in […]

Posted On : Published By : Tom Whipple
Category:

Ukraine Wants to Double Gas Transit Fees for Gazprom, Says Energy Minister

ENLARGE A natural gas line outside Donetsk, Ukraine. The country wants to almost double the fees it charges Russia’s Gazprom to transit gas through Ukraine to the European Union. Photo: Getty Images KIEV, Ukraine—Fresh talks on Russian natural gas supplies to Ukraine will begin Friday in Brussels but no deal is imminent as Moscow and Kiev continue to quarrel over prices and transit fees, Ukraine’s energy minister said Thursday. Volodymyr Demchyshyn said that he and his Russian peer, Alexander Novak, earlier Thursday agreed to launch talks in the European Union capital, but said, “Russia doesn’t want to sign any specific documents, but let’s see how they do it.” Ukraine wants to almost double the fees it charges state-owned OAO Gazprom to transit Russian gas through Ukraine to the European Union , Mr. Demchyshyn said in an interview with The Wall Street Journal. The two sides need to resolve this, […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Will Recover

On St. Patrick’s Day the U.S. Energy Information Administration (EIA) reported that oil production from three of America’s largest shale plays is in decline. The EIA is forecasting that total U.S. oil production will be in decline in the 3rd quarter. The South Texas Eagle Ford, North Dakota’s Bakken/Three Forks and the Niobrara in Colorado & Wyoming are in decline. Since horizontal shale wells have very steep production decline rates (more than 50% in the first year), the oil supply “glut” will be corrected by market forces. Shale plays require continuous drilling or they quickly go on decline. Note: In the EIA chart above, the government’s production forecast is based on an active onshore rig count of 1,300. Baker Hughes reported March 13, 2015 that the land rig count was down to 1,069. I am forecasting the active onshore rig count in the U.S. to fall below 800 by […]

Posted On : Published By : Tom Whipple
Category:

Crude oil prices could go as low at $35 per barrel

Crude oil prices could go as low at $35 per barrel thumbnail Crude oil prices took a roller coaster ride dipping down to a six-year low of $42.17 per barrel before bouncing back up and closing the day at $44.66 per barrel. But one expert on the Eagle Ford shale said conditions are ripe for oil prices to drop even further before they can climb back up and stabilize. University of Texas at San Antonio Economics Professor Thomas Tunstall said the price drop is due to a glut in global oil supplies, lower global demand and record high inventory. The United States is producing high levels of crude from its shale oil fields, including the Eagle Ford region just south of San Antonio. U.S. Energy Information Agency released a Wednesday morning report revealing that oil inventories are at record high levels in the United States. Commercial crude oil inventories […]

Posted On : Published By : Tom Whipple
Category:

The Oil Age – A new quarterly peer-reviewed printed journal

The Oil Age – A new quarterly peer-reviewed printed journal thumbnail 1. Background & Objectives The journal addresses all aspects of the evolving ‘Oil Age’, including physical, economic, social, political, financial and environmental characteristics. Oil and gas are natural resources formed in the geological past and are subject to depletion. Increasing production during the First Half of the Oil Age fuelled rapid economic expansion, with human population rising six-fold in parallel, with far-reaching economic and social consequences. The Second Half of the Oil Age now dawns. This is seeing significant changes in the type of hydrocarbon sources tapped, and will be marked at some point by declining overall supply. A debate rages as to the precise dates of peak oil and gas production by type of source, but what is more significant is the decline of these various hydrocarbons as their production peaks are passed. In addition, demand for […]

Posted On : Published By : Tom Whipple
Category:

Oil Futures Give up Gains as Oversupply Fears Resurface

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

Posted On : Published By : Tom Whipple
Category:

U.S. shares, oil jump after Fed statement

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

Posted On : Published By : Tom Whipple
Category:

Natural Gas Prices Rally on Colder Forecasts, Strong Demand

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

Posted On : Published By : Tom Whipple
Category:

Non-U.S. Shales Prove Difficult to Crack

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

A Nuclear Deal With Iran Could Increase Global Oil Glut

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

Posted On : Published By : Tom Whipple
Category:

Kurdish oil production to increase

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

Posted On : Published By : Tom Whipple
Category:

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

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

Posted On : Published By : Tom Whipple
Category:

Exclusive: India to import first oil to fill strategic reserves – source

NEW DELHI (Reuters) – India is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve (SPR), taking advantage of cheap prices and lending some support to a market suffering from oversupply. India’s SPR purchases could temporarily help offset the impact of an expected pause in China’s strategic stocks build and the start of spring maintenance at Asian refiners. India’s oil ministry on Tuesday instructed state refiners Indian Oil Corp and Hindustan Petroleum Corp Ltd to each seek two very large crude carriers (VLCC) of Basra oil for arrival in May-June, totalling 8 million barrels, two sources familiar with the matter said. The tenders are to be issued this month and plans call for the federal cabinet to approve issuing tenders at its meeting next week, said one of the sources, who declined to be identified. A committee of directors suggested Basra oil […]

Posted On : Published By : Tom Whipple
Category:

China Plans Opening Oil Futures to World in Bid for Influence

(Bloomberg) — China plans to allow foreign investors to trade its proposed crude futures contract as the world’s second-largest oil consumer seeks to bolster its influence in determining benchmark prices. The Shanghai International Energy Exchange will allow foreign investors to trade through agents that have net capital of at least 30 million yuan ($4.8 million) or the equivalent in foreign currency, according to draft rules published on its website on Wednesday. It will accept foreign-denominated funds, standard warehouse receipts, treasury bonds and securities with “stable value and high liquidity” as collateral. China wants more control over oil pricing as its reliance on crude imports increases. The nation’s overseas shipments as a share of consumption will surpass 60 percent this year for the first time, up from 59.5 percent in 2014, according to China National Petroleum Corp. The government introduced a domestic crude futures contract in 1993, stopping a year […]

Posted On : Published By : Tom Whipple
Category:

U.S. shale oil firms brace for more pain as crude resumes slide

HOUSTON/WILLISTON, N.D. (Reuters) – With the prospect of another plunge in crude prices CLc1LCOc1 looming after two months of stability, U.S. shale oil producers may face another round of spending cuts to conserve cash and survive the downturn. A deeper retrenchment would have far-reaching effects. Additional cutbacks would further gut the already-hemorrhaging oilfield services industry and may heighten expectations for a steeper drop in U.S. crude output later this year. They would also reinforce the United States’ emerging role as the world’s "swing producer," with dozens of independent companies that can quickly ramp up production in good times and dial it back in a downturn. "If I were an oil company today, I would talk about one thing: how far can you cut costs," said Fadel Gheit, an oil analyst at Oppenheimer in New York. "They cannot control anything else." Gheit said he expected a new wave of capital […]

Posted On : Published By : Tom Whipple
Category:

Bakken production dips, surge expected near June

The Bakken needs to drill and complete 115 wells every month to maintain a production level of 1.2 million barrels of oil per day, according to Helms. PHOTO: OVERLAND PHOTOGRAPHY The current price of oil in conjunction with active or expected North Dakota-imposed tax breaks for oil and gas producers has led to the first major activity slowdown in North Dakota in several months, said Lynn Helms, director of the North Dakota Department of Mineral Resources. According to Helms, the state’s production for January fell by 3 percent compared to the previous month. With the low oil price market, rig count has also dropped. In January, the state’s rig count was down 21 from December, February followed a drop of 27, and today western North Dakota has 111 drilling rigs operating—the lowest since April 2010. The number of uncompleted wells rose from the previous month, totaling roughly 825 wells. […]

Posted On : Published By : Tom Whipple
Category:

EIA: falling rig counts affecting production in Bakken

Although production has decreased in these three shale plays, the EIA said production for the areas it provides DPR’s for was up in March, reaching 5.6 million barrels per day. PHOTO:U.S. ENERGY INFORMATION ADMINISTRATION The U.S. Energy Information Administration’s recent Drilling Productivity Report indicates a slowdown in oil production growth patterns in three key oil plays in the U.S., including the Bakken, Eagle Ford and Niobrara. The combined plays are down roughly 24,023 barrels of oil per day (bopd). The estimates cover the months of March and April, and include the first projected declines in crude production in these regions since the first issue of DPR appeared in October 2013. The DPR projects the Bakken to be producing 577 bopd in new well oil production per rig in March 2015, and 592 bopd in April 2015, a change of 15 bopd. It also predicted that overall oil production in […]

Posted On : Published By : Tom Whipple
Category:

ND’s revised oil tax revenue for 2015-17: $3.4 billion

According to the North Dakota Office of Management and Budget, the large oil extraction tax trigger will start in May 2015 and even in April 2016 based on NYMEX oil futures prices. The large trigger brings the extraction to zero percent for producers The revised oil tax revenue forecast has been issued by the North Dakota Office of Management and Budget. The updated forecast was created with the help of Moody’s Analytics and shows that the state’s total oil tax revenue during the 2015-17 biennium will be roughly $3.4 billion. In January, the North Dakota legislature predicted that oil tax revenue for the biennium would total $4.2 billion. In total, the March revenue forecast shows a difference of nearly $870 million less compared to the January forecast. The total revenue generated by the state in the upcoming biennium will be roughly $5.1 billion, according to the OMB’s update forecast. The […]

Posted On : Published By : Tom Whipple
Category:

Mont Tech researcher reinjects Bakken flared gas for EOR

To verify the plausibility of reinjecting Bakken associated gas, Montana Tech researchers had to test the miscibility (pressure at which oil and gas form single phase) required to correctly compress the captured gas back too prior to reinjection. The PHOTO: MONTANA TECH Todd Hoffman is looking to reinjected Bakken flared gas as a vehicle to drive enhanced oil recovery in the Williston Basin. Hoffman, assistant professor at Montana Tech’s petroleum engineering department, is currently in the midst of a research program focused on testing, proving and analyzing the fiscal feasibility of capturing associated gas produced during oil retrieval, compressing the captured gas at the well site and then injecting the gas back into the reservoir. The injected gas, he said, helps to increase well productivity in the same way CO2 does, and it is also stored and available for recapture when the necessary gathering infrastructure is available at the […]

Posted On : Published By : Tom Whipple
Category:

Canadian Refiners Set to Buy More U.S. Oil With Wider Discount

(Bloomberg) — Cheaper North American oil is poised to replace West African and Middle East cargoes at eastern Canadian refineries with U.S. crude prices at the lowest level compared with the international benchmark in 14 months. Imports to Canada from outside North America averaged 244,089 barrels a day this month through March 15, down 27 percent from a year earlier, according to New York-based ClipperData, which tracks tanker shipments. Canada, the world’s fifth-largest oil supplier, produces most of its oil in the western province of Alberta and exports it south to the U.S. A lack of pipelines means Canada’s eastern refineries depend on imports by tanker and train. U.S. export “volumes have been growing pretty exponentially,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said by phone Wednesday. U.S. oil is “going to Eastern Canadian refineries and displacing waterborne light crude.” U.S. crude oil […]

Posted On : Published By : Tom Whipple
Category:

Trains Slow U.S. Petroleum Shipments After Derailment

(Bloomberg) — Rail shipments of crude and refined products fell last week to the lowest level since October 2013 after a derailment shut a track in Illinois for four days. The U.S. transported 12,724 carloads of petroleum in the week of March 8-14, according to data released Wednesday by the Association of American Railroads. That’s down 10 percent from the previous week and the lowest level for March since 2012. Petroleum shipments by rail have fallen since last summer as plummeting crude prices have caused the biggest slowdown of oil drilling on record. BNSF Railway Co. shut its mainline near the town of Galena, Illinois, from March 5-9 after a derailment, causing delays and reroutings. “Commodity price pressure is slowing and will continue to slow the cadence of drilling activity, and that’s one of the drivers of crude by rail being lower,” Vincent Piazza, senior energy analyst at Bloomberg […]

Posted On : Published By : Tom Whipple
Category:

Canadian Oil Jobs Cut as Companies Slash Deeper Than 2008

(Bloomberg) — Another round of oil job cuts is rolling through downtown Calgary this week with three producers eliminating at least 650 positions in Canada as they wrestle with prices near a six-year low. ConocoPhillips is the latest, announcing Wednesday it’s terminating 200 people, about seven percent of the Houston-based company’s Canadian workforce. That follows cuts Tuesday by Talisman Energy Inc., which is eliminating 150 to 200 positions in its Calgary head office and Cnooc Ltd.’s Nexen Energy, which is reducing its Canadian headcount by 300. Cutting jobs is one lever energy companies are pulling as they reduce capital spending to adjust to lower cash flow after crude’s 60 percent slide since June. The latest measures add to thousands of jobs lost in Alberta earlier this year as producers slow development of the province’s oil sands, the world’s third-largest proven reserves. “We are seeing pretty aggressive cuts in terms […]

Posted On : Published By : Tom Whipple
Category:

U.S., Canada under pressure on oil-train safety

Sign up for our daily Energy Newsletter Federal agencies slow to address safety standards for crude oil transport by rail, critics say. Photo courtesy Transportation Safety Board of Canada ONTARIO, Quebec, March 18 (UPI) — Federal regulators in North America are under pressure from industry bodies and environmental advocates worried about the safe transport of oil by rail. North American crude oil production has increased to the point that there’s not enough pipeline infrastructure to handle deliveries. That leaves energy companies to rely more on rail as an alternate transit method and, with that, comes more derailments involving trains carrying oil. Canadian officials are still responding to a March 7 derailment of a Canadian National Railway Co. train carrying crude oil through Ontario. Three of the 39 cars that derailed fell into an area river in a ball of flames . Canadian Transport Minister Lisa Raitt announced new regulations […]

Posted On : Published By : Tom Whipple
Category:

U.S. working to cut flaring of natural gas

U.S. Interior Department said to expect new standards aimed at encouraging a reduction in the amount of natural gas burned off, or flared, during production. Photo by Steve Oehlenschlager/Shutterstock Sign up for our daily Energy Newsletter WASHINGTON, March 18 (UPI) — The U.S. government will roll out new standards in the coming months to cut the amount of shale natural gas wasted through flaring, the interior secretary said. Much of the natural gas associated with shale oil deposits is burned off, or flared, because of a lack of infrastructure needed to utilize the resource. U.S. Interior Secretary Sally Jewell said at the Center for Strategic and International Studies, a Washington think-tank, that her agency would propose "in the coming months" standards meant to cut emissions and reduce the amount of gas wasted during flaring . "We will be updating our decades-old standards to encourage the kind of infrastructure and […]

Posted On : Published By : Tom Whipple
Category:

Conoco becomes latest energy company to cut spending

ConocoPhillips announces plans to trim spending to adjust to low oil price environment. Photo courtesy: ConocoPhillips The company said spending of $11.5 billion through 2017 was a cut of 28 percent from its earlier expectations. That mirrors announcements from peers ranging from BP to Exxon Mobil, who’ve all said the low price of oil forced a cut in capital expenses and staff . Conoco Chairman and Chief Executive Officer Ryan Lance said his company expects low oil prices to endure the foreseeable future. "We’re taking this period of commodity price weakness to position ConocoPhillips for long-term success in any price environment," he said in a statement on Tuesday. Oil prices rallied from around $45 per barrel in February, but have pulled back in recent weeks. The price for West Texas Intermediate, the U.S. benchmark, hit a six-year low this week to trade below the $43 per barrel mark. The […]

Posted On : Published By : Tom Whipple
Category:

Anti-Fracking Movement Blamed on Russia

Harold Hamm Says Russia Hamm Claims Russia Financed Anti-Frack Movement Continental Resources’ Harold Hamm accused Russia of trying to destroy the U.S. shale oil industry. During an interview at a recent Forbes event, Hamm claims that Russians have worked with environmental groups and financed the anti-fracking movement in hopes of producing panic in the United States. Hamm of course has a vested interest in the anti-fracking movement. He was a pioneer in the use of horizontal drilling and hydraulic fracturing to extract soil from shale. and has been instrumental in the development of the Bakken shale formation which has sparked a hge oil boom. It is expected that the Bakken will produce more than 1.3 million barrels of oil this year, according to the U.S. Energy Information Agency. Related: U.S. Leads World-Wide Oil Production This isn’t the first time such accusations against Russia have been made. In June of 2014, […]

Posted On : Published By : Tom Whipple
Category:

Banks Struggle to Unload Oil Loans

Citigroup faces energy-loan losses. ENLARGE Photo: Getty Images Citigroup Inc., Goldman Sachs Group Inc., UBS AG and other large banks face tens of millions of dollars in losses on loans they made to energy companies last year, a sign of investor jitters in a sector battered by the oil slump. The banks intended to sell the loans to investors but have struggled to unload them even after cutting prices, thanks to a nine-month-long plunge that has taken Nymex crude futures to their lowest level since 2009. The losses mark a setback for Wall Street, after global banks earned $31 billion in fees over the past five years by financing energy-company stock sales, borrowing and mergers-and-acquisition transactions, according to Dealogic. Wall Street’s losses on the loans could have a chilling effect on some oil companies’ ability to fund their operations as investors take a more cautious view of the sector. […]

Posted On : Published By : Tom Whipple
Category:

Transocean to Book Charge From Rig Disposal

Transocean Ltd. said it expects to book an after-tax charge of between $300 million and $325 million as it moves to dispose of four rigs. The cuts come as plunging oil prices have wreaked havoc in the industry. The U.S. oil-rig count fell to 866 last week, the 14th straight week of declines, according to Baker Hughes Inc. The rig count hadn’t fallen below 1,000 since June 2011. Last month, the Switzerland-based company, which boasts the world’s largest fleet of offshore drilling rigs, logged a $992 million charge to correct the value of its contract drilling business. Transocean, whose chief executive abruptly resigned last month , has seen its corporate credit slashed to junk by one of the three credit-rating firms with the other two indicating possible downgrades. The company had spent billions of dollars to expand its fleet just before oil prices collapsed. It has since tried to […]

Posted On : Published By : Tom Whipple
Category:

Willbros Group Warns About Impact from Energy Downturn

Engineering company Willbros Group Inc. warned the downturn in its oil-and-gas business could lead to credit defaults that eventually may raise doubts about its ability to continue as a going concern. Shares of the energy-sector infrastructure contractor fell 51% to $2.70 in late-afternoon trading, after hitting an all-time low of $1.50 earlier. The company also said it expects to miss the deadline for its annual financial report. Houston-based Willbros said Tuesday that it is in talks with lenders to amend or get waivers on its credit agreements because the company expects to be out of compliance with certain debt-ratio requirements through next March. “The downturn in energy prices is clearly affecting our industry, and we have re-evaluated our outlook for 2015,” Chairman and Chief Executive John T. McNabb II stated in a news release. In a research note, Stifel Nicolaus said Willbros management sounded optimistic that the company could […]

Posted On : Published By : Tom Whipple
Category:

Rising energy prices will challenge western way of life

Rising energy prices will challenge western way of life thumbnail A little-known Ministry of Defence (MoD) report published earlier this year warns that converging global trends will dramatically affect UK economic prosperity through to 2040. The report says that depletion of cheap conventional “easy oil”, along with shortages of food and water due to climate change and population growth, will sustain rocketing energy prices. Long-term price spikes are likely to lead to a long recession in Western economies, fuelling internal unrest and the rise of nationalist movements. The report departs significantly from the conservative and relatively optimistic scenarios officially adopted by the British government, as exemplified in the coalition’s new Energy Security Strategy published in November last year by the Department of Energy and Climate Change (Decc). Peak “easy oil” The report predicts that “the imminent passing of the point of peak ‘easy oil’ will mean that hydrocarbon-based energy […]

Posted On : Published By : ASPO-USA
Category:

Peak Oil Price? Winners And Losers At The End Of The Era of The $100 Barrel

What if the world never again sees sustained prices for oil over $100 per barrel? What if—absent exogenous black-swan events like major wars—oil never sells for much more than $50 per barrel for decades into the future? Who wins? Who loses? Short answer: The winners are consumers everywhere, and American businesses that produce oil. The losers are nations that are oil monocultures, and businesses or policies everywhere anchored in expensive oil. Is such a scenario likely? Or is the current price collapse a kind of inverse bubble? History is often meaningfully predictive. In the roughly 150-year history of oil prices there have been just three short periods where oil sold for over $50 per barrel (measured in inflation-adjusted terms). It happened first for about 20 years after 1860 at the dawn of the oil age, followed by nearly a century with oil cycling around $20. The second price bubble, […]

Posted On : Published By : ASPO-USA
Category:

The Global Coal Boom Is Going Bust: Report

A new report by CoalSwarm and the Sierra Club provides compelling evidence that the death knell for the global coal boom might very well have rung some time between 2010 and 2012. Based on data CoalSwarm compiled of every coal plant proposed worldwide for the past five years as part of its Global Coal Plant Tracker initiative, the report finds that for every coal plant that came online, plans for two other plants were put on hold or scrapped altogether. The failure-to-completion rate was even higher, as much as 4 to 1, in Europe, South Asia, Latin America, and Africa, according to the report, which also says that the long decline in coal-fired energy production in the United States and the European Union can be expected to speed up in the near future. “From 2003 to 2014, the amount of coal-fired generating capacity retired in the US and the […]

Posted On : Published By : Tom Whipple
Category:

Global population growth threatens to outstrip fresh water supply

ROME (Thomson Reuters Foundation) – Global demand for fresh water is set to outstrip supply as a result of population growth by the middle of this century if current levels of consumption continue, a study said. Fears of water shortages could intensify although this is not the first time in history that demand is poised to outpace supply, Tony Parolari, the study’s lead author, said on Wednesday. “Global water consumption per capita has been declining since 1980 which means efficiency is increasing,” Parolari, a researcher at Duke University, told the Thomson Reuters Foundation. “But if population growth trends continue, water use will have to decline more substantially.” The world’s population is expected to hit 9.6 billion by 2050 from more than 7 billion now, according to U.N. estimates. Whether humans can adapt to declining water supplies depends on what new technologies for finding water are developed, and whether population […]

Posted On : Published By : Tom Whipple
Category:

Brent falls towards $53 after U.S. crude stocks rise; weaker dollar limits fall

SINGAPORE (Reuters) – Brent crude fell towards $53 a barrel on Wednesday as U.S. crude stocks were forecast to have surged for the tenth straight week to a new record high, fuelling supply concerns of a global oil glut, although a weaker dollar kept a floor under prices. Brent for May delivery LCOc1 fell 50 cents to $53.01 a barrel by 0644 GMT (0244 ET) after ending the previous session 7 cents up at $53.51. U.S. crude for April delivery CLC1 fell 92 cents to $42.54 a barrel, falling more than $1 a barrel in early Asian trade on Wednesday after crude inventories rose by 10.5 million barrels to 450 million in the week to March 13, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected a 3.8 million barrel increase. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 3 million barrels, […]

Posted On : Published By : Tom Whipple
Category:

U.S. Oil Prices Fall to Fresh Six-Year Lows

Dow Jones Newswires By Eric Yep Oil prices fell further in Asian trade Wednesday with U.S. crude posting fresh six-year lows on mounting worries over rising supplies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $42.62 a barrel at 0306 GMT, down $0.84 in the Globex electronic session, extending losses from the previous trading session. Brent crude for May delivery on London’s ICE Futures exchange fell $0.21 to $53.30 a barrel, after falling 0.80% on Tuesday. Oil prices have been falling since mid-2014 but the decline had stalled in February, raising expectations that prices had bottomed out. But oil started tumbling again this month on the back of surging U.S. production. U.S. oil prices have now fallen to their lowest since early 2009, erasing February’s gains as surplus crude in storage touches record highs. Late Tuesday, the American Petroleum Institute, an […]

Posted On : Published By : Tom Whipple
Category:

Iran and U.S. Differ on Optimism About Nuclear Talks

LAUSANNE, Switzerland — Iran and the United States issued contrasting assessments Tuesday on their progress toward an agreement to limit Iran ’s nuclear program as Energy Secretary Ernest J. Moniz met here with his Iranian counterpart. In comments to the Iranian news media, Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran, said that 90 percent of the technical issues had been worked out. Mr. Salehi said he hoped to resolve a remaining “point of difference” in a meeting Tuesday afternoon with Mr. Moniz. A senior American official was far more cautious in comments to reporters Tuesday morning. “We have definitely made progress in terms of identifying technical options for each of the major areas,” said the official, who declined to be identified by name under the protocol for briefing reporters. “There is no way around it: We still have a ways to go,” the official […]

Posted On : Published By : Tom Whipple
Category:

NYMEX crude sinks to fresh six-year low on glut worries

New York (Platts)–17Mar2015/414 pm EDT/2014 GMT Oil futures were lower across-the-board Tuesday, with front-month NYMEX crude setting a fresh six-year low as persistent concerns over surplus inventories weigh on prices. The April contract’s discount to May decreased 52 cents to $1.73/b. The April contract’s coming expiration Friday could have prompted traders to begin rolling their positions into the May contract, Tradition Energy senior analyst Gene McGillian said. Traders with short positions would need to buy April futures and sell May futures, explaining why the price gap would narrow, he said. "It took some of the contango out of market," McGillian said. ICE May Brent settled 43 cents lower at $54.31/b. In refined products, NYMEX April ULSD ended 47 points softer at $1.6939/gal; April RBOB closed up 15 points at $1.7301/gal. The Federal Open Market Committee began its two-day meeting Tuesday, with market participants looking for any clues regarding possible […]

Posted On : Published By : Tom Whipple
Category:

U.S. Oil Prices Fall to New Six-Year Low

U.S. oil prices slid to a fresh six-year low Tuesday on expectations that domestic crude stockpiles have risen to a record high. Light, sweet oil for April delivery settled down 42 cents, or 1%, at $43.46 a barrel on the New York Mercantile Exchange, the lowest settlement since March 11, 2009. Stored supplies of crude oil in the U.S. are at the highest level in about 80 years, according to the U.S. Energy Information Administration, and production continues to grow. Demand is typically restrained at this time of year as refiners process less crude while performing seasonal maintenance. The EIA is set to release inventory data for the week ended March 13 on Wednesday, and traders expect the report to show another build in crude stocks. Concerns are mounting that oil inventories could reach maximum storage capacity in some locations, which could push down crude prices by limiting the […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Rebounds on Cold Start to Spring

Dow Jones Newswires By Timothy Puko Natural gas prices surged to nearly a three-week high after forecasts grew colder, ramping expectations for heating demand coming in the first week of spring. Natural gas for March delivery settled up 13.9 cents, or 5.1%, at $2.855 a million British thermal units on the New York Mercantile Exchange. It is the highest settlement since Feb. 25 and the largest percentage gains in one day since Jan. 14. A high pressure front from Canada is likely to send an unseasonably cold burst of air into the Great Lakes and Northeast, including some of the country’s biggest heating markets, according to WSI in Andover, Mass. Half of U.S. homes use natural gas for heating fuel, and they may need more of it in the last two weeks of March than previously expected. "Everyone was telling you that the weather is getting warmer, warmer, warmer, […]

Posted On : Published By : Tom Whipple
Category:

Oil traders hope to win big when Cushing fills, with bet on April-May spread

NEW YORK (Reuters) – Oil traders are increasing bets on a blowout in crude oil price spreads as U.S. storage capacity dwindles, with unknown speculators taking unusually large positions in calendar-spread options (CSO). In this high-risk derivative play, traders are placing bets on how much prices between two months for U.S. crude oil futures – in this case April and May – are expected to move. In particular, traders are using the vehicle to bet that once Cushing fills, April’s prices will plummet relative to those of May. On Friday, 4,500 put contracts for the April/May spread traded at negative $3.50 a barrel at a premium of 10 cents, data from the CME Group showed on Monday. As a result, open interest in that contract leapt to 4,500 from 200. The trades are valued at nearly half a million dollars. The signs of a blowout may be increasing. On […]

Posted On : Published By : Tom Whipple
Category:

U.S. Is Awash in Oil, But What About the Rest of the World?

Newly constructed oil-storage tanks in Cushing, Okla., in 2012. Despite a boom in tank construction since 2009, U.S. facilities are running out of room for more crude. AP Is the world awash in crude, or just the U.S.? Record-high crude-oil supplies in the U.S. pushed the benchmark U.S. crude-oil contract, known as West Texas Intermediate, to fresh six-year lows Monday. But Brent crude, the global benchmark, is still about $7 a barrel above its own recent lows. Much of the world’s excess oil has ended up in the U.S., which has the most available on-land storage , weighing on domestic prices. At the same time, Brent prices have been boosted in recent weeks by bad weather, which hampered Iraqi exports, and concerns that violence in Libya could interrupt the country’s oil output. The two contracts are trading about $10 a barrel apart, up from zero in mid-January but down […]

Posted On : Published By : Tom Whipple
Category:

Saudi oil: Peak conspiracy

The oil world’s been full of speculation about the shift of strategy last year by Saudi Arabia which saw it keep the pumps running even as the price fell, turning an initial drop into a plunge. There may be a simpler explanation for Saudi’s willingness to see prices slide than an attack on US shale or a “ political plot ” against regional rival Iran, though: a change in the Saudi view on peak oil. The Saudis have two choices with their oil: sell it now, or sell it later. If they think oil is running out, it is reasonable to think prices will keep rising in future – perhaps rising much faster than the returns they could earn by deploying the money elsewhere, particularly since they invest a lot of their excess foreign exchange in US Treasury bonds paying almost nothing. The logical thing to do is to […]

Posted On : Published By : Tom Whipple