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U.S. oil hits 5-month high as dollar weakens

LONDON (Reuters) – U.S. crude oil hit a five-month high on Thursday as the dollar slipped to its lowest since February and as more evidence emerged of a gradual balancing of the U.S. domestic market. The U.S. currency slipped to a two-month low against a basket of currencies as the euro and Japanese yen rallied, making oil less expensive for holders of other currencies. "The dollar has been the big factor," said Bjarne Schieldrop, chief commodities analyst at SEB in Olso. "The dollar index broke below its 60-day moving average on Monday this week for the first time since July and it is only 1.1 percent away from breaking below its 120-day moving average at the moment," he added. Brent crude oil was up 25 cents at $66.09 a barrel by 0830 GMT. U.S. crude oil, also known as West Texas Intermediate or WTI, hit a high of $59.40 […]

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Iran looks inward for economic gains

Iranian Supreme Leader Ali Khamenei says economic strength rests with domestic resolve rather than international diplomacy. UPI/Leader.ir/HO TEHRAN, April 29 (UPI) — Iran’s economic transformation rests with domestic issues and not with ongoing nuclear negotiations, Supreme Leader Ali Khamenei said Wednesday. U.S. Secretary of State John Kerry met Tuesday in New York City with his Iranian counterpart, Javad Zarif, to review progress on nuclear talks . State Department spokesman Jeff Rathke said the meeting "was productive." The five permanent members of the U.N. Security Council, plus Germany, are working with their Iranian counterparts to formalize a framework agreement that pulls Iran back from the brink of having the technology needed to develop a nuclear weapon. Iran is restricted to around 1 million barrels per day in exports to a few consuming nations. That’s about half the level from before a joint arrangement went into force in late 2013, though […]

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Asian imports of Iran crude fall 9.2 percent in March as India halts purchases

TOKYO (Reuters) – Asian imports of Iranian crude fell 9.2 percent in March from a year ago as India bought no oil from the sanctions-hit country for the first time in at least a decade under U.S. pressure, offsetting a jump in purchases by Japan and South Korea. Imports by Iran’s four biggest buyers – China, India, Japan and South Korea – totaled 1.04 million barrels per day (bpd) in March, government and tanker-tracking data showed. On a monthly basis, however, imports were at a three-month high. South Korea and Japan roughly doubled purchases in March from a year ago, with Japanese imports hitting a two-year peak. There are indications that purchases will pick up from April following the recent framework deal on Iran’s disputed nuclear program between Tehran and world powers that could see sanctions on Iran eventually lifted if a more permanent pact is finalised by a […]

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A Saudi Royal Shake-Up With a Goal of Stability

Photo From left, the new Saudi crown prince, Mohammed bin Nayef, with Prince Muqrin bin Abdulaziz and King Salman in January. Credit Saudi Press Agency, via Associated Press BEIRUT, Lebanon — In a series of predawn appointments on Wednesday, King Salman of Saudi Arabia eased the potentially treacherous issue of royal succession by placing a new generation of security-focused leaders first in the line of succession. The far-reaching changes carry the potential to reshape not only the kingdom and its place in the region, but its relations with its most important ally, the United States. “The government is now in the hands of the next generation, under the supervision of the king,” said Khalid al-Dakhil, a Saudi political analyst. With Saudi Arabia locked in bloody proxy wars with its longstanding regional rival, Iran, for influence in Yemen and Syria, the 79-year-old king promoted the two princes most responsible for […]

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What the Saudi royal reshuffle means for oil

What the Saudi royal reshuffle means for oil thumbnail Uncertainty hit oil markets on Wednesday, with analysts contemplating what a major reshuffle of Saudi Arabia’s ruling elite might meant for the commodity. On Wednesday, it was announced that Saudi Arabia’s King Salman bin Abdulaziz had appointed a new heir and rotated some of the top ministerial jobs, accelerating the personnel changes set in motion when he took the throne in January. As Saudi Arabia is the world’s top oil exporter and the dominant force in OPEC (the Organization of the Petroleum Exporting Countries), any change to its power structure is of major interest to energy markets. This is particularly the case given OPEC’s maintenance of oil production at high levels—in order to retain market share—which is viewed as exacerbating the 40 percent price decline seen since last June. However, analysts said that Wednesday’s personnel changes, which include the promotion […]

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iPhone Maker Seeks $1.7 Billion in U.K. for Work in Clean Energy

Employees work along a production line in the Longhua Science and Technology Park, also known as Foxconn City, in Shenzhen, China, on Sept. 4, 2010. Photographer: Thomas Lee/Bloomberg Foxconn Technology Group is in talks with U.K. investors to raise about $1.7 billion for green initiatives as the maker of iPhones boosts work on projects designed to save energy. Installation of solar farms, LED lighting and more efficient air conditioning are among Foxconn’s plans to make its operations in China more environmentally friendly and to cut costs, said Allen Wang, director of international business development at unit Shenzhen Fox-Energy Technology Co. Foxconn, which expects to commence installation for the first of its solar-electricity farms this year, joins global technology giants including Apple Inc. and Google Inc. in backing renewables and other green initiatives. Foxconn has already doubled its return on more than 700 million yuan ($113 million) of energy-efficiency projects […]

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Hercules Offshore: Rig market depressed

Rig company Hercules Offshore said market should remain depressed for the year, noting the current climate has been particularly rough for companies in the exploration and production field. Photo courtesy: Hercules Offshore. HOUSTON, April 29 (UPI) — The demand for offshore rigs should remain low for the year with few signs of recovery in the current oil price market, U.S. rig company Hercules Offshore said. "[This year] is shaping up to be a very challenging year for our industry in general and our company in particular," Hercules Offshore President and Chief Executive Officer John Rynd said in a statement Wednesday. Hercules said it posted a first quarter net loss of $57.1 million, compared to net income of $19.9 million during the first quarter of 2014. Crude oil is trading in a bear market in part because of weak demand and surplus, largely built as a result of increased U.S. […]

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Majors’ Quandary: Why Drill for Oil When They Can Buy Somebody Else’s?

ENLARGE The rising costs of finding and producing oil were eating into profits even before global crude prices began to slide last summer from over $100 a barrel to about $66. Photo: Reuters The costs of finding oil are on the rise. The value of some smaller oil companies has tumbled. For the world’s biggest crude producers, this adds up to a question: Is it cheaper to buy someone else’s oil than to go digging for it? As Exxon Mobil Corp. XOM 0.08 % and Chevron Corp. CVX 0.55 % report quarterly profits this week, executives are likely to face questions about their appetite for megadeals like the $70 billion takeover Royal Dutch Shell RDSA 0.61 % PLC disclosed earlier this month of BG Group BG. 0.56 % PLC. “There is no doubt that it’s much, much less expensive to take over a company than develop a new oil […]

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Marcellus Production Outlook

Has Well Productivity Peaked in the Nation’s Largest Shale Gas Play? The Marcellus shale gas play of Pennsylvania and West Virginia came onto the scene in 2007 in a big way and has grown to become the nation’s largest. It has accounted for much of the growth of U.S. shale gas production, and made up for declines in former shale gas giants like the Haynesville and Barnett plays of Louisiana and eastern Texas. Companies have scrambled to build pipeline infrastructure to connect the Marcellus to consumers in the U.S. northeast. Canadians, once supplied by gas from western Canada, are also looking to the Marcellus (and the much smaller Utica play in Ohio) for future supply; the pipelines that delivered gas to the east might be converted to instead deliver bitumen from the western tar sands. Companies in both the northeastern U.S. and eastern Canada are looking to build LNG […]

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In Pitch to End Crude Export Ban, Drillers Promise Cheaper Fuel

Alaska Senator Lisa Murkowski, the Republican chair of the Senate Energy and Natural Resources committee. Photographer: Andrew Harrer/Bloomberg The oil industry has a new sales pitch for you: Support efforts to lift the 40-year-old ban on U.S. crude oil exports, and reap the reward of cheaper gasoline. If you’re dubious, you’re not the only one. And that’s the challenge for critics of the export ban, who know they won’t get anywhere unless they can persuade consumers to come on board. The politics are clear. Because voters think the ban saves them money at the pump, most lawmakers won’t touch it. The industry’s top leaders and Alaska Senator Lisa Murkowski, the Republican chair of the Senate Energy and Natural Resources committee, hope to offset that idea using reports from the Brookings Institution and the U.S. government that say the opposite is true. “As long as lawmakers are fearful that there […]

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These Titans of Oil Are Experts at Making Bold Predictions*

Photographer: Daniel Acker Nobody saw it coming. Oil prices had been sliding, but on Oct. 1, the future still looked bright. For the next three months, oil would average $97 a barrel, according to a Bloomberg survey of 36 analysts. The first quarter of 2015 would be even better. The most pessimistic among them called for $91 a barrel.  Ha.  We all know what happened next. The free-fall in oil prices was just getting started. WTI crude, the U.S. benchmark, would tumble from $107 a barrel in June to below $45 in January. Humbling, perhaps, but it hasn’t quieted the bold predictions coming from CEOs, analysts, and energy ministers.  Here’s a look at some of the big calls made during the crash and how they’ve panned out.  Don’t Panic "Let’s not panic over the first little decline in oil prices,” Whiting Petroleum CEO Jim Volker said on Sept. 22. He made more bold predictions:  "Saudi Arabia […]

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U.S. crude stocks build less than expected as Cushing draws: EIA

NEW YORK (Reuters) – U.S. crude inventories rose last week to hit a record high for the 16th straight week but the build was smaller than expected as supplies at the Cushing, Oklahoma, oil hub declined for the first time since November, data from the Energy Information Administration (EIA) showed on Wednesday. Crude stockpiles rose 1.9 million barrels to 490.91 million in the week to April 24, compared with analysts’ expectations for an increase of 2.3 million barrels. Crude stocks at Cushing, the delivery point for U.S. crude futures, fell 514,000 barrels, the EIA said. The decline at Cushing was the first since Nov. 28, according to EIA data. U.S. crude for June delivery extended gains after the EIA report and was up $1.40 at $58.46 a barrel at 11:05 a.m. EDT (1505 GMT), after posting a fresh 2015 peak at $58.55. Brent June crude was up $1.06 at […]

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« The U.S. Production Decline Has Begun

The U.S. oil production decline has begun.  It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled. The implications are profound. Production will decline by several hundred thousand of barrels per day before the effect of reduced rig count is fully seen. Unless oil prices rebound above $75 or $85 per barrel, the rig count won’t matter because there will not be enough money to complete more wells than are being completed today. Tight oil production in the Eagle Ford, Bakken and Permian basin plays declined approximately 111,000 barrels of oil per day in January . These declines are part of a systematic decrease in the number of new producing wells added since oil prices fell below $90 per barrel in October 2014 (Figure 1).  Figure 1. Eagle Ford, Bakken and Permian basin new producing wells by month and WTI oil […]

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Hess reports 1Q net loss of $389 million, trims budget

HOUSTON, Apr. 29 Hess Corp. reported a net loss of $389 million during the first quarter compared with net income of $386 million in first-quarter 2014. An adjusted net loss of $279 million was down from an adjusted net income of $446 million in first-quarter 2014. The company says lower realized selling prices reduced adjusted net income by $700 million after-tax year-over-year. First-quarter results benefitted from higher crude oil and natural gas liquids production, but were offset primarily by higher depreciation, depletion, and amortization expense. Net cash provided by operating activities was $362 million in the first quarter, compared with $1.16 billion in first-quarter 2014. Hess is further reducing its full-year guidance for capital and exploratory expenditures by $300 million to $4.4 billion. The company also forecasts its full-year cash costs will be lower by $250 million. The company says it will continue to pursue additional savings in 2015 […]

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U.S. energy demand slows except for industrial, commercial sectors

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (interactive table viewer) U.S. energy consumption has slowed recently and is not anticipated to return to growth levels seen in the second half of the 20th century. EIA’s Reference case projections in the Annual Energy Outlook 2015 (AEO2015) show that domestic consumption is expected to grow at a modest 0.3% per year through 2040, less than half the rate of population growth. Energy used in homes is essentially flat, and transportation consumption will decline slightly, meaning that energy consumption growth will be concentrated in U.S. businesses and industries. Near-zero growth in energy consumption is a recent phenomenon, and there is substantial uncertainty about the main drivers of consumption as the United States continues to recover from the latest economic recession and resumes more normal economic growth. EIA’s analysis in the AEO2015 includes several cases with various assumptions about macroeconomic growth, […]

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US economic growth slows to 0.2%

Growth in consumer spending slowed to 1.9% The US economy "all but stagnated" in the first three months of the year, growing at an annual rate of just 0.2%, official figures show. The growth figure was far lower than expectations. Analysts had forecast growth would be about 1%. Harsh winter weather for a second year dampened consumer spending, while energy companies struggling with low oil prices cut investment. The strength of the dollar also hurt exports, which fell by 7.2%. A strike by dock workers at normally busy West Coast ports also hindered growth. But the US Commerce Department said there were signs that activity was picking up in the second quarter. The US growth figure much lower than the previous three months, when the economy expanded at an annualised pace of 2.2%. Analysis: Linda Yueh, BBC chief business correspondent The dollar has risen on the back of expected […]

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Fed points to softer U.S. labor market, weak economic growth

WASHINGTON (Reuters) – The Federal Reserve pointed to weakness in the U.S. labor market and economy on Wednesday in a policy statement that came just hours after data showing tepid economic growth, suggesting the central bank may have to wait until the third quarter to begin raising interest rates. The Fed’s statement leaves it dependent on fresh economic data, in a meeting-by-meeting approach, as it seeks to decide on the timing of its first rate hike since June 2006. The central bank, however, acknowledged weakness in some sectors of the economy, making it more likely that it will not be ready to raise until at least September. "The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective […]

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California Gov. Brown Orders Major Cut in Greenhouse Gas Emissions

ENLARGE California Gov. Jerry Brown, shown in a file photo, announced a plan for major cuts in greenhouse gas emissions on Wednesday. Photo: Monica Davey/European Pressphoto Agency SAN FRANCISCO—Gov. Jerry Brown on Wednesday ordered new standards for greenhouse gas emission reductions over the next 15 years in California, building on the state’s already stringent requirements. Mr. Brown ordered a reduction in greenhouse gas emissions to 40% below 1990 levels by 2030. The targets align the nation’s largest state with the standards set by the European Union, Mr. Brown said in a news release. “With this order, California sets a very high bar for itself and other states and nations, but it’s one that must be reached—for this generation and generations to come,” Mr. Brown said. Currently, the state is set to meet a goal of reducing greenhouse gas emissions to 1990 levels by 2020, Mr. Brown said. That goal […]

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U.S. economy stumbles in first-quarter as weather, low energy prices weigh

WASHINGTON (Reuters) – U.S. economic growth nearly stalled in the first quarter as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending. Gross domestic product expanded at an only 0.2 percent annual rate, the Commerce Department said on Wednesday. That was a big step down from the fourth quarter’s 2.2 percent pace and marked the weakest reading in a year. A strong dollar and a now-resolved labor dispute at normally busy West Coast ports also slammed growth, the government said. While there are signs the economy is pulling out of the soft patch, the lack of a vigorous growth rebound has convinced investors the U.S. Federal Reserve will wait until late this year to start hiking interest rates. The recovery is the slowest on record and the economy has yet to experience annual growth in excess of 2.5 percent. "The U.S. economy has yet […]

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BP unwinding oil storage play as contango narrows

LONDON (Reuters) – Oil major BP said it will gradually sell throughout 2015 more than $1.25 billion of oil it had stored earlier this year to seize on a futures market structure to boost profit. Traders including BP bought and stored oil throughout late 2014 and early 2015 after an oil price collapse as prompt prices dropped below those for further into the future, a market structure known as contango. Traders have been profiting from the contango by storing crude in the hope of reselling it at a profit at a later date or by simply locking gains via paper trading. Chief Financial Officer Brian Gilvary said BP’s trading unit had performed much better than in an average quarter, likening the quarter to a strong trading performance in early 2009 when crude prices last crashed. "The profit we booked in one quarter for contango is relatively modest, in the […]

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Russia building nuclear reactors – and influence – around the globe

Tags: energy | european union | jordan | nuclear energy | nuclear reactor | rosatom | | vladimir putin Russian President Vladimir Putin (2nd L), his Egyptian counterpart Abdel Fattah al-Sisi (2nd R) and Russia’s Defense Minister Sergei Shoigu (L) meet onboard a guided missile cruiser at the port of Sochi, August 12, 2014. REUTERS/Alexei Druzhinin/RIA Novosti/Kremlin Russia has been notoriously brazen in using state-owned companies as instruments of national power. President Vladimir Putin’s natural-gas wars with Belarus and Ukraine made headlines and sometimes left substantial parts of Europe in the cold . But Moscow’s exploits in other energy-related areas have been less noticed. Recent revelations about the concerted Russian effort to buy up uranium resources across the globe may change that. For Moscow’s state-owned nuclear-energy company, Rosatom, has made successful inroads into markets around the world. It is Rosatom — not France’s Areva or the United States’ Westinghouse […]

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BP signals start of new North Sea campaign

British energy company BP starts drilling in deep waters west of Shetland Islands, part of a seven-year commitment to regional developments. (UPI/Shutterstock/James Jones Jr.) LONDON, April 29 (UPI) — British energy company BP said Wednesday it was marking the start of a campaign west of the Shetland Islands with deepwater drilling in the Loyal oil field. BP is working as the operator at the Loyal field on behalf of its partners at Royal Dutch Shell and Austrian energy company OMV using the Deepsea Aberdeen rig. BP President for North Sea operations Trevor Garlick said the start of drilling marks an "important milestone" for regional operations . The British company said five wells are planned in the area. First oil is expected by the end of 2016 and will be moved to a new floating, production, storage and offload vessel. BP, which has been the focus of potential takeover rumors […]

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Oil dips on oversupply after Saudi reshuffle

LONDON (Reuters) – Oil prices dipped on Wednesday on oversupply after news King Salman of Saudi Arabia had altered the line of royal succession in the kingdom in a dramatic reshuffle. King Salman bin Abdulaziz sacked his younger half-brother as crown prince and appointed his nephew, deputy crown prince Mohammed bin Nayef, as the new heir apparent. He also appointed his son, Prince Mohammed bin Salman, as deputy crown prince, and replaced veteran foreign minister Prince Saud al-Faisal with the kingdom’s Washington ambassador Adel al-Jubeir as well as appointing several other ministers. Saudi reshuffles often move oil prices as stability in the world’s biggest oil exporting country is key to global supplies. Traders and analysts said it was not clear how Saudi oil policy might be affected by the changes at a time when the oil market was oversupplied and facing a seasonal dip in demand. "I don’t think […]

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U.S. Oil Prices Inch Higher

NEW YORK—U.S. oil prices ended Tuesday with a modest gain, after a brief spike following the news that Iran seized a Western cargo ship in the Strait of Hormuz. Light, sweet crude for June delivery rose 7 cents, or 0.1%, to $57.06 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, fell 19 cents, or 0.3%, to $64.64 a barrel on the ICE Futures Europe exchange. The oil market was roiled by a report on the maritime confrontation, sending U.S. crude prices to as high as $57.73 a barrel. Later, the U.S. Department of Defense clarified that the cargo ship that was taken over by the Iranian forces bore a Marshall Islands flag, and there were no U.S. citizens on board. The Pentagon also said the incident took place in Iranian waters, instead of international waters. “When we first saw the report, it was unclear […]

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Oil falls more than 1 pct, U.S. crude stockpiles set for another high

SINGAPORE (Reuters) – Oil fell more than 1 percent on Tuesday ahead of weekly U.S. crude inventory data that is expected to hit another high and as Saudi Arabia pledged to supply more oil to China if needed. U.S. commercial crude stockpiles were expected to have risen last week for the 16th straight week, up from a record 489 million barrels, even though drilling activity fell, a preliminary survey by Reuters showed on Monday. Comments from top Saudi oil officials on Monday reiterated the country’s position of keeping production high to meet demand as it maintains its market share. Brent June crude futures had dropped 84 cents to $63.99 a barrel by 0702 GMT. U.S. June crude fell 84 cents to $56.14 a barrel. The fall in prices "reflects the major gains that have been made in the last few weeks and a little bit of concern over what […]

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The Oil Rally Looks Doomed, in Five Charts

Oil has surged 20 percent this month to $57 a barrel as expanding violence in Yemen stoked concern that supplies could be disrupted. The rally follows the biggest drop since 2008, with crude falling as low as $43.46 a barrel in March, as a price war broke out between OPEC producers and U.S. shale drillers. West Texas Intermediate oil, the U.S. benchmark, is now back up at close to a four-month high. Prices gained in each of the last six weeks, the longest stretch in more than a year. Before deciding prices will race back to $100, here are five charts worth keeping in mind. "The cart is moving ahead of the horse," Barclays Plc analysts said in an April 27 report. Long-dated futures are falling Even as prices rise for oil contracts that will be settled in the next few months, the price of oil is actually falling […]

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Year in Review: Crude Oil Prices 2014

Background In 2014, Brent front month crude oil futures prices fell from $108 per barrel on January 2 to $57 per barrel on December 31. This report gives an overview of the primary drivers of crude oil price movements in 2014, in particular the substantial price decline that took place during the second half of the year. Factors such as increased global supply of crude oil, lower crude oil supply disruptions, lower economic growth expectations, and currency exchange rate movements are explored in the report. In addition, links are provided to several other published EIA articles with further in-depth discussion of topics related to the oil price decline. After trading in a relatively narrow $10 per barrel range for the first six months of the year and reaching its peak of $115.06 per barrel on June 19, the Brent front month futures price fell sharply and settled at $57.33 […]

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Natural Gas Climbs as Contract Expires

By Timothy Puko and Carolyn Cui Natural gas futures rose Tuesday as the front-month contract headed toward expiration, pushing a rebound amid a raft of bearish bets. Bets on falling prices have been outnumbering wagers on rising prices by more than 3 to 2 in recent weeks, a scenario that can cause a rally on expiration day. Many of those bears will have to close out their bets or roll them over to the next month, and to do that they must buy back into a contract they once sold. "Some traders would wait until the last minute to get out of their positions," said Phil Flynn, a futures account executive at the Price Futures Group in Chicago. Unlike many other commodities, the first notice day comes after the expiration in the energy markets, allowing traders to hold their positions until the last trading day. Prices for the front-month […]

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Senate debates bill on congressional approval of Iran deal

AP Photo/Jason DeCrow Buy AP Photo Reprints Latest News WASHINGTON (AP) — Democrats and Republicans backing a bill to give Congress a chance to review a nuclear deal with Iran insisted on Tuesday that it be passed free of controversial add-ons that they claim could scuttle negotiations with Tehran, draw a presidential veto or leave lawmakers with no say on a national security threat. As written, the legislation would block President Barack Obama from waiving congressional sanctions for at least 30 days while lawmakers weigh in on any final deal the U.S. and five other nations can reach with Iran. And it would stipulate that if senators disapprove the deal, Obama would lose authority to waive certain economic penalties – an event that would certainly prompt a presidential veto. Senate Minority Leader Harry Reid warned GOP presidential hopefuls in the Senate not to use it as a "platform for […]

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An Eroding Syrian Army Points to Strain

Photo Rebel fighters took up positions in Jobar, Syria, last week for what they called a battle to unite rebel factions against forces loyal to the president. Credit Amer Almohibany /Reuters BEIRUT, Lebanon — The Syrian Army has suffered a string of defeats from re-energized insurgents and is struggling to replenish its ranks as even pro-government families increasingly refuse to send sons to poorly defended units on the front lines. These developments raise newly urgent questions about the durability of President Bashar al-Assad ’s rule. “The trend lines for Assad are bad and getting worse,” said a senior United States official in Washington, who, speaking on condition of anonymity to discuss confidential intelligence assessments, nevertheless cautioned that things had not yet reached “a boiling point.” The erosion of the army is forcing the government to rely ever more heavily on Syrian and foreign militias, especially Hezbollah , the Lebanese […]

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Saudis Hit a Yemeni Airport, Possibly Closing Aid Route

SANA, Yemen — A Saudi-led military coalition carried out at least seven airstrikes on the international airport here on Tuesday, possibly crippling the airport in order to prevent an Iranian airplane from landing, according to Saudi and Yemeni officials. The airstrikes hit the main runway, endangering one of Yemen ’s last usable airports and a major transit point for global aid shipments. An airport official said the damage had made it impossible to use the runway. The bombings demonstrated the extent to which Yemen has become trapped in the escalating regional proxy war between Saudi Arabia and Iran . Saudi Arabia began its bombing campaign against the Houthi rebel movement in Yemen last month in large part to counter what Saudi officials saw as the influence of Iran, which has supported the Houthis. Saudi accusations that the Houthis were acting as an instrument of Iranian power were viewed by […]

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Saudi king resets succession to cope with turbulent times

RIYADH (Reuters) – Saudi King Salman appointed a new heir and made his young son second in line to rule on Wednesday, a major shift in power within the ultra conservative Saudi elite at a time of almost unprecedented regional turmoil. By making Interior Minister Mohammed bin Nayef, 55, crown prince and Defence Minister Mohammed bin Salman, 30, deputy crown prince, King Salman has effectively decided the line of succession for decades to come in the world’s top oil exporter. The reshuffle also cements relations with the United States. Prince Mohammed bin Nayef, who replaces Prince Muqrin, the successor chosen by the late King Abdullah before his death in January, enjoys closer personal ties with U.S. officials than almost any other senior royal, diplomats have said. In another big shift, Salman replaced veteran Foreign Minister Prince Saud al-Faisal, who had served in the role since October 1975, with the […]

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Riyadh’s Asian grit sends oil prices lower

Saudi Arabian Oil Minister Ali Al-Naimi says oil-rich kingdom ready and willing to meet growing energy demands from Asian economies. File photo by Michael Kleinfeld/UPI NEW YORK, April 28 (UPI) — Saudi Arabia asserted its influence on an evolving market, sending crude oil prices lower Tuesday after saying it was ready to meet growing Chinese demand. "We are ready to meet all needs, and with the increasing number of people in Asia and the growth of the middle class, the demand for energy will increase," Saudi Oil Minister Ali al-Naimi said at an energy meeting in China . "The demand will be met through a growing set of supplies." Oil prices started falling below the $100 per barrel mark in mid 2014 as U.S. oil production gains tipped the global market toward the supply side. Prices faltered further in November when Saudi Arabia said it would maintain a steady […]

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Ghana told to stop oil drilling

Ghana told to stop oil drilling thumbnail Ghana has been told by an international tribunal not to begin any new offshore drilling for oil in disputed waters with the Ivory Coast. The International Tribunal for the Law of the Sea did, however, allow Ghana to continue developing current oilfields. These include the so called-Ten fields, part owned by UK firm Tullow Oil. Ivory Coast had asked that all drilling be suspended, but the tribunal ruled this would risk “considerable financial loss” to Ghana. Instead, it told the West African nation to “take all necessary steps to ensure than no new drilling either by Ghana or under its control takes place in the disputed area” and to “refrain from granting any new permit for oil exploration and exploitation in the disputed area”. ‘Call for restraint’ The area is believed to contain large reserves of oil, which both countries are keen […]

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Nigeria: ‘Missing’ U.S.$20 Billion Oil Money: Our Audit Report Not Reliable -PricewaterhouseCoopers

The much anticipated report of the forensic audit of the Nigerian National Petroleum Corporation, NNPC, operations on the missing $20 billion oil money may not amount to much after all, as PricewaterhouseCoopers Limited, the audit firm that conducted the probe, has said it cannot vouch for the integrity of its findings. In a startling introductory letter addressed to Nigeria’s Auditor General, the audit firm said findings in its 199-page report were limited to available information and did not constitute a review in accordance with generally accepted standards. "The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards," the firm said. "Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based," it added. The report and all accompanying deliverables, the company pointed out, […]

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Venezuela to Begin Nationwide Power Rationing

CARACAS—Venezuela’s government, which heavily subsidizes electricity, will start rationing power nationwide as it faces a surge in demand for air conditioning amid a continuing heat wave, officials said Tuesday. The cuts will begin with some public-sector offices where the workday will be reduced to six hours from eight and where power use will be moderated, Vice President Jorge Arreaza said in an address broadcast on state television. He also promised inspections of large private consumers such as malls, hotels and other industries. He blamed the recent surge in power demand on climate change caused by excessive industrialization. “This is of course linked to global warming and the excessive industrialization of capitalism, which never stops, nor has ever stopped, for the effects that it can have on the climate, on society and on Mother Earth,” Mr. Arreaza said. The announcement comes one day after local reports of power outages affecting […]

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Japan Sees Clean Energy Edging Out Nuclear Power in 2030

An installation trainee secures a solar panel in Wrexham, Wales. Photographer: Chris Ratcliffe/Bloomberg Japan anticipates that by 2030 clean energy such as solar and hydro will generate slightly more of the nation’s electricity than nuclear power plants. Clean energy sources will supply as much as 24 percent of Japan’s electricity in 15 years, while atomic power will account for as much as 22 percent, according to a draft report from the Ministry of Economy, Trade and Industry on what Japan’s electricity mix should look like by 2030. Though the eagerly-awaited report — the result of months of study by a ministry panel debating the electricity mix — continues to see a need for nuclear, the draft proposes a diminished role compared with before the Fukushima disaster of March 2011. Nuclear power accounted for more than a quarter of Japan’s electricity generation before the meltdowns at the Fukushima Dai-Ichi reactors. […]

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Texas oil output up, but pessimism endures

Texas state data show oil production on a steady rise, though economic concerns remain in No. 1 oil producer in the nation. File photo by Ian Halperin/UPI AUSTIN, Texas, April 28 (UPI) — Nearly half of all land rigs in service in the United States are in Texas, where a state regulator said oil production increased 5 percent from January. The Railroad Commission of Texas, the state’s energy regulator, said preliminary data from February show crude oil production averaged 2.34 million barrels per day. That’s an increase of 5.2 percent , or 117,550 barrels, from January and 17 percent higher than February 2014. Texas is the No. 1 oil producer in the nation. The so-called Beige Book published by the Dallas Federal Reserve said the low price for crude oil is hurting the state’s oil sector. While most firms surveyed by the bank said they’d be able to weather […]

Posted On : Published By : Tom Whipple
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U.S. frontier energy plans under fire

Frontier developments planned in U.S. territorial waters criticized for lack of transparency and over complaints of state authority. Photo by num_skyman/UPI WASHINGTON, April 28 (UPI) — A South Carolina congressman’s question over state authority over maritime territory and concerns about transparency may curb frontier U.S. oil developments. U.S. Rep. Mark Sanford , R-S.C., was joined by state and local officials in expressing opposition to permits to conduct seismic testing to get a better understanding of potential oil and gas reserves off the coast of South Carolina. The U.S. Interior Department in February released a draft proposal for 2017-22 for access to federal waters. Ten leases are planned for the Gulf of Mexico, three for offshore Alaska and one, a debut, for waters in the Atlantic. Sanford said state authorities are sidelined from the federal decision-making process for operations off their coasts. "It makes little sense to even conduct tests […]

Posted On : Published By : Tom Whipple
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North Dakota land grants support oil boom

North Dakota awards land grants to support development in the west of the state as its government reviews lowering the tax for oil extraction. File photo by Gary C. Caskey/UPI BISMARCK, N.D., April 28 (UPI) — As an oil tax bill heads to his desk, North Dakota Gov. Jack Dalrymple said more than $12 million in grants are supporting development in the oil-rich state. "These grants are an important part of our ongoing commitment to help the oil and gas region meet the challenges created by rapid growth," the governor said in a statement. The state’s Land Board awarded more than 130 grants totaling $12.3 million to fund developments in the west of the state where the boom in oil and natural gas is resulting in unprecedented growth. North Dakota catapulted to the No. 2 spot in the nation, after Texas, as output from the Bakken shale reserve area […]

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Lower Oil Tax for North Dakota

North Dakota Oil Tax Reductions North Dakota is one step closer to cutting the price-triggered exemption that will lower the extraction tax on oil. Related: North Dakota Tax Trigger Getting Closer On Friday, North Dakota lawmakers cleared the way to change a 30 year old tax structure that gave some tax breaks for the oil industry have been linked to a price “trigger.”  Debate in North Dakota’s House was fierce and ended in a 66-26 vote in favor of cutting the state’s oil tax rate from 11.5 percent to 10 percent. Republicans believe that this will provide a more stable table policy that will boost the state’s economy, but Democrats have said that it will cost the state billions over the next 10 years. The legislature’s research group estimates that the new tax structure will add $120 million to the state’s coffers between 2015-2017. Now that the bill has […]

Posted On : Published By : Tom Whipple
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Offshore Drillers’ Problem: Few Oil Firms Need Their Rigs

ENLARGE Analysts are likely to be pressing offshore specialists on the state of their contracts as they report first-quarter earnings, beginning with Hercules Offshore on Wednesday. Photo: Bloomberg News Offshore drillers are bracing for a wave of contract cancellations as energy companies try to cut their costs to cope with low oil prices. Big oil and gas companies lease drilling rigs and crews from oil-field-services companies, often for years at a time and at a cost of up to $400,000 a day. The industry has long considered these leases basically unbreakable. But now several drilling companies have reported that clients including BP PLC and some government-owned energy companies are trying to get out of leasing deals—and analysts say a flood may follow. “We expect additional contract cancellations,” said Angie Sedita, an analyst at the investment bank UBS. “Offshore rigs could be offered for free and most oil companies would […]

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Projections show U.S. becoming a net exporter of natural gas

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (interactive table viewer) In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. […]

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Freeport LNG unit closes on financing, starts building third train

FLNG Liquefaction 3 LLC, a unit of Freeport LNG Expansion LP , has closed on the $4.56 billion in financing needed to start construction of the third train of FLNG’s gas liquefaction and LNG loading facility on Quintana Island near Freeport, Tex. The construction cost for the combined three-train project is expected to be $12.5 billion, including owner’s costs and interest during construction. An additional $3 billion in funds were raised for refinancing and acquisition costs associated with the existing LNG import facility, letters of credit facilities, and a special contingency fund. With closing on this financing, Freeport LNG has completed all milestones and issued a full notice to proceed to CB&I Inc., Zachry Industrial Inc., and Chiyoda International Corp. to construct the project’s third train. Full three-train operation is expected by third-quarter 2019. LNG production from the first liquefaction train is expected in early 2018, with commercial operation […]

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EIA projections indicate US becoming a net exporter of natural gas

EIA projections indicate US becoming a net exporter of natural gas thumbnail In its recently released annual energy outlook (AEO2015), EIA expects the US to be a net natural gas exporter by 2017. After 2017, natural gas trade is expected to be driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of US natural gas and world prices that encourages exports of LNG and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed US oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. Net LNG exports […]

Posted On : Published By : Tom Whipple
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Gazprom Profits Plunge on Ruble Weakness and Ukraine Crisis –Update

By Thomas Grove and Andrey Ostroukh MOSCOW–Russia’s gas giant OAO Gazprom said Wednesday its 2014 net profit plunged 980.26 billion ruble ($19 billion) on year to 159 billion ruble due to weakness in the Russian currency and instability in Ukraine. Gazprom, facing tougher conditions in its biggest market Europe, saw its sales to the continent fall to 159.4 billion cubic meters from 174.0 bcm a year ago. Russia’s ruble plummeted last year, losing around half of its value against the dollar, due to lower oil prices and a crisis of confidence in the currency following Western sanctions on Russia over the crisis in Ukraine. The weaker ruble also pushed Gazprom’s net debt higher by 48% to 1.65 trillion rubles. The company said it suffered a 34 billion ruble loss on its balance sheet due to a dispute with Ukraine’s state energy company Naftogaz. Gazprom has been in arguing with […]

Posted On : Published By : Tom Whipple