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NYMEX May natural gas futures settle at $2.531/MMBtu, down 7.5 cents

NYMEX May natural gas futures settled at $2.531/MMBtu Thursday, down 7.5 cents as the market responded to US Energy Information Administration data showing a build in storage stocks at the higher end of analyst expectations. US natural gas in storage rose 90 Bcf to 1.629 Tcf for the week ended April 17, the EIA said Thursday. This was at the upper end of the consensus of analysts surveyed by Platts of an injection between 86 Bcf and 90 Bcf. "The 90-Bcf net injection into US natural gas storage for last week was slightly more than the consensus expectation and bearish compared with a 46-Bcf five-year average for the date," Citi Futures Perspective energy futures specialist Tim Evans wrote in a daily commentary. Aaron Calder, senior market analyst at Gelber & Associates, said that the 90 Bcf injection suggests the market remains oversupplied by about 3 Bcf/d, according to his […]

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Diplomats press on in Vienna for final Iran nuclear deal

VIENNA (Reuters) – U.S. Under Secretary Wendy Sherman and Tehran’s Deputy Foreign Minister Abbas Araqchi met in Vienna on Thursday in the latest push to secure a final nuclear deal by a June 30 deadline, Iranian media said. The latest round of nuclear diplomacy, being held in a luxury hotel in Austria’s capital, kicked off with a bilateral meeting between Iran and the European Union on Wednesday. Catherine Ray, spokeswoman for European Union foreign policy chief Federica Mogherini, said on Twitter that senior foreign policy officials from Iran, six world powers including Britain, China, France, Germany, Russia, and the United States and the EU will meet on Friday. Western diplomats in New York said U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif were expected to meet next week on the sidelines of the five-year review conference on the nuclear Non-Proliferation Treaty. One diplomat said […]

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EIA: Yemen presents unique energy risk

U.S. military ships deploy to Yemeni waterways to ensure security in and around key crude oil shipping lanes. File photo courtesy the U.S. Navy WASHINGTON, April 23 (UPI) — Conflict in Yemen may drag on the global crude oil market, not because of production, but because of strategic waterways, U.S. analysis said Thursday. Saudi Arabia this week announced an end to a pan-Arab air campaign in Yemen dubbed "Decisive Storm." The offensive was meant to ensure political stability in a Yemen under threat from the Houthi rebel group, which has backing from the Shiite government in Iran. Yemeni President Abdu Rabbu Mansour Hadi fled the country to Saudi Arabia. Riyadh through its official news agency announced it was transitioning to a counter-terrorism and political effort called "Restore Hope." Norwegian energy company DNO stopped work in Yemen last month because of the tense security situation in the country. Prior to […]

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Iran Ships Off Yemen Head Home

Fresh airstrikes were reported in San’a and Taiz less than two days after Saudi Arabia said it would scale back air operations in Yemen. WSJ’s Asa Fitch has the story. Photo: Getty An Iranian flotilla suspected of carrying weapons bound for rebels in Yemen reversed course and appeared to be heading home, averting a potential confrontation in the Gulf of Aden, U.S. defense officials said Thursday. The cargo ships, accompanied by two Iranian warships, shifted course as a U.S. aircraft carrier moved within 200 nautical miles of the flotilla and Saudi Arabian officials said their sailors would attempt to search the ships if they tried to dock in Yemen. Saudi Arabia and its Arab allies have been carrying out airstrikes on Houthi rebels for nearly a month. The fighters have overrun much of Yemen in the past eight months, capturing the capital San’a and the government, and seeking to […]

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Oil trade off Yemen coast grew by 20% to 4.7 million barrels per day in 2014

Source: U.S. Energy Information Administration, based on Lloyd’s List Intelligence, Suez Canal Transit Authority, Eurostat, and Global Trade Atlas, using EIA conversion factors While Yemen is not a major oil-producing country, its coast borders the Bab el-Mandeb Strait, a narrow chokepoint between the Horn of Africa and the Middle East. This strait is a strategic route for Persian Gulf oil, natural gas, and petroleum product shipments to Europe and North America, as well as European and North African oil exports to Asia. Although the strait is 18 miles wide at its narrowest point, tankers passing through must use two 2-mile-wide shipping channels. Trade in crude oil and petroleum products transiting the Bab el-Mandeb has increased steadily in recent years, growing from 2.7 million barrels per day (bbl/d) in 2010 to almost 4.7 million bbl/d in 2014. From 2013 to 2014, trade grew by more than 20%, with an increase […]

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CERAWeek: Evolutions of Pemex, YPF running parallel

HOUSTON, Apr. 23 OGJ Staff Writer Chief executives of Mexico’s Petroleos Mexicanos (Pemex) and Argentina’s YPF SA are both seeing energy reforms within their respective countries, and both emphasize the need for investment from international oil and gas companies to achieve their new goals. “Pemex is transforming itself from a government organization to an enterprise” and is tasked with the new challenge and luxury of financial autonomy, explained Emilio Lozoya Austin, the company’s chief executive officer, at IHS CERAWeek on Apr. 21 in Houston. Four new agencies and five new spinoff companies have been created in Mexico over the past year, including transportation and services companies that will serve international participants following their entrance into the country ( OGJ Online, Aug. 21, 2014 ). Over the next year, the biggest steps forward will come through partnerships created with international companies in the Round One bid round and ensuring contracts […]

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IHS CERAWEEK: EPA’s McCarthy says Clean Power Plan will not impact reliability

Gina McCarthy, administrator of the US Environmental Protection Agency, said Thursday there is "absolutely no scenario that I will accept where [electricity] reliability comes into question" as the agency’s Clean Power Plan nears implementation. McCarthy, speaking in Houston at IHS CERAWeek, said the CPP, which calls upon the US power sector to reduce carbon dioxide emissions by 30% below 2005 levels by 2030, mainly through the retirement of coal-fired power plants, should be considered a major plank in the nation’s low-carbon future. McCarthy reminded the audience the program has been under development for three years. She said that, to date, there have been 3.9 million comments on the plan filed with the agency by industry participants and individuals. McCarthy attended the CERAWeek conference last year, where she announced that the CPP was coming. At that time she said she was on a mission to listen to what the industry […]

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Chinese banks must cut coal lending, shift to cleaner businesses: study

BEIJING (Reuters) – China needs to cut lending to coal-related industries and shift more financing to cleaner businesses in order to address a huge funding gap that is hindering the country’s war on pollution, a study drawn up in part by central bank researchers said. Some 2.9 trillion yuan ($468 billion) a year was required over the next five years to boost clean energy and tackle pollution, said the study published on Thursday by the Financial Research Institute of the People’s Bank of China and Greenovation Hub, a non-governmental organization. The researchers found that bank loans to the coal sector rose sharply from 2012 and more than doubled in 2013, a period when growth in Chinese energy demand remained high and coal firms were rapidly expanding. After reviewing loans made to 168 Shanghai-listed companies, the report found that 5.5 trillion yuan went to borrowers specializing in coal mining, coal-fired […]

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China Has a Massive Debt Problem

How Concerned Should We Be Over China Defaults? China has a $28 trillion problem. That’s the country’s total government, corporate and household debt load as of mid-2014, according to McKinsey & Co. It’s equal to 282 percent of the country’s total annual economic output. President Xi Jinping’s government aims to wind down that burden to more manageable levels by recapitalizing banks, overhauling local finances and removing implicit guarantees for corporate borrowing that once helped struggling companies. Those like Baoding Tianwei Group Co., a power-equipment maker that Tuesday became China’s first state-owned enterprise to default on domestic debt. Now hold that thought, and consider this: China’s also trying to prop up a $10.4 trillion economy that’s decelerating and probably will continue to do so through 2016, or so says the International Monetary Fund. The economy expanded 7 percent — the leadership’s growth target for this year — in the first […]

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As drillers hunker down, Wall St sees quicker oil price bounce

HOUSTON (Reuters) – There is a growing disconnect between Houston and Wall Street over when slumping oil prices will recover. Beaten down by a seven-month rout that slashed crude prices from over $147 a barrel last summer to $42 a barrel, producers are bracing for oil to remain at about $60 a barrel for as long as the next five years or so, according to executives gathered this week at the industry’s biggest annual conference. They are shedding staff and slashing spending because they reckon that prices will remain depressed. "We’re lower for longer," said BP CEO Bob Dudley. But the financial community is already looking for the upside, buying up energy equities and plotting private equity acquisitions in a bet that the oil price cycle may turn more quickly than the industry expects. "There is clearly a gap in view between the strategics and the financial community," David […]

Posted On : Published By : Tom Whipple