Category:

EU charges Russia’s Gazprom, alleging price gouging

BRUSSELS (Reuters) – The European Union launched a legal attack on Gazprom on Wednesday, stoking tension with Moscow as it accused the Russian gas giant of overcharging buyers in Eastern Europe and hindering competition. The Kremlin appeared to take a conciliatory tone, saying it hoped for compromise and an impartial stance from EU regulators. The EU’s new antitrust chief, Margrethe Vestager, who a week ago announced a similar market abuse prosecution against U.S. tech giant Google, said state-controlled Gazprom was using its continued dominance in Moscow’s old Soviet client states to hike prices by as much as 40 percent over the norm. It could do so, she said, by insisting on contracts that bar customers selling on gas to others, notably across borders, which she described as a hindrance of free markets that broke EU law. It has also been an obstacle to EU efforts to supply Ukraine. Another […]

Posted On : Published By : Tom Whipple
Category:

Russian oil company irked by arctic rules

Russian state oil company Rosneft said private companies are getting more support from the government when considering frontier arctic territory. File Photo by Denis Larkin/Shutterstock. MOSCOW, April 22 (UPI) — Private company interests are favored over those of state entities when considering access to frontier arctic territory, Russian oil company Rosneft said. State-owned Rosneft said it was frustrated that private companies were getting more government support for developing arctic reserves than those controlled by the government itself. "The existing system protects the interests of the state when developing the Arctic shelf and set clear rules of providing access to private partners both Russia and foreign ones," the company said Wednesday. U.S. energy company Exxon Mobil has a partnership with Russian oil company Rosneft for work in the arctic waters of Russia . With Western sanctions impeding developments, the Russian government has placed a greater emphasis on domestic exploitation of […]

Posted On : Published By : Tom Whipple
Category:

EU Files Formal Charges Against Gazprom for Abuse of Dominant Position

ENLARGE BRUSSELS—The European Union accused Russia’s state-controlled gas company OAO Gazprom of hindering competition and charging unfair prices in Central and Eastern Europe, a move that could constrain Moscow’s ability to wield power in its former backyard. The charges, which escalate a 2½-year investigation , come only a week after the EU waded into another politically sensitive antitrust battle with the U.S. search engine Google Inc. Margrethe Vestager, the European Commissioner in charge of competition policy. They open up the possibility of multibillion-dollar fines for Gazprom and injunctions that could have far-reaching consequences for a company already struggling with low oil prices and EU moves to diversify the bloc’s gas supply. The accusations also attack the way the company has tied its gas deals to broader strategic goals defined by Moscow. “From now on it will be more difficult for the Kremlin to use Gazprom as a tool of […]

Posted On : Published By : Tom Whipple
Category:

Gazprom Faces Effects of Politics on Its Bottom Line

Photo The Gaz-System distribution station in Gustorzyn, Poland. Poland and some other European countries are largely dependent on Russian gas. Credit Agencja Gazeta/Reuters MOSCOW — European antitrust regulators are striking at Gazprom ’s core, going after the Russian energy giant’s pricing policies and its politically hued control over natural gas pipelines. But market forces, more than regulatory pressures, are stacking up against the company, as it struggles to maintain its earnings power and geopolitical heft. Long used by President Vladimir V. Putin to further Russia’s economic and political interests, Gazprom has used its muscle to dictate prices and set terms for natural gas supplies across Europe. This worked for years because customers had few other options. But politics, Gazprom is quickly realizing, are not always good for profits. Those same policies are making it difficult to maneuver, as Gazprom finds itself competing against a wide array of ever more […]

Posted On : Published By : Tom Whipple
Category:

What Happens To US Shale When The Easy Money Runs Out?

Today we will take a look at both Whiting Petroleum (WLL) and Continental Resources (CLR) as far as their Bakken economics. Overall the numbers will show that, despite claims of low cash costs per MBOE ($16 or so for CLR) and high IRRs on $60 WTI, the facts say otherwise. In addition, the analysis will show how very high depletion rates combined with falling rig counts spells trouble for Bakken production growth despite better efficiencies per well. The analysis will be based on April presentations of both companies from which the graphs below are taken. I should note these economics are not much different from Eagle Ford, the second most prolific addition to US production growth in past years. Firstly one must understand that the easy money via QE from the Fed and zero interest rates allowed many shale players to burn free cash flow while showing operationally net […]

Posted On : Published By : Tom Whipple
Category:

Heinberg: Afterburn

Heinberg: Afterburn thumbnail We live in a time of what might be called The Great Burning. However, we tend to ignore the tremendous inferno blazing around us. Most of the combustion occurs out of sight and out of mind, in hundreds of millions of automobile, truck, aircraft, and ship engines; in tens of thousands of coal or gas-fired power plants that provide the electricity that runs our computers, smart phones, refrigerators, air conditioners, and televisions; in furnaces that warm us in the winter; in factories that spew out products we are constantly urged to buy. Add all this burning together and it amounts to the energy equivalent of torching a quarter of the Amazon rainforest every year. In the United States, the energy from annual fossil fuel combustion roughly equates to the solar energy taken up by all biomass in the nation. It’s a conflagration unlike anything that has […]

Posted On : Published By : Tom Whipple
Category:

Saudis end air campaign in Yemen, seek political solution

DUBAI (Reuters) – Saudi Arabia announced on Tuesday it was ending a month-long campaign of air strikes against the Houthi rebels who seized large areas of Yemen and said it would back a political solution to bring peace to its war-ravaged neighbor. Iran, which has supported the fellow Shi’ite Houthis, welcomed the ceasefire, which followed months of factional fighting between the militant group and forces loyal to the government, which was driven out of the capital Sanaa. "Operation Decisive Storm has achieved its goals…(including) removing the threat to Saudi Arabia and neighboring countries, especially in terms of heavy weapons," said a statement carried by Saudi state news agency SPA. It said a new phase called "Operation Restoring Hope" was beginning. It would combine political, diplomatic and military action but would focus on "the political process that will lead to a stable and secure future for Yemen." Saudi spokesman Brigadier […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Fall as Middle East Tensions Ease

By Georgi Kantchev LONDON–Oil prices fell on Wednesday with investors bracing for key data on the U.S. oil supply and tensions in the Middle East eased after Saudi Arabia halted its military operation in Yemen. Brent crude for delivery in June fell 0.8% to $61.58 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, June-dated light, sweet crude futures fell 1.2% to $55.93. Late Tuesday, the American Petroleum Institute, an industry group, said its data showed a 5.5 million barrel increase in U.S. crude stockpiles last week. The U.S. Energy Information Administrations will release its official data later Wednesday and analysts surveyed by The Wall Street Journal expect the report to show that oil stockpiles rose by 2.8 million barrels. Last week’s data showed an increase of 1.3 million barrels. "Today’s report would likely either make or break the recent bullish momentum," said Daniel Ang, […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Inches Up on Abnormally Cool Weather

By Timothy Puko and Nicole Friedman Natural gas prices strengthened Tuesday on abnormally cool spring weather forecasts, which could increase demand for the heating fuel. Futures for May delivery settled up 3.9 cents, or 1.5%, at $2.575 a million British thermal units on the New York Mercantile Exchange. Now that the peak of winter demand season is past, the gas market is dominated by low volatility and traders who buy and sell based on charts, analysts and a broker said. That has led to small seesaw moves and only a gradual and grinding descent in prices since late December. "Short-term temperature forecasts still tilt bullish, but not enough to sustain price advances much above this week’s highs," energy-advisory firm Ritterbusch & Associates said in a note. The market is likely to remain steady, said Frank Clements, co-owner of Meridian Energy Brokers Inc. Below-normal temperatures in the Midwest in the […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Fall as Saudi-Led Military Operation Ends in Yemen

Oil prices fell as a Saudi-led coalition ended its nearly monthlong military operation in Yemen, easing concerns that violence in the Middle East could affect oil production in the region. Though Yemen has little oil production, the military campaign had sparked fears that the violence could spread to other oil-exporting countries in the region and interrupt output. “I don’t think anybody expected the military operation to end so quickly,” said Phil Flynn , analyst at the Price Futures Group in Chicago. In the oil market, “it definitely accelerated the selling.” On Tuesday, light, sweet crude for May delivery fell $1.12, or 2%, to settle at $55.26 a barrel on the New York Mercantile Exchange, a one-week low. The May contract expired at settlement Tuesday. Brent, the global benchmark, dropped $1.37, or 2.2%, to $62.08 a barrel on ICE Futures Europe. Market participants are waiting for the latest U.S. energy […]

Posted On : Published By : Tom Whipple