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Gazprom CEO Offers Greece a Gas Pipeline but Little Else

The chief executive of Russian state-owned OAO Gazprom pushed a plan Tuesday to sell its natural gas to the European Union via Greece, but made no public offers of immediate sweeteners during a visit to cash-strapped Athens. OAO Gazprom CEO Alexei Miller said in a statement that the company could guarantee annual shipments of 47 billion cubic meters of gas via Greece. He said Greece could raise commercial loans against the guaranteed deliveries. Greece, which is in difficult talks with European leaders over much-needed financing, is hoping for an economic boost from Russia, such as cheaper natural gas supplies or an exemption from Moscow’s ban on European food imports. But there have been no major agreements despite a two-day trip by Greek Prime Minister Alexis Tsipras to Moscow earlier this month, where he met Russian President Vladimir Putin and criticized the EU’s sanctions policy against Russia over the Ukrainian […]

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Yergin: Why the oil-price collapse changes everything

General Ideas It was not long ago that $100 per barrel oil was accepted as the new normal. China’s strong economic growth (and energy demand) would continue apace, and OPEC and Saudi Arabia would continue to play the traditional role as swing producer in support of oil prices. Events have proved otherwise. Oil markets have entered a new period. Now it is supply, not demand, which is the key the factor, making not-so-distant discussions of “peak oil” seem very far gone. China’s economy, while still growing, has slowed. And by leaving oil prices to the market, OPEC has effectively ceded the role of de facto swing producer to a country that hardly expected it—the United States. Markets never cease in their ability to upend current expectations and confound established thinking. That is certainly the case for the world of energy in a year that has seen the rapid creation […]

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Saudi Arabia’s Oil-Price War Is With Stupid Money

Saudi Arabia’s Oil-Price War Is With Stupid Money thumbnail Saudi Arabia is not trying to crush U.S. shale plays. Its oil-price war is with the investment banks and the stupid money they directed to fund the plays. It is also with the zero-interest rate economic conditions that made this possible. Saudi Arabia intends to keep oil prices low for as long as possible. Its oil production increased to  10.3 million barrels per day  in March 2015. That is 700,000 barrels per day more than in December 2014 and the highest level since the Joint Organizations Data Initiative began compiling production data in 2002 (Figure 1 below). And Saudi Arabia’s  rig count  has never been higher. Figure 1. Saudi Arabian crude oil production and Brent crude oil price in 2015 U.S. dollars. Source: U.S. Bureau of Labor Statistics, EIA and Labyrinth Consulting Services, Inc. Market share is an important part of the motive but Saudi Minister […]

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EU data shoves oil prices lower

Weak construction data from the European Union helps push oil prices lower in Monday trading. File Photo by John Angelillo/UPI NEW YORK, April 20 (UPI) — Weak economic data Monday from the European Union offset concerns about threats to the oil sector in Saudi Arabia, pushing oil prices lower. The price for Brent crude oil, the global benchmark, fell more than 1 percent from the previous close to trade at $62.71 per barrel early Monday. Brent is up more than 10 percent since the start of April, but still more than $40 per barrel below the June 2014 level. Crude oil is trading in a bear market because of a steady increase in oil output from key producers Saudi Arabia and the United States. While global demand for oil is increasing, key members of the world economy are still working to regain footing lost during the last recession. Eurostat, […]

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Oil extends gains on lower U.S. rig count, Chinese stimulus

SINGAPORE (Reuters) – Oil prices rose on Monday, extending last week’s gains as a drop in the number of U.S. rigs drilling for crude pointed to lower supply later in the year, while China’s latest stimulus measure also underpinned the market. U.S. oil drilling rigs fell for a record 19th straight week to the lowest since 2010, data from Baker Hughes showed. While the drop slowed, suggesting the collapse in drilling could be coming to an end, Schlumberger Ltd ( SLB.N ), the world’s largest oilfield services company, said an eventual recovery in U.S. oil drilling activity may never reach last year’s frenzied pace. China’s central bank cut the amount of cash that banks must hold as reserves on Sunday, the second industry-wide cut in two months, adding liquidity to bolster the economy. Brent crude CLOc1 was up 70 cents at $64.15 a barrel by 0532 GMT. It settled […]

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Dollar rises as Greece anxieties sting the euro

NEW YORK (Reuters) – The dollar rose broadly on Monday, with the euro sliding more than half a percent against the U.S currency, on growing concern that Greece may default on debts. The euro was last off 0.70 percent against the dollar at $1.0730, weighed down by the European Central Bank’s bond-buying program and the risk Greece could leave the single currency within months. Athens is in negotiations with its euro zone partners and the International Monetary Fund over reforms required to unlock remaining bailout funds. Public sector entities in Greece were ordered to transfer idle reserves to the central bank to help with a cash squeeze. The European Central Bank’s vice president, Vitor Constancio, said on Monday that Greece would not necessarily have to leave the euro if it defaults on its debt. Still, ECB officials are concerned about the country’s looming 1 billion-euro bill due to the […]

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Oil prices source of imbalance, global banks say

World Bank and International Monetary Fund say during spring conference crude oil prices are among the factors upending balance in the global economy. Photo courtesy of IMF. WASHINGTON, April 20 (UPI) — Backers of the World Bank and International Monetary Fund are called on to remain vigilant against monetary shocks like the low price of oil, the banks said. The IMF and World Bank issued a joint statement following their annual spring conference in Washington. The meeting came as global economic dynamics are shifting in an era of lower oil prices, a key barometer of economic health. Both institutions said the global economy this year is growing faster than in 2014, though rates of growth are uneven. "We remain vigilant to the risks from potential financial market volatility, movements in exchange rates and oil and other commodity prices, and sluggish global trade," they said in a joint statement issued […]

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Natural Gas Slumps as Pace of Supply Growth Accelerates

By Christian Berthelsen Natural gas futures posted their largest one-day percentage drop in more than a month, as the market comes to grips with accelerating supply growth and warmer-than-expected weather forecasts for early May. The May contract fell 9.8 cents, or 3.7%, to settle at $2.536 a million British thermal units on the New York Mercantile Exchange. The loss, combined with Friday’s decline, wiped out much of last week’s rally. The market opened down and continued to grind lower over the course of the trading session. Analysts have been noting the accelerating pace of production and growth in stored supplies, with the industry adding between 3 billion and 6 billion cubic feet of output above demand levels every day. "We have a lot of gas coming out of the ground," said Gene McGillian, senior analyst with futures brokerage Tradition Energy in Stamford, Conn. Teri Viswanath, a strategist at BNP […]

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Iran wants OPEC to pave way for its extra oil production when sanctions lifted

ANKARA (Reuters) – Members of the Organization of the Petroleum Exporting Countries (OPEC) should prepare for extra Iranian crude production when Western sanctions on Tehran are lifted, Iran’s oil minister was quoted on Tuesday by state news agency IRNA as saying. "We expect the members of OPEC to pave the ground for (an) increase of Iran’s oil production that will reach global markets when sanctions are lifted," Bijan Namdar Zanganeh said during a meeting with his Venezuelan counterpart Asdrubal Chavez in Tehran, the agency reported. Iran, once OPEC’s second-largest producer after Saudi Arabia, hopes to boost crude exports by as much as 1 million barrels per day (bpd) if Tehran and six major powers finalize a nuclear agreement by a June 30 deadline. Sanctions imposed by the European Union and the United States have halved Iran’s oil exports to just over 1 million barrels per day since 2012. Lower […]

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U.S. says might talk to Iran about regional stability, cites Syria

WASHINGTON (Reuters) – The U.S. State Department said on Monday it might talk with Iran about promoting regional stability, noting it had been open to including Iran in past efforts to achieve a Syrian peace deal if Tehran had altered its policy. But it drew a distinction between talking to Iran about issues beyond its nuclear program and actually working with Tehran on such matters, something Washington has ruled out. State Department spokeswoman Marie Harf made the comments when asked about a call by Iranian Foreign Minister Mohammed Javad Zarif in a New York Times opinion piece for regional dialogue to address the crises in countries such as Iraq, Syria and Yemen. Washington was put in an awkward position since it blames Tehran for much of the instability and because it does not wish to upset Gulf Arab allies who fear a nuclear deal being negotiated with Iran may […]

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