Prince Charles shuns fossil fuel investments
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U.K. Tells BP it Would Oppose Foreign Takeover of the Company
ENLARGE The U.K. government told BP it would intervene to prevent any foreign takeover of the oil company. Photo: NICK ANSELL/ZUMA PRESS LONDON—The U.K. government told BP PLC that it would oppose any potential foreign takeover of the company because it wants the oil giant to remain a British company with global clout. With a market cap of more than $132 billion, BP would be a huge takeover target—and a big bite for even its largest rivals. But amid today’s low oil prices, speculation has swirled over possible deal making. Earlier this month, Royal Dutch Shell PLC reached a deal to buy UK-based BG Group PLC for some $70 billion. A British government official said Sunday that the U.K. government told BP it would intervene to prevent any foreign takeover bid of BP, one of the world’s biggest oil companies. It would also seek to prevent a takeover from […]
War Haunts Russia’s Southern Fringe, Threatening Pipelines
Armenian soldiers during a cease fire during the Nagorno-Karabakh War in 1993. Russia’s southern periphery is closer to open war than at any time since the 1990s. Hostilities between Azerbaijan and Armenia are mounting 21 years after a cease-fire froze a conflict that flared in the dying days of the Soviet Union. During the relative calm, companies including BP Plc poured billions of dollars into producing oil and gas in Azerbaijan and building pipelines to link the country with southern Italy. The upswing in violence now threatens to put some of those investments at risk and destabilize a region that separates Russia from Turkey and Iran. A May 3 election looming in Nagorno-Karabakh, the region Armenians took over in the war more than two decades ago, may trigger a wider confrontation, the Royal Bank of Scotland Group Plc said. The vote “could further escalate the tensions, increasing the risks […]
Greece’s Day of Reckoning Inches Closer as Payments Loom
Greek Finance Minister Yanis Varoufakis. Greece is struggling to amass cash to pay its pensioners and employees this week, as the country and its creditors resume efforts to break the deadlock in bailout talks. Europe’s most-indebted state is counting on deposits of local governments, cities and other funds to meet end-of month payments of over 1.5 billion euros ($1.6 billion) after euro area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. That may further strain liquidity buffers at banks, after households and companies withdrew almost 1.3 billion euros in savings last week, according to a person who’s not authorized to speak publicly on the matter. “Despite the inelegant way the government did it, we will deposit our reserves at the Bank of Greece,” Yiannis Boutaris, Mayor of Thessaloniki, Greece’s second-largest city, said in comments on Mega TV. As polls show that a […]
Cause behind African migrant flood has terrifying implications for the world
Tags: Africa | climate change | Migrant | sahel | shipwreck Italian coastguard and Armed Forces of Malta personnel in protective clothing carry the body of a dead immigrant off the ship Bruno Gregoretti in Senglea, in Valletta’s Grand Harbour, April 20, 2015. REUTERS/Darrin Zammit Lupi The migrant crisis in the Mediterranean is symptomatic of deep dislocation in the Sahel region and sub-Saharan Africa — dislocation exacerbated by climate change. Climate change is affecting such basic environmental conditions as rainfall patterns and temperatures and is contributing to more frequent natural disasters like floods and droughts. Over the long term, these changing conditions can undermine the rural livelihoods of farming, herding and fishing. The resulting rural dislocation is a factor in people’s decisions to migrate. Migratory decisions are complex, of course, and nobody would argue that climate change is the only factor driving them. But climate change cannot be ignored. […]
The Last Two Oil Crashes Show Peak Oil Is Real
Summary Recent oil crashes show you the hard floor for gauging value oil company equities. Properly understood, the crashes lend an insight into the concept of Peak Oil. All oil equity investors should understand the overarching upward trend on display here. PLEASE NOTE: ALL prices used in this article are using current 2015 dollars, inflation adjusted using the US BLS inflation calculator Generally, when I invest, I try to keep my thesis very simple. Find good companies, with good balance sheets and some kind of specific catalytic event on the horizon. But when one starts to concentrate their holdings in a sector, as I have recently in energy (see my recent articles on RMP Energy (OTCPK: OEXFF ) and DeeThree Energy (OTCQX: DTHRF ) , you need to also get a good handle on the particular tail or headwinds that are affecting it. Sometimes a sector like oil (NYSEARCA: […]
A Look At The “Confounding” Global Supply Glut
On Saturday we once again explored the question of whether central banks are creating deflation. The idea that post-crisis DM monetary policy may be causing disinflationary pressures to build is somewhat counterintuitive on its face but in fact makes quite a lot of sense. Here’s how we explained it: The premise is simple. By keeping rates artificially suppressed, the central banks of the world effectively make it impossible for the market to purge itself of inefficient actors and loss-making enterprises. As a result, otherwise insolvent companies are permitted to remain operational, contributing to oversupply and making it difficult for the market to reach equilibrium. The textbook example of this dynamic is the highly leveraged US shale complex which, by virtue of both artificially low borrowing costs and the Fed-driven hunt for yield, has retained access to capital markets in the midst of the oil slump and has thus continued […]
Oil Prices Retreat
An oil drill near a construction site for homes and office buildings in Midland, Texas. ENLARGE Photo: Getty Images U.S. oil prices slipped Friday as crude traders refocused on signs of oversupply. Light, sweet crude for June delivery lost 59 cents, or 1%, to $57.15 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, pared its gains from early in the session but still ended at a fresh five-month high of $65.28 a barrel, up 43 cents, or 0.7%, on the ICE Futures Europe exchange. Investors were swayed by indications that global oil production is growing. John Kilduff, founding partner of Again Capital in New York, said there was news that Russia is unexpectedly increasing production. Norway is also pushing to approve a $15 billion project in the North Sea that could be profitable when oil costs $32 a barrel. Signs from earlier this month […]
Oil prices edge down from 2015-highs, but set for weekly gain
SINGAPORE (Reuters) – Oil prices held steady on Friday near 2015-highs reached the session before, remaining on track for weekly gains after renewed air strikes in Yemen stoked concerns on the security of Middle East oil shipments. Crude prices on both sides of the Atlantic have surged almost $10 a barrel this month amid rising tension in the Middle East, while slowing U.S. production growth and signs of stronger global demand have also provided support. Brent crude for June delivery had climbed 22 cents to $65.09 a barrel by 0706 GMT (3.06 a.m. ET), after settling up $2.12 on Thursday. The benchmark touched its highest since Dec. 10 at $65.58 on Thursday. U.S. crude for June delivery rose 8 cents to $57.82 a barrel, after settling up $1.58. The front-month contract hit a 2015-high of $58.41 on Thursday and is on course for its sixth straight weekly gain. The […]
Oil firms face further cuts as low prices linger
LONDON (Reuters) – Oil majors may need deeper cuts to oil and gas exploration and production spending as they grapple with an extended period of low crude prices. The industry is expected to reveal another set of grim earnings for the first quarter when benchmark Brent prices averaged $55 a barrel, almost half the level of a year ago. Exxon Mobil Corp., Royal Dutch Shell, BP and France’s Total have already responded by cutting 2015 capital spending by 10 to 15 percent, delaying and scrapping projects and cutting operating costs. And despite a sense among some industry executives that oil prices may have hit their 2015 lows following a decline in U.S. shale production, more cuts may be needed. Exxon, the world’s biggest listed oil company, has reduced 2015 capital spending by 12 percent to $34 billion. "We’ll see throughout the year whether we stay there (capex) or not, […]
Oil markets adrift after reaching 2015 high
Low price of oil could throttle future growth potential from key shale basins in the United States, a federal briefing said Friday. File photo by Gary C. Caskey/UPI NEW YORK, April 24 (UPI) — Crude oil prices were in mixed territory early in the Friday session following a record-setting day, though analyst sentiment still favors a bear market. The price for Brent crude oil , the global benchmark, made modest gains early Friday to trade near $65 per barrel, its record high for the year. Brent struggled to hold $50 per barrel in late 2014 and early 2015 as markets were weighed heavily on the supply side. For the week, the price is up 3.6 percent after hitting a record high for the year in Thursday’s session. Crude oil prices are low enough to put pressure on the exploration and production side of the global energy sector as companies […]
Brent/WTI spread settles above $8/b on Yemen risk, bearish US supply
The June ICE Brent/NYMEX WTI spread settled $1.02 wider at $8.13/barrel Friday after hitting a one-month high early in the session amid ongoing fighting in Yemen and bearish supply pressure in the US. The prompt spread widened to $8.41/b during morning US trade, the highest since March 23, when the spread settled at $8.47/b. NYMEX June crude settled 59 cents lower at $57.15/b, while ICE June Brent ended 43 cents higher at $65.28/b. Products were led by NYMEX May RBOB, which settled 1.23 cents higher at $2.0079/gal. May ULSD settled 44 points higher at $1.9283/gal. "The broad perspective is this ongoing concern regarding Yemen, with the Saudis and their allies increasing the pressure there, when we had thought earlier in the week that they were going to back off," CHS Hedging analyst Tony Headrick said. Article continues below… "So there’s the familiar risk premium being added to Brent, while […]
Natural Gas Unchanged
By Timothy Puko Natural gas pared gains back to unchanged as bearish bank analysts are advising summer speculators not to get excited. Natural gas for May delivery settled at $2.531 a million British thermal units on the New York Mercantile Exchange. Prices have been falling since November as near-record production has kept the market oversupplied. BNP Paribas SA said Friday it cut its 2015 price forecast by 5% to $2.85/mmBtu because it doesn’t expect there to be enough demand for the fuel to heat or cool building in the months to come. "The mild start to the cooling season threatens to extend the discount window for natural gas prices," analyst Teri Viswanath said in a note to clients. Bets on falling prices outnumber bets on rising prices by more than three to two, according to data from U.S. regulators. But that has helped limit losses in recent weeks, analysts […]
Iraq tells partners to lift Basra Heavy crude from May: sources
SINGAPORE (Reuters) – Iraq’s State Oil Marketing Organisation (SOMO) has informed its partners they can start loading Basra Heavy crude from May, instead of its flagship light grade, two sources with direct knowledge of the matter said on Friday. The No.2 OPEC producer is splitting its southern oil production into two streams – a light and a heavy grade – to resolve quality issues dogging its exports. SOMO told its partners that the new heavy grade could be loaded from single point mooring units 1 and 3 in southern Basra, the sources said. But two of its partners due to receive the heavy grade complained they had already sold Basra Light crude that was allocated to their companies 1-2 months ago for loading in April and May. "We were expecting it (the launch of Basra Heavy) to happen in June but it came earlier than expected," said a source […]
American Naval Force Off Yemen Gets Credit After Iranian Convoy Turns Away
WASHINGTON — Pentagon officials on Friday credited the deployment of an American aircraft carrier group in waters off the coast of Yemen for a decision by Iran to turn back a naval convoy suspected of carrying weapons bound for Shiite rebels. Although it was unusual to dispatch such a large American naval force to the Arabian Sea on an interdiction and deterrence mission, Pentagon officials said the deployment — and Iran’s apparent response — had lowered tensions in the continuing regional proxy war between Tehran and Saudi Arabia. The nine-ship Iranian convoy had turned north and east near the coast of Oman, in the direction of Iran, Defense Department officials said. Col. Steven H. Warren, a Pentagon spokesman, said, “We do not know their future intentions,” but added that “it’s fair to say that, yes, this appears to be a de-escalation of some of the tensions.” Earlier this week, […]
Yemeni Rebels Lash Out at Saudis on Border
ENLARGE Saudi soldiers on watch from behind sandbag barricade at the border with Yemen in Jazan, Saudi Arabia this past week. Photo: Hasan Jamali/Associated Press NAJRAN, Saudi Arabia—Yemen’s Houthi militias have no ability to confront the Saudi jets that pound them with deadly airstrikes. But on the ground, they are a much more formidable foe, exacting revenge in Saudi casualties with a string of border attacks. The 870-mile-long frontier stretches from the craggy mountains in Saudi Arabia’s Red Sea province of Jizan, where deadly fighting with the Houthis tested the mettle of Saudi troops in 2009, and through the sandy deserts and basalt hills in the province of Najran, farther inland, where most of the recent Houthi attacks concentrate. These parts of Saudi Arabia were incorporated into the kingdom only after a war with Yemen in 1934, and, like many Yemenis, the Houthis—whose stronghold of Saada lies just an […]
More fighting, air strikes in Yemen, civilian death toll exceeds 550
ADEN (Reuters) – Fighting between Yemen’s warring factions raged in southern and central parts of the country and air strikes hit Houthi militia forces in Aden on Friday, but there were no fresh moves toward dialogue. Saudi Arabia says it is winding down its month-old bombing operation against the Iran-allied Houthis and forces loyal to Yemen’s former president. But Riyadh pounded targets with at least 20 airstrikes across Yemen on Thursday and 10 more on Friday. The civilian death toll from the fighting and airstrikes since the bombing started on March 26 has reached an estimated 551 people, the United Nations said on Friday. Its children’s agency UNICEF said at least 115 children were among the dead. Washington and other Western countries backing the Saudi-led aerial campaign have grown increasingly worried about the humanitarian crisis on the ground and also about the risk of Sunni Muslim jihadist groups taking […]
Billions at risk for Ghana, oil firms from ocean boundary ruling
DAKAR/ACCRA (Reuters) – Ghana’s decision to seek arbitration in a dispute with Ivory Coast over an oil-rich basin in the Atlantic could prove costly for the country and a consortium led by Tullow if a court halts development there. The International Tribunal for the Law of the Sea will rule on Saturday on Ivory Coast’s February request for a moratorium on activity in the basin. The decision is part of legal proceedings on a maritime border dispute sought by Ghana’s President John Dramani Mahama in September. Although many expect the dispute to be ultimately settled in Ghana’s favor, analysts say a ruling that prevented the $4.9 billion offshore TEN oil and gas field opening in mid-2016 would be a further blow to the battered Ghanaian economy. "Even if Ghana wins on the boundary eventually, as most people expect, they stand to lose two years of revenues from TEN which […]
Kazakhstan hosts oil-spill roundtable
Parties to a roundtable discussion on oil spills in Kazakhstan look to response to Deepwater Horizon incident in 2010 as a case study. File Photo by UPI/U.S. Coast Guard. ASTANA, Kazakhstan, April 24 (UPI) — The government in oil-rich Kazakhstan hosted a roundtable discussion on developing a regional response to spills, the OSCE said Friday. The Organization for Security and Cooperation in Europe in coordination with the Kazakh Energy Minister and the U.S. Embassy in Kazakhstan organized a discussion on how best to plan a regional response to an oil spill program. "Once approved, the regional oil spill plan will be an important tool to ensure that the regional authorities have a system that will ensure effective co-ordination and integration of all relevant resources both from government and private sectors," Peter Taylor, a manager for the regional oil spill response organization, said in a statement. The roundtable brought more […]
Nigeria: Petroleum Minister, Alison-Madueke, Denies Seeking Asylum
Nigeria’s Minister of Petroleum Resources, Diezani Alison-Madueke, has denied planning to flee the country to escape alleged corruption charges under the incoming Buhari government. Mrs. Alison-Madueke struck a defiant tone Wednesday, dismissing allegations that six countries had denied her requests for asylum. The minister said she had no plan to escape as she was not indicted for any offence. Following her recent meeting with former Head of State, Abdulsalami Abubakar, the minister said speculations have been rife that she is looking for a “soft landing” from the in-coming administration. “I have not sought such assistance because I am not aware that I have been indicted of any crime that I will need a soft landing,” Mrs. Alison-Madueke told journalists at the presidential villa in Abuja Wednesday. “Over the last four years, I have been severally and unfortunately accused and labeled in so many malicious and vindictive ways. “I have […]
Russia eyes Argentinian energy role
President of Argentina Cristina Fernandez de Kirchner on hand for signing of memorandum of cooperation with Russian energy company Gazprom on April 23, 2015. Photo by UPI/Andrew Harrer. MOSCOW, April 24 (UPI) — Russian energy company Gazprom said it signed a memorandum of cooperation in Moscow to work alongside its counterparts on Argentina. Argentine President Cristina Fernandez de Kirchner met in Moscow with her Russian counterpart, Vladimir Putin, to discuss bilateral relations . Gazprom said its management team signed the memorandum with Argentinian energy company YPF on the sidelines of the meeting. Russia expressed interest in Argentina’s energy market in 2012 following the nationalization of YPF. The following year, Gazprom won a tender to supply Argentina with 15 shipments of liquefied natural gas with a total of 1 million tons through 2015. In the Latin American market, both sides have focused on development the Vaca Muerta shale site in […]
These U.S. Companies Are Hurting From Venezuela’s Hyperinflation
Every time Venezuela introduces a new, weaker currency exchange rate, some of the world’s largest companies face the decision of whether or not to adopt it. If they eventually do switch to the less favorable rate, it can result in multimillion-dollar charges that drag down balance sheets and earnings statements. At least 46 S&P 500 companies, about 10 percent of the total index, have told investors about potential exposure to Venezuela’s currency in the past year, according to a search of company filings compiled by Bloomberg. Venezuela currently has three legal exchange rates that are pre-set by the government, and companies that operate there have to decide which one they should use to value net monetary assets and report sales. The rates are currently at 6.3, 12 and 196.95 bolivars per dollar. The first two rates (called the Cencoex rate and the Sicad rate) are allowed for transacting government-authorized priority goods including food, medicine and car parts. […]
EU sees need for LNG in energy plan
European Commissioner for Energy Miguel Arias Canete says pipelines aren’t the only solution to European energy diversification schemes. Photo courtesy European Commission DUBLIN, Ireland, April 24 (UPI) — Liquefied natural gas needs to re-emerge as a central component of European energy security strategies, the European commissioner for energy said. The European Commission this week filed statements of concern against Russian natural gas company Gazprom, saying it was violating antitrust measures in Eastern and Central Europe. The European market gets about 20 percent of its gas needs met by Russia, though most of that supply runs through a Soviet-era transit network in Ukraine, where lingering political and national security issues present risks to European energy security. Miguel Arias Canete, the European commissioner for energy, told delegates at a gas infrastructure conference in Dublin the situation in Ukraine has sharpened the sense of risks to the European energy market. "We need […]
CNOOC revenue off nearly 40 percent
Chinese oil company CNOOC latest major energy company to announce a decline in revenue because of a weak crude oil market. Photo by tcly/Shutterstock BEIJING, April 24 (UPI) — China National Offshore Oil Corp. said Friday a "harsh" climate for global oil prices in part led to a 39.9 percent decline in revenue for the first quarter. The company, China’s top offshore oil producer, said oil and gas sales revenue for the first quarter of the year dropped off substantially in part because of slumping global crude oil prices during the period. The price for Brent, the global crude oil benchmark, dipped below the $50 per barrel mark in early January, a value that was less than half its June 2014 high. Peer companies, from BP to oil services company Schlumberger, have cut spending or staff numbers in order to cope with the weak crude oil market. CNOOC said […]
China’s Cnooc to Curb Spending as Oil’s Slide Cuts Into Revenue
ENLARGE A CNOOC logo is seen at the entrance of China National Offshore Oil Corp office tower in Beijing on March 20, 2013. Cnooc has pledged to cut spending by roughly one-third compared with a year ago. Photo: PETAR KUJUNDZIC/REUTERS BEIJING— Cnooc Ltd. is likely to slash spending further after low oil prices led to a sharp drop in the Chinese state-controlled oil giant’s first-quarter revenue. The partial results released on Friday by the listed unit of state-owned China National Offshore Oil Corp. indicate further pain ahead for the Chinese oil industry as it grapples with a price slump that is challenging energy companies around the globe, as well as softer demand at home. Cnooc has pledged to cut spending by roughly one-third compared with a year ago, but its figures indicate it has more cutting to do to reach that goal. “Capital expenditure was reduced significantly,” said Neil […]
EIA report highlights top 100 U.S. oil and natural gas fields
Source: U.S. Energy Information Administration, based on Form EIA-23L and DrillingInfo Note: The top 100 largest oil and natural gas field locations are plotted using latitude-longitude of the approximate center of the field. Dot diameter is relative to its 2013 proved reserves. The top 100 oil fields in the United States accounted for 20.6 billion barrels of crude oil and lease condensate proved reserves, or 56% of the U.S. total in 2013. The top 100 natural gas fields accounted for 239.7 trillion cubic feet of natural gas proved reserves, 68% of the U.S. total. Proved reserves are defined as estimated quantities of oil and natural gas that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. Source: U.S. Energy Information Administration, based on Form EIA-23L and DrillingInfo Note: The top 100 largest oil and natural gas field locations are plotted […]
BHI: US rig count drops 22 units in 20th straight week of losses
HOUSTON, Apr. 24 OGJ Staff Writer The US drilling rig count fell 22 units to 932 rigs working during the week ended Apr. 24, marking the 20 th consecutive week of declines, according to data from Baker Hughes Inc. The count has now plunged 988 units since the week ended Dec. 5 ( OGJ Online, Dec. 5, 2014 ). The total of 932 is the lowest since July 17, 2009, and 929 fewer units compared with this week a year ago. Analysts at Raymond James & Associates Inc., however, have predicted an impending trough in the count as well permitting activity picks up ( OGJ Online, Apr. 17, 2015 ). “All things considered, we believe that we are close to a bottom in the rig count, which is likely to be seen in the next couple of months,” they said earlier this week in an energy update. RJA tracks […]
Oil at $65 Seen Freeing 500,000 Barrels From Shale Fracklog
Oil needs to recover to $65 a barrel for U.S. drillers to tap a pent-up supply of oil locked in shale wells and unleash more crude on markets than is produced by Libya. Dipping into this “fracklog” would add an extra 500,000 barrels a day of oil into the market by the end of next year, Bloomberg Intelligence said in an analysis on Thursday. Producers in oil and gas fields from Texas to Pennsylvania have 4,731 idled wells at their disposal. Prices are rebounding from a six-year low after drillers idled half the nation’s oil rigs, slowing the shale boom that boosted production to the highest in four decades. The number of wells waiting to be hydraulically fractured, known as the fracklog, has ballooned as companies wait for costs to drop. That could slow the recovery as firms quickly finish wells at the first sign of higher prices. “Once […]
Peak Oil: Still The Problem And Not The Answer
General Ideas While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014. I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. [1] “Animosity” directed to fossil fuels? Has a nice right-wing playbook buzz to it, but those of us concerned with facts have an annoying habit of insisting that all of them be considered, and that consequences must also find a place at the table where overly-broad statements otherwise prefer being alone. And how exactly does one direct animus toward an energy source which has indeed made it […]
British shale decisions delayed
Local council in United Kingdom delays decisions on fledgling shale gas campaign until June. File Photo by UPI/Gary C. Caskey. PRESTON, England, April 24 (UPI) — A local council at the center of a fledgling shale natural gas program in the United Kingdom said it needed more time to review planning applications. Cuadrilla Resources estimates there may be as much as 200 trillion cubic feet of shale natural gas in Lancashire. The Lancashire County Council recommended rejecting the companies’ drilling applications, though Caudrilla in January was given more time to address concerns about noise pollution and traffic in the area. The county council said it opted to move the decision on operations at two sites in the region to June 30. "The extension follows a request by Cuadrilla to consider additional information about the applications," the council said in a Thursday statement. An initial decision was expected by April […]
TransCanada Asks U.S. Permission for New Pipeline Amid Keystone Delay
WASHINGTON— TransCanada Corp., the Canadian energy giant behind the Keystone XL pipeline, is asking the U.S. government to permit a new and different pipeline project. The Calgary, Alberta–based company filed an application with the State Department on Wednesday to receive a presidential permit that will let it construct a 200-mile pipeline across the U.S.-Canadian border, according to a company spokesman. The proposed $600-million Upland Pipeline Project, first reported by The Wall Street Journal in February , aims to transport up to 300,000 barrels a day of North Dakota crude to a connection in Saskatchewan. From there, approximately 70,000 barrels of that oil is expected to flow on TransCanada’s planned Energy East pipeline, which aims to ship up to 1.1 million barrels of oil a day nearly 3,000 miles across Canada to refineries and ports along the country’s East Coast. The rest of the capacity would feed other pipelines, although […]
U.S. Oil Rig Count Falls Again
The U.S. oil-rig count fell by 31 to 703 in the latest week, the lowest level since October 2010, according to Baker Hughes Inc. The number of U.S. oil drilling rigs—a proxy for activity in the oil industry—has fallen sharply since prices headed south last year. There are now 56% fewer rigs compared with a peak of 1,609 in October, and Friday’s report marks the 20th-straight week of declines. U.S. oil prices hit their 2015 highs recently on hopes production is finally showing signs of falling. U.S. crude-oil futures were recently down 1.2% at $57.11. According to Baker Hughes, gas rigs were up eight to 225 this week. Offshore rig count was 34, up one from last week and down 20 from a year earlier. For all rigs, including natural gas, the week’s drop was 22 to 932. The data report two weeks ago showed the first drop below […]
Canada Issues Directive Aimed at Slowing Crude-Carrying Trains
ENLARGE In this July 6, 2013, photo, smoke rises from railway cars that were carrying crude oil after derailing in downtown Lac Megantic, Quebec. The Canadian government issued an emergency directive late Thursday aimed at slowing crude-carrying trains traveling through urban areas. Photo: Associated Press Canada issued an emergency directive late Thursday aimed at slowing crude-carrying trains traveling through urban areas and requiring increased inspections and risk assessments along key routes used for transporting dangerous goods. The directive is the latest in a series of steps by the Canadian government to boost rail safety in the wake of a number of derailments of crude-carrying trains as crude-by-rail shipments rise. Trains will be required to slow to a maximum of 40 miles an hour through highly urbanized areas, Transportation Minister Lisa Raitt in a statement. She also ordered more inspections and risk assessments along major routes used for the transport […]
Glut of Capital and Labor Challenge Policy Makers
A coal shoot loads barges with coal outside Pittsburgh. ENLARGE Photo: Bloomberg News The global economy is awash as never before in commodities like oil, cotton and iron ore, but also with capital and labor—a glut that presents several challenges as policy makers struggle to stoke demand. “What we’re looking at is a low-growth, low-inflation, low-rate environment,” said Megan Greene, chief economist of John Hancock Asset Management, who added that the global economy could spend the next decade “working this off.” The current state of plenty is confounding on many fronts. The surfeit of commodities depresses prices and stokes concerns of deflation. Global wealth—estimated by Credit Suisse at around $263 trillion, more than double the $117 trillion in 2000—represents a vast supply of savings and capital, helping to hold down interest rates, undermining the power of monetary policy. And the surplus of workers depresses wages. Meanwhile, public indebtedness in […]
EU frustration over Greece hits boiling point at eurogroup meeting
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EIA: Eagle Ford’s Eagleville oil field largest in US
The Eagleville oil field in South Texas, discovered only in 2009, is the largest in the US, according to a supplement to a report from the US Energy Information Administration Continue Reading
What the Next Two Weeks Holds in Store in the Greek Crisis Saga
People sit at the foot of Acropolis Hill in Athens, Greece. Photographer: Kostas Tsironis/Bloomberg A euro area finance ministers meeting over the disbursement of bailout funds ended in acrimony on Friday, as creditors expressed frustration with the country’s refusal to comply with the terms attached to its emergency loans. While focus now turns on a May 6 interest repayment to the International Monetary Fund and the next Eurogroup meeting on May 11 in Brussels, the country has a number of funding hurdles to clear before then and beyond. From Monday through to the end of the month, the government needs to pay pensions and salaries to civil servants and retirees. The country’s alternate finance minister, Dimitris Mardas said Wednesday there’s not enough cash in state coffers to meet these obligations, unless local authorities comply with a decree ordering them to transfer reserves to the Bank of Greece for short-term […]
Oil prices edge down from 2015-highs, but set for weekly gain
SINGAPORE (Reuters) – Oil prices held steady on Friday near 2015-highs reached the session before, remaining on track for weekly gains after renewed air strikes in Yemen stoked concerns on the security of Middle East oil shipments. Crude prices on both sides of the Atlantic have surged almost $10 a barrel this month amid rising tension in the Middle East, while slowing U.S. production growth and signs of stronger global demand have also provided support. Brent crude for June delivery had climbed 22 cents to $65.09 a barrel by 0706 GMT (3.06 a.m. ET), after settling up $2.12 on Thursday. The benchmark touched its highest since Dec. 10 at $65.58 on Thursday. U.S. crude for June delivery rose 8 cents to $57.82 a barrel, after settling up $1.58. The front-month contract hit a 2015-high of $58.41 on Thursday and is on course for its sixth straight weekly gain. The […]
U.S. Oil Prices Hit 2015 High on Supply Expectations
ENLARGE Pumping equipment in North Dakota. Traders are watching for signs that robust U.S. crude-oil production is easing. Photo: Associated Press Oil prices rose to their highest level of the year on Thursday on expectations the oversupply of crude oil may be shrinking and concerns about violence in the Middle East. Light, sweet crude for June delivery settled up $1.58, or 2.8%, to $57.74 a barrel, the highest settlement since Dec. 12, on the New York Mercantile Exchange. Brent, the global benchmark, rose $2.12, or 3.4%, to $64.85 a barrel on the ICE Futures Europe exchange, the highest level since Dec. 9. In the U.S., signs of elevated demand for gasoline fuels boosted prices, along with a reported drop in crude-oil supplies at a key storage hub. Stockpiles of gasoline in the U.S. fell more than expected last week to the lowest level of the year, the Energy Information […]
Oil prices edge lower on rising U.S. inventories
SINGAPORE (Reuters) – Oil prices fell slightly on Thursday as rising U.S. crude inventories due to robust shale production outweighed concerns over renewed air strikes in Yemen. Saudi-led coalition warplanes continued bombing Yemen on Wednesday despite an announcement by Riyadh a day earlier that it was ending its campaign of air strikes. While Yemen is not among the biggest producers in the Middle East, others in the region ship crude bound for Europe along the Gulf of Aden on Yemen’s southern coast and through the narrow straits of Bab el-Mandeb, between Yemen and Djibouti. Oil prices have risen as much as $10 this month due to concerns over potential supply disruption as well as signs of stronger global demand. Brent crude for June delivery was down 40 cents at $62.33 a barrel by 0724 GMT, after settling 65 cents higher. U.S. crude for June delivery was trading 30 cents […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]