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IEA Chief Economist: No Immediate Oil Market Impact After Iran Deal

NEW DELHI—It could take three to five years for a new wave of Iranian oil to significantly increase world petroleum supplies and have a lasting impact on prices, the chief economist of the International Energy Agency said Monday. The prospect of a deal to lift Western sanctions in exchange for limits on Iran’s nuclear program has added a new layer of volatility to an oil market reeling from a historic collapse in prices, from about $115 a barrel last summer to a low of $47 in January. Brent crude, the global benchmark, was trading at about $59 Monday afternoon in London. Iranian officials have said they could ramp up production quickly, adding as much as a million barrels a day to the world’s supply. But Fatih Birol, the chief economist at the International Energy Agency, said in an interview that it would take time for Iran to boost its […]

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Futures prices point to more balanced oil market in second half: Kemp

LONDON (Reuters) – (John Kemp is a Reuters market analyst. The views expressed are his own) Professional commodity traders watch spreads (differences between the prices for adjacent futures contracts) rather than spot prices as the best indicator of the balance between supply and demand. In crude, the narrowing spreads for both Brent and West Texas Intermediate (WTI) indicate a closer balance between supply and demand in the second half of the year than in the first. Periods of excess supply are normally characterized in futures prices by a “contango” structure, an obscure term that originated in the 19th century. In contango, contracts for deferred delivery trade at a premium to the spot price to compensate the seller for the costs of financing, storing and insuring the product before delivery. By the middle of February, the futures market for crude was trading in a wide contango, reflecting the steady rise […]

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Oil companies’ profits hit by quest for crude price exposure

LONDON (Reuters) – The drop in big oil companies’ profits in the past eight months isn’t just a function of lower crude prices – it also reflects strategic choices. A Reuters examination of corporate filings by some of the biggest players in the industry, including BP, Shell and France’s Total, shows the sensitivity of these companies’ earnings to changes in oil prices has risen in recent years. This means that for every dollar the oil price drops, their profits sink more than they might have done five years ago. Of course, that wasn’t the plan. Choices made by several oil majors that built more exposure to prices into their portfolio, mainly through the kinds of contracts they opted to sign, was aimed at enjoying prices that were historically high. "In simple terms it (oil price sensitivity) has increased and that’s been a deliberate choice," Simon Henry, Chief Financial Officer […]

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Russia opens way to missile deliveries to Iran, starts oil-for-goods swap

MOSCOW (Reuters) – Russia paved the way on Monday for missile system deliveries to Iran and started an oil-for-goods swap, signaling that Moscow may have a head-start in the race to benefit from an eventual lifting of sanctions on Tehran. The moves come after world powers, including Russia, reached an interim deal with Iran this month on curbing its nuclear program. The Kremlin said President Vladimir Putin signed a decree ending a self-imposed ban on delivering the S-300 anti-missile rocket system to Iran, removing a major irritant between the two after Moscow canceled a corresponding contract in 2010 under pressure from the West. A senior government official said separately that Russia has started supplying grain, equipment and construction materials to Iran in exchange for crude oil under a barter deal. Sources told Reuters more than a year ago that a deal worth up to $20 billion was being discussed […]

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Iran says it’s ready to send gas to Europe

Iran says it’s ready to serve as a reliable gas partner to the European market. UPI/Maryam Rahmanian ASTANA, Kazakhstan, April 13 (UPI) — Iran can serve as a reliable and steady partner for the European community in terms of natural gas needs, Iran’s foreign minister said Monday. Iranian Foreign Minister Javad Zarif said during a visit to Kazakhstan his country was already a trustworthy gas partner for Asian economies and a westerly pivot may soon follow. "Iran, on par with Russia, enjoys all the (needed) resources to provide gas to Europe," he said from Astana. Iran is anticipating major sanctions relief if a framework nuclear agreement with international powers enters into force during the summer. Sanctions limit Iran’s energy export potential and the lifting of sanctions could help Tehran capitalize on its European market ambitions. The Islamic republic is pegging energy advancements on its oil and gas from the […]

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Deal or not, many U.S. states will keep sanctions grip on Iran

WASHINGTON (Reuters) – As the United States and Iran come closer to a historic nuclear deal, many U.S. states are likely to stick with their own sanctions on Iran that could complicate any warming of relations between the long-time foes. In a little known aspect of Iran’s international isolation, around two dozen states have enacted measures punishing companies operating in certain sectors of its economy, directing public pension funds with billions of dollars in assets to divest from the firms and sometimes barring them from public contracts. In more than half those states, the restrictions expire only if Iran is no longer designated to be supporting terrorism or if all U.S. federal sanctions against Iran are lifted – unlikely outcomes even in the case of a final nuclear accord. Two states, Kansas and Mississippi, are even considering new sanctions targeting the country. The prospect of unwavering sanctions at the […]

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US shale oil output estimated to see first drop in May: EIA

US shale oil production is expected see its first net drop in May of 57,000 b/d, reversing a years-long trend of continued growth, according to the US Energy Information Administration’s latest Drilling Productivity Report, which was published Monday. The data show estimated net production in the Bakken, Eagle Ford and Niobrara shale plays all dropping in May, as they did in April. But April’s estimates still showed a net growth of 1,000 b/d, EIA said. May’s estimates are the first time total net domestic shale oil output will have contracted since the EIA began publishing the DPR in November 2013. Among shale plays, only the Permian Basin in West Texas and New Mexico is forecast to show a significant projected net gain in May — of 11,000 b/d. That compares with 21,000 b/d net gain projected for the Permian in April. Because of low oil prices that have clung […]

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Baghdad seeks to assuage IOC security worries

Interior Minister Mohammed Ghabban (center) looks on as the head of the Badr Organization, Hadi al-Amiri, explains the plan for the assault on Tikrit on March 6, 2015. (THAIER AL-SUDANI/Reuters) Recommend 57 people recommend this. Sign Up to see what your friends recommend. Minister of Interior Mohammed Ghabban is seeking to reassure foreign oil companies they will be kept safe as they lead Iraq to record oil production, even though the government is relying increasingly on Shia militias to provide security."The Interior Ministry is making all efforts to enhance security in the province of Basra because of its importance with foreign investment companies operating on its soil, which are betting on the restoration of safety there," Ghabban said during an April …

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Reuters Iraq bureau chief threatened, denounced over story

LONDON (Reuters) – The Baghdad bureau chief for Reuters has left Iraq after he was threatened on Facebook and denounced by a Shi’ite paramilitary group’s satellite news channel in reaction to a Reuters report last week that detailed lynching and looting in the city of Tikrit. The threats against journalist Ned Parker began on an Iraqi Facebook page run by a group that calls itself "the Hammer" and is believed by an Iraqi security source to be linked to armed Shi’ite groups. The April 5 post and subsequent comments demanded he be expelled from Iraq. One commenter said that killing Parker was "the best way to silence him, not kick him out." Three days later, a news show on Al-Ahd, a television station owned by Iranian-backed armed group Asaib Ahl al-Haq, broadcast a segment on Parker that included a photo of him. The segment accused the reporter and Reuters […]

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Baiji refinery attacks expose ongoing vulnerability

Oil Minister Adil Abdulmahdi tours the besieged Baiji refinery on Sept. 11, 2014, a day after formally taking office. (Source: Office of Adil Abdulmahdi) Recommend 199 people recommend this. Sign Up to see what your friends recommend. Pro-government forces are defending against persistent attacks on the Baiji refinery, highlighting the ongoing challenge of defending territory regained from the Islamic State (IS) militant group."The fighting has been ongoing for the last 48 hours between the Iraqi security fores and the terrorist Daesh inside Baiji refinery, when some of Daesh were able to get inside the refinery near the oil technical institute," said a senior Salahaddin Operations Command official, using an Arabic term …

Posted On : Published By : Tom Whipple