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US companies cut back sharply on hiring

US companies scaled back hiring sharply last month, adding to evidence that the economy has lost momentum since the start of the year and triggering a decline in the dollar. Payrolls increased by 126,000 in March, well below Wall Street’s 245,000 consensus forecast and snapping a 12-month spell of gains above 200,000, the Bureau of Labor Statistics said. The previous two months’ readings were also revised down by a net 69,000 jobs, while the unemployment rate was unchanged at 5.5 per cent, according to the report. Job gains were seen in professional and business services, healthcare and the retail sector, while the mining industry lost posts as the oil price fell . The figures are likely to contribute to a mood of caution at the Federal Reserve , where the majority of policy makers are still expecting to lift interest rates this year. Janet Yellen, the central bank’s chairwoman, […]

Posted On : Published By : Tom Whipple
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Bakken Rig Count Drops to 91

Crude by Rail Skyrockets The Bakken-Three Forks rig count dropped by six at 91 rigs running across our coverage area by midday Thursday. In recent Bakken news, the Energy Information Administration (EIA) released the latest data for crude by rail  (CBR) across the country that shows a significant increase over the last five years. Crude by rail continues to be highly controversial as people question the safety for individuals and the environment. Read more: Crude by Rail Up 1700% The U.S. rig count fell another 20 to 1028 rigs running as of today. A total of 211 rigs were targeting natural gas (down 11 from the previous week) and 812 were targeting oil in the U.S. (1 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 91 rigs are running in the Williston Basin across MT, ND, and SD. 90 are […]

Posted On : Published By : Tom Whipple
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Economic risks may emerge in North Dakota

Standard & Poor’s says there may be sub-state economic issues in North Dakota because of a depressed oil market. File Photo by photostock77/Shutterstock. CHICAGO, April 3 (UPI) — The rig count in North Dakota continues to decline and the economic health of cities depending on the oil industry may start to suffer, credit analysis finds. State data show 94 rigs actively exploring for or producing oil and natural gas. That’s down 2 percent since the start of the week and a reflection of spending cuts enacted by energy companies reacting to the low price of oil. State-wide, analysis from Standards & Poor’s finds the North Dakota economy will be able to cope with a depressed energy sector. For cities and counties in the oil-rich parts of the state, the slowdown could result in decreased revenues during the second half of 2015 and early 2016. "Oil-industry activity in North Dakota […]

Posted On : Published By : Tom Whipple
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Texas energy sector can weather the storm, officials say

Texas regulators say policies are in place for the state to cope with the low price of crude oil. UPI/Gary C. Caskey SAN ANTONIO, April 3 (UPI) — The Texas oil and natural gas sector may be facing challenges in the low oil price environment but it’s well tooled to weather the storm, officials said. The Railroad Commission of Texas, the state energy regulator, reported total crude oil production for January, the last full month for which data are available, was 2.2 million barrels per day, up from the 1.9 million bpd reported in January 2014. Texas is the No. 1 oil producer in the nation. About half of all rigs actively exploring for or producing oil in the United States are in Texas. Railroad Commissioner Ryan Sitton told the San Antonio Petroleum Club the state is rivaling its national and international peers as a result. "The long-term fundamentals […]

Posted On : Published By : Tom Whipple
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Hiring Boom Fizzles as Companies Adjust to Slower U.S. Growth

Weaker U.S. Jobs Report May Spur Fed Consideration America’s employment boom fizzled in March. Payrolls increased by 126,000 workers last month, the smallest gain since December 2013 and weaker than the most pessimistic forecast in a Bloomberg survey, a report from the Labor Department in Washington showed Friday. The advance over the prior 12 months averaged 269,000. The smaller March reading may give Federal Reserve policy makers pause as they consider the timing of an interest-rate increase that Chair Janet Yellen has said will probably occur this year. The jobs data are now more in line with recent figures showing economic growth cooled in the first quarter as energy companies pulled back, the strong dollar and tepid overseas markets hurt manufacturers and rough winter weather restrained consumer spending. “This is a soft print all the way around, no matter how you slice it,” said Omair Sharif, rates sales strategist […]

Posted On : Published By : Tom Whipple
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Clock keeps ticking toward North Dakota oil tax break

(Reuters) – The clock kept ticking in March on a potential $5.3 billion, two-year tax break for North Dakota’s oil industry after a state-calculated average of the month’s crude price fell below $52.59 per barrel. The state waives its 6.5 percent oil extraction tax if the monthly price of benchmark West Texas Intermediate (WTI) crude at the Cushing, Oklahoma, transport hub falls below an inflation-adjusted limit, set at $52.59 per barrel for 2015, for five consecutive months. For March, the average calculated price was $47.76 per barrel, according to data from the North Dakota tax commissioner’s office. The March average was a drop from the February average of $50.86 per barrel. The tax break kicks in if the average monthly price is below that $52.59 level for the next two months. If it is off even one month, the clock resets. The tax returns if the average price exceeds […]

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Worrying Sign For Automakers: Americans Burning Least Amount Of Gasoline In A Generation

Fascinating data released today indicate an encouraging trend in which it’s hard to see a downside – unless you’re in the energy or auto industries. The University of Michigan’s Transportation Research Institute said average fuel consumption for U.S. drivers dropped in 2013 to the lowest level since UMTRI began measuring in 1984. Any way you care to slice it – by vehicle, driver, person or household – fuel consumption is lower now than a generation ago and is some 14 to 19 percent less than peak levels in 2003-2004, said UMTRI researcher Michael Sivak. Sivak’s numbers indicate that in 2013 the amount of fuel consumed per person in the U.S. was about 392 gallons, while households consumed an average of 1,011 gallons – respective declines of 17 percent and 19 percent from 2004′s peaks. Fuel consumption per vehicle dropped to 524 gallons in 2013 (down 14 percent from the […]

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Russia Drilling on Weak Ruble Leads to Oil Output Gain: Sberbank

Russian oil producers benefiting from last year’s ruble collapse used relatively cheaper service costs to increase drilling and boost crude output in March, according to Sberbank CIB. Development drilling jumped 23 percent in the first two months of the year, helping push oil output to 10.71 million barrels a day, Sberbank CIB analysts Alex Fak and Valery Nesterov wrote in a research note Friday. That matched the post-Soviet record level of production in January. “Oil companies benefited from relatively low drilling fees paid to service contractors under old contracts,” the analysts said. Tax changes lowering export duties provided further stimulus. Russia has increased output in the face of slumping prices for Brent crude, which trades now at less than half of the peak price in 2014. Under Russia’s tax system, the state bears most of the price risk, while the currency collapse benefits exporters, which earn in dollars and […]

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Ruble Trims Weekly Gain With Stocks After Oil Drops on Iran Deal

The ruble and Russian stocks pared weekly gains as falling oil prices threatened to undercut the nation’s budget revenue, stoking concern assets have climbed too far. The currency retreated from the strongest level this year, trimming its third weekly advance to 1.7 percent by 6:51 p.m. in Moscow. Brent dropped 3.8 percent on Thursday after a nuclear pact sealed between Iran and world powers stoked speculation supplies may increase. Markets in the U.S. and U.K. were closed for holidays on Friday. The ruble’s strength amid weaker oil prices risks exacerbating a budget shortfall that’s forecast to be the widest since 2010. In ruble terms, the price of a barrel of Brent is near the lowest in four months, complicating the government’s revenue plan as the economy of the world’s biggest energy exporter heads for its first recession in six years. “For the Russian economy in its present state, there’s […]

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ExxonMobil Sues Russia Claiming $500 Million in Overpaid Taxed

MOSCOW–U.S. oil and gas company ExxonMobil Corp. (XOM) has filed a claim with the Stockholm Arbitration Court looking to change the way the firm is taxed by the Russian government it told the country’s energy ministry on Monday, a spokeswoman for the ministry said Friday. The spokeswoman declined to elaborate on details of the lawsuit, but confirmed a report by Russian daily Vedomosti which said the company was seeking to change the way the taxation clause in the agreement on Sakhalin-1 –an oil and gas project in Russia’s far east in which it holds a 30% stake–is interpreted. ExxonMobil is seeking to be reimbursed for part of the income tax it has overpaid over the past six years, worth $500 million, Vedomosti’s report said. In mid-March Russian daily newspaper Kommersant quoted unnamed sources as saying ExxonMobil wants Russia to return several billions of rubles in taxes which it said […]

Posted On : Published By : Tom Whipple