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How do you lose 100 million barrels of oil? Kemp

LONDON Oil-market watchers are struggling to reconcile the large estimated oversupply in the market with the much smaller buildup of reported inventories and narrowing contango in futures prices. Some blame the barrel counters who compile official statistics on supply, demand and stocks. But the truth is that information on the world oil market is incomplete and it is easy for hundreds of millions of barrels of oil to disappear from the supply chain without being counted. According to the three main statistical agencies, the global market has been oversupplied by between 1.5 million and 2.5 million barrels per day (bpd) since the start of the year. Stockpiles should have increased by between 200 million and 350 million barrels, according to the International Energy Agency, OPEC and the U.S. Energy Information Administration. U.S. crude stocks have indeed increased by around 100 million barrels since the start of the year while […]

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Iran’s Supreme Leader Rules Out Broad Nuclear Inspections

TEHRAN — Iran ’s supreme leader on Wednesday ruled out allowing international inspectors to interview Iranian nuclear scientists as part of any potential deal on its nuclear program , and reiterated that the country would not allow the inspection of military sites. In a graduation speech at the Imam Hussein Military University in Tehran, the supreme leader, Ayatollah Ali Khamenei , widely believed to have the final say on whether Iran accepts a deal if one is reached next month, denounced what he said were escalating demands by the United States and five other world powers as they accelerate the pace of the negotiations with Iran. “They say new things in the negotiations,” Ayatollah Khamenei told the military graduates. “Regarding inspections, we have said that we will not let foreigners inspect any military center.” Like last summer, when he vowed that Iran would ultimately build an industrial-scale uranium enrichment […]

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Saudi Arabia’s crude export record could be near-term peak

Saudi Arabia’s recent push to maintain international oil market share saw its oil exports surging in March, but the kingdom may find itself unable to maintain much upward momentum in the coming months. The latest official data from the Riyadh-headquartered Joint Organizations Data Initiative or JODI, published Monday, May 18 showed that Saudi crude exports rose by 548,000 b/d in March to 7.898 million — their highest level in over a decade. However, March is the last month of the Arabian Peninsula’s cooler season, with maximum daytime temperatures in Riyadh still averaging below 30 degrees Celsius. Temperatures start to rise rapidly thereafter, with the daytime maximum typically averaging 45 degrees Celsius by July, the hottest month of the year. As the mercury rises and demand for air conditioning soars, so does Saudi Arabia’s domestic oil consumption, as the kingdom burns significant volumes of fuel oil and crude for power […]

Posted On : Published By : Tom Whipple
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U.S. Shifts Iraq Focus to Western Province

ENLARGE Iraqi forces defend their headquarters against attacks by Islamic State extremists during a sand storm in the eastern part of Ramadi on Thursday, May 14. Photo: Associated Press WASHINGTON—The Obama administration is turning its focus in Iraq away from the northern city of Mosul toward the province west of Baghdad, where Islamic State captured the key city of Ramadi over the weekend. U.S. officials conceded on Wednesday that any hope of seizing military momentum in Iraq has been stalled by the Sunni militants’ takeover of the capital of Sunni-dominated Anbar Province. That has forced American officials to shift their plans . “Everybody is focused like a laser on Anbar right now,” said a senior State Department official. For months, U.S. officials had hoped to mount an offensive to retake the northern city of Mosul, Iraq’s second-largest. But officials in Washington and elsewhere on Wednesday said that plan would […]

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Islamic State seizes ancient city from Syrian forces

BEIRUT Islamic State militants stormed the Syrian city of Palmyra on Wednesday, seizing it from government forces in fierce fighting as civilians were evacuated and Syria’s antiquities chief called on the world to save its ancient monuments. The capture of Palmyra is the first time the al Qaeda offshoot has taken control of a city directly from the Syrian army and allied forces, which have already lost ground in the northwest and south to other insurgent groups in recent weeks. The central city, also known as Tadmur, is built alongside the remains of a oasis civilization whose colonnaded streets, temple and theater have stood for 2,000 years. It is home to modern military installations, and sits on a desert highway linking the capital Damascus with Syria’s eastern provinces, mostly under rebel control. "Praise God, (Palmyra) has been liberated," said an Islamic State fighter speaking by Internet from the area. […]

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Iraqi violence no concern for Gulf Keystone Petroleum

Security is not a concern for operations in the Kurdish north of Iraq, Gulf Keystone Petroleum CEO says. Photo courtesy: Gulf Keystone Petroleum. LONDON, May 20 (UPI) — Security in the northern Iraqi oil fields is not a concern for British energy company Gulf Keystone Petroleum, its chief executive officer said. "Security right now is not a concern for us," CEO John Gerstenlauer said in an operational update. "Everything is going along quite smoothly." Iraqi Prime Minister Haider al-Abadi gave his approval during the weekend for a military assault on the western Iraqi city of Ramadi after the Sunni-dominated region was overrun by the group calling itself the Islamic State. "The loss of Ramadi does not mean the tide of the campaign has turned, and we have long said that there would be ebbs and flows on the battlefield," U.S. Defense Department spokeswoman Elissa Smith said. The Islamic group […]

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Saudi Arabia, partners turn down Chinese requests for extra oil

BEIJING/SINGAPORE Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records. While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market. Senior Chinese oil traders told Reuters the Saudis have turned down requests from Chinaoil and Unipec – the respective trading arms of PetroChina and Sinopec – for extra cargoes of crude for May and June loadings, forcing them to seek supplies from producers in West Africa, Oman and Russia. Saudi Arabia "used to […]

Posted On : Published By : Tom Whipple
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Saudi Arabia, OPEC partners turn down Chinese requests for extra oil

Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records. While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market. Senior Chinese oil traders told Reuters the Saudis have turned down requests from Chinaoil and Unipec – the respective trading arms of PetroChina and Sinopec – for extra cargoes of crude for May and June loadings, forcing them to seek supplies from producers in West Africa, Oman and Russia. Saudi Arabia "used to provide […]

Posted On : Published By : Tom Whipple
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China’s Frugal Oil Companies

Oil rigs are seen off China’s coast in this 2005 file photo. Reuters With the oil price dropping as much as it has over the past nine months, one would expect China’s state-run oil giants to go on a shopping spree abroad. China’s so-called big three oil companies — China National Petroleum Corp. (CNPC), China Petroleum & Chemical Corp. (Sinopec) and China National Offshore Oil Corp. (CNOOC) — have been big buyers of international oil assets in previous years, driven by China’s swelling hunger for energy. Now they’ve suddenly put away their wallets, falling in line with an industry that has produced few noteworthy mergers and acquisitions since prices started plummeting in 2014, aside from BG Group PLC’s $70-billion merger with Royal Dutch Shell PLC in April. Why is Chinese big oil staying silent? To find out, China Real Time interviewed Chen Weidong, the chief energy researcher of the […]

Posted On : Published By : Tom Whipple