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NYMEX June gas futures settle 7.3 cents higher at $3.008/MMBtu

NYMEX June natural gas futures settled 7.3 cents higher at $3.008/MMBtu Thursday as the market reacted to a government storage report that showed an inventory build below expectations. US natural gas storage stocks rose 111 Bcf to 1.897 Tcf for the week that ended Friday, the Energy Information Administration said Thursday. The build was shy of Platts consensus expectations of an injection between 115 Bcf and 119 Bcf. "Even though we saw an injection significantly above the five-year average, the market continues to test new highs," Tradition Energy senior analyst Gene McGillian said. "Frankly, I’m a little puzzled." Thursday’s $3.008/MMBtu settle marked the first time the prompt-month contract has closed above $3/MMBtu since January 19. The fundamental picture of continued growth in gas production and tepid heating demand during the shoulder season remains unchanged, McGillian said, and did not warrant prices breaking above $3/MMBtu. The only major change in […]

Posted On : Published By : Tom Whipple
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Hedge fund manager Andurand sees drop in Brent crude by year-end

Oil-focused hedge fund manager Pierre Andurand said on Thursday that he expected benchmark Brent crude to drop to about $50 a barrel by year-end due to higher production and market volatility. "I don’t think the market is ready to see $80 to $90 oil in the short term," the manager of the $450 million London-based Andurand Capital told Reuters ahead of his speech at an industry conference in New York on the direction of oil. Andurand said oil’s rebound from a seven-month rout has been overdone as investors have bet on U.S. production cuts, which he sees as temporary. The decline, which started in June, was largely due to lower-than-expected demand growth, fewer supply disruptions with the recovery of Libyan production, and the move by Saudi Arabia and other OPEC members to not cut output in order to protect market share, Andurand said. Andurand said demand would not keep […]

Posted On : Published By : Tom Whipple
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Who wants to be a swing producer? No one: Kemp

LONDON U.S. shale producers are the new “swing producers” in the oil market, as many analysts have noted, but the status of swing producer is hugely misunderstood. It is often portrayed as if it confers power and control. In fact, it often means the opposite. The swing producer often becomes the passive absorber of shifts in market supply and demand. Between the 1930s and the 1970s, the role fell to small, independent well owners of Texas, who were forced to limit their production to balance the global oil market. Prorationing orders issued by the Railroad Commission of Texas and conservation commissions in other states compelled owners to restrict output to a fraction of the well’s maximum, and it was not a comfortable experience for the U.S. domestic oil industry. Saudi Arabia found itself cast in the role of swing producer in the early 1980s, an experience that traumatized the […]

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Baghdad-Erbil oil deal strained by disappointing April payment

A tanker loads Kirkuk crude at the Turkish port of Ceyhan. (STAFF/Iraq Oil Report) Iraqi Oil Minister Adil Abd al-Mahdi travelled to Erbil Wednesday in an apparent attempt to salvage a cooperative oil export and revenue sharing agreement, after the Kurdistan Regional Government (KRG) raised objections to a smaller-than-expected April budget payment.KRG Prime Minister Nechirvan Barzani expressed strong dissatisfaction after Baghdad’s monthly budget transfer fell to just 488.7 billion Iraqi dinars ($407.25 million*) for April – a month when Kurdistan’s contribution to fed…

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U.S. House passes Iran nuclear review legislation

WASHINGTON The U.S. House of Representatives voted overwhelmingly on Thursday to pass legislation giving Congress the right to review, and possibly reject, an international nuclear agreement with Iran. The 400-25 vote sends the legislation to the White House, where administration officials have said President Barack Obama will sign it into law. The Iran Nuclear Review Act of 2015 passed the Senate last week after lawmakers reached a compromise removing some of its toughest provisions, and Obama dropped his threat to veto the measure as a threat to continuing negotiations between the United States and other world powers and Iran. The bill gives Congress 30 days to review a final nuclear deal after international negotiators reach such an agreement, and during that time bars Obama from temporarily waiving any U.S. sanctions on Iran that were passed by Congress. The Republican House Speaker, John Boehner, said the legislation was the only […]

Posted On : Published By : Tom Whipple
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Iran Patrol Boats Fire on Singapore-Flagged Commercial Oil Tanker in Gulf

WASHINGTON—Iranian patrol boats opened fire on a Singapore-flagged oil tanker as it moved through the Strait of Hormuz in a confrontation that raised new concerns about Iran’s attempts to exert more control of commerce in the Persian Gulf. For the second time in two weeks, Islamic Revolutionary Guard Corps Naval patrol boats confronted a commercial ship moving through the strait and ordered it into Iranian waters on Thursday, according to U.S. officials. Three Iranian patrol boats opened fire on the 600-foot-long Alpine Eternity when the tanker crew refused to follow their direction and then chased the tanker after it issued a call for help, U.S. officials said. While the Alpine Eternity made it safely to port in the United Arab Emirates, the confrontation is the latest in a string of developments that have heightened tensions in the Gulf region. Over the past month, the U.S. military has sent an […]

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Algeria Replaces Oil Minister Ahead of OPEC Meeting — State News Agency

By Benoit Faucon and Michael Amon Algerian President Abdelaziz Bouteflika has replaced the country’s oil minister ahead of a crucial OPEC meeting, the country’s state-run news service said on Thursday. Salah Khebri, a consultant and the former head of the Algerian Petroleum Institute, replaces Youcef Yousfi as the country’s minister of energy and mines, said APS, the news agency. Mr. Yousfi, 74 years old, a long-serving Algerian politician, was the president of the Organization of the Petroleum Exporting Countries in 1998 and 1999. He was named oil minister in 2010. Algeria will be among 12 OPEC nations that gather in Vienna on June 5 to decide whether to continue pumping increasing amounts of oil in the face of falling prices. Like other OPEC nations, Algeria’s budget is highly dependent on oil revenue and has been hurt by prices that have fallen by more than 40% since last summer. Mr. […]

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Nigeria: Missing U.S.$20 Billion – Sanusi Faults Alison-Madueke, Says Audit Report Proves At Least U.S.$18.5 Billion Lost

A former governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, has reacted to the recent audit report by PricewaterhouseCoopers on the alleged missing $20 billion oil money, saying the report has confirmed in the first instance that at least $18.5 billion was indeed missing. Mr. Sanusi faulted the petroleum minister, Diezani Alison-Madueke, who said the report had exonerated the Nigerian National Petroleum Corporation, NNPC, earlier accused of diverting the money. In an opinion article published by the Financial Times of London, Mr. Sanusi, who is now the Emir of Kano, said the argument that the outstanding amount was used by the NNPC for apparently unlawful purposes such as kerosene subsidy, does not dismiss the notion that the NNPC illegally withheld billions of oil dollars from the government. "Contrary to the claims of petroleum minister Diezani Alison-Madueke, the audit report does not exonerate the NNPC. It establishes that […]

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Venezuela – The Unmentioned Oil Superpower

Venezuela has larger oil reserves than Saudi Arabia. The country only produces 20% of Saudi Arabia’s production level. Venezuela needs higher oil prices for success – this may result in increased production and therefore market supply. Introduction Venezuela is a significant player in the oil markets. The country has several hundred billion barrels worth of oil according to their data, which represents ten years of the world’s production by itself. The country currently has a production of 30.41 million people up from 24.41 million in the year 2000 and 19.74 million in the year 1990. The country’s oil allows it to have a relatively high $14,414.75 GDP per Capita. This compares to $11,208.08 for Brazil and $41,787.47 for the United Kingdom. Reserves Venezuela Oil Holdings – Deep Resource As we can see here, much of the country’s reserves are from the Orinoco Belt in Venezuela. The Orinoco Belt has […]

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For Modi’s year-old government, storm brewing in rural India

KHANNA/KAMARGAON, India Just one year after taking office, Prime Minister Narendra Modi is facing a challenge that could come to haunt him – the farm sector that sustains three-fifths of the population is in deep trouble, and he is being blamed for not doing enough. Promising good governance and a stronger economy, Modi romped to power in elections last May by the biggest margin any prime minister has got in three decades. But the rural crisis has dented his popularity and the vanquished opposition is finding new vigor in his discomfort. From the start of the crop season last October through March, India’s farm exports have fallen more than 11 percent to $15 billion, as the impact of the global commodities glut has been sharpened by events like Iran’s nuclear talks and a currency dip in Brazil. The fall in exports has depressed domestic farmgate prices just as unseasonal […]

Posted On : Published By : Tom Whipple