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What would it take to free U.S. oil exports?

WASHINGTON Lawmakers pushing to repeal the 1970s-era ban on U.S. oil exports face a steep obstacle: The Obama administration sees no need to fully remove the restriction while the country is still importing part of its oil supply. And many politicians are wary of a voter backlash if gasoline prices go up just as they open the door to exports. However, Senator Lisa Murkowski, the Republican head of her chamber’s energy committee, is expected to introduce a bill as soon as Tuesday night that would lift the ban Congress passed in 1975 after the Arab oil embargo created fears of global shortages. While there is plenty of resistance in Congress against lifting the ban, the prospects for a reversal could improve under some of the following conditions: THE US OIL PRICE DROPS FURTHER Mainly because of the U.S. oil glut, domestic crude producers now get about $6 a barrel […]

Posted On : Published By : Tom Whipple
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European growth lifts crude oil prices

European economy beats the United States in the first quarter in terms of GDP gains, supporting crude oil prices in trading Wednesday. File Photo by canadastock/Shutterstock NEW YORK, May 13 (UPI) — Signs of life in the European economy trumped concerns about an energy market tilted toward the supply side, lifting crude oil indices in Wednesday trading. Eurostat, the statistical office of the European Union, said seasonally adjusted gross domestic product increased by 0.4 percent for the 19 central economies in the region during the first quarter of the year. That’s up from the 0.3 percent growth in the fourth quarter and 1 percent higher than the first quarter of 2014. Quarterly, the European economy grew faster than the United States, though U.S. GDP is up 3 percent year-on-year, Eurostat said. The Organization of Petroleum Exporting Countries said in its latest monthly market report world economic demand was revised […]

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Is The Shale Oil Production Peak The Key Inflection Point For The Stabilization And Continual Rise Of Oil?

Summary The U.S. has lost 1 percent of its shale oil production this month. Oil production from the major U.S. shale plays is expected to fall 86,000 bpd in June of 2015. The supply of oil worldwide still is higher than the worldwide demand for oil. Has there been a production peak at the notable Eagle Ford and Bakken shale play areas? According to the most recent EIA report the former statement could yield a yes. The EIA has forecasted that oil production from the seven major U.S. shale plays which include Bakken, Eagle Ford, Utica, Niobrara, Marcellus, Haynesville and Permian, will fall by 86,000 bpd in June of 2015. This month the U.S. has lost 1 percent of its shale oil production, and most analysts believe that this is just the beginning. On Wednesday, May 13, 2015, oil rose toward its five month high. The factors contributing to […]

Posted On : Published By : Tom Whipple
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The oil crash: something wicked this way comes

The recent oil price crash signals the impending demise of the oil and gas industry as a major world energy producer. That should be a good thing, in principle, but something wicked may still come out of the process. With the ongoing collapse of the oil prices, we can say that it is game over for the oil and gas industry, in particular for the production of “tight” (or “shale”) oil and gas. Prices may still go back to reasonably high levels, in the future, but the industry will never be able to regain the momentum that had made its US  supporters claim “energy independence” and “centuries of abundance.” The bubble may not burst all of a sudden, but it surely will deflate. So, what’s going to happen, now? The situation is, to say the least, “fluid”. A great rush is ongoing to convince investors to place their money […]

Posted On : Published By : Tom Whipple
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Oil Extends Gains, Trades Near Year High

May 13, 2015 12:50 a.m. ET By Eric Yep Oil prices extended gains from the previous session and are trading near their highest level this year, helped by a weak U.S. dollar, bullish demand projections and signs of slowing U.S. oil production. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $61.22 a barrel at 0301 GMT, up $0.47 in the Globex electronic session. June Brent crude on London’s ICE Futures exchange rose $0.31 to $67.17 a barrel. Crude-oil prices have had a strong and "uncanny" correlation with the U.S. Dollar Index in recent weeks, and the reversal in the greenback has been a key catalyst for the run-up in oil prices since April, Morgan Stanley’s Adam Longson said. With the U.S. dollar well off its highs and given a bullish outlook, any future rally in the dollar could see a modest […]

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Natural Gas Hits Seven-Week High on Signs Oversupply May Wane

May 12, 2015 4:17 p.m. ET By Timothy Puko Natural-gas prices rose to a seven-week high as warm weather and slowing production are causing a rally by forcing bearish traders to cut their positions. Prices for the front-month June contract settled up 9.5 cents, or 3.4%, at $2.897 per million British thermal units on the New York Mercantile Exchange. It is the highest closing price since March 18. Gas is also nearing a bull market, rising more than 16% since it closed at a 2 1/2-year low on April 27. This week’s weather forecasts have sparked more optimism than the ones from late last week, Dominick Chirichella, analyst at the Energy Management Institute, said in a note. Forecasts show warmer-than-normal temperatures settling in over the entire East Coast and large parts of the Midwest for most of the second half of May, raising expectations that power plants could burn […]

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Crude oil prices holding steady

Markets start Tuesday in a state of confusion as OPEC delays the release of its monthly oil market report. UPI/Maryam Rahmanian NEW YORK, May 12 (UPI) — Crude oil prices retreated from early gains Tuesday amid market uncertainty following delays in the release of a monthly market report from OPEC. Oil prices pulled back from an early May rally as traders awaited reports on whether the world economy was pushing markets toward the demand side. Oil prices fell by more than half their June highs above $100 per barrel in early 2014 as crude oil continued to build up in storage as the global economy failed to gain traction. A survey last week from Platts showed the Organization of Petroleum Exporting Countries increased production in April by 210,000 barrels per day to 30.9 million bpd. Tacit OPEC leader Saudi Arabia, which saw an increase in production, said last month […]

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Oil prices drop on high Saudi output, Goldman expects more falls

SINGAPORE Oil prices dipped on Tuesday as Saudi Arabia reported strong crude production figures and U.S. investment bank Goldman Sachs warned of further oil price declines. Tuesday’s falls continued price declines on Monday and the previous week, and they came after Brent climbed 40 percent from its January lows, with many analysts saying upward momentum looks to have come to an end as production around the world continues to outpace demand. Top oil exporter Saudi Arabia pumped 10.308 million barrels of oil per day in April, slightly less than in March but still close to record highs. Goldman Sachs said in a note that the recent price rally itself prevented a reduction of oversupply and would therefore lead to lower prices going forward. "While low prices precipitated the market rebalancing, we view the recent rally as premature with crude oil prices expensive relative to current and forecast fundamentals," the […]

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Natural gas generation poised to nearly equal coal in April, May: US EIA

Generating power with natural gas will come close to equaling generation from coal in April and May, the US Energy Information Administration predicts in its May Short-Term Energy Outlook report, released Tuesday. Coal and gas generation are expected to make up 31.7% and 30.7%, respectively, of all generation in the US in April, EIA said. For May, EIA predicts coal to make up 33% of all generation and gas to account for 31.6%. Recent low gas prices have significantly increased the use of the fossil fuel rather than coal for generation, the EIA said, with utility switching in April and May resulting in the closest convergence in generation shares between the two fuels since April 2012, when gas prices neared record lows. Coal consumption in the electric power sector will fall 6% in 2015, making up 35.8% of all generation, the EIA said. The use of gas-fired generation is […]

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OPEC oil output boost keeps supply surplus despite higher demand

LONDON OPEC said its oil output rose further in April, keeping an excess supply in the market despite stronger demand and signs the producer group’s strategy of letting prices fall to hurt other producers is taking effect. In a monthly report on Tuesday, OPEC said demand for its oil this year would be 50,000 barrels per day (bpd) higher than previously thought, thanks to a slightly lower supply forecast for countries outside the group. Oil prices have almost halved from $115 a barrel in June 2014, in a decline OPEC officials have said is stimulating fuel use. The report made a small upward revision to forecast oil demand growth in 2015 and was upbeat about the outlook. "Despite the slow start in some countries, world economic growth could strengthen further as the year progresses, leading to an improvement in crude oil demand in 2015," the report said. Last year, […]

Posted On : Published By : Tom Whipple