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NYMEX July natural gas futures settle at $2.706/MMBtu, down 14.1 cents

On its first day as the prompt month, the NYMEX July natural gas futures contract slid 14.1 cents to settle at $2.706/MMBtu on Thursday, as the market reacted to government data that showed a build to storage stocks well above expectations. US natural gas in storage rose 112 Bcf to 2.101 Tcf in the week ended May 22, the Energy Information Administration said Thursday, well above consensus expectations of an injection of 97-101 Bcf. "This action we saw today comes after a much larger-than-expected build," said Gene McGillian, senior analyst at Tradition Energy. "It really points out the market’s vulnerability when pushing above that $3[/MMBtu] level." McGillian, who has argued before that market fundamentals did not support levels above $3/MMBtu, noted that production growth continues to surprise. Despite a sharply lower rig count, "the market is showing that we still have a lot of gas coming out of the […]

Posted On : Published By : Tom Whipple
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OPEC Output Target Seconded by Libya as Ministers Head to Vienna

OPEC will maintain its production target next week, Libya’s deputy vice prime minister said, joining Kuwait in predicting no policy change when oil ministers from the 12-member group meet in Vienna next week. The output target will remain 30 million barrels a day, Mohammad Oun, Libya’s deputy vice prime minister for energy, said by phone from al-Bayda, eastern Libya. Oun will be part of Libya’s delegation to the June 5 meeting. OPEC is working on a long-term strategy draft to present next week that is likely to show projections of crude supply from non-OPEC producers are the same as those forecast in 2014, he said. “The target number will not change,” Oun said. Libya is pumping 400,000 barrels of oil a day, state-run National Oil Corp. spokesman Mohamed Elharari said in a phone interview Thursday. That makes Libya the smallest producer in OPEC. The Organization of Petroleum Exporting Countries […]

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Medical Need Climbs Alongside Death Toll in Yemen

Photo Yemenis were taken to a hospital after they were wounded during shelling Wednesday in Taez. Credit Abdel Rahman Abdallah/Agence France-Presse — Getty Images SANA, Yemen — Airstrikes by a Saudi-led military coalition were said to have killed at least 80 people in Yemen on Wednesday, and the World Health Organization warned that roughly one-third of the country’s population was in urgent need of medical care. The airstrikes hit a military base in a densely populated neighborhood here in the capital and areas near the Saudi border. Health officials said those killed included dozens of civilians, as well as fighters loyal to the Houthi rebel movement. The death toll, which could not be independently confirmed, appeared to be one of the highest in a single day since Saudi Arabia launched its air war against the Houthis in late March, with the stated goal of returning Yemen’s exiled government to […]

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Protesters target West Qurna 2 for security jobs

Workers operate a drilling rig at the West Qurna 2 oil field in Basra. (ALI ABU IRAQ/Iraq Oil Report/Metrography) About 150 local residents temporarily shut down access to Iraq’s super-giant West Qurna 2 oil field this week, protesting that they had not been given jobs protecting the project.The unarmed protesters dispersed peacefully on Tuesday after blocking access roads for the previous two days. Several workers at the field said nobody was able to enter or leave the facility, but production was not affected."We were supposed to go back to our families this afternoon, but protesters blocked the r… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
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DNO ready to spend in Iraq

Swedish energy company DNO said it plans to review spending plans in Kurdish north of Iraq as business climate improves. Logo courtesy: DNO OSLO, Norway, May 28 (UPI) — Norwegian energy company DNO said Thursday it plans to invest more on its assets in the Kurdish north of Iraq as the business cycle improves. "We are ramping up production, export and local sales following the recently completed Tawke capacity expansion," Executive Chairman Bijan Mossavar-Rahmani said in a statement. "We will dust off investment plans as our revenue stream continues to grow." DNO in a quarterly statement early this month said weak sales to the Kurdish market and the low price of oil forced it to cut capital spending on the back of reduced revenues. For first quarter 2015, production from the DNO-operated Tawke field in the north of Iraq was 104,925 barrels of oil per day, of which about […]

Posted On : Published By : Tom Whipple
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Oil Crunch, Islamist War, Power Cuts Face New Nigeria Leader

Nigerians queue to buy fuel at Mobil filling station in Abuja. Photographer: Stringer/Anadolu Agency/Getty Images Crippling fuel shortages, power cuts, slowing economic growth and Islamist militants wreaking havoc. Muhammadu Buhari is taking on a tough job when he’s sworn in as Nigeria’s president on Friday. Former military ruler Buhari, 72, swept incumbent Goodluck Jonathan from office in March elections by pledging to end endemic corruption and Boko Haram’s rebellion in the north. His stewardship of Africa’s biggest oil producer, this time as elected president, may depend on the price of crude, which supplies the government with more than two-thirds of its income. “If you look at expectation and look at funding, there’s quite a gap,” Olusegun Sotola, a research fellow at the Lagos-based Initiative for Public Policy Analysis, said by phone. “Buhari is going to be running a government without the necessary funding, which is a big problem because […]

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Nigeria: Why Fuel Subsidy Must Go (II)

Lagos — As the world awaits the inauguration of Muhammadu Buhari as the President of Nigeria, controversy over the contentious fuel subsidy claims has taken a centre stage following the fuel scarcity that almost brought the country to its knees. This is coming as the Federal Government is said to have spent more than N6 trillion from 2006 to 2014 on fuel subsidies. Vanguard can now reveal the amount spent on subsidy since 2006. The table below shows the amount spent on subsidy from 2006: *2006 – N151.9 billion; *2007- N188 billion; *2008 – N256.3billion (January to July); *2009 – N421.5billion; *2010 – N673 billion; *2011 – (N1.3 trillion)revised to N2.19 trillion; *2012 – N888 billion + N161.6 billion supplementary *2013 – N971 billion; and, *2014 – N971.1 billion Although figures are now being bandied about by respective groups, but former President Olusegun Obasanjo reintroduced subsidy on fuel as […]

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Venezuela, Russia’s Rosneft agree on $14 billion oil, gas investment

CARACAS Venezuela and Russia’s top oil producer, Rosneft, have agreed on around $14 billion in investment in the South American OPEC country’s oil and gas sector, President Nicolas Maduro said on Wednesday evening. Maduro said he met with the chief executive of state-owned Rosneft, Igor Sechin, earlier on Wednesday, in the company of PDVSA [PDVSA.UL] President Eulogio del Pino and National Assembly boss and Socialist Party No. 2 Diosdado Cabello. "We had a great meeting and agreed on investment of over $14 billion," said Maduro during a televised broadcast, adding the funds would go toward doubling Venezuela’s oil production. PDVSA has formal ambitious targets to double national production to 6 million barrels a day by 2019, with 4 million of that projected to come from the Orinoco Belt, but few industry experts or foreign investors expect those goals to be met. Speaking at a Socialist Party event broadcast on […]

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Saudi Arabia goes on refinery hiring spree in South Korea

SEOUL/KHOBAR, Saudi Arabia Saudi Arabia’s state oil firm is on a hiring spree in South Korea, as the world’s top crude exporter seeks engineers to run plants in its soaring refining sector – setting it on course to compete with some Asian countries that are big oil buyers. Technicians from South Korea are an obvious target given parts of its refining sector are struggling and the two countries also have long-established business ties across a range of areas including refining. But Asia has established itself as the world’s biggest refining region and so Saudi moves to become a major refiner are set to increase competition with countries such as India that also refine Saudi crude to supply Europe. Having little prior experience in refining, state oil firm Saudi Aramco is trying to lure experienced engineers and technicians from South Korea with generous expatriate packages. "Working in Aramco has three […]

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US oil production hits 43-year high

An oil well owned an operated by Apache Corporation in the Permian Basin is shown in Garden City, Texas, Feb. 5, 2015. The Organization of the Petroleum Exporting Countries has adopted a market-based pricing strategy that it hoped would shake out high cost producers. One such high cost producer is the U.S. shale industry, which dramatically boosted world production in recent years. While U.S. rigs are now down more than 50 percent from last year, analysts and traders have speculated that the rigs coming off line are those that were already declining in production and that the robust rigs are still operating. In addition, many investors believed that lower prices would squeeze U.S. shale producers to produce less, but the data show otherwise. Analysts say the high level of production shows that the U.S. industry continues to be resilient and continues to find efficiencies in the system. “As the […]

Posted On : Published By : Tom Whipple