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Why economists were totally wrong about cheap oil

If there was one thing most economists agreed on at the start of the year, it was this: Plunging oil prices would boost the U.S. economy. It hasn’t worked out that way. The economy is thought to have shrunk in the January-March quarter and may barely grow for the first half of 2015 — thanks in part to sharp cuts in energy drilling. And despite their savings at the gas pump, consumers have slowed rather than increased their spending. At $2.74 a gallon, the average price of gas nationwide is nearly $1 lower than it was a year ago. In January, the average briefly reached $2.03, the lowest in five years. Cheaper oil and gas had been expected to turbocharge spending and drive growth, more than making up for any economic damage caused by cutbacks in the U.S. oil patch. Consider what Federal Reserve Chair Janet Yellen said in […]

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Oil Prices Lower as Dollar Strengthens

NEW YORK—Oil prices slid Friday as the dollar strengthened and the closely watched U.S. oil-rig data showed another slight decline . Light, sweet crude for July delivery recently fell $1.07, or 1.7%, to $59.65 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.17, or 1.8%, to $65.37 a barrel on ICE Futures Europe. Moves in the oil price have closely tracked the dollar in recent weeks, with some analysts attributing nearly all of a recent rally in oil prices to a weakening in the dollar. The global crude market remains oversupplied, and some analysts warn that the rally was unsustainable and oil prices are likely to slump from current levels later this year. The dollar rose Friday after the Labor Department said that U.S. consumer prices rose for the third straight month in April. The WSJ Dollar Index, which tracks the greenback against other […]

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Brent crude oil steadies near $66 before long weekend

LONDON Oil prices steadied on Friday as worries over the impact on crude supplies of war in the Middle East were balanced by reports of profit-taking ahead of a long weekend. Monday, May 25 is Memorial Day in the United States and a public holiday in much of Europe, closing many markets. "No one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. July Brent crude LCOc1 was down 25 cents at $66.29 a barrel by 0800 GMT after closing up 2.3 percent on Thursday. U.S. crude futures are experiencing their longest winning streak since records began in 1983, helped by a drop in U.S. crude and product stockpiles last week, reflecting better demand in the world’s largest oil consumer. [EIA/S] U.S. crude for July CLc1 was down […]

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Natural-Gas Prices Give Up Gains

By Nicole Friedman NEW YORK–Natural-gas prices snapped a three-week winning streak on continued concerns about ample supplies. Front-month futures for June delivery settled down 6.2 cents, or 2.1%, to $2.887 a million British thermal units on the New York Mercantile Exchange. Prices fell 4.3% on the week. Prices have rallied in recent weeks since hitting a nearly three-year low in April, as cheap prices and hotter temperatures spurred expectations of demand for gas-fueled power generation to run air-conditioning units. Natural-gas stockpiles grew less than expected last week, an indication of stronger consumption. But after prices rose Thursday on the inventory data, "traders were quick to take their money and run," said Aaron Calder, analyst at Gelber & Associates in Houston, in a note. Robust production continues to keep the market subdued. In addition, some power generators switch from natural gas to coal when gas prices near $3 a million […]

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World Exports versus Consumption, The ELM

The EIA has updated their International Energy Statistics  with annual production numbers through 2014 and export data through 2012. Sometimes these stats can be confusing as they include several types of production and exports. But for production I use only “Crude plus Condensate” and for exports I used “Crude Oil Exports” which I assume includes condensate as well. Also the export data is not exact, just close, because some importers are also exporters. For instance in 2001 the US exported 59,000 barrels per day. In 2012 the US exported 629,000 barrels per day. The exporting of condensate is allowed in the US and since the Shale boom condensate exports have increased quite dramatically because Light Tight Oil is rather top heavy with condensate. To get exports versus consumption for exporting nations I simply subtracted their exports from their production. The difference was what they consumed. Similar data can be […]

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Iraq exports hold close to record high in May

LONDON Iraq’s oil exports have held above 3 million barrels per day (bpd) so far in May, according to loading data and an industry source, keeping shipments from OPEC’s second-largest producer close to a record high. Another strong month from Iraq adds to signs of high output from major members of the Organization of the Petroleum Exporting Countries focused on keeping market share, weighing on global oil prices. "There is little doubt that record crude exports out of Iraq are adding further length to an already extremely well-supplied market, thereby adding downside pressure," said Eugene Lindell, oil analyst at JBC Energy in Vienna. Exports from Iraq’s southern terminals have averaged 2.55 million barrels per day (bpd) in the first 21 days of May, according to shipping data seen by Reuters and an industry source, down from 2.63 million bpd in April. But exports from Iraq’s north via Ceyhan in […]

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Sunni Tribes in Iraq Divided Over Battle Against Islamic State

Islamic State claimed full control of the ancient Syrian city on Palmyra and a nearby military airport and prison. What is the strategic and cultural significance of this victory? WSJ’s Jason Bellini has #TheShortAnswer. BAGHDAD—While some of his Sunni kinsmen in Anbar province set about working with Shiite militias on a strategy to oust Islamic State, Emad al-Jumaili was making a very different kind of plan. The tribal elder was busy preparing to guard his home and family from those same militias. “I have always said I would much prefer to be killed by a Sunni terrorist organization than a Shiite terrorist organization,” said Mr. Jumaili. Islamic State now controls Palmyra, a Syrian city housing renowned archeological ruins. Amr Al Azm, Syrian antiquities expert at Shawnee State University, discusses what’s at risk. Photo: Getty That’s a big problem for the Shiite-dominated Iraqi government and its U.S. allies. They are […]

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Shi’ite militia deploy from base near Iraq’s Ramadi

BAGHDAD A convoy of Shi’ite militia fighters and Iraqi army forces set out from a base near the western provincial capital of Ramadi on Saturday, heading towards areas controlled by Islamic State militants, an eyewitness and a local official said. Anbar provincial council member Azzal Obaid said hundreds of fighters, who arrived at the Habbaniya air base last week after Ramadi was overrun by Islamic State, were in Khalidiya and were approaching Siddiqiya and Madiq, towns in contested areas near Ramadi. While pro-government forces are seeking to retake Ramadi, Islamic State insurgents have been pushing forward in the direction of Fallujah in a bid to take more territory in Anbar province that would bring them closer to the Iraqi capital Baghdad. (Reporting by Baghdad Bureau; Writing by Stephen Kalin; Editing by David Holmes )

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After seizing Ramadi, IS presses Anbar campaign

Iraqi security forces battle militants from the Islamic State (IS) group in Ramadi, in Anbar province, on May 14, 2015. (STRINGER/Reuters) Recommend 271 people recommend this. Sign Up to see what your friends recommend. The Islamic State (IS) group is battling swiftly toward a key Iraqi military base in Anbar – building on momentum from its recent takeover of Ramadi – in an apparent campaign to consolidate its control of the province.IS militants are pushing toward the al-Habbaniya air base, east of Ramadi, which is one of the Iraqi government’s few major staging areas in Anbar from which it can potentially launch counter-attacks.Iraqi Army forces began to retreat Thursday afternoon from the Juayb… 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 .

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Exxon denies reports on review of U.S.-Iranian ties

WASHINGTON, May 22 (UPI) — Exxon Mobil said Friday reports that it was lobbying the U.S. government on sanctions imposed on Iran are inaccurate. "Exxon Mobil is not lobbying on Iran sanctions," Ken Cohen, Exxon’s vice president of Public and Government Affairs, said in a statement . "Erroneous media reports resulted from errors in a consultant’s lobbying disclosures. Current U.S. law prohibits American companies from operating in Iran." Bloomberg news reported Exxon hired a lobbying company , the Nickels Group, formed by former Sen. Don Nickles, R-Okla. to monitor Iranian sanctions measures. "We are not lobbying on Iran sanctions," Alan Jeffers, an Exxon spokesman, told Bloomberg. "We are monitoring activities related to Iran in the U.S. government." Nickles served as Senate Whip and chairman of the Senate Committee on the Budget before leaving office in 2005. Bloomberg reports Exxon’s work with the Nickles Group is the first time since […]

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ISIS Claims Responsibility for Bombing at Saudi Mosque

Photo The wreckage of a mosque after a suicide bombing in Al Qudaih, Saudi Arabia. The attack on Shiites took place during midday Friday Prayer. Credit Agence France-Presse — Getty Images RIYADH, Saudi Arabia — The Islamic State extremist group claimed responsibility Friday for a suicide bombing during midday prayer at a Shiite mosque in eastern Saudi Arabia. The Saudi Health Ministry said at least 21 people had been killed and more than 120 others injured. It appeared to be the first official claim of an attack inside the kingdom by the Islamic State, which has seized control of much of Syria and Iraq. The group attributed the attack to a new unit, the Najd Province, named for the central region of Saudi Arabia around Riyadh. But it was unclear whether the attack was planned by Islamic State leaders, initiated independently by a Saudi sympathizer, or merely claimed opportunistically […]

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Germany’s Wintershall Interested in Occidental’s Libyan Oil Assets

ENLARGE Illustration: Reuters Germany’s Wintershall Holding GmbH has expressed an interest in buying stakes in Libyan oil-and-gas assets from Occidental Petroleum Corp. OXY 0.18 % , Libyan officials said, a rare move by a western company to increase its foothold in the war-torn country. Houston-based Occidental has sought and obtained permission from Libya’s state-run National Oil Co. to allow Wintershall access to confidential data of fields it partly owns, Libyan officials said. “Occidental has been asking approval of NOC for disclosing information to Wintershall,” an official said. Occidental has been trying to sell up to a 40% stake in its Middle Eastern and North African interests since October 2013, as it tries to focus on its prolific North American assets. Its Libyan fields have been producing insignificant amounts, the company said in its 2014 report to the U.S. Securities and Exchange Commission, as the country remains divided by a […]

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Yemen struggles with food shortages as shipments stay slow

* Several ships waiting clearance to deliver goods * Aid groups say hunger growing LONDON, May 22 (Reuters) – A trickle of aid, medicine and commercial food cargoes is reaching Yemen yet the process remains slow as more ships await clearance to discharge at ports and logistical chains buckle due to fuel shortages and war. Before Saudi Arabia launched air strikes in Yemen in March, the Arabian Peninsula’s poorest country imported more than 90 percent of its food – most of it by sea. It faces increasing problems as many shipping companies have pulled out and those still willing to bring cargoes endure a long wait for clearance from Saudi-led warships trying to prevent arms supplies reaching Iran-allied Houthi fighters. In recent days over 130,000 tonnes of wheat has reached Yemen in commercial ships as well as other supplies including sugar and fuel, partly helped by a five-day truce […]

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Nigeria: May 29 Handover – No Facts From Jonathan On Fuel Crisis – Buhari

APC Candidate, Muhammadu Buhari. By Levinus Nwabughiogu, Johnbosco Agbakwuru & Joseph Erunke Abuja — The president-elect, General Mohammadu Buhari, yesterday, lamented that the out-going administration of President Goodluck Jonathan has failed to provide the in-coming government with all the necessary information needed for a smooth take-off next week, particularly on how to tackle the current fuel scarcity in the country. The President-elect spoke on a day the Senate directed its committees on Petroleum Resources ( Upstream and Downstream ) to immediately commence investigation into the remote and immediate causes of the fuel crisis in the country. The Senate directive was sequel to the motion by the Deputy Senate Majority Leader, Senator Abdul Ningi, who had called on the lawmakers to pay serious attention to the fuel crisis that had created great hardship for Nigerians at the moment. Senator Ningi wondered why a country that has abundant oil resources should […]

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Nigeria — Africa’s largest oil producer — crippled by fuel shortages

Fuel shortage causing long lines in Nigeria 01:56 Lagos, Nigeria (CNN)Nigeria is Africa’s largest oil producer, but fuel shortages have paralyzed the country that just a year ago was declared Africa’s largest economy. At one gas station in Lagos, crowds push at the gates waving empty jerry cans. Cars queue for a kilometre down the road creating gridlock. Similar scenes are being repeated at almost every petrol station across Nigeria. "I’ve been here since 4 a.m. It’s not good," says local resident Abdulsalam Mohammed as he finally drives his car to the petrol pump. "Now it’s almost 3 p.m. Nobody can work today." "We are an oil producing country, very rich, a giant in Africa," says Seun Olewale, another driver who is carrying empty fuel cans. "But the experience we are getting now is so hard." The shortages have been going on since March despite the fact that, according […]

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Statoil comes up dry in Norwegian Sea

OSLO, Norway, May 22 (UPI) — The Norwegian government said Friday energy company Statoil came up empty-handed when drilling in a frontier prospect near the Helm field in the Norwegian Sea. The Norwegian Petroleum Directorate said Statoil is finishing drilling operations at wildcat wells , those drilled in an area not previously known to contain oil or gas reserves, about three miles north of the Hyme field. "The well is classified as dry," the NPD said in a data review. The company spent more than $790 million on developing the Hyme prospect, getting the project into production ahead of schedule in early 2013. Statoil estimates the field holds as much as 30 million barrels of oil equivalent. Most of the recoverable reserves exist as oil deposits. The company said the field, discovered in 2009, should be able to produce oil and natural gas past 2020. NPD said preliminary data […]

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Fed on track to hike rates as economic headwinds wane: Yellen

PROVIDENCE, R.I. Federal Reserve Chair Janet Yellen was clearer than ever on Friday that the central bank was poised to raise interest rates this year, as the U.S. economy was set to bounce back from an early-year slump and as headwinds at home and abroad waned. Yellen spoke amid growing concern at the Fed about volatility in financial markets once it begins to raise rates, and a desire to begin coaxing skeptical investors toward accepting the inevitable: that a 6-1/2-year stretch of near-zero interest rates would soon end. In a speech to a business group in Providence, Rhode Island, Yellen said she expected the world’s largest economy to strengthen after a slowdown due to "transitory factors" in recent months, and noted that some of the weakness might be due to "statistical noise." The confident tone suggested the Fed wants to set the stage as early as possible for its […]

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U.S. issues corrective action order over oil pipeline spill in California

LOS ANGELES Owners of the oil pipeline that ruptured in California this week must take numerous corrective measures, including an in-depth analysis of factors contributing to the spill, before they can restart the line, federal safety officials said on Friday. The corrective action order issued on Thursday by the U.S. Transportation Department’s Pipeline and Hazardous Materials Administration is not regarded as a disciplinary enforcement sanction against the company, Texas-based Plains Pipeline LP, officials said. But it requires Plains to perform a detailed and lengthy list of actions before the oil line resumes operations, starting with removal of the failed pipe for metallurgical examination, purging the line of remaining petroleum and independent review of inspection results. It also requires a "root-cause analysis" of the spill, exploring not only the direct cause of the failure, but "every contributing factor" that may have played a part, including any safety compliance issues, said […]

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U.S. oil platform on fire in Gulf Of Mexico; no injuries: Coast Guard

An oil platform caught fire and was evacuated in the U.S. Gulf of Mexico offshore Louisiana in the early hours of Friday, though no injuries were reported, the U.S. Coast Guard said. Fire-fighting crews worked to contain the fire on Friday near Breton Island, 50 miles (80 km) offshore New Orleans, the Coast Guard said. All 28 people were evacuated from the platform. It was unclear what caused the incident or how much oil leaked into the ocean, but the Coast Guard said it has observed a 1.4 nautical mile rainbow sheen drifting southwest of the platform. The platform, owned by Texas Petroleum Investment Co, has an estimated 4,000 barrels of crude oil on board, the Coast Guard said. It was not clear if the company also operated the well. The well has been shut and production stopped, the Coast Guard said. The company was not immediately available for […]

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Millions of Barrels of Oil Are About to Vanish

Millions of barrels of untapped oil that U.S. shale drillers discovered during the boom years are about to disappear from their inventories. Six years ago, the industry pushed the Securities and Exchange Commission to make it easier for companies to claim proved reserves for wells that wouldn’t be drilled for years. Some prospects considered sure-things when crude was $95 a barrel are money losers at today’s $60. When crude crashed in 2008, 44 U.S. companies wiped 630 million barrels from their books. Now the stakes are higher. Of all the proved reserves of oil and natural gas liquids found by the 44 companies since 2008, more than half — 5.4 billion barrels out of the 9.7 billion — is attributed to wells that don’t exist yet, according to data compiled by Bloomberg. “We’re going to see a lot of proved undeveloped reserves get vaporized,” said Ed Hirs, a managing […]

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Coal’s Worst Fears Affirmed in Analysis of Obama Climate Plan

Emissions rise as a U.S. flag flies at a coal-fired power plant in Winfield, West Virginia. Photographer: Luke Sharrett/Bloomberg A new government analysis of President Barack Obama’s signature effort to fight climate change affirms what critics suspected: the proposal could further weaken an already battered coal industry. Electricity generation from the carbon-intensive fossil fuel would fall by 90 gigawatts, more than twice the decline government analysts had predicted as recently as April, according to a report released Friday by the Energy Information Administration. Most of the coal-plant closures would come by 2020, when the Environmental Protection Agency’s proposal to cut carbon dioxide emissions would kick in. Consumers may also take a hit as electricity prices would increase as much as 7 percent on average by 2025, partly because of the costs of building new power plants. “In short, EIA confirms EPA’s rule is all pain, no gain — a […]

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Federal data: As oil production soars, so do pipeline leaks

AP Photo/Mark J. Terrill Buy AP Photo Reprints Multimedia A year after the Gulf oil spill, problems remain Interactives Producers Tap Old Wells in Search of Oil The oil pipeline leak that fouled a stretch of California coastline this week reflects a troubling trend in the nation’s infrastructure: As U.S. oil production has soared, so has the number of pipeline accidents. Since 2009, the annual number of significant accidents on oil and petroleum pipelines has shot up by almost 60 percent, roughly matching the rise in U.S. crude oil production, according an analysis of federal data by The Associated Press. Nearly two-thirds of the leaks during that time have been linked to corrosion or material, welding and equipment failures, problems often associated with older pipelines, although they also can occur in newer ones, too. Other leaks were blamed on natural disasters or human error, such as a backhoe striking […]

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New York snubs Albany port bitumen project

ALBANY, N.Y., May 22 (UPI) — New York’s state government found there would be "at least one" environmental issue with a proposal to build a tar sands storage facility at a rail terminal. The state Department of Environmental Conservation rescinded a 2013 notice to Global Partners, which has headquarters in Massachusetts, that a proposed project to warm rail cars filled with the heavier form of crude oil called bitumen would not present environmental threats. Global wanted to install boilers at its Albany terminal to offload to vessels headed for coastal refineries. DEC rescinded its 2013 notice after reviewing thousands of comments and documents, including those submitted by environmental groups. Its review found "little experience" with heating bitumen in major oil storage facilities. "This new information suggests that the proposed project has the potential for at least one significant adverse environmental impact that was not considered in the negative declaration," […]

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Oil-Rig Count Decline Continues Moderating

The U.S. oil-rig count has declined for 24 straight weeks. ENLARGE Photo: Pioneer Natural Resources/Bloomberg News The U.S. oil-rig count fell by one to 659 in the latest week, according to Baker Hughes Inc., marking the 24th straight week of declines. The number of U.S. oil drilling rigs—a proxy for activity in the oil industry—has fallen sharply since prices headed south last year. There are now about 59% fewer rigs working since a peak of 1,609 in October. But the rate of decline has slowed in recent weeks, and some shale oil companies are expecting to add rigs in the coming months if prices stabilize near the current levels. U.S. crude oil futures were recently down 1.9% to $59.58 a barrel. According to Baker Hughes, gas rigs were down one to 222 this week. The U.S. offshore rig count is at 29, down five last week and off 23 […]

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Pipeline in California Oil Spill Ordered Shut Down, Tested

ENLARGE Workers clean oil Friday from the shoreline of Refugio State Beach in Goleta, Calif. On Friday, federal regulators ordered Plains All American Pipeline LP, the operator of the pipeline responsible for the spill, to determine the causes of the pipeline’s failure. Photo: Justin Sullivan/Getty Images Officials at the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration, the agency responsible for oversight of the line, said Friday the company must fulfill all of the requirements of the corrective order, issued Thursday, before the line can restart pumping oil. The order requires the company to determine the cause of the spill, and test the entire line for any conditions similar to the cause of the rupture. To do so, Plains All American must empty and purge the pipeline, and conduct a physical and analytical review that includes inspections of various engineering records and company data, among other materials. The […]

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Alpha Natural to Lay Off 439 at West Virginia Coal Mine

By John W. Miller Coal miner Alpha Natural Resources Inc. on Friday said it plans to lay off 439 miners at a mine in south-central West Virginia. Murray Energy Corp., another big Appalachian miner, is planning to lay off around 1,800 workers, mostly in Ohio and West Virginia, the Wall Street Journal reported Thursday. Like Murray, Bristol, Va.-based Alpha is reeling from competition from the natural gas industry and its less expensive energy for power plants, and from a global coal glut and tougher environmental regulations in the U.S. The layoffs will affect workers at the Camp Creek underground coal mine and processing plant in Camp Creek, W.Va. In addition, the company said it had downsized its workforce at three other Alpha-affiliated mines in Kentucky and Virginia, affecting 71 workers. Alpha Chairman and Chief Executive Kevin Crutchfield called current market conditions "an unprecedented time in the coal industry." His […]

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US drivers to see lowest gasoline prices since 2009 this holiday weekend: EIA

US drivers hitting the roads this Memorial Day weekend can expect to find the lowest prices at the pump since 2009, federal data showed Friday. "On May 18, the US average retail price for gasoline was $2.74/gal, or 92 cents per gallon lower than at the same time last year," the US Energy Information Administration said in a report published Friday. "This is the lowest average price heading into the Memorial Day weekend — the traditional start of the summer driving season — since 2009," the report said. After a lag, pump prices began following global oil prices down last summer, reflecting a glut of oil followed by gasoline pressing on the market. Wholesale gasoline values hit bottom in December and began to rebound early this year, and this trend has also been seen in pump prices. This spring, gasoline values have been on the rise, reflecting recovered demand […]

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Oil Holds on to Recent Gains, WTI Trades Above $60/Bbl

By Eric Yep Crude-oil futures softened marginally in Asian trade Friday but retained the bulk of strong overnight gains that helped push U.S. oil prices over the $60 a barrel mark. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $60.56 a barrel at 0316 GMT, down $0.16 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange fell $0.20 to $66.34 a barrel. West Texas Intermediate crude on Nymex had gained nearly 3% in the previous trading session, while Brent crude had gained around 2.3%. "Oil market sentiment remains buoyant, reflecting a considerable confidence that the market will rebalance as demand grows and U.S. shale oil production declines," analyst Tim Evans at Citi Futures said in a report. But stronger demand and weaker U.S. oil production are not enough to tighten the market fast enough, and materially stronger […]

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Brent crude oil steadies near $66 before long weekend

LONDON Oil prices steadied on Friday as worries over the impact on crude supplies of war in the Middle East were balanced by reports of profit-taking ahead of a long weekend. Monday, May 25 is Memorial Day in the United States and a public holiday in much of Europe, closing many markets. "No one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. July Brent crude LCOc1 was down 25 cents at $66.29 a barrel by 0800 GMT after closing up 2.3 percent on Thursday. U.S. crude futures are experiencing their longest winning streak since records began in 1983, helped by a drop in U.S. crude and product stockpiles last week, reflecting better demand in the world’s largest oil consumer. [EIA/S] U.S. crude for July CLc1 was down […]

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Oil edges further above $65 on U.S. inventory drop, Iraq

LONDON Oil rose further above $65 a barrel on Thursday, gaining for a second day, supported by expectations that a global supply glut is starting to ease and by fighting in Iraq. The U.S. government’s supply report on Wednesday showed crude inventories declined for a third week. Stockpiles had been at record levels due to excess supply, raising concern that storage capacity was getting tight. [EIA/S] Brent crude LCOc1 was up 23 cents at $65.26 as of 0828 GMT, after earlier falling as low as $64.83. U.S. crude CLc1 was up 22 cents at $59.20. "Brent is getting a bit of impetus from the threat Islamic State is posing in Iraq," said Christopher Bellew, senior broker at Jefferies Bache. "I can see prices moving up further from here on geopolitics towards $70." In Iraq, the city of Ramadi fell to Islamic State on Sunday in the most significant setback […]

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NYMEX June natural gas futures settle at $2.949/MMBtu, up 3.4 cents

NYMEX June natural gas futures settled 3.4 cents higher at $2.949/MMBtu Thursday as the market reacted to a government storage report that showed an inventory build below expectations. US natural gas in storage rose 92 Bcf to 1.99 Tcf for the week ended May 15, the US Energy Information Administration said Thursday. The net injection was below consensus expectations of an injection between 93 Bcf and 97 Bcf. In the corresponding week last year, the EIA reported a 106-Bcf injection, while the five-year average is an 89-Bcf injection. "The smaller than expected [EIA injection] number popped us above $3.00[/MMBtu], but the market is finding some resistance above [that price level]," said Gene McGillian, senior analyst at Tradition Energy. McGillian said that there are a couple of factors creating that resistance. The first is that production levels remain very high, despite a recent slowdown in the rate of production growth, […]

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Natural Gas Price Rises on Forecasts for Warm Weather, Growing Demand

By Timothy Puko Natural gas prices rose slightly on Thursday, as warmer weather and rising power-sector demand keep encouraging traders. Prices for the front-month June contract gained 3.4 cents, or 1.2%, to $2.949 a million British thermal units on the New York Mercantile Exchange. Gas prices are up 18% since they hit a nearly three-year low on April 27. The U.S. Energy Information Administration said on Thursday that storage levels grew by 92 billion cubic feet in the week ended May 15. That is 5 bcf less than the 97-bcf average of forecasters surveyed by The Wall Street Journal. The EIA update is widely considered one of the best measures of supply and demand for the natural-gas market. This figure would indicate slightly smaller supply or larger demand than expected. And it suggests the market has become more balanced from how it was two to four weeks ago, said […]

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Oil Giants Band Together to Add Voice to Climate Debate

Europe’s largest oil companies are banding together to forge a joint strategy on climate-change policy, alarmed they’ll be ignored as the world works toward a historic deal limiting greenhouse gases. Royal Dutch Shell Plc, Total SA, BP Plc, Statoil ASA and Eni SpA are among oil companies that plan to start a new industry body, or think tank, to develop common positions on the issues, according to people with knowledge of the matter. So far the largest U.S. companies — Exxon Mobil Corp. and Chevron Corp. — have decided not to participate, the people said, asking not be named before a public announcement expected as early as next month. Efforts to reduce fossil-fuel investments and spur renewables such as solar and wind power have gathered pace in the past two years with oil companies sitting largely outside the debate. One aim of the European producers will be to push […]

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Gaddafi’s home town falls to Islamic State in anarchic Libya

SIRTE, Libya Standing guard at his frontline post, Libyan soldier Mohammed Abu Shager can see where Islamic State militants are holed up with their heavy weaponry less than a kilometer away. The militants have effectively taken over former dictator Muammar Gaddafi’s home city of Sirte as they exploit a civil war between two rival governments to expand in North Africa. "Every night they open fire on us," said Abu Shebar, who with comrades on Sirte’s western outskirts holds the last position of troops belonging to one of the two warring Libyan governments, the General National Congress, which controls the capital Tripoli and most of the west of the country. "They are only active at night," he said, pointing to the militants’ position in a house just down the road blocked by sandbags. He sleeps in a shed next to his firing positions where used tank shells litter the ground. […]

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Obama cites ‘personal interest’ in locking down Iran deal

WASHINGTON (AP) — President Barack Obama says he has a personal stake on ensuring that negotiations with Iran produce an agreement that keeps Tehran from producing a nuclear weapon over the long-term. He says in an interview with The Atlantic that if Iran has a nuclear weapon in 20 years he would be held accountable. "Look, 20 years from now, I’m still going to be around, God willing. If Iran has a nuclear weapon, it’s my name on this," he said. "I think it’s fair to say that in addition to our profound national security interests, I have a personal interest in locking this down." Critics of an agreement say the president is so determined to burnish his legacy that he will accept a less-than-ironclad commitment from Iran. The talks involve Iran, the U.S., four other permanent members of the U.N. Security Council and Germany – a group call […]

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Iran sets oil sights on Asia

Iran expects to tap deeper into Asian oil market if sanctions are lifted as the result of ongoing nuclear talks. UPI/Stephen Shaver TEHRAN, May 21 (UPI) — Iran will be among the top oil suppliers for Asian consumers if sanctions are lifted as the result of nuclear talks, Iran’s deputy oil minister said. Iran is expecting an influx of foreign cash, should sanctions lift as the result of ongoing nuclear negotiations with six world powers. Under the terms of joint deal reached in November 2013, oil exports are limited to around 1 million barrels per day and to just six countries: China, India, Japan, South Korea, Taiwan and Turkey. Iran’s deputy oil minister, Rokneddin Javadi, said that while efforts would be made to diversify exports, the Asian market would remain a top priority . "Before the sanctions were imposed, Asian countries were the leading consumers of Iran’s oil," he […]

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Saudi Oil Minister Says World Can’t Abandon Fossil Fuels

ENLARGE Saudi Arabia’s Oil Minister Ali al-Naimi, left, speaks with French Foreign Minister Laurent Fabius during the Business Climate Summit in Paris, France. Photo: Bloomberg News Saudi Arabian Oil Minister Ali al-Naimi said on Thursday that he sees a great future for solar power but that the world can’t abandon fossil fuels in the short term Mr. Naimi, speaking on a panel in Paris, addressed questions about whether the world’s oil-and-gas companies should move on to other forms of energy in the face of climate change linked to human carbon emissions. He said it wouldn’t make economic sense to make a dramatic move now. “You say decarbonize. Are you willing to have me go back home and shut all the oil wells? Can you afford that today?” Mr. Naimi said at the Business and Climate Summit in Paris, broadcast by Bloomberg. “What will happen to the [oil] price if […]

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South Sudan Repels Rebels’ Oil-Field Attack

ENLARGE File pictures showing South Sudan President Salva Kiir, left, and the leader of South Sudan’s largest rebel group and former Vice-President Riek Machar. Photo: Agence France-Presse/Getty Images KAMPALA, Uganda—South Sudan’s army has repelled a rebel attack on oil fields in Upper Nile state, allowing the country’s only functional crude oil facility to remain open, officials said Thursday. After capturing the Upper Nile state capital Malakal over the weekend, several thousand rebels loyal to former Vice President Riek Machar pushed toward the oil fields. But government troops backed by helicopter gunships, tanks and armored cars successfully defended one of the country’s major economic assets. “The rebels have been defeated” said military spokesman Col. Philip Aguer. “Oil fields are fully under our control”. By Wednesday evening both sides had lost dozens of fighters, but government troops beat back the rebel assault, the army and witnesses said. The rebel assault was […]

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Nigerians groan under biting petrol shortages over subsidy row

Business leaders in Africa’s leading oil producer Nigeria on Thursday warned that jobs could be at risk, as a weeks-long fuel crisis showed no signs of easing. Long queues have been seen for days outside filling stations, flights have been grounded and generators that kick in when the country’s patchy public electricity supply goes off have run silent, leaving many without power. "Many companies have shut down because they cannot get diesel to fuel their plants," Musa Yusuf, of the Lagos Chamber of Commerce and Industry, told AFP. "Unless the situation is redressed, companies may be forced to lay off (staff)." Addressing the crisis looks likely to be the first major task for incoming president Muhammadu Buhari, who takes office next Friday. – Empty tanks – Nigerian motorists have borne the brunt of the shortages, with long queues at petrol stations in major cities such as Lagos, the capital […]

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Exxon makes big oil find offshore Guyana

Exxon announces the finding of a significant volume of oil in the deep waters off the coast of Guyana. Photo by project1photography/Shutterstock IRVING, Texas, May 21 (UPI) — Exxon Mobil said it made what it described as a significant oil discovery in the deep waters about 120 miles off the coast of Guyana in the Caribbean. The company ran through a 295-foot column of oil reserves while drilling an exploration well in the Stabroek reserve area about 120 miles of the Guyana coast in 5,719 feet of water, "I am encouraged by the results of the first well on the Stabroek block," Stephen M. Greenlee, president of Exxon Mobil Exploration Co., said in a statement. "Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block." A report from the U.S. Geological Survey said […]

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Reliance Petrol Stations Are Back in Business in India

ENLARGE A woman walks past a Reliance petrol and gas station in Navi Mumbai, India, in 2012. Photo: Bloomberg News NEW DELHI— Reliance Industries Ltd. EQRELIANCE -0.73 % plans to fully resume retail sales of fuel—a business it exited in 2008—by next March, as India’s move to end diesel subsidies provides it a level playing field to compete with state-run operators. The Mumbai-based refiner of crude oil had ventured into selling gasoline and diesel in 2006 through its nearly 1,400 petrol stations across the country. But it had to shut operations as it wasn’t getting subsidies extended to state-run operators. The subsidies were to compensate retailers for losses incurred on mandatory fuel sales below market prices, aimed at shielding the poor from inflation. However, the government ended subsidies on gasoline in 2012 and diesel last October , paving the way for private operators’ entry. The move “has presented an […]

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Gasoline Futures Hit Six-Month High

NEW YORK—Gasoline futures climbed to a 2015 high Thursday on expectations of strong driving demand during the Memorial Day weekend. U.S. gasoline consumption has risen this year as oil prices fell to multiyear lows and employment increased. Economists debate about how much cheaper gasoline encourages drivers to hit the road, but some analysts and investors are counting on increased driving demand to help shrink the global glut of crude oil this year and boost oil prices. Prices at the pump averaged $2.73 a gallon Thursday, according to motor club AAA, up more than 25 cents in the past month but still 91 cents cheaper than a year ago. Gasoline futures started rising Wednesday after weekly inventory data showed that stockpiles of gasoline fell more than expected, even as refineries processed more crude oil into fuel. On Thursday, gasoline futures for June delivery settled up 4.13 cents, or 2%, at […]

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Net imports of natural gas fall to lowest level since 1987

U.S. Energy Information Administration, based on U.S. Department of Energy Office of Fossil Energy U.S. net imports of natural gas decreased 9% in 2014, continuing an eight-year decline. As U.S. dry natural gas production has reached record highs, lower domestic prices have helped to displace natural gas imports. Net natural gas imports (imports minus exports) totaled 1,171 billion cubic feet (Bcf) in 2014, the lowest level since 1987. Imports by pipeline from Canada account for nearly 98% of all U.S. natural gas imports, and were the main driver of the decrease in total imports. Net imports from Canada represented 7% of total U.S. natural gas consumption in 2014, down from 11% in 2009. U.S. natural gas exports also decreased in 2014, but at a slower rate than the decrease in imports, and were still 9% above the previous five-year average. Natural gas exports to Mexico, which account for nearly […]

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US BOEM director defends Shell Arctic drilling decision

Faced with intense opposition from environmentalists, the director of the US Interior Department’s Bureau of Ocean Energy Management defended the administration’s conditional approval of Shell’s plans to drill in the Arctic this summer, a decision she indicated was based on both federal statute and, partly, national security. "There are certain regulatory requirements and [Shell] had met all of those requirements," BOEM Director Abigail Ross Hopper said in an interview with Platts on Wednesday. "We don’t have the ability to push things back, we can either approve or deny or approve with conditions. [Shell] met all the regulatory requirements … there’s not a basis upon which to reject it." The majority of environmental groups are pushing for an effective ban on US Arctic drilling, a path some felt President Barack Obama may have been moving toward when in late January he designated 9.8 million acres in the Beaufort and Chukchi […]

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Murray Energy to Lay Off Around 1,800 Workers

ENLARGE The planned layoffs at Murray Energy will come mostly from its mines in West Virginia and Ohio. Photo: Jeff Swensen for The Wall Street for The Wall Street Journal Coal miner Murray Energy Corp. is set to announce layoffs of around 1,800 workers at nine locations on Friday, according to a person familiar with the matter, dealing another blow to the coal-mining industry in Appalachia. The planned layoffs, which represent about 21% of Murray’s workforce, will come largely at mines in West Virginia and Ohio, a region already reeling from the impact of abundant natural gas and a global coal glut. Robert Murray, the 75-year-old founder and chief executive of the company, made the decision Wednesday after a 12-hour meeting with operations managers, according to the person familiar with the matter. The company decided to make much bigger cuts than it had previously been considering because of growing […]

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Vanguard Natural Resources to Buy Eagle Rock Energy Partners

The deal gives Vanguard a bigger presence in Oklahoma, where the company already pumps oil and gas, Vanguard chief executive Scott Smith said. “The assets being acquired are attractive bolt-ons to our Mid-Continent, Permian, and Gulf Coast Basin operations,” Mr. Smith said, referring to Vanguard’s existing drilling operations in Texas, New Mexico, Colorado, Wyoming and several other states. Terms of the deal calls for a subsidiary of Vanguard to merge into Eagle Rock for $474 million in stock and assume Eagle Rock’s net debt of $140 million. Following that combination, Eagle Rock will be a subsidiary of Vanguard. Joseph A. Mills, chief executive of Eagle Rock, said the agreement gives Eagle Rock shareholders a 24% premium over Thursday’s closing price of $2.45 a share. “We have been very impressed with the Vanguard team and look forward to working together to successfully combine our two companies,” he said.

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U.S. Railroad Oil Shipments Fell Amid Weak Oil Pricing

ENLARGE Crude oil volume on U.S. railroads has been falling as the declining price of oil pushes companies to pull back production. Photo: Associated Press Railroads carried less crude oil in the first quarter as oil companies scaled back domestic shipments. The Association of American Railroads reported that crude oil carried by big U.S. railroads fell nearly 14% to 113,089 carloads compared with the fourth quarter of 2014. The railroads have been major beneficiaries of the U.S. energy boom, as oil companies shipped crude oil from the Bakken Shale in North Dakota to refineries on the coasts. But as the price of oil tumbled, shipments dipped. Crude-by-rail shipments are still a small part of railroads’ total revenues—only about 5% for the sector combined with drilling supplies—but the business has grown at a rapid rate in recent years. The tonnage of crude petroleum carried by U.S. railroads soared from about […]

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Santa Barbara Oil Spill Worsens Dramatically

What was originally thought to be around 21,000 barrels is now over 105,000 barrels of oil spilled on to the pristine beaches of Santa Barbara County . On Wednesday, Gov. Jerry Brown declared a state of emergency for Santa Barbara County to free up resources to respond to the spill, which as the following horrible images show, is far worse than it initially appeared. After seeing all of that, it is no wonder that OilPrice.com’s Charles Kennedy believes this latest oil pipeline spill could galvanize environmentalist opposition . Santa Barbara area oil and gas facilities But the images of the cleanup are awful… Source: LA Times, The Telegraph *  *  * After seeing all of that, it is no wonder that OilPrice.com’s Charles Kennedy believes this latest oil pipeline spill could galvanize environmentalist opposition. A pipeline in California broke and spilled oil into the Pacific Ocean on May 19. […]

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