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China April home prices fuel hopes of bottoming out, but long road to recovery

HONG KONG China’s new home prices fell for the eighth consecutive month in April from a year earlier but were flat from March, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out. But analysts warned any recovery in the market will take some time given a huge inventory of unsold homes, and said the property sector remains the biggest risk to the world’s second-largest economy, which looks set for its worst year in 25 years. That will keep pressure on policymakers to roll out more interest rate cuts and other stimulus measures later this year to boost activity. Average new home prices in China’s 70 major cities dropped 6.1 percent last month from a year ago, the same rate of decline as in March, according to Reuters calculations based on official data published on Monday. But nationwide prices steadied […]

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Oil Investors Take a Closer Look at Production

ENLARGE A spotlight has landed on a previously overlooked metric as oil traders drill deeper for clues on price movement. More often, investors are looking to weekly U.S. oil-production data from the U.S. Energy Information Administration for signs the global glut of crude that sunk prices last year is starting to shrink. That data point, however, has some significant, well-known limitations, and some analysts say traders are giving too much credence to it. The EIA’s weekly production data are largely based on a forecasting model, not reported output. And the week-to-week changes are often too small to be a reliable indicator of whether production is rising or falling, according to the EIA. Still, on April 1, when the EIA report showed the first weekly production decline since January, the U.S. oil price surged by 5.2% to settle above $50 a barrel, even though the same report showed domestic crude […]

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Bakken by County and Legacy Decline

North Dakota publishes Historical Oil Production by County . However confidential wells are not included in these totals. But they also publish a State Summary Report  which does include confidential well data for the previous two months. Working with both we can get a pretty good estimate of production from each county. McKenzie had  a 12,533 bp/d gain in March but they are still 32,447 below their December high. Mountrail peaked back in September 2014 and dropped another 9,467 bp/d in March. Mountrail dropped the most in October when the Bakken rig count averaged 191 and WTI averaged in the mid $80s. Once North Dakota’s largest producer, I don’t think there is any question that Mountrail has peaked. Dunn had a big increase of 10,884 bp/d in March and surpassed its previous peak in September. Williams was down by just over 1,000 bp/d in March. North Dakota outside the […]

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U.S. gas prices up 22 cents over past three weeks: survey

The average price of a gallon of regular-grade gasoline in the United States rose 22 cents over the past three weeks to $2.82, according to a Lundberg survey released on Sunday. The average price per gallon, which has now jumped 35 cents since April 10, is the highest seen by the survey since late November, but is still nearly 93 cents lower than a year ago. Rises in crude oil prices over the three-week period were not driven by changes in oil supplies, said Trilby Lundberg, publisher of the survey, but rather were caused by a recent weakening of the dollar against key foreign currencies. Prices should remain relatively low for the coming summer driving season. "The chances are high that there will be small or negligible price rises from here in the national average, assuming no crude oil price spike in the near future," Lundberg said. The price […]

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Heinberg paints a bleak picture of an inevitable post-carbon future

Very slowly, environmentalists have begun to convince the world we can have our cake and eat it too. They argue human civilization can transition away from fossil fuels without suffering a significant blow to the global economy. Capitalism, continual growth, and high standards of living can all continue, and continue without the onset of catastrophic climate change. We can transition to renewable sources of energy such as solar, wind, and hydro—which, in recent years, have become substantially more economically viable. And that allow us save the planet while continuing to update to the latest iPhone each year and without forgoing the annual vacations in Hawaii. But Richard Heinberg argues this optimistic future is a fantasy. It is absolutely imperative that the world does move away from fossil fuels, he maintains. But it is not going to happen without severe economic sacrifice, political upheaval, and a “simplification and decentralization of […]

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Shell’s Arctic voyage marks beginning of peak oil era

World will need to repeat US shale revolution to meet future oil demand Even though the current weakness in oil prices below $100 per barrel has been caused by a glut in global supply this will be short lived. Most of the new oil has come from three sources, US shale, Iraq and Africa. Each has its own problems going forward that will limit its potential to deliver the incremental increases in supply that will be required to meet even the most pessimistic forecasts for demand by 2040. In the case of US shale this oil already represents the bottom of the barrel. Lower prices mean that US output will plateau this year at around 9.3m bpd as oil companies shut down rigs at a record rate. However, even when these rigs eventually return once prices recover, as they have since March, it is unlikely that America’s oil output […]

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Oil heads for weekly gain, shrugs off ample supply; U.S. output eyed

SINGAPORE Oil prices were little changed on Friday but were set to end the week slightly higher, buoyed by a weaker dollar and forecasts for lower growth in U.S. crude output. U.S. crude is set to rise for a ninth week, which would be the benchmark’s longest winning streak since 1983. U.S. crude stockpiles have fallen from record levels, while the government has trimmed forecasts for crude output growth in 2015 and 2016. June West Texas Intermediate futures were down 6 cents at $59.82 a barrel as of 0631 GMT. July Brent crude rose 3 cents to $66.73 a barrel. Front-month Brent is on track for a weekly gain after a 1.6 percent decline last week interrupted its month-long rally. But analysts said prices have outperformed weak oil fundamentals. Supply continues to exceed demand growth, which has been curbed by a lackluster global economy. "Recent price action across a […]

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U.S. Oil Prices Fall But Eke Out Weekly Gain

May 15, 2015 4:25 p.m. ET By Nicole Friedman U.S. oil prices fell for a third straight session on Friday, a signal to some in the market that the recent strong rally in crude-oil prices may be petering out. Light, sweet crude for June delivery settled down 19 cents, or 0.3%, to $59.69 a barrel on the New York Mercantile Exchange. Prices rose 0.5% in the week. Brent crude for July delivery, the global benchmark, rose 11 cents, or 0.2%, to $66.81 a barrel on the ICE Futures Europe exchange. The contract rose 1% on the week. Oil prices have climbed off near-six-year lows since March on expectations that spending cutbacks would lead to a drop in U.S. crude-oil production. The number of rigs drilling for oil in the U.S. has plummeted in the past few months, spurring expectations of a decline in output. But U.S. shale-oil companies say […]

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Natural Gas Retreats from Rally

By Timothy Puko Natural gas prices are inching back from a nearly three-week rally as investors cash out and insure themselves against a potentially larger retreat. Natural gas for June delivery fell 0.8 cent, or 0.3%, to $3.00 a million British thermal units on the New York Mercantile Exchange. Gas is still just barely in bull-market territory, up more than 20% since April 27 after prices surged to a nearly four-month high Thursday. That has led many investors to pull back Friday, analysts said. Many don’t think that gas has rebalanced from rampant oversupply and that the recent rally is overcooked. Several money managers said they have started selling recently to try to get out at the top of the market. "Prices are overvalued and are currently becoming more susceptible to a downside correction," Dominick Chirichella, analyst at the Energy Management Institute said in a note. Thursday’s surge came […]

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Venezuela says working on OPEC, non-OPEC deal to stabilize prices

CARACAS Venezuela’s president Nicolas Maduro said on Friday the country is working towards a new agreement between OPEC and non-OPEC nations to stabilize oil prices "We’re currently working on a deal that hopefully can materialize in June regarding an announcement between OPEC and some of the most important (oil) producers in the world to finish stabilizing the market in the second half of the year," he said after a meeting with Qatar’s emir. He said it was in the interests of the South American country and OPEC nations to stabilize prices around $100 per barrel in the medium term. (Reporting by Caracas newsroom; Editing by Meredith Mazzilli)

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ISIS Fighters Seize Government Headquarters in Ramadi, Iraq

Photo Iraqis prepared to leave Ramadi, the capital of Anbar Province, some 70 miles west of Baghdad, on Friday amid an advance by Islamic State fighters. Credit Associated Press BAGHDAD — In a major setback for the Iraqi government’s efforts to defend its hold on Ramadi, a crucial regional capital, Islamic State militants conquered the city’s government sector on Friday, raising their black flag over the main compound before setting fire to the building, local officials said. The new jihadist assault began under the cover of darkness late Thursday, starting with a wave of suicide attacks by clean-shaven fighters driving armored Humvees and dressed in Iraqi Army uniforms. As fighters for the Islamic State, also known as ISIS or ISIL, advanced on Friday, there were reports of massacres. Sheikh Omar Shihan al-Alwani, a tribal leader whose men have been fighting the Islamic State there, said more than a dozen […]

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Nigeria: Shell Shuts Down Nigeria’s Crude Export Pipeline

The Trans Nigeria Pipeline that carries Nigeria’s Bonny Light crude oil to an export terminal has been shut down since May 12, a Shell spokeswoman said on Thursday. While neither the reason for the shut down nor its expected duration have been disclosed as at the time of filing this report, traders affirmed that Bonny Light loadings have been delayed by up to four days over the past week. This development is taking place about a week after the Anglo-Dutch oil giant, Shell, declared force majeure on exports of Nigeria’s Forcados crude oil stream. "Force majeure" is a legal term releasing a company from contractual obligations when faced with circumstances beyond its control. It declared force majeure on the evening on May 5 following "a series of leaks" in the Trans Forcados pipeline that brings the oil to the export terminal. The pipeline itself is operated by the Nigerian […]

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WPX Energy would add North Dakota rigs with $65 per barrel oil

WILLISTON, N.D. Oil and gas producer WPX Energy Inc would add one or two drilling rigs in North Dakota if WTI oil prices stabilized around $65 per barrel, Chief Executive Rick Muncrief told Reuters on Friday. The forecast falls in line with U.S. shale peers, several of whom have pointed to $65 to $70 per barrel as the range in which they would add rigs and ramp up production. Indeed, Muncrief’s comments add to a body of evidence that the United States is now the world’s swing oil producer, able to ramp production up or down quickly. For WPX specifically, Muncrief’s outlook is part of a broader strategy to show Wall Street that after years of bloated spending, cash flow and cost management are top priorities. It’s a focus that appears to be working: WPX’s stock is up 15 percent so far this year, compared with a nearly 3 […]

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Shell facing stiff Seattle opposition

Seattle protestors plan weekend events in an effort to try to show Shell is a poor steward for the environment. Photo courtesy: Emily Johnston/350 Seattle. SEATTLE, May 15 (UPI) — Though Shell may drill in Alaska’s arctic waters no matter how many protests are held, a Seattle organizer said the company can be cast in a bad light. Seattle organizers are planning weekend protests against Shell’s use of a port terminal for drilling rigs bound for the Chukchi Sea off the coast of Alaska. Emily Johnston, a spokeswoman for advocacy group 350 Seattle, said in response to email questions port consideration for Shell was offensive. "We probably can’t stop them from getting to Alaska this summer, but we can make sure they don’t get to make such catastrophic decisions in quiescent business-as-usual conditions," she said. "We’ll shine a bright light on exactly how bad an actor they are." Seattle […]

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Canada oil group vows to strengthen industry

Canadian oil group pledges to work to make the industry stronger than ever in the evolving energy market. Photo by Heather Snow/Shutterstock CALGARY, Alberta, May 15 (UPI) — The oil and gas industry in Canada said it was ready to work with the incoming provincial government in Alberta to strengthen a sector hurt by low oil prices. The Canadian Association of Petroleum Producers announced it would form an industry group to work alongside Alberta Premier-elect Rachel Notley to advance their interests in the oil-rich province and all of Canada. The Canadian National Energy Board said it was monitoring crude oil prices as U.S. oil production gains push markets toward the supply side. Low energy prices means less spending on exploration and production and Kevin Brin, director of the Canadian oil sands division at consultant firm IHS, said in a February interview a potential slowdown in Canada was a reflection […]

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Pace of U.S. rig decline slows

The pace at which the exploration and production sector in North America seems to be slowing. Photo by Lilac Mountain/Shutterstock HOUSTON, May 15 (UPI) — The pace at which the exploration and production sector in North America is declining is slowing, weekly data from oil field services company Baker Hughes show. Baker Hughes said in a weekly report the number of rigs actively exploring for or producing oil and natural gas in the United States and Canada declined by a combined 15 for the week ending May 8. That’s an improvement over the week-on-week decline reported for the week ending May 1. A weak crude oil market, characterized by a slump in demand and a surplus of supplies, has forced most energy companies to cut back on exploration and production. Through the first quarter of the year, that’s resulted in a decline in production from some states, though rig […]

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U.S. sued over oil-train rules

American Petroleum Institute challenges federal mandates for oil-trains in court, arguing timelines are arbitrary. File Photo by Steven Frame/Shutterstock. WASHINGTON, May 15 (UPI) — The American Petroleum Institute said it filed a lawsuit against the U.S. Department of Transportation challenging a federal timeline for oil-train safety. U.S. Transportation Secretary Anthony Foxx hosted Canadian Transport Minister Lisa Raitt in Washington to announce new standards for "stronger, safer rail tank cars" carrying flammable liquids like crude oil through North America. By Jan. 1, 2018, the U.S. rule mandates the retrofit or removal from the rail fleet for oil transport of cars designated DOT-111. The Canadian government set a May 1, 2017, deadline. Brian Straessle, a spokesman for the American Petroleum Institute, said the industry was frustrated with those timelines. "Improving on a 99.997 percent safety record requires data-driven efforts to prevent derailments with enhanced inspections and maintenance, upgrade the tank car […]

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U.S. Oil Rig Count Falls to 660 in Latest Week

The U.S. oil-rig count fell by eight to 660 in the latest week, according to Baker Hughes Inc., marking the 23nd 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. That hasn’t yet translated into a drop in actual output, even though it has squelched production capacity. Crude-oil futures were recently down about 0.75% to $59.42. According to Baker Hughes, gas rigs were up two to 223 this week. The U.S. offshore rig count is at 34, unchanged from last week and down 23 from last year. For all rigs, including natural gas, the week’s drop was six to 888, and down 973 from last year’s 1861.

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BHI: US rig count decline shrinks to 6 this week, settles at 888

HOUSTON, May 15 OGJ Staff Writer The trend of shrinking declines in the US drilling rig count continued during the week ended May 15. Just 6 units were laid down to settle at a total of 888 rigs working, representing the smallest drop in the 23 consecutive weeks in which the count has dived, easily surpassing last week’s 11 that went offline, according to data from Baker Hughes Inc. ( OGJ Online, May 8, 2015 ). Since Dec. 5, 1,032 units have now gone offline ( OGJ Online, Dec. 5, 2014 ). The total of 888 is still higher than the nadir of 876 during the 2008-09 downturn but is 973 fewer units compared with this week a year ago. In an energy update early this week, Raymond James & Associates noted that weekly well permits, a primary indicator of rig count activity, “have been relatively stable as of […]

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Lower 48 Oil Production to Keep Growing, but At Slower Pace

U.S. Lower 48 oil production will continue to grow, but at a much slower pace than expected this time a year ago as lower oil prices impact production and industry capital expenditures, according to recent analysis by Wood Mackenzie. However, a Wood Mackenzie analyst emphasized that the firm doesn’t expect an annual trend of declining production to occur until oil prices remain at $50/barrel for a two-year period. Lower 48 production grew by 1.1 million barrels per day (bpd) during 2014, but Wood Mackenzie expects the rate of growth to decline going forward, with 675,000 bpd incremental production forecast for 2015 and 425,000 bpd of incremental production growth in 2016, Benjamin Shattuck, senior analyst for the analysis firm’s Lower 48 Upstream group, told reporters at a media briefing Friday in Houston. As a result, Wood Mackenzie estimates a long-term impact of this growth to be 800,000 bpd by the […]

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Weak U.S. data point to modest second quarter economic rebound

WASHINGTON U.S. industrial production unexpectedly fell for a fifth straight month in April due in part to a further decline in oil and gas drilling, suggesting that the economy is growing at only a modest pace in the second quarter. The economy’s struggle to pick up steam after a dismal first quarter was underscored by other data on Friday showing a drop in consumer confidence to a seven-month low in early May and only a mild rebound in factory activity in New York state. Coming on the heels of weak retail sales and producer inflation data this week, the reports suggest the Federal Reserve will probably not raise interest rates anytime soon. "It means in the next month or so we are unlikely to see a massive rebound in growth momentum. These are not the numbers that would inspire confidence in the Fed to tighten policy," said Millan Mulraine, […]

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Major Flaw Found in “ITER” – nuclear fusion reactor

In their paper “Elephant in the room: overlooked plasma-destroying reaction with cross section 1012 times that for fusion necessitates redesign of International Thermonuclear Experimental Reactor ITER,”* three physicists from California Science and Engineering Corp., Irvine, CA, claim that ITER designers were unaware that the ignored fusion-preventing atomic reaction known as “charge transfer” or “CT,” had a trillion times higher cross section (probability) than that for fusion, hence it will prevent the ignition of ITER, as it did in all 160-odd tokamaks within the past 50 years.  CT’s cross section measurement in UK1 of a billion barn became known only after ITER was designed; fusion cross section is a 1/1000 of a barn.  There no mention of CT in ITER design2. EXISTENCE OF ‘CRITICAL ENERGY’.  Existence of CT gives rise to the hitherto – unknown critical energy below which reactors are inoperable; and above which – free from CT destruction […]

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British secretary calls for ‘solar revolution’

Incoming British energy and climate secretary calls for more effort to build up behind solar power capacity. File Photo by UPI/Bill Greenblatt. LONDON, May 15 (UPI) — Incoming British Energy Secretary Amber Rudd told her local newspaper she aims to usher in a "solar revolution" through the new administration. British Prime Minister David Cameron tapped Rudd as the head of the Department of Energy and Climate Change, at which she’s served since last year. From 2010-12, she was a minister in the British Environment, Food and Rural Affairs Select Committee. Rudd laid out part of her strategy in an interview with her local newspaper , the Hastings and St. Leonards Observer. "I want to unleash a new solar revolution," she said in the interview. "We have a million people living under roofs with solar panels and that number needs to increase." DECC last year said the country was in […]

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Serbia backs Russian gas pipeline interests

Russian Foreign Minister Sergei Lavrov gets Serbian support for gas pipeline planned to Europe through Turkey. File photo by Monika Graff/UPI MOSCOW, May 15 (UPI) — The Serbian foreign minister told his Russian counterpart Friday joining a gas pipeline project through Turkey was in his country’s best interests. "We want to participate in this [Turkish Stream] project," Serbian Foreign Minister Ivaca Dacic said from Moscow. "At present, we can express our readiness for participation in this project because we need reliable gas supplies." The Kremlin said the Turkish gas project will help ensure European energy security. South Stream, a longer version of the pipeline, was envisioned as a European network before the Russian government pulled it off the table in late 2014. Russia meets about a quarter of the natural gas needs for the European economy. The majority of that runs through the Soviet-era transit network in Ukraine, where […]

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Ruble Options Show Rally to End as Central Bank Starts Purchases

The chances of the ruble adding to this year’s world-beating gains have declined since Russia’s central bank said it would start buying foreign currency, options data show. There’s a 39 percent chance the currency will rise below 49 against the dollar by June 30, compared with a 44 percent chance on Wednesday, the day before the Bank of Russia announcement, options data compiled by Bloomberg show. The ruble advanced 1.1 percent Friday after Thursday’s 1.7 percent tumble as the bank said it would buy $100 million to $200 million a day to replenish reserves after last year’s plunge. The ruble is the best performer globally this year, buoyed by a cease-fire in eastern Ukraine and a rebound in the price of oil. While that appreciation has enabled Russia to slow inflation and reverse some emergency interest-rate increases, it’s also cut the revenue earned from crude and other exports. “Without […]

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Oil heads for weekly gain, shrugs off ample supply; U.S. output eyed

SINGAPORE Oil prices were little changed on Friday but were set to end the week slightly higher, buoyed by a weaker dollar and forecasts for lower growth in U.S. crude output. U.S. crude is set to rise for a ninth week, which would be the benchmark’s longest winning streak since 1983. U.S. crude stockpiles have fallen from record levels, while the government has trimmed forecasts for crude output growth in 2015 and 2016. June West Texas Intermediate futures were down 6 cents at $59.82 a barrel as of 0631 GMT. July Brent crude rose 3 cents to $66.73 a barrel. Front-month Brent is on track for a weekly gain after a 1.6 percent decline last week interrupted its month-long rally. But analysts said prices have outperformed weak oil fundamentals. Supply continues to exceed demand growth, which has been curbed by a lackluster global economy. "Recent price action across a […]

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Crude oil prices stall out

Brent crude oil prices expected to say relatively low through next year, EIA report says. Photo by tcly/Shutterstock NEW YORK, May 14 (UPI) — Expectations of a lower price for Brent crude oil kept keep indices treading water in early Thursday trading, relatively unchanged to start the day. Brent crude oil prices ended Wednesday at $66.81, down 1 percent for the day. Brent traded Thursday at $66.87, relatively stable for the month. European economy data helped the early Wednesday rally, though suggestions markets were still weighed heavily on the supply side pushed prices down through the trading day. The U.S. Energy Information Administration in a market report for May said it expected Brent crude oil prices would average around $63 per barrel, a 14.5 percent increase from its April prediction, for the second half of the year. Stronger global demand, an expected slump in U.S. oil production and continued […]

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Oil slips, economic worries offset U.S. crude stocks draw

SINGAPORE Oil slipped on Thursday as weak data from the world’s top economies raised concern about the outlook for global fuel demand, offsetting data that showed a large drawdown in U.S. crude stockpiles last week. China, the world’s top energy consumer, saw its economy losing more steam in April despite easier monetary policy, while Europe’s largest economy, Germany, slowed in the first quarter. In the United States, retail sales were flat in April, dampening hopes of a sharp rebound in growth in the second quarter. "We’ve had a round of very weak data in the last 24 hours and that’s offset the strength that we would normally expect to come through from a larger than expected draw in U.S. inventories," said Michael McCarthy, chief strategist at CMC Markets in Sydney. June Brent crude fell 18 cents to $66.63 a barrel as of 0623 GMT after settling 5 cents lower […]

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Natural-Gas Price Soars to Nearly Four-Month High

By Tim Puko The benchmark natural-gas price soared to a nearly four-month high, bolstered by rising demand from power generators that are pivoting away from coal. This year, utilities will retire 4.3% of the nation’s coal-fired electricity-generation capacity that is either outdated or unable to meet new environmental regulations, according to the U.S. Energy Information Administration. As a result, the burden of making up that shortfall will fall on gas-fired facilities, boosting overall demand and prices for gas. U.S. natural-gas inventories posted a smaller-than-expected increase last week, according to EIA data released Thursday. That coincided with above-normal temperatures in the East and Midwest, highlighting the role power-plant demand will play in the natural-gas market this summer when air-conditioning use could force generators to run hard. Natural-gas futures Thursday rallied 2.5% to $3.008 a million British thermal units, the highest level since Jan. 16 on the New York Mercantile Exchange. […]

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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 […]

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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 […]

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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 […]

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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 […]

Posted On : Published By : Tom Whipple
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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
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China Fires Away at Coal Power

Operators of coal-powered plants in China are in an uncomfortable position. ENLARGE Photo: Hao Tonqian/Xinhua/Zuma Press China is planning the biggest overhaul of its power industry in over a decade. And the scope for upheaval is biggest at companies that depend on coal, such as China Resources Power. In the past two months, China’s top planning body has published multiple documents stressing that market forces should decide how electricity is generated, transmitted and distributed. Specifics are still missing, and internal contradictions still rife—the documents, for instance, push renewable energy that currently survives by government rules that subvert market forces. But if enacted, these ideas would mark the next step in electricity reform after Beijing in 2002 cleaved transmission and distribution away from generation. In theory, that allowed generation companies to compete, though in practice Beijing dictated electricity prices. Now, the planners seem to want power generators free to set […]

Posted On : Published By : Tom Whipple
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China

China is the world’s most populous country with a fast-growing economy that has led it to be the largest energy consumer and producer in the world. Rapidly increasing energy demand, especially for petroleum and other liquids, has made China influential in world energy markets. China has quickly risen to the top ranks in global energy demand over the past few years. China became the largest global energy consumer in 2011 and is the world’s second-largest oil consumer behind the United States. The country was a net oil exporter until the early 1990s and became the world’s second-largest net importer of crude oil and petroleum products in 2009. The U.S. Energy Information Administration (EIA) reports that China surpassed the United States at the end of 2013 as the world’s largest net importer of petroleum and other liquids , in part because of China’s rising oil consumption. China’s oil consumption growth […]

Posted On : Published By : Tom Whipple
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EOG Waiting Out Oil Prices

EOG Releases 2015 Q1 Report EOG Resources will continue to hold off on Bakken well completions  until crude prices stabilize. Pulling back, slowing down and waiting it out is the preferred strategy for oil producers looking for strategies during the current pricing crisis. During an earnings call, EOG says that they are benefiting greatly from the pull-back in activity and progress is being made to lowering cost in each phase of their operations. The company announced a first quarter loss net loss of $169.7 million. Related: EOG Reduces 2015 Capex 40 Percent Bakken Activity The slowdown in activity has allowed EOG to focus on three things in its Bakken operations Operational efficiencies and lowering well cost. Currently, a typical 10,000 foot lateral is now drilled in just over 10 days. Using new technical data from our integrated completion process to further adjust and tailor high density completion designs to specific […]

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Florida lawmakers say no to Atlantic drilling

Several hundred people line Pensacola Beach in Florida for a 2010 Hands Across the Sand protest against offshore oil drilling. Florida lawmakers have introduced a bill to ban seismic testing, in preparation for drilling, in the waters of the Atlantic. File photo by Mark Wallheiser/UPI WASHINGTON, May 14 (UPI) — Florida lawmakers introduced a bill to ban early oil and gas work off the state coast, saying an early push for east coast drilling was too risky. "I was involved in the cleanup efforts following the BP oil spill in the Gulf Coast, and I refuse to sit by while Florida’s east coast could potentially be threatened from the devastating effects of offshore drilling," U.S. Rep. Patrick Murphy , D-Fla., said in an emailed statement. "Seismic testing is the first step in the wrong direction." Seismic testing is used to get a better understanding of the reserve potential in […]

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Oil production rebounds in North Dakota

North Dakota reports a 1 percent increase in crude oil production despite low rig deployment figures. Photo by photostock77/Shutterstock BISMARCK, N.D., May 14 (UPI) — Oil production in North Dakota increased 1 percent despite obvious signs of a slowdown in the state’s shale reserve areas, state data show. The North Dakota Industrial Commission said oil production in March, the last full month for which data are available, was 1.19 million barrels per day, up from the 1.18 million bpd from February but down from the 1.22 million bpd in December, the all-time high. The increase comes despite a drop in the number of rigs exploring for or producing oil and natural gas in the No. 2 oil producer in the nation. "The drilling rig count dropped 25 from February to March, 17 more from March to April, and has since fallen 8 more from April to today," the NDIC […]

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New drilling technology could unlock old oil

Using advances in drilling technology from the United States could unlock more oil in mature basins outside of North America, IHS finds. File photo by Gary C. Caskey/UPI HOUSTON, May 14 (UPI) — Analysis from research center IHS finds advances in hydraulic fracturing used in the United States could unlock oil in mature fields outside North America. IHS researchers looked into what would happen if new and advancing drilling techniques were applied to 170 mature oil fields that may have what was described as incremental hydrocarbon resources. By applying the new technology to low-productivity oil basins, IHS found there may be hundreds of billions of barrels of potential new oil. "While our analysis was an initial, high-level assessment of low productivity plays outside the U.S., we were quite surprised at the impressive potential for increased recovery using these unconventional techniques," Susan Farrell, vice president of upstream energy research at […]

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New York fracking ban closer to law

State report from New York finds uncertainty surrounding hydraulic fracturing and may pave the way to making the governor’s ban formal law. File Photo by UPI/Kevin Dietsch. ALBANY, N.Y., May 14 (UPI) — Parts of the Marcellus shale natural gas play in New York may be off limits to hydraulic fracturing because of potential adverse risks, a state review found. New York Gov. Andrew Cuomo banned the use of hydraulic fracturing , or fracking, as a means of extracting natural gas after a years-long study by environmental and health officials. His December move triggered a review from the state Department of Environmental Conservation, which found "significant uncertainty remains" regarding the risks to public health and the environment that would result from fracking in the state. Interstate movements on fracking have been fluid since a moratorium was first introduced in 2008. A federal report finds that, while the amount of […]

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U.S. Crude-by-Rail Rules Face Fresh Challenge

ENLARGE Burning oil-tank cars from a BNSF train that derailed at Heimdal, N.D., lay askew along the railroad tracks on May 6. Photo: Associated Press Environmental groups are the latest challengers to push back against the new crude-by-rail rules with filings in federal court that argue the new regulations are too weak. Earthjustice filed a petition with the U.S. Court of Appeals for the Ninth Circuit in San Francisco on Thursday on behalf of seven nonprofits, arguing the timeline to phase out dangerous older tank cars is too long and that the standard for upgrades is too weak. The Earthjustice filing also seeks lower speed limits for trains carrying hazardous flammable liquids and requirements that railroads provide more information about the routing of dangerous goods to the public. “Explosive oil trains present real and imminent danger, and protecting the public and waterways requires an aggressive regulatory response,” said Marc […]

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Slump in Oil Prices Could Drag Calgary, Edmonton into Recession

An empty lot ready for a newly built house is for sale in Calgary, Alberta, April 7, 2015. Reuters The slump in oil prices is altering the economic pecking order among Canada’s major cities, pushing cities in oil-rich Alberta from the top to the bottom, the Conference Board of Canada says. The Ottawa-based think tank says Calgary and Edmonton, which have led Canada’s cities in growth over the last several years, will fall into recession . Oil is Canada’s biggest export and the big drop in prices for that commodity is expected to be a net negative for Canada’s economy. But oil production is concentrated in the western provinces and in offshore drilling in the Atlantic off the coast of Newfoundland and Labrador. As a result, those areas are much more vulnerable to the economic pressures created by lower oil prices, while the manufacturing-oriented economies of central Canada could […]

Posted On : Published By : Tom Whipple