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Oil prices expected to ‘improve’ on rising demand, low stocks: Naimi

* Saudi oil minister ‘optimistic’ about future market * Says alliance with Russia to help stabilize market * Riyadh, Moscow also sign nuclear, military deals Saudi Arabia’s oil minister Ali Naimi is confident that oil prices will rise in the coming months given the increase in global demand and the low level of commercial stocks. Naimi, cited by Saudi state news agency SPA late Thursday in St Petersburg, also said a cooperation alliance agreed with Russia earlier in the day would be for the benefit of the stability of the international oil market. Article continues below… The Platts Global Energy Awards is a competitive awards program honoring excellence and accomplishments in the global energy industry. The 17th annual awards will be presented at a black-tie gala, attracting energy industry leaders from around the world on Wednesday, December 9th, 2015 at Cipriani’s in New York. Don’t miss this opportunity to […]

Posted On : Published By : Tom Whipple
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Shale Fallout Torments Nigeria as Flagship Oil at Decade-Low

The shale boom that’s reduced U.S. dependence on overseas crude is reverberating in Nigeria as Africa’s biggest oil producer cuts the pricing for its flagship grade to the lowest in a decade. The country, part of the Organization of Petroleum Exporting Countries, will sell July supplies of its Bonny Light crude at 23 cents more than Dated Brent, according to an e-mailed statement from state-run Nigerian National Petroleum Corp. That’s the smallest differential since 2005 and compares with a 50 cent premium in June and $2.55 a year earlier, data compiled by Bloomberg show. Surging output from U.S. shale formations contributed to a market glut that drove crude down almost 50 percent last year, roiling global markets as producer nations lost revenue and foreign-exchange reserves. While oil has pared losses this year, prices are still below what some producers including Nigeria and other OPEC members need to balance their […]

Posted On : Published By : Tom Whipple
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Big Investors Shun Venezuela’s Flagship Oil Industry Event

Jun 19, 2015 Venezuela’s biggest annual gathering of oil investors used to be a memorable affair: thousands of oilmen from around the world would arrive, greeted by statuesque models, and attend whisky-fueled after-parties. The deal-making could run into the billions. This year’s event was a far cry from previous years’ bashes, where hordes of investors would clamor for a stake in the country with the world’s largest oil reserves. “It used to be much bigger,” lamented Hugo Hernández, a former head of the Venezuela Petroleum Chamber, reminiscing about the days when 40,000 participants would show up. “You know how the situation is in the country. Now many people don’t come.” Organizers said slightly more than 3,000 people visited the expo this week, including hundreds of workers from state oil giant PDVSA. Among the notable absentees were many of Venezuela’s foreign production partners. Of the more than 30 multinationals that […]

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North Dakota governor sees OPEC ceding global swing status

BISMARCK, N.D. OPEC’s decision this month to maintain existing oil output will fail to push rival producers out of the market because rising global crude demand should soon lift prices and boost drilling activity, North Dakota Governor Jack Dalrymple said. Since November, the Saudi Arabian-led cartel has held to a policy of unconstrained output, an approach many suspect is designed to flood global markets with more crude, push prices lower and punish rivals, including North Dakota, the second-largest U.S. oil producer. "It’s not surprising that Saudi Arabia would finally make a decision that they are not going to be the sole equalizer of supply and demand around the world," Dalrymple said in an interview with Reuters this week at his capitol office. "They are going to expect other countries to be part of controlling supply." Yet the strategy seems to have backfired, as producers have had to become leaner […]

Posted On : Published By : Tom Whipple
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The Shale Industry Could Be Swallowed By Its Own Debt

The debt that fueled the U.S. shale boom now threatens to be its undoing. Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size. The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank. “The question is, how long do they have that they can get […]

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California Has Never Experienced A Water Crisis Of This Magnitude – And The Worst Is Yet To Come

Things have never been this dry for this long in the recorded history of the state of California, and this has created an unprecedented water crisis. At this point, 1,900 wells have already gone completely dry in California , and some communities are not receiving any more water at all. As you read this article, 100 percent of the state is in some stage of drought, and there has been so little precipitation this year that some young children have never actually seen rain . This is already the worst multi-year drought in the history of the state of California , but this may only be just the beginning. Scientists tell us that the amount of rain that California received during the 20th century was highly unusual. In fact, they tell us that it was the wettest century for the state in at least 1000 years. Now that things […]

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Despite obstacles, chances grow for final Iran nuclear deal

NEW YORK/ANKARA/PARIS Iran is trying to avoid detailed commitments. The French are sticking to their tough line. And U.S. President Barack Obama faces a battle to sell any deal to a skeptical Congress. Despite those and other obstacles, negotiators appear increasingly likely to clinch an historic deal to restrict Iran’s nuclear program for at least a decade in exchange for relief from sanctions, Western and Iranian officials said. U.S. officials, including Obama, have long said they see at best a 50-50 chance of getting a deal with Iran. That remains the official line, but diplomats close to the talks tell Reuters the chances are higher than that as foreign ministers and other negotiators head to Vienna next week for the final stage of a nearly two-year process. Driving the cautious optimism, they say, is not so much progress made in overcoming sticking points as the intense political pressure on […]

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Oil, Gas Drilling Wastewater Blamed for Earthquakes in Oklahoma

Wastewater from oil and natural gas drilling that’s pumped underground for disposal is more likely to trigger earthquakes than extracting the fuel by fracking, according to a new study. The salty byproduct of hydraulic fracturing is often injected back underground where it penetrates fault lines and triggers seismic activity, said Mark Zoback , a geophysics professor at Stanford University and lead author of the study Thursday in the journal Science Advances. Fracking, in which fluids are forced underground to shatter rock and release oil and gas, presents a much lower risk, he said. The issue has gained attention in Oklahoma where a drilling boom has coincided with a surge in earthquakes measuring 3.0 or higher on the Richter scale. About 10 barrels of water are produced for every barrel of oil in Oklahoma where there were two dozen magnitude-4 earthquakes last year compared with one or two a decade […]

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U.S. Oil-Rig Count Falls to 631 in Latest Week

The number of U.S. oil drilling rigs, which is a proxy for activity in the oil industry, has fallen sharply since oil prices headed south last year. There are now about 61% fewer rigs working since a peak of 1,609 in October. Crude oil futures recently fell 2% to $59.19. OPEC recently said it would keep its production ceiling unchanged, the second time in six months it decided to take no action amid the global glut. Oil prices have traded in a tight range recently, with U.S. prices pivoting around the psychologically key $60-a-barrel level. Forecasts that the global glut of crude oil will shrink, due to growing demand and a decline in drilling, have boosted prices from multiyear lows earlier this year. But some investors remain hesitant, especially because some U.S. companies say they can increase production if prices hold above $60. According to Baker Hughes, gas rigs […]

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After Energy-Job Losses, Texas Jobs Boom in May

Employment bounced back in Texas last month following recent losses, a sign that the state is weathering the slowdown in the energy industry, the Labor Department said Friday . By contrast, in North Dakota, which is also heavily reliant on energy production, employment continues to fall as the state grapples with a slowdown in energy prices. Texas added 33,200 jobs in May, the third-largest month-over-month employment increase in the country, the department said. Just two months ago, in March, Texas saw 25,400 jobs disappear . The state’s unemployment rate stands at 4.3%, down from 5.1% in May 2014. The national unemployment rate was 5.5% in May, according to the Labor Department. Since its last oil-related boom and bust cycle three decades ago, Texas has sought to diversify its economy . Much of the state’s growth has taken place in the Dallas-Fort Worth area and around San Antonio, two regions […]

Posted On : Published By : Tom Whipple