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Weatherford Raises Layoffs Target to 11,000

Responding to continued weakness in the North American oilfield services market, Weatherford International said Thursday it would revise the number of planned layoffs to 11,000. The company completed 97 percent of its planned workforce reduction of 10,000, Weatherford said in its second quarter 2015 earnings report Wednesday. The additional cuts in Weatherford’s workforce will occur in the company’s U.S. operations, with a focus on support positions. Based on its 2015 reduction in force actions, Weatherford now expects annualized savings of $754 million from the release of 9,936 employees, said Weatherford Chairman, President and Chief Executive Officer Bernard J. Duroc-Danner during the company’s second quarter 2015 earnings call Thursday morning. The company is taking advantage of the downturn to develop a leaner structure and a tighter organization, Weatherford said. In addition to layoffs, the company has closed more than 60 operating facilities across North America through the first half of […]

Posted On : Published By : Tom Whipple
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U.S. oil imports rise, WTI contango deepens: Kemp

The word oil is pictured on an oil bank at a recycling yard in London March 2, 2011. Futures prices are making it increasingly profitable to store surplus crude in the United States, coinciding with a strong period of oil imports and a further build up of already swollen stockpiles. WTI crude futures prices imply the market is paying more than 61 cents per month to cover the cost of financing and storing oil at the Cushing delivery hub during the fourth quarter of 2015. The WTI contango for the fourth quarter of 2015 has tripled from less than 20 cents per month at the start of June. Over the same period, the contango for fourth-quarter Brent has increased by much less, from 37 cents to 48 cents per month ( link.reuters.com/puc35w ). It has become more profitable to store oil in the United States in a “cash and […]

Posted On : Published By : Tom Whipple
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Oil Producers’ Ugly Duckling Refineries Just Turned Into Swans

Oil companies’ least-loved business over the past five years is proving to be their lifeline. Margins from refineries in northwest Europe rose fivefold last quarter to the highest since at least 2003, data from Total SA show. In the preceding quarter, the share of profit from processing crude and chemicals at Royal Dutch Shell Plc and BP Plc was four times higher than the same period a year earlier. The turnaround follows last year’s end to an oil boom that tripled the cost of crude for processing since 2009 and spurred a focus on drilling instead of refining. A decade-long doubling of refining capacity in China also swamped European efforts to rein in supply. Crude’s slump in the past year has reversed the dynamic, curbing refining costs and raising demand for fuels. “Refining has become a boon in these times from being a burden over the years,” Iain Armstrong, […]

Posted On : Published By : Tom Whipple
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Zero-Pollution Buses Emerge With Backing From Silicon Valley

An all-electric bus made by Kleiner Perkins-backed Proterra Inc. Source: Proterra via Bloomberg Chicago Transit Authority expects two electric buses it bought from New Flyer Industries will each save $300,000 in fuel costs and $660,000 in public health costs over their 12-year expected runs. That more than makes up for the $500,000 premium over the diesel buses that the electric ones replaced. They can run for 100 miles — a full day’s work — before needing to recharge overnight. CTA operates about 1,800 buses. ‘Most Sense’ “Electric drive trains make the most sense in heavier vehicles,” said Michael Linse, a partner at venture capital firm Kleiner Perkins that’s made early investments in Proterra. “Hybrids get a third of the market now and they’re just marginally better and very expensive at $650,000 to $700,000. It was almost all diesel 10 years ago.” BYD Co., the Chinese automaker partly-owned by Warren […]

Posted On : Published By : Tom Whipple
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Lobbying Grows in Debate Over Easing U.S. Ban on Oil Exports

On the other side is Consumers and Refiners United for Domestic Energy, which spent $180,000 on lobbying through the first half of this year to retain the ban. It includes PBF and Delta Air Lines Inc. unit Monroe Energy LLC. Exact amounts being spent on the export ban aren’t available because registrants disclose total expenditures on all issues in a single form. ConocoPhillips has the most extensive effort on the ban, according to the filings. It’s hired three firms to represent it, in addition to five lobbyists on its own staff. Other big oil producers, including Exxon Mobil Corp., Chevron Corp. and Marathon Oil Corp., support ending the export limits. All three have their own lobbying teams as well as outside firms to help on the issue. While there is some congressional support for lifting the restrictions, there probably isn’t enough backing to end them before the 2016 elections, […]

Posted On : Published By : Tom Whipple
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Flotilla of European Gasoline Tankers Fuels U.S. Driving Binge

As a flotilla of gasoline tankers steams across the Atlantic Ocean to the U.S., European motorists are paying more for their gasoline because Americans are driving more than ever. Surging demand and rising prices for gasoline in the U.S. are luring about double the number of tankers compared with 2014, boosting shipping rates to the highest seasonal levels in seven years. With so much being exported, fuel prices in Europe have increased almost four times faster than crude since February to the equivalent of more than $6 a gallon. The flotilla underscores the rising thirst for fuel after oil prices fell by half since June 2014 and the U.S. economy improved. Americans are driving record miles, raising consumption of gasoline and profit margins for refiners. The International Energy Agency said global oil demand is expected to increase 1.5 percent this year, the most since 2010. “There’s cheap crude and […]

Posted On : Published By : Tom Whipple
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Outrage over EPA emissions regulations fades as states find fixes

HAZARD, Ky. — Even after years of talk about a “war on coal,” Senate Majority Leader Mitch McConnell startled some of his constituents in March when he urged open rebellion against a White House proposal for cutting pollution from coal-fired power plants. The Obama administration’s Clean Power Plan is “extremely burdensome and costly,” the Kentucky Republican said in letters advising all 50 states to boycott the rule when it goes into effect this summer. The call for direct defiance was unusual even for McConnell, who has made a career of battling federal restrictions on coal. Yet more striking is what has happened since: Kentucky’s government and electric utilities have quietly positioned themselves to comply with the rule — something state officials expect to do with relatively little effort. In this coal-industry bastion, five of the state’s older coal-burning power plants were already scheduled to close or switch to natural […]

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Moody’s Says Low Oil Price Here to Stay as Russia Bleeds Capital

Low oil prices are just the tip of what ails Russia, according to Moody’s Investors Service. With its dependence on commodities and a slump in investment, Russia will have a hard time recovering from its record economic slump as global oil prices are bound to remain lower for a long time, Yves Lemay, managing director in the sovereign risk group at Moody’s in London, said in an interview on Wednesday. As much as a quarter of Russia’s gross domestic product and two-thirds of its exports are linked to the energy industry, according to the rating company. “Our assessment is that low oil prices are here to stay,” Lemay said. “Without major investment in the infrastructure, modernizing the equipment, oil production in Russia is unlikely to rise and may slowly decline in the coming years.” Crippled by its first recession since 2009, Russia is starved of investment as U.S. and […]

Posted On : Published By : Tom Whipple
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Oil Glut Weighs on Prices, Nymex Crude Stays Under $50/Bbl

By Eric Yep Oil prices remained weak in Asian trade Thursday after sharp losses in the previous session that drove Nymex oil futures below the $50 a barrel mark–the first time it has settled below that level since April 2. In addition to concerns over sustained U.S. oil supply despite falling prices, oil markets are also jittery over high export volumes from the Organization of the Petroleum Exporting Countries and only limited growth in global oil demand. "The OPEC production growth has stoked market fears of further oversupply, as crude stocks in Europe and Asia show signs of building," Michael Wittner, head of oil research at Societe Generale, said in a report. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $49.31 a barrel at 0319 GMT, up $0.12 in the Globex electronic session. September Brent crude on London’s ICE Futures exchange […]

Posted On : Published By : Tom Whipple
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Oil steady; U.S. crude below $50 as stocks rise

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson, North Dakota June 26, 2015. Oil prices steadied on Thursday after a weaker dollar helped offset the negative impact of rising U.S. stockpiles, which drove U.S. crude prices to near three-month lows. Crude oil stocks in the United States rose 2.5 million barrels last week to above the five-year seasonal average, according to data from the Energy Information Administration (EIA), trumping expectations for a 2.3 million-barrel drop. U.S. September crude futures were 18 cents higher by 0827 GMT (4.27 a.m. EDT) on Thursday at $49.37, after having fallen $1.67 on Wednesday to settle below $50 for the first time since April. Brent crude was up 9 cents at $56.19 a barrel, after settling down 91 cents. Brent has lost around 12 percent in July, its largest one-month fall since March, pummeled by concern […]

Posted On : Published By : Tom Whipple