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California drivers pay dearly for refinery problems: Kemp

People fill up their tanks with gasoline at a Costco Gas Station in Carlsbad, California October 5, 2012. California motorists are paying $1 per gallon more for gasoline than drivers in the rest of the country as problems at state refineries leave the state fuel market unusually tight. The average price of gasoline sold in the state was $3.95 per gallon on Monday, compared with a nationwide average of $2.89, according to the U.S. Energy Information Administration ( link.reuters.com/xyx25w ). The gap between fuel prices in California and the rest of the country hit a record $1.06, up from just 43 cents at the start of the year ( link.reuters.com/baz25w ). There are plenty of conspiracy theories about why the state’s motorists are paying so much, ranging from high taxes and specialty fuel formulations to market manipulation, but the truth is more prosaic. Pump prices include taxes and fees […]

Posted On : Published By : Tom Whipple
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Is the U.S. Really the World’s Top Oil Producer?

According to the recently-released BP (NYSE: BP) Statistical Review of World Energy 2014 , the U.S. was the world’s largest and most diverse energy producer in 2014. The Statistical Review ranked the U.S.: #1 in oil production #1 in natural gas production #1 in nuclear power #1 in wind power #1 in geothermal power #1 in biofuels #2 in coal production #4 in hydropower #5 in solar power The U.S. is clearly an energy production superpower, but we are an even greater energy consumer. Thus, despite the large amount of energy production, the U.S. is not energy independent. Our position as the #2 coal producer behind China (not coincidentally) mirrors our #2 position behind China in carbon dioxide emissions. And despite the rapid growth of renewable energy in both countries, carbon dioxide emissions in both countries rose to new record highs in 2014. Perhaps the most surprising item from […]

Posted On : Published By : Tom Whipple
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U.S. Oil Prices Struggle to Rise Above $50

A truck drives past pump jacks at an oil field in Bashkortostan, Russia. Oil prices remained under pressure in Asian trade Tuesday, with U.S. oil prices struggling to move above the $50 mark amid persistent concerns over a global oil glut . A stronger U.S. dollar is also weighing on oil prices after the ICE U.S. dollar index hit a three-month high on Monday, triggering a selloff across commodities as investors shifted to other asset classes. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $50.00 a barrel at 0304 GMT, down $0.15 in the Globex electronic session. It lost 1.5% in the previous session, falling to a near four-month low of $50.15 a barrel. September Brent crude on London’s ICE Futures exchange fell $0.10 to $56.55 a barrel. Nymex crude has fallen for four consecutive trading sessions and is down around […]

Posted On : Published By : Tom Whipple
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NYMEX crude closes lower, dips below $50/b on rising US dollar

Crude futures weakened Monday as US dollar strength pushed front-month NYMEX crude below $50/barrel for the first time since April 6. NYMEX August crude fell as low as $49.85/barrel before climbing back over $50/b to settle at $50.15/b, down 74 cents. ICE September Brent settled 45 cents lower at $56.65/b. Refined product futures lacked direction. NYMEX August ULSD settled 57 points lower at $1.6584/gal, while NYMEX August RBOB settled 17 points higher at $1.9303/gal. The US dollar index reached 98.1 on Monday, a level not seen in almost three months, as the greenback gained ground on expectations the Federal Reserve will raise short-term interest rates this year. Article continues below… Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude and products and more than 200 end-of-day assessments. One factor limiting WTI’s declines Monday was […]

Posted On : Published By : Tom Whipple
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Oil Prices Dip Below $50 on Crude Oil Glut

NEW YORK—U.S. oil prices dipped below $50 a barrel Monday for the first time since April on continued concerns that global crude-oil supplies are overwhelming demand. Light, sweet crude for August delivery settled down 74 cents, or 1.5%, to $50.15 a barrel on the New York Mercantile Exchange, the lowest settlement since April 2, after slipping as low as $49.85 a barrel earlier in the session. The August contract expires at settlement Tuesday. The more-actively traded September contract closed down 77 cents, or 1.5%, to $50.44 a barrel. Brent, the global benchmark, fell 45 cents, or 0.8%, to $56.65 a barrel on ICE Futures Europe. After falling to near-six-year lows in March, oil prices rallied through April on expectations that cuts in U.S. oil drilling would lead to lower production. But prices have slid in recent weeks as output from the U.S. and other nations has stayed robust. While […]

Posted On : Published By : Tom Whipple
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Hedge funds turn unusually bearish on oil: Kemp

The word oil is pictured on an oil bank at a recycling yard in London March 2, 2011. Hedge funds and other money managers have rarely been so bearish about the outlook for oil prices, according to the latest positioning data from the U.S. Commodity Futures Trading Commission. Hedge funds boosted short positions in futures and options linked to the price of U.S. crude to 138 million barrels by July 14, from 84 million four weeks earlier. Over the same period, they cut long positions from 340 million to 292 million barrels. The hedge fund community has an inherent long-bias, but the ratio of long to short positions, at just over 2:1, down from 4:1 a month ago, is among the lowest in the last six years. The number of hedge funds with reported short positions was equal to the number of longs last week, which is highly unusual. […]

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Oil Slump Hurts Currencies From Norway to Brazil as Growth Slows

Crude oil’s worst run in four months is hurting more than just commodity traders. Currencies from the Norwegian krone to Brazil’s real are tumbling as investors revise economic growth expectations for petroleum-exporting nations. Mexico’s peso slumped to its weakest since a 1993 revaluation, while the Canadian dollar fell to a six-year low. “It is oil today,” Greg Anderson, Bank of Montreal’s global head of foreign-exchange strategy, said by phone from New York. “The economies in these countries have slowed down enough that they’re cutting interest rates, so now it’s about that, in addition to commodity-price weakness.” The Norwegian krone led losses by commodity currencies, sliding 0.6 percent to 8.2236 per dollar as of 2:30 p.m. in New York. Brazil’s real declined 0.2 percent to 3.1955 per dollar, approaching its lowest since March. Oil fell below $50 a barrel in New York for the first time since April 6. It’s […]

Posted On : Published By : Tom Whipple
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History Shows Iran Could Surprise the Oil Market

Iran could restore oil production halted by sanctions faster than anyone anticipates if the history of previous shutdowns is any guide. The consensus among analysts and traders is that Tehran needs at least a year after sanctions are lifted to raise output to the level prevailing before restrictions were imposed in 2012. Similar pessimistic assessments for supply disruptions at OPEC members Libya and Venezuela were confounded by quicker-than-expected recoveries, according to data compiled by Bloomberg. Here’s Venezuelan oil production before and after a strike at state oil company Petroleos de Venezuela SA that started in late 2002: Venezuela strike Even after equipment was damaged during the shutdown and the company fired thousands of workers, the Latin American nation was able to lift output by 2 million barrels a day in just four months. The recovery was “sharper than expected,” the Paris-based IEA said in April 2003. Case study two […]

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Is Iran’s gas on tap for Pakistan?

Iran’s official media quotes Pakistani energy official as saying gas pipeline between both countries could develop in the post-sanctions era UPI/Hamid Forotan/ISNA ISLAMABAD, July 20 (UPI) — If sanctions are removed in full, Pakistan could in theory move forward with implementing a bilateral natural gas pipeline project with Iran. Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world’s largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India. For Pakistan, sanctions targeting Iran’s energy sector meant it was time to reconsider the pipeline project. "Removal of sanctions will facilitate us in meeting our commitments and addressing our energy needs," Pakistani Energy Minister Shahid Khaqan Abbasi was quoted as t elling the […]

Posted On : Published By : Tom Whipple