Category:

Oil-Company Earnings Will Be Bleak (Again)

Don’t expect a pretty second quarter earnings season for the oil sector. Even though crude prices have rebounded from the lows hit at the start of the year, they’re still under pressure. Both U.S. West Texas Intermediate and international benchmark Brent crude are down around 40% compared to the second quarter of 2014. Low gas prices are also a problem, particularly as many of the biggest oil companies now produce as much, if not more, gas than oil. That means investors should brace themselves for another punishing set of results when big oil reports on its performance for the quarter later this month. Oppenheimer has a particularly bleak view of what’s coming, predicting the oil majors will report their lowest quarterly earnings in five years. That follows a dismal first quarter in which the companies had to contend with oil dropping to a six-year low below $50 a barrel. […]

Posted On : Published By : Tom Whipple
Category:

U.S. Oil Rig Count Falls to 638 After Two-Week Upturn

By Angela Chen The U.S. oil-rig count fell by seven to 638 this week, reversing the brief upturn of the past two weeks, according to the latest report from Baker Hughes Inc. Last week had been the second straight week of increases after 29 weeks of declines. The number of U.S. oil-drilling rigs, which is a proxy for activity in the oil industry, had fallen sharply since oil prices headed south last year. Oil prices fell nearly 60% from June 2014 to a six-year low in March, as soaring production from the U.S. and other countries overwhelmed global demand. There are about 60% fewer rigs working since a peak of 1,609 in October, though the pace of declines has slowed considerably recently. In late May, several U.S. shale-oil companies said they were ready to bring rigs back into service, setting up the first big test of their ability to […]

Posted On : Published By : Tom Whipple
Category:

US Atlantic Coast gasoline imports slide as European arbitrage window closes

A bounty of supplies in the US Atlantic Coast gasoline market and a recent surge in European gasoline values shut an arbitrage window for shipments from Europe this week, sources say. Atlantic Coast gasoline stocks totaled 62.1 million barrels in the week that ended July 10, up 1.6 million barrels week on week and 1.5 million barrels higher than a year ago, according to US Energy Information Administration data. Meanwhile, imports of gasoline into the region, which have been strong all year and peaked at 797,000 b/d in the week that ended July 3, are starting to fall. Imports fell to 634,000 b/d in the week that ended July 10, a total which remains strong by historical standards — imports averaged 514,000 b/d in 2014 — and reflects an average of two cargoes a day. And looking forward, market observers expect import levels to slip yet further. Data from […]

Posted On : Published By : Tom Whipple
Category:

Using the PHEV (Plug-In Hybrid Electric Vehicle) to Transition Society Seamlessly and Profitably From Fossil Fuel to 100% Renewable Energy

« BMW launches operations at Center of Urban Mobility Competence; boosting electromobility through EV sharing | Main | New non-metallic molecular catalyst system approaches efficiency of platinum in fuel cell oxygen reduction reaction » by Professor Andrew Alfonso Frank CTO Efficient Drivetrains Inc. and UC-Davis Emeritus and Catherine JJ DeMauro Abstract. The alternative-fuel car evolved to reduce exhaust emissions and other problems derived from burning fossil fuels. The PHEV (Plug-in Hybrid Electric Vehicle), a subset of the electric car, combines a primary electric motor with a much smaller back-up engine fueled with a hydrocarbon/biofuel mix. (In this paper PHEV refers solely to the long-range PHEV of 60 miles (100 km) electric-only range.) The PHEV does not require the heavy, costly batteries required by other electric cars, nor does it suffer from a limited range or poor freeway performance. Though the PHEV combines the two types of energy and power, […]

Posted On : Published By : Tom Whipple
Category:

The Mighty Bakken Bites Back

Defying the trend in declining rig counts, daily volumes in the Bakken are climbing higher to the point of a record for gas production at an all-time high of 1.63 billion cubic feet per day (bcfd) in May. Well completions also increased from 102 to an early count of 114, which coincided with previous estimates by Wood Mackenzie Ltd. Jonathan Garrett, WoodMac’s principal Bakken analyst, said the most interesting data point was the fact that despite oil bring priced in the $50 per barrel range and that the rig count is down by 60 percent, production is still increasing at the Bakken in both oil and gas. Operators have achieved this with three primary approaches: drilling only in the acreage’s sweet spot—this means no testing around the perimeter; rig efficiency with high horsepower; and better completion rates, Garrett said. What’s more, during the second half of the year, operators […]

Posted On : Published By : Tom Whipple
Category:

Oil, Gas Industry Sounds Off on BSEE Proposed Well Control Rule

The International Association of Drilling Contractors (IADC) is one of seven oil and gas industry trade associations who expressed concerns in a joint letter to the BSEE about the Bureau of Safety and Environmental Enforcement’s (BSEE) Proposed Blowout Preventer Systems and Well Control rule . The rule, which was proposed in April , came as a response to the April 2010 Deepwater Horizon tragedy. Itwill require more controls over the maintenance and repair of blowout preventers (BOPs), identified by BSEE in an April 13 press release as “a point of failure” in the Deepwater Horizon event. In a release, IADC president and CEO Stephen Colville said the association “believes in the need for better regulation” as long as it’s “fair, fit for purpose, practically implementable and affordable” for the industry. Colville added that “the lengthy period of gestation of rule is regrettably unmatched by the very short period for […]

Posted On : Published By : Tom Whipple
Category:

Canada Provinces Agree To Strategy On Pipelines, Climate Change

OTTAWA, July 17 (Reuters) – Canada’s provinces reached a long-sought deal on Friday over an energy plan for the country, agreeing broadly to curb greenhouse gas emissions while also promoting the use of pipelines. The oil-producing province of Alberta originally conceived the strategy as a way to ensure that it could move its fuel to market. The plan was changed at the insistence of some of the provinces to reflect their desire to fight climate change. Alberta and Saskatchewan have limited markets for their land-locked oil, with environmentalists opposing pipelines that have to go through other provinces to reach the Pacific or Atlantic oceans. These include the Energy East pipeline proposed by TransCanada Corp, which is also trying to build the controversial Keystone XL pipeline through the United States. Canada’s provinces agreed to ensure that regional, Canadian and international infrastructure exists for sending energy products to domestic and international […]

Posted On : Published By : Tom Whipple
Category:

Comerica Drops as Oil Crash Pain Spreads to Shale Boom Bankers

Comerica Inc., a Dallas-based bank that has helped finance U.S. shale drillers, fell the most in three years after reporting Friday that it set aside more money to cover souring energy loans. Shares fell by as much as 6.8 percent, the most since October 2011, after the bank said Friday that its at-risk energy loans grew by $329 million in the second quarter, with past-due accounts up by $100 million. About 14 percent, or $578 million, of the bank’s energy portfolio has been classified as “criticized,” the bank said in a call with investors and analysts. Banks that have been critical to the U.S. shale boom have set aside more cash to cover potential losses after oil fell 51 percent in the past year to about $50 a barrel. This week, JPMorgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. all reported increased […]

Posted On : Published By : Tom Whipple
Category:

Montana train derailment spilled 35,000 gallons of crude oil

A train derailment in rural eastern Montana spilled 35,000 gallons (132,489 liters) of crude oil and forced the evacuation of about 30 people, a U.S. official said on Friday in an email to state officials. About 20 cars on the Berkshire Hathaway-owned BNSF [BNISF.UL] crude oil train went off the rails east of Culbertson, Montana, on Thursday evening, officials said. There was no fire and no injuries were reported. A hazardous materials team from BNSF responded to the scene and contained the spilled oil with earthen dams, Michael Turnbull, an official with the U.S. Department of Transportation, said in an email to Montana officials that was released to the media. The spilled crude did not reach any waterways, the email said. Culbertson authorities temporarily evacuated about 30 people from an area a half-mile around the accident site, Turnbull’s email said. The spilled crude came from three breached tank cars […]

Posted On : Published By : Tom Whipple
Category:

Hedge Funds Turn Bearish on Ruble for the First Time This Year

Investors using Russian ruble futures turned bearish this week for the first time since December, according to data compiled the U.S. Commodity Futures Trading Commission. Hedge funds and large speculators were net short 2,001 futures contracts on the currency in the week ended July 14, wagering that the ruble will decrease in value, the data show. That compares with 999 long positions in the prior five trading days. The ruble dropped 0.9 percent this week, widening its loss from this year’s high to about 14 percent. Brent crude, the oil grade traders use to price the country’s main export blend, slid 2.8 percent to $57.10 per barrel, extending the decline from last year’s high to 50 percent. Economists surveyed by Bloomberg estimate that Russia’s gross domestic product will contract 3.5 percent this year. The country’s last recession was in 2009.

Posted On : Published By : Tom Whipple