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U.S. refiners’ golden era fading as LatAm export boom stalls

Big U.S. oil refiners along the Gulf of Mexico, which have led an almost charmed life for the past five years, may have to brace themselves for leaner times in the months ahead. A boom in domestic shale production yielded a gusher of high-quality oil available at discounted prices thanks to an longstanding ban on U.S. crude exports. Refiners made billions by turning half of that extra supply into products such as gasoline and diesel that could be freely exported to countries including Brazil and Colombia. More recently, while drillers reel from the collapse in crude prices, refiners such as Valero Energy Corp and Phillips 66 are still riding high on healthy margins, savoring an OPEC-induced surplus of crude while low pump prices revive domestic demand. But that business may start losing some of its luster in the coming months, according to a Reuters analysis of refining capacity and […]

Posted On : Published By : Tom Whipple
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U.S. Oil Rolls With OPEC’s Blows as Brazil and Canada Take Hits

Eight months into OPEC’s plan to hit rival oil producers, the casualties are mounting. Surprisingly, the most resilient may be the one that triggered the fight: the U.S. Projections for combined daily output from Brazil, Canada, Russia, Mexico and Colombia by the end of the decade were cut by 2.8 million barrels since oil slumped last year, data from the countries and the International Energy Agency show. In contrast, the U.S. Energy Department increased its estimate for crude output in 2020 by more than a million barrels. Prices fell more than 45 percent in the past year after the Organization of Petroleum Exporting Countries refused to cut output, instead pressuring rival producers to eliminate a global supply glut. While the number of active U.S. oil rigs has halved, production remains close to a three-decade high and is forecast to keep growing after a pause in the coming year. Projects […]

Posted On : Published By : Tom Whipple
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To Clean Up Oil Sands’ Dirty Image, Alberta May Try Emission Tax

Alberta’s new government is engaged in a balancing act. It’s trying to cut carbon emissions while protecting an oil-sands industry that supports hundreds of thousands of jobs. Tar sands are found almost exclusively in the western Canadian province. They produce a product that generates about 17 percent more carbon dioxide on average than conventional oil, and emissions in Alberta have risen by more than 53 percent since 1990. At the same time, they’re the nation’s single most valuable export, making up nearly a fifth of total foreign sales. The challenge for the government is to work with an industry, already struggling with price cuts, on ways to hold off environmental criticism of the tar sands. Opponents have so far blocked the Keystone XL pipeline that would carry the oil to the U.S., and limited the world’s third-largest reserve from reaching new buyers. “If Alberta wants better access to world […]

Posted On : Published By : Tom Whipple
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Greece Might Be Better Off Outside Eurozone, German Finance Minister Says

Photo Wolfgang Schäuble, Germany’s finance minister, said on Thursday that a temporary Greek exit from the eurozone could give Greece the flexibility it needs to reduce its debt load. Credit Ralph Orlowski/Reuters BERLIN — Despite bitter opposition in many quarters to the austerity-first policies Germany has imposed on Europe’s poorer nations, Chancellor Angela Merkel’s government has hung on to its role as champion of integration on the Continent through deft use of diplomacy and the country’s economic clout. But in negotiating a new deal this week to bail out Greece , Germany displayed what many Europeans saw as a harder, more selfish edge, demanding painful measures from Athens and resisting any firm commitment to granting Greece relief from its crippling debt. And that perception was fueled on Thursday when the German finance minister, Wolfgang Schäuble, suggested that Greece would get its best shot at a substantial cut in its […]

Posted On : Published By : Tom Whipple
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London proposes new fracking restrictions

British government proposes pulling some parts of the country off the table for hydraulic fracturing. Photo courtesy of Cuadrilla Resources. LONDON, July 16 (UPI) — The British government boasted of its environmental track record Thursday, saying it was taking steps toward excluding some areas from hydraulic fracturing. "The United Kingdom has one of the best track records in the world when it comes to protecting our environment while also developing our industries – and we’ve brought that experience to bear on the shale gas protections," Energy Minister Andrea Leadsom said in a statement. The British government published draft regulations that would place groundwater aquifers, as well as parks and heritage sites, off limits to potential hydraulic fracturing activities. Shale energy is in its infancy in the country, though Leadsom said the government was committed to developing the sector safely and economically. Her comments follow the publication of a set […]

Posted On : Published By : Tom Whipple
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Wood Mackenzie: Russia’s energy players resilient

Russian energy companies should be able to remain competitive in the weakened crude oil market, Wood Mackenzie finds. Photo by DyMax/Shutterstock EDINBURGH, Scotland, July 16 (UPI) — Consultant group Wood Mackenzie said Thursday oil and gas companies in Russia are suited well to withstand any protracted slump in the crude oil market. Crude oil prices starting in June 2014 began a steady decline, dropping from levels above the $100 per barrel mark to below $50 per barrel in early 2015. This year in June, Russian Minister for Economic Development Alexei Ulyukayev said "the oil market has attained certain stability." Analysis from Wood Mackenzie finds oil and gas producers in Russia break even near $60 per barrel. "Costs are largely ruble denominated and among the lowest in the world, underpinned by vast conventional domestic legacy production; and the ruble devaluation has cushioned the negative effect from the fall in oil […]

Posted On : Published By : Tom Whipple
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Bypassing Ukraine will be costly for Russia’s Gazprom: analysts

An employee turns a valve at a gas compressor station in the village of Boyarka, outside Kiev, Ukraine, in this April 22, 2015 file photo. Russia’s plans to drop Ukraine as a route for pumping natural gas to Europe will still leave state-run Gazprom facing about $1 billion in annual transit fees to Slovakia and Bulgaria for years to come, analysts and industry sources say. Russia wants to circumnavigate Ukraine to pipe its gas to Europe because of pricing disagreements, which at times have led to disruptions in supplies to the European Union, but doing so will come at a cost which some analysts say is too high. Billions of euros will be needed to build and expand alternative routes, and the route of the existing pipeline means transit fees to Slovakia and Bulgaria will have to be paid by Gazprom even if Russia manages to bypass Ukraine by […]

Posted On : Published By : Tom Whipple
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Greece licks wounds after bailout vote, ECB move expected

Greek Prime Minister Alexis Tsipras reacts during a parliamentary session in Athens, Greece July 16, 2015. Greece awoke with a political hangover on Thursday after parliament approved a stringent bailout program, thanks to the votes of the pro-European opposition, amid the worst protest violence this year. The vote, vital to unlocking emergency financing from European partners as early as Thursday, left Prime Minister Alexis Tsipras weakened by a revolt in his leftist Syriza party but clinging to power for now. The European Central Bank’s governing council, meeting in Frankfurt, was expected to ease its funding squeeze on shuttered Greek banks, the first step toward permitting them to reopen after nearly three weeks’ closure while cash rationing and other capital restrictions will remain in place. European finance ministers were to hold a conference call on Thursday morning to agree on a plan for 7 billion euros in bridging funds to […]

Posted On : Published By : Tom Whipple
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Why the cash economy in Greece may be ending

Many believe we have a teetering world economy, even without Greece as an indicator. Now Greece is looming ever larger as a critical if unknown actor. It is mostly considered a bad one, for the entire European, and even the worldwide, financial system and economy. The Greek economy is approaching an almost unprecedented standstill. For clear reasons it probably will never get back to a "normal" or desirable level of consumption. When stepping back from witnessing the daily crisis, it would appear timely to ask what are the real factors in the big picture? Was the crisis brought on just by second-rate policies combined with inefficiency, corruption, and oppression? Or have longer-term characteristics of industrialism and Western Civilization’s relentless, aggressive growth caught up with us to undermine our future as a species? If so, the discussion about what’s wrong and how to deal with it has to change, and […]

Posted On : Published By : ASPO-USA
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Oil prices steady as stock draw balances supply

Pump jacks are seen in the Lost Hills Oil Field, California April 20, 2015. Oil prices steadied on Thursday after data showed U.S. crude inventories dropped and refinery demand was robust, although the global market remained extremely well supplied. U.S. crude inventories fell by 4.3 million barrels last week, according to the Energy Information Administration (EIA), as refineries boosted throughput to a record level. The data suggested demand in the United States, the world’s biggest oil consumer, was holding up well and still absorbing fuel at a time of ample global production. Brent crude for August was unchanged at $57.05 a barrel by 0750 GMT. U.S. light crude, also known as West Texas Intermediate or WTI, was up 10 cents at $51.51. Daniel Ang of brokerage Phillip Futures said the U.S. crude inventory figures looked bullish for both global oil benchmarks. "As a result of this, we would believe […]

Posted On : Published By : Tom Whipple