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BHI: US rig count jumps 19 units to 876

The US drilling rig count jumped 19 units to reach 876 during the week ended July 24, according to data from Baker Hughes Inc. The gains came primarily from rigs drilling on land. Land rigs were up 17 units to 841. Those drilling in inland waters also increased, up 2 units to reach 4 rigs working. During the week, rigs targeting oil jumped 21 units to 659. Gas-directed rigs, meanwhile, were down 2 units to 216. Rigs considered unclassified were unchanged at 1 rig working. Rigs engaged in horizontal drilling increased 12 units to 662. Directional drilling rigs lost 1 unit to 83. Rigs drilling offshore and in the Gulf of Mexico were both unchanged this week, both maintaining counts of 31. Canada’s rig count continued its upward climb, increasing 8 units to an even 200. Its count has now risen in 9 of the last 11 weeks. This […]

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Exclusive: Total seeks buyer for half of Texas refinery

General view of the Total’s oil refinery at La Mede near Marseille, southern France, April 16, 2015. French oil major Total S.A. ( TOTF.PA ) is selling a 50 percent stake in its sole U.S. refinery in Port Arthur, Texas, and has retained investment bank Lazard to advise on the deal, according to a source familiar with the matter. The French oil major, which has been trying to reduce its downstream exposure for three years, intends to remain operator of the 225,000 barrel-per-day plant, which it has owned for more than 40 years, the source said. The move reflects Total’s efforts to shift more capital toward production, two people familiar with refining transactions added. Lazard and Total both declined to comment. The sale would be the latest step by a big oil company to move away from the downstream sector, which has long been considered a low-margin drag on […]

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Ruble Falls for Fifth Week Tracking Oil as Russia’s RTS Slides

The ruble fell, extending the longest weekly slump since November, and bonds declined as the selloff in oil drove the price of Brent to a three month-low. A dollar-denominated gauge of stocks entered a bear market. Russia’s currency weakened 1.1 percent against the dollar to 58.4980 by 6:47 p.m. in Moscow. It declined 2.6 percent this week, the most since the period ended June 7. The RTS Index extended the retreat from its peak in May to more than 20 percent. Oil, which along with natural gas accounts for half Russia’s revenue, has tumbled in London and entered a bear market in New York amid a persisting surplus. The ruble’s correlation with oil rose to 0.47 this week, the highest level in two years, according to data compiled by Bloomberg. “The ruble is a petrocurrency, and oil is on another leg down,” Vladimir Miklashevsky, a strategist at Danske Bank […]

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Weatherford: Future looks grim

Rig services company Weatherford says the future does not look good for the North American market. Photo by Calin Tatu/Shutterstock BAAR, Switzerland, July 24 (UPI) — With few prospects for a recovery in the crude oil market, rig services company Weatherford said it was making deeper cuts in its North American portfolio. "Market conditions will not improve significantly in the balance of the year," Weatherford President and Chief Executive Officer Bernard Duroc-Danner, said in a statement. "There will be modest activity increases in North America and selected international geographies but these will not be material." Weatherford, which has headquarters in Switzerland, joins peer companies Baker Hughes and Halliburton in announcing downbeat expectations for the trajectory in crude oil markets. West Texas Intermediate, the U.S. benchmark for crude oil, traded Friday at around $48.60 per barrel, down about 18 percent from July 1 and more than 50 percent below June […]

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British shale pioneer to push back against local council

Shale pioneer Cuadrilla Resources says it will appeal county decision to deny permits for a drilling campaign that would include hydraulic fracturing. Photo courtesy of Cuadrilla Resources LONDON, July 24 (UPI) — British shale pioneer Cuadrilla Resources said it planned to appeal June’s decisions by a county council to deny permits for a hydraulic fracturing campaign. "We have given careful consideration to appeal the planning decisions taken by Lancashire County Council," Cuadrilla Chief Executive Officer Francis Egan said in a statement. "This is a natural step in the democratic process for deciding any planning application." The council in Lancashire last month voted to refuse a permit to start a hydraulic fracturing campaign in the Preston New Road and Roseacre Wood sites. The council said it refused the applications because of noise and visual impact concerns, and "potentially severe" impacts on road infrastructure and traffic, respectively. In the past, the […]

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Why do Russians love Putin so much?

Vladimir Putin first stepped into power 15 years ago. His leadership has been bolstered by portraying himself as a patriotic and unshakable president, with unmatchable athletic ability. But in the past year, Putin’s relationship with the West has deteriorated. Russians are struggling under western sanctions after Putin’s annexation of Crimea and continuing support for Russian-separatists in Eastern Ukraine. The rouble has tumbled and the price of oil – Russia’s main export – has slumped. But despite all this, President Putin’s popularity at home has gone up. The Levada Center – an independent Russian polling and research agency – found 87 percent of Russians approved of Putin. Just down from a record high of 89 percent in June. It’s a big increase from 2012 when 64 percent approved of him. So, why are Russians rallying around their leader? Presenter: Laura Kyle Guests: Dmitry Babich – Political Analyst and Contributor to […]

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Oil Turning Back to Bear Erases $100 Billion From Shale Drillers

The Permian Basin in Mentone, Texas. Crude oil slipped back into a bear market Thursday, disappointing U.S. shale drillers that pinned their hopes on higher prices. West Texas Intermediate, the benchmark U.S. contract, tumbled 21 percent since June 10 to $48.45 a barrel, erasing more than $100 billion in market value from the companies in the Bloomberg Intelligence North America Independent Explorers and Producers Index. Crude’s recovery fizzled amid a worldwide glut that shows little sign of abating. U.S. production remains near the highest level in four decades, output from Saudi Arabia and Iraq surged to record levels, and Iran is focused on resuming exports after reaching a nuclear agreement with world powers. “The commodity price is telling the U.S. shale sector to shrink,” said Subash Chandra, an oil analyst at Guggenheim Securities LLC in New York. “Barrels from the U.S. are on a collision course with barrels coming […]

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Oil prices climb, but stay in bear market territory

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson, North Dakota June 26, 2015. Oil prices edged up on Friday after closing at their lowest in months in the previous session as oversupply and disappointing Chinese factory activity dragged on the market. Oil prices in the United States have slumped more than 20 percent in the past six weeks, a slide considered by many traders to constitute a bear market. The oil demand outlook dimmed further on Friday after a preliminary private survey showed factory activity in China’s struggling economy contracted by the most in 15 months in July. "Concerns around the demand environment were heightened further today by the PMI (Purchasing Managers’ Index) read out of China," said Michael McCarthy, chief market strategist at CMC Markets in Sydney. "The lack of supply side response means that the downtrend looks to be […]

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Oil Prices Enter Bear Market Amid Global Glut of Crude

U.S. oil prices sank into a bear market Thursday as a global glut of crude shows little sign of abating. Prices had settled below the key $50-a-barrel mark for the first time since early April on Wednesday, and they kept falling for most of Thursday. An unexpected increase in U.S. crude inventories, announced earlier this week, combined with high production already coming from the Organization of the Petroleum Exporting Countries, is raising concerns that the market is settling into a long period of oversupply. Light, sweet crude for September delivery settled down 74 cents, or 1.5%, at $48.45 a barrel on the New York Mercantile Exchange, the lowest settlement since March 31. The U.S. benchmark has posted losses in 17 of the past 21 sessions. That skid has now dropped it into a bear market, down more than 21% from the 2015 high that it hit just a month […]

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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 […]

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Dim crude price outlook may force more spending cuts for oil majors

A pedestrian stands near a sign displaying the cost of gasoline at a filling station in San Francisco, California July 22, 2015. The world’s top oil companies are set to report yet another sharp drop in quarterly profits that could force more spending cuts due to a dim outlook for oil prices. Oil companies rarely scale back capital expenditure (capex) in the middle of the fiscal year. But with oil prices failing to recover and even lurching lower in recent weeks after a nuclear accord between Iran and world powers, boards could take more action beyond cuts already announced, analysts say. "Oil companies are hunkering down for a downturn that will take longer than some initially thought," Martijn Rats, head of European oil and gas equity research at Morgan Stanley, told Reuters. International oil companies including Exxon Mobil, Chevron, Royal Dutch Shell, BP and Total all reduced 2015 spending […]

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Natural Gas Plunges on Oversupply

By Timothy Puko Natural gas prices had their largest one-day loss in a month after traders pulled back on signs of oversupply. The U.S. Energy Information Administration said producers added 68 billion cubic feet of natural gas to storage in the week ended July 17. The figure is one of the leading measures of balance between supply and demand, and it shows supply outdoing demand by nearly 30% more than it usually does this time of year. Analysts estimate that it puts oversupply at about 1 billion cubic feet a day, despite record demand from the power sector. "Supply continues to outpace demand in the market, and there doesn’t seem to be much of a cure," Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. The front-month August contract lost 8.1 cents, or 2.8%, to $2.816 a million British thermal units […]

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Republicans Have Minds Made Up as Debate Begins on Iran Nuclear Deal

Photo Senator Bob Corker, chairman of the Foreign Relations Committee, scolded Secretary of State John Kerry on Thursday. Credit Zach Gibson/The New York Times WASHINGTON — Senator Bob Corker, Republican of Tennessee and the chairman of the Foreign Relations Committee, stared at Secretary of State John Kerry on Thursday with thinly veiled disgust. “You have turned Iran from being a pariah to now, Congress being a pariah,” said Mr. Corker, who helped broker a delicate deal with Democrats and the White House allowing lawmakers to review the proposed lifting of sanctions against Iran. While Mr. Corker, who promised a considered assessment of the agreement, may have seemed close to an endgame during a hearing on Capitol Hill, the vast majority of Republicans appear to have made up their minds before a single classified briefing, hearing or visit with administration officials. Their view seems born of genuine distaste for the […]

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Iran’s President Defends Nuclear Deal in Blunt Remarks

Photo Secretary of State John Kerry, left, with Hossein Fareydoun, center, the brother of Iran’s president, and Iranian Foreign Minister Javad Zarif in Vienna in July. Credit U.S. State Department TEHRAN — Pushing back against domestic critics of Iran ’s nuclear deal, President Hassan Rouhani suggested on Thursday that the alternative was an economic “Stone Age” and that the accord was the precise reason he was elected two years ago. The remarks by Mr. Rouhani at a medical conference, broadcast on national television, were among the bluntest he has made in defending the agreement reached with six big powers , including the United States, on July 14 in Vienna. Under the agreement, economic sanctions on Iran , including restraints on its oil and financial trade, will be lifted in exchange for significant limits on the country’s nuclear activities, with verifiable guarantees that they remain peaceful. Conservative elements of Iran’s […]

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Saudi Arabia Approves of Iran Nuclear Deal, U.S. Defense Chief Says

JIDDA, Saudi Arabia — Defense Secretary Ashton B. Carter gave a surprisingly upbeat assessment on Wednesday of American relations with Saudi Arabia , asserting that the kingdom welcomed the international nuclear deal reached with its regional rival, Iran . Mr. Carter, who visited Jidda and held his first meeting with King Salman, also said the Saudi monarch would visit the United States this fall and was committed to fighting the Islamic State, the Sunni militant extremist group. The defense secretary’s description of ties with the Saudis, which he made to reporters after the meeting while en route to Amman, Jordan, was unexpectedly upbeat, considering Saudi Arabia ’s strong reservations about the nuclear negotiations between the big world powers and Iran that yielded an agreement last week. Israel , another crucial American ally in the Middle East, has strongly protested the Iran accord and bluntly conveyed that message to Mr. […]

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Iran to Use Most Stranded Cash for Investments

VIENNA—Iran will spend most of the billions of dollars released under a nuclear deal in investments, a top financial official said Thursday. The planned release of the funds has become a focal point for U.S. critics of the atomic pact clinched last week. Some in the U.S. Congress—which has to vote on the agreement in the next two months—suspect the money could be used to bolster Iran’s allies hostile to American partners in the region. Speaking to reporters at a Vienna trade conference, Akbar Komijani, the deputy head of Iran’s Central Bank, said the country’s cash broad is “primarily intended for investment, not for imported goods.” He cited projects in petrochemicals, natural gas, industry, mining, roads and construction that will “create jobs.” Some projects could go to Europeans if they are competitive, he said. The Vienna conference promoting trade between the European Union and Iran is the first of […]

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Iran eyes $185 billion oil and gas projects after sanctions

Iran on Thursday outlined plans to rebuild its main industries and trade relationships following a nuclear agreement with world powers, saying it was targeting oil and gas projects worth $185 billion by 2020. Iran’s Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said the Islamic Republic would focus on its oil and gas, metals and car industries with an eye to exporting to Europe after sanctions have been lifted, rather than simply importing Western technology. "We are looking for a two-way trade as well as cooperation in development, design and engineering," Nematzadeh told a conference in Vienna. "We are no longer interested in a unidirectional importation of goods and machinery from Europe," he said. The United Nations Security Council on Monday endorsed a deal to end years of economic sanctions on Iran in return for curbs on its nuclear programme. Sanctions are unlikely to be removed until next […]

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How a Chinese Company Slipped on Canada’s Oil Sands

Weeks after the state-controlled oil company bought Nexen for $15 billion, its executives were in Calgary with a blunt message for the Canadian company, which had struggled for years to extract crude from the oil sands in the Alberta wilderness. Cnooc Chief Executive Li Fanrong told staffers Nexen provided just 2% of Cnooc’s profits, say attendees, warning that “2% is not enough.” Two years later, Cnooc is still trying to fix Nexen, its troubles compounded by low crude prices. And now Cnooc must explain an oil spill: This month, a pipeline Nexen installed last year ruptured, spilling nearly 31,500 barrels of a mixture of crude oil, wastewater and sand in northern Alberta. Nexen’s chief executive, Fang Zhi, on Wednesday stood by the oil-spill site near the hamlet of Anzac. “It is very disappointing that this has happened,” he said, the scent of petroleum wafting. “I therefore personally apologize.” Buying […]

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Turkey to Allow Use of Key Air Bases for U.S. Warplanes to Bomb ISIS

AMMAN, Jordan — The United States and Turkey have reached an agreement for manned and unmanned American warplanes to carry out aerial attacks on the Islamic State from two Turkish air bases, Obama administration officials said Thursday. The agreement on the bases, Incirlik and Diyarbakir, was described by one senior administration official as a “game changer” that would significantly strengthen the American military’s ability to strike at ISIS targets in Syria and carry out extended aerial surveillance. It came after months of negotiations that culminated on Wednesday with a phone call between President Recep Tayyip Erdogan of Turkey, and President Obama, another administration official said. The development came as Turkish forces were reported to have engaged in the first direct combat with Islamic State forces on the Syrian side of the border. Both developments vaulted Turkey squarely into the broader battle with the Islamic State, also known as ISIS […]

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Turkish Airstrikes Hit ISIS Targets in Syria

ISTANBUL — Turkish fighter jets struck three Islamic State targets inside Syria on Friday in a pre-emptive measure based on intelligence about a planned attack on Turkey , a senior government official said. The airstrikes came a day after Turkish forces engaged in their first direct combat with the Islamic State, also known as ISIS or ISIL, on the border with Syria and gave permission for American warplanes to use two air bases in the fight against the group in Syria. As well as the airstrikes, Turkey also carried out simultaneous raids across 13 provinces on Friday, resulting in the arrests of 250 people suspected to have ties with terrorist organizations. Three F-16 jets launched guided bombs against two command centers and a meeting point for Islamic State fighters across the border from Kilis, in southern Turkey, without entering Syrian airspace, according to the prime minister’s office. “We received […]

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KRG to tender three new refineries

The Lanaz oil refinery on the Gwer road west or Erbil, March 31, 2015 (PATRICK OSGOOD/Iraq Oil Report) The Kurdistan Regional Government (KRG) is hoping to attract private bids for three new refineries with a total of 150,000 barrels per day (bpd) of capacity, in an attempt to bridge the gap between uneven domestic fuel supply and rising demand.In tandem with these efforts, government officials hope to reform the structure of Kurdistan’s downstream sector, aiming to wean it from expensive subsidies.If successful, the plans could help the cash-strapped KRG save hundreds of millions of dol… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

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Missing: 2.7 Million Barrels of Oil

Pemex has given conflicting statements about how much output was cut. In an e-mailed response to questions on July 8, Pemex reiterated its 1.5 million-barrel estimate. In a follow-up e-mail on July 10, the company said Bloomberg’s 4.2 million-barrel calculation was also “in the order of Pemex’s estimates” and didn’t provide details to explain the difference when asked in additional messages. At the heart of the confusion appears to be what, exactly, Pemex means by lost output. The production isn’t “lost,” Pemex says, just “deferred.” “It seems like Pemex is using a word game to avoid calling production lost,” said George Baker, an oil analyst and publisher of Mexico Energy Intelligence. “If production is being deferred after an accident, then that means the infrastructure isn’t in place or in good enough condition to pump the oil, so wouldn’t that be the same thing as lost production?” It’s not the […]

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China factories falter, commodities take the hit

An employee works on a final assembly line for CRH380B, a high speed train model, at China CNR’s Tangshan Railway Vehicle’s factory in Tangshan, Hebei province, February 11, 2015. Activity in China’s factory sector seemingly contracted at the fastest pace in 15 months in July, a preliminary private survey showed on Friday in a blow undercutting recent signs of stabilization in the struggling economy. The news came as Beijing announced it would allow its yuan currency to fluctuate more widely within its trading band as a way to support the trade sector. Fears of faltering demand in the world’s largest commodity buyer piled further pressure on resource prices, sending gold to a five-year low and copper to a six-year trough. It also added to the woes of emerging market nations already struggling with the risk of a rise in U.S. interest rates later this year. The flash Caixin/Markit China […]

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Shell still on arctic hot seat, advocacy group says

Greenpeace activists arrested by U.S. Coast Guard officials during protest against Shell drilling plans offshore Alaska. Photo courtesy of Greenpeace. JUNEAU, Alaska, July 23 (UPI) — Legal counsel for advocacy group Oceana said that, while pressure hasn’t stopped Shell’s slow march to arctic oil, feet can be still held to the fire. The Bureau of Safety and Environmental Enforcement granted permission to Shell to drill two wells in the arctic waters off the Alaskan coast. BSEE said the permits excluded drilling into oil-bearing zones because Shell lacks a critical piece of safety equipment . Shell’s efforts to drill offshore Alaska have long been the target of advocacy groups, most recently from kayak-bound activists protesting against rig deployments from the Port of Seattle. Michael LeVine, Pacific senior counsel for Oceana, said that, given Shell’s track record in Alaskan waters, a return to the regulatory and procedural drawing board may be […]

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Rig company Hercules posts heavy quarterly loss

U.S. rig company Hercules Offshore expects weak market for crude oil to endure at least into 2016. Photo by num_skyman/Shutterstock HOUSTON, July 23 (UPI) — Low crude oil prices suggest activity in the exploration and production side of the energy sector will stay depressed, U.S. rig company Hercules Offshore said. From U.S. operations alone, Hercules said revenue generated during the second quarter of the year dropped 71 percent year-on-year to $40.6 million. Crude oil markets are struggling to recover from the long decline that began in June 2014, when prices were above the $100 per barrel mark. West Texas Intermediate, the U.S. benchmark, dropped below $50 per barrel in interday trading this week. "The latest pullback in the price of oil is likely to delay any improvement in worldwide activity levels well into 2016," Chief Executive Officer John Rynd said in a statement. In the U.S. sector, the company […]

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Friends and foes debate U.S. energy landscape

Rep. Ed Whitfield, R-Ky., works to steer energy policy to reflect shale boom, though industry groups say the efforts fall far short of what’s needed. (UPI Photo/Roger L. Wollenberg) WASHINGTON, July 23 (UPI) — The American Petroleum Institute said there is still more work to do as U.S. lawmakers work to craft legislation that matches the shale energy landscape. "The last major energy legislation was crafted in 2007, and important changes are needed to unlock the full economic and security benefits made possible by America’s energy revolution," API Executive Vice President Louis Finkel said in a statement. A House energy subcommittee unanimously passed a measure to modernize U.S. energy infrastructure and "bolster America’s energy security and diplomacy." Lawmakers and industry supporters are pressing for new policies to reflect the gains in U.S. oil and natural gas production, drawn largely from shale basins in states like Texas and North Dakota. […]

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Canada expects gas production lift

Canadian regulator expects initial shale gas production rates to increase through 2017 in western parts of the country. Photo by Steve Oehlenschlager/Shutterstock CALGARY, Alberta, July 23 (UPI) — Technological improvements in drilling into natural gas basins in Western Canada means initial production rates should increase through 2017, a regulator said. The National Energy Board said average initial production rates in gas basins in the area declined from 2000 to 2006 as most operators focused on conventional deposits. Since 2007, operators have started focusing on reserves locked in shale basins , which are harder to exploit. "Because these tight and shale formations tend to have higher initial production rates than the mature conventional resources of the Western Canada Sedimentary Basin, the overall average initial production rates started increasing," the NEB said in a report. "This upward trend to all initial production rates is expected to continue through 2017." A forecast […]

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Gazprom ‘Still Pushing for EU Antitrust Settlement’

BRUSSELS—Russian gas monopoly OAO Gazprom still aims for an amicable settlement of the European Union’s antitrust case against the company, Deputy Chairman Alexander Medvedev said Thursday following a meeting with the EU’s competition commissioner. Mr. Medvedev said the company disagrees “in particular” with one point of the commission’s charges, which accuses the company of charging customers in some Eastern European countries excessive prices for natural-gas shipments. “Our prices are nearing a record low for our customers across Europe,” Mr. Medvedev said in a statement. Mr. Medvedev said his meeting Thursday with the EU’s Competition Commissioner Margrethe Vestager, the first since charges were filed against Gazprom in April , was “productive.” “As I have stated in the past, we prefer to settle this case amicably and will continue to engage with DG Competition [the EU’s antitrust body],” Mr. Medvedev said. “Today’s meeting provided a good framework for future discussions and […]

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Average diesel retail price below gasoline price for first time in six years

graph of U.S. weekly average gasoline and diesel prices, as explained in the article text On July 13, the U.S. average diesel fuel retail price fell below the average regular gasoline retail price for the first time since the week of August 10, 2009. From August 2009 through June of this year, retail diesel fuel sold at an average premium of 34 cents per gallon (gal) over regular grade gasoline, with the difference reaching more than 90 cents/gal in January. The persistent price premium for diesel compared with gasoline from August 2009 until last week reflected a combination of factors including strong global demand for diesel, federal fuel taxes for diesel that are 6 cents/gal higher than those for gasoline, and the higher production cost of ultra-low sulfur diesel (ULSD) that was phased in between 2006 and 2010. Gasoline and diesel have opposite seasonal demand patterns: gasoline demand tends […]

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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 […]

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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 […]

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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, […]

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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 […]

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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, […]

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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 […]

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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 […]

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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 […]

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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 […]

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Diesel Prices Tank Amid Global Glut

The world is awash in diesel, sending prices plunging and delivering some commuters a rare bounty. Diesel at the pump was cheaper than regular gasoline in 21 states Wednesday, according to auto club AAA. The national average price for retail gasoline, at $2.75 a gallon, was 4.6 cents below diesel, compared with an average discount of 37 cents from 2010 to 2014. The national average gas price last exceeded diesel’s in 2009, AAA said. Diesel fuel typically costs more than gasoline because U.S. refineries export much of their diesel output, leaving less available for the domestic market, and federal taxes are higher for diesel than for gasoline. As gasoline demand has risen around the world, refineries are running at high rates to produce as much of it as possible. Facilities from Russia to China to the U.S. make diesel alongside gasoline, so in their rush to produce gasoline they […]

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World Bank projects crude oil to average $57/b in 2015, $61/b in 2016

The World Bank on Wednesday revised upward its 2015 crude oil price forecast to $57/barrel from $53/b in April, with demand higher than expected in the second quarter, particularly in the US. However, large inventories and rising output from OPEC "suggest prices will likely remain weak in the medium-term," John Baffes, the World Bank’s senior economist, said in a statement. The bank said it expects the price to rise to $61/b in 2016 as supply growth slows. The price projections are included in the organization’s latest quarterly Commodity Markets Outlook. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more It noted that the US rig count is down 60% since its November […]

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World Bank Sees Commodities Headed for Another Bad Year on Glut

The outlook for commodities is looking grim for yet another year, except that oil will fall a bit less than previously forecast, the World Bank said. Average prices for fuels such as crude, natural gas and coal will tumble 39 percent this year from 2014, while those for materials like metals and fertilizers will fall about 12 percent, the Washington-based lender said in its quarterly “Commodity Markets Outlook” released Wednesday. “All main commodity price indices are expected to decline in 2015, mainly due to abundant supplies, and in the case of industrial commodities, weak demand,” the bank said in the report. Commodities are trading at their lowest in 12 years following a decade-long bull market fueled by growth in developing nations such as China and India. The bank said that metals and coal consumption in particular may slow in China as the nation shifts to a more services-oriented economy […]

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Post-sanctions Iran initially won’t shake markets up, executive says

Iran’s resumption of oil and gas exports, once sanctions are lifted under the recently negotiated nuclear limits agreement, probably won’t flood global markets initially, the chief executive officer of Crescent Petroleum forecasts. Majid Jafar said Iran Petroleum Minister Bijan Zangeneh has said he wants to increase the country’s crude oil production to more than 4 million b/d in the near future, and plans to unveil National Iranian Oil Co.’s new petroleum contract in late August. “I think Iran can achieve this, but it won’t be easy—and it won’t have as big an impact as it might have had in the 1990s when there weren’t so many other options,” Jafar said during a July 22 address at the Atlantic Council. NIOC reportedly is trying to reform its contract terms to attract new outside investment, but faces considerable challenges similar to other countries in the region that have state-owned oil companies, […]

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Republicans, pro-Israel groups step up campaign against Iran deal

An image of Iranian leaders is projected on a giant screen in front of demonstrators during a rally apposing the nuclear deal with Iran in Times Square in the Manhattan borough of New York City, July 22, 2015. Top Republicans vowed Wednesday to do their utmost to scrap President Barack Obama’s nuclear deal with Iran as the biggest pro-Israel lobby prepared for an all-out campaign to pressure wary lawmakers into rejecting the agreement. A bigger push against last week’s historic accord in Vienna was being met with a counteroffensive by senior Obama administration officials, who have already spent hours on in-person and telephone briefings with members of Congress. Secretary of State John Kerry, Energy Secretary Ernest Moniz and Treasury Secretary Jack Lew briefed the entire House of Representatives and Senate in separate closed-door sessions on Wednesday and will defend the deal at a public Senate Foreign Relations Committee hearing […]

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UN envoy voices deep concern over Syria barrel bombing

Sunni fighters say the army has now encircled them within a five square kilometre radius inside the city [File: Getty Images] The United Nations envoy for Syria has said government forces have dropped a large number of barrel bombs on Zabadani city, "causing unprecedented levels of destruction". Staffan de Mistura cited local sources on Thursday, saying the air strikes caused many civilian deaths in the city, located about 45km northwest of the capital Damascus, and about 10km from the border with Lebanon. " [The] Army of Fatah (a Sunni rebel alliance), that controls Zabadani, retaliated by firing rockets and mortar bombs on two Shia villages, Al Foua and Kefraya, near Idlib city in the north," de Mistura said. "In both cases, civilians are tragically caught in the middle of the fighting." Syrian state television said the army had destroyed a 70-metre-long tunnel used by the rebels to transport equipment […]

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Nigeria: Oil Theft – Axe Dangles On Ex-Ministers, Others

Presidents Obama and Buhari with aides following Oval Office meeting. Whichever documents we are able to get and subsequently trace the sale of the crude or transfer of money from ministries, departments, Central Bank, we will ask the cooperation of those countries to return those monies to federation accounts and we will use those documents to arrest those people and prosecute them. This, I promise Nigerians He said his administration will recover the mind-boggling funds stashed in foreign bank accounts. The President, who made the vow during his meeting with members of Nigerians In Diaspora Organization, NIDO, resident in the United States and Canada at the Nigerian Embassy in Washington DC, also expressed difficulty in identifying genuine Boko Haram leaders with whom to negotiate for the release of Chibok girls, disclosing that the sect was plotting to exchange some of their leaders being held by the government with the […]

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Beijing’s stock rescue has $800 billion bark, small market bite

Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, in this July 14, 2015 file photo. China has enlisted $800 billion worth of public and private money to prop up its wobbly stock markets, a Reuters analysis shows, but the impact of the unprecedented government-orchestrated rescue has so far been modest. Public statements, media reports and market data reveal that Beijing unleashed 5 trillion yuan ($805.2 billion) in funds – equivalent to nearly 10 percent of China’s GDP in 2014 and greater than the 4 trillion yuan it committed in response to the global financial crisis – to calm a savage share sell-off. But while the 2008 stimulus package staved off recession, analysts wonder what benefit the stock rescue package can bring to offset the risk the government is buying stocks at valuations private investors are no […]

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North Dakota oil well completions slow sharply: Kemp

A service truck drives past an oil well on the Fort Berthold Indian Reservation in North Dakota, November 1, 2014. No new well completion reports have been filed in North Dakota since July 10, the longest gap this year, according to daily activity records published by the state’s Department of Mineral Resources (DMR). Completions, rather than wells drilled, provide the best guide to short-term changes in output, since operators can always delay completing a well and putting it into production, either because they are waiting for completion crews to be available or to wait for better prices. Completion is usually defined as a single operation including the stimulation and testing of a well as well as the installation of surface production equipment (“Dictionary of petroleum exploration, drilling and production” 2014). North Dakota’s regulators consider a well completed when the first oil is produced through wellhead equipment into tanks from […]

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Lifting Oil Export Ban Left out of Bipartisan Senate Energy Bill

The leaders of the Senate energy panel released a bill Wednesday that includes measures to promote energy efficiency and protect the electric grid from cyber threats, but avoids the controversial issue of lifting a ban on exporting U.S. oil. The bill was drafted by both Senator Lisa Murkowski of Alaska, the Republican chairman of the Energy and Natural Resources Committee, and Maria Cantwell, the panel’s top Democrat. A similar bill is advancing in the Republican-led House. “This represents the universe of where there is bipartisan agreement,” Robert Dillon, a Republican spokesman for the Senate committee, said. Congress hasn’t passed major energy legislation since 2007, as the parties have clashed over renewable energy commitments and projects like the Keystone XL pipeline to link Canadian heavy crude with U.S. refineries. The bill, which the committee will begin debating on July 28 and may vote on later that week, is the common […]

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