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Oil Rigs Left Idling Turn Caribbean Into Expensive Parking Lot

Imagine parking your $300 million boat for months out in the open sea, with well-paid mechanics hovering around it and the engine running. The Gulf of Mexico and the Caribbean Sea have become a garage for deepwater drillships — at a cost of about $70,000 a day each. It’s either that or send your precious rig to a scrapyard. The dilemma underscores how an offshore industry that geared up for an oil boom is grappling with a bust. Rig owners are putting equipment aside at unprecedented numbers as customers including ConocoPhillips pull back from higher-cost deepwater exploration. That’s helped make Transocean Ltd. and Ensco Plc two of the three worst performers in the Standard & Poor’s 500 Index over the past year. “Most contractors have never seen an environment like this, where demand is falling as quickly as it is,” David Smith, an analyst at Heikkinen Energy Advisors in […]

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Jobs Machine From Canada Oil Slows as Robots Add to Price Slump

Truck driver Craig Huzulak is unemployed after losing his job four times since December — the new normal in a Canadian oil patch still reeling from a downturn. Huzulak, 49, was working at a mine last year near Fort McMurray, Alberta, when crude prices plunged and work dried up. He lost two more positions in the following months and then had a job offer yanked at the end of June before he could even start. In addition to the market rout, the father of two now worries about the self-driving trucks Suncor Energy Inc. is rolling out in its oil-sands mining operations that will replace workers like him to save companies money. “It’s really, really hard for heavy-equipment operators,” said Huzulak, who has driven trucks and worked on drilling rigs in Western Canada for 15 years. “There’s a lot more fear now that this might last longer.” The burgeoning […]

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Murkowski breaks rank on oil tie to highway funding

Measure aimed at keeping highway trust fund afloat with oil sales draws criticism from Sen. Lisa Murkowski, vocal supporter of the industry. File photo by Jim Ruymen/UPI WASHINGTON, July 22 (UPI) — Sen. Lisa Murkowski , a vocal supporter of the oil industry, said selling oil from strategic national reserves to fund highway projects was bad policy. Murkowski, R-Alaska, chairperson of the Senate Energy Committee, criticized the so-called bipartisan DRIVE Act, a measure aimed at generating $9 billion for the federal highway trust fund, by suggesting it puts national security interests at risk . "The Strategic Petroleum Reserve is a vital national security asset that must be maintained in case of serious future supply disruptions," Murkowski said. "While I recognize that a long-term highway bill is a priority, a shortsighted sale that undermines our emergency preparedness could have real and lasting impacts on our security." Senate Majority Leader Mitch […]

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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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Congress Eyes Sales From Nation’s Oil Stockpile for Highway Funding

By Amy Harder And Nicole Friedman WASHINGTON–Lawmakers are eyeing the Strategic Petroleum Reserve as a piggy bank, but not without controversy. The Senate is considering legislation that would partly replenish the U.S. highway trust fund with $9 billion worth of sales from the reserve, which at 695.1 million barrels of oil is close to its 713.5-million-barrel capacity. This month, the House passed a bill to sell 80 million barrels from the reserve to raise $7 billion to help pay for legislation to boost government drug approvals and research funding. But proposals to tap the nation’s oil stockpile as a way to pay for unrelated government programs have drawn opposition. The Senate Energy Committee chairman, the U.S. energy secretary and oil industry analysts all criticize the move as shortsighted. The sale of crude from the reserve is one of about 15 new funding sources that Senate leaders want to use […]

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Falling Crude Prices Upend Canada’s Oil Sands Projects

Two years ago Canadian oil sands producer Cenovus Energy Inc., CVE -2.54 % buoyed by success at its flagship project and eager to cut operating expenses, halved the amount of instrumentation used to measure finicky temperature and pressure at its wells. But that turned out to be a costly mistake that cut into its Foster Creek site’s production volumes, which only have recently recovered after the company reversed course. “We started to cut our operating costs, but in hindsight that’s a lesson learned,” Harbir Chhina, Cenovus’ executive vice president in charge of oil sands, said in an interview. “If I compare the oil sands to a baseball game, I think we just finished the first inning,” he said. Of the roughly two million barrels a day that Canada currently produces from its oil sands, about half is mined from the surface using giant excavators and the world’s tallest dump […]

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Rail Tank Car Orders Fall Sharply

Orders for railroad tank cars fell sharply in second quarter, reflecting lower shipments of crude oil amid falling prices. Orders for 3,155 tank cars were placed in the quarter, down 29% from first quarter and off 70% from the second quarter of 2014, the Railway Supply Institute reported. The order backlog dropped 11% from the first quarter to 46,375 tank cars. The decline comes amid a broad decline in energy shipments at railroads. Carload volume for oil and petroleum products for the week ended July 18 was down 20% from last year and were off 2.7% in the first 28 weeks of 2015 from the same period in 2014, according to the Association of American Railroads. Meanwhile, orders for boxcars surged in the second quarter as shippers—led by the paper industry—complained of car shortages caused by railroads culling older boxcars from their fleets. Boxcar orders were 2,940 against none […]

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Texas RRC Oil & Gas Production

The Texas RRC Data is out. All RRC data below is through May. The EIA data is through April. Texas C+C There appears to be an increase in Texas May crude oil production. You will notice that the EIA has departed from their usual practice of just estimating Texas C+C production up about 50,000 bpd for every month for the last six months or so. They have a new method or estimating Texas production which is explained in the first link below the charts. That new method has Texas C+C production down 64,000 barrels per day in April. The May Texas production data will be out on July 31, in the Petroleum Supply Monthly . Dean C+C Dr. Dean Fantazzini has calculated what the data wil eventually look like and given us the 95% confidence bounds. He has Texas C+C basically flat since December. Texas crude only appears to […]

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US Senate energy bill to speed LNG exports, clarify SPR sales limits

Key US senators have reached a deal on a broad package of energy sector reforms that if enacted would speed decision-making on liquefied natural gas exports, focus the intent of the Strategic Petroleum Reserve and require reviews of how federal rules impact electric system reliability. The agreement on the bipartisan legislative package follows a number of Senate hearings in recent months and lawmakers’ consideration of more than 100 bills offered for inclusion in the wider package. The bill unveiled Wednesday is also the result of negotiations between the two leaders of the Senate Energy and Natural Resources Committee — Chairman Lisa Murkowski of Alaska and Ranking Member Maria Cantwell of Washington — and their staffs, and debate and voting — a markup — of the bill is scheduled to begin in the week starting July 27. A major provision in the bill will speed decision-making on LNG exports by […]

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US coal carload volumes rise to highest total in 11 weeks: AAR

Coal carload volumes originated on US railroads reached to an 11-week high, according to data released Wednesday by the Association of American Railroads. For the week ending July 18, the AAR reported 99,975 coal carloads, up 4.9% from 95,318 carloads the previous week. It was the second straight week of coal shipment gains since a year-low 82,924 carloads were reported for the week ending July 4. It was the highest volume of coal carloads since 101,495 carloads for the week ending May 2. Despite the increase, the latest total marked the 15th week this year coal volumes were below 100,000 carloads. It is the most times in a year weekly volumes have remained that low since the AAR began such record keeping in 1988, more than doubling the previous high of seven weeks in 1989. Article continues below… Platts Coal Trader provides the latest prices for key benchmark coals, […]

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US Says Shell Is Not Yet Allowed To Drill In Arctic Oil Zone

WASHINGTON, July 22 (Reuters) – The U.S. Interior Department on Wednesday granted Royal Dutch Shell two final permits to explore for crude in the Arctic this summer, but said the company cannot drill into the oil zone until required emergency equipment arrives in the region. The department’s Bureau of Safety and Environmental Enforcement (BSEE) conditionally granted Shell permits for exploration in the Chukchi Sea off Alaska, in a season which sea ice limits from July until October. But Shell must have emergency equipment to contain a potential blown-out well deployable within 24 hours before drilling into the oil zone, the office said. Shell discovered weeks ago that the Fennica icebreaker that holds the required equipment, called a capping stack, had a three-foot (1-meter) gash in it. "Without the required well control system in place, Shell will not be allowed to drill into oil-bearing zones," BSEE Director Brian Salemo said. […]

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Solar Desalination Could be a Game Changer for California Farms

Let’s be clear from the outset: I’m no fan of conventional desalination. The idea of using climate-altering fossil fuels to drive an energy-intensive de-salting process that threatens coastal environments in order to produce drinking water that, in most cases, could be secured more cheaply through conservation and efficiency improvements, simply fails to pass the bar of economically sensible, environmentally sound solutions to our water problems. But now desalination of a very different stripe is under way – not by the sea, but in California’s drought-stricken Central Valley farming region. The project is turning salty, contaminated agricultural drainage into fresh water that can be re-used to irrigate crops. Powered not by fossil fuels, but by the sun, the technology has the potential to shift the way water is used and managed in parts of the west, where agriculture accounts for 70-80 percent of water use. Developed by a San Francisco-based […]

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Russia’s Missed Debt-Sale Goal Shows Rate-Cut Bets Went Too Far

Russia raised less money than targeted at a debt auction as demand for one series of bonds offered fell to the lowest level since April, the latest sign investors are scaling back bets for interest-rate cuts.. The nation sold 9.82 billion rubles ($172 million) of local debt, known as OFZs, after tendering 15 billion rubles of notes maturing in five and 13 years. While bids exceeded the amount offered, investors’ yield demands were higher than the government was willing to pay following a four-week rally in sovereign bonds. Those gains came to an end this week as investors speculated the impact of potential interest-rate cuts is already factored into prices. The Bank of Russia will make its next decision on borrowing costs on July 31 and Kapital Asset Management expects policy makers will hold off on changing them amid concern inflation isn’t falling fast enough to justify lower interest […]

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Greek PM keeps lid on party rebellion to pass bailout vote

Anti-austerity demonstrators hold up a giant Greek flag in front of parliament in Athens, July 22, 2015. Greek Prime Minister Alexis Tsipras contained a rebellion in his left-wing Syriza party to win parliamentary approval on Thursday for a second package of reforms required to start talks on a financial rescue deal. A first set of reforms that focused largely on tax hikes and budget discipline triggered a rebellion in Syriza last week and passed only thanks to votes from pro-EU opposition parties. The bill that lawmakers voted on early Thursday covered rules for dealing with failed banks and speeding up the justice system – two more conditions set by the euro zone and IMF to open negotiations on an 86 billion euro rescue loan. The legislation easily passed with the backing of 230 votes in the 300-seat chamber, once again due to opposition support. But 36 Syriza deputies – […]

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Gazprom Neft Leads Russian ADRs Lower as Crude Extends Decline

OAO Gazprom Neft tumbled the most in seven weeks, leading a slump in U.S.-traded Russian stocks as crude prices extended their decline from this year’s high, prompting investors to withdraw from the world’s largest energy exporter. The oil producer’s American depositary receipts sank 3.8 percent to $11.80 in New York. Trading volume was more than 4 times the daily average of the past three months. It was the worst performance in the Bloomberg Russia-US Equity Index, which slid to a two-week low. Stocks declined as Brent crude, which traders use to price the country’s main export blend, fell 1.6 percent to $56.13, pushing the decline from its May 6 high to 17 percent. Oil, which is selling at about three-fifths its five-year average price, is the country’s biggest export and, along with natural gas, accounts for about half its budget revenue. Lower prices, combined with sanctions linked to the […]

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EU extends loan to assist with Ukrainian reforms

European Commissioner extends assistance to Ukraine to help with energy and financial sector reforms. Photo by canadastock/Shutterstock BRUSSELS, July 22 (UPI) — The European Commission said Wednesday it agreed to extend financial assistance to Ukraine, a key energy transit country, to help with economic reforms. The commission, acting on behalf of the European Union, said it disbursed $650 million in assistance to Ukraine to address "urgent financing needs" necessary for economic stability . The loan is aimed at steering Ukraine through energy and financial sector reforms. "Through this financial assistance, the EU is proud to support the courageous reform agenda pursued by the government," Valdis Dombrovskis, European commissioner for the euro, said in a statement. "I am confident that the implementation of those ambitious reforms will help Ukraine exploit its many assets to the full, so as to foster strong and sustainable economic growth for the benefit of all […]

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Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

Why are commodity prices, including oil prices, lagging? Ultimately, it comes back to the question, “ Why isn’t the world economy making very many of the end products that use these commodities? ” If workers were getting rich enough to buy new homes and cars, demand for these products would be raising the prices of commodities used to build and operate cars, including the price of oil. If governments were rich enough to build an increasing number of roads and more public housing, there would be demand for the commodities used to build roads and public housing. It looks to me as though we are heading into a deflationary depression, because prices of commodities are falling below the cost of extraction. We need rapidly rising wages and debt if commodity prices are to rise back to 2011 levels or higher. This isn’t happening. Instead, Janet Yellen is talking about […]

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Oil prices fall as industry data shows U.S. crude stocks rising

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. Oil prices fell on Wednesday after industry data showed U.S. crude inventories rose last week when they had been expected to drop, even as a weaker dollar helped to limit deeper losses. Crude futures have steadied this week after tumbling to three-months lows earlier in July on concerns that higher Iranian exports would add to an oversupplied market. U.S. crude held above $50 a barrel on Wednesday after dipping below that mark this week for the first time since early April. By 0657 GMT (2.57 a.m. EDT), West Texas Intermediate (WTI) for September delivery CLc1 was trading 60 cents lower at $50.26 a barrel, after closing 42 cent higher in the previous session. The WTI August contract CLQ5, which expired on Tuesday, settled at $50.36 a barrel on its last day of trade, after slipping as […]

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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 […]

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Oil gains after choppy trade, U.S. Aug crude expires above $50

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. Crude oil futures held on to gains after a volatile session that saw the U.S. front-month August contract expire and go off the board above $50 a barrel, with a weaker dollar providing support. Weak U.S. RBOB gasoline futures helped curb gains for crude, especially Brent, traders said, as expectations that inventories rose again last week weighed on prices. The dollar .DXY retreated from a three-month high against a basket of currencies on mild profit-taking and as the euro rebounded as traders pared bearish bets as Greece started to adopt measures to avert bankruptcy. [USD/] A rising dollar makes it more profitable for non-U.S. investors to sell dollar-denominated assets and a weaker greenback makes oil less expensive for consumers using other currencies. Expectations of more Iranian supply following last week’s agreement on Tehran’s nuclear program and […]

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How plunging oil prices have created a volatile new force in the global economy

He’d spent years touting his vision that America would one day dominate one of the world’s most powerful markets. And when Harold Hamm, a pioneer in discovering vast reserves of shale oil under American soil, took the stage in front of several hundred oil luminaries, he never acknowledged that the narrative was in doubt. “For the next 50 years, we can expect to reap the benefits of the shale revolution,” Hamm said one day this spring. “It’s the biggest thing that ever happened to America.” But away from the stage, the US oil industry – and Hamm – was in crisis. In the previous six months, Hamm, founder of oil giant Continental Resources , had lost $6.5bn, more than one-third of his net worth. The industry that Hamm had helped create was facing its greatest test in a frantic race to stay profitable as rival Saudi Arabia worked to […]

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Natural-Gas Prices Rebound From Prior Session’s Fall

(Adds price table) By Timothy Puko Natural-gas prices rose Tuesday, likely connected to seasonal increases in demand, analysts said. Few, if any, market factors changed from Monday when prices fell, but the bump fits a larger pattern of gas quickly bouncing back and forth this summer, analysts said. Front-month futures have traded within a 31-cent range for six weeks as traders are divided between record demand from power plants and near-record production from the resilient oil-and-gas boom. The front-month August contract climbed 5.9 cents, or 2.1%, to $2.882 a million British thermal units on the New York Mercantile Exchange. The move is a rebound from Monday when it settled down 1.6%, retreating from trading at the high end of its range. "The market is schizophrenic," said Scott Gettleman, an independent trader in New York. "There’s no rhyme or reason right now." Consumption of gas-powered electricity often rises in the […]

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Obama Compares Critics of Iran Deal to Iraq War Hawks

PITTSBURGH — President Obama said Tuesday that opponents of the nuclear deal with Iran were behaving like those who pushed for war with Iraq more than a decade ago, and said the United States should choose diplomacy instead of another rush to armed conflict. In remarks to members of the Veterans of Foreign Wars, Mr. Obama said the criticism of the Iran agreement offered “echoes of some of the same mind-set and policies that failed us in the past,” and was being put forward by “the same folks who were so quick to go to war in Iraq.” The president did not mention President George W. Bush or Vice President Dick Cheney by name in his remarks, but the implication was clear. As he seeks to persuade members of Congress not to reject the Iran deal, Mr. Obama urged what he called “a smarter, more responsible way to protect […]

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Iran Lawmakers to Wait 80 Days Before Voting on Nuclear Deal

Photo Foreign Minister Mohammad Javad Zarif defended the nuclear deal in the Iranian Parliament on Tuesday. A delay will allow Iran to see how the American Congress reacts to the deal. Credit Abedin Taherkenareh/European Pressphoto Agency TEHRAN — The Iranian Parliament will wait at least 80 days before voting on a nuclear agreement reached last week with world powers, as legislators decided on Tuesday to form a committee to study the accord, state radio reported. The legislators have effectively opted to withhold their judgment until they know whether the American Congress approves of the deal, analysts said, as a way to avoid losing face by appearing to look weak if the agreement is rejected by their counterparts in the United States. The parliamentary delay in voting also was seen as a way to position the Americans to get the blame if Congress repudiates the agreement, which Iran and six […]

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Western Oil Firms Will Find Tough Competition in Iran

European and U.S. oil-and-gas companies drawn to Iran as sanctions ebb can expect to encounter not only opportunities, but also capable Iranian companies offering tough competition or joint ventures. While no Iranian companies have attained the prowess of integrated oil-and-gas firms such as Exxon Mobil Corp. XOM -0.12 % or big service outfits like Schlumberger Ltd. SLB 0.93 % , a new breed has emerged during Iran’s years of economic isolation. They can take on engineering tasks—such as laying pipelines, building offshore platforms and drilling wells—that previously were handled by foreign companies. If the nuclear agreement comes into effect and economic sanctions are lifted against Iran by the end of this year or early in 2016, those Iranian companies will be well positioned to compete for tens of billions of dollars in service contracts or to forge strategic relationships with Western companies, say industry officials. “One of the good […]

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Sanctions to Be Lifted on Iranians Suspected of Nuclear Weapons Work

WASHINGTON—The Obama administration and European Union agreed as part of the accord last week to lift sanctions over eight years on a network of Iranian scientists, military officers and companies long suspected by the U.S. and United Nations as central players in a covert nuclear weapons program. The U.S. also agreed to remove a German engineer from its financial blacklist by late 2023 after he was targeted by sanctions for his alleged role in a global black market in nuclear weapons technology run by the father of Pakistan’s nuclear program, Abdul Qadeer Khan. The decision to roll back sanctions on these individuals and organizations is detailed in more than 100 pages of documents released last week as part of the landmark nuclear accord reached between Iran and six world powers. The intricate agreement is accompanied by five detailed annexes and technical attachments that spell out many of the long-term […]

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Iran’s Guards Cloud Western Firms’ Entry After Nuclear Deal

Western companies eager to take advantage of the new nuclear agreement with Iran face a host of challenges. One of the biggest: Iran’s Revolutionary Guard Corps. A branch of Iran’s military, the force is charged with defending the country’s Islamic system. During years of sanctions and economic isolation , it has also established itself as one of the country’s most powerful economic forces. Through an opaque-but-vast network of companies it controls, the Guards have interests in construction, manufacturing, banking and shipping, among other industries, said people familiar with the organization. Khatam al-Anbia, an engineering and construction firm at the heart of the Guards’ business empire, estimates the long-term value of its contracts is about $50 billion, equivalent to around 12% of Iran’s gross domestic product. If Iran implements the terms of the deal reached with six world partners in mid-July, many sanctions could be lifted by early next year. […]

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Iran won’t accept curbs beyond 10 years, negotiator says

Negotiators of Iran and six world powers face each other at a table in the historic basement of Palais Coburg hotel in Vienna April 24, 2015. Iran will not accept any extension of sanctions relating to its nuclear program beyond 10 years, the Islamic Republic’s senior nuclear negotiator said on Wednesday. Abbas Araqchi told a televised news conference that any attempt to re-impose sanctions after they expire in 10 years would breach the agreement Iran reached with six world powers one week ago. Araqchi was referring to a resolution the United Nations Security Council passed on Monday, endorsing the deal to curb Iran’s nuclear program in return for relief from sanctions. The world powers suspected Iran was trying to create a nuclear bomb; Tehran said the program was peaceful. The resolution allows all U.N. sanctions to be re-imposed if Iran violates the agreement in the next 10 years. If […]

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Iran working to renew gas pipeline interest

Iranian media agency rolls out interviews suggesting renewed interest in natural gas project once dubbed the Peace Pipeline. UPI/Hamid Forotan/ISNA TEHRAN, July 21 (UPI) — A project once dubbed the Peace Pipeline could see new life with Chinese and Indian investors working in a post-sanctions Iran, a Pakistani official said. Salman Shah, a former Pakistani finance minister, told the official Islamic Republic News Agency he expected renewed interest in a gas pipeline running east from Iran. "China and India will probably join the … network," he was quoted as saying in a Tuesday interview. "Once the gas starts flowing, India will like to join it and China has already expressed its willingness for joining the project." IRNA earlier this week quoted Pakistani Energy Minister Shahid Khaqan Abbasi as saying last week’s nuclear deal with Iran meant Islamabad had more options to address lingering energy needs. Pakistan’s aging infrastructure means […]

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ISIS Transforming Into Functioning State That Uses Terror as Tool

ISTANBUL — The Islamic State uses terror to force obedience and frighten enemies. It has seized territory, destroyed antiquities, slaughtered minorities, forced women into sexual slavery and turned children into killers. But its officials are apparently resistant to bribes, and in that way, at least, it has outdone the corrupt Syrian and Iraqi governments it routed, residents and experts say. “You can travel from Raqqa to Mosul and no one will dare to stop you even if you carry $1 million,” said Bilal, who lives in Raqqa, the Islamic State’s de facto capital in Syria , and out of fear insisted on being identified only by his first name. “No one would dare to take even one dollar.” The Islamic State, also known as ISIS , ISIL and Daesh, initially functioned solely as a terrorist organization, if one more coldblooded even than Al Qaeda. Then it went on to […]

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U.N. envoy says deeply concerned by battle at Syria border

A child inspects a site hit by what activists said was an airstrike by forces loyal to Syria’s President Bashar el-Asaad at Arbin town in Damascus countryside, Syria July 21, 2015. The United Nations envoy for Syria has voiced deep concern about civilians in the city of Zabadani, the focus of an offensive by the Syrian military and Lebanon’s Hezbollah aimed at wresting control of the area from insurgents. Citing local sources in a statement late on Tuesday, Staffan de Mistura said the military had dropped a large number of barrel bombs on Zabadani "causing unprecedented levels of destruction and many deaths among the civilian population." Control of the city, about 45 km (30 miles) northwest of the capital Damascus, is seen as crucial to consolidating President Bashar al-Assad’s control over the border zone between Lebanon and Syria. The Syrian air force has bombarded areas in and around the […]

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Mosul insurgents challenge Islamic State occupiers

Members of the Islamic State militant group drive through Mosul on June 12, 2014. (STRINGER/Reuters) MOSUL – Members of the so-called Islamic State (IS) group are being hunted in and around Mosul. Dozens of militants have been killed, mostly gunned down by assassins, over the past two months as the group that calls itself Kataib al-Mosul – the Mosul Brigades, in English – has launched a violent insurgency. "We finally decided to end our silence," said Fawaz al-Badrani, the pseudonym used by a leader of Kataib al-Mosul, who spoke to Iraq Oil Report by phone. "What we mainly sought for is the liberation of Mosul, even if it means cooperating with the devil himself." Badrani claims to have been a Republican Guard officer under Saddam Hussein. In addition to targeting IS fighters directly, his group has helped feed locations of IS military positions and other information to pro-government forces […]

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Iraqis launch offensive against Islamic State near Anbar military base

Iraqi security forces and Sunni tribal fighters launched an offensive to dislodge Islamic State militants near the western outpost of Haditha in a bid to secure a key supply route to an important military base, police and tribal sources said. Haditha and its nearby dam are in one of the few parts of the Sunni Muslim province of Anbar still under the control of Iraq’s Shi’ite-led government forces, which were driven out of the provincial capital Ramadi in May.The offensive started with army and police forces backed by Sunni tribal fighters attacking the Albu Hayat area, 20 km (12 miles) southeast of Haditha. Militants have used the area to strike the supply route to the Ain al-Asad military base where U.S. Marines are training Iraqi troops. "We are attacking Daesh from three directions and we will not retreat until retaking Albu Hayat to secure not only Haditha but the […]

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China’s Iran oil imports hit two-month high in June: customs

A worker walks down stairs of an oil tank at a refinery in Wuhan, Hubei province March 23, 2012. China’s crude oil imports from Iran rose in June to a two-month high, customs data showed on Tuesday, just as the Islamic nation begins to look ahead to ramping up its exports in the wake of last week’s nuclear deal. Iran’s largest oil client imported 2.76 million tonnes last month, or 671,800 barrels per day (bpd), up 29.6 percent from May and 26.5 percent from a year ago. [O/CHINA1] Thomson Reuters Oil Research & Forecasts had estimated China’s June imports from Iran at 507,300 bpd, and has said it expects the volumes to hit 562,800 bpd in July. The U.N. Security Council on Monday backed the deal Iran reached the previous week with six world powers to curb its nuclear program in exchange for the easing of economic sanctions. And […]

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Report: Cuba may get oil help from Angola

Cuban energy company reaching out to Middle East counterparts for help with offshore oil development. Photo by GVictoria/Shutterstock HAVANA, July 21 (UPI) — Cuba expects to kick start its deepwater oil exploration activity with assistance from Angola’s state-run energy company Sonangol, a Cuban official said. Cuba is opening its doors more for Western powers after a long Cold War policy of isolation from the United States. The country in the past worked to cut the amount of oil it imports from Venezuela through development of its own offshore reserves. An unnamed official from Cuba’s Cubapetroleo, or Cupet, told energy reporting service Argus the preliminary deal with Sonangol outlines drilling schedules. "The matters to be determined include which of the blocks contracted by Sonangol will be drilled, the sourcing of a rig and the timing of the start of the work," the official said. The U.S. Geological Survey, which reviewed […]

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AAA: U.S. retail gasoline market volatile

A stable national average price for gasoline in the United States masks some volatility for consumers, motor club AAA said. File Photo by UPI/John Angelillo WASHINGTON, July 21 (UPI) — A stable national retail average price for a gallon of gasoline is masking volatility in some U.S. sectors brought on by refinery issues, motor club AAA said. The national average price for a gallon of gasoline Tuesday was $2.75 per gallon, about seven tenths of a percent lower than last week and 1.4 percent, or four cents, lower than one month ago. AAA said the general stability masks an otherwise volatile retail market that saw prices pulled higher in part by ongoing spikes in California. The state average price in California for Tuesday was $3.87 per gallon of regular unleaded. "Drivers in California are paying the highest averages since August 2014, largely due to imbalances between gasoline supply and […]

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Chesapeake to Eliminate Dividend to Pay for Capital Spending

Chesapeake Energy Corp. CHK -9.54 % said Tuesday that it will eliminate its shareholder dividend starting in the third quarter and redirect the money to capital spending, the latest round of cutbacks for the U.S. shale driller. Shares of Chesapeake, down 48% this year, fell 1.2% to $10.15 a share in premarket trading. Chesapeake estimated that getting rid of the annual dividend of 35 cents a share will save the company $240 million a year. The company plans to use the money for its 2016 capital program. Chesapeake said it has also agreed to sell some properties to FourPoint Energy LLC. Chesapeake has struggled to recover from years of aggressive spending as the land-grab approach the company pioneered for oil and gas drilling meant it spent more than its wells generated in profit. But under Doug Lawler, who joined as chief executive in June 2013, the company has been […]

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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 […]

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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 […]

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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