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US apaches strike Daesh positions near Iraq’s Mosul

U.S. helicopter gunships on Wednesday carried out raids on four positions held by the Daesh militant group near Iraq’s northern city of Mosul, a Daesh stronghold, leaving more than 15 militants dead, according to a Kurdish Peshmerga officer. “U.S. apaches carried out a string of raids on Daesh positions on the outskirts of Al-Fadeliya [a town located 17 kilometers northeast of Mosul],” Lieut. Raed Mazouri of the Kurdish Peshmerga forces told Anadolu Agency. Iraq has suffered from a security vacuum since the summer of last year, when Daesh militants overran the northern Mosul province. Massacres perpetrated by the group in the latter half of 2014 – along with the forced deportation of minority populations from areas held by Daesh – led to the establishment of a U.S.-led coalition last September to combat the extremist group. In the ten months since, the coalition has carried out numerous airstrikes against Daesh […]

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Iraq says no alarm at prospect of hiked Iran oil exports

Iraq can offset the impact of the Iran nuclear deal on oil prices and competition for export markets with higher production and improved regional trade, the oil ministry said Wednesday. The deal reached between Tehran and world powers Tuesday could lead to the lifting of economic sanctions on Iran and allow the Islamic republic to increase its oil exports. Experts predict that the return of Iranian oil exports could help keep oil prices low. Cash-strapped Iraq relies on oil exports for the vast majority of its income. "Iraq’s income will be reduced but this has been taken into account," oil ministry spokesman Assem Jihad told AFP. World oil (Other OTC: WOGI – news ) prices collapsed by 60 percent between June 2014 and January, when they hit a low of $45 a barrel. This was due in part to excessive supplies caused by the boom in US shale oil. […]

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Iraq: Isis Bans Civilians from Mosul Hospitals after Taking Heavy Casualties in Anbar Battle

The city of Mosul as shown in an ISIS video The Islamic State (Isis) in Iraq has banned civilians from entering the public hospitals in Mosul, as they are occupied by several of its fighters injured in a recent battle in Anbar province. Since Monday morning, Isis has barred civilian patients from entering the local public hospitals, according to reports . The militants have also banned the patients already admitted to the hospitals from leaving the premises. The report stated that Isis imposed the restrictions over fears that the information on "heavy casualties" would be leaked to the government. A source from Joumhouriya Hospital told Bas News (an Iraqi Kurdish news agency) that Isis has deployed its men in all the five hospitals in the city and that "hundreds of killed and injured Isis fighters" were recently brought there, following an intense clash in Anbar province. The Iraqi troops […]

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Egypt ISIS Affiliate Claims Destruction of Naval Vessel

Photo An Egyptian naval vessel burned off the coast of the northern Sinai Peninsula on Thursday. A militant group and the military gave conflicting accounts of an attack. Credit Hatem Khaled/European Pressphoto Agency CAIRO — A militant group affiliated with the Islamic State said it destroyed an Egyptian naval vessel on Thursday, posting photographs on social media of a missile exploding in a ball of fire as it slammed into the vessel. An Egyptian military spokesman said that the crew of the unnamed ship “exchanged fire” with militants off the coast of the northern Sinai Peninsula, causing a fire on board that did not result in any fatalities. But the militant group, which calls itself Sinai Province, claimed that the missile was guided and had killed everyone on board. It was at least the fourth unusually bold militant assault since late June, when Egypt’s top prosecutor was killed by […]

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ISIL-affiliate sets Egypt navy vessel ablaze off Sinai

[Reuters] An Egyptian naval vessel has caught fire in the eastern Mediterranean during a clash with fighters affiliated with the Islamic State of Iraq and the Levant (ISIL) group in Sinai Peninsula, the military said. Inside Story – Has Sisi’s Egypt failed on security? The patrol boat spotted the fighters from the Sinai Province group on the coast of Rafah on Thursday and engaged them, the military’s spokesman said in a statement. The boat went up in flames during an ensuing firefight. The military said it suffered no casualties, in the attack, which Sinai Province later claimed on Twitter. A series of pictures released by the group, showed a missile approaching and striking the vessel causing a large explosion. A witness in the Palestinian Gaza Strip, just across the border with the Egyptian town of Rafah, said the boat was struck at least three kilometres from the shore. "We […]

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Woodside Sales Slide 47% as Gas Trades Near Five-Year Low

Woodside Petroleum Ltd.’s sales fell by almost half in the second quarter amid falling energy prices and lower output of liquefied natural gas. Revenue at Australia’s second-biggest oil and gas producer dropped 47 percent to $898 million, the Perth-based company said Thursday. That compares with Goldman Sachs Group Inc.’s estimate of $924 million. Woodside is among liquefied natural gas producers grappling with prices in Asia that are trading near the lowest in five years. Prices for the fuel have tumbled in the past year as new supply combined with weakened demand in key markets such as Japan, Korea and China. Production last quarter was lower mainly because of maintenance at the Pluto liquefied natural gas project, the company said. “It’s a tough time to be marketing incremental LNG volumes,” Nik Burns, an analyst at UBS Group AG in Melbourne, said by phone. “There is an oversupply at the moment […]

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Big Oil to Battle for Mexico’s Deep Crude After Auction Snub

Busting When Everyone Else Is Booming Mexico is about to undergo its first subsea land rush. International energy producers that sat out Mexico’s historic oilfield auction this week will be among the fiercest competitors for potentially massive deepwater prospects that go up for sale as soon as next month, said Ivan Cima, Wood Mackenzie Ltd.’s head of Latin American upstream research. Unlike Wednesday’s government auction, which involved 14 close-to-shore fields holding at most a few hundred million barrels of crude each, the tranche of prospects Mexico is expected to offer in August includes more promising geologic structures, Cima said in an interview on Thursday. The blocks are near the line that divides U.S. and Mexican waters of the Gulf of Mexico and close to some of the most significant discoveries of the past 15 years on the U.S. side, Cima said. “Those are capital-intensive projects that are certainly geared […]

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Is it end of the line for South Asia’s ship graveyards?

Workers carry a rope line to fasten a decommissioned ship at the Alang shipyard in Gujarat, India, in this March 27, 2015 file photo. In the world’s biggest ship recycling center of Alang on India’s Arabian Sea coast, workers with blow torches cut segments of steel stripped from the rusting hull of a towering cargo ship, sold for scrap by its Japanese owner. But in this town – located in Prime Minister Narendra Modi’s home state of Gujarat – more than half of the ship-breaking yards have shut in the past two years and the future of the trade in India and neighbors Bangladesh and Pakistan is bleak. The industry has been hit by a flood of cheap Chinese steel and new European Union environmental rules due later this year threaten to push business to more modern yards in places like China and Turkey – in turn devastating local […]

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For Asia’s Oil Consumers, It’s a Buyer’s Market

SINGAPORE—With oil prices at half what they were a year ago and crude flooding into Asia from all directions, buyers from the west coast of India to southern Japan are, for the first time in decades, spoiled for choice. The changing balance of power is already affecting the regional market share of key producers. With a full return of Iranian supplies now looming, following a nuclear accord this past week, competition will likely heat up further. Oil consumers, mainly the refineries that turn crude into products such as gasoline and jet fuel, face a dilemma in this “new normal” era. Do they stick with multiyear contracts with long-established suppliers, primarily from the Middle East, or buy more oil on spot markets, getting cheaper prices but risking security of supply? Asian refiners, located far from major oil-producing regions, previously have tied up as much as 95% of their crude intake […]

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Billionaire Paul Singer: China Crash Is ‘Way Bigger Than Subprime’

American billionaire and hedge fund manager Paul Singer Hedge fund manager Paul Singer said that China’s debt-fueled stock market crash may have larger implications than the U.S. subprime mortgage crisis, echoing warnings from fellow billionaire money managers Bill Ackman and Jeffrey Gundlach. “This is way bigger than subprime,” Singer, founder of hedge fund Elliott Management, said at the CNBC Institutional Investor Delivering Alpha Conference in New York in response to a question about China’s crash potentially affecting other markets. Singer said it may not be big enough to cause a global financial market conflagration. China’s stock market has dropped from a June 12 peak wiping out almost $4 trillion in value in less than a month after investors who borrowed to buy shares had to unwind trades. Markets tumbled even as President Xi Jinping’s government ramped up efforts to stem the rout, including preventing share sales of companies. The […]

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BHP Shale Writedown Has Some Banks Asking: Where’s the Rest?

The size of BHP Billiton Ltd.’s $2.8 billion writedown for its U.S. shale assets took some banks by surprise: at least two thought it was too small. After the latest charge, Melbourne, Australia-based BHP values its U.S. onshore business at $24 billion. That’s more than 40 percent higher than what analysts at JPMorgan Chase & Co. think it is worth and over twice Citigroup Inc.’s estimate. The producer said its U.S. onshore assets would generate positive cash flow in the year to June 2016 with oil at $60 a barrel, above current prices. “Given the deteriorating conditions of the U.S. oil and gas market, we thought an impending impairment could have been larger,” analysts at JPMorgan including Lyndon Fagan wrote in a research note Wednesday. After four years of record supply, America’s natural gas output is shrinking as producers retreat from shale amid tumbling oil prices. That’s hurting investments […]

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Canada set energy sector records last year

Federal regulator’s report points to strong 2014 for energy sector, though industry groups less optimistic in their 2015 forecasts. Image courtesy of the National Energy Board. CALGARY, Alberta, July 16 (UPI) — A federal Canadian report on the energy sector pointed to a strong 2014, though industry groups this year suggest rough waters are ahead in a weak oil market. The National Energy Board, the federal regulator, released a report on full-year 2014 production . Though crude oil prices fell roughly 50 percent from June 2014 to year’s end, the NEB said the energy sector was resilient and export revenue of $100 billion set a record. Total Canadian crude oil production in 2014 increased by 7.9 percent year-on-year to around 3.75 million barrels per day. "This growth is largely attributed to increased oil sands production, including several new in situ bitumen projects coming on-line and increased tight oil production […]

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ConocoPhillips Increases Dividend But Cuts Deepwater Spending

The Houston-based oil company’s dividend is now 74 cents instead of 73 cents and is expected to cost an additional $12.3 million a quarter. The most significant spending reductions will come from its program in the Gulf of Mexico where ConocoPhillips will terminate its contract for the Ensco DS-9 deepwater drill ship. Drilling was scheduled to begin there later this year. Financial terms weren’t disclosed. ConocoPhillips will pay a termination fee that represents up to two years of contract day rates and will take a special item charge for the termination in the third quarter. “Since the start of the oil and gas price downturn last year, we have moved decisively to position ConocoPhillips for lower, more volatile prices by exercising capital flexibility and reducing operating costs across our business,” said Chief Executive Ryan Lance. “Our decision to reduce spending in deepwater will further increase our capital flexibility and […]

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Sabine Oil, Lenders Put Off Fight Over Cash

During the hearing, Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan approved of a series of routine motions designed to ensure the company’s continued operations, including paying employees and accessing bank accounts. But a long fight over about $250 million Sabine holds in cash could signal a difficult and contentious path forward for the company and its newly launched chapter 11 case. Discussions with lenders before filing for bankruptcy didn’t lead to a prearranged restructuring deal that could have made for a more streamlined trip through chapter 11, court papers show. Jonathan Henes, a lawyer for Sabine, said in court Thursday that the company cannot sustain a prolonged trip though bankruptcy. “We need to get this company out as quickly as we can,” he said. Sabine, which hasn’t sought special bankruptcy financing to fund its operations while in chapter 11, asked Judge Chapman for permission to support […]

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EIA now reporting monthly base gas levels in underground natural gas storage

graph of monthly U.S. underground natural gas storage by storage type, as explained in the article text Source: U.S. Energy Information Administration, Form EIA-191, Monthly Natural Gas Underground Storage Report Note: Working gas is defined as the quantity of natural gas in the reservoir that is in addition to base gas and is available for withdrawal. It may or may not be completely withdrawn during any particular withdrawal season. With the release of the most recent Natural Gas Monthly , EIA began publishing base gas levels in natural gas storage facilities through the natural gas query system . Base gas plays an important role in underground natural gas storage, serving to maintain cavern or reservoir pressure and keeping natural gas storage facilities operational. Because of the geologic properties of storage facilities, a certain level of pressure is required to maintain reservoir integrity and to withdraw gas for commercial use. […]

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API: US petroleum demand rose in June, second quarter

Total US petroleum deliveries, a measure of demand, increased 4.2% from June 2014 to average 19.6 million b/d last month. In the second quarter, demand gained 3.7% compared with the same period last year. “Demand for and production of oil and refined products grew almost across the board over the last year,” said API Chief Economist John Felmy. “Notably, gasoline demand last month reached the highest level since the summer of 2007.” Gasoline demand in June averaged more than 9.3 million b/d, up 3.5% from June 2014 and the highest for any month since August 2007. Deliveries of gasoline in the second quarter increased 2.6% compared with last year. Distillate deliveries were up 1.3% from the prior year to average 3.9 million b/d. Over the same period, demand rose for jet fuel (0.6%), residual fuel (3.1%), and “other oils” (8.9%). At nearly 9.8 million b/d, US crude oil production […]

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ConocoPhillips plans further capex reduction for deepwater exploration

ConocoPhillips reported plans to further reduce its capital expenditures for deepwater exploration, with the “most significant reductions” coming from its operated program in the Gulf of Mexico. The company did not specify by how much capex would be decreased, however. At yearend 2014, the Houston-based independent slashed its 2015 capital budget by 20% to $13.5 billion compared with 2014’s capex plans ( OGJ Online, Dec. 8, 2014 ). “Since the start of the oil and gas price downturn last year, we have moved decisively to position ConocoPhillips for lower, more volatile prices by exercising capital flexibility and reducing operating costs across our business,” said Chairman and Chief Executive Officer Ryan Lance. The company has provided notice that it will terminate its contract for the Ensco DS-9 deepwater drillship, which was slated for delivery to the gulf late this year to start drilling the company’s operated deepwater inventory under a […]

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DOE official: LNG exports could be limited by silt-clogged waterways, ports

Silt, which is increasingly filling US waterways and ports, potentially could limit US LNG exports if it is not dredged soon, a top US Department of Energy official warned. Sedimentary deposits in Louisiana’s Calcasieu Ship Channel, “where many LNG exports would be moving,” could reach a point where tankers moving in different directions won’t be able to pass each other, said Melanie Kenderdine, who directs DOE’s Energy Policy and Systems Analysis Office. “These, by and large, are federal responsibilities,” Kenderdine noted during a presentation on the Quadrennial Energy Review and energy security at the Center for Strategic and International Studies. “That makes funding projects difficult under sequestration and budget caps.” The problem should be addressed because DOE has approved LNG projects totaling 9.9 bcfd of export capacity, Kenderdine said. “If all of that gets built, it would bring us close to Qatar, which is the world’s largest LNG exporter […]

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Study: Utica Shale Larger Than Previous Estimates

The technically recoverable resources of the Utica shale play are larger than previously thought, according to a study from West Virginia University. The size of the Utica shale play’s technically recoverable resources is larger than previously thought, a recent study by West Virginia University (WVU) has found. WVU found that the Utica play contains technically recoverable resources of 782 trillion cubic feet (Tcf) of natural gas and around 1.9 billion barrels of oil. That’s higher than the U.S. Geological Survey’s (USGS) 2012 estimate of technically recoverable resources at 38 Tcf of gas and 940 million barrels of oil. The study results indicate that the Utica – which spans West Virginia, Kentucky, Pennsylvania, Ohio and New York – is comparable to the Marcellus shale play in terms of size and potential recoverable resources. The Marcellus is the large U.S. shale play and second largest shale oil and gas play in […]

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

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

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U.S. Oil Rolls With OPEC’s Blows as Brazil and Canada Take Hits

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

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To Clean Up Oil Sands’ Dirty Image, Alberta May Try Emission Tax

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

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Greece Might Be Better Off Outside Eurozone, German Finance Minister Says

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

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London proposes new fracking restrictions

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

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Wood Mackenzie: Russia’s energy players resilient

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

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Bypassing Ukraine will be costly for Russia’s Gazprom: analysts

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

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Greece licks wounds after bailout vote, ECB move expected

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

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Why the cash economy in Greece may be ending

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

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Oil prices steady as stock draw balances supply

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

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Oil Prices Slide on Supply Data

Oil prices sank to a fresh three-month low Wednesday on concerns that the global glut of crude oil is being processed into a glut of refined products. Though data released Wednesday showed that U.S. crude-oil stockpiles fell last week, the country’s total commercial inventories of crude oil and petroleum products rose to a record high. The inventory report reinforced investors’ concerns that demand from consumers is not keeping up with production of gasoline and other fuels. Consumption rose strongly in the first half of the year, but some analysts say that growth was weather-related and can’t be repeated. Crude-oil production is near multiyear highs in the U.S., Saudi Arabia, Iraq and elsewhere. In addition, Iran and six world powers reached a deal to limit Iran’s nuclear program and eventually lift sanctions that currently limit the country’s oil exports. Light, sweet crude for August delivery settled down $1.63, or 3.1%, […]

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Natural Gas Nears Eight-Week High on Forecasts of Hot Weather

By Timothy Puko Natural gas prices rose to a near eight-week high on Wednesday, as weather reports continue to show large patches of above-normal temperatures for the second half of July. Natural gas for August delivery gained 7.8 cents, or 2.8%, to $2.918 a million British thermal units on the New York Mercantile Exchange. It was the highest settlement since May 21. The summer heat is likely to result in more demand for gas-fired power to run air conditioners. Recent forecasts predicted above-normal temperatures spreading in the next two weeks across large parts of the country, especially in the Southeast. Forecasts from MDA Weather Services show the most heat, with temperatures 1 to 5 degrees Fahrenheit above normal for nearly the entire country from July 25-29. However, Wednesday’s rally was capped by concerns that the hot temperatures won’t be extreme and may not last long enough to outweigh near-record […]

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Oil’s Fall Requires Major Changes

The oil and gas industry is in for a new round of cost cutting. It also needs a dose of fresh thinking. Oil prices are under pressure thanks to a combination of China, Greece and Iran. That, along with a bearish prognosis from the International Energy Agency in its latest report, dents hopes for a quick rebound this year. That should have the oil producers teeing up for more cost cutting. All cuts, however, aren’t created equal. This industry had a cost problem at $100 a barrel, let alone $50 a barrel. Announcing their first-quarter results, the majors pointed to evidence that development costs on ambitious new projects were falling already. BP , BP -0.72 % for example, said it was seeing savings of between 20% and 30% in certain areas and the industry as a whole is trimming overheads, shedding jobs and squeezing contractors. There is a lot […]

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How the plunging price of oil has set off a new global contest

HOUSTON — 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 U.S. oil industry — and Hamm — was in crisis. In the previous six months, Hamm, founder of oil giant Continental Resources, had lost $6.5 billion, 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 […]

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Cheap Oil Is Bad for the Economy (at Least, So Far)

It’s been about a year since oil prices started their historic drop, falling from above $100 a barrel to a bottom of about $45 in March. After creeping back to around $60, prices are shaky again amid news of a nuclear deal with Iran and record Saudi production. And low oil prices are good for growth, right? Cheap oil means cheap gasoline, and the assumption throughout the oil price rout has been that for the U.S. economy, built on consumer spending, cheap gas is all good. In theory, yes. In practice, it’s been tough to find the benefits in the economic data this year. Goldman Sachs estimates that a decline in energy-related investment such as new drilling equipment, caused by low oil prices, subtracted about half a percentage point from economic growth during the first half. That’s a pretty hefty bite out of a growth number that probably won’t […]

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Size Matters as Big Oil Takes Pass on Mexican Oilfield Auction

Exxon Mobil Corp., Chevron Corp. and the French oil giant Total SA opted out of Mexico’s historic oil auction because the fields are too small. None of the 14 shallow-water prospects in the Gulf of Mexico holds more than 384 million barrels of crude, according to Mexico’s National Hydrocarbons Commission. That’s far short of the billion-barrel finds prized by major international oil producers, said Fadel Gheit, a New York-based senior analyst at Oppenheimer & Co. “Shallow water is the minor leagues and these companies want to play in the major leagues,” Gheit said on Wednesday. “Deepwater is where the major leagues are. The shallow waters have already been picked dry.” The U.S. and European explorers that abstained from the first round of bidding Wednesday also probably balked at some of the financial and contractual terms insisted upon by the Mexican government, Gheit said. Any terms that would have crimped […]

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Russia Quickly Maneuvers to Capitalize on Iran Nuclear Deal

Photo Sergey V. Lavrov, center, the Russian foreign minister, with Frank-Walter Steinmeier, the German foreign minister, left, and Secretary of State John Kerry before a session Tuesday in Vienna. Credit Pool photo by Joe Klamar MOSCOW — Sergey V. Lavrov, the Russian foreign minister, lost no time in talking about the accord on Iran ’s nuclear program . He was on television minutes after the deal was clinched, and even before the formal news conference had begun, announcing the landmark agreement to the audience back home and emphasizing the many potential benefits, strategic and economic, that it holds for Russia . The deal reopens the door for lucrative contracts to expand Iran’s civilian nuclear energy program, which Russia has been looking forward to for years. And it may neutralize a major reason the United States has offered for developing a missile defense system in Europe, a project that President […]

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Iran’s oil return a game changer for OPEC, but not for now

A gas flame is seen in the desert near the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008. OPEC is likely to keep oil output steady and defend its market share this year after Tehran’s nuclear deal with major powers, since a full return of Iranian crude to the market will not be swift, Gulf OPEC delegates said. But 2016 will be a tough year for the producer group when international sanctions on Iran are expected to ease, allowing it to boost oil production and exports. Tehran’s determination to reclaim its position as OPEC’s second largest producer after it clinched the deal on Tuesday will cause new rivalries within the group. But Saudi Arabia and its Gulf OPEC allies are betting that higher demand next year may help the market absorb extra volume. They doubt that Iran’s return would pose a serious challenge to their […]

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Iran needs time and favorable conditions to boost oil output: Kemp

Iran has big ambitions to increase oil and gas production once sanctions are lifted but a substantial increase in exports is probably years away. The country has the world’s fourth-largest proved reserves of crude oil (behind Venezuela, Saudi Arabia and Canada) and the largest proved reserves of natural gas (ahead of Qatar and Russia), according to BP. It is the oldest major oil producer in the Middle East and output peaked at more than 6 million barrels per day (bpd) in 1974 ( link.reuters.com/ryq25w ). But decades of revolution, war and sanctions have cut production of crude and condensates to just 3.6 million bpd in 2014 ("BP Statistical Review of World Energy" 2015). In contrast, Saudi Arabia, Iran’s main rival, has raised liquids output from 8.6 million bpd in 1974 to 11.5 million bpd in 2014. RECOVERY HOPES Sanctions imposed by the United States and the European Union amid […]

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Warming Ties With Iran? For EU, It’s Complicated

A final Iranian nuclear deal signed on Tuesday will likely spark a flurry of diplomacy as Europe and Iran seek to repair their dilapidated relations—but true political engagement could prove more elusive. Wariness of Tehran’s ambitions, differences among European Union governments, and the limits of European leverage in a turbulent and fractious Middle East are likely to limit cooperation over issues such as Syria, Yemen or Iraq. First, though, the accord has set off plans for a procession of high-ranking visitors to Tehran. French Foreign Minister Laurent Fabius said Wednesday he will go soon. British Foreign Secretary Philip Hammond on Wednesday said he hopes the U.K. and Iran can fully reopen their respective embassies by year-end. Ties plunged after the 2011 storming of the British embassy in Tehran. European Union foreign policy chief Federica Mogherini, who presided over the nuclear negotiations, also wants to open the first EU mission […]

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Basra, Kurdistan oil exports to keep momentum

A ship docks at the al-Basra Oil Terminal. (BEN LANDO/Iraq Oil Report) Oil exports from southern Iraq are expected to average around 3 million barrels per day (bpd) at least through August, though total Iraqi export quantities are unclear as more northern Iraq oil is being sold as independent Kurdistan exports.Southern exports have averaged slightly over 3 million bpd so far this month, according to ship loading data seen by Iraq Oil Report. Iraq exported 3.022 million bpd via the Basra Gulf in June.The Kurdistan Regional Government (KRG), meanwhile, has a… 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 .

Posted On : Published By : Tom Whipple
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Shale does not mean end to Argentina’s natural gas imports: IAPG

Argentina likely will continue to import natural gas supplies to meet peak demand, even as its production from large shale and tight gas resources grows in the next two decades, the Argentine Institute of Oil and Gas (IAPG) said. This is because it would not be economically viable to install production and transport infrastructure to meet peak demand in winter, due to the high cost of maintaining excess capacity simply to have it available for up to 90 days of the year, the industry group said in its gas demand forecast for 2015-2035. "It is cheaper to import LNG, than to build infrastructure and drill wells to meet peak demand," said IAPG president Ernesto Lopez Anadon. IAPG forecast that gas demand would rise to 260 million cubic meters/d in 2035, with peaks of 290 million cu m/d in the May-September cold season. That compares with average gas demand of […]

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Saudi Arabia triggers potential fuel price war by flooding market with diesel

The world’s top crude oil exporter Saudi Arabia has turned itself into a major power of refined fuels, offering customers millions of barrels of diesel and potentially triggering a price war with Asian competitors as its exports feed into a glut. Saudi Arabia, a leading member in the Organisation of Petroleum Exporting Countries (OPEC), already pledged last November to keep crude output high to defend its market share against higher-cost producers. While the strategy has kept crude markets well-supplied and prices low, the Kingdom has seen mixed success in defending its market share as global production remains high despite low prices. Saudi Arabia is now processing more of its crude at home as its massive refineries turn it into the world’s fourth-largest refiner, in a tie with Royal Dutch Shell, that allows the Kingdom to export more fuel products than ever before. Aramco Trading Co, a subsidiary of state […]

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Yemen fuel shortages could kill more than ‘bullets or bombs’ as truce ignored

Aden: Fuel shortages in war-torn Yemen could cause more deaths than the continuing conflict, which rages on three days after the start of a UN-brokered humanitarian truce, an international aid agency said on Tuesday. The lack of fuel, caused by fighting and restrictions on imports, has affected food deliveries, water supplies and health services for most of Yemen’s population, according to Oxfam. A Saudi-led Arab coalition has been bombarding the Iranian-allied Al Houthi rebel movement — Yemen’s dominant force — since late March in a bid to reinstate exiled President Abd Rabbo Mansour Hadi, who has fled to Riyadh. A week-long pause in the fighting was meant to have started on Saturday to allow aid deliveries, but the Saudi-led alliance said it had not been asked by President Hadi, in whose name it is acting, to stop its raids. “In Yemen, fuel is critical,” Oxfam country director for Yemen […]

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Mexico Energy Reform Starts With Thud in Offshore Oil Auction

Mexico’s first auction of offshore oil leases fell short of the country’s expectations as several majors decided not to participate and only two of 14 blocks received qualifying bids. Exxon Mobil Corp., Chevron Corp. and Total SA passed on the 14 shallow-water oil blocks auctioned by Mexico Wednesday in the country’s first-ever sale of territory in the Gulf of Mexico, 77 years after seizing energy assets. The 14 percent success rate was less than half the 30 percent to 50 percent goal that the government said would be its minimum for judging the auction a success. The auction was the first in a series that will help determine whether Mexico can reverse a decade-long decline in crude output and fulfill President Enrique Pena Nieto’s pledge to double the pace of economic expansion. The output drop and an almost 50 percent plunge in oil prices during the past year had […]

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Cooling of China’s Stock Market Dents Major Driver of Economic Growth

HONG KONG — As the usual drivers of economic growth have faltered in China, the stock market euphoria has helped pick up the slack, driven by a slate of businesses feeding off the frenzy. With the market now cooling, the Chinese economy is losing a major boost, adding pressure on the government to take further action. “Definitely, it can’t last,” said Julian Evans-Pritchard, a China economist at Capital Economics, referring to the stock market’s lift to the country’s growth. “It’s not sustainable.” The stock market rise was fast and furious. At their peak in mid-June, China’s main share indexes, for the Shanghai and Shenzhen exchanges, had more than doubled over the course of a year. “What stands out in China’s case is the sheer velocity of the increase in prices,” analysts at Goldman Sachs wrote this week in a research note. To find a comparable performance in the United […]

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US limits on crude, LNG exports violate world trade commitments: report

US limitations on crude oil and liquefied natural gas exports are examples of resource nationalism, violate international trade commitments and have strained relations with key allies, particularly in Asia, according to a new report. The report, released Wednesday by the American Council for Capital Formation, an economic policy organization which has been pushing for an end to energy export restrictions, argues these policies hurt US credibility on global free trade and could set the US up for a challenge at the World Trade Organization. "It is hard to see how the United States would successfully defend its current resource nationalism policies, if a serious challenge were brought forth," the report states. In two recent WTO cases, the US has fought against resource nationalism, the use of government policy to control the export of a commodity in order to seek a benefit which may not be available through free trade. […]

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Savage Services Cuts Jobs in Bakken

More Oilfield Layoffs Savage Services Corp, a North Dakota railcar and logistics facility, laid off 10% of its full time employees this week. Savage is one of the largest facilities of its kind in the region and employed 118 people before this layoff. Company sources blame the layoffs on decreased demand for railcars to transport Bakken crude oil, saying that as pipeline construction has increased, the demand for railcars is the lowest it has been in three years. This is contrary to other data about the prevalence of transporting crude oil by rail. In May, the Energy Information Administration (EIA) released its latest data for crude by rail across the country that shows a 1700% increase over the last five years. It has been almost two years since Savage announced the expansion of the Bakken Petroleum Services Hub in Trenton, ND as a result of its acquisition of Ft. […]

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Amazon to build North Carolina wind farm

Amazon subsidiary looks to wind power to meet energy needs of cloud-based subsidiary in North Carolina. File Photo by UPI/Pat Benic SEATTLE, July 15 (UPI) — The first utility-scale wind farm in North Carolina is part of a broader effort to reduce the carbon footprint, an arm of online retailer Amazon announced. The technology infrastructure division of the retailer, Amazon Web Services, announced it contracted Iberdrola Renewables to help build and operate a 208 megawatt wind farm in North Carolina . Dubbed Amazon Wind Farm U.S. East, the facility will generate about 670,000 megawatt hours of electricity and be the state’s first utility-scale wind farm once up and running by December 2016. The Amazon subsidiary in November committed to getting 100 percent of its electricity needs from renewable resources, with the aim of meeting 40 percent of that goal by the end of 2016. Jerry Hunter, a vice president […]

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