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Michigan calls for tar sands ban

A worker tends to an oil boom on the Kalamazoo River near Battle Creek, Mich., in 2010. Pipeline operator Enbridge has been called on to stop sending heavier crude oil grades through a Michigan pipeline network. File Photo by Brian Kersey/UPI LANSING, Mich., July 15 (UPI) — A pipeline report from Michigan calls for a ban on the transportation of heavier crude oil grades through pipelines running through the Straits of Mackinac. "While we recognize the importance of transporting energy to power Michigan communities, it cannot be at the expense of our environment," Michigan Department of Environmental Quality Director Dan Wyant said in a statement. Wyant and Michigan Attorney General Bill Schuette released a report from a pipeline task force, which calls for "an immediate" ban on sending tar sands and heavy crude through Enbridge pipeline Line 5b running through the straits. Wyant and Schuette announced last year they’d […]

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Fund manager Taylor sees $30 U.S. oil from torrent of supply

A worker climbs onto a crude oil train to set the hand brake at the Eighty-Eight Oil LLC’s transloading facility in Ft. Laramie, Wyoming July 15, 2014. U.S. oil, which has already halved in value over the past year to around $50 a barrel, could sink to $30 as a torrent of supply makes it hard to sustain any rally, hedge fund manager Beau Taylor said on Wednesday. The manager of the Taylor Woods Capital Management fund told an investor conference that the next six to 18 months would frustrate anyone betting on an oil price recovery, adding that he had a "short", or bearish, position on futures of U.S. West Texas Intermediate crude (WTI). "It just seems like it’s going to be a market that’s going to be very, very difficult to rally in the near term," Taylor, who manages some $800 million at the Connecticut-based fund, told […]

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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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Diesel cars: Is it time to switch to a cleaner fuel?

Car exhaust In the 1920s, pregnant women were encouraged to drink Guinness to increase their iron intake. For decades we were all told to avoid fatty butter and eat synthetic margarine. Both pieces of so-called health advice have since been totally debunked. We are now learning that millions of motorists who’ve bought diesel cars believing they were less harmful to the environment have been equally misguided. Diesel cars emit less carbon dioxide (CO2) than their petrol equivalent, we were told. In fact, not only are CO2 emissions almost indentical on average, but they also produce large quantities of other pollutants linked with thousands of premature deaths . Carmakers say they have already taken action to reduce emissions greatly in the past decade and regulators are beginning to acknowledge the problem, but the challenge remains enormous. The reason is simple: about half of all cars currently sold in Europe are […]

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LNG deliveries mulled for Ukrainian market

Texas company reviews prospects of sending liquefied natural gas to a Ukrainian market under the thumb of Russian energy company Gazprom. File Photo by UPI/Shutterstock/Igor Golovniov HOUSTON, July 15 (UPI) — A Texas-based company, led in part by a former Conoco Phillips veteran, said it was reviewing the prospects of shipping liquefied natural gas to Ukraine. Frontera Resources Corp. said it signed a memorandum of understanding with Ukraine’s state-run energy company Naftogaz to work in the upstream, or exploration and production, sector in Ukraine as well as study the potential to deliver liquefied natural gas from its work in Caucasus country Georgia. "I strongly believe that our closer work with Naftogaz will open avenues to strategically supply Ukraine with LNG from across the Black Sea," Steve Nicandros, former Conoco brass and Frontera’s chairman and chief executive officer, said in a statement. "This will serve to diversify the country’s supply […]

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I.M.F. Report Shines Uncomfortable Light on Greece’s Financing Gap

FRANKFURT — The International Monetary Fund said what everyone knew but would not admit when it laid out in gory detail late Tuesday how Greece could be crushed by its staggering debt unless creditors agreed to lighten the load. The I.M.F. was not saying anything different from what it and its chief, Christine Lagarde, had quietly told eurozone leaders last weekend. But by going public with its warnings, the fund was putting the world on notice: Without some relief that might enable Greece to grow its way out of debt, the I.M.F. is unwilling to continue throwing good money after bad. The question in the next couple of days will be whether that frank appraisal helps or hinders attempts to keep Greece in the eurozone. The I.M.F. report on Greece’s debt said the country had a financial shortfall of 85 billion euros, or $93 billion, and predicted that within […]

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Greece, Its Back to the Wall, Adopts Austerity Steps

ATHENS — Under threat from the nation’s creditors to move quickly or lose any chance of obtaining a desperately needed new bailout package, Greece ’s Parliament approved painful new austerity measures early Thursday, virtually guaranteeing that life would get harder for millions of Greeks. With banks closed and the economy on the verge of collapse, Prime Minister Alexis Tsipras had urged the adoption of the measures, saying that while it was a difficult deal the creditors were offering, it was the only one available and would avert a humanitarian and fiscal disaster. The measures passed easily, with a vote of 229 to 64, with six abstentions. Yet much of the support came from opposition parties. Thirty-two members of Mr. Tsipras’s own Syriza party voted no, including three of his ministers, throwing the stability of his left-wing coalition government into question. Mr. Tsipras, who unexpectedly took the floor before the […]

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BofA Sees Weaker Ruble Mitigating Iran-Spurred Oil Swings

Russia current account Potential economic risks to Russia triggered by oil-price volatility in the aftermath of Iran’s nuclear accord will be mitigated by the ruble, according to Bank of America Corp. Though the country will ultimately be a “net-loser” of the deal, “further ruble weakness should continue to re-balance Russia’s current account and fiscal balances, which should help limit the negative impact on the broader economy,” Vladimir Osakovskiy, the chief Russia economist at Bank of America in Moscow, said in an e-mailed note. Iran and six world powers on Tuesday sealed a historic deal to curb the Islamic Republic’s nuclear program in return for ending sanctions. While Russia is set to suffer from Iran’s future supplies of energy resources to Europe, Moscow’s key export market, “ruble flexibility will continue to help absorb external shocks” and energy cooperation between the two countries could offset some of the negative impact, Bank […]

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Russia ETF Extends Decline as Industrial Production Contracts

Russian Industrial Production Shrank More Than Forecast in June The biggest exchange-traded fund tracking Russian stocks ended a four-day gain as data showed industrial production fell more than forecast and oil slumped, dimming the economic outlook for the world’s biggest energy exporter. The Market Vectors Russia ETF slid 1.6 percent to $17.82 in New York. Energy companies, which account for 43 percent of the fund’s weighting, tumbled as Brent crude slid to a one-week low. A Bloomberg gauge of U.S.-traded Russian stocks fell for a second day. Russian equity assets tumbled after government data on Wednesday showed output at factories, utilities and mines dropped 4.8 percent in June from a year earlier, exceeding the median forecast for a 4 percent decline among 18 economists surveyed by Bloomberg. It was the fifth consecutive month that industrial production fell, the longest slump since 2009. The report further damped speculation that a […]

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The ‘Oil Supply Glut’ Appears To Be A Myth

Summary The media continues to report that the world is greatly oversupplied with oil and this continues to have a negative effect on oil prices. The EIA and IEA both appear to be underestimating worldwide demand for oil by nearly 2 million barrels per day. The EIA lacks reliable production figures for any state except for Alaska. The figure that the EIA adds to actual crude oil stocks before reporting has increased greatly in recent weeks. The oil price decline has led to cutbacks in capital spending, which is likely to exacerbate an oil supply shortage going forward. For quite some time now, the media has been discussing the oil supply glut that has been blamed for pushing down the price of oil from its previous peak in the middle of last year. However, there is now an increasing amount of evidence that the extent of the supply glut […]

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Oil prices edge up as Iran export surge to take time after deal

An oil well is seen near Denver, Colorado February 2, 2015. Oil prices rose on Wednesday as investors recognised it would take time for Iran to ramp up oil exports after its nuclear deal with six world powers, although an ongoing global crude glut kept a lid on gains. Under the nuclear deal reached on Tuesday, sanctions imposed by the United States, the European Union and the United Nations are to be lifted in exchange for curbs on Iran’s nuclear programme. While oil prices initially fell on the news, they recovered later as it became apparent the deal would not immediately lead to a flood of new supply. Brent crude was up 27 cents at $58.78 a barrel by 0529 GMT. U.S. futures were up 18 cents at $53.22. "New oil will not flow from Iran until 2016 and there will probably be less of it than optimists predict," […]

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Crude futures bounce off lows to settle higher on Iranian deal

Crude futures closed higher Tuesday, recovering from early declines, as the market recognized the just-announced Iranian nuclear deal will unlikely lead to a large jump in Iranian crude exports this year. NYMEX August crude led the oil complex, settling 84 cents higher at $53.04/barrel. ICE August Brent settled up 66 cents at $58.51/b. Refined product futures were almost unchanged. NYMEX August ULSD closed 66 points higher at $1.7253/gal, while NYMEX August RBOB settled down 89 points at $1.9307/gal. The historic agreement places strict limits on Iran’s nuclear program in exchange for a lifting of EU and US economic sanctions. Article continues below… Oilgram Price Report is a daily report that covers market changes, market fundamentals and factors driving prices. Oilgram Price Report also brings a vast array of Platts international prices for crude and products, netback tables, and market critical data. But sanctions will not be removed until compliance […]

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U.S., Brent curves align as oil traders caution slump may be ahead

The word oil is pictured on an oil bank at a recycling yard in London March 2, 2011. The structure of the oil market is shifting with the one-year price curves for global Brent and U.S. crude converging, a signal that traders say may portend the next leg down in the price rout. U.S. oil firmed over the past two months and global Brent weakened, but the two are now changing course. The reversal undermines conventional wisdom that the U.S. market is rebalancing on a pickup in demand and Brent is backlogged with barrels in floating storage. While punters watch oil prices bounce up and down, real oil traders tend to monitor so-called "term structure" or the differences in contract prices for future delivery. That structure is a key indicator of the market’s health. "WTI is playing some catch-up to Brent structure that’s been weaker for some while, reflecting […]

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Oil futures curve shows caution over Iran’s return

U.S. Secretary of State John Kerry (2nd L) meets with foreign ministers and delegations from Germany, France, China, Britain, Russia and the European Union at a hotel in Vienna, Austria July 13, 2015. Have oil markets done enough, or too much, to price in the expected return of millions of barrels of Iranian crude? Global benchmark Brent crude gained 1.1 percent on Tuesday after news of the deal between Iran and six major powers to monitor the Islamic republic’s nuclear program in exchange for a relaxation of sanctions, including those on oil exports and investment. The rise in Brent was ascribed to the view that even if the deal gets final approval from all parties, it will still take several months to start being implemented, meaning that increased Iranian oil shipments are unlikely to hit the market until sometime in 2016. While movements in the front-month futures contract tend […]

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Never mind Iran. Oil price is going nowhere

Crude oil came under renewed pressure Tuesday as Iran and six world powers announced they had reached a deal on Tehran’s nuclear program. But Citigroup’s head of commodities research played down the impact of Iran’s potential return to the oil market, saying traders shouldn’t expect much net price movement in crude futures. “In six months we think we’ll be at exactly the same level we’re at now. It’ll maybe go up a bit in the third quarter,” Edward Morse told CNBC’s “Squawk Box.” U.S. benchmark West Texas Intermediate crude was trading at about $53 Tuesday, while international Brent priced near $58.50. “How far down could it go? We’ll repeat what we’ve said before. If nothing gives, production will have to be shut in through the price mechanism, and it will take $40 or lower WTI to get to that level,” Morse said. The nuclear agreement reached this week would […]

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Congressional Republicans Signal Deep Resistance to Iran Nuclear Deal

WASHINGTON—The nuclear deal between Iran and six global powers is set to spark a fierce foreign policy fight on Capitol Hill, pitting Republicans and potentially some Democrats against President Barack Obama in his push to implement what would be a cornerstone of his international legacy. Implementation of the accord depends on whether Mr. Obama can retain the support of enough of his party’s lawmakers in the face of what is almost certain to be widespread GOP opposition . Congress is expected to review the agreement and vote on it in early September, and the initial Republican reaction signaled deep resistance to the deal. The prospect that the GOP-controlled Congress will try to block the deal puts Mr. Obama in the familiar position of trying to minimize defections from his own party and leaves Democrats considering whether they can back an agreement vilified across the aisle. “The deal that we […]

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OPEC Members Disagree Over Prospect of New Oil Supplies From Iran

The nuclear agreement between Iran and six world powers has caused disagreement among Organization of the Petroleum Exporting Countries officials over how to react to new supplies of oil coming onto the export market. As oil prices dropped Tuesday after the deal was announced, Algeria’s oil minister Salah Khabri said he may call for an emergency OPEC meeting to address the situation. In addition to the Iran development, the oil market has been affected by the Greek debt crisis and the Chinese stock market’s recent dive . “Considering the current situation in the oil market, especially a drop in oil prices, we will, if needed, summon an extraordinary OPEC meeting,” said Mr. Khabri, according to the state-run news service APS. Iraq’s oil ministry said Tuesday that it would increase the country’s oil exports in reaction to the deal to make up for the anticipated drop in prices. Iraq has […]

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Iran Nuclear Deal ‘Built on Verification,’ Obama Says

VIENNA — Iran and a group of six nations led by the United States said they had reached a historic accord on Tuesday to significantly limit Tehran’s nuclear ability for more than a decade in return for lifting international oil and financial sanctions. The deal culminates 20 months of negotiations on an agreement that President Obama had long sought as the biggest diplomatic achievement of his presidency. Whether it portends a new relationship between the United States and Iran — after decades of coups, hostage-taking, terrorism and sanctions — remains a bigger question. Mr. Obama, in an early morning appearance at the White House that was broadcast live in Iran, began what promised to be an arduous effort to sell the deal to Congress and the American public, saying the agreement is “not built on trust — it is built on verification.” Mr. Obama made it abundantly clear that […]

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Arab World Split Over Iran Nuclear Deal

BEIRUT, Lebanon — The agreement between world powers and Iran over its nuclear program provoked sharp reactions Tuesday across the Arab world, with some hoping the diplomatic success would reduce tensions and others fearing it would empower Iran and increase instability. The deal added a new, unpredictable factor to a region where many major players are closely allied with or supported by either Shiite Iran or Sunni Saudi Arabia , and any gain by one is often seen as a loss by the other. For decades, the United States has been closer to the Saudi camp, so the agreement – and the great effort President Obama invested in reaching it – led parties on both sides to suspect it marked a strategic realignment, with the United States moving away from its traditional Sunni allies. That feeling has caused alarm in Saudi Arabia, which has long counted on its alliance […]

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Iran Is No Qatar, Even With World’s Second-Biggest Gas Reserves

CHART: Iran’s Gas Reserves Natural gas made Qatar’s citizens the richest in the world within a generation. Even with bigger fuel reserves, Iran will struggle to follow its neighbor’s path. Iran’s own production is consumed by a population of 78 million and an oil industry that injects gas into fields to boost productivity. Qatar, with a population of 2.3 million, now ranks second only to Russia in gas exports, generating about $86 billion last year. While Iran and world powers Tuesday reached a nuclear deal after almost two years of talks that would ease sanctions and allow more investment, the government in Tehran is contending with domestic gas demand that is doubling every decade. Iran holds 18 percent of the world’s gas and yet accounts for less than 1 percent of trade. “They have a huge domestic demand,” Jonathan Stern, head of the natural gas program at Oxford Institute […]

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Iran Oil Boost on Hold to 2016 as Nuclear Inspectors Go to Work

Global oil markets won’t feel the real impact of Iran’s historic deal with world powers until 2016 as sanctions remain in place while nuclear inspectors go to work, said banks including Citigroup Inc., UBS Group AG and Commerzbank AG. OPEC’s fourth-largest member won’t achieve a crude-export boost of more than 500,000 barrels a day, or about 50 percent, until next year as Iran’s compliance with curbs on its nuclear program is verified, the banks say. The nation will probably choose to gradually increase exports once sanctions are lifted, rather than risk lower prices by rapidly pushing crude into an oversupplied market, according to the International Energy Agency . It will be a long and winding road before Iranian oil returns to the market The agreement between Iran and six world powers will eventually lift restrictions that have halved its crude exports, provided the Persian Gulf nation removes nuclear centrifuges […]

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Iran’s Supreme Leader Is Wild Card in Nuclear Deal

VIENNA—It wasn’t until American negotiators were close to a nuclear deal with Iran that U.S. Secretary of State John Kerry turned to his Iranian counterpart and asked about the wild card. “Do you have the mandate of the Supreme Leader?” Mr. Kerry asked, referring to Tehran’s paramount political figure, Ayatollah Ali Khamenei. Iranian Foreign Minister Javad Zarif said he was confident he did. The exchange, described by U.S. aides accompanying Mr. Kerry, was both a breakthrough in the final wrenching days of negotiations and a warning of the challenges that lie ahead if the deal is to be successfully implemented. Throughout two years of negotiations, Mr. Khamenei was the ghost in the machine. U.S. officials could never be fully certain he was on board—indeed, they never spoke to him directly, one Kerry aide said—and he repeatedly blindsided participants on both sides. Through the final hours of talks, he continued […]

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Iran Accord’s Complexity Shows Impact of Bipartisan Letter

Photo Iran’s nuclear reactor in Arak, about 150 miles southwest of Tehran, will be redesigned to no longer produce two bombs worth of weapons-grade plutonium every year. Credit Hamid Foroutan/Iranian Students News Agency, via Associated Press A bipartisan group of nuclear and Middle East experts, including five of President Obama ’s former senior advisers on Iran, wrote a public letter last month describing the emerging nuclear deal with Iran as weak. They called for a number of improvements, and described the strengthening as a bare-minimum requirement to win their support for the complicated accord. The letter was widely seen as laying down standards that, if unmet, could rally enough support in Congress to kill the deal. As unveiled Tuesday in Vienna, the accord runs to 109 pages of fine print , long lists and paragraph after paragraph of mind-numbing jargon. Even so, many of the new particulars bear on […]

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Nigeria: Shell Fixes Trans Forcados Pipeline, Resumes Crude Oil Export

Shell Petroleum Development Company, SPDC, yesterday, lifted its more than two months force majeure on exports of Nigeria’s Forcados crude oil stream, following the repair of the Trans Forcados Pipeline. According to a statement by the company, the Joint Venture had earlier declared force majeure on the evening on May 5 following a series of leaks in the Trans Forcados pipeline that brings the oil to the export terminal. The Trans Forcados pipeline has a capacity of 150,000 barrels per day. Specifically, the Nigerian Petroleum Development Company, NPDC, a subsidiary of the NNPC, uses the pipeline to transport around 11,000 barrel per day of crude and 6.5 million cubic feet of gas per day, while Seplat Petroleum uses the pipeline to transport its over 60,000 barrel per day of crude oil output. Despite the fact that the bigger, 28-inch and 48-inch sections of the pipeline are operated by Shell, […]

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Pipeline problems hamper exports via Turkey

The original start of the Iraq-Turkey Pipeline in Kirkuk. (BEN LANDO/Iraq Oil Report) As the cash-starved Kurdistan Regional Government (KRG) pushes to increase oil exports to Turkey, it faces not only political and legal complications from its disputes with Baghdad, but also operational problems with the Turkish pipeline that carries oil to the Mediterranean port of Ceyhan.Pipeline outages on the Turkish side of the border have prevented about $509 million worth of Iraqi oil from being sold through the first half of this year, according to an Iraq Oil Report analysis of figu… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

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Venezuela expands oil blending scheme with Nigeria crude buys: traders

An oil tank is seen at PDVSA’s Jose Antonio Anzoategui industrial complex in the state of Anzoategui April 15, 2015. Venezuelan state-run oil company PDVSA has bought two 1-million barrel cargoes of Nigerian crude from Royal Dutch Shell in the past month to be used as diluents for its extra heavy oil, traders told Reuters. Venezuela, which has the world’s largest crude reserves, began importing a variety of crudes for the first time last year, using them to dilute the OPEC nation’s heavy grades in order to reduce costs and create better blends for customers. PDVSA imported some 4 million barrels of Algerian Saharan Blend crude from October to January under a supply contract with state-owned Sonatrach during the maintenance of a heavy-crude upgrader, which it says saved $10 to $20 a barrel. It is also buying Russian Urals crude for its Isla refinery and a storage terminal on […]

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Aussie companies early victors in Mexican oil auction

Success of auction for permits for offshore Mexico may test oil sector reforms announced last year by Mexican President Enrique Peña Nieto. File Photo by Dennis Brack/Pool/UPI MEXICO CITY, July 14 (UPI) — Australian media reports Tuesday energy companies there are among the early victors in the first round of auctions for exploration permits offshore Mexico. Australia’s BHP Billiton and Woodside Petroleum each prequalified as bidders for the first round of auctions for permits to explore the shallow Mexican territorial waters of the Gulf of Mexico, the first in more than 70 years. Neither company offered a statement on the approval. Deutsche Bank energy analyst Paul Young told The Sydney Morning Herald deepwater permits, expected on the auction block next year, were among the "most promising and anticipated acreage" offers in the region. Mexican President Enrique Peña Nieto last year set a goal of producing 3.5 million barrels of […]

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New Oil Players Line Up to Bid on a Piece of Mexico

MEXICO CITY—Former Mexican finance minister Pedro Aspe has an unusual collection on the walls of his offices here: stock and bond certificates from some of the Mexican oil companies that existed before the industry was nationalized in 1938, creating the monopoly Petróleos Mexicanos. The more than 170 such companies that existed at the time had names, such as Co. Lluvia de Oro, or Rain of Gold Co. “Many of these companies were subsidiaries of foreign capital, but there was a Mexican oil industry too. And that’s what we want to recreate,” said Mr. Aspe, a senior managing director of Evercore Partners Inc. and head of the U.S. investment-banking advisory firm’s Mexican unit. Now, as Mexico opens its oil industry to competition for the first time in nearly 80 years, Mr. Aspe is one of several Mexican businessmen who have financed or helped create homegrown oil companies . Mexico plans […]

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Oil-Thirsty China a Winner in Iran Deal

BEIJING—The Iran nuclear deal is likely to provide big benefits to one of its brokers—China—giving Beijing greater room to ramp up Iranian oil imports as part of a global buying binge. For years, the U.S. threatened to punish countries that didn’t reduce crude imports from Iran, forcing China’s government and oil companies to walk a tightrope between rising Chinese energy demand and displeasing Washington. While Beijing publicly opposed the U.S. moves, China also cut its Iranian oil imports in 2012 and 2013, boosting U.S. efforts to isolate Iran’s economy. China and Iran had already begun ramping up their oil trade ahead of Tuesday’s deal between Tehran, Washington and five other governments, including Beijing. China on average bought more barrels a day from Iran in the first five months this year than before U.S. efforts to isolate Tehran intensified. Over time new Chinese investment in energy and infrastructure there could […]

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China’s Economy Shows Few Signs of Revival

BEIJING—A large jump in brokerage fees from stock-market turmoil in the final weeks of June is likely to show up as a modest but badly needed bump in China’s second-quarter growth. Beijing had hoped that its economic groundwork in recent months would start paying some visible dividends, and that a pickup in U.S. and European demand would boost exports. It will have to wait. Economists point to few signs of a decisive turnaround in the second quarter, which started against the backdrop of a broad stock rally and ended under the shadow of that rally’s collapse. The broader economy veered little from its recent slowdown course, underlining both how divorced the stock market remains from economic fundamentals as well as the economy’s sluggish response to the government’s efforts to revive it. China is targeting growth of about 7% for the year; a reading below that level in the second […]

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China growth beats forecasts as activity warms up

China’s economy grew an annual 7 percent in the second quarter, steady with the previous quarter and slightly better than analysts’ forecasts, though further stimulus is still expected after the quarter ended with a stock market crash. Monthly activity data, released alongside the GDP report, also beat expectations across the board to show signs of a rebound, with factory output hitting a five-month high, following reports of increased bank lending on Tuesday. It has been a difficult year for the world’s second-largest economy. Slowing growth in trade, investment and domestic demand has been compounded by a cooling property sector, deflationary pressure, and the recent equity market panic, so signs of improvement may help buttress faltering investor confidence in the effectiveness of Beijing’s management. Beijing will still need to provide liquidity to buttress its still-rickety stock exchanges – which the statistics bureau described as key to economic stability – and […]

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China stocks drop again, positive data shrugged off

Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, July 14, 2015. China stocks tumbled in afternoon trade on Wednesday, despite surprisingly positive official economic data, as a recent post-rout, government-triggered rebound appeared to be running out of steam. The CSI300 index of China’s largest listed companies tumbled more than 5 percent at one point, but eased some losses to end the day down 3.5 percent, at 3,966.76. The Shanghai Composite Index lost 3.0 percent, to 3,805.70 points. The slide highlights the difficulty Beijing faces as it seeks to restore confidence in its stock market without signaling investors it is guaranteeing a zero-risk free for all, which would simply reinflate a rally that even regulators said had become too frothy. "Sentiment is still weak," said Du Changchun, analyst at Northeast Securities in Shanghai, adding that he believed […]

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China oil demand rises in June, car sales slump may cap growth

A worker examines a pumpjack at a PetroChina oil field in Panjin, Liaoning province June 30, 2014. China’s implied oil demand grew 3.5 percent in June, as rising air travel and vehicle usage boosted fuel consumption, but a drop in passenger car sales amid a recent stock market rout could limit demand growth over the next few months. China consumed roughly 10.56 million barrels per day (bpd) of oil in June, up from 10.20 million bpd in the same month a year ago and up 2.3 percent from 10.32 million bpd in May, according to Reuters calculations based on preliminary government data. That would mean China’s implied oil demand in the first half of 2015 was up 5.7 percent year-on-year at 10.43 mln bpd, using the preliminary data. Demand growth, however, may weaken after China’s automakers association cut its 2015 forecast for vehicle sales growth to a meager 3 […]

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South Korea’s June crude imports from Iran down 20 percent year-on-year

South Korea’s top refiner SK Energy’s main factory is seen in Ulsan, about 410 km (256 miles) southeast of Seoul, February 25, 2009. South Korea’s crude oil imports from Iran dropped 19.7 percent in June from a year earlier, and its shipments from the OPEC country in the first half of this year also declined 5.5 percent year-on-year, meeting international sanction requirements. Iran and six major world powers on Tuesday reached a nuclear deal under which the sanctions imposed by the United States, European Union and United Nations are set to be lifted in exchange for curbs on Iran’s nuclear program. "More oil from Iran will help already oversupplied crude markets become more favorable to buyers … from a long-term perspective, it is likely to help improve refining margins," said a Seoul-based source at one of the two South Korean refiners that import Iranian crude. Of four refiners in […]

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Emerging Stocks Decline as China Data Fail to Boost Confidence

Emerging-market stocks fell for a second day as industrial companies tumbled and better-than-estimated economic data in China failed to bolster investor confidence in the nation’s equities. Russia’s ruble weakened. Daewoo Shipbuilding & Marine Engineering Co. plunged 30 percent in Seoul on concern the company may report losses and could need to restructure its debt. The Shanghai Composite Index sank 3 percent and Hong Kong’s Hang Seng China Enterprises Index slid 1.3 percent. The ruble, South Africa’s rand and Turkey’s lira lost at least 0.3 percent versus the dollar. The MSCI Emerging Markets Index lost 0.2 percent to 939.03 at 9:07 a.m. in London. China’s gross domestic product expanded 7 percent from a year earlier in the second quarter, beating estimates for a 6.8 percent increase. The Shanghai Composite has slumped 25 percent in four weeks, the world’s worst-performing equity market. Federal Reserve Chair Janet Yellen addresses Congress while Greece’s […]

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White House Cuts Growth Forecast for 2015, 2016

The White House said it sees U.S. growth rising by just 2% this year before rebounding to 2.9% in 2016—down from its earlier forecast of 3% growth for both 2015 and 2016 released in February—after the economy stalled during the first quarter. The new estimate came Tuesday in the White House budget office’s “Mid-Session Review,” which updates the economic and budget projections it made at the beginning of the year. The new growth forecast largely reflects the current thinking among private economists. The economy contracted at a 0.2% seasonally adjusted annual rate in the first quarter. The White House forecasts for gross domestic product, the broadest measure of goods and services produced across the economy, estimate the change in the fourth quarter from the prior-year period. At the same time, higher federal revenues and lower-than-expected government spending has helped to trim the deficit. The White House estimates that the […]

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Permian’s Pancaked Rock Layers Make It the U.S. Oil Patch King

In West Texas, the king of the U.S. oilfields is proving to be the safest investment for explorers. The Permian Basin added the most drilling rigs of the four major U.S. oil plays last week. Output from the region, which stretches into southeastern New Mexico, will rise by 5,000 barrels a day in August, the Energy Information Administration estimates. The Eagle Ford in south Texas, the Bakken region of North Dakota and the Niobrara of Colorado and Wyoming will all drop by at least 20,000 barrels. WPX Energy Inc. entered the region with Tuesday’s $2.35 billion deal to buy RKI Exploration & Production LLC. WPX and other explorers are turning to the Permian to drill into the large number of oil-soaked underground rock deposits stacked like pancakes. “What the Permian shows is the opportunity, and the opportunity is driven by the stacked reservoirs,” Rick Muncrief, chief executive officer at […]

Posted On : Published By : Tom Whipple
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Sabine Files for Bankruptcy in New York Amid Falling Oil Prices

Sabine Oil & Gas Corp., the Houston-based exploration and production company that merged with Forest Oil Corp. last year, filed for bankruptcy amid falling oil prices. Sabine had about $2.5 billion in assets and about $2.9 billion in liabilities as of May 31, according to Chapter 11 filings in bankruptcy court in New York. The company continues to discuss a consensual financial restructuring plan with lenders and debt holders, it said in a statement. Sabine has sold assets, cut expenses for drilling and new wells and froze wages to cope with a sharp decline in energy prices, according to court filings. “Given the severity of the current market conditions and their impact on the company’s cash flow situation, the company has been unable to right-size its balance sheet through cost-cutting and self-help measures alone,” Chief Financial Officer Michael Magilton said. The case is in re Sabine Oil & Gas […]

Posted On : Published By : Tom Whipple
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Low oil price domino effect to shut more North Sea fields early

A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, around 100 miles east of Aberdeen in Scotland February 24, 2014. Low oil prices have tightened the screws on some of the most depleted and costly oilfields in Britain’s North Sea, forcing operators to cease production earlier than planned and adding to fears of a domino effect in mature areas. For years North Sea producers have delayed expensive decommissioning projects, supported by high oil prices that have helped paper over soaring operating costs. But with oil prices halving over the last 12 months, some companies are faced with the unenviable choice of operating at a loss during a field’s twilight years, or limiting losses by bringing decommissioning forwards. Unsurprisingly, the industry is looking at the second option very closely. "It’s a sign that many of the meetings I’m going to, the […]

Posted On : Published By : Tom Whipple
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BHP says will take $2bln charge on U.S. onshore energy business

A promotional sign adorns a stage at a BHP Billiton function in central Sydney August 20, 2013. BHP Billiton on Wednesday said it will take a $2 billion impairment on its U.S. shale operations – the third writedown in three years. The charge on fiscal 2015 financial results, pushed BHP’s Australian shares to their biggest fall in a week — down 1.7 percent to $26.64. The gas-focused Hawkville field in Texas accounts for the substantial majority of the charge to be included in results for the fiscal year that ended on June 30, which BHP estimates will be around $2.8 billion on a pre-tax basis. BHP announced a $328 million write-down on the Permian field in February and a $2.84 billion impairment on the gas component of the shale division in 2012. The latest charge comes as BHP, the world’s biggest diversified mining company, faces a sharp fall in […]

Posted On : Published By : Tom Whipple
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Shale Gas Supply Held Hostage by Oil to Drop by Most in a Year

(Bloomberg) — After four years of record supply, America’s natural gas output is showing signs of weakness as producers retreat amid tumbling oil prices. Gas production from the seven largest U.S. shale basins will fall 0.6 percent to 45.1 billion cubic feet a day in August from a month earlier, the biggest drop since March 2014, the U.S. Energy Information Administration said Monday in its monthly Drilling Productivity report. EIA estimates have shown supply declines since June. The government’s forecasts signal the collapse in crude oil prices, which have plunged by about half over the past year, is reverberating in the natural gas market. As drillers shut wells in liquids-rich deposits from North Dakota to Texas, they’re also curtailing gas output from those reservoirs. That may prevent further price declines for gas, which has slid almost a third over the same period. “Gas is being held captive by oil,” […]

Posted On : Published By : Tom Whipple
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Suncor Oil Sands Project Aims to Replace Steam with Radio Waves

CALGARY, Alberta, July 14 (Reuters) – Suncor Energy Inc has launched a pilot project to replace the high-pressure steam used to extract bitumen from oil sands with radio frequency technology developed by U.S. defence contractor Harris Corporation. Canada’s largest oil and gas company, which produces 440,000 barrels per day from Alberta’s oil sands, said on Tuesday that the technology could significantly reduce costs, greenhouse gas emissions and water usage. Alberta’s oil sands are the world’s third-largest crude reserves after Saudi Arabia and Venezuela and a leading source of U.S. crude imports. However, breakeven costs for new projects are some of the highest globally. And the carbon-intensive process of using steam to liquefy the tar-like bitumen trapped in the sand has attracted fierce opposition from environmental groups. "Anytime you can develop a resource that is more environmentally benign and economically advantageous is going to be a strategic advantage. I would […]

Posted On : Published By : Tom Whipple
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Summer gasoline prices are lowest in years

graph of monthly average regular grade motor gasoline retail price, as explained in the article text The average retail price for motor gasoline this summer (April through September) is expected to be $2.67 per gallon, the lowest price (in real dollars, meaning adjusted for inflation) since 2009, based on projections in EIA’s July Short-Term Energy Outlook (STEO). This decline is mainly the result of the projected 41% year-over-year decline in the average price of North Sea Brent crude oil. Travel and gasoline consumption are expected to be higher this summer compared to levels in 2014. Motor gasoline consumption is expected to increase by 194,000 barrels per day (b/d), up 2.1% from last summer, reflecting higher real disposable income, substantially lower retail motor gasoline prices, and higher employment and consumer confidence. graph of monthly U.S. motor gasoline product supplied, as explained in the article text Source: U.S. Energy Information Administration, […]

Posted On : Published By : Tom Whipple
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Weak U.S. retail sales hint at slower economic growth

A woman pulls shopping carts through the aisle of a Target store, Connecticut November 25, 2011. U.S. retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods, which could raise concerns the economy was slowing again and temper expectations of a September rate hike. The Commerce Department said on Tuesday retail sales slipped 0.3 percent, the weakest reading since February, after May’s downwardly revised 1.0 percent increase. Retail sales excluding automobiles, gasoline, building materials and food services dipped 0.1 percent following a 0.7 percent gain in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Coming on the heels of June’s disappointing employment report and sharp drop in small business confidence, the weak retail sales data suggests the economy might have lost some momentum at the end of the second […]

Posted On : Published By : Tom Whipple
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Shale Gas Bulldozer Runs Over Pessimists

“…why do operators keep drilling while their own over-production has depressed the price of natural gas by half of its value?” Art Berman, 2010 Thirty years ago, at an energy conference at M.I.T., I made a presentation about our research on natural gas supply, and opened with a joke. (That is, intentional humor.) The gas industry, I noted, kept saying that prices were too low to cover their costs, while continuing to drill. What could explain this? Management psychology? Animal spirits? Finance theory (option valuations)? No, the explanation was found in “The Journal of Abnormal Psychology.” The joke was much appreciated, except by the natural gas producers in the audience. Now, the same question could be raised. After all, for most of a decade, predictions of a production collapse have floated around the punditsphere, while estimates of the breakeven price have tended to be well above those which have […]

Posted On : Published By : ASPO-USA
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Russian Oil Production Hits Post-Soviet Record

Russian oil and condensate production reached a new post-soviet record of 10.7 million barrels a day in 2015, according to the latest analysis from Wood Mackenzie. The research firm claims that condensate production will increase by 50 percent by 2018, compared to 2014 levels, although Wood Mackenzie warns that Russia could face a sizeable production gap after 2020, when the impact of Western sanctions kick in. Mr Christian Boermel, Russia upstream analyst for Wood Mackenzie, commented: “We see Russia defying expectations in terms of 2015 liquid production levels achieving a new post-soviet record of 10.7 million barrels per day. The steady increase seen in the first half of this year is contrary to many pessimistic predictions, due to the turbulent geopolitical situation for the country as a result of the Ukraine crisis and subsequent Western sanctions. We see actual growth in liquids being driven by condensate, but given the […]

Posted On : Published By : Tom Whipple
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IMF Warns Eurozone That Greece Needs Far More Debt Relief

WASHINGTON—The International Monetary Fund questioned the ability of Greece to deliver on promised bailout overhauls and warned in its starkest language yet that the eurozone must commit to debt restructuring to ensure the program will work. The IMF’s warning—made in a three-page paper circulated to eurozone officials over the weekend and published more broadly Tuesday—is a reality check for Europe and Greece about the political and economic commitments needed from both sides. “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date—and what has been proposed by” eurozone authorities, the IMF said in its latest assessment of Greece’s economy. The IMF’s dour debt assessment is a clear warning that the fragile bailout accord hasn’t removed the risk of a Greek exit from the eurozone and that the IMF needs […]

Posted On : Published By : Tom Whipple
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Renewables outpace nuclear in economies making up 45 percent of world population: report

Solar, wind and other forms of renewable energy besides hydro-electric dams now supply more electricity than nuclear in Japan, China, India and five other major economies accounting for about half the world’s population, an atomic industry report shows. While nuclear stations on average produce about twice as much electricity as renewables annually for every kilowatt installed, the high growth of solar, wind and other renewables means atomic power is fast being eclipsed as nations turn away from the energy source after the Fukushima disaster in Japan. This is one of the main observations of the World Nuclear Industry Status Report 2015, a draft copy of which was given to Reuters before the release of the document at 0900 GMT in the House of Commons in London. Nuclear power generation increased by 2.2 percent globally in 2014, even with the first extended shutdown of Japan’s atomic industry for 45 years, […]

Posted On : Published By : Tom Whipple