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U.S. natural gas production waning

Federal U.S. report finds only one of seven shale natural gas basins are expected to post gains in overall short-term production. Photo by photostock77/Shutterstock WASHINGTON, Aug. 26 (UPI) — A drilling productivity report from the United States finds the Utica shale basin in Ohio is the only one of seven reviewed that’s expecting more production. The U.S. Energy Information Administration finds production from seven shale basins in the United States reached 45.6 billion cubic feet per day in May for an all-time high. That’s expected to drop 1.5 percent by September. The report finds net natural gas production from new wells drilled into U.S. shale reserves is not enough to counter the expected decline from legacy wells. EIA attributed that phenomenon to the decline in the number of drilling rigs deployed across the country. "Given the substantial drop in rig counts since the fourth quarter of 2014 in each […]

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EIA expects near-term decline in natural gas production in major shale regions

graph of monthly changes in natural gas production in DPR regions, as explained in the article text Natural gas production across all major shale regions in EIA’s Drilling Productivity Report (DPR) is projected to decrease for the first time in September. Production from these seven shale regions reached a high in May at 45.6 billion cubic feet per day (Bcf/d) and is expected to decline to 44.9 Bcf/d in September. In each region, production from new wells is not large enough to offset production declines from existing, legacy wells. The DPR provides a month-ahead forecast of natural gas and crude oil production for the seven most significant shale formations in the United States. In order to estimate total natural gas production within a DPR region in a given month, production from both new wells and legacy wells must be taken into account. New-well production is estimated by multiplying estimated […]

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British shale oil sector gaining momentum

British energy industry reviews what’s thought to be a significant deposit of oil in shale beds in the country. Photo by David Gaylor/Shutterstock LONDON, Aug. 26 (UPI) — At least 10 billion barrels of potential oil in place is thought to lie in the Horse Hill shale license area in the south of the country, a British group said. U.K. Oil and Gas Ltd. said an independent assessment from oil services company Schlumberger found a mean 10.9 billion barrels of oil in pace in a 55 square-mile area of the Horse Hill basin . U.K. Oil and Gas Chairman Stephen Sanderson said the independent analysis predicts "significant" oil volumes and gives further support for development plans. The company early this year said the reserves at Horse Hill are in shale beds that are fractured naturally, meaning extraction may be carried out using conventional techniques. The discovery at Horse Hill […]

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Deflationary Collapse Ahead?

Both the stock market and oil prices have been plunging. Is this “just another cycle,” or is it something much worse? I think it is something much worse. Back in January, I wrote a post called Oil and the Economy: Where are We Headed in 2015-16? In it, I said that persistent very low prices could be a sign that we are reaching limits of a finite world . In fact, the scenario that is playing out matches up with what I expected to happen in my January post. In that post, I said Needless to say, stagnating wages together with rapidly rising costs of oil production leads to a mismatch between: The amount consumers can afford for oil The cost of oil, if oil price matches the cost of production This mismatch between rising costs of oil production and stagnating wages is what has been happening. The unaffordability […]

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Oil near six-and-a-half-year lows as China economy fears linger

A service truck drives past an oil well on the Fort Berthold Indian Reservation in North Dakota, November 1, 2014. Crude oil futures edged up on Wednesday, but were still not far off 6-1/2 year lows after China’s central bank moved to support the country’s stumbling economy, while concerns about a supply glut capped gains. Asian stocks shook off early weakness to race higher on Wednesday, led by battered Chinese shares even as worries lingered on whether China’s actions would be enough to stabilise its cooling economy or halt a collapse in its stock markets. Brent LCOc1 was trading 25 cents higher at $43.46 a barrel as of 0641 GMT, and U.S. October crude CLc1 was up 26 cents at $39.57 a barrel. ANZ said China’s rate cuts had calmed commodity markets, but they remained cautious and gains would be limited. "The displacement of high-cost supply from the United […]

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Emerging Stocks Fall as China Rate Cut Fails to Stop Equity Rout

Emerging-market stocks fell as China’s interest-rate cut failed to stop a $5 trillion rout in the nation’s shares and Middle Eastern equities retreated. Russia’s ruble weakened. The Shanghai Composite Index recorded the steepest five-day drop since 1996 and a gauge of Chinese stocks traded in Hong Kong slumped for a ninth day. Equity gauges in Saudi Arabia and Dubai slid 1.1 percent. The ruble depreciated 0.8 percent versus the dollar and Malaysia’s ringgit traded near the lowest level since 1998. Israel’s shekel lost 1 percent. The MSCI Emerging Markets Index lost 0.3 percent to 785.86 at 9:29 a.m. in London, following the gauge’s biggest gain in two years on Tuesday. Chinese equities have lost half their value since mid-June as the government struggles to shore up economic growth, curbing demand for riskier assets. China cut interest rates for a fifth time since November and lowered the amount of cash […]

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Commodity Traders Feel Unusual Pain of a Market Rout

LONDON—For years, the secretive club of the world’s largest commodities traders thrived on volatility and sometimes tiny price differences in the raw materials they trade—styling themselves as nimble middlemen able to profit whether markets were rising or falling. These days, many outfits are very different animals and that’s causing unusual pain amid today’s commodities-market rout. During a decade of booming commodities prices, many of these trading firms put billions of dollars into mines, pipelines and storage terminals. Those bets were supposed to help their traders understand supply and demand, while providing their trading floors with a ready source of supply. But they also made them more exposed to falling prices in markets in which they have built up a physical presence. Just how much, however, is difficult to gauge, since many of the biggest traders are still privately held and disclose little. Even the trading floors of big, publicly […]

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Out in the Real World, Oil Market Is Much Better Than It Looks

The global oil market is healthier than it looks, signaling that crude’s plunge to six-year lows has probably gone too far. While futures tumbled below $45 a barrel in London for the first time since 2009, Morgan Stanley and Standard Chartered Plc say other measures suggest physical markets for crude have stabilized or even strengthened in recent weeks. China, the world’s second-biggest oil consumer, will keep buying extra barrels to fill its strategic reserve this year, according to Goldman Sachs Group Inc. “While oil fundamentals aren’t strong, physical markets do not corroborate the substantial weakness in flat price,” New York-based Morgan Stanley analyst Adam Longson said in a report Monday. The “latest oil pricing pressure appears more financial than physical.” A measure of returns from commodities sank to its lowest since 1999 Monday on concern that a slowing economy in China, the world’s largest consumer of energy and raw […]

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Iran says will reclaim full oil market share post-sanctions

Iranian Oil Minister Bijan Zanganeh wave to journalists as he arrives for a meeting of OPEC oil ministers at OPEC’s headquarters in Vienna December 4, 2013. Iran will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions on the OPEC member are lifted, Iran’s Oil Minister Bijan Zanganeh said on Tuesday. "After lifting sanctions, Iran will take back the market share of more than 1 million barrels a day that it lost," Zanganeh was quoted as saying by Shana, the oil ministry’s news agency. "To this end, in the first days after sanctions are lifted 500,000 barrels a day will be added to Iran’s production, and in a short time after that a further 500,000 barrels a day will be added." Zanganeh also said Iran’s oil exports had increased by 15 percent in the first four months of the current Iranian year, […]

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Iran Pushes Back on Nuclear Disclosure at Vienna IAEA Meeting

VIENNA—Iranian officials warned the United Nations atomic agency not to bow to pressure from U.S. lawmakers to detail its probe into Tehran’s past nuclear work, warning Iran will “not accept” any leaks of their discussions. Speaking after a meeting of the International Atomic Energy Agency’s Board of Governors in Vienna, Iranian Ambassador Reza Najafi dismissed the charge that Iran ever worked on nuclear weapons, reiterating Iran’s line that these were “baseless allegations” used to justify sanctions on his country. “The IAEA should at the same time exercise utmost vigilance to ensure full protection of all confidential information coming to its knowledge,” Mr. Najafi told reporters. “We won’t accept any kind of leakage of classified information by anyone.” The IAEA investigation into Iran’s past actions has become a focal point for skeptics of the nuclear agreement Iran reached with six world powers on July 14. The deal still needs approval […]

Posted On : Published By : Tom Whipple