Category:

Oil trades close to multi-month lows, Brent below $50

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. Oil traded near multi-month lows on Thursday with Brent under $50 a barrel as excess supplies and the prospect of further dollar strength weighed on prices. Gasoline stocks in the United States rose more than expected last week, overriding the bullish picture from a larger-than-expected drop in crude stockpiles and pushing prices down to their lowest levels in months. "We’re talking about September crude runs now and that’s pretty much past summer," said Tony Nunan, a risk manager at Mitsubishi Corp. "The U.S. has (cheap) crude supply and can keep runs high but the rest of the world is not looking so good … We remain oversupplied and world-wide inventories are high." September Brent crude LCOc1 fell 21 cents to $49.38 a barrel by 0633 GMT after dropping to $49.02 […]

Posted On : Published By : Tom Whipple
Category:

Two Top Commodity Traders Disagree on Oil’s Path After Rout

July’s oil rout, the worst since 2008, is leaving two top commodity traders at odds over how long the slump will last. Pierre Andurand, one of the most successful traders in the past year, told clients in a letter sent July 24 that oil prices won’t recover substantially until 2017. Andy Hall, one of the best-known oil investors, is increasingly adamant that the market has it wrong, writing in an Aug. 3 letter that a perceived glut in oil supply is overstated. The two managers, among a select group who run hedge funds with heavy exposure to the industry, both profited last year as oil dropped into a bear market. When oil rebounded in the first half of this year, their views diverged, and now the two are completely at odds over whether there’s a glut in the supply of oil that will determine prices. So far, Andurand’s been […]

Posted On : Published By : Tom Whipple
Category:

To Please Investors, Big Oil Makes Deepest Cuts in a Generation

Oil companies are making the largest cost cuts in a generation to reassure investors. They’re risking their own future growth. From Chevron Corp. to Royal Dutch Shell Plc, producers are firing thousands of workers and canceling investments to defend their dividends. Cutbacks across the industry total $180 billion so far this year, the most since the oil crash of 1986, according to Rystad Energy AS, an Oslo-based energy consultant. BP Plc Chief Executive Officer Bob Dudley said last week his “first priority” was payouts to shareholders. Chevron CFO Patricia Yarrington said her company was committed to continuing its 27-year record of annual dividend increases. While the dividend payouts please investors, the producers risk repeating the patterns of 1986 and 1999, when prices slumped and they slashed spending. It took years for them to rebuild their pipelines of production growth. “You need to question whether it’s optimal to base the […]

Posted On : Published By : Tom Whipple
Category:

Oil’s $4.4 Trillion Hole

It rankles when you lose $20. But hey, at least it isn’t $4.4 trillion. That is roughly how much revenue the world’s oil producers will forego over the next three years, based on the current outlook for prices and demand, relative to what was expected just a year ago. With Brent crude having tumbled back below $50 a barrel, the industry has entered a vicious, and spreading, bout of deflation. A year ago, futures indicated an average Brent crude-oil price in 2016 through 2018 of about $101 a barrel. Today, that is just under $60. Estimates of future demand have also been marked down slightly. The implied hit to oil producers’ revenue is about $4.4 trillion spread across those three years. It is a crude metric that, for example, doesn’t take account of different grades of oil commanding different prices. But it does indicate the scale of the hit […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Gains on Inventory Data

By Nicole Friedman NEW YORK–Natural gas prices rose Thursday after weekly inventory data showed a smaller-than-expected increase in natural-gas stockpiles. Futures for September delivery settled up 1.5 cents, or 0.5%, to $2.813 a million British thermal units on the New York Mercantile Exchange. Natural-gas inventories rose by 32 billion cubic feet in the week ended July 31, the U.S. Energy Information Administration said Thursday. Analysts surveyed by The Wall Street Journal had expected a storage injection of 43 billion cubic feet. The lower-than-expected build indicates that consumption was higher than expected, said Ben Smith, president of market-data service First Enercast Financial. Prices turned positive on the report. "Demand seems to be very strong, Mr. Smith said. "That’s going to feed into lowering everyone’s estimates [of storage injections] for the next two weeks, at least." But weather forecasts released Wednesday and Thursday called for cooler temperatures, which could lower natural-gas […]

Posted On : Published By : Tom Whipple
Category:

Iran expecting Italian interest in oil sector

Iranian Minister for Oil Bijan Zangeneh says he’s expecting a renewed relations with Iranian energy investors. File photo by Maryam Rahmanian/UPI TEHRAN, Aug. 6 (UPI) — With hundreds of business executives in Tehran, the Iranian government said it expects to broker some form of energy deal with Italian companies. Senior executives, including Eni Chief Executive Claudio Descalzi, were among the hundreds of representatives who joined Italian Foreign Minister Paolo Gentiloni on an official visit to Tehran. Eni had a $550 million deal to help Iran develop its Darkhovin oil field, expected to produce 160,000 barrels per day, before suspending operations in 2010 under sanctions pressure. With sanctions pressure easing in response to last month’s multilateral nuclear deal, Iranian Oil Minister Bijan Zangeneh said Italian companies were among those in Europe expected to reinvest in Iran. "By removal of the sanctions, Iran will be able to export its oil as […]

Posted On : Published By : Tom Whipple
Category:

New Zealand marks end to coal power

The era of coal is over, the government in New Zealand says as it phases in more renewable energy on its electric grid. Photo by Reinhard Tiburzy/Shutterstock WELLINGTON, New Zealand, Aug. 6 (UPI) — Coal-fired power is coming to an end in New Zealand as the country focuses on taking the global pole position in renewables, the energy minister said. "Historically coal has played an important role in ensuring the security of New Zealand’s electricity supply, particularly in dry years where our hydro-lake levels are low," New Zealand Energy and Resources Minister Simon Bridges said in a statement. "But significant market investment in other forms of renewable energy in recent years, particularly in geothermal, means that a coal backstop is becoming less of a requirement." Utility Genesis Energy said Thursday it’s on pace to shut down its last two coal-fired power plants by December 2018, effectively marking the end […]

Posted On : Published By : Tom Whipple
Category:

Suicide attack targets security forces at Saudi mosque

There was no immediate claim of responsibility for the attack in Asir, but ISIL has been blamed for recent attacks in Saudi [Al Jazeera] Saudi Interior ministry has said that 13 people were killed in a suicide attack on a mosque in the country’s southwest region bordering Yemen. The Interior Ministry’s statement said 10 of those killed in the attack on Thursday in the city of Abha in Asir province were members of the security forces. The attack on the mosque belonging to the emergency forces also injured at least nine others, the ministry added. Earlier, state media said 17 people were killed. Emir of Asir region visits injured in the bombing of special emergency forces mosque in Asir region. – SPA pic.twitter.com/xt8LStxHSg — Saudi Gazette (@Saudi_Gazette) August 6, 2015 Saudi Television said initial information indicated that the blast occurred after a suicide bomber detonated his explosive belt. It […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia arrests hundreds of suspected ISIL members

Saudi Arabia has arrested 431 people suspected of belonging to Islamic State of Iraq and the Levant (ISIL) cells, and thwarted suicide attacks on mosques, security forces and a diplomatic mission, the interior ministry has said. In a statement on Saturday carried on the official state news agency, the interior ministry accused those arrested over the "past few weeks" of conducting several attacks, including an ISIL-claimed suicide bombing in May that killed 21 people in the village of al-Qudeeh, in the oil-rich eastern Qatif region. It was the deadliest assault in the kingdom in more than a decade. The statement said most of the 431 suspects were Saudi nationals, but also included other nationals from the Middle East and Africa. The report said authorities also stopped six successive suicide operations, which targeted mosques in the Eastern province, and timed with assassinations of security men. Related: How is ISIL expanding? […]

Posted On : Published By : Tom Whipple
Category:

Egypt unveils new Suez Canal extension

The first cargo ships passed through Egypt’s New Suez Canal last week in a test-run before it opened on Thursday [Reuters] Egypt has unveiled a major extension of the Suez Canal billed by its President Abdel-Fattah el-Sisi as a historic achievement needed to boost the country’s ailing economy after years of unrest. Sisi, wearing his ceremonial military uniform and trademark dark sunglasses on a sweltering August day, flew to the site on Thursday aboard a military helicopter and immediately boarded a monarchy-era yacht that sailed to the venue of the ceremony. A visibly triumphant Sisi stood on the vessel’s upper deck, waving to well-wishers and dance troupes performing on shore. At one point, a young boy in military uniform and holding an Egyptian red, black and white flag joined him on the deck. Historical facts: the Suez Canal Planning for the Suez Canal officially began in 1854 when a […]

Posted On : Published By : Tom Whipple
Category:

Saudi tempers oil price hikes in Asia to defend market share

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. Saudi Arabia has increased the September prices for crude it sells to Asia by less than forecast, traders said on Thursday, as the world’s biggest oil exporter defends its market share amid slowing demand. Refining profits have fallen to the lowest level of the year in Asia, prompting refiners to cut output even as the Organization of the Petroleum Exporting Countries (OPEC) pumped at historic highs in July, helping to depress global oil prices to multi-month lows. [O/R] OPEC kingpin Saudi Arabia maintained output near record levels in July as the group showed no sign of wavering in its focus on defending market share instead of prices. [OPEC/O] Asia is the only region where Saudi Arabia raised oil prices in September. "The region’s refiners may rue the fact that […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia Might Just Have Blinked In the Oil War

Kenny Rogers is probably not well known in Saudi Arabia but if recent speculation about the kingdom resorting to the international debt market is correct then the words of The Gambler should be called, loudly, from every minaret in Riyadh. If you don’t know Kenny’s signature song it’s the one which includes the refrain: “You’ve got to know when to hold em, know when to fold ‘em, know when to walk away, know when to run.” In the case of Saudi Arabia, and the unconfirmed reports of it seeking $27 billion in debt via an issue of bonds, it appears to be adopting the gamblers strategy of seeing off its opponents in the increasingly competitive oil world by calling “raise ‘em”. Betting The House (Of Saud) What the debt raising signals is that the kingdom is prepared to bet the house of Saud on a high-risk gamble based on […]

Posted On : Published By : Tom Whipple
Category:

IHS: Energy explorers face strong headwinds

Analysis finds some energy companies focused on exploration and production might not survive the downturn. UPI/Gary C. Caskey HOUSTON, Aug. 6 (UPI) — The depressed crude oil market could limit the borrowing options for North American exploration and production companies, analysis finds. The price for West Texas Intermediate crude oil, the U.S. benchmark, has struggled in recent trading days to break the $50 mark. In early Thursday trading, WTI was $44.72, more than 50 percent lower than this time last year. Paul O’Donnel, an equity analyst at IHS Energy, said the low price of crude oil, and expectations that the weak market will endure, spells trouble for companies focused on exploration and production. "Prolonged depressed prices for oil are hurting many of the [exploration and production companies] and will begin to limit their borrowing options," he said in a statement. Marathon Oil this week became the latest in a […]

Posted On : Published By : Tom Whipple
Category:

Gas prices could keep falling, AAA says

Motor club AAA expects some parts of the country could see gasoline prices around the $2 mark as weakness endures in the crude oil market. Photo by John Angelillo/UPI WASHINGTON, Aug. 6 (UPI) — The national average retail price for a gallon of gasoline is falling quickly, a trend expected to continue for the remainder of the year, motor club AAA said. AAA reports a national average price for a gallon of regular unleaded gasoline at $2.62 for Thursday, about 5 cents less than one week ago and more than 10 cents less than this date in July. The motor club said in a mid-week gauge of the retail gasoline market the price at the pump has dropped at its fastest rate since January because of continued weakness in the crude oil market and improved refinery operations. As of Thursday, the national average price for gas has dropped 17 […]

Posted On : Published By : Tom Whipple
Category:

Bakken outperforms for Marathon

Shale oil basin in North Dakota a standout for Marathon Oil as it posts a financial loss for the second quarter. Photo by Calin Tatu/Shutterstock HOUSTON, Aug. 6 (UPI) — Production from the Bakken shale play in North Dakota was a standout in terms of gains for Marathon Oil, which posted a $386 million loss in the second quarter. For all of North America, the company said in its second quarter report net production averaged 274,000 barrels of oil equivalent per day. That represents a 21 percent increase year-on-year, but 3 percent lower than first quarter 2015. Marathon President and Chief Executive Officer Lee Tillman said the net decline was in part because of less spending on exploration and production. "Capital spending in the quarter was down about 40 percent sequentially as we’ve moderated activity levels in the U.S. resource plays," he said in a statement. In North Dakota, […]

Posted On : Published By : Tom Whipple
Category:

U.S. Bankruptcy Filings Jump 77% in July, Paced by Energy Sector

Newly released numbers bear out the feeling that a long-awaited bump in bankruptcy filings has arrived this summer, as submissions under chapter 11 rose 77% in July. There were 637 filings under chapter 11 of the bankruptcy code last month across the U.S., according to statistics from Epiq Systems, compared with 359 at the same time last year. It is the most monthly new chapter 11 filings in nearly three years. That excludes April 2014, an outlier month during a very slow restructuring year, when a spike was driven by Energy Future Holdings Corp.’s massive 71-petition filing. But the summer pickup in filings might not be a permanent return to the time before low-interest rates and high filing costs kept many away from the bankruptcy courts. Shaunna Jones, bankruptcy lawyer at Willkie Farr & Gallagher LLP described this summer as one that has “pockets of business but still feels […]

Posted On : Published By : Tom Whipple
Category:

July job gains may favor September interest rate rise

A job seeker holds literature while waiting to speak with a representative of the Golden Gate National Parks Conservancy at a career fair in San Francisco, California July 14, 2015. The number of U.S. jobs probably rose at a healthy pace in July and wages likely rebounded in data due on Friday, providing further signs of an improving economy that could allow the Federal Reserve to raise interest rates in September. A Reuters survey of economists forecast U.S. nonfarm payrolls increased by 223,000 last month, matching June’s job gains, a number which would be slightly above the monthly average for the first half of the year. Though the pace of hiring has slowed from last year, it remains double the rate needed to keep up with population growth. The Labor Department will release its closely watched employment report on Friday at 8:30 a.m. (1230 GMT) "We expect this report […]

Posted On : Published By : Tom Whipple
Category:

‘Frack now, pay later,’ top services companies say amid oil crash

The exterior of the Schlumberger Corporation headquarters building is pictured in the Galleria area of Houston January 16, 2015. Business is so tough for oilfield giants Schlumberger NV and Halliburton Co that they have come up with a new sales pitch for crude producers halting work in the worst downturn in years. It amounts to this: "frack now and pay later." The moves by the world’s No. 1 and No. 2 oil services companies show how they are scrambling to book sales of new technologies to customers short of cash after a 60 percent slide in crude to $45 a barrel. In some cases, they are willing to take on the role of traditional lenders, like banks, which have grown reluctant to lend since the price drop that began last summer, or act like producers by taking what are essentially stakes in wells. At Halliburton, some of the capital […]

Posted On : Published By : Tom Whipple
Category:

U.S. refiners find the oil market’s sweet spot: Kemp

An oil refinery is seen near an oil slick along the coast of Refugio State Beach in Goleta, California, United States, May 19, 2015. Low crude prices and strong demand for gasoline are creating near-perfect conditions for oil refineries across the United States, especially those geared towards maximising gasoline production. Valero, the country’s largest independent refiner, made a gross margin of more than $13 on every barrel of oil processed in the second quarter, and a net margin of almost $8.50, both the highest since 2007. Little wonder then that Valero’s share price has climbed to the highest level since December 2007. The enormous profitability of turning crude into gasoline has incentivized refiners to run flat out since the start of the year. The volume of crude processed by U.S. refineries last week hit a record 17.1 million barrels per day (bpd), 680,000 bpd above the prior-year level and […]

Posted On : Published By : Tom Whipple
Category:

Despite Glut of Oil, Energy Firms Struggle to Turn Off the Tap

Despite all their spending cutbacks and idle drilling rigs, American energy producers are finding it hard to turn off the taps that have helped lead to a global glut of oil. Rising crude production was a major theme in the past week as shale drillers reported their second-quarter earnings. Analysts say American oil pumpers need to cut their output by at least 500,000 barrels a day to stem the oversupply that has sent oil prices tumbling over the past 14 months to just under $45 a barrel. But monthly oil production rose steadily through March, peaking at a record 9.7 million barrels a day that month and just slightly less in April, before edging down to 9.5 million barrels in May, according to the latest federal data. “We need to cut a whole lot more,” said Jamie Webster, a senior director at IHS Energy, a consultancy. “This industry has […]

Posted On : Published By : Tom Whipple
Category:

Explorers In Need of Cash Are Selling Oil Fields as Last Resort

Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. (Bloomberg) — Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling — often a wildcatter’s option of last resort — is surging after a six-month lull. There’s more to come — by one estimate, another $20 billion this year — as executives at Occidental Petroleum Corp., Whiting Petroleum Corp., Penn Virginia Corp., Exco Resources Inc., Chesapeake Energy Corp. and Ultra Petroleum Corp. have all […]

Posted On : Published By : Tom Whipple
Category:

Can’t outrun peak oil

On the other hand, domestic oil production has taken a jump in recent years due to fracking, tar sands, deepwater drilling, etc., but oil and other fuels obtained from those sources are actually more expensive and take more energy to get than oil obtained from conventional wells. This is what’s called the EROEI ratio, which stands for “Energy Returned On Energy Invested.” According to data compiled by professor L. David Roper, in the early 20th century, the golden age of North American oil production, the equivalent of one barrel of oil invested yielded as many as 100-200 barrels produced. By 1970, the average EROEI ratio for crude oil had fallen to 30:1 (Saudi oil fields are still producing at this rate). Today, one barrel of oil invested typically gives only 15 barrels in return. New technologies, such as tar sands, have a barely 2:1 ration of energy return on […]

Posted On : Published By : ASPO-USA
Category:

15 Things the World Is Running Out of

We live in an era of limited resources—peak oil, peak phosphorous, peak everything. With the world population at nearly 7.4 billion and people living increasingly energy-intensive lifestyles, there has never been a more pressing need to conserve natural resources and develop renewable energy sources. A recent report from James Hansen and 16 other leading climate experts found that the international target of limiting global temperatures to a 2°C rise this century will not be nearly enough to prevent catastrophic melting of ice sheets that would raise sea levels much higher and much faster than previously thought possible. To make matters even worse, as 2015 shapes up to be the hottest year on record , scientists warn the world is set to pass the 1°C point this year. The icing on the cake? We won’t even have wine, coffee, tequila or chocolate to cope with runaway climate change .

Posted On : Published By : ASPO-USA
Category:

Oil trades close to multi-month lows, Brent below $50

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. Oil traded near multi-month lows on Thursday with Brent under $50 a barrel as excess supplies and the prospect of further dollar strength weighed on prices. Gasoline stocks in the United States rose more than expected last week, overriding the bullish picture from a larger-than-expected drop in crude stockpiles and pushing prices down to their lowest levels in months. "We’re talking about September crude runs now and that’s pretty much past summer," said Tony Nunan, a risk manager at Mitsubishi Corp. "The U.S. has (cheap) crude supply and can keep runs high but the rest of the world is not looking so good … We remain oversupplied and world-wide inventories are high." September Brent crude LCOc1 fell 21 cents to $49.38 a barrel by 0633 GMT after dropping to $49.02 […]

Posted On : Published By : Tom Whipple
Category:

Oil bulls’ hope for quick price dip dimmed by 2020 crude under $70

Gasoline drips off a nozzle during refueling at a gas station in Altadena, California March 24, 2012. As oil prices entered a second steep slide a few weeks ago, bullish traders and analysts had hoped for a repeat of the sharp but short dip that occurred early in the year – a speculative slide below $50 a barrel followed by a quick recovery. Some are now reconsidering that view, as long-term oil prices take the lead in the market’s latest dive, swaying sentiment toward a lengthier slump that would mean prolonged pain for big producers, from Exxon Mobil Corp ( XOM.N ) to Saudi Arabia. While immediate delivery benchmark global Brent crude oil futures at $50 a barrel are still about $4 higher than they were at their lowest point in January, prices for delivery in December 2020 LCOZ0 are nearly $8 lower than the start of this year, […]

Posted On : Published By : Tom Whipple
Category:

With crude at $50, oil firms fear deeper crisis than in 1980s

A sign advertising gas prices is seen at a Chevron station in Los Angeles, California March 4, 2015. After slashing spending by $180 billion to deal with one of the worst industry downturns in decades, oil companies are still bleeding cash and slipping further into debt to maintain dividends to shareholders. Depressed crude prices – at below $50 a barrel Brent crude is half what it was a year ago – mean even more cuts are needed at new projects and existing operations. Companies trying to dispose of oilfields to raise cash could be forced to sell quickly and for less than they hoped. There is little sign that the oil price will come to the rescue as the Organization of the Petroleum Exporting Countries (OPEC) continues to pump hard into an oversupplied crude market in response to explosive growth in U.S. shale oil. Brent is expected to average […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Gives Up Gains on Cooler Weather Forecasts

By Nicole Friedman NEW YORK–Natural gas prices gave up early gains Wednesday as weather forecasts turned cooler, limiting demand expectations. Natural gas use rises in summer when households and offices use more electricity to power air-conditioning units. Forecasts released Wednesday morning called for hotter weather in Texas and the Southern U.S. than previously expected, boosting prices. But closely watched midday updates to the forecast were less bullish, said Aaron Calder, analyst at Gelber & Associates in Houston. "Noon updates took some heat out of the forecasts," Mr. Calder said in a note. Futures for September delivery settled down 1.4 cents, or 0.5%, at $2.798 a million British thermal units on the New York Mercantile Exchange. Robust production has outweighed demand this summer, leaving natural-gas stockpiles at a surplus to the five-year average. Inventory data for the week ended July 31 is due Thursday, and analysts surveyed by The Wall […]

Posted On : Published By : Tom Whipple
Category:

Pemex Cuts Back on Rigs as Oil Price Languishes

By Laurence Iliff MEXICO CITY–National oil company Petróleos Mexicanos is cutting back on drilling rigs to bring its costs more in line with languishing oil prices, much to the dismay of some rig leasers who didn’t anticipate Mexico’s sole petroleum producer would move so quickly and aggressively. Pemex is also renegotiating rates on rigs that it wants to keep under contract as the oil company slashes $4 billion from this year’s investment budget and prepares for more austerity next year, officials at the oil firm said. "The idea here was not to strangle or squeeze our suppliers, it is to get through a very hard time which we hope at some point is going to even out," said Pemex’s chief procurement officer Arturo Henríquez Autrey. He estimates the firm’s rig leases have fallen to 41 from 61, with shallow-water jack-up rigs cut the most. Pemex is spending about $1.8 […]

Posted On : Published By : Tom Whipple
Category:

It’s Either Iran Nuclear Deal or ‘Some Sort of War,’ Obama Warns

WASHINGTON — President Obama took on critics of the nuclear deal between Iran and six world powers in an aggressive speech on Wednesday, saying they were the same people who created the “drumbeat of war” and played on public fears to push the United States into the Iraq war more than a decade ago. “Let’s not mince words: The choice we face is ultimately between diplomacy and some sort of war — maybe not tomorrow, maybe not three months from now, but soon,” Mr. Obama told about 200 people in a speech at American University. “How can we in good conscience justify war before we’ve tested a diplomatic agreement that achieves our objectives?” Mr. Obama, opening a new, more overtly political phase of his public campaign for the accord, portrayed the coming vote in Congress to approve or reject the deal as the most consequential foreign policy decision for […]

Posted On : Published By : Tom Whipple
Category:

Syria’s Oil Industry Largely Destroyed

Syria’s oil industry, like most of its industries, is in a state of collapse. And even recent gains, according to analysts, won’t come close to bringing it back. “We have great necessity to have oil production to make the economic wheel go forward,” said Afif Dalla, a political analyst in Damascus, but “I think in general we won’t be able to reproduce the [former levels of] oil production again at the same time of the existence of these terrorist groups.” As long as the war drags on, he adds, no sector of the Syrian economy will recover fully. Since the onset of the Syrian war in 2011, government oil production has nearly stopped, with current production estimated at less than three percent of pre-war levels. In recent days, some local authorities have re-opened one of the country’s largest oil fields, more than doubling the country’s small output. But the […]

Posted On : Published By : Tom Whipple
Category:

U.S. crude stockpiles fall more than expected in week: EIA

Oil storage tanks are seen at sunrise with the Rocky Mountains and the Denver downtown skyline in the background October 14, 2014. U.S. crude stocks fell last week, while gasoline and distillate inventories rose, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories fell 4.41 million barrels to 455.28 million in the last week, a bigger decline than the decrease of 1.5 million barrels that analysts had expected. U.S. crude imports fell last week by 370,000 barrels per day (bpd) to 6.6 million bpd, or about 2.5 million barrels over the course of the week. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 542,000 barrels, EIA said. "The report was distinctly bullish for crude, with refining up and imports down, while modest builds for the products tilts bearish," said Matt Smith, director of commodity research at Clipper Data in New York. After initially extending […]

Posted On : Published By : Tom Whipple
Category:

Yes, she confirms, that’s the same

Shell’s Polar Pioneer in Port Angeles, Wash., on May 12. Photographer: Jason Redmond/Reuters In a windowless conference room in Anchorage, a dozen Royal Dutch Shell employees report on the highest-profile oil project in the multinational’s vast global portfolio. Warmed by mid-July temperatures, Arctic ice in the Chukchi Sea, northwest of the Alaskan mainland, is receding. Storms are easing; helicopter flights will soon resume. Underwater volcanoes—yes, volcanoes—are dormant. “That’s good news for us,” Ann Pickard, Shell’s top executive for the Arctic, whispers to a visitor. Overhead, a bank of video monitors displays blinking green radar images of an armada of Shell vessels converging on a prospect called Burger J. Company geologists believe that beneath Burger J—70 miles offshore and 800 miles from the Anchorage command center—lie up to 15 billion barrels of oil. An additional 11 billion barrels are thought to be buried due east under the Beaufort Sea. All […]

Posted On : Published By : Tom Whipple
Category:

U.S. energy group wants oil and gas in presidential debate mix

Jack Gerard, president and CEO of the American Petroleum Institute, wants U.S. presidential candidates to lay out vision for energy. File photo by Kevin Dietsch/UPI WASHINGTON, Aug. 5 (UPI) — With the first debate coming this week, the American Petroleum Institute said it wants to hear how presidential candidates will navigate the era of abundance. Fox News announced a roster of 10 candidates vying for the Republican nomination for president for this week’s debate. Real estate mogul Donald Trump is leading in public opinion surveys alongside former Florida Gov. Jeb Bush and Wisconsin Gov. Scott Walker . The American Petroleum Institute, which represents the interests of the oil and gas sector, said it wants to hear how each candidate, including Democrats, plans to steer the United States as it takes a global leadership position in terms of oil and natural gas production. API President and Chief Executive Officer Jack […]

Posted On : Published By : Tom Whipple
Category:

Pioneer bucks trend by planning more rigs in Texas

Pioneer Natural Resources moves against tide with plans to spend more on rigs in shale basins in Texas. Photo by Calin Tatu/Shutterstock AUSTIN, Texas, Aug. 5 (UPI) — Despite posting a loss for the second quarter, Pioneer Natural Resources said it would increase its capital budget for the second half and add more rigs. Pioneer said it lost $218 million in the second quarter, joining its peers struggling to generate revenue during the downturn in the crude oil market. Chairman and Chief Executive Officer Scott Sheffield said in a statement the company was seeing benefits from operations focused largely in the Spraberry/Wolfcamp shale basin in Texas. "As a result, we are putting rigs back to work and plan to return to an activity level during 2016 that can result in a similar growth trajectory that we were delivering in the second half of 2014 before the downturn," he said […]

Posted On : Published By : Tom Whipple
Category:

API: Oil, natural gas boost 2015 US trade balance

The oil and natural gas industry continues to drive US economic gains in 2015, a trend that could accelerate under free trade policies, noted American Petroleum Institute Chief Economist John Felmy in comments about the Aug. 5 midyear trade report from the US Department of Commerce. “Despite a very competitive global market, the US energy revolution continues to push our trade balance in a positive direction,” Felmy said. “Oil imports remain on the decline, and strong exports of petroleum and refined products are creating new opportunities for America to bring wealth and jobs back to US shores.” Bolstered by the surge in US oil and natural gas production , the total US trade deficit had dropped to $508 billion by 2014, after peaking at $762 billion in 2006. Today’s report, covering trade data through June, shows that the US trade deficit among petroleum and petroleum products fell 56.1% compared […]

Posted On : Published By : Tom Whipple
Category:

Explorers In Need of Cash Are Selling Oil Fields as Last Resort

Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling — often a wildcatter’s option of last resort — is surging after a six-month lull. There’s more to come — by one estimate, another $20 billion this year — as executives at Occidental Petroleum Corp., Whiting Petroleum Corp., Penn Virginia Corp., Exco Resources Inc., Chesapeake Energy Corp . and Ultra Petroleum Corp. have all said in recent weeks that they are selling assets or exploring sales. The surge shows how the industry’s two-pronged strategy […]

Posted On : Published By : Tom Whipple
Category:

Fracking-Related Earthquakes Could Ding Credit Quality

CCOs Concerned About Compliance IT Systems: Survey More authority and stronger organizational support are helping to increase the effectiveness of corporate compliance programs, yet persistent concerns remain about information technology (IT) systems’ ability to fulfill compliance program requirements, according to “In Focus: 2015 Compliance Trends Survey,” a joint effort between Deloitte and Compliance Week. In addition, third parties continue to be the single biggest worry for surveyed CCOs.

Posted On : Published By : Tom Whipple
Category:

The Link Between Oil Reserves and Oil Prices

Last December the Energy Information Administration (EIA) released its latest estimate of U.S. Crude Oil and Natural Gas Proved Reserves . Although natural gas reserves rose, the real story was crude oil reserves. The EIA reported that U.S. proved reserves of crude oil and lease condensate had increased for the fifth year in a row, and had exceeded 36 billion barrels for the first time since 1975: There are two reasons for this increase in proved reserves. The first is that despite >150 years of oil production in the U.S., new fields are still being discovered. In March 2015 the EIA released its update to the Top 100 U.S. Oil and Gas Fields as a supplement to the December report. This was the EIA’s first update on the Top 100 fields since 2009. The most significant addition to the list was the Eagleville field (in the Eagle Ford Shale), […]

Posted On : Published By : Tom Whipple
Category:

BP commits to new North Sea spending

Bob Dudley’s BP seeks to breath new life into North Sea developments with major investment announcement. File photo by Roger L. Wollenberg/UPI LONDON, Aug. 5 (UPI) — Though the global energy sector is crimping available revenue streams, BP said Wednesday it planned billions of dollars of spending in the North Sea. "These are challenging times for the industry and we are having to make hard choices," BP North Sea Regional President Trevor Garlick said in an emailed statement. "Nonetheless, we remain committed to improving the competitiveness of the North Sea and to maximizing economic recovery from our fields." BP in a quarterly earnings report released last week said it lost $5.8 billion, which in part was a reflection of the July 2 settlement reached to resolve claims associated with the oil spill in the Gulf of Mexico in 2010. The British company said it earned $228 million from oil […]

Posted On : Published By : Tom Whipple
Category:

Ankara blames Kremlin for gas pipeline delays

Turkey blames Russian planners for delays in momentum of the planned Turkish Stream natural gas pipeline. Photo by Kodda/Shutterstock ANKARA, Turkey, Aug. 5 (UPI) — Turkish Energy Minister Taner Yildiz said there were delays in planning on the Russian side in developments of the planned Turkish Stream gas pipeline. Yildiz told the state-backed Anadolu News Agency that Russian planners delayed delivering route coordinates for the pipeline through his country. "Turkey could not begin any construction without these coordinates," he said. Russian energy company Gazprom said in February it surveyed the Turkish land route for the 110-mile section of pipeline from the Black Sea. The Kremlin said the Turkish gas project will help ensure European energy security. South Stream, a longer version of the pipeline, was envisioned as a European network before the Russian government pulled it off the table in late 2014. Russia meets about a quarter of the […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Rise Ahead of U.S. Inventory Data

LONDON—Oil prices were trading higher on Wednesday ahead of closely watched U.S. supply data. Oil slipped to multi-month lows earlier in the week on renewed concerns about the global oversupply of crude. Traders are awaiting the latest weekly data on U.S. crude oil inventories and production later in the day to gauge how the low price environment is affecting supply. Brent crude, the global oil benchmark, rose 0.7% to $50.34 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.7% at $46.07 a barrel. Late on Tuesday, the American Petroleum Institute reported that U.S. oil inventories fell by 2.4 million barrels last week. The industry group said that gasoline supplies fell by 946,000 barrels, while distillate stocks increased by 1.7 million barrels in the week. The U.S. Energy Information Administration will release its official inventory report later Wednesday […]

Posted On : Published By : Tom Whipple
Category:

Brent inches up above $50 ahead of U.S. oil stocks data

A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015. Benchmark Brent crude oil prices inched up just above a key support level of $50 on Wednesday, recovering from multi-month lows, as investors await U.S. oil inventories data to gauge supply. Oil markets paused for a breather after prices tumbled about 20 percent in July because of a supply glut. OPEC continued to pump at record rates in July and U.S. shale oil production showed no sign of abating as drillers added more rigs in past two weeks. A landmark nuclear deal struck between Tehran and world powers has sparked concerns of more Iranian oil returning to global markets and worries about fuel demand growth has also dragged down oil prices. "The market is still digesting news of Iran coming back with more supply," Ben Le Brun, a markets analyst at OptionsXpress […]

Posted On : Published By : Tom Whipple
Category:

Oil Prices Rise But Hold Near Multimonth Lows

NEW YORK—Oil prices rose Tuesday on expectations that inventory data due Wednesday would show U.S. crude-oil supplies fell last week. Concerns about an economic slowdown in China , coupled with persistently high production from some of the world’s biggest petroleum suppliers, have soured investor sentiment in recent weeks. Oil prices plunged into a bear market last month and have continued to fall in August. Prices rose slightly Tuesday after sinking to multimonth lows on Monday. Light, sweet crude for September delivery settled up 57 cents, or 1.3%, at $45.74 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 47 cents, or 0.9%, to $49.99 a barrel on ICE Futures Europe. Analysts surveyed by The Wall Street Journal expect the U.S. Energy Information Administration to report Wednesday that U.S. crude-oil supplies fell by 1.5 million barrels last week. The closely watched weekly EIA report is due […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Prices Rise as Weather Warms

By Timothy Puko Natural gas prices made their largest one-day gains in nearly three weeks Tuesday as weather forecasts show a heat wave settling in over Texas. The front-month September contract gained 6.4 cents, or 2.3%, to $2.812 a million British thermal units on the New York Mercantile Exchange. The boost sent gas back to the middle of the 31-cent trading range it has settled in every session for nearly two months. Consumption of gas-powered electricity often rises in the summer as people turn on their air-conditioning units. Tuesday’s forecasts show temperatures more than five degrees Fahrenheit above normal settling in for the next week in Texas, one of the country’s largest markets for cooling and power. Both Dallas and Houston will make it over 100 degrees Fahrenheit, according to private forecasters. "The Texas heat is going to be a big deal in the coming 1-2 weeks as the […]

Posted On : Published By : Tom Whipple
Category:

Oil Companies’ Spending Cuts Unlikely to Be Enough

LONDON—The world’s biggest oil companies have vowed to bring down the costs of big projects in the face of slumping oil prices, but the unrelenting price weakness—with crude below $50 a barrel—suggests they could have to dig deeper still. In the past year, as oil prices plunged 60% from highs of $114 in 2014, U.K. energy giant BP BP 0.16 % PLC began testing new projects for profitability around $60 a barrel, down from $80 a barrel last year. Its Anglo-Dutch rival Royal Dutch Shell RDS.A -0.17 % is testing projects at prices as low as $50 a barrel, though its overall price outlook is between $70 and $110 a barrel. Under other circumstances, those would seem like draconian cuts. Billions of dollars less is being spent on everything from exploration and project engineering to construction equipment and drill rigs. But last week, when all of the world’s biggest […]

Posted On : Published By : Tom Whipple
Category:

The Oil Crash Has Caused a $1.3 Trillion Wipeout

It’s the oil crash few saw coming, and few have been spared as it erased $1.3 trillion, the equivalent of Mexico’s annual GDP, in little more than a year. Take billionaire Carl Icahn. When crude was at its peak in June 2014, the activist investor’s stake in Chesapeake Energy Corp. was worth almost $2 billion. Today, oil has lost more than half its value, Chesapeake is the worst performer in the Standard & Poor’s 500 Index and Icahn has a paper loss of $1.3 billion. The S&P 500, by contrast, is up 6.9 percent in that time. State pension funds and insurance companies have also been hard hit. Investment advisers, who manage the mutual funds and exchange-traded products that are staples of many retirement plans, had $1.8 trillion tied to energy stocks in June 2014, according to data compiled by Bloomberg. “The hit has been huge,” said Chris Beck, […]

Posted On : Published By : Tom Whipple
Category:

Oil industry frets about another lost decade: Kemp

An oil pump is seen during an extraction process in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela, March 20, 2015. Oil is an inherently cyclical business. The point is remarkably simple but it is amazing how often it gets forgotten by forecasters and investors. In the century and a half since the modern oil industry was founded with the drilling of Edwin Drake’s well in 1859, real prices have doubled in the space of three years on no fewer than six separate occasions, and halved on four. If prices remain around $50 for the rest of the year, 2015 will be the fifth time real prices have fallen more than 50 percent in the space of less than three years. Sharp price changes over short periods have therefore been the norm and the long period of relative stability between 1931 and 1969 was the exception. It follows […]

Posted On : Published By : Tom Whipple
Category:

Oil price unlikely to recover as Saudi refining hits market

An offshore oil platform is seen in Huntington Beach, California September 28, 2014. Oil prices are unlikely to recover soon as Saudi Arabia’s drive to boost its refining activities is expected to force refineries elsewhere to slow down their operations, thus creating an even bigger glut of unwanted crude oil. Two big new refineries in Saudi Arabia are adding to growing supplies of diesel and jet fuel, which could mean other refiners will use less crude as they respond to the oversupply of oil products. Oil prices currently near $50 a barrel are already under pressure, in part from an oversupply of fuels produced by refiners enjoying healthy margins from cheap crude as a result of the U.S. shale boom and record OPEC output. A big difference now is that the world’s largest oil exporter, Saudi Arabia, whose new refineries have added to a flood of the fuels now […]

Posted On : Published By : Tom Whipple