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Chinese shares continue their recovery

Chinese shares were looking up in Friday trade Chinese shares extended their recovery on the last day of a volatile week which started with shock losses that spread fear to global markets. The mainland’s benchmark Shanghai Composite was up by 1.1% at 3,123.04 points in early trade. With these gains adding to Thursday’s recovery, investors hope that the panic and sell-off has died down for now. Stocks elsewhere in Asia also continued their rebound, helped by a strong finish for US shares. In Hong Kong, the Hang Seng index was higher by 1.6% at 22,186.30 points. Japan inflation flatlining Japan’s benchmark Nikkei 225 saw the strongest gains of Asia’s big markets, climbing 2.4% higher to 19,020.56. Morning trade in Tokyo extended Thursday’s recovery on the region’s largest stock market after its sharp losses earlier in the week. Investors were also looking at fresh data showing Japanese inflation fell back […]

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U.S. second-quarter GDP growth rate revised up to 3.7 percent

People are seen walking through Roosevelt Field shopping mall in Garden City, New York February 22, 2015. The U.S. homeland security chief said on Sunday he takes seriously an apparent threat by Somali-based Islamist militants against prominent shopping sites in the West… Aug 27 The U.S. economy grew faster than initially thought in the second quarter on solid domestic demand, showing fairly strong momentum that could still allow the Federal Reserve to hike interest rates this year. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate. The GDP report, which was released in the wake of a global stock market sell-off, should offer assurance to both investors and cautious Fed officials that the United States was in good shape to weather the growing strains in the world economy. […]

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Excluding a Slump in Oil Investments, the U.S. Economy Grew the Most in Nine Years

A gas flare burns at an oil well site near Sidney, Montana, U.S. Photographer: Daniel Acker The U.S. clocked its fastest rate of economic growth in nine years. Well, at least if you strip out the effects of a battered energy sector. Oil and exploration companies this year have cut back on investment in response to a plunge in crude prices that gathered steam as 2014 drew to a close. If it weren’t for such a dramatic reversal in demand for drilling rigs and wells, the economy would have posted its strongest pace of growth since the start of 2006. Gross domestic product, which includes what consumers, companies and governments spend and invest, increased at a 4.5 percent annualized rate in the second quarter when outlays for exploration, shafts and wells are excluded. Corporate investment in oil and mining structures retreated at a whopping 68 percent annualized rate from […]

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Here’s One Thing Standing Between You and Even Cheaper Gasoline

Oil has lost a third of its value in two months, bringing U.S. drivers within pennies’ reach of $2.50 gasoline. But there’s at least one thing standing in the way of a steeper decline at the pumps: ethanol. While the crude rout dragged gasoline futures down about 60 cents a gallon, ethanol’s dropped a mere 15 cents — making it costlier than gasoline this week for the first time since January. Ethanol’s one thing that’ll keep gasoline prices from a total free fall. The biofuel’s value is being propped up by concern over yields for this year’s corn crop, its main feedstock. Meanwhile, refiners are required to blend the additive into gasoline to comply with the federal regulations. “Because they’re forced to blend, they’re blending a more expensive product,” Chris Knittel, professor of energy economics at the Massachusetts Institute of Technology in Cambridge, said by phone. “A large fraction […]

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Washington governor calls wildfires ‘slow-motion disaster’

AP Photo/Elaine Thompson CHELAN, Wash. (AP) — Rising temperatures and increased winds Thursday could cause the largest wildfire in Washington state history to grow even bigger. The National Weather Service issued a red-flag warning for the Okanogan Complex of fires, saying the weather conditions had the potential to spread the flames Thursday afternoon. "The heat coming back on us early is going to be a problem," said Rick Isaacson, spokesman for the fire that grew to 450 square miles on Thursday. The blazes killed three firefighters last week, and have burned at least 40 homes and 40 outbuildings. Heavy smoke that had grounded aircraft this week lifted a bit Thursday morning and helicopters were able to drop water on the flames, Isaacson said. Aircraft were expected to drop retardant in the afternoon. More than 1,150 square miles of Washington are on fire, nearly the size of Rhode Island, the […]

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Canada’s oil diversity may be paying off

Canadian oil export data suggests healthy balance in an era of low crude oil prices. Photo by Heather Snow/Shutterstock CALGARY, Alberta, Aug. 27 (UPI) — Canadian crude oil exports in the depressed energy market were down for conventional oil but up for heavier oil sands, national data show. The National Energy Board reported exports of lighter conventional crude oil down 25 percent from January to 772,000 barrels per day in June. Compared with June 2014, total light crude oil exports are down 10 percent. For the heavier oil sands , however, NEB data show a 6 percent increase from January to 2.2 million bpd in June and up 13.5 percent year-on-year. In July, NEB released its report on full-year 2014 production. Though crude oil prices fell roughly 50 percent from June 2014 to year’s end, the NEB said the energy sector was resilient and export revenue of $100 billion […]

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EIA: U.S. oil swaps make sense regionally

Crude oil swaps with Mexico makes sense for regional refiners, U.S. Energy Information Administration reports. UPI/Shutterstock/tcly WASHINGTON, Aug. 27 (UPI) — The U.S. crude oil swap agreement with Mexico makes sense for regional refiners looking to bridge the gap between oil grades, the U.S. government said. The U.S. Commerce Department’s Bureau of Industry and Security this month granted a request from Mexican energy company Petroleos Mexicanos, known also as Pemex, to swap as much as 100,000 barrels of U.S. crude oil per day for refining into the nation. The deal requires Mexico to refine the crude oil at home and forbids re-export to other nations. The U.S. Energy Information Administration noted the deal makes sense for North American refiners. U.S. refineries situated along the Gulf Coast are designed to process a heavier grade of crude, like that found in Mexico, while Mexican refiners are geared toward lighter oils, like […]

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Sanctions Bite Massive Gas Project in Russian Arctic

SABETTA, Russia—A $27 billion energy project is rising rapidly on this icy peninsula jutting above the Arctic Circle, but the race to shore up its finances has emerged as a test of Moscow’s ability to weather Western sanctions. U.S. restrictions on OAO Novatek , NVTK 7.32 % the project’s Russian leader, are squeezing the massive Yamal LNG liquefied-natural-gas venture, a centerpiece of President Vladimir Putin ’s plan for Russia to reduce its heavy dependence on natural-gas customers in Europe by increasing exports to Asia and, in turn, cementing Russian ties with China. Barred by the sanctions from raising long-term dollar loans, Novatek and its foreign partners, Total SA TOT 6.12 % of France and China National Petroleum Corp., are having to seek more money from Chinese lenders than they had intended, in addition to kicking in nearly $10 billion of their own, according to company executives. But they have, […]

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US middle distillate demand, exports seen to slow on globally oversupplied market

Outlook for US middle distillate demand, which has grown slightly amid rising exports so far in 2015, will look bearish as the Brent/WTI spread narrows in a globally oversupplied market, speakers at Benposium East 2015 said in New York Thursday. Robust refining margins and lackluster demand growth in the first half of the year has led to the record-breaking stocks of ULSD in New York Harbor, Ed Morse, head of global commodity research at Citigroup Global Markets, said. Suzanne Minter, manager of energy analysis at Bentek Energy, said refined US product stocks have consistently been higher throughout 2015 than in previous years, and while demand is still increasing, it has not kept pace. "ULSD was supposed to be the barrel that refiners wanted to make, but these margins aren’t getting the uplift," Minter said. Article continues below… US Marketscan provides you with a daily market overview of the major […]

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White House Says Keystone XL Pipeline Review Continues

ABOARD AIR FORCE ONE, Aug 27 (Reuters) – The White House said on Thursday that the U.S. State Department continues to review TransCanada Corp’s proposed Keystone XL pipeline from Canada’s oil sands to Gulf Coast refineries. "This project continues to be under review by the State Department. I’m not aware of any decision that the State Department has forwarded on to the White House," White House spokesman Josh Earnest said, adding that he did not have an update on when the review would be completed. Asked about a report in a Canadian newspaper that said President Barack Obama would deny a permit for the pipeline next week before the Labor Day holiday weekend, Earnest said he had not seen the report. (Reporting by Jeff Mason and Roberta Rampton; Editing by Emily Stephenson)

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What West Texas producers are saying about $40 oil

The aerial view from a Midland, Texas -bound airplane tells the story: thousands of well pads carved into the desert shrubbery as far as the eye can see. It’s all about oil in West Texas. The area is home to the Permian Basin, the most prolific oil-producing formation in the U.S., a hydrocarbon-rich collection of formations that stretch from Texas into New Mexico. Once written off as a place for tumbleweeds, the area has become a boom region in the past decade as the advent of horizontal hydraulic fracturing—"fracking"—brought new investment to waning, vertically drilled oil fields. Crude production in the Permian Basin is at near-record levels, around 2 million barrels per day, according to the Energy Information Agency, for the first time since the early 1970s. But as crude prices have collapsed over the last year amid oversupply and waning global demand, cutbacks have once again starkly taken […]

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Rosneft makes LNG deal with Egypt

Russian energy company Rosneft reaches Egyptian gas deal during bilateral trade talks in Moscow. Photo courtesy of the office of Russian President Vladimir Putin. MOSCOW, Aug. 27 (UPI) — Russian energy company Rosneft said Thursday it was marking its frontier entry into the global liquefied natural gas market through a deal in Egypt. Rosneft signed an LNG supply and purchase agreement with the Egyptian Natural Gas Holding Co. Documents were signed between Rosneft board members and their Egyptian counterparts during a visit to Moscow by Egyptian President Abdel Fattal el-Sisi. "Cooperation with EGAS marks Rosneft’s entry into the world LNG trading market," the company said in a statement. "Also, implementation of the provisions of the signed documents will, in the long term, open access for Rosneft to the Egyptian gas market which has a significant growth potential." Egypt is a global leader in terms of natural gas consumption and […]

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Oil Rises 2% as Stocks Rebound

Crude-oil futures got a reprieve Thursday, erasing overnight losses to rise 2% in Asian trade as stock markets across the region made solid gains. Oil prices were also supported by a decline in weekly U.S. oil inventories and some amount of bargain hunting after falling to more than six-year lows earlier this week. Investor sentiment was shored up after the Dow industrials rallied on Wednesday’s close, followed by a rebound in most Asian stock markets and commodities. The Shanghai Composite Index was last higher by around 2%. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $39.42 a barrel at 0415 GMT, up $0.82 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange rose $1.00 to $44.14 a barrel. “Considering the volatility we have seen over the past few days, prices seem to be stabilizing at this level,” […]

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Oil prices rise as global market fears ease, but outlook remains weak

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado February 2, 2015. Oil prices climbed by around $1 a barrel on Thursday on an unexpected fall in U.S. crude inventories and a rally in global equity markets, although ongoing oversupply capped gains. Asian stocks rose on Thursday as a sharp rebound on Wall Street and gains in battered Chinese shares eased fears of a deep and protracted global market rout, while the dollar also rallied as risk aversion eased. Oil markets moved away from 2009 lows reached earlier this week, although high production around the world and a weakening Asian demand outlook still dragged on prices. Front-month Brent LCOc1, the global oil benchmark, was up $1.16, or 2.67 percent, at $44.30 a barrel by 0636 GMT (2.36 a.m. EDT). U.S. crude’s front-month contract CLc1 was up $1.11 at $39.71 a barrel. U.S. […]

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Oil futures crash no help to sellers of the real thing

A worker prepares to fill a car at a gas station close to Copacabana beach in Rio de Janeiro, January 12, 2015. When oil futures markets crash – as they have this summer – physical markets often move the other way as refiners jump on the opportunity offered by cheap oil to stockpile. With futures prices now hovering around six and a half year lows, the physical market would typically begin to strengthen and signal a potential rebound in futures – in a repeat of patterns seen during the previous crisis of 2008/09. But traders in barrels from Nigeria to Russia say the physical market remains stubbornly weak in further evidence a global crude oil glut is proving much more difficult to clear. "I can’t remember when during such a correction (in futures), differentials and values in the physical market stayed so weak. It tells me only one thing […]

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Oil Industry Needs Half a Trillion Dollars to Endure Price Slump

At a time when the oil price is languishing at its lowest level in six years, producers need to find half a trillion dollars to repay debt. Some might not make it. The number of oil and gas company bonds with yields of 10 percent or more, a sign of distress, tripled in the past year, leaving 168 firms in North America, Europe and Asia holding this debt, data compiled by Bloomberg show. The ratio of net debt to earnings is the highest in two decades. If oil stays at about $40 a barrel, the shakeout could be profound, according to Kimberley Wood, a partner for oil mergers and acquisitions at Norton Rose Fulbright LLP in London. West Texas Intermediate crude was up 2.8 percent at $39.68 a barrel at 8:10 a.m. in London. “The look and shape of the oil industry would likely change over the next five […]

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Transocean mulls steps to navigate weak market

Rig company Transocean considers scrapping dividends as it works to navigate weak energy market. File Photo by UPI/Shutterstock/James Jones Jr. ZUG, Switzerland, Aug. 26 (UPI) — Offshore rig company Transocean said it plans to cancel issuance of stock dividends and record $2.1 billion in impairments because of the weak market. The company, which has headquarters in Switzerland, announced plans to hold an emergency general meeting of shareholders in October to consider the cancellation of the third and fourth installments of its dividend. The company noted "the deterioration of the offshore drilling market and concerns regarding the timing of the market’s recovery" where behind that proposal and the expected impairment of more around $2.1 billion. The steady decline in crude oil prices, off more than 50 percent from last year, has forced most major oil and gas companies to cut back on spending in exploration and production, leading in turn […]

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Obama on cusp of winning Iran nuclear vote

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Iran wary of foreign control over oil

Iranian Oil Minister Bijan Zanganeh frets over foreign manipulation in an eventual post-sanctions Iran. File photo by Maryam Rahmanian/UPI TEHRAN, Aug. 26 (UPI) — With Iranian sanctions set for U.S. congressional review, Iran’s oil minister made it clear there will be no major foreign control over its reserves. Republican leaders in the U.S. Congress are working to court their adversaries in the Democratic Party to move against the July deal reached between Iran, the five permanent members of the U.N. Security Council, plus Germany. Countering delicate partisanship that saw some key Democrats moving in opposition of President Barack Obama , Sen. Harry Reid , D-Nev., said he would "do everything" in his power to uphold the agreement . Opponents said the nuclear agreement could spark an arms race in the region, though supporters singled it out as a victory for U.S. diplomacy. Iran under the terms of the deal […]

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Iran says some in OPEC do not want high oil price

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. Iran’s Oil Minister Bijan Zanganeh blamed the latest drop in oil prices on some members of OPEC and questioned whether any OPEC emergency meeting would reach an agreement, the oil ministry’s news agency Shana reported. "To balance the oil price… OPEC members should balance their production. An emergency meeting has been requested and we don’t have a problem with that," Shana cited Zanganeh as saying. "But as you know the result of OPEC meetings should be approved by all members, I think some members do not want the price of oil to be high and they want to damage other countries by low prices." Zanganeh, said on Sunday that holding an emergency OPEC meeting may be "effective" in stabilizing the oil price. Algeria said earlier this month […]

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IAEA: Iran Provides Sizable Amount of Info for Nuclear Probe

Director General of the International Atomic Energy Agency, IAEA, Yukiya Amano of Japan addresses the media during a news conference after a meeting of the IAEA board of governors at the International Center in Vienna, Austria, Tuesday Aug. 25, 2015. (AP Photo/Ronald Zak) Iran has provided a "substantive volume" of information to the U.N. atomic agency on allegations that it worked on nuclear arms, the agency’s chief said Tuesday, but declined to characterize the value of the documents. Yukiya Amano said it would be premature to say how useful the information given by Iran last week would be in the investigation being conducted by his International Atomic Energy Agency . "We need to see the whole picture to have an assessment," he told reporters on the sidelines of a meeting of the IAEA’s 35-nation board, convened to seek approval — and funds — for the agency’s assigned task of […]

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Iraqi Kurds wage anti-IS offensive near oil hub

AP Photo BAGHDAD (AP) — The Kurdish regional government in northern Iraq says its peshmerga forces have killed 25 Islamic State militants and cleared nine villages south of the northern oil city of Kirkuk in a new offensive. A statement by the Kurdistan Regional Security Council says Wednesday’s offensive began at dawn, involved 2,000 soldiers and enjoyed air support from a U.S.-led coalition. The Kurdish region in northern Iraq has enjoyed self-rule since the end of the 1991 Gulf War. The regional government’s peshmerga forces have been battling IS militants since the extremist group swept across much of the area as well as western Iraq in the summer of 2014. The statement did not say whether there were peshmerga casualties.

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Gulf Keystone Keeps Production Target for Main Kurdistan Field

Gulf Keystone Petroleum Ltd. reiterated its production forecast for its main oil field in the Kurdistan region of Iraq and expressed optimism about the resumption of export payments from local authorities. “We are confident that our host government will be able to deliver on their recent pledge to establish a regular payment cycle for our crude from next month,” Chief Executive Officer Jon Ferrier said Thursday in a statement. “This will provide us with the necessary means to recommence investment into the field.” Full-year production for its flagship Shaikan field will be 30,000 to 34,000 barrels a day, the company said. Gulf Keystone loss after tax widened to $77.7 million in the first half, from $29.8 million a year earlier. The slump in crude prices over the past year has squeezed the budgets of Iraq’s federal and regional governments, preventing regular payments to Gulf Keystone and other exporters including […]

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Algeria Targets Hidden $40 Billion as Oil-Price Pleas Ignored

Day and night, trucks trundle the 10 miles from Algiers port to the suburb of Semmar, where workers unload and stack goods that will feed into a vast black market. Merchants pack narrow streets to buy canned and dry fruit, grains and vegetables for cash, with the biggest crowds gathering after dark. Bazaars like this drive a $40 billion untaxed parallel economy, one the government says it can no longer tolerate as the oil slump slashes revenue and fellow OPEC members rebuff Algeria’s pleas for steps to prop up prices. Under the terms of an amnesty, Algerians have a year to deposit income from undeclared businesses with banks and pay a 7 percent fee, or face punishment. For President Abdelaziz Bouteflika’s administration, alternative measures — such as cutting a soaring bill for subsidies that helped ward off the strife which has swept the region since 2011 — aren’t attractive. […]

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Mexico Sweetens Oil Auction to Draw Firms Hit by Low Oil Prices

MEXICO CITY—Mexico’s hydrocarbons regulator has improved the terms for its September oil auction to drum up more interest among cash-strapped international oil firms reeling from falling prices, with industry analysts applauding the move Wednesday as a step in the right direction. The National Hydrocarbons Commission approved a series of changes in both auction procedures and contract terms that reduce the risk to oil companies seeking to begin operations in Mexico following the nation’s energy opening to private and foreign firms. The first oil block auction under the energy overhaul, held in July, was considered a failure because only two of 14 exploratory offshore blocks were awarded. Mexican officials promised to find ways to improve the terms for the second auction, which are for five groups of already discovered offshore fields. Some analysts said the government has at least partially delivered on its promise. “This is the kind of response […]

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Venezuela’s Food Shortages Trigger Long Lines, Hunger and Looting

LA SIBUCARA, Venezuela—Hours after they looted and set fire to a National Guard command post in this sun-baked corner of Venezuela earlier this month, a mob infuriated by worsening food shortages rammed trucks into the smoldering edifice, reducing it mostly to rubble. The incident was just one of numerous violent clashes that have flared in pockets around the country in recent weeks as Venezuelans wait for hours in long supermarket lines for basics like milk and rice. Shortages have made hunger a palpable concern for many Wayuu Indians who live here at the northern tip of Venezuela’s 1,300-mile border with Colombia. The soldiers had been deployed to stem rampant food smuggling and price speculation, which President Nicolás Maduro blames for triple-digit inflation and scarcity. But after they seize contraband goods, the troops themselves often become targets of increasingly desperate people. “What’s certain is that we are going very hungry […]

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China stocks surge in last hour of trading

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China Economic Upheaval Mints Winners and Losers

BEIJING—The China economic slowdown that has rattled global markets is also shaking the fortunes of multinationals that do business here . Those that fed China’s traditional boom industries of infrastructure, energy and steel—like Anglo-Australian miner BHP Billiton Ltd. BHP 3.52 % and French energy-equipment maker Schneider Electric SU 2.22 % SE—are suffering precipitous falls in revenue there after years when their profits were boosted by the country’s 10%-plus economic growth. Many also face heavy write-downs as investment plans predicated on surging China demand look increasingly unrealistic as the country’s growth slows. “We’re spending as much as we always do,” said Zhen Lin, a 27-year-old magazine editor on maternity leave, emerging from a Beijing supermarket with a cart half full of groceries. Ms. Lin said she eats out several times a week and isn’t holding back on her spending. Among the purchases she is planning: a new computer this year […]

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Sun-Drenched Miners Look to the Skies to Cut Fuel Costs in Half

The DeGrussa copper and gold mine in Australia’s sun-scorched outback is getting a solar farm, the latest example of the industry embracing clean energy. The plant will replace about 5 million liters (1.3 million gallons) of diesel a year, a fifth of the mine’s energy needs. Energy generated by the system may eventually cost about half that of diesel-generated power, according to Sandfire Resources NL, the deposit’s owner. Miners including Rio Tinto Group are installing new solar plants from Chile to South Africa, betting they’ll deliver long-term savings even as tumbling oil prices cut power costs. The global solar-power market for mining companies may grow to about $2 billion a year by 2022 from about $42 million in 2013, according to Navigant Consulting Inc. “Solar-power providers are specifically targeting mines right now and it’s about replacing diesel,” Dexter Gauntlett, a senior research analyst at Navigant said by phone from […]

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PetroChina’s First-Half Profit Drops 63% on Oil Market Rout

PetroChina Co., the nation’s biggest oil and gas producer, posted a 63 percent decline in first-half profit as oil prices slumped, lagging analyst estimates. Net income dropped to 25.4 billion yuan ($4 billion), or 0.14 yuan a share, in the six months ended June 30, from 68.1 billion yuan, or 0.37 yuan, a year earlier, the Beijing-based company said Thursday in a statement to the Hong Kong stock exchange. The average of three analysts estimates compiled by Bloomberg was a profit of 30.3 billion yuan. PetroChina is suffering amid the collapse in oil prices as it depends on exploration and production for most of its revenue. Crude has tumbled as producers sustain output to protect market share, worsening a global oversupply. Brent, the benchmark for about half the world’s crude, averaged about $59 a barrel in the first half of the year, down 45 percent from the same period […]

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China’s slowing auto market to put further pressure on oil

New vehicles are seen at a parking area of an automobile factory in Wuhan, Hubei province, August 1, 2015. China’s falling auto sales have been at the forefront of concerns that its economy is slowing much faster than expected, weighing on oil prices. Yet moves to cut the cost of car-financing as part of economic stimulus efforts this week may not be enough to drive up auto sales or boost demand for oil, analysts said. Domestic car sales have fallen since April, dropping by 7 percent, or more than 100,000 cars, in July from a year ago and likely putting out of reach even a revised 2015 vehicle growth target of 3 percent, down from 7 percent previously. The downturn has already hit oil markets as importers and refiners adjust their order books. To stem the tide, China’s central bank has cut interest rates and reserve requirement ratios for […]

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China market chaos blamed on exodus of regulatory ‘turtles’

An investor looks at an electronic board showing stock information of Shanghai Stock Exchange Composite Index at a brokerage house in Beijing, August 26, 2015. At the height of the 2008 financial crisis, as Wall Street slashed jobs, Beijing took advantage of the disarray to poach top Chinese financial talent from overseas to help reform its stock markets. By summer 2015, China’s Securities Regulatory Commission (CSRC) needed them more than ever; a year-long market boom had imploded in a few weeks, and the government was desperate to keep the crisis from widening. But the best and brightest returnees, known in China as "sea turtles", had already left for the private sector, disillusioned and disappointed. A former official at the CSRC, one of a group of 20 high-profile returnees, recalled the CSRC’s appeal to make "sacrifices for the motherland". "We moved our families back to China and gave up high-paying […]

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Traders, Growing Thirstier for Energy Details, Likely to Get More Data Soon

With oil prices at near-six-year lows, traders and analysts are scrambling to figure out what’s coming next for energy markets. Lucky for them, more detailed U.S. data may be on the way. The Energy Information Administration, the data and statistics arm of the U.S. Department of Energy, is collecting comments on proposed changes to its energy-data surveys until Sept. 8. The agency surveys energy companies for data on energy production, inventories, demand and trade flows. The EIA is widely considered to be the best provider of timely and comprehensive energy-market data. Still, its reports have come under heightened scrutiny in recent months by oil traders seeking to know as much as possible about the market amid plunging oil prices. The EIA is already planning some updates to its data. Many of the proposed changes to these surveys come in response to recent topics of interest in the oil market, […]

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Western Canadian Crude Oil Stockpiles Rise to a Record

Stockpiles of Western Canadian crude reached a new high last week, according to a report from a leading energy market data provider, in a further sign of the North American oil glut rising as energy prices fall. The rapid rise in inventory, which may worsen the price discount between Western Canadian and other crudes, comes as global demand for oil hasn’t kept up with the pace of production increases. Oil prices have slumped to six-year lows in recent trading, prompting North American producers to park more crude in storage tanks as they wait out the slump in the hopes of a rebound in demand and prices. Storage levels in Western Canada, which includes several tank farms in the oil-rich province of Alberta, rose 10% on the week to a record of 27 million barrels as of August 21, according to data from Genscape of Louisville, Ky. That topped the […]

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Total Sells North Sea Assets for $905 Million

PARIS—French oil company Total SA TOT -0.19 % said Thursday that it has agreed to sell a gas pipeline and gas terminal in the North Sea to North Sea Midstream Partners for 585 million pounds ($905 million) as it battles against the oil price collapse. Total will sell the 362-kilometer Frigg U.K. Pipeline and the St. Fergus Gas Terminal. The company recently embarked on a restructuring plan to bring its extraction costs below market price, which includes cutting investment, selling assets and boosting production. It said in February that it plans to shed $5.5 billion worth of less-profitable assets this year in an attempt to raise overall profitability to offset the negative effects that low oil prices are having on its balance sheet. The company had long struggled with overcapacity in European refining. European demand for petroleum products has dropped 15% since 2008, the company said earlier this year, […]

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Investors fear European energy groups will slash dividends

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US natural gas glut prompts price warning

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Posted On : Published By : Tom Whipple
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North Dakota plans more wind power capacity

North Dakota expecting more wind power on its grid, touting its diversity in the era of shale oil. File Photo by UPI Photo/Gary C. Caskey BISMARCK, N.D., Aug. 26 (UPI) — In parallel with the White House, North Dakota said it was planning to connect a 43-turbine wind farm to the grid as part of an "all of the above" strategy. North Dakota Lt. Gov. Drew Wrigley was on hand for a ceremony to celebrate the upcoming completion of the Thunder Spirit wind farm, a 43-turbine wind farm with a maximum capacity of 107 megawatts of power. "The completion of the Thunder Spirit wind farm marks another important milestone in North Dakota’s ‘all of the above’ energy production journey," Wrigley said in a statement. Using data provided by the American Wind Energy Association, the state government said it’s the national leader in wind energy , with wind power accounting […]

Posted On : Published By : Tom Whipple
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Fitch sees Houston at risk from weak oil market

Fitch Ratings sees some risk for Houston finances and jobs because of the depressed crude oil market. Photo by Aaron M. Sprecher/UPI CHICAGO, Aug. 26 (UPI) — Fitch Ratings finds lower crude oil prices will impact U.S. cities differently, though Houston may be a standout in terms of financial risk. U.S. crude oil prices are down more than 50 percent from this time last year. An increase in oil production, largely from reserve areas like the Eagle Ford shale basin in Texas, has pushed markets toward the supply side. Fitch found that, since at least the early 1980s, local government finances have been linked strongly to energy prices. Using metrics like tax revenue and gross domestic product, the ratings agency found some Texas cities in particular were pressured by the weak crude oil market . For the state as a whole, tax collections for June were down 1.4 percent […]

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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