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Oil Explorers Boost U.S. Drilling Even as Price Slumps

Drillers added rigs in U.S. oilfields for the seventh time in the past eight weeks as declining crude prices fail to hold back activity. Rigs targeting oil in the U.S. rose by 2 to 674 this week, the highest since the last week of April, Baker Hughes Inc. said on its website Friday. Drilling equipment added in the Williston Basin of North Dakota and other shale plays more than offset a declining count in areas like Texas’ Eagle Ford and Permian formations. The crude being pumped out of shale rock in the U.S. has helped create a global glut that pushed prices in New York below $40 a barrel for the first time in more than six years on Friday. At such low prices, the recent drilling increase may be short-lived, and the rig count remains almost 60 percent lower than in October. “We hit bottom, we bounced off […]

Posted On : Published By : Tom Whipple
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Oil Falls in Asia After Weak Chinese Manufacturing Data

A tanker vessel sat moored outside a plant in Shunan, Japan, on July 20. Oil prices resumed their downward trajectory in Asian trade on Friday following weak Chinese manufacturing data, as markets remain jittery due to concerns about global economic growth. U.S. oil prices reversed overnight gains pressured by rising supply levels and are still vulnerable to falling below the key psychological price level of $40 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October recently traded at $40.80 a barrel, down $0.52 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange fell $0.52 to $46.10 a barrel. Early Friday, the preliminary Caixin China Manufacturing Purchasing Managers’ Index, a gauge of nationwide manufacturing activity, fell to a 77-month low in August to 47.1, compared with a final reading of 47.8 in July. “Today’s weaker-than-expected PMI will add to […]

Posted On : Published By : Tom Whipple
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Natural Gas Slides as Autumn Nears

Natural gas prices sank to a two-month low Friday as the approaching autumn threatens demand. Futures for September delivery settled down 7.9 cents, or 2.9%, to $2.676 a million British thermal units on the New York Mercantile Exchange. It is the lowest settlement since June 5 and breaks gas out slightly from a 25-cent range it had settled within every session since then. Gas lost 4.5% for the week, its largest weekly loss since late May. It snapped a two-week winning streak. Summer prices are closely tied to heat because consumption usually rises as people turn on their air-conditioning units and ramp up demand for gas-powered electricity. Friday’s weather forecasts are little changed, but the peak of the summer is starting to pass. Traders are looking ahead to the fall, when consumers typically use less natural gas because weather is too mild to cause heating or cooling demand, analysts […]

Posted On : Published By : Tom Whipple
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No End in Sight for Oil Glut

When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived. Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come. The reason: In the global battle for market share, nobody has backed down. Nobody has even blinked. Not Saudi Arabia, not the U.S., and not even troubled producers from Russia to Iraq. Everyone who can seems locked into pumping as much oil as possible. Far from going out of business, American oil companies have stunned their global rivals by maintaining or even adding production as U.S. prices nose-dived from $100 a barrel to $70 late last year to, as of Thursday, just above $40. Even more surprisingly, the Saudis have actually increased their production in the face of falling prices, in […]

Posted On : Published By : Tom Whipple
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Pressure Mounts to Retire Older Fleet as Rig Oversupply Persists

With no signs of a turnaround in global rig demand, drilling contractors are under increasing pressure to retire older rigs. Operators worldwide have succumbed to the prolonged weakness in oil prices by curtailing drilling activities. An oversupply of rigs in an already slow drilling market combined with the addition of newbuilds to the global fleet, are key factors nudging drilling contractors towards retiring their older fleet. Pressure Mounts to Retire Older Rigs According to Rigzone’s RigLogix database , worldwide utilization of rigs, comprising drill barge, drillship, inland barge, jackup, platform rig, semisubmersible, submersible and tender rig, stood at 65.4 percent August 2015, down 12.6 percent from August 2014’s 78 percent as rig demand fell due to oil prices trading around half the level they were in the corresponding period. Transocean Ltd., a major industry player, disclosed in a May 19 presentation that the “rig market is temporarily oversupplied, including […]

Posted On : Published By : Tom Whipple
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U.S. Tests Show Islamic State Used Mustard Agent Against Kurdish Fighters

WASHINGTON—Preliminary U.S. tests show Islamic State fighters used mustard agent against Kurdish Peshmerga fighters in northern Iraq in at least one attack earlier this month, U.S. military officials said on Friday. If confirmed, the use of mustard agent in the Aug. 11 mortar attack on the Kurds in northern Iraq would be the second known instance in which Islamic State has used mustard agent on the battlefield. U.S. officials said last week that test results confirmed Islamic State used mustard agent against Kurdish forces in northern Syria in late July. The officials also suspect mustard agent or a similar blistering agent was used in an Aug. 13 attack against the Peshmerga in northern Iraq, but preliminary test results from that incident have yet to be announced. The preliminary results from the Aug. 11 mortar attack in northern Iraq were based a field test conducted after Peshmerga fighters brought fragments […]

Posted On : Published By : Tom Whipple
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Israel Came Close to Attacking Iran, Ex-Defense Minister Says

JERUSALEM — A former Israeli defense minister, Ehud Barak, revealed new details to his biographers about how close Israel came to striking Iran ’s military facilities in 2010, 2011 and 2012 and why it did not despite his and Prime Minister Benjamin Netanyahu ’s desire to do so, according to interview excerpts aired on Israeli television Friday night. Mr. Barak, who also previously served as Israel’s prime minister, said that he and Mr. Netanyahu were ready to attack Iran each year but that in 2010, the military chief of staff said Israel lacked the “operational capability”; in 2011, two key ministers waffled at the last minute; and in 2012, the timing did not work out because of a joint United States-Israel military exercise and visit by the American defense secretary. He noted that the two ministers who balked in 2011, Moshe Yaalon and Yuval Steinitz, “are the most militant […]

Posted On : Published By : Tom Whipple
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Prospect of Self-Inspections by Iran Feeds Opposition to Nuclear Deal

To the most strident opponents of President Obama’s nuclear deal with Iran , the suspicious behavior at a military base about 12 miles southeast of Tehran has become a rallying call to defeat the accord, especially as it now appears that Iranian officials may be allowed to take their own environmental samples at the site and turn them over to inspectors. It did not take long for the speaker of the House, John A. Boehner, to question whether “anyone at the White House has seen the final documents” establishing rules for inspections. Though the International Atomic Energy Agency says it will monitor the collection, the chairman of the House Foreign Affairs Committee, Ed Royce, declared that, “International inspections should be done by international inspectors. Period.” But as in most debates about the Iran deal, the sound bites — on both sides — do not entirely align with reality, or […]

Posted On : Published By : Tom Whipple
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Iran Prepares to Lure Foreign Investors After Nuclear Deal

Photo Sadjad Ghoroghi, who runs a mining company in Zanjan in northwestern Iran. He said he had long dreamed of finding a foreign investor willing to help expand his operations. Credit Newsha Tavakolian for The New York Times ZARRINABAD, Iran — When Iran ’s Revolutionary Guards Corps took over the nation’s telecommunications monopoly in 2009, the move was denounced as another dark step in the hard-line military group’s seizure of the levers of power. “It’s not just a matter of the Guards dominating the economy, but of controlling the state,” Alireza Nader, an expert on Iran and the co-author of a comprehensive RAND Corporation report on the Revolutionary Guards, said at the time . Last month, however, the company, the Telecommunication Company of Iran, was put up for sale, as the Revolutionary Guards now seem more interested in cashing in on what Iranian leaders are hoping will be a […]

Posted On : Published By : Tom Whipple
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Colombian Peso Leads Global Currency Declines as Crude Tumbles

Colombia’s peso led global declines as oil, the nation’s biggest export, tumbled on concern that a slowdown in China’s economic growth will reduce demand for the commodity. The peso plunged 1.5 percent to a record low 3,107.65 per dollar at the close in Bogota, extending its weekly loss to 3.7 percent. The daily drop was the biggest among 152 currencies tracked by Bloomberg. Crude oil tumbled to below $40 a barrel in New York for the first time since 2009. “This really is panic mode,” Andres Munoz, the head currency trader at Corp. Financiera Colombiana, said from Bogota. “Investors are getting out of emerging markets” including Colombia’s local peso bonds. One-month implied volatility on options for the peso, reflecting projected shifts in the exchange rate, increased Friday to the highest level since June 17. The currency’s swings may lead the central bank to announce currency measures to ease swings […]

Posted On : Published By : Tom Whipple