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BHI: US oil rig count continues rise, but overall count unchanged

The overall US drilling rig count sat unchanged during the week ended Aug. 14, remaining at 884 rigs working, according to data from Baker Hughes Inc. Oil-directed rigs, however, continued their warm streak—albeit modestly—with a 2-unit gain. The overall count is now down 1,029 units year-over-year. In an energy update released earlier this week, Raymond James & Associates noted that 832 well permits were issued last week, representing a decline from the 857 issued during the previous week. Utilizing a 4-week average, weekly permits issued were lower by 15 permits week-over-week. “This is not surprising, given the current oil price environment,” RJA said. “With WTI below $45[/bbl] right now, operators are likely taking a step back to see what happens. If prices continue to fall—or even stay flat as we are modeling—from where they are currently, we do not expect to see any meaningful pickup in activity.” US onshore […]

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First offshore wind farm in the United States begins construction

U.S. Energy Information Administration, based on Lindoe Offshore Renewables Center Source: In July, American offshore wind developer, Deepwater Wind , installed the first foundation for what is expected to be the first offshore wind farm in the United States. The project will be located three miles southeast of Block Island, Rhode Island. With five turbines totaling 30 megawatts (MW) of generation capacity, the Block Island Wind Farm is expected to come online in 2016. Deepwater Wind, the developer, is also planning two larger offshore projects along the Atlantic Coast, but their timing remains uncertain. The National Renewable Energy Laboratory (NREL) estimates that the United States has 4,200 gigawatts (GW) of developable offshore wind potential, compared to its estimate of 11,000 GW of onshore wind potential. Wind resources are classified on a scale of zero to seven based on their power density, and more than 66% of offshore wind in […]

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Top U.S. hedge funds stayed bullish in second quarter on energy as slump began

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. Top U.S. hedge funds made bullish bets on the energy sector in the second quarter even as companies’ shares began a slide toward multi-year lows on concerns about oversupply, regulatory filings showed on Friday. Hedge funds such as Baupost Group, Magnetar Capital and Jana Partners increased or took new stakes in energy shares over the second quarter, a period when the S&P 500 energy index lost 2.6 percent. That decline has since accelerated, with the S&P energy index now down about 13.7 percent for the year, largely reflecting renewed fears of crude oversupply and weak global demand. Two favorites among hedge funds were Cheniere Energy and Pioneer Natural Resources. However, both companies struggled in the second quarter, with Cheniere falling 10.5 percent and Pioneer dropping more than 15 percent. Hedge fund managers had already been overweight […]

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KKR’s Samson Resources Plans Chapter 11 Filing by Mid-September

George Roberts is co-chairman and co-chief executive of KKR. The filing would represent the biggest corporate casualty yet of a slump in oil and gas prices and another black mark in energy for the private-equity pioneer. The Tulsa, Okla.-based oil and gas producer agreed to hand ownership to a group of its lenders in bankruptcy, the company said in a statement Friday, confirming an earlier Wall Street Journal report. The move would wipe out the roughly $4.1 billion in cash KKR and its partners invested in the company. The private-equity firm led a $7.2 billion leveraged buyout of Samson in 2011, the biggest-ever such deal for an oil and gas producer. Samson’s board approved the restructuring agreement Friday afternoon, according to a person familiar with the deal. The energy producer intends to skip a bond payment due Monday and use a 30-day grace period to seek broader creditor support […]

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Eurozone Finance Ministers Approve Greek Bailout

BRUSSELS — Eurozone finance ministers on Friday backed a Greek bailout plan approved earlier in the day by lawmakers in Athens, overcoming months of bitterness. The finance ministers ended lengthy talks in Brussels after finessing the final elements of the deal, which grants Greece as much as 86 billion euros, or about $95 billion, during the next three years. The sticking points had included the role of the International Monetary Fund and the possibility of reducing Greece’s debt-repayment burden and the process for recapitalizing the country’s banks. “The past six months have been difficult,” Jean-Claude Juncker, the president of the European Commission , the European Union executive body that helped broker the deal, said in a statement. “Together, we have looked into the abyss. But today, I am glad to say that all sides have respected their commitments.” In a statement, the managing director of the I.M.F., Christine Lagarde, […]

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The Oil Price: How Low Is Low?

With West Texas Intermediate (WTI) and Brent close to their January 2015 lows some readers are wondering how these lows compare with historic lows when the oil price is adjusted for inflation (deflated). BP just happen to provide an oil price series that is adjusted for inflation (Figure 1). The data are annual averages and based on Brent since 1984. Annual averages conceal the extreme swings in price that tend to be short lived. At time of writing WTI front month future contract was $44.42 and Brent front month future was $49.92. Figure 1 The blue line gives the annual average oil price (Brent since 1984) in money of the day and the red line adjusted for inflation expressed in $2014. Three large spikes in the oil price are evident in the 1860s, 1970s and 2010s. It is notable that the magnitude of each spike is similar, of the […]

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Oil Prices Slide to 6½-Year Low

LONDON—U. S. oil prices slid to a more-than six-year low Friday on escalating concerns about the mismatch between global supply and demand. Oil futures on the New York Mercantile Exchange hit a low of $41.35 a barrel, a level seen last on March 4, 2009, when the U.S. economy was still mired in a deep recession. Oil was recently trading at $41.88 a barrel, down 0.7% from Thursday’s settlement. Brent crude, the global price benchmark, fell 0.6% to $49.32 a barrel on London’s ICE Futures exchange. Investors are worried about China’s oil demand following its surprise currency devaluation earlier this week. A weaker yuan makes imports of dollar-priced commodities, such as crude, more expensive. Fears about demand in the world’s second biggest oil consumer are compounded by strong supply from the U.S. and the Organization of the Petroleum Exporting Countries, a 12-nation oil cartel. Market participants are awaiting the […]

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U.S. crude oil hits six and a half year low on high stocks, China

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. U.S. crude oil fell to its lowest in almost six-and-a-half years on Friday as huge stockpiles and refinery shutdowns added to concerns about global oversupply and slowing economies in Asia. Oil had already tumbled more than 3 percent on Thursday, driven by a report that stocks at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose more than 1.3 million barrels in the week to Aug. 11. U.S. crude CLc1 was down 30 cents at $41.93 a barrel by 0845 GMT. The contract earlier hit an intraday low of $41.35, its lowest since March 4, 2009. Brent crude LCOc1 traded at $49.00, down 22 cents and some way off its 2015-low of $45.19 reached in January. U.S. crude is much weaker than the North Sea benchmark, partly due to […]

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NYMEX settles near six-year low as Whiting issue weighs

NYMEX September crude closed $1.07 lower at $42.23/b Thursday. The contract hit a low of $41.91/b prior to the NYMEX settle, the lowest intraday level since March 4, 2009. ICE September Brent settled 44 cents lower at $49.22/b. NYMEX September RBOB closed 4.94 cents lower at $1.7141/gal, and September ULSD fell 1.82 cents to settle at $1.5687/gal. Lingering concerns related to weak global oil demand and excess supply have dragged down crude prices, particularly in North America, where the situation has been aggravated by the closure of a crude distillation unit at BP’s 430,000 b/d refinery in Whiting, Indiana. An International Energy Agency monthly oil market report showed that while oil demand is robust, the global oil supply surplus is set to carry into 2016. Article continues below… Oilgram Price Report is a daily report that covers market changes, market fundamentals and factors driving prices. Oilgram Price Report also […]

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Crude Prices Seen Staying Below $70 a Barrel Over The Next Year

As U.S. crude prices hit a six-year low Thursday, a survey of 10 investment banks by The Wall Street Journal showed increasing pessimism about the outlook for oil. The average forecast of 10 banks surveyed this month was for oil prices to stay below $70 a barrel until late next year. They expect Brent crude, the international price benchmark, to average $58 a barrel this year, down from the forecast of $62 a barrel in May’s survey. For U.S. oil, the average forecast of the banks was $54.50 a barrel this year and $63.40 in 2016. Both grades of crude were trading at more than $100 a barrel a little over a year ago. “The heart of the matter is simple: There is too much oil,” said Michael Wittner, global head of oil research at Société Générale SA, SCGLY 0.00 % one of the banks surveyed. “We are now […]

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