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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
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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
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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
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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
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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
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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
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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 […]

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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 […]

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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