Category:

Revenue cut by pipeline attacks, Kurdish government says

Kurdish government of Iraq says salaries for forces combating terrorism may be curbed following attacks on a key oil pipeline running north to a Turkish sea port. UPI/Mohammed al Jumaily ERBIL, Iraq, Aug. 19 (UPI) — The Kurdish government said theft and sabotage targeting an oil pipeline running to the Turkish sea port of Ceyhan has cost it around half a billion dollars. A section of the Kirkuk-Ceyhan oil pipeline, running from northern Iraq to Turkish ports, was bombed in southern Sirnak province in Turkey in late July. The pipeline has a maximum capacity of around 400,000 barrels of oil per day and serves as a main artery for the export of oil from the Kurdish north of Iraq. The Kurdish Ministry of Natural Resources said attacks, as well as pilfering, on the pipeline are a threat to the welfare of its constituents . "The estimated revenue loss to […]

Posted On : Published By : Tom Whipple
Category:

Saudi Oil Exports Rebound From Five-Month Low on Record Output

Saudi Arabia’s oil exports rebounded in June from a five-month low as the largest OPEC producer boosted output to a record. Exports climbed to 7.37 million barrels a day from 6.94 million barrels in May, according to data on the website of the Joint Organizations Data Initiative, or JODI. Output by the world’s biggest exporter rose to 10.564 million barrels daily from 10.3 million. Saudi Arabia told OPEC its June production was a record, exceeding a previous all-time high set in 1980. The 12-member Organization of Petroleum Exporting Countries has been boosting output for most of the past year to maintain market share amid higher production from the U.S. to Russia. That’s led to a glut in the market that’s pushed Brent crude prices down 15 percent this year. OPEC in June pumped 32.5 million barrels a day, a seven-year high, according to data compiled by Bloomberg. Saudi Arabia […]

Posted On : Published By : Tom Whipple
Category:

Yemen conflict: Country on brink of famine, says UN official

More than 21 million people in Yemen are in need of help, according to the UN Months of conflict in Yemen has pushed the country to the brink of famine, according to a top United Nations official. Ertharin Cousin, head of the UN’s World Food Programme (WFP), said markets in the country do not have enough food to feed the population. Aid agencies are also unable to reach areas of need because of the ongoing violence, she added. The WFP estimates that nearly 13 million people urgently require help. The conflict has involved Houthi rebel fighters clashing in many places with forces loyal to the Saudi-backed Yemeni government and its allies. ‘Perfect storm’ Ms Cousin, who was speaking in Cairo after a three-day trip to Yemen, said fighting around the major ports is stalling deliveries of aid. She said Yemen faced the "perfect storm" because those people most in […]

Posted On : Published By : Tom Whipple
Category:

Nigeria Refineries Low on Petrol Production

Current data on refineries production in Nigeria indicate that more heavy or fuel oils (low and high fuel oil/black oil) are being produced from the four refineries than other high demand products like premium motor spirit, PMS, otherwise known as petrol. The revelation comes despite assurances by the Nigerian National Petroleum Corporation, NNPC, which said last week that two of its refineries were working between 60 and 80 percent of their installed capacities. NNPC had promised that the four refineries would be re-streamed by July end, when the turn around maintenance, TAM, of the hitherto almost comatose refineries would have been rounding up, thus, buoying high hopes for imminent relief from products scarcity in the country. Capacity utilisation However, status of the refineries operations as at July 31, 2015, exclusively obtained by Sweetcrude, indicate that the refineries cannot still meet the daily consumption requirement of between 40 and 42 […]

Posted On : Published By : Tom Whipple
Category:

Islamic State claims Cairo courthouse bomb which wounded 29

A security official stands guard at the site of a bomb blast at a national security building in Shubra Al-Khaima, on the outskirts of Cairo, August 20, 2015. Islamic State’s Egypt affiliate said it was behind a car bombing that wounded 29 people near a state security building and courthouse in a Cairo suburb early on Thursday. A statement circulated on Twitter by supporters of the group, Sinai Province, said the bomb was a reprisal for the execution of six of its members convicted of carrying out an attack north of the Egyptian capital last year. "Let the apostates of the police and army, the followers of Jews, know we are a people who do not forget our revenge," the statement said. In May, Egypt executed six members of Sinai Province for attacking soldiers near Cairo in 2014. The men were convicted on charges which included carrying out an […]

Posted On : Published By : Tom Whipple
Category:

Kazakhstan floats tenge, currency tumbles

People wait in line outside a currency exchange office in Almaty, Kazakhstan, August 20, 2015. Kazakhstan’s under-pressure tenge lost more than a quarter of its value on Thursday after the oil producing central Asian nation, hit by a sharp fall in world crude prices, introduced a freely floating exchange rate for the currency. Acting against a backdrop of devaluation and depreciation in the currencies of some of its major trading partners and rivals, Kazakhstan’s government and central bank said the country’s economic policy would henceforth be based on inflation targeting. "This is not a devaluation, this is a transition to a freely floating rate when the market itself determines a balanced exchange rate on the basis of demand and offer," central bank Governor Kairat Kelimbetov told a news conference broadcast from the capital Astana. The official tenge rate tumbled by 26.2 percent to 255.26 per dollar on the Kazakhstan […]

Posted On : Published By : Tom Whipple
Category:

Low Oil Prices Could Break The “Fragile Five” Producing Nations

Persistently low oil prices have already inflicted economic pain on oil-producing countries. But with crude sticking near six-year lows, the risk of political turmoil is starting to rise. There are several countries in which the risks are the greatest – Algeria, Iraq, Libya, Nigeria, and Venezuela – and RBC Capital Markets has labeled them the “Fragile Five.” Iraq, facing instability from the ongoing fight with ISIS, has seen its problems compounded by the fall in oil prices, causing its budget to shrink significantly. The government is moving to tap the bond markets for the first time in years, looking to issue $6 billion in new debt. Revenues have been bolstered somewhat by continued gains in production. Iraq’s oil output hit a record high in July at 4.18 million barrels per day, up sharply from an average of 3.42 million barrels per day in the first quarter of this year. […]

Posted On : Published By : Tom Whipple
Category:

Mexico Hedges 2016 Oil Exports at $49 a Barrel

MEXICO CITY—Mexico hedged oil exports for 2016 at an average price of $49 a barrel, down 36% from the hedge for this year as oil prices tumble and domestic production declines. The hedging contracts covered 212 million barrels of crude oil, the Finance Ministry said late Wednesday. It cost the government about $1.1 billion, the highest sum since 2010. The 2016 oil hedge is well below the $76.40 a barrel at which the government hedged for this year. The Mexican crude-oil benchmark is trading near $38, some 60% lower than a year ago. Mexico, the world’s ninth-largest oil producer, uses the hedge to protect its public finances from unexpected oil shocks. The government buys options to guarantee a minimum price for its crude. But the oil hedge will provide only limited relief for a government accustomed in recent years to oil prices near $100 a barrel. About 18% of […]

Posted On : Published By : Tom Whipple
Category:

Chinese Stocks Resume Rout on Economy, Capital Outflow Concerns

China’s stocks slumped to a two-week low as concern a slowing economy and weaker currency will spur capital outflows outweighed prospects for more state support. The Shanghai Composite Index dropped 3.4 percent to 3,664.29 at the close, the lowest level since Aug. 6. About 17 percent of mainland-listed shares remain halted. The Hang Seng China Enterprises Index sank 2.3 percent to a 10-month low, while the Hang Seng Index closed within three points of entering a bear market. “The market will trade between 3,500 to 3,900 in the short term as market sentiment is still weak,” said Zhang Yanbing, a Shanghai-based analyst at Zheshang Securities Co. “Whether China’s stock market stabilizes will depend on future economic data and further easing policies.” Speculation about the degree of government intervention in stocks has increased since the securities regulator indicated Friday that the state will reduce buying and data showed the richest […]

Posted On : Published By : Tom Whipple
Category:

China’s Building a Huge Canal in Nicaragua, But We Couldn’t Find It

A man points out the towns that will be affected where the canal, red line, will be built across Nicaragua. Deep on the southeastern side of Lake Nicaragua, along a bumpy dirt road that climbs gently through lush-green forest, sits the tiny town of El Tule. It is quintessential rural Central America: Chickens roam outside tin-roofed homes while pigs stand tied to trees, awaiting slaughter; the sound of drunk locals singing along to ranchera music greeted visitors on a recent rain-soaked afternoon. The village, if you listen to Nicaraguan officials, is a key point in what will be the biggest infrastructure project the region has ever seen, the construction of a $50 billion canal slated to run 170 miles from the country’s east to west coast. Awarded two years ago by President Daniel Ortega to an obscure Chinese businessman named Wang Jing, the concession calls for El Tule to […]

Posted On : Published By : Tom Whipple
Category:

Yuan Devaluation, Slow China Economy Won’t Hurt Cathay, Chu Says

Cathay Pacific Airways Ltd. Chief Executive Officer Ivan Chu said the devaluation of the yuan and an economic slowdown won’t hurt demand in Greater China, where the airline gets half its revenue. Traffic growth in the region in the first half was in “double digits,” a reflection of a strong yuan against world currencies, Chu said in an interview Wednesday with Bloomberg Television’s Francine Lacqua from Hong Kong, where Cathay is based. The airline is still filling most of its seats, but Chu said he is concerned about cargo, especially fewer goods coming out of China for exports. “The renminbi has been rising for the last five years, it has been a one-way bet,” said Chu, 53. “Some adjustments, some growth slowing down from 10 percent to 7 percent is not a huge deal. So any economy when it’s growing so fast, you have some correction. So I do […]

Posted On : Published By : Tom Whipple
Category:

Oil Companies Sit on Hands at Auction for Leases

Photo Oil pumping jacks and drilling pads at the Kern River Oil Field in Bakersfield, Calif. Credit Mark Ralston/Agence France-Presse — Getty Images HOUSTON — With oil prices collapsing and companies in retrenchment, a federal auction in the Gulf of Mexico on Wednesday attracted the lowest interest from producers since 1986. It was the clearest sign yet that the fortunes of oil companies are skidding so fast that they now need to cut back on plans for production well into the future. The auction, for drilling leases, attracted a scant $22.7 million in sales from five companies, but energy analysts said that came as no surprise on a day when the American oil benchmark price plummeted by more than 4 percent. For the first time since the recession, it is approaching the symbolic $40-a-barrel level. Last summer, it was above $100 a barrel. A glut on American and world […]

Posted On : Published By : Tom Whipple
Category:

Energy Slowdown Hits One Town Hard

WAYNESBURG, Pa.—As fracking took off here over the past eight years, so did Gary Bowers’s business supplying everything from Gatorade to replacement valves to crews drilling into natural-gas reserves a mile underground. This year, however, the good times at his firm, Producers Supply Co., came to a screeching halt. Since January, the company’s monthly sales have declined by more than half, as the number of drilling rigs operating in the Marcellus Shale has plummeted to 70 from 131 at the end of last year. “This thing is spiraling down, and we don’t know how long it’s going to last,” said Mr. Bowers, who expects the rig count to keep falling. “It’s new territory for Appalachia.” The economic pain from lower oil and gas prices is spreading to small towns and businesses across Pennsylvania and parts of Ohio and West Virginia that had been riding a wave of prosperity from […]

Posted On : Published By : Tom Whipple
Category:

Auto Industry’s Ranks of Electric-Car Battery Suppliers Narrow

Failed technology gambles and a half-decade of jockeying among suppliers have top auto makers increasing choosing LG, Samsung Electronics Co. SSNHZ 0.00 % ’s SDI unit and Panasonic Corp. PCRFY -0.79 % The three are emerging as the early winners amid a shift by car companies away from in-house efforts, traditional battery makers and startup ventures. Their quick rise as key suppliers to European, Asian and U.S. car makers is remarkable for an industry that typically insists on reducing risks by building key components such as engines in-house—or using lots of suppliers for less-critical parts. In part, experts say few companies so far have shown they can meet the challenge of building advanced batteries with the quality, weight and cost expectations that auto makers demand. And the technology is moving so fast that few auto makers have tried to master the exotic chemistry required. Of course, electric cars remain […]

Posted On : Published By : Tom Whipple
Category:

Canadian Oil-Sands Producers Struggle

CALGARY, Alberta—Canada’s high-cost oil-sands producers are struggling as oil prices sink to fresh six-year lows, and even the most efficient drillers are losing money on every barrel they produce at current prices, according to a report published Wednesday. Canadian oil-sands production has grown 30% in the past five years but the recent price slump has hit producers’ bottom lines and forced them to suspend development of new projects. Western Canadian heavy crude costs more to extract than other oil sources because it must be separated from deposits of sand. It also trades at a discount to other crudes, in part because of the distance it must be transported from remote boreal forests in Alberta. Benchmark West Texas Intermediate oil cost less than $41 a barrel in Wednesday trading, which although at multiyear lows was still well above the Western Canadian Select average of around $24 a barrel. More than […]

Posted On : Published By : Tom Whipple
Category:

Marcellus Shale Gas Revolution Deals Blow to Rockies’ Producers

Eight years ago, a group of companies led by Kinder Morgan Energy Partners began building a $6.8 billion pipeline to carry natural gas from America’s Rocky Mountains to fuel-hungry markets in the East. Then came the shale gas revolution. The eastern U.S. is now home to the country’s most productive formation, the Marcellus, and the 1,698-mile Rockies Express is carrying lower-cost gas in the opposite direction. On Aug. 1, the pipeline was partially reversed, shrinking the market for Colorado and Wyoming drillers who’ve seen their share prices fall as much as 93 percent from 2008 highs. The burgeoning supply from Pennsylvania and West Virginia has transformed the U.S. gas market, redirecting pipeline flows and sending prices plummeting. Output from the Niobrara shale formation in Colorado and Wyoming has dropped 12 percent from an all-time high in 2012 as production from the region competes with the Marcellus, where output is […]

Posted On : Published By : Tom Whipple
Category:

Strong jobs, weak inflation data muddy Fed rate debate: minutes

U.S. Federal Reserve officials widely agreed last month the economy was nearing the point where interest rates should move higher, but worried lagging inflation and a weak global economy posed too big a risk to commit to "liftoff." Only one Fed policymaker was ready to vote for a rate hike at the central bank’s July 28-29 policy meeting, while some others "viewed the economic conditions for beginning to increase the target range for the federal funds rate as having been met or were confident that they would be met shortly," according to minutes from the meeting released on Wednesday. "Most judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," the minutes said. That sentiment, combined with a broader recognition among "many members" that full employment was close, led the Fed to say in its post-meeting statement that […]

Posted On : Published By : Tom Whipple
Category:

Athabasca oilsands operations hit by water shortages

Alberta’s first oilsands operation, Bitumont, on the shore of Athabasca River near Fort McMurray, Alta. Many oilsands operators are facing water restrictions due to low water levels. (Jeff McIntosh/Canadian Press) It’s wreaked havoc on crops and shut down fisheries across Alberta, but now the hot dry weather and ensuing stresses on our rivers have hit the oilsands. This week the Alberta Energy Regulator reined in oil companies by imposing restrictions on how much water they can draw from the North Athabasca basin. Those in the lower Athabasca region — including heavy hitters Suncor, Syncrude and CNRL — are not affected by the restrictions. ‘Preview of the future’ Simon Donner says a University of British Columbia study he helped to write predicted this would happen. He says this year’s low flows are the result of both climate change and a strong El Nino event that’s developing. "With regulators this week […]

Posted On : Published By : Tom Whipple
Category:

As Canada’s Oil Debt Soars to Record, an Industry Shakeout Looms

Canadian energy companies’ debt loads are the heaviest in at least a decade, boosting concern that some won’t survive the collapse in crude prices. (Bloomberg) — Canadian energy companies’ debt loads are the heaviest in at least a decade, boosting concern that some won’t survive the collapse in crude prices. Trican Well Service Ltd., Canada’s largest fracking service provider, said last week it may be unable to continue because it’s in danger of breaching the terms of its debt. It’s the latest firm to see crude’s descent to a six-year low sap the cash flow needed to meet financial obligations. Oil’s plunge has pushed a measure of the average debt burden among Canadian energy firms to the highest since at least 2002, and another measure of their ability to make interest payments to the third-lowest level in a decade, according to data compiled by Bloomberg. Facing some of the […]

Posted On : Published By : Tom Whipple
Category:

Texas RRC June Production Data

The Texas RRC Oil & Gas Production Estimates are in. By now everyone should know that the Texas oil and gas data is incomplete and the drooping data lines will eventually look more like the EIA lines as the more and more data comes. The EIA data is only through May but all Texas Railroad Commission data is through June. Texas C+C It appears that Texas C+C was flat to slightly up in June. Dean C+C Dr. Dean Fantazzini has a program that attempts to correct for the incomplete data and give a pretty good estimate of what the final data will look like. He has April C+C down, May down also but only slightly so and has June Texas Crude+Condensate up slightly. Texas crude only appears to have increased slightly. Dean Oil Dean has crude only pretty much the same as C+C for April, May and June except […]

Posted On : Published By : Tom Whipple
Category:

Can Bakken Break Even at $30?

Crude Plunges to Six Year Low Crude oil has fallen to a six year low in recent weeks, but even at the current price of around $43, analysts speculate the Bakken will remain strong. Related: Oil Plunges to Six Year Low West Texas Intermediate crude is now down more than 30% in just the last few months after a 50% rebound earlier this spring. Bloomberg reported this week that a lower profitability point from producers has allowed U.S. oil production to remain near a 40-year high. Bloomberg Analyst, William Foile said, “A single break-even price doesn’t actually exist. Rather, what the model indicates is that at a realized oil price of $29.42, half of wells will generate returns exceeding 10%. This price is considerably lower than the $70 breakeven estimated by industry watchers at the start of the oil price slump.” In McKenzie County, North Dakota, one estimate is […]

Posted On : Published By : Tom Whipple
Category:

Shale-rich Colorado welcomes EPA methane proposals

Colorado Gov. John Hickenlooper says EPA proposals for methane emissions for the oil and gas industry model rules on the books for shale companies working in his state. File Photo by UPI/Mike Theiler DENVER, Aug. 19 (UPI) — The proposal to cut methane emissions from the oil and gas industry models Western state shale rules is already on the books, Colorado’s governor said. The U.S. Environmental Protection Agency called for the first-ever mandates regarding methane emissions generated by the oil and gas industry. Over the next decade, the industry would need to cut methane emissions by at least 40 percent from their 2012 levels. "We are underscoring our commitment to reducing the pollution fueling climate change and protecting public health while supporting responsible energy development, transparency and accountability," EPA Administrator Gina McCarthy said in a statement. The EPA described methane as the second-most prevalent greenhouse gas emitted from human […]

Posted On : Published By : Tom Whipple
Category:

Report: Groundwater pumping in California has land sinking

AP Photo/Florence Low FRESNO, Calif. (AP) — Vast areas of California’s Central Valley are sinking faster than in the past as massive amounts of groundwater are pumped during the historic drought, state officials said Wednesday, citing new research by NASA scientists. The data shows the ground is sinking nearly two inches each month in some places, putting roads, bridges and vital canals that deliver water throughout the state at growing risk of damage. Sinking land has occurred for decades in California because of excessive groundwater pumping during dry years, but the new data shows it is happening faster as the state endures its fourth year of drought. "We are pumping at historic levels," said Mark Cowin, head of the California Department of Water Resources. He added that groundwater levels are dropping to record levels – up to 100 feet lower than previously recorded. Scientists at NASA’s Jet Propulsion Laboratory […]

Posted On : Published By : Tom Whipple
Category:

Oil Refinery Outage Outlook Adds to Pressure on Slumping Prices

Crude markets already in a downward spiral sank under the weight of a supply report showing growing stockpiles of oil after a major U.S. Midwest refinery shutdown. And the oversupply may just be getting started. A heavy slate of refinery maintenance in the region this fall threatens to make inventory builds in Cushing, Oklahoma, a common occurrence. The outages will follow trouble at BP Plc’s Whiting refinery in Indiana that meant about 1.5 million barrels of oil didn’t get consumed last week. “There is a lot of maintenance scheduled in the fall,” said John Auers, senior vice president at Turner Mason & Co., a Dallas-based energy consultancy. “Having a lot of plants down for turnarounds tends to push us into an oversupply situation and starts widening out the domestic-international spread.” Heavy refinery outages would leave more crude to fill storage tanks, forcing U.S. prices to fall to encourage shippers […]

Posted On : Published By : Tom Whipple
Category:

Trying to Break the U.S. Energy System for Its Own Good

Cooling towers are reflected in a puddle in Winfield, West Virginia. Photographer: Luke Sharrett/Bloomberg The White House doesn’t want anyone to panic over its new climate rules. Instead of marking a big shift, the Obama team believes the Clean Power Plan is piggybacking on trends already under way in the economy: Natural gas is killing off coal; solar and wind are cheaper than ever; state-level renewable energy and climate policies are spreading. Americans won’t feel a thing. That’s why the head of the Environmental Protection Agency, in her first public appearance since the release of the climate plan, emphasized that the rules wouldn’t cause a disruption for energy companies. "I don’t expect that the energy industry is going to take a right turn," Gina McCarthy said last week . Yet just a short jaunt across the National Mall from the EPA’s headquarters, another part of the executive branch is […]

Posted On : Published By : Tom Whipple
Category:

British shale company nabs more acreage

British shale company Cuadrilla Resources awarded new acreage for fledgling campaign in the country. Photo by photostock77/Shutterstock LONDON, Aug. 19 (UPI) — British shale natural gas pioneer Cuadrilla Resources said it was awarded two new licenses to explore the reserve potential in Yorkshire. Cuadrilla secured licenses to explore around 750 square miles of combined land in Yorkshire . During the next year, the company said most of the activity would consist of "desktop studies" that will give the company a better idea of the geology and reserve potential. "While we continue to progress our shale gas exploration work in Lancashire, we welcome the potential for exploration in Yorkshire along with the associated benefits of new jobs and economic growth we believe it will bring," Cuadrilla Chief Executive Officer Francis Egan said in a statement. The British Geological Survey started a baseline environmental survey in Yorkshire last week. Third Energy […]

Posted On : Published By : Tom Whipple
Category:

Kremlin: No word yet on Turkish gas pipeline

Turkey aims to exploit its geographical position to serve as an energy bridge for oil and natural gas supplies running from Eastern economies to Europe. Photo by tcly/Shutterstock MOSCOW, Aug. 19 (UPI) — A source close to Russian energy ministry discussions told state media there are no proposals in the Kremlin from Turkey on a proposed natural gas pipeline. A representative in the Russian Energy Ministry told state news agency ITAR-Tass last week the Kremlin has sent two offers to the Turkish government for consideration on a pipeline project dubbed Turkish Stream. On Wednesday, similar sources said there is still no word on the project from the Turkish government. Russia, the source was quoted as saying, was ready for a "phased implementation" of the project. Earlier, the Turkish government said Russian planners hadn’t come forward with route coordinates for the pipeline through the country . The project can’t move […]

Posted On : Published By : Tom Whipple
Category:

Norway’s Economy Stagnates as Oil Plunge Saps Investments

Norway’s economic growth slowed in the second quarter as plunging crude prices sap investments and drive up unemployment in western Europe’s biggest petroleum producer. Seasonally adjusted gross domestic product, excluding oil, gas and shipping, grew 0.2 percent, after expanding a revised 0.3 percent in the first quarter, Oslo-based Statistics Norway said on Thursday. Mainland growth was seen at 0.2 percent in a Bloomberg survey. Total output shrank 0.1 percent. “We have confirmation that the economy is decelerating,” said Kjersti Haugland, an analyst at DNB ASA. “There will be a prolonged period of slow growth” as the impact of lower oil prices feeds into the economy, she said. The slump in oil prices is proving painful for Norway’s economy, with almost half its exports related to petroleum. Crude producers and service companies such as state-controlled Statoil ASA have cut more than 20,000 jobs, sending ripples through an economy where one […]

Posted On : Published By : Tom Whipple
Category:

Oil prices fall again as lower demand U.S. season looms

A worker fills a tank with subsidized fuel at a fuel station in Jakarta April 18, 2013. Oil prices fell on Wednesday after eking out gains in the previous session, with the United States set to enter the lower demand autumn season and Asia’s leading economies continuing to show signs of slowing down. Oil prices edged up on Tuesday after the release of bullish U.S. economic data and as traders placed bets on the prospect of falling crude stockpiles. But a rout that has dominated the past six weeks remains in force, analysts say, and U.S. West Texas Intermediate (WTI) crude and internationally traded Brent have dropped back again. "Any recovery in WTI prices from a six-year low may be short-lived with the U.S. entering the slow demand period in September," ANZ bank said on Wednesday. U.S. crude futures CLc1 were trading at $42.42 per barrel at 0656 GMT, […]

Posted On : Published By : Tom Whipple
Category:

Oil Bounces Back on Profit Taking

Oil prices rebounded Tuesday as bargain buyers and profit takers outweighed some of the pressure from Chinese economic concerns and strong supply that have recently added to oil’s fall. West Texas Intermediate crude hit a six-year low just a day ago, causing many bearish traders to hesitate on selling more futures, analysts said. Crude has had such a large and steady collapse—down about 60% from 2014’s highs—that many will use the…

Posted On : Published By : Tom Whipple
Category:

U.S. oil prices near six-year lows as China weighs

A drop of diesel is seen at the tip of a nozzle after a fuel station customer fills her car’s tank in Sint Pieters Leeuw December 5, 2014. Wholesale petrol prices have slumped by 35.5 percent since reaching their peak for the year in June, but in more than half of European… U.S. oil prices fell toward six-year lows on Tuesday after stock markets tumbled in China, the world’s largest energy consumer, adding to worries about global fuel demand at a time of heavy oversupply. Chinese stocks fell 6 percent on Tuesday as the yuan weakened against the dollar, raising fears that Beijing may further devalue the currency. Such a move could decrease China’s consumption and import levels. Industrial metals, including copper, also traded near six-year lows, adding to bearish market sentiment. "That is dragging oil lower – it was in bearish territory to start with," SEB chief commodity […]

Posted On : Published By : Tom Whipple
Category:

Democratic Senator Menendez announces opposition to Iran deal

Senator Bob Menendez speaks at Seton Hall University in South Orange, New Jersey August 18, 2015. Senator Robert Menendez issued a scathing critique of the U.S.-led international nuclear deal with Iran on Tuesday and became the second senior lawmaker from President Barack Obama’s own party to announce he would vote to kill the pact with Tehran. Defying Obama and many other fellow Democrats, Menendez said in a speech in his home state of New Jersey: "I will vote to disapprove the agreement and, if called upon, would vote to override a veto" by the president. The Senate and House of Representatives have to vote by Sept. 17 on a "resolution of disapproval" being brought by majority Republicans aiming to sink the deal. Obama is trying to gather enough support among Democrats to sustain a veto of the resolution. Under the agreement between six major powers and Iran, new curbs […]

Posted On : Published By : Tom Whipple
Category:

Iraq Hires Banks Including Citigroup for $6 Billion Sale

Iraq hired banks for its first international bond issue in almost a decade, seeking $6 billion to help plug a widening fiscal deficit. The government appointed Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co., said Muneer Mohammed Omran, director general of the central bank’s investor department in Baghdad. The bond program will be in tranches, with the first sale coming this year, he said by phone Tuesday. Spokesmen for the banks declined to comment. Iraq, holder of the world’s fifth-largest oil reserves, is looking to bolster its finances amid civil conflict and the global slump in oil prices. Fitch Ratings expects the fiscal deficit to top 10 percent for 2015 because of lower crude prices, higher military spending and costs associated with civil unrest. It ranked Iraq five levels below investment grade this month in its first ratings for the country. “Iraq is going through some difficulties […]

Posted On : Published By : Tom Whipple
Category:

Saudi Stocks Sink Into Death Cross as IMF Sees Growth Slowing

Investors sold Saudi Arabian stocks after an International Monetary Fund warning of slowing growth in the Middle East’s biggest economy tipped the equity index into a so-called death cross. Dubai’s shares also slumped. The Tadawul All Share Index slid for a sixth day, closing 2.9 percent lower at 8,197.02, the weakest level in more than seven months. That dragged its 50-day moving average below the 200-day moving average, a signal to some investors that further declines are in store. Al Rajhi Bank’s 2.9 percent decrease was the biggest contributer to the loss. Dubai’s DFM General Index slipped 2.5 percent to the lowest close since April 13. The Tadawul’s drop comes two months after Saudi Arabia opened its stock market to direct foreign investment for the first time to help diversify its economy away from oil. It puts into focus the deepening concern that King Salman is pushing ahead with […]

Posted On : Published By : Tom Whipple
Category:

Divisions and Inertia in Congress May Hand Obama a Victory on Iran Deal

WASHINGTON — Partisanship has become the pre-eminent scapegoat for American political failure, an all-purpose explanation for Washington’s inability to act. Yet in rare circumstances, it can actually guarantee action. So, notwithstanding an acrimonious debate, polarization makes the United States’ acceptance of the Iran nuclear deal very likely. That is because the mechanism for congressional consideration, agreed on by Republican leaders and the White House , reverses the typical legislative imperative. Instead of requiring an extraordinary majority to act, it requires one to stop action — which means partisanship is all President Obama needs to approve the deal. The Republican-controlled House and Senate can pass a resolution next month disapproving the deal, as lawmakers in both parties expect they will. Mr. Obama can then veto that resolution, as he has promised to do. To override that veto and block the deal, Republican leaders would need two-thirds majorities in each chamber. […]

Posted On : Published By : Tom Whipple
Category:

US should reject Iran deal, consider oil exports to keep allies: key Democrat

A key Senate Democrat on Tuesday said the P5+1 should have struck a better nuclear deal with Iran, urging Congress to reject the agreement and the Obama administration to assuage US allies by considering exports of US oil to countries that had previously purchased Iranian crude. Senator Bob Menendez of New Jersey, a former chairman of the Senate Foreign Relations Committee, has been one of a handful of Democrats to break from President Barack Obama on the Iran deal. In a speech at Seton Hall University in his home state, Menendez said Congress should pass a resolution of disapproval on the nuclear pact, and the Obama administration should renegotiate with Iran for more stringent restrictions on its nuclear program. And as it negotiates, the US should "consider licensing the strategic export of American oil to allied countries struggling with supply because Iranian oil remains off the market," he said. […]

Posted On : Published By : Tom Whipple
Category:

KRG oil revenue entangled in presidency crisis

Kurdistan President Massoud Barzani speaks in Dohuk on Aug. 3, 2015. (ARI JALAL/Reuters) Kurdistan’s oil revenue flows have become clogged in the political controversy engulfing the region over the tenure of President Massoud Barzani.The Kurdistan Regional Government’s (KRG) Finance Ministry said Tuesday it has not received any money from June or July oil sales, and called on the Ministry of Natural Resources (MNR) to release the funds. The MNR blamed the Finance Ministry for failing to effect the transfers.The MNR is controlled by Barzani’s Kurdistan Democratic Party (KDP) … This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
Category:

OPEC’s ‘Fragile Five’ Face Rising Cost in the Fight for Oil Market Share

The costs of OPEC’s plan to protect members’ share of the oil market by out-producing rivals are mounting. As oil prices slump to six-year lows, the risks of worsening political turmoil are rising in the organization’s most vulnerable nations. This includes Algeria, Iraq, Libya, Nigeria and Venezuela, a group dubbed the ‘Fragile Five’ by RBC Capital Markets Ltd. The pain doesn’t end there. With even Saudi Arabia facing its biggest budget deficit in almost three decades, consultant Petromatrix GmbH says the plan to produce at full throttle was a “strategic mistake.” Oil prices slumped to near $40 a barrel in New York on Aug. 14 as a global surplus endures almost nine months after the Organization of Petroleum Exporting Countries unveiled its plan to squeeze rivals led by U.S. shale drillers. American production has stubbornly refused to buckle. This chart shows how the budget position of Saudi Arabia and […]

Posted On : Published By : Tom Whipple
Category:

Yuan Ripples Reach Kazakhstan as Tenge Tumbles Most Since 2014

Kazakhstan allowed its tenge to weaken the most since a devaluation 18 months ago, signaling Central Asia’s biggest crude exporter wants to adjust to declines in the currencies of its top trading partners, China and Russia. The tenge declined 4.4 percent to 197 per dollar by 2:29 p.m. in Almaty. That was the steepest retreat since February 2014 when the central bank, which uses its foreign-currency reserves to manage the exchange rate within a trading band versus the dollar, depreciated it by about 20 percent. Central bank representatives weren’t available to comment when contacted by Bloomberg. Pressure is mounting on countries that trade with China to let their currencies weaken after the yuan slide last week made their exports less competitive. Kazakhstan has also suffered from oil’s 22 percent retreat in the past two months, especially since its northern neighbor and trading partner Russia is allowing the ruble to […]

Posted On : Published By : Tom Whipple
Category:

Angola to Ship Most Crude in Four Years to Meet Asian Demand

Angola will export the most crude in almost four years in October as the OPEC member satisfies Asian demand and offsets diminished revenue from lower oil prices. Africa’s second-largest producer plans to ship 1.83 million barrels a day in October, the most since November 2011, according to a preliminary loading program obtained by Bloomberg. This compares with 1.77 million barrels a day in September. Angola slashed its budget by a quarter in response to the slump in crude prices, which have lost more than 50 percent in the past year. The African nation’s bid to recapture revenues is supported by demand in China, the world’s second-biggest oil-consumer, which imported near-record levels of crude in July. “Angola continues to profit mainly from Chinese demand, in addition to some demand from India and Indonesia,” said Ehsan Ul-Haq, an analyst at KBC Economics in London. The single biggest increase will be in […]

Posted On : Published By : Tom Whipple
Category:

Oil is cheaper than it’s been in years. Why aren’t gas prices?

(Susana Gonzalez/Bloomberg) Oil prices have fallen this month to their lowest point in years, but fuel costs haven’t fallen nearly as quickly. While West Texas Intermediate crude, a U.S. benchmark, has dropped 15 percent in the last month, the cheapest it has been since 2009, prices at the pump have slipped just 3 percent. A barrel of crude cost $42.61 Tuesday afternoon. The national average for a gallon of regular-grade gasoline is now $2.66, according to AAA, still much cheaper than last year but well above what a gallon cost last winter. The gulf owes to a handful of factors — more people drive in the summer, for example, and the blend of gasoline produced this time of year is costlier to make — but gas prices have also been pushed up by trouble at a refinery in Indiana, industry followers say. Machinery issues at BP’s refinery in Whiting, […]

Posted On : Published By : Tom Whipple
Category:

Asia shares shaken as China stocks extend plunge

A man walks past a display showing stock prices in Tokyo August 12, 2015. Asian shares retreated to two-year lows on Wednesday after Chinese stocks extended their plunge, continuing to stoke fears about the stability of China’s economy. With Chinese stocks steepening their decline, spreadbetters forecast a lower open from Britain’s FTSE .FTSE , Germany’s DAX .GDAXI and France’s CAC .FCHI . The Shanghai Composite Index .SSEC retreated 2.8 percent, extending Tuesday’s 6 percent slide, amid growing worries that the government could be scaling back its rescue efforts. [.SS] "Market confidence was hit the most by signs that the ‘national team’ is starting to retreat," Zhou Lin, analyst at Huatai Securities said, referring to government funds that bought stocks in early summer to halt a market rout. China’s securities regulator said late last week that the market had normalized and the government would allow market forces to play a […]

Posted On : Published By : Tom Whipple
Category:

Pennsylvania’s governor issues crude-by-rail study he commissioned

Pennsylvania Gov. Tom Wolf (D) issued a study he commissioned in late April of issues stemming from the growing number of crude oil shipments by rail across the state. The report by Allan M. Zarembski, who directs the Railroad Engineering Program at the University of Delaware’s Civil and Environmental Engineering Department, made 27 recommendations including calls for more frequent track inspections and adoption of several voluntary safety measures. “Every week, roughly 60-70 trains carrying crude oil travel through Pennsylvania destined for Philadelphia or another East Coast refinery, and I have expressed grave concern regarding the transportation of this oil and have taken several steps to prevent potential oil train derailments,” Wolf said as he released the report on Aug. 17. “Protecting Pennsylvanians is my top priority and Dr. Zarembski’s report is important in helping my administration take the necessary steps,” he said. “I will also continue to work with […]

Posted On : Published By : Tom Whipple
Category:

US House leaders press BP for answers on Whiting refinery outage

Leaders in the US House of Representatives are demanding answers from BP PLC regarding the early August unplanned and still ongoing shutdown of a major processing unit at its 413,000-b/d refinery in Whiting, Ind. Reps. Jackie Walorski (R-Ind.) and Fred Upton (R-Ind.) have sent a letter to BP Chief Executive Robert Dudley asking for information pertaining to the sudden closing of the refinery unit on Aug. 8, which has caused a sharp spike in gas prices throughout the upper Midwest, Walorski and Upton said in a joint release. “Some areas of the Midwest have seen prices rise over $1/gal over a 24-hr period, disproportionately affecting the most vulnerable of our constituents and resulting in large unpredicted costs in getting goods to market across the region,” the House members wrote. In addition to noting the immediate hardship posed to constituents in their districts as a result of rising prices at […]

Posted On : Published By : Tom Whipple
Category:

Unplanned refinery outage leads to higher Midwest gasoline prices

graph of retail prices regular gasoline, as explained in the article text On August 8, the BP refinery in Whiting, Indiana, the largest petroleum refinery in the Midwest , experienced an unplanned outage and was forced to reduce production. The BP Whiting refinery has a crude oil distillation unit (CDU) capacity of 413,500 barrels per calendar day (b/d), and it is an important source of gasoline and distillate fuel oil supply to the region. Press reports indicate that the largest of three crude oil distillation units at the refinery was shut down because of leaking pipes, cutting the refinery’s total operable CDU capacity by roughly 50%. EIA estimates the loss of gasoline production from that unit to be between 120,000 b/d and 140,000 b/d, based on May 2015 refinery yield data for the region and press reports of the refinery running at 40% capacity. Initial estimates are that it […]

Posted On : Published By : Tom Whipple
Category:

Clinton splits from Obama over offshore oil drilling in Arctic

Sign up for quick access to a wealth of global business news, including: Clinton splits from Obama over offshore oil drilling in Arctic Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no […]

Posted On : Published By : Tom Whipple
Category:

Rail fading from North Dakota oil transit

State data from North Dakota show rail transport of crude oil falling back after peaking in December 2014. Graph courtesy of the North Dakota Pipeline Authority BISMARCK, N.D., Aug. 18 (UPI) — New pipelines operating in North Dakota have pushed the volume of crude oil by rail lower during the first half of the year, a state official said. Rail broke away from pipelines as the main source of crude oil delivery in 2012. The boom in shale oil production from the so-called Williston basin, hosting the Bakken and Three Forks shale formations, had outpaced pipeline capacity, leaving companies with rail as the primary alternative transit option. After peaking in December 2014, when the state set its crude oil production record at 1.22 million barrels per day, transport by rail has been in a general decline and is now at parity with pipeline transport. Justin Kringstad, director of the […]

Posted On : Published By : Tom Whipple
Category:

Europe struggles to respond as migrants numbers rise threefold

More than three times as many migrants were tracked entering the European Union by irregular means last month than a year ago, official data showed on Tuesday, many of them landing on Greek islands after fleeing conflict in Syria. While the increase recorded by the European Union’s border control agency Frontex may be partly due to better monitoring, it highlighted the scale of a crisis that has led to more than 2,000 deaths this year as desperate migrants take to rickety boats. Italian police said they had arrested eight suspected human traffickers that they said had reportedly forced migrants to stay in the hold of a fishing boat in the Mediterranean as 49 of them suffocated on engine fumes. Some of those traffickers were accused of kicking the heads of the migrants when they tried to climb out of the hold as the air became unbreathable, prosecutor Michelangelo Patane […]

Posted On : Published By : Tom Whipple
Category:

Commerzbank Cutting Russia Debt Worsens Bond Rout as Ruble Falls

Russian bonds fell for a third day and the ruble retreated as Commerzbank AG recommended selling the nation’s local debt as sliding oil prices make it less likely that the central bank can press on with interest-rate cuts The decline in five-year OFZ bonds lifted the yield three basis points to 11.26 percent, set for the highest level in a month. The currency weakened 0.5 percent to 65.8560 per dollar by 6:08 p.m. in Moscow, a six-month low as President Vladimir Putin said he discussed the currency on Tuesday with Prime Minister Dmitry Medvedev. Assets in the world’s biggest energy exporter are under pressure as oil trades in a bear market, diminishing the scope for deeper reductions in borrowing costs after the Bank of Russia lowered them by 600 basis points this year. Brent oil fell for a fourth day, dropping 0.4 percent to $48.53 a barrel, headed for […]

Posted On : Published By : Tom Whipple