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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. […]

Posted On : Published By : Tom Whipple
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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 […]

Posted On : Published By : Tom Whipple
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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

Sign up for quick access to a wealth of global business news, including: Obama on cusp of winning Iran nuclear vote 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 no For […]

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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 […]

Posted On : Published By : Tom Whipple