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BP fights to blow away gas market rigging case

Sign up for quick access to a wealth of global business news, including: BP fights to blow away gas market rigging case 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 […]

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Russia Says Ukraine Preparing New Offensive Against Separatists

MOSCOW — Russia’s foreign minister Sergei Lavrov said on Monday he suspected Ukraine was preparing a new offensive against pro-Moscow separatists in east Ukraine following an upsurge in fighting. Clashes near the port city of Mariupol and the rebel-held town of Gorlivka have put further strain on a fragile ceasefire between Ukrainian government forces and the separatists. "We are worried by the developments in recent days which strongly recall preparation for more military actions," Lavrov told a news conference, accusing Kiev of breaking the terms of a ceasefire. "It was like that in August last year when Ukrainian soldiers received the order to attack. … It was like that in January of this year. One shouldn’t be experimenting and trying one’s luck, one should simply fulfill what was agreed in Minsk." Both sides have withdrawn artillery guns, tanks and other heavy weapons under the terms of the Minsk peace […]

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What is the price of oil telling us?

Market fundamentalists tell us that prices convey information. Yet, while our barbers and hairdressers might be able to give us an extended account of why their prices have changed in the last few years, commodities such as oil– which reached a six-year low last week –stand mute. To fill that silence, many people are only too eager to speak for oil. And, they have been speaking volumes. So much information in that one price! First, as prices fell last year when OPEC refused to cut its oil production in the face of slowing world demand, the industry kept saying that it could continue to produce from American tight oil fields at around $80 a barrel and be profitable . Then, as prices fell further, the industry and its consultants assured everyone that while growth in tight oil production would slow, it would still be profitable for the vast majority […]

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Population and climate instability will lead to severe food shortages by 2050

The food industry has become much more efficient in the last few decades as a result of globalization, but also a lot more vulnerable to shocks. Climate change will lead not only to increased temperatures, but the extreme weather it causes in North, South America and Asia are likely to also lead to global food shortages. Severe production shocks, with the food shortages, price spikes and market volatility that come with are likely to become three times as usual than today, according to a joint report by a US-British task force. These are likely to occur every 30 years by 2040. The Task force on Extreme Weather and Global Food System Resilience estimated that due to a rise in the world population from 7.3 billion to 9 billion in 2050, food production will need to increase by more than 60 percent and climate-linked market disruptions could lead to civil […]

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Approaching A Global Deflationary Crisis?

Anyone with any sense for global economic trends ought to be worried. The signs are everywhere of a serious deflationary crisis. It is obvious that Chinese growth is falling. The prices for energy and the raw materials that feed the growth economy keep falling. The demand for Chinese exports is down too. Stock Markets in Asia are falling, despite attempts to prop them up. Countries are being tempted to export their problems abroad – for example by competitive devaluation. In Europe its obvious that a “solution” is being cobbled together for the Euro and Greek crisis even though no one at all believes that it will work. At the same time the policy response of “quantitative easing” which has kept interest rates down very low has reached the end of the road. With interest rates at or near to zero the scope for addressing the crisis through monetary policy […]

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Why an Oil Glut May Lead to a New World of Energy

The plunge of global oil prices began in June 2014, when benchmark Brent crude was selling at $114 per barrel. It hit bottom at $46 this January, a near-collapse widely viewed as a major but temporary calamity for the energy industry. Such low prices were expected to force many high-cost operators, especially American shale oil producers, out of the market, while stoking fresh demand and so pushing those numbers back up again. When Brent rose to $66 per barrel this May, many oil industry executives breathed a sigh of relief. The worst was over. The price had “reached a bottom” and it “doesn’t look like it is going back,” a senior Saudi official observed at the time. Skip ahead three months and that springtime of optimism has evaporated. Major producers continue to pump out record levels of crude and world demand remains essentially flat. The result: a global oil […]

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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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Optimistic Oil Experts Still See Rally as Crude Hits New Lows

(Bloomberg) — Oil analysts are, if nothing else, optimists. So much so that no one seemed to see the 60 percent slide in oil prices coming when the commodity was trading at almost $108 a barrel on June 20, 2014. At the time, analysts as a group predicted oil would average about $100 a barrel this quarter and the most pessimistic called for $84, instead of the low $40s it’s languishing at. Analysts are still mostly sunny, looking for a 60 percent rally by late next year. Even the worst month for oil since 2008 has brought out just a few frowns, as Societe Generale SA and Canadian Imperial Bank of Commerce cut their estimates in the past week by more than $10 a barrel. The prognosticator looking smart? Goldman Sachs, which in May said the rally would fizzle. “Oil prices have so many moving parts that it’s exquisitely […]

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Tomgram: Michael Klare, Big Oil in Retreat

On July 14, 2011, at TomDispatch , Bill McKibben wrote that he and a few other “veteran environmentalists” had issued a call for activists to descend on the White House and “risk arrest to demand something simple and concrete from President Obama: that he refuse to grant a license for Keystone XL, a new pipeline from Alberta to the Gulf of Mexico that would vastly increase the flow of tar sands oil through the U.S., ensuring that the exploitation of Alberta’s tar sands will only increase.” It must have seemed like a long shot at the time, but McKibben urged the prospective demonstrators on, pointing out that “Alberta’s tar sands are the continent’s biggest carbon bomb,” especially “dirty” to produce and burn in terms of the release of carbon dioxide and so the heating of the planet. Just over four years later, the president, whose administration recently green-lighted Shell […]

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Iran is hiding more oil at sea than we realized

Western companies eye Iran’s business potential One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea. That’s a key question because Iran’s nuclear deal with the West could lift crippling sanctions, and pave the way for tons of Iranian oil to hit the market . A surge in Iranian exports would only deepen the oil supply glut that has sent prices to fresh six-year lows this week to below $43. Iran claims it’s not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran’s vessels held 30 million to 40 million barrels of oil. But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That’s up nearly 150% from April 2014 when Windward started tracking this closely-watched metric. Based in […]

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Angola’s Credit Outlook Cut to Negative by S&P on Oil Price Drop

Angola’s credit-rating outlook was cut to negative by Standard & Poor’s, which predicted the country’s fiscal deficit will widen in the face of lower oil prices. S&P affirmed Angola’s B+ rating, four steps below investment grade, the company said in a statement on Friday. “The negative outlook indicates that we could lower our long-term rating on Angola if the country’s external or fiscal positions continue to deteriorate over the next year,” S&P said. Angola, Africa’s largest crude producer after Nigeria, relies on the fuel to generate about 70 percent of taxes and 95 percent of export income. As the price of oil plunged more than 50 percent in the past 12 months, the government slashed this year’s budget by a quarter, cut fuel subsidies and froze hiring. Government spending accounted for more than a third of Angola’s $129 billion gross domestic product in 2014.

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Venezuela’s food shortage keeps getting worse

People queue to buy staple items outside a state-run Bicentenario supermarket in Caracas, August 4, 2015. See Also As dawn breaks over the scorching Venezuelan city of Maracaibo, smugglers, young mothers, and a handful of kids stir outside a supermarket where they spent the night, hoping to be first in line for scarce rice, milk, or whatever may be available. Some of the people in line are half-asleep on flattened cardboard boxes; others are drinking coffee. Almost all are bemoaning their situation. With shortages of basic goods and looting on the rise, more Venezuelans say they are resorting to nighttime waits in front of closed stores. "I can’t get milk for my child. What are we going to do?" said Leida Silva, 54, breaking into tears outside the Latino supermarket in northern Maracaibo, where she arrived at 3 a.m. on a recent day. The food shortages in Venezuela, a […]

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Exclusive: U.S. approves landmark crude oil export swaps with Mexico

Oil pump jacks are seen next to a strawberry field in Oxnard, California February 24, 2015. The Obama administration will allow limited sales of U.S. crude to Mexico for the first time, a senior administration official told Reuters, marking another milestone in loosening a contentious ban on exporting domestic oil. The Commerce Department is "acting favorably on a number of applications" to export U.S. crude in exchange for imported Mexican oil, the official said. Such oil swaps are one of several possible exemptions allowed in the four-decade-old law that otherwise bans most overseas shipments. The approvals come eight months after Mexico formally sought permission for a swap, a historic step for a nation where oil self-sufficiency has long been a source of pride. The shipments, likely to be lighter, high-quality shale oil, will help Mexico’s aging refineries produce more premium fuels. U.S. refiners will continue to get Mexican heavy […]

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BP Refinery Outage Could Push Down Oil Prices

The outlook for Canada’s oil sands is pretty grim, but it just got hit with an unexpected blow. An outage at a Midwest refinery could lead to deeper discounts for Canadian oil for several months. BP’s Whiting refinery in Indiana was forced offline for unexpected repairs. Without going into too much detail, BP said that it “shut down the largest of its three crude distillation units for unscheduled repair work.” It also said that production has been cut back at the refinery, which has the capacity to process 413,000 barrels per day, or 19 million gallons of refined fuel each day. The disruption of the Indiana-based Whiting refinery could lead to a spike in gasoline prices in the Midwest as the region suddenly encounters shortages of fuel supplies. Gas prices in Chicago are above $3 per gallon, while the national average is $2.61. The impacts could reverberate beyond the […]

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The Lowly Lightbulb Outshines Solar and Wind on U.S. Power Grids

Utility and power grid managers in the U.S. are learning that the best way to cut carbon emissions and improve efficiency is the easiest: Just change your lightbulbs. The nation’s largest grid, serving more than 61 million customers from Washington to Chicago, is revising its demand forecasts after recognizing that better lighting has undercut its projections. Swapping all of Thomas Edison’s incandescent lightbulbs with lamps containing light emitting diodes, or LEDs, would save enough electricity to power 20 million American homes, according to the Energy Department. In February, the Super Bowl became the first National Football League championship played under LEDs Americans’ energy-conservation efforts, from switching bulbs to upgrading washing machines and air conditioners, have done more to reduce carbon emissions than the increased use of solar, wind and natural gas, according to consultant Wood Mackenzie Ltd. Efficiency can help meet half of the emissions cuts sought under President […]

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AAA: BP refinery outage means several weeks of expensive gas

Gasoline prices in the Great Lakes states surging far above national average after BP reported an outage at its Whiting refinery. Photo by Kevin Dietsch/UPI WASHINGTON, Aug. 14 (UPI) — It could be the end of September before gas prices in the Great Lakes region move lower, though BP is likely losing big after a major refinery issue, AAA said. BP reported one of the largest of three crude oil distillation units at its refinery in Whiting, Ind., was shut down Saturday . A spokesperson said the outage has reduced production at the refinery, the sixth largest in the nation and a key gasoline supplier to the regional market. Gasoline prices in the region increased dramatically as a result of the outage, skewing the national average price upward. AAA reports a state average retail price for a gallon of regular unleaded gasoline in Indiana at $2.89, up 48 cents […]

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Rig company Hercules Offshore files for bankruptcy

Hercules Offshore files for Chapter 11 bankruptcy to navigate weak crude oil market. Company in 2013 spent more than $3 million after part of its rig, Hercules 265, collapsed in the U.S. waters of the Gulf of Mexico. Photo courtesy of the Bureau of Safety and Environmental Enforcement. HOUSTON, Aug. 14 (UPI) — Rig company Hercules Offshore announced it filed for bankruptcy as part of a financial restructuring effort in an era of lower crude oil prices. "We are working toward a new capital structure which will provide a better foundation for Hercules to meet the challenges in the global offshore drilling market due to the down cycle in crude oil prices," Hercules President and Chief Executive Officer John T. Rynd said in a statement. In its quarterly report filed last month , Hercules said its net operating days in the United States declined by more than half year-on-year […]

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TransCanada: Study shows pipeline safer than rail

TransCanada points to study that says using pipelines to transport oil and natural gas is safer than rail. Photo courtesy of TransCanada. CALGARY, Alberta, Aug. 14 (UPI) — Pipeline company TransCanada pointed to a study that suggests the increase in the rail transport of crude oil is a risky option for the industry. TransCanada spokesperson Mark Cooper in an emailed statement said a report from The Fraser Institute shows transport of crude oil and natural gas in Canada by pipelines is 4.5 times safer than rail. For its long-delayed Keystone XL pipeline through the United States, the company said pipelines are also substantially less carbon intensive than other modes of transit. "Federally regulated pipelines in Canada currently move just under 15 times more hydrocarbons than do the railroads," Kenneth P. Green, the study’s lead author, said in a statement. "But with increased production and continued opposition to new pipeline […]

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Bakken Production Data and STEO Predictions

The Bakken Production Statistics and the ND Production Statistics with June production numbers has been published. Bakken & ND BPD Bakken production was up by 10,887 barrels per day to 1,152,455 BPD while all North Dakota production was up by 8,565 barrels per day to 1,211,180 BPD. Bakken production is still 11,068 bpd below their December high while all North Dakota production is still 17,240 bpd below their December high. Bakken BPD Per Well Bakken barrels per day per well dropped by 2 to 116 and all North Dakota barrels per day per well dropped by 1 to 97. From the Director’s Cut , bold mine. May Producing Wells = 12,679 June Producing Wells = 12,864 (preliminary)(NEW all-time high) May Permitting: 150 drilling and 0 seismic June Permitting: 192 drilling and 0 seismic July Permitting: 233 drilling and 1 seismic (all time high was 370 in 10/2012) May Sweet […]

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U.S. Oil Rig Count Rises for Fourth Consecutive Week

The number of U.S. oil-drilling rigs, a proxy for activity in the oil industry, had fallen sharply amid a 14-month tailspin in oil prices as surging U.S. production and an unwillingness by the world’s cartel to reduce production led to a global glut. U.S. oil prices set a six-year low Thursday as concerns about global economic growth, a stronger U.S. dollar and a major U.S. refinery outage weighed on the market. Total U.S. rigs are down 1,029 from a year ago, with oil rigs down 917, gas rigs down 110 and other rigs down by two, Baker Hughes said, though the pace of declines has slowed. Meanwhile, two gas rigs were taken off service in the latest week, bringing the total down to 211. The U.S. offshore rig count was 35 in the latest week, down three rigs from the previous week and 27 from the year-ago period.

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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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Oil market adjustment is about more than just shale: Kemp

Oil company workers walk as oil pipes and oil pumps are seen in the background in Sakir, south of Manama, October 11, 2014. U.S. shale oil production amounted to just 5 million barrels per day (bpd) at the end of 2014, less than 6 percent of world production and consumption. Despite the shale sector’s small market share, it has disrupted the entire oil industry because it emerged in the middle of the cost curve and has accounted for more than half of the increase in global supplies since 2010. Between 2010 and 2014, shale output rose by 4 million bpd, accounting for more than half of the 7 million bpd increase in global liquids production over the same period, according to the U.S. Energy Information Administration (EIA). Shale is more expensive to produce than oil from the giant conventional fields of the Middle East but cheaper than deepwater megaprojects […]

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EIA: Expect more of Iran’s oil by next year

WASHINGTON, Aug. 13 (UPI) — An increase in Iranian crude oil production of around 600,000 barrels per day is likely in the latter half of next year, a U.S. federal report found. Government officials and representatives from some of the world’s largest oil companies have discussed potential opportunities with Iran, which is expecting sanctions relief as a result of a breakthrough nuclear agreement reached with the five permanent members of the U.N. Security Council, plus Germany. Iran in December produced just under 2.8 million barrels per day, down about 20 percent from 2011 levels. The country reported oil production for July at 3.13 million bpd, an increase of six tenths of a percent from the previous month. Accounting from the Organization of Petroleum Exporting Countries, of which Iran is a member, finds Iranian oil production of 2.86 million bpd in July was a 1.1 percent increase from the previous […]

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Nuclear accord creates potential for additional crude oil production from Iran

graph of monthly Iran crude oil production, as explained in the article text On July 14, the P5+1 (the five permanent members of the United Nations Security Council and Germany) and Iran announced an agreement that could result in relief from United States and European Union nuclear-related sanctions (which include some oil-related sanctions). If the agreement is implemented and sanctions relief occurs, it will put additional Iranian oil supplies on a global market that has already seen oil inventories rise significantly over the past year. These additional Iranian supplies, along with relatively higher global oil production and comparatively slower global oil consumption growth, will contribute to large inventory builds next year, resulting in lower oil prices than previously expected. The North Sea Brent crude oil price, which averaged $57 per barrel in July, is expected to rise to an average of $59/barrel (b) in 2016, according to EIA’s August […]

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Is Syria’s president losing his grip on power?

There have been four long years of war. Almost a quarter of a million people dead. Millions more displaced. More rebel groups and ISIL fighters are infiltrating and taking territory. The future of Syria’s president, Bashar al-Assad, is increasingly in question. Assad welcomed Iran’s foreign minister on Wednesday. After signing a landmark nuclear deal with world powers, what is Javad Zarif doing in Damascus? The visit by the major ally of the Syrian leadership follows increased diplomatic efforts; Russia, the United States and several Middle Eastern powers are all trying to find a way to end Syria’s conflict. Presenter: Shiulie Ghosh Guests: Radwan Ziadeh : Executive Director, Syrian Center for Political and Strategic Studies. Arron Reza Merat: Iran analyst for the Economist Intelligence Unit. Christopher Swift , from the Center for National Security Law at the University of Virginia. Source: Al Jazeera

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In Iraq’s oil capital, reform movement heralds change

Iraqis shout slogans during a protest on Aug. 1, 2015 in the southern Iraqi city of Basra. (AFP/Getty Images) The Iraqi oil capital of Basra has begun a significant reshuffling of the local government, following the national Parliament’s approval Tuesday of a major initiative in governance reform spearheaded by Prime Minister Haider al-Abadi.The changes in Basra, announced Wednesday and Thursday, are affecting several entities that interact with international oil companies and other foreign investors, including the governor’s office, the investment commission, and district and sub-district councils…. 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 .

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Kuwait uncovers ‘terror’ cell’s giant arms cache

Kuwait said the explosives were found in locations near the Iraqi border [interior ministry photo] Kuwaiti authorities say they have arrested three members of a "terrorist" cell and seized a huge arms cache they say was smuggled from Iraq and hidden beneath houses near the border. The Interior Ministry on Thursday said that the three Kuwaiti citizens have confessed to joining a group that was plotting to destabilise the country. Majority Sunni Muslim Kuwait has been on alert since a suicide bomber blew himself up at a Shia mosque in the capital, Kuwait city, in late June, killing 27 people. The bombing was claimed by the Islamic State of Iraq and the Levant (ISIL) group. A total of 19,000 kg of ammunition, 144 kg of explosives, 68 weapons, and 204 grenades were seized from three properties near the Iraqi border, the ministry said. The ministry said the explosives were […]

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Study Links Polluted Air in China to 1.6 Million Deaths a Year

Photo Waiting on a roadside this month for a highway from Beijing to Hebei Province to reopen after it was closed because of low visibility on a day of heavy smog. Credit Damir Sagolj/Reuters BEIJING — Outdoor air pollution contributes to the deaths of an estimated 1.6 million people in China every year, or about 4,400 people a day, according to a newly released scientific paper . The paper maps the geographic sources of China ’s toxic air and concludes that much of the smog that routinely shrouds Beijing comes from emissions in a distant industrial zone, a finding that may complicate the government’s efforts to clean up the capital city’s air in time for the 2022 Winter Olympics. The authors are members of Berkeley Earth , a research organization based in Berkeley, Calif., that uses statistical techniques to analyze environmental issues. The paper has been accepted for publication […]

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China Stock Futures Signal Deeper Pessimism

HONG KONG—As global financial markets try to gauge the impact of a weaker yuan, China’s stock-index futures are signaling that investors are more pessimistic than current Shanghai share prices suggest. Textbook financial theory says a currency devaluation such as the one China’s central bank engineered this week should support stocks by making them cheaper for foreign investors and lifting business prospects for local exporters. The Shanghai Composite Index has remained relatively flat since the yuan began sliding Tuesday. Stock stability in China should please regulators after their summertime battle to prop up shares. Yet, the level of futures that trade based on Chinese share indexes tell a more negative story about investor expectations for Chinese stocks. CSI 300 Index Futures, which track an index of the 300 largest companies listed on the Shanghai and Shenzhen stock exchanges, continue to point lower. On Thursday, the CSI 300 futures contract that […]

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China’s yuan devaluation to pressure commodities: Goldman

An advertisement poster promoting China’s renminbi (RMB) or yuan , U.S. dollar and Euro exchange services is seen outside at foreign exchange store in Hong Kong, China August 13, 2015. China’s yuan devaluation signals that global economic conditions have taken a turn for the worse, creating more downward pressure to come for commodity markets, Goldman Sachs said. "The CNY (yuan) devaluation has been important for commodity markets and we believe it signals that global macro conditions have changed," Goldman Sachs said in a note to clients. "Even China has now joined the negative feedback loop that is running between commodity deflation, growth and deleveraging trends… (and) we believe the net commodity market effects are bearish," it said. The bank said it believes the key areas of focus for commodity markets now include how dollar-yuan and the yuan-traded weighted index will evolve. "A weaker USD/CNY could see margins for Chinese […]

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China Seeks to Calm Markets as It Devalues Currency for 3rd Consecutive Day

Photo Studying stock charts on Thursday at a brokerage firm in Shanghai. After two days of declines, the Shanghai composite index rose 1.8 percent on Thursday. Credit Johannes Eisele/Getty Images — Agence France-Presse HONG KONG — China on Thursday sought to calm fears that the country’s depreciating currency had set off, as authorities defended the devaluation decision. The country’s central bank has pushed the value of the currency lower for three consecutive days. Since Tuesday, the currency, the renminbi, has fallen 4.4 percent, the biggest drop in decades. While China said the move was aimed to make the currency more market-oriented, it has raised concerns that the already slowing economy was in deeper trouble. The sharp and sudden fall has also prompted questions about whether the country’s leadership can manage the slowdown. At an ad hoc news conference on Thursday, officials from the central bank defended the devaluation, saying […]

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Volatility Saps Momentum for China’s Market Reform

BEIJING—As China’s central bank fights to stick with a year-end timetable it set to open up the country’s markets, questions are emerging about whether the creaky financial system, and the people who run it, are up to the task. Permitting market forces more influence over the exchange rate, a path the People’s Bank of China embarked on this week , is only one step on the road to tearing down the barriers that keep money from flowing across China’s borders. While President Xi Jinping himself has promoted the idea of market forces playing a decisive role in China’s economic priorities, the PBOC has led the push to liberalize capital markets. But China’s stock market meltdown exposed significant holes in the country’s financial regulations that its watchdogs are now trying to plug. That leaves political leaders and the technocrats who run the government with little capacity or appetite to oversee […]

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Oil Majors’ $60 Billion Cuts Don’t Go Far Enough as Crude Slides

The $60 billion of oil-industry spending cuts this year aren’t likely to be enough to meet sacrosanct dividend commitments as crude languishes near a six-year low. The world’s biggest producers will need to trim investments by a further $26 billion, according to Jefferies Group LLC. Capital spending will have to fall 10 percent next year, Banco Santander SA says. Oil companies are bracing for “lower for longer” prices as a global supply glut persists, dragging crude to the lowest close since March 2009 in New York on Tuesday. Royal Dutch Shell Plc, which has reduced spending 20 percent this year, has “more levers to pull” should the market weaken further, according to Chief Executive Officer Ben Van Beurden. The tightening means international producers such as Shell and Chevron Corp. can break even at a lower crude price — about $10 lower than before they started cuts last year, according […]

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BP’s Whiting refinery handicapped for several weeks

Outage at part of BP’s refinery in Whiting, Ind., leaves Great Lakes states spared from national trend of falling gasoline prices. Photo courtesy of BP. WHITING, Ind., Aug. 13 (UPI) — While BP was officially mum on the issue, at least one petroleum analyst said it may be several weeks before the Whiting refinery is running at full capacity. BP said in an emailed statement one of the largest of three crude oil distillation units at the Whiting refinery was closed Saturday for "unscheduled repair work." "While the rest of the refinery continues to operate safely, the outage has reduced production," BP spokesperson Scott Dean said. The refinery is the largest in BP’s portfolio and, with a production capacity of 413,000 barrels per day, the sixth largest in the United States. It can process 19 million gallons of fuel for commercial and private vehicles and the outage has caused […]

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New ozone limits unnecessary, 370 state business groups declare

The US Environmental Protection Agency’s proposal to reduce ozone limits is both costly and unnecessary, 370 state business groups from across the country—including petroleum councils affiliated with the American Petroleum Institute—told White House Chief of Staff Dennis McDonough. EPA’s current regulations are working, air quality continues to improve, and the United States is leading the world in reducing emissions,” the groups said in an Aug. 13 letter to McDonough. “New ozone standards could significantly damage the economy by imposing unachievable emissions limits and reduction targets on almost every part of our country, including rural and undeveloped areas,” they continued. “Therefore, we strongly urge you to retain the current ozone standards when finalizing this proposal.” EPA proposed reducing allowable ground level ozone limits under the National Ambient Air Quality Standard (NAAQS) from 75 ppb, where they were set in 2008, to a 65-70 ppb range late last year ( OGJ […]

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U.S. shale firms turn to private equity as market funding tails off

A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. A renewed slide in crude prices is having the effect U.S. energy sector dealmakers and private equity managers have been looking for: oil companies are now returning calls from potential buyers. Throughout much of the crude market rout that started in mid-2014 oil firms could rely on generous capital markets investors betting on a quick recovery in prices, which made any asset sales look unattractive. But since crude prices began tanking again in early July after a partial three-month recovery, oil firms have finally started to feel the squeeze. A torrent of $44 billion in high-yield debt and share sales in the first half of this year has slowed to a trickle with oil now at just above $42 a barrel, 30 percent below its June levels and 60 percent down from June 2014, […]

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U.S. refinery outages give European gasoline late boost

British Petroleum oil refinery as seen in Whiting, Indiana, August 16, 2007. A string of refinery outages across the United States and unrelenting demand for gasoline in the country have given European gasoline a late boost to counter the traditional decline in overseas demand as summer draws to a close. About 1.7 million tonnes of gasoline have been booked for loading in August from Europe to the east coast of the United States and the Gulf Coast, Reuters ship-tracking data showed, in what traders said has been an exceptionally strong month. With oil prices more than halving over the past year, demand for gasoline in the United States has surged in recent months as motorists drive more and buy larger cars. U.S. and global demand for gasoline has been the main engine supporting refining margins in recent months. The difference between the prices of crude oil and gasoline, used […]

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States Move to Block Obama Administration’s New Carbon Rules

WASHINGTON—Fifteen states asked a federal court Thursday to temporarily block Obama administration carbon regulations while they mount a full legal challenge to the rules. The move is the first step in what is expected to be a yearslong court battle over recently completed Environmental Protection Agency rules that call for carbon emissions from power plants to be cut 32% by 2030 from 2005 levels. The rules are the cornerstone of President Barack Obama ’s climate agenda. The states asked the U.S. Court of Appeals for the District of Columbia to issue an emergency stay blocking the rules, noting that they would be required “to spend significant and irrevocable sovereign resources now” to be in a position to meet the initial deadline of Sept. 6, 2016 for states to submit compliance plans to the EPA. The states are mostly from the South and Midwest, including Ohio, Michigan, Florida Georgia, West […]

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BP Manipulated Texas Natural Gas Market in 2008, Judge Says

A U.S. regulatory judge ruled BP BP -1.43 % PLC manipulated the Texas natural gas market in 2008 and said fines against the British energy company could increase because the scheme took place after earlier market manipulation. The ruling by Carmen A. Cintron, an administrative law judge for the U.S. Federal Energy Regulatory Commission, found BP flooded a Texas delivery point with natural gas to drive down prices there in the physical market, while at the same time placing trades in related financial markets that would benefit from the reduced price. BP said Thursday it disagreed with the judge’s conclusions and would appeal the decision to the full FERC commission. “BP is committed to adhering to the highest ethical standards,” the company said. It had maintained in case filings and an earlier hearing that the trading wasn’t improper and that FERC’s analysis of the evidence was flawed. A FERC […]

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Oil at $30 Is No Problem for Some Bakken Drillers Cutting Costs

The lowest crude prices in six years might not be enough to put the brakes on the U.S. energy renaissance. Some parts of North Dakota’s Bakken shale play are profitable at less than $30 a barrel as companies tap bigger wells and benefit from lower drilling costs, according to a Bloomberg Intelligence analysis. That’s less than half the level of some estimates when the oil rout began last year. The lower bar for profitability is one reason why U.S. oil production has remained near a 40-year high even as crude prices fell more than 50 percent over the past year to the lowest level since March 2009. “One of the explanations for why production hasn’t fallen off is that the cost has gone down so much,” David Hackett, president of Stillwater Associates LLC, an energy consulting firm in Irvine, California, said by phone. “The marginal cost to produce has […]

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Euro zone economy sputters as China risks loom

A steel-worker is pictured at a furnace at the plant of German steel company Salzgitter AG in Salzgitter, Lower Saxony on March 17, 2015. Germany enjoyed robust if unspectacular growth in the second quarter while the French economy stagnated, leaving policymakers looking at a fragile euro zone recovery and risks from volatile Chinese markets. The German economy, Europe’s largest, grew by 0.4 percent on the quarter — a slight acceleration from 0.3 percent in the first three months of the year but below expectations for a 0.5 percent expansion as weak investment acted as a drag. In France, a jump in exports was not strong enough to offset the impact of weak consumer spending and changes in inventories and growth came to a standstill after a strong first quarter. Data for the whole of the euro zone is expected at 0900 GMT. The readouts from the euro zone’s two […]

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