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OPEC oil output in August falls from record on Iraq disruption: survey

A man fills up his 1976 Chevy Nova with gasoline at a PDVSA gas station in Caracas January 12, 2015. OPEC oil output fell in August from the highest monthly level in recent history, a Reuters survey found on Wednesday, as disruptions to flows on Iraq’s northern pipeline halted supply growth from the group’s second-largest producer. Largely stable output from Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries indicated they are not wavering in their focus on defending market share instead of prices. OPEC supply fell in August to 31.71 million barrels per day (bpd) from a revised 31.88 million bpd in July, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. Oil has weakened due to surging output and is trading below $50, not far from a more than six-year low close to […]

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Iran puts figure on 2016 oil production goals

Iran could be producing more than 4 million barrels of oil per day by the end of next year, oil minister says. File photo by Maryam Rahmanian/UPI TEHRAN, Sept. 2 (UPI) — Iranian oil production by the end of 2016 will be in excess of 4 million barrels per day, more than in the pre-sanctions era, the nation’s oil minister said. Iranian Oil Minister Bijan Zangeneh said the country will increase net oil production by more than 1.5 million barrels per day, bringing total production for the Islamic republic to just over 4 million bpd. "Around the end of next year, we will be close to this figure," he said in an interview broadcast by CNN . Zangeneh said his country could become the second largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia, within seven or eight months of sanctions relief. Production during the pre-sanctions […]

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New North Oil Company chief appointed

Flares burn at the Baba Dome of the Kirkuk oil field on Aug. 3, 2009. (AKO RASHEED/Reuters) Akram Fouad Ahmed, a 25-year veteran of the North Oil Company (NOC), has been named by Iraqi Prime Minister Haider al-Abadi as the state-run company’s new director general.He takes over from Safa Abdulrahman Ahmed, the deputy director general of NOC who was temporarily put in charge following the removal of Sameer Salman al-Taie on July 27.Taie has been demoted to engineer and is under investigation for corruption, three senior NOC officials said. One of those officials said Taie is eff… 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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Israeli Officials Concerned About Gas Discovery in Egypt

A worker from the Israeli gas-drilling Tamar platform in July. Israeli officials expressed concern that the discovery of an extensive gas field off the coast of Egypt could upend Israeli development of its energy resources. The Italian energy company Eni E 0.92 % SpA on Sunday announced the discovery of the largest gas field in the Mediterranean, threatening a deal between the Israeli government and developers that was based on expectations of substantial gas exports to Egypt. That deal already was bogged down in disagreements about regulation, pricing and profit-sharing that have delayed the start of production. “The discovery of the Egyptian gas field is a painful reminder that while Israel has been asleep at the wheel and delaying final approval of the gas deal and additional exploration, the world is changing before our very eyes with implications for export possibilities,” Israel’s Energy Minister Yuval Steinitz said after Sunday’s […]

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LNG Export

The Sabine Pass LNG export terminal. From a mile away, at the distant end of a flat, two-lane road, the Sabine Pass Liquefied Natural Gas terminal materializes like an alien city from the haze of the Louisiana bayou. Five white cylinders with domed tops, each 140 feet tall and 225 feet in diameter, rise from the empty horizon. Set on the Texas border 4 miles from the mouth of the Sabine River on the Gulf Coast, the terminal is one of the largest industrial energy facilities under construction in North America. The domes, made of nickel alloy and wrapped in a layer of carbon steel, are essentially giant freezers, each capable of holding 81,000 tons of liquefied natural gas (LNG) at -260F. Cheniere Energy, based in Houston, has spent more than a decade, and upwards of $20 billion, turning 1,000 acres of swamp into the first LNG export terminal […]

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Canadian oil sector edging forward

More Canadian oil projects despite slumping oil-based economy. Photo courtesy of Husky Energy CALGARY, Alberta, Sept. 2 (UPI) — Despite working in a weak market, two companies — Husky Energy and ConocoPhillips — announced the start of new oil operations in Canadian oil sands. Husky announced the start of operations at its Sunrise energy project in Alberta. Production began in April and the new phase of development should put the project closer to full capacity of 60,000 barrels of oil per day by the end of next year. Data from the Canadian Association of Petroleum Producers show oil sand deposits, centered largely in Alberta province, hold an estimated 167 billion barrels of oil, the third largest reserves in the world. Canada depends heavily on oil and natural gas for government revenue. With crude oil prices more than 50 percent below mid-2014 levels, the nation has teetered on the brink […]

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Germany’s E.ON eyes U.S. solar market

German energy company E.ON said it aims to expand its development across the U.S. solar power sector. File photo by Stephen Shaver/UPI DUSSELDORF, Germany, Sept. 2 (UPI) — German energy company E.ON said it was working to expand its footprint in the U.S. utility sector through its activity in large-scale solar projects. The German company said it started construction on the 20-megawatt Maricopa West solar project in southern California. With 89,000 panels, the company said it’s the second such large-scale project built by E.ON in California. In May, the state became the first in the nation with more than 5 percent of its total annual utility-scale electricity generation coming from solar power. California’s full-year 2014 solar power generation of 9.9 million megawatt hours was more than all other states combined , according to data from the federal Energy Information Administration. The German company’s first California project, the 20-megawatt Alamo […]

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Former Bakken Operator Pleads Not-Guilty

Saltwater Waste A Southlake, Texas man charged with illegally injecting saltwater into a disposal well in North Dakota pled not guilty to federal charges last week in federal court. Jason Halek, a former operator of a saltwater well in southwest North Dakota, was indicted on 13 federal counts and fined a record $1.5 million in 2013 for putting drinking water at risk by illegally dumping more than 800,000 gallons of salty, oilfield wastewater into a former oil well in Stark County. He entered not guilty pleas to all charges including violating the Safe Drinking Water Act, making false statements and obstructing grand jury proceedings. The indictment claims Halik conspired to hinder by “craft, trickery, deceit, and dishonest means the lawful and legitimate functions of the EPA, in enforcing federal laws relating to the requirements of the North Dakota underground injection control program.” Saltwater is considered an environmental hazard that […]

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Effects of removing U.S. crude export restrictions depend on price, resource assumptions

graph of propject U.S. crude oil production, as explained in the article text A new study by the U.S. Energy Information Administration (EIA) on the potential implications of allowing more crude oil exports finds that effects on domestic crude oil production are key to determining the other effects of a policy change. Gasoline prices would be either unchanged or slightly reduced. Trade in crude oil and petroleum products would also be affected. The recent rise in domestic crude oil production from 5.4 million barrels per day (b/d) in 2009 to 8.7 million b/d in 2014 and the prospect of continued supply growth have sparked interest in the question of how the relaxation or removal of current policies, which restrict but do not ban exports of crude oil produced in the United States, might affect markets for both crude oil and petroleum products over the next decade. EIA’s new report, […]

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EIA: Benefits of lifting US crude export ban most evident if output rises

A study released Sept. 1 by the US Energy Information Administration was apparent cause for celebration for several oil and gas industry groups, which took its findings as confirmation that lifting restrictions on US crude oil exports would be a net positive for the industry as well as consumers. EIA developed several analyses that examine the implications of removing the restrictions for the price of US and global marker crude streams, gasoline prices, crude production , refining activity, and trade in crude and petroleum products. The study, Effects of Removing Restrictions on US Crude Oil Exports , was conducted in response to requests from US Sen. and current Senate Energy and Natural Resources Committee Chairman Lisa Murkowski (R-Alas.) and former chairman and Sen. Mary L. Landrieu (D-La.), ( OGJ Online, Apr. 14, 2014 ), as well as current members Ronald L. Wyden (D-Ore.) and Maria E. Cantwell (D-Wash.). Murkowski […]

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Majority of U.S. shale firms pass up second quarter chance to hedge $60 crude

With the benefit of hindsight, last quarter may have been the best chance for cash-strapped U.S. shale oil producers to ensure they would get at least $60 a barrel for the next year or two. Barely a third did so. According to a Reuters analysis of hedging disclosures by the 30 largest such firms, more than half of them did not expand their hedges during the three months ended June or had no hedges at all, exposing them to a plunge that wiped more than $20 off the price of oil in the following months. In total, 12 companies increased their outstanding oil options, swaps or other derivative hedging positions by 36 million barrels at the end of the second quarter compared with the end of the first quarter, according to the data. Another 14 companies ended the quarter with hedging positions reduced by a total 37 million barrels, […]

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Oil Export Bill Said to Be Set to Move as Price Fears Ease

Congress is set to begin consideration of a measure to lift the decades-old ban on U.S. crude exports after a government study concluded the move wouldn’t raise gasoline prices for consumers, people familiar with the plan said. A panel in the House of Representatives is planning to vote on a measure to lift the ban, which dates back to the Arab oil embargo of the 1970s, as early as next week, according to three lobbyists working on the matter, who asked not to be named because the markup hasn’t been announced yet. The full House may vote on it later in September, leaving ahead the more difficult task of gaining enough support for repeal in the Senate, they said. Repealing the ban has gained new political potency as hydraulic fracturing has triggered a boom in domestic oil and natural gas output. Oil companies such as Exxon Mobil Corp. have […]

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Cnooc Canadian Oil-Sands Plant to Shutdown Amid Pipeline Probe

CALGARY, Alberta—The Canadian unit of Chinese state-controlled energy giant Cnooc Ltd. CEO 0.69 % said Wednesday it will halt production at a 50,000 barrel-a-day oil-sands plant indefinitely as part of its effort to comply with an order from regulators forcing it to shut down pipelines at the site. The move comes after the chief energy regulator in the Western Canadian province last week suspended operating licenses affecting 95 pipelines at Cnooc subsidiary Nexen Energy ULC’s Long Lake heavy oil extraction facility in northern Alberta for suspected failure to comply with certain rules . Shutting down Long Lake is the latest in a string of setbacks at the plant , which started up in 2008 but has never reached its capacity of 72,000 barrels a day. The loss of output is a blow to parent company Cnooc, which bought Nexen for $15 billion in 2013 and installed its own management […]

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Production Woes at Oil-Sands Giant Syncrude to Impact Full-Year Output

By Chester Dawson CALGARY, Alberta– Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands project, said Wednesday that production of synthetic crude would be "minimal" for two weeks after a weekend fire at Syncrude’s main plant, and that the lost production would impact its annual output. The company halted production after a blaze on Saturday damaged equipment at its Mildred Lake strip mine’s crude processing facility in northern Alberta. The loss of some 200,000 barrels per day of output has contributed to a sharp spike in prices of Canadian synthetic oil this week. "Syncrude plans to implement a phased recovery strategy with minimal synthetic crude oil shipments and operating rates for the next two weeks, " Canadian Oil Sands said in a statement late Wednesday. Production is expected to return to more normal levels at the end of the month, it said. The company said that […]

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Shell president: ‘Oil will be required for a long time’

The president of Shell Oil Co. said exploratory drilling off Alaska’s northwest coast is going well despite stormy weather last week that caused the company to halt operations for a few days. And in an interview this week with The Associated Press Marvin Odum said he expects further protests against the company’s plans for Arctic drilling like the ones in Seattle and Portland where activists in kayaks tried to block Shell vessels. Arctic offshore drilling is bitterly opposed by environmental groups that say a spill cannot be cleaned in ice-choked waters and that industrial activity will harm polar bears, walrus and ice seals already harmed by diminished sea ice. In Seattle, Shell faced protests on the water by “kayaktivists” upset over the company staging equipment in the city. In Portland, Oregon, Greenpeace USA protesters hung from the St. Johns Bridge to delay a Shell support vessel, from heading to […]

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The World’s First Clean Oil Sands Project: An Interview With Dr. Gerald Bailey

After decades of exhaustive attempts to overcome the dirty reputation of oil sands, we finally have an environmentally-friendly and low cost method to tap into these vast resources in the state of Utah—good news both for Mother Nature and all oil and gas investors. MCW Energy Group’s CEO, former Exxon President of the Arabian Gulf region, Dr. R. Gerald Bailey, tells Oilprice.com in an exclusive interview that his hunt for an innovative technology that simultaneously makes money and cleans up the environment is over. The race to capitalize on Utah’s vast oil sands resources is on, and only the ‘clean’—both financially and environmentally—will survive. Coming hot off of the successful launch of clean oil sands operations in Utah, while other oil sands projects are under fire from protesters, Dr. Bailey discusses: • The difference between Utah and Alberta when it comes to oil sands resources. • How new technology […]

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For Russia, Oil Collapse Has Soviet Echoes

For most countries, the economic slowdown in China and the accompanying slump in commodity prices represent something between nuisance and pothole. For Russia, they are a catastrophe. Russia’s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The International Monetary Fund predicted in July that Russia’s economy would shrink 3.4% this year, the most of any…

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Ruble Falls Second Day as Citigroup Sees Further Weakness on Oil

The ruble weakened, following the biggest drop in more than four months, after Citigroup Inc. said the currency will remain under pressure until oil ends its declines. Russia’s currency fell 0.8 percent to 67.4010 against the dollar by 3:16 p.m. in Moscow after strengthening as much as 0.9 percent. The ruble tumbled 3.9 percent on Tuesday as Brent crude slid the most since May 2011. The currency led the declines among emerging markets on Wednesday. Brent in Rubles Drops “The currency, and more broadly Russian assets, will find a bottom only when the market somehow reaches the conclusion that the oil prices have no further room to fall,” Ivan Tchakarov, a Moscow-based economist at Citigroup, said by e-mail. “I doubt the market has come even close to thinking that.” The ruble price of Brent dropped to 3,305, below the average of the past 12 months, as oil extended its […]

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Shell acquisition of BG cleared by Europe

European Commission clears Shell acquisition of British counterpart BG Group. Photo by Christian Lagerek BRUSSELS, Sept. 2 (UPI) — Royal Dutch Shell and BG Group announced their planned merger received unconditional approval Wednesday from the European Commission. The board of directors at Shell and BG Group issued a joint statement in April saying they’ve reached an agreement for the Dutch acquisition of its rival. The deal, valued at around $70 billion, is among the largest acquisitions since the Exxon Mobil merger was completed in 1999. It also comes at a time when most energy companies are streamlining capital expenses in a weak oil market. Both companies issued statements Wednesday saying the merger was approved by the European Commission, which found the combined corporate market share would be limited in terms of exploration and production despite the acquisition. When the deal was announced Helge Lund , chairman of BG Group, […]

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Earth’s trees number ‘three trillion’

Image copyright David Zeleny The new estimate includes "ground truth" density data from 400,000 forest plots There are just over three trillion trees on Earth, according to a new assessment. The figure is eight times as big as the previous best estimate, which counted perhaps 400 billion at most. It has been produced by Thomas Crowther from Yale University, and colleagues, who combined a mass of ground survey data with satellite pictures. The team tells the journal Nature that the new total represents upwards of 420 trees for every person on the planet. The more refined number will now form a baseline for a wide range of research applications – everything from studies that consider animal and plant habitats for biodiversity reasons, to new models of the climate, because it is trees of course that play an important role in removing the greenhouse gas carbon dioxide from the atmosphere. […]

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Oil prices extend losses on U.S. oil inventory, manufacturing data

Pump jacks and pipes are seen on an oil field near Bakersfield on a foggy day, California January 17, 2015. Oil prices fell 2 percent in Asian trade on Wednesday, as a stronger-than-expected build in U.S. crude oil stocks and weaker U.S. manufacturing data fueled a rout in prices that started in the previous session. Brent and U.S. crude finished around 8 percent lower on Tuesday to end a 25 percent three-session surge, the largest three-day gain since 1990. That came after oil prices dropped to their lowest in six-and-a-half years last week. This roller-coaster volatility could continue especially if there are similar wild swings in the equity markets, said Ric Spooner, chief market analyst at Sydney’s CMC Markets. "Any change in sentiment tends to be amplified. Any change in direction in the oil markets has the potential to be risk driven by what’s going on in the equity […]

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Oil Prices Drop Sharply on China Worries

Oil prices dropped Tuesday, giving up most of Monday’s strong gains, as worries resurfaced about China’s economy and a seasonal decline in U.S. demand. The current oil market is the most volatile in years. The U.S. benchmark posted a move of more than 6% for the fourth straight trading day on Tuesday, the longest such streak since January 1991. Light, sweet crude for October delivery settled down $3.79, or 7.7%, to $45.41 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, slumped $4.59, or 8.5%, to $49.56 a barrel on ICE Futures Europe, notching the largest one-day percentage decline since May 2011. Both oil benchmarks rose more than 25% in the three days ended Monday, posting their largest three-day gains on a percentage basis since Iraq invaded Kuwait in 1990. Both contracts are still up more than 14% from Wednesday’s settlement. On Tuesday, official and private […]

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Oil falls 3 percent on weak China factory data

A customer prepares to fill the tank of her car at a fuel station in Sint Pieters Leeuw December 5, 2014. Oil prices fell more than 3 percent on Tuesday after official data showed China’s giant manufacturing sector, the engine powering the world’s biggest energy consumer, contracted at the fastest pace in three years. China’s official Purchasing Managers’ Index (PMI) fell to 49.7 in August from 50.0 in July, reinforcing concerns over the world’s second-largest economy. The figures helped spur a retreat in oil prices after three days of hefty gains. Investors took profits after Brent and U.S. crude both soared more than 8 percent on Monday, traders said. "It was primarily the China fear factor," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told Reuters Global Oil Forum. Benchmark Brent crude dropped $2.13 to a low of $52.02 a barrel, and was trading around $52.15 by 0815 […]

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Natural Gas Rises on Hotter Forecast

NEW YORK–Natural gas prices rose Tuesday on expectations that a heat wave would increase demand for natural gas as a power-generation fuel. Summer heat increases demand for air conditioning, leading to higher consumption of gas-powered electricity. Prices have declined in recent weeks as traders looked past summer to fall, when demand typically eases as the weather moderates. But a bout of “highly anomalous late summer heat” is forecast to spread across the eastern and southern U.S. in the next six to 10 days, said forecaster WSI Corp. on Tuesday. Futures for October delivery settled up 1.3 cents, or 0.5%, at $2.702 a million British thermal units on the New York Mercantile Exchange. “Prices are slightly higher as the heat wave engulfs major parts of the country,” Dominick Chirichella, analyst at the Energy Management Institute, said in a note. However, he added, “the market is not overly excited as the […]

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Oil bear bets on return to $25 a barrel

Sign up for quick access to a wealth of global business news, including: Oil bear bets on return to $25 a barrel 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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Oil market displays its irrational side: Kemp

An oil pump is seen near Bakersfield, California October 14, 2014. U.S. crude prices jumped more than 27 percent in three trading days between Thursday and Monday, which should convince even the most die-hard believers the oil futures market is neither efficient nor rational. The rally has left traders, analysts and journalists struggling to make sense of the sudden change in direction after prices had fallen steadily for two months, hitting their lowest level since 2009. Possible explanations range from a bounce in global stock markets, pipeline problems in Nigeria, new data showing U.S. oil production falling, and an editorial published in OPEC’s monthly bulletin interpreted by some analysts as a call for a coordinated approach to cutting output (“Cooperation holds the key to oil’s future”, August 2015). But it should be obvious none of these factors, singly or in combination, is sufficient to explain an increase in the […]

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How Long Can a Sentiment-Fueled Oil Rally Last? Goldman Sachs and Citi Debate

Whither oil prices. After West Texas Intermediate posted its best three-day gain in a quarter-century, analysts are divided over the durability of the rally in the commodity price and related equities. Goldman Sachs and Citigroup agree that the near-parabolic trajectory of crude prices has been driven by a shift in sentiment, rather than a significant change in the fundamentals of the oversupplied global oil market. But while the former believes that energy stocks have more room to run, the latter says the shaky foundation of the rally should prompt investors to head to the sidelines. The notable increase in energy options prices amid the severe equity selloff last week "demonstrates a capitulation in sentiment and positioning that we have been waiting for for the past two months," according to Goldman Sachs. Spikes in implied volatility, which can be derived from options prices and the put-call skew—or the extent to […]

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The oil price explosion is totally detached from reality

Oil prices are still massively higher than they were a week ago but Citi believes that the surge is pretty much devoid from reality. Crude oil rocketed nearly 30% in just three days, its biggest three-day rally in 25 years . Since Friday August 28, oil over 20% higher. Today, crude oil prices are initially ebbing off ever-so slightly. But while crude oil is hovering around $47.86, the chart shows the undeniable explosion in prices over the last few days. NYMEX crude oil price over the last five days. Marketwatch.com However, the spike isn’t good news, considering oil prices are still around 50% lower than they were at their peak in the summer of 2014. Edward L Morse and his team at Citi, in a note entitled "The Oil Price Surge" sent to investors this morning, say that the markets may be in for a nasty shock as people […]

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Oil exports and revenues drop in August

Employees of state-run Iraqi Drilling Company in Basra Jan. 16, 2011. (ATEF HASAN/Reuters) The cash-strapped Iraqi government suffered a sharp decrease in August oil revenues, due mainly to depressed global oil prices as well as a dip in exports from both the south and the north.The federal government earned just $3.874 billion in August, according to the Oil Ministry, down more than 20 percent from the $4.908 billion earned in July.Federal exports averaged 3.079 million barrels per day (bpd) in August – a total of 95.447 million barrels – according to State Oil Marketing … 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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Obama Nears Needed Votes on Iran Nuclear Deal

Photo Senator Bob Casey, Democrat of Pennsylvania, said in a statement that he would support the Iran nuclear deal, despite deep concern that Iran would not hold up its end of the bargain. Credit Andrew Harnik/Associated Press WASHINGTON — President Obama all but clinched victory for his Iran nuclear deal on Tuesday, as two Democratic senators threw crucial support behind the landmark accord. The announcements by the senators, Bob Casey of Pennsylvania and Chris Coons of Delaware, came a week before the Senate was to formally debate a Republican resolution disapproving the agreement between Iran and six world powers. Mr. Obama would veto any such resolution, and with further announcements of support for the accord expected as soon as Wednesday, any move to override him would almost certainly fail. Mr. Coons’s decision in particular is likely to have resonance with the few remaining undecided Democrats. As an outspoken member […]

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OPEC Split on Need for Long-Term Oil-Price Forecasts

OPEC’s strategy review is due for completion later this year. The previous edition produced in 2010 estimated crude would trade in a range of $70 to $86 a barrel through to 2020, then climb to $106 by 2030. Saudi Arabia and its Gulf allies are at odds with Iran and other OPEC members over whether the organization should include oil-price forecasts in its long-term strategy report, according to three of the group’s delegates. The Gulf kingdom, which has led the Organization of Petroleum Exporting Countries in a battle against rival producers, is seeking to exclude price assumptions from the report, according to the delegates, who asked not to be identified because the document isn’t public. The disagreement reflects internal divisions over whether OPEC policy should focus on prices or the stability of the oil market, one of the delegates said. Oil prices plunged to a six-year low last month […]

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Obama Gains Support of Two Senators for Iran Deal

Photo Senator Bob Casey, Democrat of Pennsylvania, said in a statement that he would support the Iran nuclear deal, despite deep concern that Iran would not hold up its end of the bargain. Credit Andrew Harnik/Associated Press WASHINGTON — Two Democratic senators threw crucial support behind the Iran nuclear deal on Tuesday, almost assuring that President Obama would have the votes to overcome congressional opponents seeking to derail the landmark accord. The announcements by the senators, Bob Casey of Pennsylvania and Chris Coons of Delaware, came a week before the Senate returned to formally debate a Republican resolution disapproving the accord among Iran and six world powers. With the support of Mr. Casey and Mr. Coons, the chances of Congress torpedoing it are becoming ever more slim. Mr. Coons, an outspoken voice on the Senate Foreign Relations Committee, received personal, written assurances from Mr. Obama on Tuesday on a […]

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OPEC: Iran has many projects on tap

A July nuclear deal could pave the way for Iran’s return to the global energy stage by the end of the year. OPEC finds the country has billions of dollars of new projects on tap. Photo by Ali Mohammadi/UPI VIENNA, Sept. 1 (UPI) — Iran could mark its return to the global energy stage when, perhaps by the end of the year, it starts $185 billion worth of new projects, OPEC said. The Organization of Petroleum Exporting Countries said in a monthly newsletter it’s expecting Iran to bring new projects online as sanctions pressure eases. Iran, which is a member of OPEC, has been preparing for the day when sanctions are released and international oil companies again express interest in investing in the country. "Iran has drawn up a list of some 50 oil and gas projects worth $185 billion which it intends to start developing once longstanding economic […]

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OPEC magazine op-ed that fueled oil rally baffles insiders

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. An OPEC publication written by the exporter group’s public relations team helped oil prices jump and prompted speculation over a possible shift in output policy – to the bafflement of some OPEC insiders. The commentary on Monday in the OPEC Bulletin, a magazine issued by OPEC’s Vienna headquarters, said downward pressure on prices due to higher production "remains a cause for concern" and OPEC "stands ready to talk to all other producers". While the 799-word article helped add another 8 percent to oil’s three-day surge, by Tuesday it seemed clear there was no sign of a significant shift in OPEC policy or any indication of a fresh push to shore up markets, analysts and OPEC insiders said. A Gulf delegate said the Bulletin reflected genuine concern in […]

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Oil price crash prompts scramble for Caribbean storage tanks

Norwegian Oil tanker ”Champion Spirit” passes beside Havana’s seafront boulevard ”El Malecon” (top) and colonial fortress ”Morro Cabana” before entering the port June 1, 2010. Demand for crude storage in the Caribbean, one of the world’s most important oil hubs, is rising as producers and traders try to ride out the worst price crash in six years by holding onto more barrels or making blends that can be sold for premiums. The last time tanks in the logistically-important islands were this full, during the price collapse of 2009, companies started leasing vessels to use as floating storage. That is not yet happening now, but the only way to get tank space at the moment is to sublease it, said one tank broker with decades of experience. Since June, his firm alone has received requests to lease up to 7.5 million barrels of tankage in a region with some 100 […]

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Venezuela Says China to Give $5 Billion Oil Loan

CARACAS—Venezuela’s government, facing a cash crunch amid a slump in oil prices, signed a deal to receive a $5 billion loan from China, President Nicolás Maduro said Tuesday. The funds will go to increase oil production in Venezuela in the coming months, Mr. Maduro said without offering more details during an address from China that was broadcast on Venezuelan state television. Support from Beijing—which also renewed a separate $5 billion loan to Venezuela earlier this year—may offer some relief to bond markets, where Venezuela’s debt securities are rated among the world’s riskiest. Wall Street analysts say the country could default on its debt as soon as next year. Mr. Maduro visited Vietnam and China this week in pursuit of financial aid for South America’s largest oil exporter as it reels from triple-digit inflation and worsening food shortages. The economic troubles are weighing on the ruling Socialist Party’s popularity ahead […]

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China stock probes send shivers through investment community

An investor looks at electronic boards showing stock information at a brokerage house in Shanghai, China, September 1, 2015. Investigations by Chinese authorities into wild stock market swings are spreading fear among China-based investors, with some unsure if they are simply helping with inquiries or actually under suspicion, executives in the financial community said. Chinese fund managers say they have come under increasing pressure from Beijing as authorities’ attempts to revive the country’s stock markets hit headwinds, with some investors now being called in to explain trading strategies to regulators every two weeks. One manager at a major fund – part of the "national team" of investors and brokerages charged with buying stocks to revive prices – said a friend, also an executive at a large fund, was recently summoned for a meeting with regulators, along with all other mutual funds that had engaged in short-selling activity. "If I […]

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Weak China PMIs won’t automatically lower commodity imports: Russell

Trucks loaded with cargo containers are seen at Ningbo Zhoushan Port, Zhejiang province, December 7, 2014. China’s various purchasing managers’ indexes gather significant attention as indicators of the health of the world’s second-biggest economy, but they are less useful as a predictor of commodity imports. The official Purchasing Managers’ Index (PMI) fell to a 3-year low of 49.7 in August, in line with market expectations and down from a reading of 50 in July. The drop below the 50-level that separates expansion from contraction will be viewed as another sign that China is struggling for growth momentum, and raises further questions over whether 2015’s official target of a 7-percent increase in gross domestic product can be realized. The Caixin/Markit PMI dropped to 47.3 in August, the weakest since 2009 and down from 47.8 in July. The official PMI focuses on large, state-controlled companies, while the Caixin/Markit measure encompasses more […]

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China stocks reverse losses after brokerages pledge support; Hong Kong flat

An investor looks at electronic boards showing stock information at a brokerage house in Shanghai, China, September 1, 2015. China stocks clawed back sharp early losses on Wednesday amid speculation that the government is putting fresh pressure on brokerages to support the market. Nine Chinese brokerages have pledged additional funds worth over 30 billion yuan ($4.71 billion) to buy shares, the China Securities Journal said on Wednesday. The estimates by the Journal followed Tuesday’s announcement by several Chinese brokerages that they would increase the size of their proprietary trading as weeks of turmoil in mainland markets showed little sign of abating. After slumping as much as 4.4 percent in early trade, the CSI300 index was down only 0.2 percent at 3,356.67 points by lunch time. The Shanghai Composite Index also reversed early losses of up to 4.6 percent, and ended the morning up 0.3 percent at 3,176.34 points. Improving […]

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China oil product exports could see big jump as quotas surge

China’s state-owned refiners could export up to 16.9 million mt (869,000 b/d) of refined products over August-December — 44% more than the volume exported in the first seven months of the year, an analysis of latest information from industry sources and official data showed. The Ministry of Commerce last week issued the fourth batch of export quotas for 2015 totaling 9.9 million mt of oil products — triple the volume approved in the third batch and taking the total volume allocated so far for 2015 to 28.65 million mt, up 47% year on year, an industry source said. The products covered under the export quota includes gasoil, gasoline, jet/kerosene and naphtha. Chinese state-owned refiners need quotas or licenses from the government before they can export refined products. These companies seek export quotas based on their requirements but they don’t necessarily have to use up the allocated quotas. The quotas, […]

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U.S. tight oil production decline

Nevertheless, U.S. tight oil production continued to climb through April. It has fallen since, but the EIA estimates that September production will only be down 7%, or about 360,000 barrels/day, from the peak in April. Actual or expected average daily production (in million barrels per day) from counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to September 2015. Data source: EIA Drilling Productivity Report. This is despite the fact that typically output from an existing well falls very quickly after it begins production. The EIA estimates that tight oil production from wells that have been in operation for 3 months or more has declined by 1.6 mb/d since April, as calculated by the sum of the EIA estimated monthly declines in legacy production from May to September. Legacy production change (month-to-month production change, in thousands of barrels per day, coming from wells in […]

Posted On : Published By : Tom Whipple
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U.S. Drivers Will Put Oil Prices in Reverse

It is nearly turnaround season, though not necessarily for your favorite baseball team. The greatest late-season surge in a quarter century is already in the books for the oil market. Through Monday, crude had its best three-day percentage gain since Iraq’s invasion of Kuwait in August 1990. The rebound was attributed to investors covering negative bets in the futures market following a six-and-a-half year trough and an easing of deep pessimism about China and the global economy. Oil futures gave back a chunk of those gains on Tuesday , though, after China’s official purchasing managers index fell to its lowest in three years and a similar one in the U.S. dropped to a two-year low . A final support to a bullish crude-oil thesis may crumble after U.S. government data on petroleum and product inventories are released Wednesday. Last week’s report showed that U.S. crude inventories declined by the […]

Posted On : Published By : Tom Whipple
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U.S. tight oil production decline

Number of active oil rigs in counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to July 2015. Data source: Nevertheless, U.S. tight oil production continued to climb through April. It has fallen since, but the EIA estimates that September production will only be down 7%, or about 360,000 barrels/day, from the peak in April. Actual or expected average daily production (in million barrels per day) from counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to September 2015. Data source: EIA Drilling Productivity Report. This is despite the fact that typically output from an existing well falls very quickly after it begins production. The EIA estimates that tight oil production from wells that have been in operation for 3 months or more has declined by 1.6 mb/d since April, as calculated by the sum of the EIA estimated […]

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Two New Canadian Oil Sands Projects Started Despite Price Pain

CALGARY, Alberta, Sept 1 (Reuters) – ConocoPhillips and Husky Energy Inc announced key milestones in bringing two new oil sands projects online on Tuesday, underlining how some producers in the high-cost sector are boosting production even as crude prices tumble. The two projects will add around 178,000 barrels per day to the 2.3 million bpd already being produced from the oil sands, the world’s third largest crude reserves after Saudi Arabia and Venezuela. The Canadian Association of Petroleum Producers forecast in June that oil sands production to hit 3.1 million bpd in 2020. That forecast may be overstated however, as Imperial Oil has since delayed plans to expand its Kearl project by another 125,000 bpd. The start up announcements on Tuesday also come as around 900 oil company jobs were cut in Canada, 500 of those by ConocoPhillips, and the U.S. benchmark crude dropped more than 6 percent on […]

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Obama wants new $1 billion Arctic icebreaker by 2020

Obama is expected to say that the government should buy a heavy icebreaker by 2020, when routine Arctic marine transit is expected, instead of the previous goal of 2022. He also will propose to start planning for additional icebreakers. The White House said the move is required for safety in the changing Arctic and to keep up with Russia. The U.S. Coast Guard used to have seven icebreakers, but the fleet has dwindled to three creaky vessels, only one of which is a heavy duty vessel, the White House said. “Russia, on the other hand, has 40 icebreakers and another 11 planned or under construction,” the White House said. During the past year, Obama has taken steps to seal off parts of Alaska from new drilling, but environmental groups have strongly criticized a recent decision to allow Royal Dutch Shell to drill off the northwest coast of the state. […]

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Drillers Unleash ‘Super-Size’ Natural Gas Output

The U.S. may have even more—and much cheaper to get—supplies of natural gas than anyone imagined. The trick is applying supersize versions of the horizontal-drilling and fracking techniques that worked successfully elsewhere to an area that hasn’t seen this approach yet. The gains come from extending the lateral portions of wells by thousands of feet and pumping them full of enormous volumes of sand, chemicals and water to flush out more hydrocarbons. So far, the impressive results have been confined to a small area in a single Louisiana parish near the Texas border. But if the approach works across the giant Haynesville Shale, which spans 120 miles across both states, the era of low American gas prices could extend for decades into the future, experts say. “There’s a large likelihood that the United States will be enjoying very low gas prices for a very long time, maybe 20 years,” […]

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AAA: U.S. gas prices plummeting

Motor club AAA finds gas prices should move lower into upcoming U.S. holiday, though debt-conscious consumers may stay home this year. File photo by Brian Kersey/UPI WASHINGTON, Sept. 1 (UPI) — Bearish trends for crude oil prices and the resolution to problems at a major U.S. refinery pushed gas prices lower at a hastened clip, motor club AAA said. AAA reported a national average retail price for a gallon of regular unleaded gasoline for Tuesday at $2.46, down about eight tenths of a percent from the previous day and 5 percent less than the previous week. AAA, in a weekly retail market report, said the persistent decline of crude oil prices and the resolution of maintenance issues at BP’s refinery in Whiting, Ind., is behind the swift pace of decline in gasoline prices . "Despite the persistence of some regional refinery issues, average U.S. gas prices are falling at […]

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North Dakota gets energy transit grant

North Dakota gets federal grant to improve safer transport of energy products like crude oil. Photo by Steven Frame/Shutterstock WASHINGTON, Sept. 1 (UPI) — A grant from a federal safety regulator will help North Dakota invest in the infrastructure needed to transport oil safely and efficiently, a senator said. U.S. Sen. John Hoeven , R-N.D., said the federal Pipeline and Hazardous Materials Safety Administration granted the state about $200,000 to improve its ability to respond to incidents involving the transportation of hazardous materials like crude oil . "It’s important for us to invest in the right kind of infrastructure to move energy [resources] as safely and efficiently as possible, now and into the future," Hoeven said in a statement. "This grant will help us do just that." Hoeven, who serves on an energy committee in the U.S. Senate, said he’s been pushing an agenda that includes improvements in rail […]

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Canadian producer Penn West slashing jobs

Canadian oil and gas producer Penn West shedding more than 400 jobs to ensure durability during weak crude oil market. File photo by ekina/Shutterstock CALGARY, Alberta, Sept. 1 (UPI) — Canadian oil and gas producer Penn West Petroleum said it would cut more than 400 jobs, or around 35 percent of its workforce, to endure a weak oil market. The company said it was cutting capital spending, suspending dividends and "significantly" cutting costs through a 35 percent workforce reduction. President and Chief Executive Officer Dave Roberts said steps taken today will help the company endure an era of historically low crude oil prices. "Limiting our capital programs to the funds flow generated from our assets and suspending our dividend are necessary steps," he said in a statement. "We remain flexible and well positioned to move forward when oil prices improve." The company said it expects to save about $34 […]

Posted On : Published By : Tom Whipple